Good evening, good morning, good afternoon, depending on where you are joining us from. Welcome to Safaricom PLC, half year 2027 pre-close call. As always, it is a joy to engage with you in this manner. I am Caroline Wambugu. I lead group finance, controls, performance and investor relations, and I will be moderating today's session. Joining me also for this call is our group CEO, Dr. Peter Ndegwa, and our group CFIO. For those who are wondering what CFIO means, it is our Chief Finance and Innovation Officer, Dilip Pal, who will open for us the session with brief remarks before we move into Q&A. Just allow me to take us through some quick housekeeping rules so that we can be able to be comfortable as we go through with the discussions.
First and foremost, if you have not already done so, please make sure that you have joined with your full name. You need to update at this particular moment by just hovering over your name on Zoom and selecting rename if you have not joined with your full name. At the same time, we shall utilize the Q&A tab throughout the call, so type in your question and include your organization name. Then we will be able to read that out on your behalf during the Q&A segment. We also do have a live transcript that is available for anybody who needs it, and you can access it through your more options tab. Just go to the View Transcript at the bottom of your Zoom screen.
Should you have any form of inquiry that is not necessarily related to today's discussion, feel free to drop us a note in the chat. I do have the investor relations team on hand that will be able to support you in the background. Use the Q&A tab for questions, and you can use the chat tab for purposes of any other unrelated query. With that, allow me to once again welcome you to this particular discussion as I hand over the session to our group CEO, Peter, to get us started. Over to you, Daktari.
Thank you. Thank you, Caroline, and good afternoon, good morning, good evening, everyone. Caroline, please confirm that you can hear me.
Yes, we can hear you well.
Or should I increase my volume?
No, it is fine. Yeah. Proceed.
So good afternoon, ladies and gentlemen, and thank you for joining us. As Caroline Wambugu has said, we will take you through just a summary of what we want to run you through. We will start by providing an update on the operating environment and the strategic and commercial progress that we are making in our two key markets of Kenya and Ethiopia, and also how those priorities will guide us as we execute for balance of year. Then Dilip Pal will provide an update on financial outlook, market expectations, in particular in relation to guidance, capital investment, but also the key considerations that you want to make as you forecast our performance. I know many of you try and update your models, or at least some of you, so I hope that we will give you a general indication.
But I need to say that because this is a pre-call or a pre-close call, our comments will remain at a high level. Therefore, because we will wait to provide a complete financial results and detailed performance disclosures at our formal results announcement, which we have scheduled for November 5 this year. We appreciate your continued engagement and hopefully this also is part of the overall engagement. I will start at an overall group level. I should say that our overall strategic direction remain unchanged. We continue to focus on our key areas that we have shared with you, which is protecting and growing our core connectivity, but also financial services businesses, accelerating the development of our new digital platforms, but also strengthening the foundations of our Ethiopia business. During the periods, our priorities are not changed, and they remain clear. Our execution continued to accelerate.
I want to mention three things we are doing. First is we want to sustain the quality and the resilience of our Kenya business, and I will explain what that means. Second, we want to deepen customer engagement and monetization, especially across M-PESA, mobile money, and fixed connectivity, and also our broader financial or digital ecosystem. Then third is to scale our Ethiopia business, whilst also improving, of course, the operating economics so that we aim for EBITDA breakeven later this year. Finally, we want to maintain disciplined execution across our P&L costs, capital investment, cash flows, and also customer experience. In summary, our group has continued to operate against the backdrop of evolving customer needs, competitive intensity, and I will explain that a bit, and also affordability pressures, whether those are related to the macroeconomic environment or related to needs of customers.
We have responded by focusing on customer segmentation. So segmentation is a big area. As you know, we have been focusing on that. In the past few quarters, ensuring that our propositions are relevant, ensuring that our infrastructure, especially our network quality and also our investment profile, reflects our customer needs, but also competition. We are avoiding going head-on in terms of competing on price and really focusing on differentiation. Let me start with where we are on our Kenya business. I will start with the operating environment. In Kenya, our operating environment has fundamentally remained resilient. But increasingly we are seeing more complexity, especially with relation to the shocks arising from the Iran-U.S.-Israel war and how that is impacting the rest of the economy.
In particular, on inflation, we have seen a step up in inflation in Kenya, now at 6.6% in August, which is almost 40% higher than your average in the previous year, which was about 4.4% around March. However, it is still within the midpoint of the Central Bank's target range, which has been the case for five consecutive months. Transportation has been the one that has been most impacted, with inflation at 15.7%, and this was primarily because, of course, transportation is the one that is impacted most by diesel prices. In particular, if I go into the detail, petrol went up by 17.26% to KES 214, and diesel up by almost 28% to KES 217. Of course, I know kerosene is primarily an indicator of how it impacts customers. It also went up by close to 25%.
Overall, though, we continue to see a resilient environment in Kenya with improving economic activity, sustained interest rates levels, which are important because it affects our borrowing rates, but also availability of credit, especially to business, and continued digitization of the economy. From an industry perspective, the underlying demand for connectivity and digital services remains strong. We continue to see increasing smartphone penetration, higher data consumption, and greater use of digital financial services. We believe these structural trends remain supportive of our long-term growth opportunity. On competition, we are seeing more intensity here. We are seeing this not only from the traditional telco competitors, but increasingly across financial services, fixed connectivity, and digital platforms. Our response is not purely to compete on price, although price is important because that allows us to deliver more value.
We believe our differentiation, though, lies in the strength of our network, the breadth of our customer relationships, and the ecosystem that we have built across connectivity, M-PESA fixed enterprise and digital services. It is also by providing converged services that allow us to have a long-term and sustainable business model. Regulation is also evolving across boundaries, and we are seeing much more interconnect between telecommunication, financial services, and technology. The distinction that was there before is becoming less obvious. We continue to support regulation that promotes innovation, investment, consumer protection, and sustainable competitive environment. Finally, for our Ethiopia business. Ethiopia continues to be an important part of our strategic journey. The business is now operating at a meaningful commercial scale, and the focus now is increasing monetization, operating leverage, and a path to EBITDA breakeven.
