Earnings Call: Q1 2021

Apr 29, 2021

Good afternoon, everyone, and Ramadan Karim. Hello, and welcome to Aridu's financial results call. My name is Sara Al Said from the Investor Relations team. We are joined by speakers from various locations in Doha during this Zoom call. Let me introduce my colleagues. We are joined by if you have joined our recent virtual Bond Roadshow, you will be familiar with Aziz Al Azman Fakhlou, Managing Director of Orito Group. Joined also by Sheik Mohammed Al Thani, Deputy CEO, Orito Group and CEO of Orito Qatar Abdallah al Zaman, the new Orito Group CFO Ajay Bahari, former Orito Group CFO and now advisor of the Group MD. All buyers are available in the investor deck. Aziz will start the presentation with key financial highlights and consolidated results followed by OpCo results information by Sheikha Hammad and our group CFO, Abdallah. We keep the presentation brief to allow sufficient time for your questions. The presentation is available on our website, orido.com, as well as on the webcast. Please do note the usual disclaimer on Slide number 2. So to begin, I will now hand over to Aziz. Good afternoon, everyone. Thank you. Once we've passed the disclaimer, I'll start. Sarah, if you can go to the group result highlights slide. Perfect. Good afternoon. Look, we're happy to start the year on a very strong foot. As you will see with our results, our revenues are flat year on year. We actually have a slight decline of 1% at QR SEK7.2 billion for the Q1. Our EBITDA increased by 6% to BRL3.2 billion for Q1. Our net profit attributable to Redo shareholder has decreased by 50%, and this is mainly driven due to FX impact. Our data revenue accounts for now 55% of our revenue. This shows and highlights our leadership strategy in data across all our markets. And of course, as you are aware, we've announced 2 landmark transaction in Q1 of this year. 1 was the successful sale of 4,200 towers in Indonesia through Redo Indusat for approximately $750,000,000 This is the highest valuation for this kind of assets reached in Asia. So we're very proud of this transaction. We also are very proud of our bond issuance. We returned to the market this year after a 5 year gap. We have a book we had a book that was oversubscribed by 3.4 times and achieved a coupon of 2.625 percent per year for $1,000,000,000 issuance. That puts us as the lowest coupon for all emerging market telecom operators. Next slide. Now as mentioned before, our revenue has marginally dropped to SEK7.2 billion. That's a 1% drop, which is driven due to an FX impact. If you exclude the FX impact, actually, our revenue has increased by 1%. Just a reminder, we achieved an increase an operational increase of revenue by 1% comparing Q1 of this year to Q1 of last year. But Q1 of last year, the 2 1st months, didn't have any of the COVID restrictions we experienced across the market and we still have to experience today in most of our markets. So we're very happy with this performance. In terms of EBITDA and this highlights our continued focus on cost optimization through leveraging technologies and digitalization, our EBITDA grew by 6% year on year to SEK 3,200,000,000. This is actually impacted again by FX. If we remove the impact of FX, our EBITDA actually grew by 9% in the Q1. This has been driven by a very strong performance and margin expansion mainly in Indonesia, Kuwait, Iraq and Myanmar. To put it in perspective, our EBITDA margin for Q1 is of 45% compared to last year's Q1 at 41%. Next slide, please. As mentioned, our net profit is down by 50% in Q1 of this year. This is really for the Q1. For the Q1. Next slide. In terms of free cash flow, in CapEx and free cash flow, we're on schedule for the CapEx plan for the year. We're slightly ahead of last year CapEx expenditure at BRL 850,000,000. That's a 5% increase on CapEx for Q1 versus last year. Remember, CapEx is quite seasonal, so the variance is actually in the norm. In terms of free cash flow, again, we have a healthy free cash flow of EUR 1,300,000,000. That's a slight reduction versus last year for the Q1, minus 14%. One factor plays in, as you've noticed, our CapEx for the year is slightly higher at the beginning of this year. This accounts for most of the deviation in free cash flow for the Q1. Our total customer base. Our total customer base is for Q1 'twenty one at 118,000,000 subscribers. That's close to par or stable versus Q1 of last year. There's been some slight drop in customer base, especially due to some regulatory change of accountability of customers in Tunisia. This drop in Tunisia has been offset by an increase in subscribers in Indonesia, Iraq, Oman and Algeria. Net debt. In terms of net debt, we're having right now a net debt to EBITDA ratio of 2, which is right in the middle of our board guidance of 1.5x to 2.5x. Again, as a reminder for the net debt, we just issued a $1,000,000,000 bond at the beginning of this quarter and used the proceeds to prepay a maturity of next year. As a summary, revenue is stable, minus 1%, in line with our guidance. Our EBITDA is at 3,200,000,000. That's 6% increase versus Q1. That's ahead of our guidance for the year. And our CapEx is of 850,000,000 QR, which is right in line with our guidance for the year. We remain confident for the rest of the year. As you may know, a lot of the rest of the outlook of the year also depends on the evolution of COVID-nineteen and impact on our markets. Thank you. Thank you, Aziz. I'll take you through the throughout the operational review, and we'll start with our home country, Qatar. In our home market, Qatar, we maintained our position as the leading operator in terms of both market share and infrastructure with Ridicata fixed line and mobile network ranked among the fastest globally. We remain focused on maintaining our