Earnings Call: Q2 2019

Aug 29, 2019

Ladies and gentlemen, thank you briefing. Throughout the presentation all participants are in a listen only mode. First need 3 housekeeping reminders. Please mute your phone during the presentation and kindly avoid using wireless headset. Also note that the call duration will be for a maximum of 90 minutes ending at 4 pm. I would now like to hand the conference over to your speaker today. Can Savi Jamaluddin, present and group CEO. Thank you, sir. Please go ahead. Thank you. This is Joao. Thank you for joining us for the second quarter 2019 results. I'm with my colleague, Vivek is the group's CFO and some of the colleagues also from some of the operating companies. Thank you again for joining us. So, let's go straight to the point, straight to the slide 4. There are 7 key messages I would like to talk about in our before I pass to my CFO, Vivay. So the first one, you've heard during the last, last year where we had the, analyst Day. We talk about shifting where we have been growing significantly from a revenue and even a beta perspective, but is time for us to translate those gates into profitability and cash. Again, just to put to perspective, the all the opcos have done extremely well to grow revenue. If you look at, for the last 10 years, every single one of them get market share, some potentially when we were talking 10 years, 11 years ago, someone number 4, number 3, number 2, number 1. Now all of them number 1, number 2. So NDA prevented a lot over the last 2, 3 years, arguably slightly more than our competitors. So we've decided as of last year or 2, should get to this thing, not necessarily at expense of revenue growth, but rather they're not picking focusing on profitability in cash to reap the benefits of our investment. And that's the strategy. So, today, I'm glad to say that it is showing technical results. Second point is that, with regards to our full year, 2019 headline KPI, bit on the foot of results, We believe that we are likely to perform better than the airline KPIs for EBITDA and for ROIC. The third point is that the 5 or 6 of course continues to gain revenue market share. The fact that we are focusing on profit, it's good to know that we are still gaining market share. And most important of all, they delivered highest profit growth in their respective markets. The 4th key points, in particular, I'd say we did a very good job to deliver good profit growth and ROIC improvement. To some extent, it's because of our, in the case of Indonesia, because of our ex JLR investment, the European results and non CTV for Bangladesh. Exactly particularly also has outperformed the market for 8 quarters consecutively in almost all measurements. Robin, is not possible for the 1st, since 1st quarter this year. And especially, sorry, 1st quarter, 2nd quarter, And since we acquired a loss making company SL in Bangladesh, a 3 point, you will see that despite the, the soft use industry environment in Malaysia, our telecom delivered very good EBITDA free cash flow, but I mean growth of 4.7%, 5% and 11.7% respectively. 2nd last point, It's good to note that it also continued to grow double digit in terms of revenue and EBITDA. And thus, final lease, of course, we announced the Board has to prove that we will give a dividend of $0.05 per share. Those are the 7 key points I'll now pass to our Vivek to go through the other setups at the rest of the time. Very good afternoon, good morning, depending on where you're based. Let me start with slide number 6, which talks about reported results. Our year to date revenue grew by 4.2 percent, EBITDA grew by 24.8%. This EBIT obviously has the impact of the MFRS, which is the lease accounting change effective from 1st January to 2019. Profit at $913,000,000, lifted by 1 off gains coming from disposal, which was of MR and quarter 1. And divestment of non core business again in quarter 1. We also did sell our rights in idea, which gave us a profit of 96,000,000 and a gain of Forex, Forex gain of around $83,000,000. So profit of $913,000,000 for the first half of twenty nineteen and for quarter 2,204,000,000 profit mainly contributed by the operational performance as well as the benefit of the IDR rights sale. Slide number 7 quarter 2 underlying performance. This is on constant currency, excluding MFRS impact. So it's all pre MFRS. I must say we had a strong operational performance on year to date as well as on a quarter basis with an EBITDA growth of 10.4 percent uplifting 2.2 percentage points in EBITDA, largely coming from tangible results of cost initiatives, which we've taken as well as the organic growth in revenue. Our revenue grew by year to date 4%. But if I look at excluding devices, the growth was 6% year to date. Potami, however, was dragged by the fact that we no longer get the profits coming from M1 since we've disposed it off. And higher tax implication in Bangladesh, the tax changes where ROBE is required to now pay tax on revenue increased from 0.75% to 2% which had an impact not only for 2019, but also the day into 2018, which dragged the profits down. The good news is, most of the opcos actually had a strong revenue