In addition to ensuring that we continue to make progress on the regulatory intervention that will allow us to have a more sustainable industry in Ethiopia. While the macroeconomic and foreign exchange environment remains an important consideration, we remain encouraged by the underlying commercial trajectory in Ethiopia, but with opportunity for growth, as I've said, in the regulatory landscape, as the telecommunication sector continues to grow. Overall, I would characterize the environment as one with strong structural demand and attractive long-term opportunities, but one that requires disciplined execution, continued customer focus, and careful capital allocation. I'll then now go into a bit more detail in terms of each of the two businesses. Kenya, I would say we are sustaining our commercial momentum. Our business continues to demonstrate resilience and are pinned by a strong brand, quality network, and a skilled customer base.
We are continuing to grow the relevance of our products to our customer base. We've talked about segments and also propositions, and those are the two areas of focus as far as our competitive position is concerned. On M-PESA, M-PESA remains the center of our growth strategy and broader digital ecosystem ambitions. During the period, we strengthened the platform across payments, merchant services, savings, credit, and wealth solutions, whilst expanding our customer and business use cases. We've also implemented, as you have seen in the media, tariff enhancements to improve affordability, particularly focusing on our merchant ecosystem, both the Pochi la Biashara, which is the micro merchant, but also Lipa na M-PESA, which is the larger, more established merchants. The intention is to increase affordability of customers, but also to increase the usability from a merchant perspective or the loyalty from our merchant perspective.
On connectivity, as you know, connectivity remains the foundation of our customer value and propositions and continues to benefit from strong demand for both voice and data, which is supported by the key growth drivers, which we have established in the past: smartphone adoption, growing digital engagement, and continued investment in quality network and capacity. We will talk a bit more when we hear questions on mobile data and voice. I won't go into too much detail at this stage. On fixed broadband, it continues to be one of our key growth opportunities, supported by expansion in both fiber but also fixed wireless, 4G adoption and improved 5G adoption. Apologies. And improved commercial execution. 5G at the moment is now about a third of penetration of our networks. It has started to provide good scale in terms of our ability to expand our fixed broadband.
On enterprise and digital services, enterprise business remains a strategic growth area as organizations, both SMEs but also a large corp, accelerate their digital transformation journeys. This includes the public sector. We continue to support customers through connectivity, cloud, cybersecurity, IoT, and managed services and digital services. We strengthened this business during the period, and we can talk about it in a minute. That's on Kenya. I'll briefly talk about Ethiopia, and then I'll conclude. With respect to Ethiopia on operating environment. The operating environment has continued to improve, supported by generally constructive telecom regulatory environment, which we announced last year. It has also benefited from improved foreign exchange conditions and a positive progress on infrastructure sharing arrangement. During the period, we saw full implementation of what we call Reference Infrastructure Sharing Framework and additional spectrum resource allocated to support network capacity and service quality.
We are seeing the benefits of this as a true benefit of regulatory, what we call regulatory reset, including cost of service pricing and reference infrastructure sharing, which now have been implemented and are already making impact on our business, both on the pricing side in ensuring that we go to a path towards selling products above cost on both mobile data and also voice. But also, we have a reference sharing arrangements as far as asset sharing is concerned. While some regulatory initiatives, particularly around industry pricing and M-PESA interoperability, remain work in progress, we remain encouraged by the overall direction of sector reform, but also the posture that the regulators are taking. The long-term opportunity within the market. On security, we've seen some improvement, particularly in the regions that previously had limited rollout. Also the elections passed peacefully, which is quite important.
On the economy, inflationary pressures accelerated in July, again related to the U.S.-Iran-Israel war, with inflation now in double digits at 15.3% from 9.4% in March 2026. This is driven by both food, which is 15.7%, but also non-food, which is 14.8%. On the macroeconomic side, higher fuel costs contributed to increased inflationary pressures. However, foreign exchange has remained more stable than previously anticipated, helping offset some of the broader macroeconomic risks. Overall, the underlying commercial momentum of the business remains strong, and our strategic priorities in Ethiopia remain unchanged. In conclusion, we are entering the second half of FY 2027 with a strong foundation and a clear regulatory and a macro backdrop across both markets.
However, I should say that El Niño rains, which is a risk that is emerging in the region, remain a clear watch-out for H2 following the lasts that we have seen across the region. We look forward to sharing a fuller picture with you at the results announcement later in November. I want now to hand over to you, Dilip, for further detail on financial performance and what we expect to see for close of the year. Thank you.
Thank you, Peter, and good morning, good afternoon, and good evening, everyone. Caroline, confirm you can hear me. Excellent.
Yes, we can hear you. Thank you.
Let me begin by thanking you all the analysts who shared their consensus estimates ahead of the close period. As you know, this is one rituals we do, and we truly appreciate your continued engagement with Safaricom and the time that you invest in understanding our business on a continuous basis. As mentioned by Peter, today's discussion will remain very high level, and also in consistence with our close period obligations, we will not be discussing financial results or providing any new material information ahead of the formal results announcements. Of course, we look forward to sharing the full details for performance in early November. Thank you to everyone who submitted estimates, your consensus estimates.
We have reviewed the consensus inputs, and also appreciate the quality of engagements, and happy to answer any questions more directionally than specific to your numbers in relation to your consensus that you have provided. Giving a little bit of an update, Peter covered quite a lot. I will not go a lot into details. First of all, at a high level, the underlying drivers of the business, which we call the health of the business, that remain healthy and consistent with the trends we have previously communicated to you. At a group level, we continue to benefit from a diverse portfolio of business that we run. We do have quite a few growth engines that we always speak about, and we have spoken about those growth engines in the past.
Also a strong customer franchise and a continued investment in network and technology platform. Starting with Kenya, we continue to see healthy customer engagements across our connectivity, M-PESA, as well as fixed business. The business remains supported by growth in active customers, increasing data usage, strong ecosystem participation within M-PESA, and of course, our customer value management proposition, which is also a lot of use of artificial intelligence to offer segmented customer offering, is also working very well for us. What are the themes that we continue to see across all the business? Starting with the growth in active customers. On the back of what you have seen last financial year, we continue to see growth in customers. We see customer engagements, and of course, we are continually benefiting from the CVM activities that we perform.
I think the other part is on our focus on the operational efficiency. If you recall, when we were giving you our guidance for this year, there was a lot of uncertainty around the Iran crisis, the Middle East crisis. There are many impacts. Inflation, I think you heard Peter talking about inflation creeping up both the markets, but also in Kenya. With respect to fuel cost, I think that was one of the major concern. We said that we are trying to mitigate as much as possible. I think some of the mitigation measures actually helped us, which is also buying fuel well in advance, ensured that we never run short of power in our base stations. That has worked well for us. Yes, it did impact, but we managed this near-term impact as we speak.
