Earnings Call: Q3 2024

Nov 28, 2024

Okay. Good afternoon, ladies and gentlemen. My name is Clare Chin, Head of Investor Relations at Axiata Group Berhad. Thank you for standing by, and welcome to Axiata's third quarter results briefing. Today, we have present with us Vivek Sood, Group CEO, as well as Nik Rizal Kamil, Group CFO, as well as representatives from our operating companies. There will be a short presentation followed by a Q&A session. Without further ado, I would like to hand over the conference to Vivek. Thank you, Clare. A very good afternoon to all of you. Welcome to the quarter three 2024 earnings call. Quarter three has been a busy quarter for the group. I think we saw some activities in Bangladesh, for example, with the social unrest as well as the internet shutdown. We've seen some softness in the markets, specifically Indonesia. In general, from an overall performance standpoint, we are quite positive with the outcome, and that's coming essentially on the back of strong OpEx, CapEx discipline across the group and also ability to manage the balance sheet. Our leverage for the quarter is down to 2.59 net debt to EBITDA, from 3.36, which was at the beginning of the year. That's coming both from the pay down some of the debt at the group level as well as improved EBITDA performance for the year so far. As you recall, in last year's investor conference, we did talk about our 5x5 strategy, that was really focused on the 5 portfolio vectors as well as the 5 key strategic priorities. Some of them are falling in place. Our merger, which was announced in June, between Dialog and Airtel, I think is being executed by the Sri Lankan team in a very positive manner. I think we are getting the integration ahead of what was originally planned. The delayering exercise, which was essentially creating Link Net as a FiberCo and moving the customers into XL to provide Fixed Mobile Convergence offer, is being done. Now LinkNet is pretty much second-largest platform for fiber wholesale provision. XL continues to provide the Fixed Mobile Convergence offer. We are also progressing well on the Indonesian mobile consolidation. Nothing is certain. We are in the midst of negotiations as we're preparing the definitive agreements. Nothing's certain. In due course of time when we complete, we would be announcing the outcome. As I said, the OpEx and CapEx discipline is actually driving strong EBIT growth for us. Q3 year-to-date, we've seen a 37.7% improvement on earnings before interest and tax. As you recall, EBIT has been one of the KPIs we've been tracking for the year. If I go to the next slide, just quick, you know, summary of performance. One second. Yeah, I think. On the overall summary, and then I'll cover a little bit around all the OpCos before I hand over to Nik to go into detail. Year-to-date, PATAMI grew by MYR 1.1 billion, coming out of strong operational performance, as well as the gains coming from Forex. As you know, at the end of September, ringgit was quite strong, and that helped in terms of the Forex gains coming for us. We also had, the buyback of bonds, under the EMTN 30-year bond, carried out, which did give us ability to pay down some debt as well as some gain coming out of the opportunity which we could monetize. Of course, shares of the results from associates, also gave us the advantage. On underlying basis, I think, the profits have been fairly strong, at MYR 551 million, which is around 3.6x of what it was same period last year, coming out of course, growth. As I said earlier, out of coming from the well management of OpEx and CapEx during the year, and that basically translates into strong profit numbers of MYR 551 million on a normalized basis, and that excludes the impact of Forex as well as the EMTN bonds redemption, treated. EBITDA as well as CapEx control did give us a very strong cash flows of nearly MYR 2 billion. This is adjusted of operating free cash flow, which is basically after leases, ROU on leases. The impact excludes the dividend which we received from of MYR 408 million from CelcomDigi during the 3 quarters. Very strong cash flows, very strong profit performance, and that all resulting in a strong balance sheet at 2.59x net debt to EBITDA, which is fairly comfortable. Overall liquidity has been very strong, not only at the group level, but also at the OpCo level. As we guided earlier in the year, and we did talk about that in the previous quarter, we maintained the position of revenue in line with the KPIs, EBIT growth ahead of KPIs. Having said that, I think the headwinds on some of the markets specifically driven from macro environment, Sri Lanka and Bangladesh, still remains. We are conscious of those facts. CapEx, we guided earlier MYR 6.1 billion. I think we would be below that guidance for the full year. Sorry. Yeah. Let's go through individual OpCo. I think CDB, you would have seen the results of CelcomDigi. I think dividend has been in line with our expectations. Synergies are pretty much on target and coming out of savings as well as increased productivity. Having said that, the market competition remains quite intense in Malaysia. XL, last quarter was softer coming out of heightened competition in the market. We've also seen ARPU improvement there, but last quarter was a little bit of a dip in the ARPUs coming out of the increased competition. Having said that, I think the company continues to focus on driving cost saving, which is delivering EBITDA