growth. Accepting Cellcom and Encel. Encelcom largely because of the industry, but also because of the and the domestic roaming revenue as well as the Hubbing revenue. And Nepal is essentially being on account of reduced ILD revenue as well as the taxes introduced last year on the telecom services. EBITDA, as I said, strong growth but the good part is we've seen double digit growth coming from XL, Robby, Smart and E. Go. Our efforts on cost excellence continues to yield results out of the $473,000,000 around $250,000,000 is on account of OpEx reduction and our plan of achieving 1,000,000,000 stays as is. Our profit, as I said earlier, despite a strong operational performance, profit got impacted because of M1 as well as the taxes in Bangladesh. If I go to the next slide, this provides a bridge, which basically says on a year to date basis, $500,000,000 improvement in EBITDA, but a lot of it got diluted because of $83,000,000 largely on account of interest rates increase in Indonesia. And this is not increased in interest rate. This is moving shifting from dollar loan, which we had around $300,000,000 last year. Into the local Soukup, which is at the local interest rates. So that's the impact which is there. However, given that we move to local currency, we do not get impacted by the forex fluctuation. Share of associates is mainly on account of Imran, which is around $60,000,000 and tax implication largely coming from Robi, but also from Excel where we have reversed some of deferred tax asset because for the past 2014, carry forward losses are not expected to be utilized. So that's I think the 479,000,000 of underlying per tonnage. So if I can go to the next slide, I think as Sanshi said earlier, our focus has been around cash flow margins. And how our CapEx is being managed, CapEx intensity at 23%. And a free cash flow margin, which is EBITDA minus CapEx has moved up from 10% to 19% and operating operating free cash flow margins has moved up from 2% to 9% which most of the opco is actually showing improvement except NCELL where we've been impacted because of the lower revenue and increased CapEx in 2019. If you recall, last year, we were subdued on our CapEx investments in Nepal, essentially because of the ZTE, which is our vendor there, had that freeze at that point in time, in 2018. So if I go to the next one, this basically is illustrative of what is being done on the cost side by the company. A broad message is the cost has been flat. This in spite of around 4% improvement in revenue growth as well as excluding devices, 6% growth in revenue. And most of the cost investments are coming from expansions largely in the network and exit. And also in Malaysia. And but savings coming out of the efforts being made in network IT sales and marketing and other expenses. If I go to the next slide, I think a strong balance sheet crossed it to EBITDA below one point or below 2x. This is on the pre MFRS, so it does not take note on the liabilities on lease payments. And we have, during the year, repaid around 420,000,000 of debt which does reduce cash balance to $5,400,000,000. So fairly strong balance sheet. I would say And we do we've had taken some decisions last year of moving most of our borrowings into fixed and also into local currencies given the volatility in both the forex side as was the interest rates. So that I think is the reflective of the share of the borrowings between local and foreign as well as our strategy of keeping around half of our forex borrowing at hedged, it's still holding firm. To try to go to the next one, I think this is our performance of all outputs, and just quickly then through each one of them. And I think details can be covered as part of Q And A. Cellcom, we've seen challenges in the industry as such you've seen the industry revenue coming down. Our revenue has been slightly below the growth in industry, but mainly coming out of the fact that we've got domestic roaming, which is the, the data for VB coming down because of the renegotiation we did last year. As well as the overall consumption and also the fact that there is interconnect revenues being reduced from the beginning of the year as well as our strategic decision on reducing the hubbing, which is not necessarily a margin accretive business. However, positive is news is 5% growth in free cash flow. 11.7% growth in Pottami, mainly coming from improvement in EBITDA year on year EBITDA improved by 13% quarter on quarter EBITDA improved by around 28%. If I go to the next one, which is Excel, again, another 1st quarter of excellent performance from Excel, The industry growth was around 7.8%, XL delivered 10.9% growth, mainly coming from the growth in data, which is improved by 129%. And, the continuing effort on network on the cost side has been yielding an improvement in EBITDA which is nearly 20% year on year, and also the fact that the business has been able to leverage the network expansion for on cost impact. Free cash flow up 60% with one point 1,000,000,000,000 and Pazami for positive profits during the year to date 2019. So excellent performance from Exane and for the last eight quarters, the business has been gaining