Good afternoon. This is the Chorus Call Conference Operator. Welcome and thank you for joining the Saras Full Year and Q4 2021 Results Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Miss Ilaria Candotti, Head of Investor Relations of Saras. Please go ahead, madam. Good afternoon, everybody, and thank you for joining us today for this conference call. As usual, I want to remind you that investor presentation and the press release are available on the IR section of our website. The agenda today will mainly cover the Q4 and full year 2021 results. There are Mr. Dario Scaffardi, CEO and General Manager of Saras Group, and Mr. Franco Balsamo, our CFO. We will start today with the highlights of the year, followed by results of the two Saras business segments. Afterwards, we will look at the outlook. Due to the current outbreak and uncertainty on the oil and gas market, which follow the current Ukrainian crisis and the possible volatility of related commodity prices, we are not going to present today the business plan that we had prepared based on the previous assumptions. Nevertheless, Dario and Franco will describe the main impacts that we are observing on the reference market and how Saras is positioning itself in the context. At the end, there will be the usual Q&A session. At this time, I would like to hand over to Dario. Grazie, Ilaria. Good evening, good afternoon, everybody. Thank you for joining us. I think that we have changed a little bit the way we are presenting. We are going to first concentrate on the results, and then we will give a little bit more detail on the outlook and our future prospects toward the end of the presentation. We'll talk about the market in specific in the second part of the call. If we look at the highlights of 2021, it has been an extremely challenging year, but also a year of change. It is the first year post-COVID. We had anticipated last year that we were expecting the scenario and the margin, particularly the refinery margin scenario, to improve gradually over 2021, and this has happened. It has actually happened even more than what we were anticipating, because we were all expecting a normalization of air travel, which did not occur for reasons that you are all very well much aware of. This notwithstanding, the diesel crack improved significantly over 2021, moving from about $4 at the beginning of the year to over $10 towards the end of the year. This very positive aspect from the oil point of view has been counterbalanced by a large surge in power costs, of course, and CO2 costs. In absence of these last two effects, we would have a very, very positive second half of the year compared to what has been, because it has been offset by these costs. Saras, in the meantime, has focused on its resiliency plan, which involves the ESTI program to improve refinery efficiency and to reduce reduction. This year is also the last year has also been extremely important in terms of what the power sector means for us and for the system. 2021 was the last year of our CIP 6 system. It was substituted by a new system, basically, which has slowly matured over time. This system is the so-called essentiality. It means that the power that we produce is considered essential for the maintenance, the safe maintenance of the power grid in Sardinia. We are, in terms of requests from the grid operator, constantly at the maximum levels of production above what is considered our reference power output. 2021 is the new year transition in this respect because we had to adjust to this new system, which basically is a system which fully covers all costs related to power production and gives a fixed remuneration on the investment. Of course, what also happened in this year is that for the very first time in over two decades, the production of power through our IGCC plant has been more competitive than producing it through gas or other means. This has altered a little bit the dynamics, of course, because the situation had never been anticipated. If anything, it proves how important it is, particularly today, to have diversity of supply and a diversification of sources. If anything, it confirms our industrial structure. During 2021, we also significantly increased our renewables power. We have acquired 45 MW of wind, and also we completed the authorization process to install 18 MW of PV power, which will be completed hopefully within this year in terms of construction. We have made also advances in all the various energy transition projects. If we look at the financial highlights, the reported EBITDA is almost EUR 350 million above that of the full year of 2020. This due to inventory effects and other aspects that Franco will be able to explain in more detail, but also at the comparable level, there is a significant improvement compared to the full year of 2020, with a positive number compared to the negative one that we had last year. Net financial position also has improved compared to that of last year, notwithstanding the increase in the prices of oil products in general. On the margin, this is an area in