Morning, ladies and gentlemen. Welcome to MOL's Q1 2023 Results Conference Call. My name is Zoltán Pozsgai, the head of Investor Relations, and we have a strong lineup of management to discuss the recent developments. Dr. György Bacsa, Executive Vice President of Group Strategy, Operations, and Corporate Development. Mr. József Simola, Group Chief Financial Officer. Mr. Zsombor Marton, Executive Vice President of Upstream. Mr. Gabriel Szabó, Executive Vice President of Downstream. Mr. Péter Ratatics, Executive Vice President of Consumer Services. We continue to use Microsoft Teams as a platform to hold our conference call. The presentation can be downloaded from our website at molgroup.info, and we'll be sharing the slides in Teams too. After the presentation, we move to Q&A session, where you will have the chance to ask questions by using the Raise Your Hand Function of Teams.
Please keep yourself muted throughout the call except when asking a question. Before we start, I would like to draw your attention to the cautionary statement on slide number two. Now let me hand over to György Bacsa, who will take us through the highlights of the Q1 period.
Welcome, everyone. I think, after the first quarter, we can report that we have a strong year start. Definitely a strong one based on internal deliveries. We managed to overcome some of your guidances and some of our targets, especially in the oil and gas production. The E&P volumetric figures are significantly higher than targeted. It's a reserved replacement and Mr. Zsombor Marton will talk about it in detail, but I think there are a lot of internal strong performance that we can highlight. The other figures are mainly in line with the guidance, especially if I take into account that first quarter is usually weaker in terms of investments, in terms of spendings.
Definitely, I have to highlight that dividend payment and lot of expenses, tax payments in certain countries, solid payments will happen in the second or the third quarter. Not happen in the monthly in the first one. That's why there is a little bit disproportionate effect. That's why the net debt to EBITDA is historically low, as you can see. The CapEx spending is also low compared to the annual guidance. However, we think that in terms of performance, in terms of, we are still in line with our guidance. If you go to the next slide. Thank you. Here are the key figures, $740 million EBITDA.
I think it's absolutely in line with the expectations and definitely taking into account the government takes, which are still significant, $350 million impact on our performance. It's a good result for the first start here. I think Downstream diminishing Petchem contribution was offset by Refining and Marketing EBITDA, this $299 million. Consumer Services EBITDA rebounded. After last year performance, we are glad to present that Consumer Services fuel and non-fuel performance is back on track. Upstream EBITDA slightly decreased, $283 million quarter-on-quarter. It's mainly due to the diminishing gas price since the gas price drop is now on the market and of course, royalty scheme, which is lowering our EBITDA performance.
All in all, strong first quarter compared to last year pace, slightly lower performance, but mainly due to macro environment, not due to internal performance. The macro conditions are still very volatile. When we talked last time, we always emphasize that it's very hard to forecast the 2023 year or annual performance, how it will look like. It's not realistic that to assume that in 2023 we will replicate the 2022 performance, and I think it's obvious already. Based on the trend of last year performance, and that's something that I think the investor base expected from us as well, a long-awaited dividend decision was passed last month. We increased the base dividend and we and the general meeting approved an extraordinary dividend as well.
All in all, HUF 350 Hungarian forint per share dividend was approved by the general meeting. If you go to the next slide, HSE targets and EU Taxonomy alignment. This is the first quarter that we really report the EU Taxonomy, eligible and aligned CapEx. That's a long road. Of course, we are at the beginning of the road, but you can see that we are already at 15% eligible CapEx. Of course, when we complete most of our transformation, CapEx investments, of course, the eligible CapEx rate will also increase according to our plans. The TLIR is slightly above our tolerable limit.
Tolerable limit, however, we set at based on the benchmarks at an ambitious level. Unfortunately, with this high internal performance, it's difficult to match, to meet with this limit. We take it seriously. We take all the measures to hit the limits. Thank you very much. Now I give the floor to József Simola .
Thank you, Dr. Bacsa. Good morning, everybody. Let me start on page eight with the overview. As George mentioned, slightly lower year-on-year and Quarter-on-Quarter performance, I think even the external environment, it's overall solid results for the Group with very strong free cash flow generation. As usual, you will hear more details and background from the business leaders on the three major businesses. Let me cover some smaller items here. I mean, very strong gas transportation business contribution in Q1 on the back of stronger capacity booking and cross-border volumes. I think it's very clear that at this point of time, it's hard to extrapolate or forecast full year results.