market share, which has been a positive development. If I go to Ravi, quickly on this one, I think we grew better than the industry at 11.3% and a very strong cash flow. Improvement. And also from an EBITDA standpoint, which is not here in this slide, we had a 70% improvement in EBITDA on higher operating leverage and profit positive but this is on an underlying constant currency basis. So if you look at the actual, you will still see some negative because of the MFRS impact, but most of it is between Robee and E.co. So from a group standpoint, it gets eliminated there. If I go to Dialog, I think, again, continued strong performance. Quarter 2 was a little bit slow because of the events, the attack, Sunday, the attack in Sri Lanka, the quarter 2 has been relatively lower. However, overall against the industry dialogue continues to perform well. With a good 10.3% improvement in revenue, a strong free cash flow regeneration as well as profit improvement by around 20.5%. Our free cash flow, I think, is also partly because of the delayed investment in CapEx in Sri Lanka. The next one on N cell and Smart Quickly, N cell, down mainly because of IND where we've seen around 14% drop, which is in line with our expectations. However, we do not see core revenue growth coming in, in that market. And one of the reasons for that has been the increased impact of the telecom service charge introduced last year, which makes it less affordable for the masses in Nepal. However, the performance of Nepal Ensell continues to be good mainly because of the ability to retain our EBITDA margins above 60% despite ILD revenue, which is a very high margin business coming down. And that's what is reflected in their potami improvements. Smart has been continuing to perform well with 12% growth in revenue 15% growth in EBITDA and a 13% growth in Pattami and a significantly high cash flow generation. So overall, From off course standpoint, I think all of them have done well, challenges in few markets, for example, Malaysia and Nepal. Mainly because of the direct adoption. So if I go to the digital business, 3 verticals, which we have, boost has been doing well from the overall GTV as well as number of customers, which they've been adding and also the merchants which has been, which has been growing pretty well. We have around 4,400,000 users of boost the number of customers who registered the advertising business ADA. I think that's is doing well. We expect it to be profitable full year in 2019 and they've been winning a good number of important clients as part of the portfolio. APGate, I think we continue to have good traction on connected merchants and growth in GTV. I think we had challenged a little bit on the revenue generation, specifically coming out of the the direct connections at southbound, where, with the operators, where the company is focused on increasing that going forward. In our core, excellent performance on revenue, 21% growth in revenue, and 29% growth in EBITDA with a strong free cash flow margins. Potami, marginally lower, mainly coming because of a part dilution in Bangladesh also on account of some impairment which has been taken in Pakistan. Dividend, as Fentry said earlier, interim dividend of 510, which translates into around 85% of payout ratio. Which is in line with what we've declared in early years, but reflective of strong performance. The next slide is on our guidance, the KPIs. We based on the performance of first half as well as the momentum, continuing momentum. We do see revenue to be in line with what has been projected. However, revenue excluding devices could be higher because we've slowed down in some of the markets, device revenues EBITDA would be ahead, likely to be above ROIC given that first half was 6.6% we are likely to be about CapEx because of some rationalization, which we've been doing on CapEx spend across market. We expect that to be below the 6,800,000,000, which we had given guidance at the beginning of the year. The next slide on, on risks, I think we are pretty normal risk. We do see unfavorable regulatory environment in some of the markets, specifically in the areas of taxation. We also have the macro challenges in Sri Lanka post the event in April, Selkom. I think while it's been tracking well, but challenges of the industry as such. And the capital gains tax in Nepal, I think we have an order yesterday, which is still in a very short form. And I think we can really interpreced and we are trying to understand until the long order comes on what next steps can be taken. Opportunities. I think Indonesia Bangladesh continues to be doing better, boost. I mean, GTV is good. I hope we are looking at how to drive revenue and infrastructure, E.OT momentum, which continues and our ability to take out costs, which at this point in time is pretty much in line with the targets which we have set for 2019. So that's it from me. Thank you very much. I'll now open up for Q And A. Thank you. Questions. Your first question comes from prem Jarrah Sangham from Macquarie. Please go ahead. Hi. Thank you for the opportunity. Two questions from me, please. First of all, on Salcom, on paper, this looks like