Of course, this crisis continue to remain volatile, and we don't know at any given point in time whether it's going to get worse or it's going to get better. Looks like it got better, and then it again got worse off. This is one area we continue to monitor, and Peter has already spoken to you about the kind of increase that we have witnessed so far. Turning to Ethiopia, we are truly encouraged by the progress we continue to see in the market on a commercial front. You have seen the numbers that we have disclosed in Q1 update. Very strong customer growth, close to 15 million customers. Of course, you have seen also an announcement of a key milestone of 15 million 90-day active customers.
We see strong data adoption and usage. We now see the customer side, an improvement in M-PESA side as well. The business continued to benefit from the better utilization of the network and the scale efficiencies, and also the monetization which Peter spoke about that we have continued to see in the first half of the year. We also continue to see positive momentum, as I said, on the M-PESA side. Of course, these are still early days, and not necessarily resulting into a lot of revenue. I think on the customer side, we are making good progress. In closing, our strategic priorities remain unchanged.
We continue to focus on our customer growth, network leadership, operational discipline capital allocation, and of course, M-PESA expansion and scaling Ethiopia into a sustainable contributor to group value creation, which you have seen that showed up in last financial year, and we believe that will continue. The underlying operating trends across our business remain broadly consistent with those previously we have communicated to you. Nothing we are seeing today that changes our confidence in the long-term outlook of the group. Of course, we are also dealing in an environment where there are quite a few variables that we are also dealing with. I think fundamentals of the business still remain very strong. Thank you once again, we appreciate your continued engagement and look forward to discussing our full year results in early November. Thank you very much. Back to you, Caroline.
Thank you. Thank you, Peter. Thank you, Dilip, for that great overview. Now we will get right into the Q&A piece. Just to remind us, please use the Q&A tab to post your questions. I see some have started streaming in. Happy to ensure we maximize on the time we have together. I will kick off with the questions that have come in. Peter, I will request that you respond to this question from Maddie of HSBC. Question on inflation. You have spoken about inflation and how that is panning out in both markets. The question is, how do you see inflation impacting our business, both pricing and costs? Is it going to positively impact M-PESA? Peter.
Yeah. Thank you for that question. I am laughing because I thought Maddie kindly would direct that inflation question to the CFIO. Very happy to answer the question. Let me just first of all speak about the obvious piece, which is the impact of inflation on fuel. Because fuel, of course, affects transport. As you have seen, transport in Kenya is at 15% in terms of inflation. Transportation affects everything that happens in the economy. There is a very big drive, impact of diesel pricing, both within the general economy, but also within our business. Within our business, we use diesel in our sites. The second aspect that is normally not seen, but is actually much more significant, is that diesel is also a component of how energy is generated. Therefore, it is an adjustment to our electricity cost.
We saw a significant increase in power cost, which is a big component of our network cost. As you know, energy cost is about half of our total operating technology OpEx. Therefore, when you have diesel and power going up, you do see a big impact on our business. But the broader issue for us is the impact on consumers. We have seen a significant impact on affordability, customers pushing for value across our business, whether that is in fixed, in mobile, or even in M-PESA. One of the ways that we have responded is actually, as I said in my opening, to actually increase the proportion of services that we offer for free. As you know, for example, what we call Kadogo, which is a small transaction of KES 100, for Pochi la Biashara merchants, we increased them to KES 200.
For Lipa na M-PESA merchants, we increased the free component for the merchant from KES 200 to KES 500. That offers relief both to end customers but also merchants. Although it impacts our revenue, we have seen that improving usage but also penetration, and also the amount of money that is actually retained in the wallet. So Maddie, your point about whether it is impacting M-PESA, you can see that there is elasticity when we offer more services for free. So it is both on the cost side, but also on the customer side. On the mobile side, we have also changed our pricing of mobile data. This has been announced. What we have done is to offer much more value for those who are buying daily, weekly, and monthly, and reduce the number of propositions we have for hourly.
In the end, we will actually be offering much more value, but we want customers to develop time for customers or rather for propositions to actually last longer. We have seen a significant acceleration or a shift from hourly to daily, which is what we want long term. Even for customers, that is good for them. We are also offering much more value during off-peak than peak, so that we are able to manage our network, and that has also helped us. The final thing I wanted to say is that, as you know, we have been going through an energy modernization program, and one of the things we have noticed as the Iran, U.S., and Israel war continues, we have started to benefit. Our network is more resilient because we have more sites on solar and we have more sites on modern battery.
Even as we see impact of diesel, we also then see the benefits of the investment that we have made in the past. So I want to leave it there, and, Dilip, please feel free to add to this.
No, Peter, thank you. You have covered it quite well. I think the Ethiopia, although our dependency on diesel is very less compared to Kenya, we did see challenges in terms of availability as country as a whole did ration import of diesel significantly. We really have to make sure that we optimize whatever is available. Although telecom was prioritized, it was never a situation where we always had availability. Availability was never a concern in Ethiopia, but availability also became a bit of a concern. We optimized it to our best possible ability. In Kenya, availability was never an issue. It was more about the price. I think, Peter, you covered it very well.
Yeah. Thanks, Peter, and thanks, Dilip. Dilip just speaking to the oil piece and the availability for both Kenya and Ethiopia markets. I think I'll do a follow-up on that based on the question from Rohit. Rohit of Citi asking what impact have the recent increase in oil prices had on the business so far? Then specifically for Ethiopia, given the high oil price environment, do we see any delay in the EBITDA breakeven target?
Yeah. I think, for Kenya, just to remind you all, the actual increase in the price that Peter mentioned about, those happened over a period of time. You may wonder what is the impact, why the cost of electricity went up. Cost of electricity went up because there is a cess, like a fuel cost embedded into electricity cost. The changes, I think some of the increase that you probably have seen in other operations, other countries, Kenya did the actual increase much later, although quite a big increase came. The actual impact of that in the half of year will be for a fewer months or lesser period than compared to you see a full increase in the six months. Of the increase that we have seen so far. Of course, we don't know what happens later on.
As I mentioned in my opening remark, I think the increase was, we are able to, cost has increased, but overall, within the operational efficiency drive that we have undertaken, we could broadly cover that. But of course, that fuel cost line has gone up, and you'll see that coming up. From a period perspective, the impact of H2 will be higher than what you will see in H1. Ethiopia, I think one is the availability, as I mentioned, so it doesn't necessarily have a direct impact on the EBITDA breakeven. It does have an impact of your sites are ready to roll out now, go on air. So you have to ensure that you are not going with a diesel solution anymore. You have to ensure that your power or grid power is available from day one. That's the process part of it.