network leadership as the Ridicata fiber rollout program success continues to 479 homes connected across the country. Financially, we had a good start of the year. And in Qatar, we have a year on year growth of 1% as a revenue on top line, a strong adoption of Oridoo 1 or redo, we call it, all in one home services. EBITDA remained stable, and we maintained a robust EBITDA of 54% margin in Q1 2021. Sequentially, revenue decreased 1% between Q4 2020 and Q1 2021. During the quarter, we were honored to have been recognized as the Global Partner of the Year and Digital Partner of the Year by leading money transfer company MoneyGram, a testament to our strategy and developing an ecosystem of solution of our customers. If we move to Slide 13 in Kuwait. COVID-nineteen contributed to a sustaining macroeconomic. EBITDA for the period the revenue declined 8% year on year. EBITDA for the period increased 2%. And thankfully that is due to the cost saving and optimization program that the company is having. Despite the revenue decline, we remain in the 28%. Back to Slide 8, please. Still there. So in the EBITDA, still we have a very healthy margin for 28% despite the top line decrease. Overall population reached a 30 year low level in Kuwait, with a sharp decrease in expat numbers, heavily impacted our customer base. And that's due to COVID-nineteen and the macro economy and whatever we have seen affecting the country itself. There is a positive M and P trend in Q1 2021. OIDO Kuwait was awarded the Best Internet Service Provider at the Annual Service Year Awards for the year 2020. The company remained focused on launching new innovative products for its customer. Most important to mention here also, Envoy to Kuwait, we signed MNOU with the MBK, the National Bank of Kuwait, to develop our digital services products and solution that contribute to the enriching customer experience, and that's part of our Oyu2Grow digital strategy. If we move to Algeria, Algeria delivered a very healthy number or set of results in Q1 2021 compared to Q1 2020 in local currency. Still there is a challenging micro economy environment. There is also a suffer from 9% depreciation in G and D now. In local currency, revenue increased 2% year on year, supported also by reopening the business and bundling of our offers, mainly in Uredu app and also targeting SoHo and SME businesses. It's a niche market that Uredu Algeria is really striving for and hitting for targeted customers in that segment. EBITDA, 34%, due to cost saving and digital efficiencies as well. Customer base is at $12,700,000 in Q1 2021, up 3% compared to the same period. Still, we have a leadership position in customer satisfaction. Over to you, Abdallah. So I will hand over to our Group CFO, Abdallah Samad, to take you through the rest of the OpCos. Thank you, Sheikha Hammad, and good afternoon to everyone. I will be covering starting with Indonesia. I would describe this quarter for Indonesia to be the best performance quarter ever when it comes towards the past 5 quarters. When it comes to the revenue, the revenue is about approximately by 13%. The growing, of course, was driven by a stronger performance and that consists of mobile and B2B. Also on the EBITDA level, we noticed that there is approximately 36% growing from a previous quarter or quarter 1, I mean 2020. And this is also due to the combination of top of growth and optimization in the costs. When it comes also to our customer base, we have noticed an increase in the customer base from previous quarter. And the good news about also Indonesia, which was covered earlier by our MD and his introduction about the sign off of the or the sale off of the towers of 4,200 towers that generate approximately EUR 750,000,000 This is also will be reflected properly in next quarter, but this is a good enough right now in Indonesia. Then I can go to Tunisia. Also Tunisia had a good top line of SEK 394 1,000,000 in the quarter 1 in 2021, an increase of approximately 3%. And that also has an impact or favorable to the FX trends for the vending machines for the commission currency. When it comes to EBITDA, there was slightly down in EBITDA, approximately 3%, and that was due to one off transaction in the OpEx. And I'm sure that this is will recover by quarter 2. When it comes to our customer base, there was a lower of €2,200,000 due to change on the prepaid customer lifecycle definition of 90 days in a state of 180 days. And this was a common methodology that was cross mobile that was applied across the mobile operator in Tunisia. When it comes to Iraq, Okay. As you are all aware, Iraqi economy was impacted by weakening in purchasing power followed by 17% devaluations of the Iraqi dinar and the effect of, of course, of COVID-nineteen pandemic that caused a little bit stretch or little bit pullback on the top line. So the revenue has decreased in quarter 1 versus quarter 1 of 2020, and that was €852,000,000 versus €1,085,000,000 And on the EBITDA level also, we've seen a decline of approximately 20%, €380,000,000 But in overall, the EBITDA margin, we can see it, it's in healthy EBITDA margin with 45% minting. There will be a slow recovery hopefully going forward. And in term of the customer base also, we've seen a slight increase in the quarter 1 2021 versus quarter 1 2020 year on year. One good news about ERAD that we have also successful launch of 4 gs. And this is will probably will impact or will lead to contribute more to the top line in the future months. When it comes to Oman, COVID-nineteen in Oman have played a big role in impacting the top line. So the top line was impacted by approximately 5%. So a decline year on year from quarter 1 2020 21 to quarter 1 2020. EBITDA also declined by approximately 12% during quarter 1 2021, but the company can remain committed to manage its overall cost structure in order to gain market and improve top line. When it comes to regional demand, customer base has increased by approximately 2%. So this is 2,900,000 in the quarter 1, 2021. And it seemed that the company has a very good foundation in term of customer base. Lastly, I will go to Minima. And as you are all aware about the political development in Minima include the restriction in mobile and wireless broadband. So the MiniMar has the top line in MiniMar has been declining for approximately 11% year on year. It's driven by, of course, revenue restriction, but offset by little invoice of the voice revenue. Luckily, the EBITDA was improved by 12%. And this is, of course, due to optimizations and cost savings in order to manage the circumstances in minimal. 