a pretty decent uptick in the EBITDA margins. Could I be rather facetious and ask what's driven down those direct expenses so much on a quarterly basis? And with regards to staff costs that seems to be creeping up or staying pretty lofty despite the VSS charges that we took last year, is there anything more that's happening in Cellcom that causing this number to remain elevated? And finally, again, with the bad debts at Cellcom, is there anything here that keeping it stubbornly high or should we expect in the not too distant future for these numbers to improve? And the second one was essentially a small one around boost. I understand that boost together with DASH in Singapore, part of this via initiative, how important is this to boost to really scale up and how soon should one be expecting more news on this one. Okay. I'm Jennifer here. I'll try to answer the first couple of questions. The first one is In terms of the direct cost, Q on Q, yes, we do have a one off cost benefit, which we have accumulated reversal the amount is good to maybe probably north of CHF15 1,000,000. But having said that, even if we were to normalize that amount, operationally, the number 2, the profits still look higher compared to Q1. Stuff costs, the amount that we're actually seeing now, because we have thing in Q1. There were certainly results that we have done in Q1. The number that's in Q2 is what the run rate for the staff cost going forward. Whilst we actually did take off some costs in terms of the VFS, the cost savings that's arising from the VFS we are seeing those results. But having said that, there was some replacement that we have to put in and hence that's why the cost we won't be seeing the entire cost savings from the VFS as we have said earlier. Then the third question is in terms of bad debt. Yes, we're starting to see some small decline in terms of the bad debt. Which was arising from some of the drives that they have actually done last year and we are hoping to see that the number continuously I wouldn't say that there's going to be a sharp decline, but we are hoping to see some smaller numbers in terms of bad debt as we come in the short the time frame. I hope that answers the question. So Thank you. And you said 13,000,000, right? Sorry, you mentioned for the first half is R28 million dollars. Yes. So, Sabrina, to your question, I think at this point in time, it's a good initiative, but we do not see benefit until we really aggressively start moving into the remittance, which is not something immediately in the in the horizon, but the company business has been working on that, but at the moment, his focus is more on the domestic side. But the biggest question is the boost, the much bigger, broader question is the, how we look at boost. The scaling up is very important to get the economies of scale and to get the I say the network effect of both because both by itself is not the end game, the services that both will be offering beyond payment are actually the end game. We're working on that. So these are the other micros micro lending micro settings micro insurance and micro remittance. 2000 is important. And last but not least, I think they were we've been saying that at the end of the day, we did consolidate shares even in this relationship market with regards to digital payment or important method, digital financial services. Thank you. Sorry, could I just add one more question? I suppose I'm not sure that you addressed it right at the beginning of the call, but would you be able to tell us where we are with regards to this merger and what you think the chance of completion is and when we can expect next steps on this one, please. Okay. Should I wait till the end? Because I do it a lot of question on that. No, the complex question will be answering this question. Thanks. Thank you. We will take our next question today from Piyush Choudhary from HSBC. Please go ahead. Yes, hi, good afternoon and congrats for a good set of results. Two questions for me. Can you share how the macro conditions panning out in Sri Lanka in third quarter? And are you seeing improvements now? Secondly, in NCELL, could you share again the outlook over there? After a tough second quarter. And lastly, you know, as payments of assets can share the update on the merger and the timelines to watch? Thank you. I asked Doctor. Ads to rush back to Sri Lanka to answer your question about Sri Lanka. So he'll be answering the first two questions. Yes, live from the ground. The 2nd quarter was somewhat subdued as Vivek explained. This was in the aftermath of the Easter bombings, what we saw was that the hospitality sector in particular but also the retail sector and the transportation sectors were impacted with the downstream compression of consumption. This was on top of the lagging effects of the removal of flow rate, which we discussed at the last call. What we are seeing in Q3 is a recovery on the tourism side. We are seeing many of the fundamentals coming back in place. So we should see recovery in the third quarter by and large. On the price price for if exposed, the removal of the prorate, much less the dialogue has, in fact, I think