It delays a bit in terms of sites that come to life. Initially in the past, what we used to do, even if there is a delay between getting the grid power, we used to put a diesel generator, and then we could actually go on. Because of the availability, we want to ensure that the sites that we already have, we cannot have any disruption. So we prioritize that, and then we ensure that when we have the grid power is only when we are going to put the site on air. That's really the, you can say, a little bit of course correction that you have to do. But the one headline number, which is, you recall when you were releasing results, the March number was truly good in terms of inflation.
From when we entered the market, inflation was around 30%, and in March 2026, it came down to single digit. I think that's what it is shifting now, it kind of doubled now close to 15%, which is what actually impacts everything else. Therefore, that's the line actually watch out a lot. But on the other side, we have also seen quite a bit of, although it's nothing to do with fuel cost, I'm also seeing there's a macro factors. Other macroeconomic factors are actually playing out quite well and probably better than that what we expected, including on the currency side, as Peter mentioned. There is far most stability in terms of the currency rate. Those of you have noted, I think if I'm not mistaken, a week back or two weeks back, typically, National Bank of Ethiopia auctions the foreign currency, dollar specifically.
First of all, the quantum of dollar, which was coming for auction, though that have gone up significantly over the period, which kind of gives the confidence that the liquidity is improving. Then, actually, the last one that I've seen was not fully subscribed. This is for the first time in Ethiopia, I think we have seen that demand was lower than the supply, which was available in currency. I'm sure those of you have watched us and spoken to us, in terms of the dollar availability. That's a material shift in the way it has evolved, and that's also a rate which was more or less consistent with what it was auctioned before.
From an EBITDA breakeven point of view, I think the fundamentals of the business, the commercial that we have spoken about in the past, and you have seen that our momentum, both on the customer as well as in the revenue side in the quarter one, that doesn't change. Therefore, it gives us the confidence. Along with the regulatory interventions, which is resulting into a lot more certainty in quite a few areas, including certainty around the co-location things. Those have also given us the confidence that our EBITDA breakeven, Ethiopia EBITDA breakeven milestone, doesn't change at this point in time. So I think that's how I want to leave Caroline for Ethiopia.
Thank you. Thank you very much, Dilip. Just staying on Ethiopia, Peter, there is a question here from Rohit about Tigray. The question is: How do we see the situation in Tigray continuing to impact the top line performance for Ethiopia? Peter?
Yeah. Thank you, Rohit. When I was going through my summary, overall, we see the security situation in Ethiopia as better than in the past. Overall. Of course, hotspots continue to change. In the past it was Amhara, then, this year, because of elections, Tigray has flared up a bit. We have a business in Tigray, and so far we are able to operate. So whilst the issue exists, it is not at a level that is impacting our operations. We continue to kind of watch the situation as it evolves. The fact that the elections were concluded in a peaceful way, and without a lot of fanfare is also very, very good, which means that going forward you would expect more stability. Because once the elections are concluded, then usually the country unites and moves forward.
The last time when we were there about two weeks ago with the board, we kind of felt, and actually in speaking to various stakeholders, is that there is confidence that actually the conclusion of elections allows for a much more predictable and more stable period to come. Of course, the macroeconomic issue, especially with respect to the Iran-Israel war and all that, and the impact on fuel, it kind of disrupts. But generally, our read of the country is a posture of more stability than less. I think that is where we want to leave it for now.
Thanks. Thank you, Peter. Let me bring us back to Kenya business. This one I will request Dilip to respond. Still from Rohit of Citi, the question is on the handsets. Following last year's handset strategy changes, which he believes are also partly supported by margins, do you expect further declines in handset sales? Would that continue to provide a tailwind to Kenya margins as more device financing is shifted to third-party partners? Dilip.
Rohit, thank you. Thank you for that question. It's a good spot that I think you found that the handset sales have slowed down. I think the margin improvement was linked to the handset sales because if you recall, we had to provide for quite a bit of non-performing assets that we did not necessarily collect. Yes, we learned a lot from that, our device financing through third parties. We needed to do things that requires, as a market leader, we need to demonstrate that device financing can work in this market. If you recall the history of device financing when we started with the Google solution, and we did quite well. Close to 2 million devices that we have sold through Lipa Mdogo Mdogo proposition. That was purely driven by upgrade of phones from 2G to 4G.
We benefited significantly out of it. Of course, customers benefited significantly out of it. Over a period of time, I think ecosystem developed. You see more and more partners finding, and they're not necessarily relying only on the 2G devices. They're also looking at upgrade from a 3G to 4G and a 4G to 5G. Along the way, when we did that, we realized that you can say it's a shift in strategy. Our main objective, let me just first, what's our strategy? Our strategy is to ensure that every Kenyans, there is a 4G+ devices, 4G or 5G devices in every single Kenyan at some point in time. We wanted to fast track it as much as possible, and that's why we went into a big drive of doing it by ourselves. We realized that ecosystem has developed, and we can leverage that.
Ultimately, what matters is the outcome. Outcome is that customers are using a 4G+ devices, and we see that our network attachment of those devices, even if it is not going through our own channel, it's very, very high. By the way, 80% is actually the open market. Therefore, we needed to ensure that we are present in the open market materially, and that's what we have driven. To answer your question, no, I think that you can assume that we have a baseline now we have set. We believe that we have our control channels that we can do continue to still drive our devices to the partners, our own partners, and also, through the open market partnership that we have through different market propositions that we drive. To answer your question, no, I think it's kind of a reset which has happened.
I don't expect that this is going to change materially or it's going to go down beyond what we already have, and therefore, I don't see any impact on the margin on this.
Thank you, Dilip. Still on Kenya, Peter, I will request that you respond to this question from Maddie. The question is: do you see M-PESA mix shifting more towards lending similar to other OTT fintech platforms, especially as competition increases?
Yeah. Maddie, that is a very good question. I think our intention is always to move the mix away from your transaction-based model, P2P, etc., into lending, savings, investments, insurance, and so on. You will have seen, after we corrected price or drove or changed the model around our lending propositions, we have seen acceleration in lending, and you saw it last year. So lending will continue to grow faster than the rest of the M-PESA business. That does not mean that the rest of the business is not growing. But lending will continue to grow faster because we see more. When you look at penetration of lending, it is still probably a quarter of our active 30-day base. So your regular borrowers, generally, if you exclude Fuliza, which has increased quite a bit, is actually about a quarter of our active 30-day base.