which of course there have been some significant changes. First let's talk about 2021, then we will talk a little bit more about the current situation. The comparison in 2021 showed an average integrated industrial and marketing margin of $4.5 per barrel. This includes a contribution from the marketing side of about 0.60 cents. In 2020, this number was about $4.7, so broadly in line. The comparison with the Saras premium over EMC benchmark stood at this $4.7. The value of the premium is also to be considered on the basis of the runs of the period, which were 94.7 million barrels in 2021 compared to 83 in 2020. The reason of the higher premium of about $0.30 compared to the number that we gave as a guidance in the segment analysis, industrial and marketing, are attributable to the performance in the fourth quarter. In particular from the marketing channel, thanks to a very, very positive contribution from this sector, both in Italy and in Spain, and to about $0.20, which is attributable to the improvement in the oil scenario, which offset the appreciation in energy cost. One thing though that should be noted about EMC is that today this EMC benchmark is no longer dependable and representative of the actual situation of the market. I remember that EMC is based on a pool of crudes, which is 50% Brent and 50% Urals. The Urals premium actually became a Urals discount, which in recent times went to $25-$28 discount. So clearly based on this, the EMC benchmark went up very significantly, and it is simply not representative of actual market conditions. Furthermore, EMC takes a standard value of power cost because it uses just a percentage of the fuel oil. CO2 is not considered. All in all, we believe that today, and by today, I mean exactly today, the EMC is not representative, so we have suspended the publication. We are studying, of course, what other benchmark might be suitable for Saras. We were debating whether we should continue presenting the EMC benchmark and then presenting a whole bunch of indicators that could compensate, but we thought that this would be too complicated and too confusing. We just prefer to withhold for the moment. This does not mean that we might not reinstate something in the coming weeks or months as hopefully the situation normalizes. If we go into the various sectors, first of all industrial and marketing, we processed in the fourth quarter of 2021, 3.29 million tons of crude, which is a bit more than 25 million barrels. This is higher than the same period in 2020. Of course, 2020 was deeply affected by the COVID emergency. There was also an increase in the processing of complementary charges, meaning feedstocks and other products. The comparable EBITDA in Q4 was EUR 25.2 million with a margin of $5 per barrel. The contribution of the marketing channel was $0.70 in this period. All this, of course, is net of the impact of maintenance activity carried out during the period. This compares with a comparable EBITDA of -EUR 34.5 million during 2020, where also the contribution of the marketing channel was significantly lower, about $0.30. The impact of the oil scenario on margin generation was positive by almost EUR 75 million. This is confirmation of the fact that the oil part is looking decidedly more positive than the previous year. The main drivers behind that are based on the strengthening of the diesel crack, $11.1 per barrel versus $4.8 in 2020. Gasoline, which was the star of 2021, which was $10 per barrel versus slightly more than $3 in 2020. This, of course, was offset by a strengthening of the absolute price of oil, of Brent. The operating performance in the same period was about EUR 212 million higher than the previous year, including the impact on the return of the guaranteed capital through the mechanism of essentiality. There was a change that includes lower sales contribution, which concerns the procurement of crude oil and complementary raw materials, the sale of finished products, tanker costs and inventory management and compulsory stocks, which although were positive during the year, as compared with the results achieved in 2020, represent a negative contribution of approximately EUR 80 million. This deviation is mainly due to the lower results achieved in trading. Trading in 2021 was less buoyant than 2020. 2020 was a great year for trading due to the volatility of the market, and the conditions for trading became a lot more challenging in 2021. This accounts for the lower results. We've had significant impacts from production planning, which means the optimization of the mix of raw materials brought in for processing and management of semi-finished products and so forth. This gave a negative contribution of about EUR 6 million, mainly in connection with the optimization of the product mix. The variable cost of industrial nature, net of the components relating to the essentiality regime, increased by almost EUR 55 million in Q4 2021. This is due for about EUR 34 million to the increase of the cost of electricity and EUR 16 million to the increase in cost of CO2. In Q4 