It's very hard to see that we will have a normal autumn and business as usual or again, a very volatile kind of preparation for the winter period. CNO minus $55 million usual range, there's a minus $10 million very small inter segment. That's a net impact of various end of the quarter eliminations. We go on page nine, CapEx, I mean, a low number, even more than $100 million lower than last year. This, I think, in line with the usual seasonality and patterns that generally very low CapEx spending. There's no systematic or specific reason for this, so no CapEx controls or anything else.
We pretty much expect that the year-end spending will be in line with the below $1.7 billion guidance for the whole year. Let's go to page 10, the net income waterfall chart. No really special items here. Let's go through the details on page 11. CCS effect which just from the decreasing crude prices in Q1 would have been negative, but there were other items, CO2 quarter-related issues and other derivative transactions, overall resulting in a small positive number. DD&A fully within the normal range. Q4 was higher because of impairment booking. Q1 last year was actually lower because of the impairment reversals at that point of time. We had overall $48 million financial gain.
As in the previous quarter, the foreign strength and 7% against the dollar, 5% against the euro, and that drove the overall number. Plus $10 million income from associates, mostly coming from Pearl Petroleum. Income tax expense slightly lower than Q1, as a kind of a mix of various impacts up and down, essentially from various companies. I think at this point of time, taxation is clearly a key issue nowadays. At this point of time, it's very hard to forecast kind of overall year numbers, probably earliest in Q3 we will have some clarity on this. Let's go to next page 12, on the operating cash flow from a strong EBITDA generation.
Overall, a number close to $750 million, including $90 million dollar positive contribution from the working capital. This is clearly a price impact, reflecting the decreasing price levels. In terms of volumes, we still run kind of a full inventory operation to maximize security of supply. Overall, essentially, higher than half a billion dollar free cash flow, even after covering organic CapEx. Very strong contribution in terms of strengthening the balance sheet from the first quarter. That brings us to the last slide, page 13, where, I mean, you see this very strong cash flow generation in the further decreasing of the Net Debt/EBITDA and also the giving.
As George mentioned, the dividend payment and other things, we expect some larger outflows during the year. I think still the overall guidance of below one, which is Net Debt/EBITDA below one, which is still a solid number, we clearly expect to remain within that range. I assume there is one question on your list, the kind of timing of the dividend payment. As usual, the board of directors will kind of take care of this at normal course of business. Next meeting is next week, I think there could be a decision at that point of time. As soon as decision made, we will publish it, and I think generally, as usual, the date expected to be sometimes in the summer months.
With this, I'd like to hand over to Gabriel to cover the downstream results.
Thank you very much, József . Good morning, ladies and gentlemen. Let me report on the downstream result in the first Q 2023. During the reported period, downstream delivered a solid result of $300 million. It means, and it's clearly seen on the graph, that is 18% increased year-on-year. It also seen at the graph that the performance was driven mainly by refining and marketing, while Petchem did not deliver positive results due to the persisting sluggish business environment, as it was mentioned by Mr. György Bacsa and also by Mr. József Simola. I believe that it's fair to mention also that the first quarter result was impacted by a few factors which we did not forecast it.
First, this is the lower processing due to some unplanned events in our land local refineries, resulted in 7% lower processing compared to base. Due to the very good external environment, the impact of these unplanned events, mainly in Slovnaft, are very much recognizable in our results. The other I would mention, and this is similar what I mentioned during our last session when we discussed and commented the Q4 results for 2022, and this is the gas trading. I mentioned three months ago that we do not do in this business segment, the CCS adjustment. The falling market prices resulted in accounting loss of downstream as an inventory revelation. But I believe that this is rather technical item because in the long run it should be balanced.
There is also an important factor which should be mentioned here, and this is that the new sanction package came into first from 5th February this year, which is limiting the sales of products made from Russian crude. With reference to this, we are increasing the processing of alternative crudes, progressing with the two dozens of investment projects in the area and also continuously testing other alternatives. Now let me turn your attention to the macro. In case we can get to the next slide, please. Thank you very much. The refining macro environment was rather strong. However, we experienced a drop of fuel spreads in April. Similarly, the Brent spread remained about $30 during the reported period, but recently there is a drop there as well.