The other aspect of lending that will also improve is also the merchant side. We see a lot of opportunity, even with both the small merchants, Pochi la Biashara, but also Lipa na M-PESA merchants. I have to say, we have not actually been as successful on the merchant side as we have been on the consumer side. So once we crack that, we believe that lending can be a much bigger part of the portfolio because there is a ready demand both on the consumer side, but also on the enterprise side.
Thank you very much, Peter, for that. I will take us now back to Ethiopia, and Dilip, I will request that you respond to this question from Linet of Absa. Linet, you are asking about the FX outlook. That one I can share with you. We just rely on just normal market research reports for purposes of FX outlook that is forward-looking. But having said that, Dilip, any sensitivities, guidance that we could give on EBIT.
This is for Ethiopia with respect to be it energy price changes, weaker beer, and/or El Niño shocks. So any sensitivities that the teams need to be aware about as far as Ethiopia EBIT guidance is concerned? Maybe you could combine that with a question from Maddie, with respect to the EBITDA break even for Ethiopia, asking that as it nears, does it mean it is going to be self-sustainable on cash flow basis as well?
So maybe you could combine those two, Dilip.
Okay. Thank you, Linet. Let me start with Ethiopia. Ethiopia, I will divide into two parts. One is the EBITDA break even. I think you already heard both Peter and me reconfirming that based on what we have seen so far and based on our estimates for the balance of the year, with two important variables, which is the most important two variables. There are many variables between the currency and pricing, or as you call market repair or corrections, which are happening at an industry level, driven by the regulatory interventions. Based on what we know now and based on what we see will happen in the rest of the year, we are confident that we will achieve the EBITDA break even milestone for FY27. Let's leave it there and I think that should be enough for you at this point in time to be able to see.
We spoke about the currency. For the longest time, despite all the other volatility, the currency remained quite stable. You will see from Caroline, and I think pretty much the outlook that some of the banks that we use, their outlook, they do not predict. Yes, currency continues to depreciate, but at a much, much slower pace than it has ever been historically for Ethiopia. That is what it is. Price ups, I think you have already seen that in quarter one as well, and how the price ups are showing up and of course, flowing into the revenue growth, that you have seen. So I want to just ensure that lands well, so that is on the EBITDA break even. EBIT is actually is in relation to a guidance, overall group guidance.
I will remain still within the broader EBIT guidance that we provide for the group without necessarily now breaking it down into First of all, we are not discussing necessarily a lot of detail about, you will see the numbers coming as and when we release our results. But for both Peter and me, we are saying we do not see any reason for us to change. For us that our full year EBIT guidance for the group need to change. Although, as I said, we are not discussing numbers now, but there is nothing that I will not go by now Kenya versus Ethiopia, but let us just remain within the ballpark of group and group EBIT, guidance remain. I do not think you need to change or there is anything that requires us to give you any indication of a change.
That's how we leave it on EBIT without being specific about Ethiopia or Kenya.
Thank you, Dilip.
Sorry, there was a question on cash flow. I missed that, Maddie.
Yes.
There was a cash flow.
Okay.
We believe the Ethiopia's big cash requirement cycle is largely over. You would have seen what you have reported in quarter one. Based on, of course, this is the period where you are saying you are getting now scale, the commercial scale of 15 or 20 million. This is the year of gaining our commercial scale of 15 or 20 million customers, and close to 4,000 sites that we want to achieve this financial. Beyond that cash requirement for the business will be driven by how we now from there on, how go we further in terms of rollout. I think by the time we did mention about, I think close to 60% population coverage last year, by the time, ballpark, we cannot be absolute certain, we have reached around close to 70% population coverage.
That gives us the scale that you can start seeing what further opportunities that we have for rolling out sites, and what are the opportunities. That will always be driven, and we will always be investing in CapEx to ensure that business can sustain the momentum and the demand that we see in that market. I think to answer your questions, I will go back to what I said when you were guiding for FY27 in terms of group guidance. Although the CapEx level is lower in Ethiopia this year, because of which you have seen a decline in overall CapEx number. I did say that overall CapEx intensity at the group level of, you have seen that 17.5%, 18% level, if I recollect that number. We do not see any reason that that do not need to change.
There would be a, this year's CapEx number is significantly lower than last year, but I do not think that is the number that you should look at. You should look at an overall level of CapEx intensity, which is what we have given you kind of indication. We believe we can sustain that level of CapEx intensity. Having said that, I think we will always look for opportunities, and we will always tell you when we see opportunities in investing in Ethiopia and see whether there is a requirement of further cash. Right now, I can safely say that the major requirement of cash, we are behind that. I will leave it there, Caroline.
Yes. Thanks. Thank you very much, Dilip. I will take us back to the Kenya business, and this question, I will request that, Peter, if you could respond to it from Mwama. Mwama is with African Lions Fund. The question is on the Kadogo transactions. The ask is: After increasing Kadogo transactions on LnM and Pochi la Biashara Merchant to KES 200 and KES 500 respectively, do you also see scope to expand the Kadogo P2P transactions from KES 100 to anything above that? Peter.
Yeah. Is it Mwama or Mwema? Yeah.
Mwama.
Yeah, Mwama, I thought. Yeah. Mwama, the reason why we actually went, our intention, our direction of travel, as far as value is concerned, is to keep giving more value to our customers, whether on the mobile side or actually on the M-PESA side. In particular on M-PESA, for the more vulnerable transaction types and lower value transaction is what we call vulnerable. We look for targeted ways of actually reducing, either increasing the number of the amount, the threshold that is free, or actually reducing the cost per unit. We decided to go with a promotion for three months on Pochi la Biashara, which we are likely to make permanent, that increases to KES 200. One of the reasons why we did that, we also wanted to understand and test the elasticity, test the kind of cannibalization of the P2P side and so on and so forth.
Because the same customers were actually using P2P. To the extent necessary. Of course, we also have to do it in a way that is gradual, that delivers the outcomes from a business perspective. You are not giving any price if we do not deliver our guidance. We do it gradually, but it is fair to say we already have 60% of our transactions are free. I am sure because of now moving the Pochi la Biashara to KES 200 and the Lipa na M-PESA to KES 500, we will see that accelerate. I cannot tell where the number will end up because it depends on usage. But I am sure in that half one or even at full year, we will be able to have taken the inventory of how that has worked.