double-digit growth and EBIT double-digit growth, and PATAMI at MYR 1.3 billion, which is around 30% higher than what was it same period last year. Robi, I think, the effect of social unrest, internet shutdown and floods did have a negative influence on the revenue for the quarter. However, on a year-to-date basis, they're still positive. Their efforts around the optimization of CapEx, adjusting to the reality in the market as well as managing their OpEx, continues to deliver a very strong profit development in three quarters of around MYR 4 billion, which is substantially higher than what was the profit delivered by Robi in the same period last year. Dialog, as I said earlier, I think progressing well on the integration of the data. The revenue's been down basically, coming from the decision to defocus on low-margin hubbing business. A quarter-on-quarter growth in revenue, which is, I think, positive development. EBITDA remains stable. Company continues to focus on cost rescaling, but EBIT impacted by higher D&A, partly because of the integration of the two companies, as well as the impact coming from relatively lower Forex gain relative compared to last year, and recognition of deferred tax liability. Also, the fact that some of the to keep the balance sheet and control some of the debt, which was a USD debt, has been moved to local debt, which is at a much higher cost of borrowing. Smart continues to be a star performer with very strong delivery of profit and cash flows. This is coming on the back of strong ARPU development in the market. Also the fact that the cost controls continue to be playing an important role in profit growth of nearly 30%. Link Net, I think is still settling down with the reorganization of the end focus of Link Net as a FiberCo. As I said earlier, the customers have all been transferred to the XL. Which means Link Net is essentially a FiberCo, some enterprise business and some media business, which is there. It continues to build home passes for XL and also looking at other opportunities outside with other ISPs. The impact also on profit with one-off taxes coming because of the gains. While the gains are not reflected in PNL, but the gain has an impact on the tax liability, which was accounted for in quarter three. edotco, I think, continues to focus on co-locations. Colos, which have been building very well for the company, resulting in strong revenue growth, coming from the key markets, Malaysia, Bangladesh and Cambodia. Cost management continues to keep the EBITDA margins, EBIT growth strong and profit lift uplift also partly coming out of Forex gain, offset to some extent by higher net financing cost and taxation. As the interest rate starts coming down, you will see the positive effect of the overall operational development. Boost launch of the bank in June. Seeing a good development on the bank front, with a strong customer uptake as well as the loan, the deposit book, which is being built. Growth on revenue is being strong. Costs are getting the upfront early cost of Boost Bank is what has been impacting the overall numbers. Despite that, the bank, the Boost continues to reduce their losses, excluding the startup cost of, for Boost Bank. ADA extremely strong performance with the two verticals, which is customer engagement as well as the e-commerce enablement, are the two strong verticals delivering growth coming at around 18.8% year-to-date revenue growth as well as strong recovery with profits greater than 100% at around MYR 36 million for year-to-date. Overall, in summary, I think up and down, but broadly speaking, while softer on the revenue front, relative to the previous quarters, I think management of OpEx, CapEx, as well as capital balance sheet has shown a very strong performance coming in the quarter and year-to-date for us. With that, I'll just hand over to Nik to take you through more details around the financial numbers here. Thank you. Okay. Thank you, Vivek. Assalamualaikum and good afternoon, everyone. I will go through the next few slides on the results. Firstly, on this slide is our reported results for the nine months of 2024. On a reported basis on the top left, our revenue was up 3.3% on a year-to-date basis due to strong contribution from all OpCos, with the exception of Link Net, Dialog, and Robi. Although Robi was mainly due to Forex translation on a local currency basis, they actually grew on a year-to-date basis. On a quarter-on-quarter basis, our revenue declined by 7.5% though, which is mainly due to the lower revenue in XL on the back of softer quarter-on-quarter momentum in Indonesia. Also, at Robi, due to the social unrest leading to the internet shutdown in the month of July, and also the several incidences of major flooding that happened during the quarter. On EBITDA and EBIT, we continue to see double-digit growth, largely contributed by strong performance from all OpCos, with the exception of LinkNet. EBITDA grew on a year-to-date basis by 14.6% on the back of higher revenue and lower costs, whilst EBIT grew growth of 37.7% was despite higher depreciation arising from LinkNet's transition to FiberCo and also the Dialog and Airtel merger. On a quarter-on-quarter basis, EBITDA was lower by 6.7%. EBIT was lower by 13.8% due to the impact of lower revenues quarter-on-quarter, despite lower costs and also depreciation figures. On the PATAMI, reported PATAMI level, showed significant improvements to MYR 1.1 billion for year-to-date 