weathered it very well and impacts due to the price war conditions have been much less than expected previously, mainly due to dialogue's very strong data offering and able to keep the per customer revenues at or above the levels previously recorded. Incell, ILD performance has been better than the run rate we expected this year, which has moderated the reduction in revenue. However, on the domestic revenue side, the lagging impact of the TSC, the telecom service charged and reduced the reduction in accrued revenue to end sales due to a larger part of it going to the authorities is still in place. And that's where we see the net revenue reduction year on year. But again, on a quarter on quarter basis, we see improvement in this area as well. The parts you want to elaborate on the CMC? Yes. So the TSC was introduced later part of Q2 last year. And On for data services, it represented a 13% tax on customer spending. And on voice services, it was an increase from 11% to 13%. So the real impact has been on data growth where the consumer needs to pay approximately 13% more than previously for the same amount of consumption. So this has in a flat ARPU environment, it means that the accrued or net revenue through Ensemble is under pressure. Having said that, in sales packaging, innovation during the last quarter has helped to stem this tide and we should see a reversal going forward. Okay. On a merger, I'll wait till the end unless this is the end. Okay, okay. Sure. We'll take our next question. I just like to know what are your plans and objectives for the fiber plants that you have for pen and some leisure and the ones that you're planning to roll out and how does that move in tandem with the newly released NFT agenda that the government has. And, yeah, that's my first question. And the second one is regarding your decline in your prepaid customers. Could you give us a bit of visibility or not? When do you think this trajectory is going to change perhaps in 1 year 2 years' time and based upon your own internal targets. Okay. Jennifer? The for the NSCP agenda, I think it's still early days for us to actually make a good I mean, a significant comment on that because usually amount and the plant has only been released lately. But having said that, we have got some in terms of the NTP from our perspective, how we want to actually contribute in terms of hybridization to the, to digitized Malaysia. But that will be what we're actually doing is actually in line to what the CapEx investment that we already had in place in our business plan. Yes, good morning. The second sorry, my name is Danny. I on the decline in prepaid customers, I think it's fair to say that anybody's guess how fast it's going to go. Because we've seen in quarter 2 as well, lots of adjustment is made at the price point below 5th tiering it where competitors, unaware ourselves, we're not trading the below catering price price plan. We see on postpaid lots of adjustments to the existing commitment levels. So lots of more gigs for the same command levels. So the low end prepaid, low end postpaid is becoming the new prepaid, if you like. So lots of customers are clocking to these price points. And as far as we have concerned, we've seen slowly the number of churn declining across the 3 months in quarter 2. So we see some kind of stabilization as far as the customer drops concern. I think going forward, we we will still continue to see the decline. To what extent this decline continues and to what it will continue remains to be seen because it depends on the intensity that happens, the fight that happens at the low end postpaid. Okay. Just a follow-up on the fiber plans for Cellcom. How much CapEx are you planning to set aside next year? To move into this space? And which I would expect that you're aiming more towards the urban areas like climate lay or perhaps even the Penang and Joho areas. I'm just wondering, how widespread do you plan to move into this given the fact that you know, there are other players like Digi. You know, it's exploring this and are you also looking to to to rent space with TNB, you know, who is just just doing a trial runs now. I think how much effect are we going to set aside in terms of for fiberization, it's still early days for me to actually make the comments. We have got some number in mind but I think we will share at a later stage and we have got that more complete idea. The other thing is on the or whether we are going to trial this another, again, We had some discussion with T And D earlier, but I think you need to wash the space to see what happens thereafter. Yes. Maybe I can answer from a broader perspective, Alex, From a strategic perspective, we are going to participate and align with the aspirations of the government in regards to an NCP gen So that's the first point. Within that, of course, we have to be quite selective on where we roll out knowing that TM and time and some XMEX is also rolling out some of the holes. So, actually, it might be the other way around. We might not go in some of the agents where they are already there. Turn out to be mostly up a new year. We are rolling out our own in Saba where we have