2021, the industrial fixed cost, thanks to containment initiatives launched during the year, recorded a reduction of almost EUR 5 million compared to the same period of the previous year. It should also be noted that within the fixed cost, approximately EUR 16 million is the amount subject to reimbursements relating to the essentiality regime. Instead, the marketing sector in 2021, as previously mentioned, did extremely well. If we look at the crude slate and the production in the following slide, we see an increase in overall runs in 2021 due, of course, to the fact in 2020 they were particularly low because of COVID. Then there is also a change in the slate, of course, due to the fact that there was a very high demand for gasoline. The slate was geared towards the light sweet crudes in order to maximize gasoline production and minimize other products. This is the reason why we have an increase from 26%-42% in the light extra sweet. The other crudes remain marginally the same. I mean, this change is mainly due to the various families within. You can see this in the results in almost a 3% increase in the yield of gasoline and naphtha, and a corresponding 2% decrease in middle distillates. We have tried also to maximize the production of VLSFO. VLSFO, which is very low sulfur fuel oil, low sulfur fuel oil for bunker and ship consumption, has increased by 2%. This is part of the program on the crude slates, which tend to optimize production of gasoline and VLSFO. Electricity production has been lower in 2021 compared to 2020 because of the breakdowns that we had in the beginning of the year in the turbines due to the operator. On the fixed and variable costs, I would skip this slide, which is full of numbers, and we'll be able to answer your questions during the Q&A session. On renewables, the results have been significantly higher than those of the previous year, mainly due to the power tariff, which increased by more than 4x. It went from an average of in the last quarter from EUR 0.05 to more than EUR 0.23/kWh. This is the main reason why also the production is higher, thanks to the fact that we acquired the new wind farm in the second part of the year, and we already applied our maintenance protocols, which gave a significant increase in the availability of the plant, also of the power produced. We also completed the activities of reblading on the existing wind farm, which does not change the nominal power, but increases the efficiency of the farm. Just to explain, given the same amount of wind, we are able to produce more power. It's about 8%-9% roughly of its peak. Extraordinary results from the renewables segment. If we move on to the scenarios, of course, the initial part was written before the Ukrainian crisis. I think it's worthwhile to split a little bit the discussion in two parts. One pre-Ukrainian crisis and one post-Ukrainian crisis with all the uncertainties of the outcomes of what might happen. From an oil point of view, we saw a strong resilience in oil demand. 2022 was expected to surpass 100 million barrels per day. I don't know if this is still actual with what is happening today. Definitely there is a continuous growth in demand for oil. Prices. Brent prices were expected to be in the $80-$90 range with a slight decline over time. This, of course, again, has been put in the center of discussions once again. Distillate crack spreads improved in 2021 pre-Ukrainian crisis compared, and further improvement was expected with finally the long-anticipated return of air travel would kick in terms of contributing to the demand of distillates. This again, the current situation has put this under discussion. Electricity prices were expected to rebalance higher than pre-COVID levels, of course, but definitely to rebalance thanks to the Nord Stream 2 pipeline. This no longer seems the case, so certain things will need to be reconsidered and thought over again. We were expecting to return to improved cash flow from operation at pre-COVID levels in 2023, and be able to reduce debt in 2023, 2024. This was the plan confirmed also by the prevailing outlook. If we look at this classical graph on distillates, you will see that the current levels of gasoline are in the high range. Well, we're in the high range in the last part of the year. In the beginning of this year, maybe the picture is slightly different, but still extremely constructive. Diesel showed a constant improvement in all through the year, going from below the five-year average to smack in the middle of the five-year average. Today it's in the upper part of the five-year average. What are the effects due to the Ukrainian crisis? Well, the obvious effect is the extreme volatility on commodity prices. We experienced an incredible speculation and volatility on the March and April ICE gas oil contracts, particularly around the expiry on the 10th of March. We saw an incredible backwardation of over $150 per ton between the March and April contracts due to the short covering and the rolling of positions. What we can expect from the Ukrainian crisis at the