2024. This was largely driven by higher revenue, higher share of results from associates, higher financing cover or gain from the early partial redemption of the EMTN papers, amounting to approximately MYR 306 million. Also on a year-to-date 2024 basis, we had Forex gains compared to Forex losses for the same corresponding period last year. Year-to-date 2024, we recorded a gain of MYR 432 million, compared to a loss for year-to-date 2023 of MYR 261 million. On the next slide, which is on underlying performance. On a constant currency basis, year-to-date revenue grew by 3.4%, supported by growth from all OpCos, except for Link Net and Dialog. The key drivers there, in XL, grew by 6.3%, driven by increased data and digital services on the back of increased ARPU. edotco grew 8.7%, primarily from Malaysia and Bangladesh. On a quarter-on-quarter basis, though, revenue on a constant currency declined 3.4%, mainly due to XL, due to the softer industry momentum quarter-on-quarter, and also in Robi, due to the country-wide internet shutdown and floods. Year-to-date EBIT reported a strong growth of 38.9% to MYR 2.6 billion on an underlying basis, mainly driven by XL, which grew by 22.1% from revenue growth and from higher ARPU and stable costs. Robi grew 35.7% from higher revenue and reduction in operating costs. On a quarter-on-quarter basis, though, EBIT was down 8.2%, mainly in XL, and also in Smart, mainly due to revenue and higher operating costs, respectively. On a year-to-date PATAMI grew by more than 100% to MYR 551 million due to edotco from revenue growth and also Smart Axiata from EBIT flow-through, offset by higher depreciation and amortization and taxation. On a quarter-on-quarter basis, PATAMI grew by 18.4% to MYR 205 million mainly from Dialog from flow-through of revenue, which includes Airtel from Q3 2024 and lower net finance costs, and also edotco, which was lifted by lower depreciation charges. On the next slide, adjusted OFCF. Adjusted OFCF increased by more than 100% to MYR 1.94 billion, due mainly to the EBITDA increase of 14.6% or MYR 1.04 billion. There was also CapEx optimization at OpCos, especially at XL, Robi and edotco. There was also lower interest costs of MYR 220 million, mainly largely due to the one-time benefit from partial early redemption of the EMTN. This was offset by higher taxation though, due to the higher profits in XL and Robi, and also the one-off impact from the delayering exercise at Link Net in quarter three. On an OpCo basis, as you guys can see, all OpCos other than Link Net made positive contributions to the AOASAF year-to-date movement. In the next slide, on the balance sheet, we continue to work on reducing our net debt to EBITDA level, where we ended quarter three 2024 at 2.59 times, compared to 3.36 times at the end of quarter four 2023. This was on the back of a reduction in borrowings and leases, as well as EBITDA growth of 14.6%. The total borrowings as at quarter three 2024 stood at MYR 22.2 billion, which is a MYR 2.6 billion reduction from end 2023 figure. The reduction was on the back of the partial early redemption of EMTN at whole group level, as well as benefits of a stronger ringgit Malaysia at the end of quarter three, which helped with the translation of the USD loan balances at the end of the quarter. Whole co cash, however, has gone down from MYR 1.3 billion at the end of last quarter, Q2 2024, to MYR 434 million as at the end of Q3, where the main use of the funds was to partially redeem the EMTN during the quarter, and also further early repayment of the MCTL loan facility of approximately $50 million. On the next slide, still on balance sheet, we continue to reduce our exposure to interest rate volatility and have increased our fixed rate borrowings to from 56% in Q2, to now 69% as at end of Q3. This is mainly at Axiata due to the early partial redemption of the EMTN, but also at Dialog. There's also further positive impact from the strengthening of ringgit to the US dollar recently, where, whilst this has happened towards the end, or throughout quarter three. The group continually looks at how we can reduce our forex volatility exposure on a net debt, and as at end quarter three 2024, we have increased our hedged debt position to 44% as at end of quarter three, in comparison to 35% at the end of the previous quarter two. On our group debt, it has an average tenure of 6.4 years, whereby short-term debt maturity over the next two years is 19%, and for whole co, it's 12%. With that, I've come to the end of my segment, and I'll pass it over back to Vivek. Thank you, Nick. Just a quick update on the headline KPI, I think which I covered earlier. These were our KPI. We think we will be in line with what we said for revenue. We will exceed on EBIT and CapEx would be below what we had indicated at the beginning of the year, which was MYR 6.1 billion. What are the key corporate actions which we are undergoing? We've talked about the merger in Indonesia. I think, as you can see, in May, we did sign the non-binding memorandum of understanding to explore. At final due diligence process as well as negotiation of a definitive agreement are underway. As I said earlier, there's nothing certain there, but progressing in the right direction. Delayering of Indonesia, we did that, as I said earlier, that customers were transferred at post-approval of the regulator end of September. These customers are now being provided a converged offer in except. Link