Regarding the regulatory environment, by that I mean the governmental anti-inflation, also the retail taxation, there is a change in Hungary. The price cap was canceled, but the 95% taxation from Brent-Ural spread was introduced. There is even a new change there that from 1st of April on, MOL is now able to retain $7.5 from Brent-Ural spread per barrel, and from the remaining part, we pay 95% to the government in Hungary. Petrochemical margins are still at the bottom of the cycle, which is coupled with the rather weaker demand and reflected in negative petrochemical performance, as mentioned before. Now let's get to my last slide. Thank you. So what are the drivers behind our year-on-year performance and the gap?
The $9 improvement in refining margin and Brent-Ural spread had a significant positive impact, partly depreciated by the lower processing, as mentioned before. On the other side also, the weak petrochemical margin and sluggish demand are behind the negative impact on Petchem. There is also within the category of other, there is the major out of it, major impact is the gas business, as I mentioned. Approaching the results from another end, so from another point of view, the windfall taxation in the form of this 95% Brent-Ural take remained a kind of major negative driver, significantly impacting the financial results. The stake is $190 million. With this, I would like to ask Peter to continue with the consumer services. Thank you very much.
Thank you, Gabriel, and good morning to everyone from my side as well. As Mr. Bacsa said at the very beginning, and I like this expression, that the consumer service is back on track. I really hope that this growth trajectory could be now again a longer kind of horizon for us. The first quarter in 2023, the EBITDA increased significantly by 97%. All in all, we reached the $127 million. On all major lines, actually, we were able to increase the performance, both on the volume and also on pure sales and margin generation side as well. The pure sales volume increased by 16%, compared to the last year same video.
In this first quarter, first time, the Lotos figures also incorporated. Still we are kind of fighting and struggling against the increasing cost base of the operation. The OPEX also increased by 27%, which gives us a lot of task to optimize further the cost base. The majority of the drivers came from the personnel-type, so the personnel-type expenses related cost increase, but also the utility price environment still much higher than we used to. Also in Hungary, the retail tax and the bank charges giving a bit of a headache for us. If you turn the page to the next one where I can a bit deeper explain the fuel market and the volume situation.
There you can see that, it's 16% from quarter-to-quarter, compared to the last year. Is a great result. Also on the fuel throughput per site, stabilized on a higher level than it was this period. If you take out the Lotos impact, then, we can say that roughly 2%, is the network increase from the volume sales point of view. Market by market, country by country, yeah, that is a bit different. In Slovenia or in Croatia, the fuel sales, up by a double digit growth. In Hungary, we experienced a bit of a drop, compared to the base period. Actually the drop is 13%.
However, I should remind you that last year, under the price cap environment, in the first quarter, we experienced a lot of disturbances on the market. Actually we recorded at that time the highest ever daily sales in our network since in the other competitors were out of fuels. I think in this case the base is not really relevant or reliable anymore. I will come back at the end, in my last slide, as fuel volumes. Before that, let's tackle the non-fuel margins, the non-fuel performance. Here I'm really satisfied with the performance of the fuel part of the business. Both the sales and the increase and the margin increased significantly.
I think in every retailer, the most important question whether the margin could grow faster than the sales. In our case, that's practically given. Actually the non-fuel margin on a constant currency was 43%, obviously. Even below the Lotos impact, both the sales and the margin, much above them are double digit. It's 19% from turnover point of view, which is, I think, very significant. As I, as I have already mentioned, I prepared one additional slide for this occasion, which is the total fuel volume kind of analytics. In this, we look back to the previous few years. I mean, we had a lot of different kind of new phenomenon on the market. In 2020, 2021, the COVID impacted significantly the numbers.
In 2022, the price caps and the price regulations all over the markets. If you compare everything to 2019, which were the last kind of so called normal year in our operation, then compared to that, you can see that 31% is the fuel volume sales increase in our network. Even if I would take out the Lotos impact on that one, then 15% is the sales impact. During this whole turbulent period, I think the most important number or KPI for me was the increase of the market share. That's what we successfully performed.
From transaction point of view, from customer number point of view, and also from total volume point of view, seemingly we are in a very strong market share position, and that would be a good start for this, for the upcoming season period for all of us. Probably a nice addition to this that next to Hungary, Slovenia and Croatia, in this quarter we launched the loyalty digital loyalty program in Slovakia and Czech Republic as well. The start was very strong in both of the countries.
Now we have more than two million downloaded application and also the active, quarterly active customer number reached the two million, even surpassed it, which means that we have a very, very strong, loyal customer base with whom we can communicate on a daily basis, and we can approach them with different offers. I think that could be the success of the, of the future growth in terms of transaction, customer interaction, and also, sales and margin. Thanks so much for your attention and I pass the word to Zsombor.