moment? Well, first of all, the overall domino effect based on the fact that a lot of crude oil coming from Russia is not purchased by the traditional buyers. We will have to see a rebalancing of the flows. There are certain companies that are or countries that have no problem in purchasing Russian crude while the majority of Europe tends to be shy about this at least for the time being, although it's not been outlawed in any way. We are going to expect a rebalancing. I don't think that there will be an outright ban of Russian crude. Should this happen, of course, the effect on the market will be extremely significant, particularly if we don't see signs of the traditional oil production producers increasing. In the short term, there is definitely a shortage of high sulfur crude in the Mediterranean due to the reluctance of many companies in purchasing Russian crude. This has created an incredible situation in which the discount for Urals has gone to levels which are absolutely unrealistic, like -$28, which has been quoted sometime during last week. At the same time, there are certainly a lot of positives for companies like Saras. I think that one of the first effects of this crisis will be that there will be less oil products coming out of Russia. Russia is a large producer of diesel, and the majority of diesel that's imported into Europe actually does come from Russia. We expect this flow to slow down, and this of course creates a window of opportunity for refiners such as Saras. I think that this view is shared by the majority of operators. At the same time, there are concerns on the independence of oil supply to Europe and to Italy in particular. I think this indicates the fact that refineries do have a role in the energy transition until there is a full transition in place. Saras is well-placed since it has no dependency on gas. There is no gas in Sardinia, so we use for our internal power consumption basically gas, which comes from the petroleum process and most of the fuel oils from the petroleum process. We are not exposed to any increase in gas price. At the same time, the market is fully recognizing the importance of our power production, and this is something extremely comforting. What I just said is exemplified in the slides that follow. Urals, of course, has done incredible things, so it's not worthwhile to comment on it. At the same time, the official selling price of the alternative crudes, while they should have diminished due to the fact that the cracks on fuel oil have gone down, have maintained high due to the fact that these crudes have come to substitute Urals that is not purchased any longer by the operators. The same sort of effect has been on Azeri, which has had a volatile trend, but has remained on the strong side. Strong demand for all alternative crudes. Some pressure on not only the Russian crude, but also on crudes coming from the Black Sea because there's worry that the supply might be disrupted. If we look at the distillate prices, we had an extraordinary run in the last weeks on the ULSD and unleaded cracks, strongly linked to this phenomenon that I mentioned before on the futures contract. We spiked to an incredible level of cracks that reached almost $50 and has since rebalanced. Still, the cracks that we are seeing today on diesel are double the value that we were seeing before the Ukrainian crisis. We are significantly above the $20 mark. This is an extremely constructive view. While the oil side, in my opinion, presents a very constructive scenario for Saras, the reasons to be worried are the power cost. Power cost is basically linked to the gas price. The surge in gas price created a surge in power price. Now, since we published these graphs, there's been a little bit of rebalancing, but still the power price in Italy is around EUR 350/ MW, after having reached more than EUR 500, which is seven times what, let's say the standard price, I mean, prior to the beginning of the surge in the spring of last year. For many years, the price hovered around the EUR 50 level. Similarly, the same thing has happened to CO2. The surge in the power price also reflects the fact that the surge in CO2 price, which has leveled off since the market is expecting that there might be some easing of the ETS regulations. Therefore, speculators who went long on ETS contracts offloaded their positions, creating this drop in price. Summarizing the outlook for Saras, we see that our strategic position and our flexibility continues to be a very strong asset. The location is crucial. We are in the center of the crossroads of oil demand, which is becoming even more essential if the flux from the important flux from the Black Sea is cut off or reduced or whatever might happen. I think it's reasonable to assume that even if a total cut-off does not happen, a reduction certainly will happen. Product demand is extremely healthy. We see this in our everyday activity in which the premiums for diesel and gasoline and other products is extremely strong and has risen significantly in the past weeks. We're talking