Net is now focusing on being a FiberCo. Consolidation in Sri Lanka underway. Our implementation of the integration is ahead of what was originally scheduled, and that should result in us getting the synergies ahead of what was originally communicated. edotco exit from Myanmar is still pending regulatory approval. We understand it's now at the final stages. Given the uncertainties, we can't talk about how long will it take to get this regulatory approval. Risks. I think Bangladesh is still trying to settle down from the new regime coming in place. I think the initial discussions have been positive. I think the new government is looking at significant reforms which should have positive long-term impact. Given the macro situation, we are seeing some pressures on affordability and buying power of the people in that country. Fiber in Indonesia, while LinkNet looks like a good opportunity but would require funding, I think that's something which we would not be pulling that. I think we would probably look at external funding to support that. Volatility, competitive landscape in Indonesia and Malaysia, I think they remain quite intense. After, at least in Indonesia, we saw a very strong path to ARPU enhancement over the last five, six quarters. Last quarters was a little bit dampening, and I think that continues. Having said that, I think there is realization of, you know, improving the pricing in Indonesia. Malaysia is a little bit still far from that. I think opportunities, USD lower interest rates should, as I said earlier, help us, while with the dollar debt, which $2 billion that we have at the holding company level. I think the opportunities, portfolio optimization as well as asset monetization should help build us, build capability. The synergies impact from Dialog Airtel as well, CDB has still to be fully captured into the earnings of the respective companies. That should give us an upside as and when we start getting those into our PNL. Just kind of information that you would have heard. We've postponed our Investor Day from December 3rd to January 13. I think we realize that doing it at the end of the year is not that constructive because we are internally with our board and with our main major stakeholders, we are still in the process of finalizing our real strategies and the plans for the next year. It may be still somewhat early for us to bring it to the analysts and the investors. We've moved it to January 13. Apologies for this inconvenience, we thought it's more appropriate for us to do that so that it is somewhat also aligned to what we said, set our KPIs for the years ahead. With that, I'll hand over back to Clare. Okay. Thank you, Vivek. We will move on to the Q&A session. To ask your questions, you may choose to do this verbally. Just raise your hand and wait till your name is called out for your turn. Otherwise, you can also type your question in the chat box too. I do see two hands raised. First let's go with Izzati from Macquarie. Please go ahead, Izzati. Hello, can you hear me? Yes. Yeah. We can. Yes. Hi. Hi. Thank you. Thank you for the call. Just two questions from me. The first one is on the debt reduction side, right? Noted that net debt to EBITDA is at the lowest, 2.59. Looking at year-to-date, it's down by 10% in terms of total debt. Can you clarify how much is from repayment and how much is from the stronger ringgit? Next question, looking forward in fourth quarter, since USD has strengthened, does that mean that we will see higher total debt going into fourth quarter? First question. Second one, you made an announcement, it was picked up by the news, that Dr. Hans will be leaving in January because he's going to be an advisor to the Sri Lankan president. We know that currently he's basically looking at the telco business and all the CEOs sort of report to him. Moving forward, how will the structure be for Axiata after he has left, in terms of org structure? Will there be changes? Can you share with us what you're doing and how you're handling that? Thanks. Okay. I think, Nik. Yeah. take the first one. You have the split, right, between the debt repayment. I'm trying to look for it. Shall I answer? Yeah, sure. Yeah. Go ahead. Okay. I think essentially, the repayment that was done in the year was MYR 1.2 billion. Approximately, that debt accounts actually for about 20% of the net debt to EBITDA move. Sorry, the debt movement from end of last year to this quarter. Essentially, you know, 80% of the movement was due to the ringgit strengthening. That has somewhat delivered the stronger, or at least lower net debt to EBITDA ratio. Having said that, it is a ratio. You would also recall that we mentioned just now that EBITDA also delivered strong growth of close to 15% on a YTT basis. Strong ringgit actually is negative on translation for us, right? On EBITDA. Only on the Taka as well as the IDR. It's Yeah. Got it. So I guess- On the second question. Yeah. I guess now that it is, I think we closed at, what, MYR 4.1- One two. 1.2 in September, so now it's running at around 4.49. I think pretty much halfway than what used to be earlier. Yeah. You would see that impact coming back on the because of the ringgit weakening in this quarter. Let me take the 3rd one. Hans is here. Hans can also advise how to structure the organization. This has been a most recent development. I am in conversation with my board on how we should reorganize ourselves. We would hopefully be able to let