There are other pockets that we are looking at and saying, "Can we actually give more value?" We will continue to respond to where customers are under pressure. But I do not want to talk about P2P. It is a large part of our business. Maybe if we went in, we would probably reduce the cost of transactions versus purely just increasing the threshold for free. But that is something that we will make judgments as we go along.
Thank you. Thank you very much, Peter, for that. I believe, Baiju, that also responds to your question around how we are looking at the competitive environment on the M-PESA space. Happy for you to do a follow-up question should you want further clarification. Then I will request, Dilip, if you could respond to this question from Mwama on the network. The question is: Now that a third of our network is 5G enabled, could we comment on whether data traffic has followed? Do you foresee a corresponding uplift in average data usage? Dilip.
Thank you. Thank you, Mwama. I will take you back to, I think, one of the slide that we presented during full year results presentation. The average usage per customer by different Gs, like 2G, 3G, 4G, and 5G. I think we had reported about 1.6 million 5G customers. That is growing rapidly. You may have seen that the usage per 5G customers are more than double that of a 4G customer. That gives you a sense of that it will be a function of how fast we can get customers. Also, I think the other part is that the device ecosystem is also growing. We have not rushed to a coverage, kind of hurry that we need. We are not in a hurry to cover the whole country on 5G.
You are now beginning to see that there is a lot more traction on 5G, and we see a lot more usage. You can imagine that we now get more customers who are using now 5G. The usage also will grow. To answer your questions, yes. I think the other part also, we are also currently looking at how can we now grow a little bit faster than what we have grown in 5G rollout. We did a kind of a one-time big rollout. Then we are doing incremental a little bit, but we are looking for opportunity to see where are those pockets of opportunity where we can 5G. Because 5G is not only the mobile usage, which we of course see a great momentum. The other part is the 5G, the FWA. Mwama, that is also a big part of our story.
You have seen in our overall fixed broadband, that is showing up as a material number in terms of the incremental growth that we are seeing, where we are not able to cover by fiber, we are able to cover by FWA. Combining these two, this is one area we are currently looking at to see and know how we can fast-track the rollout and therefore, more customers. I think the opportunity is much bigger, as you can see. Internally, we discuss about average usage per customer in Ethiopia and in Kenya. You know that shows up. Of course, you can argue that Ethiopia has 10, 11 million data customers and Kenya has double of that. But it is not that Kenya has three times or four times.
From a usage perspective, when Ethiopia is at more than 7 GB and where in Kenya we are at just about 4+ GB, we see an opportunity. I think we also have to enable the device strategy, which is working very well, combined with our rollout, a fast-tracking rollout, and ensuring that we drive both the mobile broadband as well as the fixed broadband to the FWA proposition. This is a very important area for us, Mwama, just to confirm.
Thank you, Dilip. Peter, I will ask you to please respond to this question from Tracy of SPG, around the merchant lending space. The question being: What are the particular bottlenecks on merchant lending not scaling as fast as consumer lending? Is it a credit scoring model issue or higher potential average loan value compared to consumer reducing appetite from bank partners? Peter.
Yeah. Remember that, Tracy, we generally work with banks. All of us actually, both banks and ourselves, want to lend more to merchants because it is such a big ecosystem. As you know, Lipa na M-PESA merchants are around 1 million, and we have Pochi customers who have been growing very, very fast. The reason why merchants have not grown as fast is there are two or three. One is just purely focus. Our business evolved as a consumer business on the M-PESA side, and therefore is more mature on the consumer side. On the merchant side also, it was primarily payment acceptance rather than actually understanding customers in that way. We have improved that, and especially with Pochi, actually it allows us to actually have cohorts. That is why I talked about segmentation of customers.
Now we have a much better ability to segment customers rather than in the way that we do primarily on the consumer side. We can actually be broadest. Whilst on the merchant side, we need to be more segmented. Either industry, now we are starting to offer Ofa Ya Boda Boda, which is offer for boda riders, which is motorcycle riders, Ofa Ya Mkulima, offer for farmers and so on. Because of ability to segment, we now have a better understanding and we can credit score better. The second is that you are right, the ticket sizes are higher, and therefore the appetite for banks is not as strong. But actually, we are seeing a lot more appetite now, not just from tier 1 banks, but generally across banking ecosystem. The third component is that our platforms and our ability to actually do this has improved massively.
Fintech 2.0 AI processes have actually improved. Our ability to actually track usage and also be able to monitor how utilization is happening is also much better. You will see going forward a lot better penetration of innovative products amongst our merchants compared to the past. How eventually that evolves, we will see, because we just kind of experiment and learn. You will see a lot more focus in this area.
Thank you. Thank you very much, Peter, for that. I will now get back to Ethiopia questions, and I will request Dilip, if you could respond to another question here from Tracy on the CapEx target. The question is: Does the current CapEx target in Ethiopia align with network population coverage targets previously agreed with the ECA, or have those targets been revised? Dilip.
Tracy, thank you for that question. So far we are on track. Of course, we now have to see what is coming up in the future. This is one of the areas that we are aware of that the trajectory of some of the disruptions that has happened in the country, that has led to material slowdown in the way we roll out. There are history to it where we have come so far. Therefore, these are some of the considerations we will have in terms of our engagement with ECA. If should there be a need to, but we have not to confirm you. No, we do not have any revised obligation or revision of target in terms of rollout obligation.
This is a live topic and this is something that we will be engaging should there be a need to change the direction in terms of the CapEx that we invest in future. But so far, we are on track. Thank you.
Thanks. Thank you, Dilip.
Can I add?
Yes.
Can I add to that, Dilip and Caroline? Tracy, one of the other elements that we were very attentive as we went to the regulator is to say, for us to be able to actually meet population coverage targets, because Ethiopia still has wide areas that are uncovered. We need a mechanism to ensure that the industry has sustainable pricing, which will then justify the investment. Because if you are selling below cost, then you cannot justify a huge expansion. But if the price is appropriate, then all we need is to increase the CapEx intensity. The regulator is also aware that how the regulatory led interventions evolve will also determine the ability of the industry, not just for Safaricom, but also the industry to be able to cover the parts of the country that are not covered.
That is also one of the aspects that we have really ensured that the regulator is aware of.