about in the period of 2024 our OpEx and CapEx plans for the refinery, not for renewables, is aimed at improving efficiency and maintaining the assets we have. We have few improvement projects which are concentrated on energy efficiency while the oil sector is well covered because our plants are absolutely in line with what the market requires at the moment. In refinery improvement plans, we have launched this plan called ESTI, which means... which is an acronym for Energy Sustainability Transition Inclusion, and also in the Sardinian dialect, it also means we are here. It is concentrated as a little bit of a bottom-up plan in which from inside of the company, so something grown internally. We are concentrating on optimizing industrial operations, so using the assets to the best possible way, putting in place all those changes, organizational and others to face the future and the future projects that we need to cover. Two main items are digitization and automatization, which is absolutely necessary to be able to put in place the instrument to create a sustainable improvement plan, and obviously energy efficiency projects, which are ever the more on the top of the agenda. In terms of hardware upgrade, there are possible projects that we might decide to follow, which is an increase in the production of petrochemicals. We could have the possibility to revamp our reformer in order to increase benzene and xylene production, which have been in high demand from the market, and convert more refinery-grade propylene, which is discounted in the market to the much more valuable polymer grade propylene, which is used in petrochemicals to produce polypropylene and all the other base chemicals which are used in the industry. Other areas where we plan to make investments is in the storage capacity. Particularly in this crisis, we see how important it is to have adequate storage in order both to face disruptions in the market and also take advantage fully of any opportunities that there might be, giving full flexibility to the supply chain. In our journey to energy transition, we maintain our plan to have over 500 MW of renewable capacity installed by 2024. We are going to reach already 60-70 in 2022. Hopefully, there has been a lot of hype in the press from the government that wants to streamline the process of granting provisions. Hopefully, the authorization process, which is extremely long, will be shortened, hopefully. We might even be able to anticipate some of the pipeline of projects that we have, but this remains to be seen. We are waiting for the assignment of funds to go ahead with our green hydrogen production, which will use renewable electricity to produce hydrogen and oxygen, which will be used inside the plant. This is a modular project, so it is done as an experiment, and if positive, it can be scaled up. We continue our monitoring of the CCS developments in the market. These are still in the study phase, but we want to be able to move quickly if and when the technological advances and the regulatory framework will enable these projects. Instead, we are concentrating also on increasing the co-processing of vegetable oils in our existing units. We could scale up. This is strongly dependent on the availability of suitable feedstocks, of course. We keep on looking at waste to fuel, which is a small niche, but significant in terms also of the service that we can provide to the community in terms of taking care of issues regarding waste. Renewables, I think we are already more or less went through. We have 170 MW installed. Eighty are going to be installed this year, and hopefully 140 MW are going to be authorized this year. Therefore, this is the reason why we're confident in being able to reach 500 MW, which is sizable. Looking forward, we see basically a similar quantity for the period beyond 2025. One of the key points of our company is the very, very strong integration with the local community and the fact that we manage internally all operational and maintenance aspects. On clean hydrogen, I already mentioned, we are ideally suited because we are the largest user of hydrogen in Italy. The use of hydrogen is a very complex gas to use. Not only is it dangerous. It also needs special skills. We have the skills and the know-how to manage this gas. On CCS, we are currently in partnership with Air Liquide to explore a new avenue, which is extremely processing, which is the cryogenic treatment of CO2. That means liquefying it and then shipping it on vessels to areas which can absorb the CO2, like the North Sea, basically in existing wells. There's also a talk in Northern Adriatic area of using it as a CO2 hub. The investment on this type of unit is something that still needs to be defined. Biofuels, we are able with, let me say, investments which are not so significant, to reach almost 450,000 tons a year of vegetable oils, being used cooking oils or palm oil or palm oil mill effluent. The challenge here is being able to find a dependable, economical partner to develop this type of activity because the access to the feedstocks is absolutely crucial, at the same time being able to secure outlets for these products. For instance, the production of sustainable aviation fuel in a location like Saras would be ideal because we could be able to mix it with fossil jet, which is absolutely necessary. I think I'm done. We would be pleased, sorry if I went maybe a little bit long, to answer any questions you might have. Thank you. This is the Chorus Call conference operator. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star then one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Joshua Stone with Barclays. Please go ahead. Yeah, thanks, Dario. Thanks, Ilaria, for the presentation this afternoon. A couple questions, please. First, we'll just take Russia head on. Are you buying Russian crude today? If not, what's your policy for buying Russian crude? If restrictions permit, do you still take these barrels? And if not, do you take a view to sort of self-sanction yourselves and not take those barrels regardless of the economics on that? And then my second question on refining profitability. I appreciate it's been extremely volatile, but maybe just give us some insight as to how the refinery has been operating in the last several weeks. How do you know, what's the utilization rate been like? How's the profitability been versus the previous quarter? Just some sort of indication. Have you been able to capture this very high, you know, spike in diesel cracks that we've seen? Actually, just a final question as well, just on that, given the move up in prices we've seen. I know it's relaxed a little bit now. Did you see any sign of any demand destruction when prices were going up as they were? Thank you. Lot of questions, Josh. Well, first of all, we have never been buyers of Russian crude. We've said this many times, just because Russian crude was never a particularly competitive grade. We always had a very limited exposure to Russia. Of course, I cannot deny that the discounts that we see on Russian crude make a very compelling reason to maybe buy it. At least for the time being, we have decided together with our board to remain on the sidelines and see how the market develops in this respect. We are, by the way, fully covered in terms of crude requirements for the forthcoming months. It's not a question of immediate concern, but as a company, we have decided at least for the time being to take a pause and see how things develop and also the indications that we receive from the authorities, to which we will comply to, as a matter of fact, of course. In terms of refining possible profitability, yes, of course, we have taken advantage of the cracks on the runs in this first part of the year have not been huge because all our maintenance was concentrated between February and March. Almost all our plants are back on stream, of course. The diesel perspectives remain extremely favorable. We are seeing a huge demand on diesel with premiums that on the spot market have spiked incredibly. On your question regarding demand destruction, have we seen it yet? No, because I think it's a little bit too early. Is it possible? It could be. It could be that local demand in Europe might decline slightly because of the high price at the pump. This is possible. It is possible. Historically, it has not happened very much, at least in the last years, but it's something that needs to be monitored. On the market, we have not seen it yet. It could come. Generally, these effects take weeks to settle in in the same way as crude. If Russian crude will remain in the Black Sea, we'll start seeing the effects in the months to come, but it's not immediate, of course. On immediate, you have the opportunity. The crude that goes unsold or the crude that has not been lifted by the operator because they've decided to do so. All of a sudden you have an opportunity on the market. We believe that much stronger will be the impact in the medium to long term on Russian oil products, which are much more significant, at least for us in our part of the world. Russia has consistently reduced supplies of crude and diesel from the Black Sea, concentrating them more on the North Sea, where there's a stronger market. This effect, which is sucking in barrels into the north from the Mediterranean, is going to have a long-term positive effect on our business, I believe. Great. Thank you. The next question is from Nicolò Storer with Kepler. Please go ahead. Good afternoon, everybody. I have a few. The first one is on electricity prices. Is there any way you can benefit from these tariffs both on the power generation side, maybe pushing production a bit higher also considering the need that we have for finding electricity from different sources than gas. On the wind side. The second one is on what you see in terms of imports from overseas, the U.S., in terms of products, whether it is a condition of high electricity prices is kind of impairing your capability of being competitive on the market. The advantage of U.S. imports. The second and the third question, last one, is on the expected