all of you know when we meet in January. Got it. Thank you. I'll jump back to the queue. Thank you. Okay. Thanks, Izzati. I think next up we have Prem. Hi. Thank you for the opportunity. I'm again gonna focus on the balance sheet, but more on the future with our monetization efforts and all that's going on, as you described in your slides in the presentation. Could you help us understand with regards to the holdco debt and balance sheet, if we were to raise money or if we were to monetize any of these assets, would our focus be on returning cash to shareholders or would we be focused more on de-gearing the holdco, so to speak? If you could help us understand your preference in that. I suppose as a follow-up to that, in the transactions that you are pursuing at this point in time, is the preference more for cash coming in or for, I suppose the market to set new prices for your assets? I think, let me maybe take, Prem, the first one. I think, we would first objective would be to create a hold co debt and overall balance sheet which is long-term sustainable so that we can continue to generate steady dividend flow with progressive growth over a period of time. I think that would be the objective. I don't think we would, look at one time, gratification or earnings for the shareholders, because the objective always has been sustainable dividend, right. I think that would be the immediate priority for us. At this point in time, whatever effort we are making, including the, buyback of some of the bonds, in the last quarter, is all with the intention of reducing the dollar exposure at the group because that's essentially a leakage, as you can see from whatever we are able to earn from our operating companies. It's better for us to pay that down. That I think is going to be the philosophy we will follow to achieve a sustainable dividend yield as well as progressive growth in the dividend. Second question, I think, the transaction, is starting with the, of course, ability to monetize, but some of these transactions are starting with the more sustainable, business or the operating company opportunity, right? I mean, what we've done in Sri Lanka, what we are trying to do in Indonesia is basically looking at market consolidation to be three-player market, which should, essentially and with the lowest market share being there around 25%-26%, that makes the markets more sustainable for long-term value creation, long-term future and also the fact that those synergies are something which we can capture well in terms of creating a stronger upside on these assets. That's I think the starting point which is there. To do that we will also look at. We'll do that for what is right for the operating company. To do that, if there are assets where we can also monetize, by way of a secondary, we will do that and that helps us to pay down some of our leverage at the group level. Perfect. Thank you very much. Thank you. Thanks, Prem. Moving along then, I think next up we have Foong from CIMB. Hi. Good afternoon, everyone. Thanks for the call. 3 questions from me. Firstly, I wanted to find out what was the startup cost for the digital bank in the third quarter and how do you see this startup loss trending over the coming quarters? That's question 1. 2, a question for edotco. I see in terms of the numbers, there was an 18% revenue drop Q on Q. What was the reason for that? Also for the normalized PATAMI, there was a 5 times jump Q on Q, to MYR 60 million. Again, you know, appreciate if I can get a bit more color as to what drove that. In terms of the outlook going forward, what is the opportunity here in terms of additional leases from the second 5G network rollout now that we know that U Mobile has won the award, perhaps maybe based on what we are currently leasing to them for 4G. Thirdly, for Link Net, are we rethinking our plans on the fiber coverage rollouts? I mean, given the intense retail competition, do you see that there's a risk, right, that could trickle down to the wholesale market in terms of how much access seekers are willing to pay to lease the Link Net network? Yep. Those are my three questions. Thank you. Sure. First one, Boost Bank, I think we've got MYR 45 million losses. As you know, we just launched the bank in June, I would expect around MYR 20 million-MYR 25 million per quarter kind of a run rate which will be there. That we expect to have over the next 3 years till we turn profitable on this, the bank, which is what was our original plan which we had laid out. I think the good thing is, the bank would be fairly operational once we start transferring, which we've already started doing, the loan book which sits in the Boost holding company into the bank. They will have a clear early start of getting revenue from the loan book which already exists there. That's the we expect on the the bank side. edotco, I think, if maybe I can ask Clare or Nik to- Yeah. On edotco, the reason for the big quarter-on-quarter jump is mainly due to the revision of useful life of their tower assets that came about in quarter three. That said, revenue is flat. The main impact is actually due to the revision of useful life from 15 to 30 years. Nick, if I can add up, add on Nick. Yes. okay, Adlan is on the line. Adlan, yeah, please. Yeah. I think revenue, I think if you recall last year, there was a gain coming from the one off coming from the CDB settlement. As part of the settlement, we've accounted for certain discounts