Thank you. Thank you very much for that, Peter. Dilip, maybe just back to you on a question here from Sila with respect to Ethiopia tariffs. The question is, "Has there been any subsequent tariff increases? Should we expect tariff changes as regulations evolve? Is there a potential for a regulated price flow as part of the industry pricing discussions?" Dilip.
Okay. There's quite a lot of questions in one question. I think let us first try and understand what happened last year, which you are calling as a regulatory intervention, which followed from the World Bank study that was done. I think you have to understand and differentiate between the price floor, which most of you are familiar with in many markets that exist. A price floor could be anything. It need not be necessarily at cost. If you think about Ethiopia, what Ethiopia regulator has done, they are not saying this as a price floor. They're saying operators are selling their services below cost, and that's why it's called cost of service. So it's a cost of service floor rather than a price floor. A cost of service floor can also change.
Based on actual cost study, that will happen over a period of time. So right now, the cost of service, which was provided by the regulator is what is in implementation. Which, of course, is getting implemented over a period of time. You have seen the first phase of implementation in December, January. Then, not necessarily headline price change, but there has also been further optimization of prices. I don't want to give you any kind of any quantum or a percentage to it, but there has also been optimization of prices, which has happened subsequent to those. We know that there are more price ups coming because especially on the data side, the voice price gaps are not from a cost of service perspective, not still necessarily from a profitability perspective, because that can still change depending on how the cost evolve.
From a cost of service flow perspective, I think voice is quite close. Data is where we're still behind. Therefore, you can expect that industry will have more interventions over a period of time. But it's not necessarily that something will happen on every month or every quarter. There would be kind of a periodic price correction to ensure that it doesn't impact the customer's ability to pay, given customers are also dealing with a lot of affordability challenges, driven by the Middle East crisis, where inflation has gone significantly high, especially in Ethiopia. Food prices and other price are materially high. So we have to balance it in a way that we keep still driving towards that cost of services. Which I said, data is still significantly lower. You will see more coming up in future. I think that's what we said.
I think nothing has changed what we have told you before. The industry is implementing the price changes, but not necessarily at one go, but over a period of time.
Thank you. Thank you, Dilip. Now that I still have you, just a follow-up question from Tracy. Any comment you could make on the debt structure for Ethiopia?
Tracy, Ethiopia, you've seen our quarter one numbers. I think the equity contribution that's coming, and I explained it last time as well, it's unwinding of the deferred vendor payables that we have, which is backed by shareholder guarantee, is now coming back as a contribution to equity. It's a shift from that line to equity line. When it comes to debt, we do have strategy around the local debt as well as the foreign currency denominated debt. You may have seen that the debt levels for the local level debts have actually come down. The foreign currency debts slightly gone up. The IFC debt is also kind of staying same. Yes, the debt strategy is very clear. In terms of waterfall, equity is the last choice of funding and therefore you will see that debt is what is funding this business.
You will see that coming also as we release our half yearly results. It will be more on the debt side rather than on the equity. Nothing changed compared to what we have mentioned before. We are looking at more of a balanced capital structure where you have a mix of equity, which I think is material. Capacity, as much as capacity we can do locally, we borrow locally, and whatever shortfall comes in after exhausting foreign currency debt, this comes through equity. That's how it continues and that's still what we see going forward as well.
Thank you. Thank you very much, Dilip. Peter, I will request you respond to a question here from Douglas. Douglas is with Ethos Investment. With no 5G spectrum allocated in Ethiopia and Ethio telecom already deploying it, do we see any changes to our performance in the short to medium term?
With no 5G?
Spectrum allocated in Ethiopia, and he asserts that Ethio telecom already is deploying it. Does that competitive gap change our performance in the short to medium term?
No, no. It does not, Douglas, and the reason for that is we have bigger fish to fry. I think the one big advantage we have in Ethiopia is that from day one we went with a 4G+, and we have 5G ready network. If we really wanted in the future to install 5G, it would not take us the same time and also cost that it has taken us in Kenya. We need to leverage the investment that we have made in 4G because the whole of our network is 4G. The second is there is quite a lot of opportunity on the fiber side because it is such low fiberization, even outside penetration compared to Kenya and so on.
Whilst 5G will be opportunistic, I would say, in airports and these types of places, we do not see 5G as a big opportunity initially at least. For the same reason that Dilip said, number of devices, kind of sequence of the needs of the business, and even to channel investment. I think spectrum is less of an issue, because we will be having spectrum that is similar to, at least, not necessarily in quantity, but similar in terms of bands to Ethio telecom. There is no reason why we cannot be able to commercialize 5G if we wanted, but it has not necessarily been a major focus area for us from a priority standpoint at this stage. We will evolve it as we go along.
Thank you. Thank you very much.
Peter, if I may just add.
Yes, please.
Go ahead.
I think to your specific, in case if your question and you are wondering whether we have 5G spectrum, the answer is yes, we do have 5G spectrum. In fact, we have 5G spectrum in three bands. We have 2300, we have 2600, and we also have 3500. You know 2300/2600 is also fungible between 4G as well as you can use it for 4G TDD, both in 2300. So we are mostly using this for our 4G because that is what our focus is, as Peter mentioned. To answer your question, Quantum could be different, but we do have spectrum allocated for 5G as well, 2300, 2600 and 3500 as well.
Thank you. Thank you, Peter. Thanks Dilip for that addition. Now that I still have you, Dilip, if you could respond here to a question from Marianne around the voice ARPU. The question is, do we expect the decline in the voice ARPU to persist? How are we thinking about the role of voice within the overall mobile service revenue mix going forward?
Thank you, Marianne. I am assuming this question is for Kenya.
Yes, it's for Kenya.
Because I don't think it's a question for Ethiopia. Because they are two very different markets. Kenya, while Ethiopia is building their voice business, Kenya is, of course, building beyond what we thought a matured business. Yes, it's voice in Kenya, we call it matured business. But what we get also surprised with the level of, when you are putting interventions in place in pockets, which you don't generalize for the country as a whole, we do see a response from the customer. That's why you'll see that the usage level actually is very encouraging. We are able to hold our customers or even increase. But most importantly, we are able to grow our usage. Therefore, when we see that more of a Because pricing is, as you know, we are significantly premium priced in terms of voice.