Good morning, everyone. I will walk you through the Upstream results about the first quarter, which shows three main characteristics.
Firstly, we had a very strong internal results on production delivery and cost discipline. Secondly, we had a normalizing decreasing commodity prices, especially on gas. Thirdly, we had a very high government take impacting our positive internal performance. If we go to the first quarter EBITDA, it stands at $283 million, which is down by 42% quarter-on-quarter, and largely driven by diminishing contributions from the Hungarian operations. You see the oil price falling to $81 per barrel. Moreover to that, the gas, the TTF month ahead also normalized further and averaged at about $97 per barrel equivalent, which brings us to the realized hydrocarbon prices, $78 per barrel altogether. That resulted this 42% lower EBITDA quarter-on-quarter.
Still, we see Croatian gas cap played a bigger role, also played a role in our results, decreasing. We still paid that at the EUR 41 per MW hour gas price in Croatia. The total impact of the regulation in Hungary and the windfall taxes is EUR 130 million in Q1. If we move to the next slide. Despite all these regulatory burdens, again, we had a very strong production performance, not only on the baseline production, but also on project contributions, combined with strict cost discipline brought us, although decreasing but stable, $25 unit free cash flow.
In absolute terms, that resulted in $205 million free cash generated by upstream in the first quarter. If we move towards to the next slide, I will elaborate a little bit on the very high government take and prices effects impact for upstream. Quarter-on-quarter, the EBITDA evolution, you see the largest negative is the price impact, which is quarter-on-quarter due to the $25 lower realized prices versus the Q4 last year. Royalties in Hungary even increased. You might thought that despite of the fact the TTS is less than half what it was in Q4 2022, we would pay proportionally a lower windfall tax due to that. However, in our case, this is different.
We still pay even more windfall tax in Hungary by $15 million quarter- on- quarter. You might recall it was $90 million in our Q4 results. Now out of the 130 government take, 105 is solely the windfall tax on gas in Hungary. Still, we see improvement because from 1st April, it was already mentioned on the other segments as well as in the beginning that the windfall regulation changes in Hungary, which results an ease for upstream on the gas windfall royalty by about $100 million USD. However, the revenue-based tax which was introduced is also hitting our division as well, also on the corporate level. If we move to the next slide, a little bit on the production itself.
Again, very strong volumes, 95.9 thousand barrels in Q1. That's around 5,000 more than what our guidance was. Largely three main contributors, Hungary and oil-driven on the ACG in Azerbaijan. That's a production sharing contract and price-driven, the PSC mechanism. The Pearl is the third one, which is the gas and increased gas and condensate production due to the higher local demand. All these are overall good news, but I have to also give you a little bit of a forecast because if there is no light without shadow.
Our shadow, for now in the production is the Shahin and Shahdin and the Turkey, the Iraq-Turkey pipeline, which is not in operation from the end of the month, which is very pity because Shahin actually mid of March, was performing on all-time highest daily production rate. However, from the 25th March, the lifting from the Turkish- Iraqi pipeline at Ceyhan stopped, which is going on for 50 days now. However, just yesterday, there was a good news published that in a couple of days, the production lifting might.
Resume because the debate between Iraq and Kurdistan is now seemingly resolved, and now Iraq's SOMO is turning to BOTAŞ to resume the production in a couple of days. We cannot say it's going to happen for sure, but we have we are very positive for that development, and we are one step ahead. If we move to the unit OPEX, that's also a big achievement. If you consider our external environment, we are still below $6 per barrel in the first quarter of 2023. Three major pressure points we have. One is the inflation, especially in the CE. Energy cost also jumps accordingly, which we need to also overcome. Thirdly, the weaker USD against regional currencies also hit our cost base.
We make significant efforts and continue to be very focused on costs and discipline the project and the production delivery. Thank you.
Right. Thanks very much, Zsombor. I think that completes the formal part of our presentation. We now open up for the Q&A session. A reminder, if you wish to ask a question, please use the Raise Hand function of Teams. We already have the first question coming in from Anna Kishmariya from UBS. Anna, please go ahead.
Hi. Thank you very much for the presentation. I have two quick questions. First would be on the downstream and the throughput rates. Do you expect to see improvement in second quarter? Second question would be regarding the recent news on the pipe, new oil pipeline construction between Hungary and Serbia. Do you have an estimate for potential cost, and what portion would be allocated for MOL? Thank you.