earlier, and because of the settlement, that discount was no longer applicable, hence there was a one-off reversal of about MYR 100. There was a reversal of MYR 121. Of the MYR 121, 46 is actually recurring annually because that has been something that we have been providing for over the last two, three years. That's essentially coming from revenue. On PAT impact, I think on EBIT impact is predominantly from the useful life review. I think we have increased our useful life from 15 to 30 years. This essentially we have actually done a benchmark with all tower costs across the region and globally. We see that tower costs useful life now in most of what is captured in the books is between 30 to 40 years, right? Hence based on review of that, we have realigned our useful life from 15 to 30 years. It's a little bit more conservative than some of the approach of some of the other tower costs. Essentially the quarter impact is around approximately MYR 50 million on EBIT. That's 1 quarter impact. Essentially the quarter impact on PAT is around MYR 45 million. The other aspect that you see a big swing in PAT, is also driven, Q on Q is also driven by the Forex gain, essentially coming from the unrealized Forex loss as well. Q on Q impact on Forex is essentially MYR 207 million gain. Thanks, Adlan. Yeah. Foong, on the 5G, can you just repeat what was your question? I wanted to understand, you know, in terms of the opportunity to lease more towers, right, to U Mobile now that they have won the rights to roll out the second 5G network. How many number of new leases do you think we can get from that rollout? Very difficult to say at this point in time. I don't know, Adlan, if you have an answer because it'll all depend on what. Yeah. Yeah. ... kind of grid the new network consists of. Right. I think, still too early, I think, Foong, because I think, U Mobile is probably doing their planning as well. Essentially, for edotco, yeah, two is better than one. Basically now we have the second 5G operator that creates a new opportunity. Our baseline has always been one. Yeah, with the second one it creates this new opportunity for us. How many? I think that we'll know in due course, because the thing is also the final letter is also not out yet as far as we understand, yeah, from the regulators to U Mobile. Okay. just based on how many towers we lease to U Mobile for 4G, right? assuming they roll out, it based on their 4G grid, you know, how many thousand new towers approximately? Today, if you look at, what are we leasing to U Mobile today is around 1,500. Okay. All right. Got it. Your fourth question on Link Net. I think, you know, our viewers, Link Net has already got the second-largest home passes, right, which is basically what they served for themselves, which are now being served for XL, as well as the home passes which they've built for XL or XL to sell, which is nearly around 3.4 million. So that in itself, the old one is nearly 22% penetration, so that provides a sustainable cash flow for Link Net. There are opportunities where XL has partnered with Link Net to look at further growth expansion plan. So I think, from that perspective, Link Net is from a liquidity cash flows is fine. The question is whether the market is going to start getting more saturated given the wholesale pricing which is there, as for pressures on wholesale pricing as well as, you know, how much sale on the home connects happen. On the ServCo side, I think that we'll have to watch out. It's still early days. There's always a euphoria when market opens up for certain things which are seen as a potential big opportunity. As you know, not many survive in that kind of a situation, and we've seen that in a lot of markets where fiber play suddenly starts expanding. Yeah Okay, got it. Just maybe just a quick follow-up, Vivek, on the MYR 45 million loss you mentioned for the digital bank. That was in the third quarter itself, is it? No, no, that's the year to date. Year to date. That's year to date. Thank you. Would have come in the third quarter, because prior to that was just more operating expenses which were capitalized pre-launch, right? Right. If I were to remove the digital bank loss, Boost would actually have been profitable for the third quarter? No, no. I think the 45. I don't know exactly how much it would've been for third quarter. Yeah, I mean, the losses from the others would be substantially lower. Okay. All right. Got it. Thanks everyone. Perhaps to clarify that, I think, you would see that, on a YTD basis, Boost's losses was MYR 134 million. Out of that, MYR 45 million is coming through from the bank side. Yeah. To answer your question, Foong, you know, the rest of the business is still loss-making, albeit on a narrowing basis. Yeah. Then we look at 2025 probably exit when the non-bank business will be profitable. Yeah. Okay. Got it. Thanks. Thanks, guys. Thank you, Foong. Okay. Moving on, we have Isaac. Isaac from Affin, please. Hi. Good afternoon. Just one questions from me, please. If I had to zoom into the third quarter result itself, the margin from the Robi and the Dialog was very strong. Especially for Robi, I mean, considering the lower revenue, we still have a higher EBITDA. What's with the unrest and all those, and what's exactly happened in these two market, and how sustainable or not is this kind of cost structure or this kind of margin trend? Thank you. Maybe, Rajiv, you're on the call? Yes, Vivek, I'm on the