inventory effect that we can expect for 2022, assuming oil prices remain at this level, so a little bit above $100 per barrel, which is the inventory effect we should expect in terms of benefits to your net financial position. Thank you. Thank you, Niccolò. Well, on electricity, the way our system works is that we have an agreed system with the authority, which is based on a history of decades, in which the electricity that we produce is sold on the basis of a formula, which for more than 20 years has been in our favor, in the sense that our favor means that our cost of production has always been higher than the cost of production, which was calculated based on gas. Now, we had a reversal of this trend in the last quarter. For the first time ever, our cost of production is lower than the cost of producing through gas. Basically, with our mechanism, we will reimburse the authority in the next year. We are getting, because basically the system we have is actually a hedge. It gives a fixed return on the investment. Of course, in this moment, one might be tempted to try to change the mechanism. We have a long history, and we believe that, you know, since our plant is going to be absolutely necessary in the next decade, we are taking a long-term view. We believe that power prices will going to rebalance one way or the other. It's difficult to imagine, although the market and the world does extraordinary things, so never say never, that the process per se can be competitive. I think it is a lesson for the authorities and for the system to show that diversifying supplies and not looking at short-term effects is actually positive. Because at this moment, as a country, as a system, Italy is benefiting from this, and the Italian consumer is benefiting from this effect. We are giving back on some of the things that we have acquired in previous terms. Having said that, this mechanism has changed only, and it has become slightly negative for us, negative meaning that our cost is slightly more positive in the very last part of 2021. We are expecting a full rebalancing in 2022, prior to this crisis. Now, of course, if gas supplies from Russia are cut off and the price of gas goes through the roof, that changes everything, of course. On the inventory, I would let Franco Balsamo. I know you were talking about the U.S., but I'd like a clarification on that. Okay. As far as your question on the inventory, of course, when there is an upside in terms of Brent, a lot of variables need to be taken into consideration. First of all, the increase in Brent prices is negative for the profitability, because the cost of consumptions is about $20 million every $5 of sensitivity of Brent. On the other side, the increase of Brent is positive for the in terms of improvement in working capital. Because these events already happened, we will see the total effect at the end of the first quarter 2022. In this quarter, we had an increase in terms of Brent. We had the increase in term of electricity prices, and the negative effect on the EPMR represented by the consumption. The combination of those effect is very difficult to be calculated in advance. I do not expect significant increase in term of debt reduction. Okay, thank you. Maybe can we come back maybe on the, maybe if should we expect to see electricity sold at market prices, or you have also on that a capped price? Mm-hmm. Uh- In any case, this electricity, as you well know, is regulated by the essentiality contract. We sell electricity directly to the market, and we take benefit from diesel; now we have at the same time higher costs. In any case, there is a sort of settlement with Terna in case the selling price is higher than cost of production. The combination of those effects could be, as I said before, slightly positive, but I do not expect a big change in our net financial position in the first quarter of this year. Thank you. The next question is from Massimo Bonisoli with Equita. Please go ahead. Good afternoon. Thank you for the presentation. A few questions also from my side. One on crude differential. What you're seeing on the market right now, do you believe the shift away from Russian crude may lead to tighter differential for other crudes, especially for heavier crudes, maybe? Another question on the level of inventories. You were talking before about huge demand for diesel, and I'm curious to hear from you what's your level of inventories for middle distillates right now, if they are normal or maybe lower than average. The third question on CapEx, if you give us just an update on the renewal projects following the increase in equipment and material costs, if you expect to have some changes in the CapEx for renewable projects. Thank you. Well, on crude differentials, yes, I expect an effect. The fact that on sour crude you have Iran off, and Russia in a sort of a limbo, let's say, at least for the time being, of course, creates more demand for alternative grades like Iraqi and so forth, and I expect their premium to increase definitely. Although the effect up to now has not