Thank you very much. Anna, thank you very much for question. Well, the throughput should be in line with the base last year. However, in from yesterday, I received the information that there is the plant shutdown if one of our units, cracking units at Slovnaft, which will have definitely a negative impact to crude processing. Now it seems that the repair works, maintenance works are under control, and it will take max two weeks to get back. With those events, unfortunately, we cannot plan in advance. I hope or I believe that the processing will be in line with the base last year.
Thank you.
Let me try to answer the interconnector, the Hungary and Serbian pipeline interconnection question. It's, we have estimations on different versions of the pipeline. There is, of course, it's a matter of the capacity that finally we have to build in and of course it's matter of financing. I think let's, 'cause we are in the middle of the intergovernmental discussion, I cannot really say that to what extent it will be borne by MOL Group and how it will be returned in terms of capacity booking and how much it will be paid by the governments or the states who are strongly supporting the interconnector. It's to a certain extent, it's an existing network expansion.
I think it's not a new pipeline. As you could, you could see the... They are also saying that this is a interconnection between Novi Sad and Oradea because till Oradea, there is an existing one. From Novi Sad to Oradea, it's a section to be built that will connect two existing pipeline networks to each other. It's a I would say it's very, very easy to calculate. It's a very, it's a limited section and the implementation time is also reasonable since most of the capacity expansions will happen on an existing route. I don't want to go into details since we are also in discussion with the state how they plan to make it economic.
Definitely, investment decision on all sides will be based on financial returns.
Yeah. If I may, [Julie], just to add few technicalities. Currently the technical teams both from Hungary and from Serbia are working very closely to each other. We are trying to setting the scope, which is very much dependent on the throughput of the pipe. There are several options there. There are also some challenges ahead of us. Once we agree and we will see what is the scope and what is the technical solution, we will know the other aspects of this investment in terms of the investment itself and the time spent needed.
Yeah. To not to, how to say, go away without figures, I would say that it's a couple of hundred million euros and not billions what we are talking about.
In more, and now I calculating both sections, both the Hungary and the Serbian section. It's EUR 200 million that we talk about.
Thank you very much.
Next question comes from Tamas Pletser, Erste Group. Tamas, The floor is yours.
Yes, thank you very much. Thanks for the opportunity to ask questions. Just a follow-up on this Serbian pipeline. If you get the chance to build it, how long will it take to finish this 130-kilometer section? Also a follow-up over here. As far as I know, you own the pipeline, the Druzhba pipeline, the Hungarian section of it. Does this mean for you that you can get some extra revenue from the transfer of crude oil to the Serbian counterparty or the issue is some way different? That would be my first question. My second question regarding this Lotos acquisition, do I understand correctly that this acquisition improved your fuel and non-fuel margins? Was this network more efficient one than the existing MOL network?
How do you proceed with this acquisition? I mean, did you change already the colors or the outlook of this network, or is this still going on in Poland? Thank you.
Thank you, Tamas. Regarding the interconnector, as I mentioned that the technical team is specifying the scope of these investments, and based on this, we will see the CapEx figures. As Mr. Bacsa mentioned, it will be EUR hundred of millions. Once we see the figure, we can calculate the commercial terms of this. Now I would not go to any judgments and any forecast of this commercial terms. It really depends on the CapEx need. In terms of the time span, well, it can. It's also very much influenced by the technical scope and the permissioning. In this case, I would give you my professional view on this, that it can last from 3 years- 4 years, I think.
It very much dependent on the technical scope and the final solution. We agree with the Serbian partner. Thank you.
Yeah, regarding the Lotos questions, let me answer that. From volume point of view, fuel sales volume point of view, obviously this is an addition. Roughly we have 420 service station there. All this input through those network practically an addition. How about with the fuel unit margins? It's a bit mixed because 2/3 of the network is a corridor, practically our own assets, our own operation. By 1/3 of the assets through franchise operation and through the franchise operation, the unit margin contribution to our results is significantly lower. On an average, the Polish operation unit margin is under the average of the more adverse operation unit margin environment. From non-fuel point of view, the situation quite similar.
From sales point of view, this is an addition, also from non-fuel margin generation point of view, it's a positive, obviously a good contribution. However, if I would compare it with the other parts of the MOL Group where the Fresh Corner operation is more, more penetrated, we see the upside potential in Poland. Practically that was one of the reason why we bought it, because we believe that we could manage it better. That would probably result two things. The first is that we will manage further the OpEx environment in Lotos. The average number of service station workers are higher than in other parts of MOL Group. We see rationalization opportunity there.