call. Sorry. Yeah. Maybe you can, you know, provide why the margin was stronger and are these sustainable? I think as Vivek explained, in Q3, there was a period of social unrest. For a period of time our network was shut down, especially on the internet side, so the revenues suffered because of that. At the same time, during this period, because of the situation and also in the change in the taxation on the new SIM cards, the number of SIM cards which we are selling in the market, that has reduced significantly. There has been a significant cost saving on that side, which is one of the biggest elements of this improvement in margin. Along with that, some of the marketing activities, given the market condition, we slowed down on them because they were not required given market was closed most of the time. These were the two main reasons why margins improved. Along with that, our sustained efforts to improve our operating efficiencies, that's a continuous journey. If I speak about in future, margins will remain strong. The SIM card sales is still suppressed given the market conditions. In the future, if I look at Q4, margins should remain at a stronger level as compared to the first half of the year. Okay. Dialog, Supun, you're on the call, right? Yeah. Hi, Vivek. Hi, everyone. Yeah, Dialog again continued the price hardening exercise, which we started in second quarter. Third quarter we had a larger period of higher pricing, which we did then. As a result, we saw 8% quarter-on-quarter growth in mobile, which led the margin improvement. In addition, the energy prices were lowered with improvement in the economy, inflation coming down. Energy price reductions also helped, plus our continued efforts on cost reductions helped. There were some dilution on the margins because of the negative EBITDA that we carried through from Airtel integration. Close to about LKR 300 million or about $1 million. This would continue to improve going forward. Overall, the margin improvement is sustainable, the revenue improvement is sustainable, as we progress through the merger integration and synergy realization as Vivek explained. All right. Thank you. Thank you. Moving on. Next in the queue is Sian Wei from HSBC. Sian Wei, please go ahead. Hi. Thanks for taking my question. I think, I actually have two questions which I think may have been touched on partially by the previous queries and answers. I'll just looking for a more specific response to these two questions. I'm gonna ask, A, about Sri Lanka and Bangladesh. It looks like your businesses in those countries are resilient despite the macroeconomic headwinds. My question is, on this note, would be considering the headwinds and your good performance, what is your outlook or slash strategy in terms of expectations of these two countries to contribute to your revenue, to the group's revenue and profitability? Also your deployment of resources in terms of growing in these two countries. Is it more of, you're happy to proceed, as planned before the macroeconomic headwinds or, has what happened recently in the past few months sort of given you a more of a sit and wait approach? My second query is more to Indonesia, which is I know you've mentioned that, there's been higher competition and therefore, lower margins and revenues. My Indonesia is a mass market, obviously. If you give us a little bit more detail on your plans to sort of grow your revenue or sort of fight the market conditions to become a bigger player in that market, I would really appreciate your thoughts and views on that. Those are my two questions. Thank you. You're looking at Bangladesh and Sri Lanka, right? Yeah, that's the first question, and the second one's about Indonesia. No, fundamentally both markets are strong. Fundamentally the market structure is fairly positive in these two markets. Sri Lanka is pretty much two and a half player market. We've seen that, which is also consistent, there is this ability to increase prices, go for price hardening. I think fundamentally this market is strong. Secondly, I think the company over the last two years have built in a fair amount of resilience, going through the difficult times, for managing the cost, OpEx as well as CapEx in line with all the market development that's happening. I think, we are confident that Sri Lanka will continue to progress in the right direction as the macroeconomic situation stabilizes, which we are seeing now far greater stability in Sri Lanka. Bangladesh, again, from a market structure standpoint, fairly strong. I think, Robi is a strong second player, growing very well on the margins as well as profit line. Having said that, I think the impact of the recent development in Bangladesh haven't still settled down. I think what Rajeev said, the wait and watch, would continue for some time. Where, for example, the sim sale, ensuring that there is no major marketing spend, or CapEx being moderated over time. Look at U.S. dollar pay down, risk on the balance sheet being. I think that's something will remain a focus as till such time the market gets some form of stability or the macro environment gets some form of stability. Bangladesh, I would still say is little bit of wait and watch and see how the developments happen on both economic and political front there. Yeah, thank you. Sorry, go ahead, please. Thank you very much for that. I think, maybe just your views on Indonesia, if you'd like me to repeat my question? Yeah ... that's