been, at least for now, dramatic, but it will take a little bit of time for various effects to settle in. In terms of CapEx, do we expect an increase on the prices? Well, yes. Well, at the moment we have the PV farm, which needs to be built during the year. Solar panels are increasing, although the amount of steel is not huge in a solar farm. If we have to build instead wind farms, yes, we would imagine just on the basis of the increase in cost of construction steel, the cost would be higher. I'm not sure whether there is an inflation in wind turbines. Actually, a little bit of the opposite has happened because, since the prices for wind farms have been capped in 2022, there's been a drop in demand for turbines. I expect this cap to be temporary. Honestly, I don't think it's going to be something that's going to last forever, but I don't know. On inventory, we try to maintain a balanced inventory based on the needs, the production needs and our customer needs. We don't play with the inventory. Whatever increases or decreases are generally due to operational reasons and financing reasons or others. Our inventory is fairly. I mean, we consider large movements of 200,000 tons, which seem large in absolute value, in reality are rather small, because all you need is a vessel of crude, which is 130,000 tons, which delays or anticipate your inventory changes by that same amount. In reality, the inventory levels. There have been no requests, by the way, by the authorities to change compulsory stocks or release compulsory stocks or other actions, at least for the time being. Very clear. Thank you. The next question is from James Winchester from Bank of America. Please go ahead. Brilliant. Thank you. Afternoon, everyone. So two from me, please. The first one is just to kind of get an idea directionally, how to kind of think about your industrial and refining EBITDA. 'Cause if we kind of take the futures curve for 2022, you know, you've kind of got distillate cracks around $25 a barrel, PUN price of EUR 250/MWh, and then carbon and Brent. You know, if you kind of annualize the full Q1, full Q2 2021 EBITDA, you get to around EUR 100 million of EBITDA for 2022. You know, if you would that be a fair kind of assumption, or are you thinking much higher, a little bit lower? Just to kind of get an idea directionally how you, how you're thinking about it. The second one, the EUR 150 million CapEx guide for 2024, could we consider that to be kind of maintenance CapEx or is there still a bit of growth in there with the wind farms and renewables? Thank you. Well, no, from that CapEx, it's the oil CapEx. 120 is the oil and 30 is renewables. On the EBITDA. On the EBITDA, your calculation of EUR 100 million is a good estimation, but coming back at the prices before crisis is a little conservative. Under this market volatility, it is extremely difficult to make any sort of forecast. We do expect, as Dario said before, that the margins on the refining product will stay higher than a budget for a longer time, while the volatility on the electricity prices could be lower. In this case, the combination of those two effect could generate additional EBITDA, in case it happens. Okay. Thank you. Could I just follow up on one topic that was talked about? The situation on the wind farm for 2022, will you still benefit from the increased power price? No, because under Italian regulations, the price is capped at the average of the prices of the year 2021. Unlikely there is a cap at the 62 EUR/MWh. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Kevin Vo with AlphaValue. Please go ahead. Yes. Hello. Hi. Yeah, just a clarification on the last question on CapEx in the long term. Do I understand correctly that in the long-term run rate for CapEx for the company, you're looking at EUR 150 million or EUR 180 million or something in between? Thank you. As I show in the slide, I don't find it. The slide 22. Yeah. Correct. Yeah. 22. Okay. This slide represent the segment Industrial and Marketing. EUR 120 million are the expected CapEx for the year 2020, and is increasing in the year 2023 because it's due to important turnaround that are scheduled for that period and is lowering in the year 2024. For the coming years it should be in the average of EUR 100 million until the essentiality contract is in place. That are the expected CapEx for the refinery, let me say. In order to take into consideration the CapEx for the renewables, just to have a proxy is about EUR 1 million for a new megawatt of new capacity. Solar could be lower, but we have also to see the impact of this situation in this kind of plant. Okay. Thank you. Once again, if you wish to ask a question, please press star and one. Okay. Okay. There are no more que- There are no more questions registered at this time. Okay. Let me thank you all. Thank you for being with us this afternoon. If there are any question, we are at your disposal to reply to any additional question you might have. Goodbye and have a good afternoon. Thank you. Goodbye. Bye. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.