a strong fiber presence even before this. So we're going to take advantage of that. And in some of the areas, we will, work with the PM, actually, using taking a much issue of MSAP rather than rolling out an old. And last but not least, from a consumer perspective, it's not fiber nor they probably don't care whether fiber or wireless. So if you can achieve a good, consistent, quality and speed, in certain areas, we rather roll out fixed wireless access. More details will be given out as we digest further the SPS data. Okay. Thank you. And also on your E.co side down, could you give us a bit more on your timeline on your E.co listing given the fact that you now have a merger plan currently going on. Yes. So I guess, in the first place, of course, we were thinking not well necessarily planning to do it before, but with the merger, we probably have to put it in a back burner for a timing. Your next question comes from Fang Chen Shen from CIMB. Please ask your question. Hi, thanks for the call. 3 questions from me. Firstly, for Cellcom, In terms of the wholesale domestic roaming revenue coming from BB, as it improve on a Q on Q basis, into the second quarter. And I recall from the first quarter conference call that, it was mentioned that 4g traffic will only pick up from the end of June. So did we also see that, from end of June till, a quarter to date? And then my second question regarding the comments on CapEx possibly coming in below the guidance of RUB 6,800,000,000. Could you provide a bit more color to where or which markets we will possibly see this CapEx coming in below guidance? And then third question, a bit more of a bookkeeping question, the normalized Batami number for year to date, as per the the the waterfall chart. Under normalized pandemic, there's a figure of 4 5,000,000 negative under others and that's quite a fair bit of an increase versus the first quarter of 2019. I just wanted to know what is driving that negative and go upwards. And on the, as you start telling no merger, also appreciate you could provide us some additional color on the discussion with regulators around the region because there were some news in Indonesia pertaining to the saying that we may have to consider the merger a bit more closely given that it's pertaining to EU and Norway. Thank you. From Jennifer, yes, I'll send the first in terms of the wholesale revenue for Telkom, the revenue from BB has not improved as much as we would like it to be in effect time up, but it's still early days for us to actually see we'll take up in terms of the 4G traffic because in honestly because there are some leading developers to actually address as well. So hopefully In the next quarter, we should be able to see a bit more better traffic in terms of the 4G. Okay. On CapEx, I think in general across, but specifically Malaysia, Telecom would be lower than what we had estimated earlier. And we also expect some lower CapEx coming from Sri Lanka. So these are the 2 markets, but in general, across markets, we are looking at a much lower number than what we had estimated. And some of them are very specific decisions of going slow on CapEx investment Sorry, any color on the amount of CapEx, total CapEx that we could be looking at for the full year? I mean, I can't give you the exact number, but it would be anywhere between 300 to 600,000,000 dollars, $700,000,000 lower. Okay. On the normalized Pottami, I think the number which you said was others of $47,000,000, right? Is that what you asked for? Just negative 460,000,000. Which chart are you looking at? This is another slide 26 in the waterfall chart on normalized that the other figure of negative CHF465 million for the first half of twenty nineteen and that seems to be a fair bit more than the first quarter 'nineteen number of 279,000,000 litigated. So, and that's sort of sort of a drag on going more than what you have. Yeah. So I think the large one is on, I mean, we obviously have Some part of it is coming from the taxes, which pertains to the both have been reversals last year. Come to what is happening this year pertaining to the prior period. So that's the big one. Which is there. Then, of course, last year, we had, so that's one which is there. N1. M1 is the other one which is there for us in the waterfall. Then there is the ADS, which is, the digital, because we've, the others we've reported as part of the specific approvals And this is relating to the to ADS losses on ADS, which is there. And there is an others of around 1,000,000, which is on account of different taxes, which is there. We can provide you the details, later on. Yes. Okay. Shall I highlight this for my agenda? Question, sorry. Please go ahead. Thank you. Thank you. We'll go to our next question today from Catherine Chu from Wells Fargo Securities. Please go ahead with your questions. One is that, since you are processing well with the tenant and merger, I would like to know how about how you're going to deal with your USB bond? And second question is that following previous question, would you like to tender your current USB bonds outstanding or doing what things or push it down to your new merged company That's