also- No, no, it's fine. Yeah. We heard your question. I think Indonesia, there's an obvious realization that the current pricing levels are not sustainable for the market. There have been, in our view, as an investor, there've been a knee-jerk reaction by the operators post the merger of one of the companies there. That knee-jerk reaction has seen softening of the market. That may not be the long-term view we carry, because there's been a smooth run for a period of time where we saw ARPU improvement, market stabilization. This whole issue of, you know, market pricing being brought down hasn't helped any of the operators from their margins and profitability standpoint. To me, this softening, I guess, is an interim phase. Things should start moving now. We are seeing some improvement there, in this quarter. Going forward in 2025, we are more optimistic that the market will still be positive. Having said that, I think the macro challenges or the mass market affordability will remain somewhat a headwind, in Indonesia. All right. Thank you very much for your insight. Thank you. Thank you. Okay, it looks like we do not have further questions. I don't see any questions on the chat box either. Okay. Perhaps then maybe we proceed with closing remarks, Vivek. Yeah. First of all, thank you very much for joining. Oh, sorry, Vivek. That's w- Sorry to interrupt. There's one more. There's one more. Okay. There is Piyush from HSBC. Oh, yeah, Piyush. Yeah. Piyush, please go ahead. Yeah, hi. good afternoon. Thanks for taking my question. I have two questions, Vivek. Firstly, on the leverage side, you know, leverage has come down this year. It's very good thing. Can you tell us your kind of 1 to 2 year target on where you want the leverage at the group level to come down, and what kind of levers are there at the group level? Secondly, on Indonesia, I don't know if this was asked earlier, because sorry I joined the call little late. On the merger of XL and Sinar Mas, can you walk us through kind of the next steps and what are the timelines which you are looking at for the merger completion? Okay. The first one, I think, we did say, Piyush, earlier that we want to be 2.5x net debt to EBITDA by 2026. Where at the moment we are ahead. Part of it, as was explained earlier, also comes because of the strengthening of ringgit. We expect that strengthening should continue in future. Well, I guess we would be ahead on that. To us, 2.5x is sustainable balance sheet leverage level for us. More important for us is to pay down some of the leverage at the group level, and that's where some of the monetization of the assets we look at it. Fundamentally, I guess two levers. One, we expect continued growth on EBITDA across our operating companies, which has been visible this year, and we expect that to continue. Second one is, some of the monetization activities which we are doing, should be used or will be used pretty much to pay down the holding company debt. That I think is plan. The second one was the merger, which I said earlier that the discussions, due diligence has been fairly completed. We are now in the stages of agreeing the definitive agreement, negotiations around that going on. The process in Indonesia requires, you know, the approvals from the local board, local. All that things have been now kind of worked on. As I said, there's nothing certain, but we are progressing the right direction. Got it. Is there a like a timeline for both the parties on this definitive agreements? Well, there is. Beyond which you can. Yeah. No, there is a long stop, which is March next year. Okay. That's the long stop. Okay. I mean, if things are working well, you can still extend it mutually, right? That's what is the plan. Okay. Okay, great. Thank you. Thank you very much. Thanks, Piyush. Thank you. One last question I see in the chat box now. Question from Aimee. Just with stronger cash flow generation, do you see higher dividend payout exceeding committed MYR 0.10? Difficult to commit. I think we see positive development on FCF. I think we will probably make a decision after the full year is over. As I said, we said earlier, we still committed to MYR 0.10 dividend. To progressively. Yeah increase that. Yeah. Okay. Okay I think that's all. No ... questions we have for today. I guess what my last comments would be that we did see some softening in some of the markets on the top line. Some markets did pick up well. I think we have a combination of assets. Good news, bad news, you can say whatever, but there's always one positive, the other negative or things change. But overall, I think fundamental focus of the entire organization on operational excellence, managing costs well, adjusting CapEx in line with how the market developments are happening, I think those things are being really focused on. Balance sheet, managing liquidity has been the cornerstone of how the operating companies have been working and focusing on. That part is, I think, something which we've been able to do well over the last couple of years. Market situation is something which we will work on ensuring the market conduct, et cetera, improves, and that we should see an upside. Having said that, I think from a strategic standpoint, we would like you to be participating on the Investor Day on the 13th of January, where we will have more discussions around what's the future, next step for Axiata. Thank you. Thank you, everyone. Thank you very much, and have a good day.