From the top-line point of view, you know, the non-fuel sales per service station and also the margin, average margin generation capability of the stations is still below the MOL Group average. We believe that we will be able in the upcoming one or two years to catch up and to increase it to the level of the other company's operation. From branding and brand penetration point of view, we started the rebranding. Now actually on a weekly basis, we reconstructed or we rebranding 10 stations. That will happen through the whole year and also the first half of the next year. Those are just the change of the color of the network.
Parallel with that, we also started to plan and execute the Fresh Cornerization of data performance stations there. That, again, 2 years- 3 years up until we will go through on the entire network. Thank you.
Yeah. Good. Thanks very much. That was really fair enough. Thank you.
Thanks, Tamas. We have a question coming in from Piotr Dzieciolowski, Citibank. Piotr, go ahead.
Hi, yes. Good morning, everybody. First question would be on the different windfall taxes that you pay. Do you have an estimate for the total figure for the year? What happened with a lot of these measures as the macro is normalizing, you know, the gas prices keep going down? Who knows what happens with raw brand differential, but would you think about these measures as more variable or more they'll fix that will be replaced with some other metrics as long as your profitability stays high? What you're thinking, what is the estimate for this year and what you're thinking into the next year about all these measures?
Well, I mean, as you mentioned, the overall Q1 impact was around $350 million. This includes actually price regulation and taxation because they are technically different, but essentially having the same impact, all visible in the EBITDA. As I mentioned, in terms of whole year guidance, I think it's it depends on various factors. Probably, I mean, any starting point for this guidance will be probably 4x Q1, and that probably gives a sense of possible magnitude. Clearly, as you mentioned, I mean, that's very much depending on external environment and various macro factors and also very much depending kind of on the changing regulation. I think that's for this year.
I mean, as for next year, we see also what we see in terms of the regulations either for this year as certain solidarity taxes are not more applicable. I think it's pretty much impossible to give any guidance or any strong view on what's going to happen in 2024 in terms of special taxation.
Okay. Have you started discussion with some of the respective governments as to, you know, lowering some of these burdens, in exchange for certain CapEx activities? Can we see some of the, this push and pull situation where you can actually not pay these taxes but then spend it on investments? We see it in the utility space quite a lot.
Yeah. Clearly, I mean, I think in all these countries where this is relevant, we are in discussion. This is not, it's important to emphasize this is a discussion and not a negotiation. We are kind of subject to the law. Also on the other side, we always do a full legal review, especially in terms of price regulation, that whether we think, this is actually in line with, especially with European regulation. Of course, and this is a very important topic. We keep on and up the discussion. There is also a high level of legal scrutiny on our side on these issues. In terms of, I think, any what's next in the pipeline, clearly we will only communicate anything if we have decisions ready to place.
Okay. I have 1 follow-up question. You know, you have a guidance for CapEx for this year, but in the past we discussed that you will, you know, try to announce transformational projects every couple of years. You know, Polyol is about to start. When could we expect some more, a deeper strategic review from your side, including the CapEx project?
Yeah. If I may, from the downstream part, I believe that in the second part of this year or the end of the year, we will come with the results of the revision of the strategy as the circumstances, external circumstances change significantly. We are also revisiting the premises used for our strategic planning. After we did do this job, we come with the results of this revision.
Okay. Understand. Thank you very much.
There's a question from Tomasz Krukowski, Santander.
Hello, everyone. Tomasz Krukowski, Santander. Just one follow-up on the taxes. When it comes to the changes which are introduced in Hungary since April, that is going to affect the way you book taxes or recognize the taxes in your P&L. It's still going to be everything above EBITDA line or some parts will just go to the tax below pre-tax level?
Yeah. I mean, there is a kind of a rearrangement of taxes in Hungary. You're right, kind of one element will come from 1st April. We will start booking this in Q2. That will be at the way we see at this point of time the accounting treatment of this, that will be booked into the EBITDA, essentially upstream and downstream. Overall in terms of, I think this rearrangement of the mix probably will have, compared to the previous kind of set of taxation rules, probably will have no major or causes no major change in the overall impact. This will be booked from Q2 into the EBITDA.
The magnitude is of this element is around, $300 million.
Thank you.
Thank you indeed. I believe we don't have further questions coming in. Thanks very much for joining us today. If any follow-ups, the IR team remains at your disposal. Thanks again. Goodbye.
Thank you. Bye-bye.