all. Thanks a lot. Well, at this point in time, we are still in the cautions on what should be the corporate structure, how the bonds would be dealt with going forward. But in general, the intention was to have our debt moved to the merge book, but how we're going to structure that and what kind of requirements would be to make that happen is we are still on the discussions. Thanks a lot. Okay. Shall I proceed with the question on budget since I was told there's no other question, moderator? Shall I proceed? Thank There are no further questions at this Yes, thank you. So, we've got the budget straight to the point. It's still ongoing. The charge off competition I would say is good. There are a lot of things of what needs to be done. So therefore, let me elaborate a bit. So when we announced sometime in early May, we talk about this process of negotiation leading to the definitive agreement would take 3 to 6 months time. At the same time now it's a port line. A lot of people must be a bit concerned whether this process will go on. The answer is yes, But to put the perspective, many of you, of course, were more than familiar, unlike all the deals that we have been to a life basically most of the deals is a one country, one big entity. We have 14 large entities and 9 countries to go on. So there's a lot of work to be done. Let me explain the 2 parts of it. 1, the working out all the terms, there are 3 category of terms. 1 is the commercial term. The other one is the terms relating to protecting national interests and a third one, protecting staff interests. And then second category of the process, they are due diligence, they are quite interested, but separate. Let me start with the easy one. That's usually just mostly mechanical. There's a lot of work to be done. There are more than 100 people involved consultants bankers, lawyers and people from the operating companies on both sides have been involved to go to diligence. So, if you ask me right now, if you still feel we're probably about 70% of the way on the due diligence, right? So a few more starts to be done. In terms of agreements, in terms of contract, in terms of all the other terms so that we can factor them in in the arrest and warranties. So we are 30% there. On the terms, we are very much, I would say we are probably overall 80% done working on all the service. Again, unlike a typical deal, which is primarily, it's not wholly commercial, There are other terms that are, but in this case, with regards to national land staff interest, given that we are GLC. So a lot of things we have to do to meet the requirements of international and staff interests. So, is there a scenario I'd say 80% mostly on the commercial we are very close, but there are other terms that we have to discuss. So, therefore, the answer why it's taking longer than normal, but like I said, it's still within the expectation expected completion date that we just talked about that we announced early during the we sign an MOU. So the next step will be to complete all the discussions on the terms But the one that will also, take a bit more time is the actual legal documentation. Again, that's less about agreeing on the terms per se. But more bringing on a word by word on the communication. So that's extremely tedious. So net net, we think we can complete within the 6 month period as we speak right now. But again, as we uncover more and more service to be discussed and legal documentation to be done, that might change, but so far, I think we are within that 6 months. We should be within that 6 months. Are there questions relating to the merger? Have I answered all the questions? We do have a question from Alex Go from AM Bank. Please go ahead. Yeah. Just, yeah, just to follow-up on the merger, are there any issues that you think it's going to be a potential, hindrance to for this deal to go through. I mean, anything that really sticks out, whether it's from a national interest site or perhaps even on the entity, the 2 separate entities as it is? Okay. I'm not sure So what hindrance is a good word, of course, to agree on some of the terms and the exact legal work to use, that could be, of course, has been in discussion for some time. Mostly related to the national interest, but you know, I can't tell you exactly why, but those are some of the discussion we are having right now. Okay. Thank you so much. Thank you. Sorry, there was a question that we shall forgot to answer with regards to the regulator from the region by phone of, from TINB. Generally, we are only doing that post signing as part of the CPO agreement and we'll do that post signing. But obviously, some countries, we have had some early discussion. Obviously, I can't talk about on their behalf. All I can say is we are progressing rather nicely in the countries that we are talking to already. In regards to Indunice share on au, yeah, I remember there was a lot of on a bond issue, I do not think they are connected. As far as I know, they are not. So with no questions at all. I just want to wish thank you to all of you. Thank you for joining us for the 2nd quarter results and for Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.