Obviously, we always look for opportunity to see how we leverage, not necessarily changing in headline price, but in leveraging pockets of opportunity, how we see the pricing. So if you put a combination of both price and usage, I would say, voice, it's more stable. Or it's more stable than what we expected or we thought that it will show up. Now, the other thing I want you to look at is, don't look at voice as a standalone business, as you always reminded. That's why I think for the last two years, if not more, we started reporting connectivity business. We include voice messaging, mobile data, and content as part of that business because it's the same wallet. So if customers are optimizing voice, they're using more mobile data.
If customers are using optimizing messaging, they're using more WhatsApp or other social channels in mobile data. So you have to see, and they're consuming more content and digital services. So we have to see this in totality as a connectivity business. We said that within that, our medium to long term growth engine would be mobile data, and that opportunity continues. You'll see that coming through. That's one of the growth drivers in that connectivity business. We also mentioned about that we grew above inflation in this overall connectivity business. If you notice for the last two years or the time that you're reporting these numbers, at a connectivity customer level, so you also look at the connectivity customers, we are growing customers, and we are also growing ARPU. So you don't look at voice ARPU, mobile data ARPU separately.
You look at overall connectivity customers. Are they giving you more than what they are giving you before? The answer is yes, they are giving more. That is why we are growing our connectivity business over the years. I think that is how I think you should look at, not voice separately, but overall connectivity business.
Thank you. Thank you very much, Dilip. As we come to almost a close of the call, I will just address the few questions remaining. Before I ask Peter Ndegwa to respond to a question with respect to the Vodafone transaction, Dilip, I would like you to respond to this one from Shruti. The question from Shruti to you specifically, Dilip, is, "If you could wish one persisting problem away, what would it be?
Shruti. One persistent problem away. I do not say that is a problem, but I think we get a lot of customers' feedback in terms of how our trust level is extremely high as a brand. But we do disappoint our customers time to time, and sometimes we score our own goal. I think if there is one wish that we had, what could be a magic wand in this area to be able to see that despite all our effort, all intention, all things that we do. Shruti, this has been one of Peter's, when he joined, one biggest focus area. But despite this being the biggest focus area, this still continues to be the biggest opportunity for us.
I think if there is one wish, that is a magic wand, I want to see that how we are able to make sure that we live to the expectation of the customers because they put a very high trust on us, and then we deliver to their expectation. I hope that still covers the wish area of Shruti, the question that you asked me.
All right. No, thank you. Thank you very much, Dilip. Shruti, thank you for that question as well. I will request Peter to respond. I think thematically, I saw some questions here on the Vodafone transaction. Peter, I will request that you just make a comment around it. I think what is coming through on the question is, was Safaricom part of the process? Should we expect any change to the dividend policy that is at 80% payout? Lastly, if there is any comment you could make around Safaricom operations in terms of the Vodafone support that we receive. Just thematically around that as you make a comment around the transaction, Peter. Peter, you are muted. If you could please unmute.
Yeah.
Sorry.
Thank you. Apologies. I knew that this question would show up. Before I answer the question, I really liked the previous question. I do not know why, Dilip, you found it strange, but your answer was spot on. The thing that frustrates me most is when we disappoint customers, and whether that is we cannot answer all the calls that customers want, whether it is that a customer wants to see a human being and they are being pushed to a bot, whether that is a customer in M-PESA potentially feels that they could be social engineered and so on. Frankly, I feel that we are now starting to make some progress.
One of the things we have started to do in order to deal with the flow of customer traffic into our retail base, our shops, is we set up what we call franchise shops that are primarily owned by dealers. Through a breakthrough that we have learned on the public sector, we are now able to actually use biometric to do SIM swaps. If there are two things that customers come into our outlets for, SIM swaps, customer statements, and PIN resets and those types of things, but that goes to the call center. As a result of that, we have seen huge reductions in queues because the waiting time is less, the service time is much less. Therefore, that is actually a very good green shoots on the service side. The other aspect where we disappoint customers, to Dilip's point, is on value.
That is why we will continue to push additional value, whether it is on M-PESA or mobile data. I thought that I should also answer that. With respect to the transaction itself, the transaction went through after the appeal court actually allowed the transaction to go through. But yesterday, there was a ruling by the high court that the transaction is not valid and actually should be reversed. Of course, that is not necessarily good news. But I should say that the transaction is between two of our big shareholders, which is the GoK and Vodafone. With respect to how we operate, nothing changes. You would have seen communication from Government of Kenya through the Minister of Finance, or the CS for The National Treasury, giving notice of appeal by the Treasury.
Them saying, look, they want to see the transaction go through, and they believe that they did all the things that they needed to do and got all the right approvals for the transaction to conclude. Therefore, from what we are seeing from the seller, is that their intention would be to conclude the transaction through an appeal process. How that evolves, that's not for us as Safaricom. It is for the shareholders to determine that path. Also because it's a legal process, we can't really comment too much on it. You'll have seen a cautionary statement that we have issued to the public to say that Safaricom continues to operate in the normal way. Of course, our legal teams, together with other external counsel, will advise us and the board on any implication to the extent necessary.
But given that this is a shareholder matter and they intend to see the transaction through, at least from what we are seeing, what has been publicly declared, then we should assume that status quo continues. In terms of impact on our business, nothing changes. The way Vodafone supports us will continue to be the case, and whether that's in the interim or in the future. So we do not see much change at a practical level. The legal piece, I'll leave it to the two shareholders and the lawyers to determine that. But from a practical perspective, our business continues to be solid. Our commercial activity will continue as if nothing has happened. In any case, this has been going on for 12 plus months, so it isn't something new. We have not been informed of anything else. So I'll leave it there.
If there's any change, I'm sure we'll update you as time evolves. Thank you.
All right. No, thank you. Thank you very much, Peter Ndegwa. Thank you very much, Dilip Pal. I think on that high note, I will bring this session to a close. If you feel you need to have any other follow-up questions, feel free to reach out to us in the usual manner. Otherwise, as we gear up now for half year, looking forward to further engage with you as we release our results on the 5th of November. I think this is also a good time to state that we are having the investor forum. Our annual investor forum that we skipped this year is happening next year in February and bringing all of you to Addis Ababa, Ethiopia. So please mark your calendars for the 25th and the 26th of February.
You should be receiving your invites coming through in the course of this week so that you save the date and also pre-register for the event as we make the necessary arrangements on our end. We will keep you posted on how that pans out. From us here, it is to say goodbye and good day. Otherwise, thank you and looking forward to half year results engagement in November. Thank you and good evening.
Thank you, everyone.
Thank you. Thank you, everyone.