1 of the major decline that contributed to the revenue of MiniMar is the FX decline, which will contribute approximately 11%. Customer base also has decreased in MiniMar by approximately 14%. Just want to let you know that also OyuDuo MiniMar also has launched number of initiative to support the community and include, of course, donation and reach a fee recharge in order to help the community during these circumstances. I will go back to you, Anders. Yes. Thank you very much, Arthur. Before we go into the Q and A session, a couple of announcements. First, I'm very proud to share with you that we just uploaded our first ESG report. It's available now on our website, and you'll find some more details about our activities and disclosures in that space. So if you have some time, please check it out. I'm going to post the link here as well in a second. Moving on to the next slide. Activities for the first half. Travel is still extremely difficult, so we can join at least some virtual conferences. And the next one will actually be coming up with ACAM from the 24th to the 26th May, followed by a Debt and Equity Conference by Bank of America Merrill Lynch at the beginning of June. And our first half results are due again at the end of July. And then another request from our side. The Ekstel survey or as it calls now the Institutional Investor Magazine survey started the voting process again, and we would highly appreciate your support there. We have 3 nominations. Best CEO is Sheikh Mohammed Alsani. Best CEO is Abdulazaman. And we got 2 nominations in the IR sector with Sarah Alsayed and myself. I shared with you the link there as well and would highly appreciate your support there. If you have some feedback for us, IR is always looking forward to that. And that's always much appreciated. Yes, moving on to the next area, which is going to be our Q and A session. So you have different ways of asking questions here. You can use the chat function in Zoom or you can just raise your hand and then we can open the microphone as well. Or if you dial star 9 on the telephone, then we can also take audio questions from the people who are dialing in via phone. So I would like to open the floor now for your questions. There's a question from Ziyad. Can we just give him the audio access? Jessica and Sarah? Hi. Can you hear me, Andreas? Yes, we can hear you. Yes. So I have several questions actually starting with the cost optimization initiatives. It seems that employee salaries and associated costs are down 14% year on year. I'm wondering what's the cause of this? Is it because of digitalization initiatives mainly in Indonesia because this is where we've seen most of the recovery? Or is it mainly due to the COVID sort of COVID-nineteen impact with shop closures and we're going to see a reversion of that trend and an increase in cost on recovery and mobility? That's the first question. Yes, okay. So second question is on Qatar. We've seen ARPU recover 5% year on year. And it's not just because of increased postpaid segment. We've seen specifically a 4% recovery in the postpaid segment's ARPU by itself. So what's driving the recovery in the postpaid segment ARPU in Qatar? And do you think this is sustainable? And what are the key sort of levers or drivers for growth in that market given that we've seen subscriber base decline? And that's the second question. And third question is with regards to the allowances for impairments. These dropped by SEK60 1,000,000 year on year. Were there any sort of reversals in this quarter? These are the 3 questions I have, but I'll stick to this and then I'll come back with more questions. Should I take that question, Andreas? Yes, please. So let me take that question. I think with the salary and we always have ongoing optimization programs and that's where we are being very efficient looking into the cost structure and mainly of OpEx item, the start cost. And we always have this efficiency. Needless to say also, the COVID-nineteen has really implemented or brought a new culture of digitalization and people working from home and people start adopting a new way of method or methods of working. And that's initiative that's being taken also by some of course our team being taken this as its trials. So it's an ongoing program optimization and digitization also and COVID-nineteen has really contributed to this efficiency. If I move to a question about copper, yes, thankfully, there has been a revision on our products and portfolio of enterprises and mainly on the 5 gs plans. And this is part of monetization of 5 gs investment. And basically, we are at Torito Khator focusing on giving more value for money and that's where the revision of our offers and being innovative with also bundling these offers with content providers. I can name it with Netflix mainly and OOS and Estraceplay. And this is really happening during the 2020 year and helped ORE to Qatar to be innovative by providing more value for money with revised prices. And that's really helped also our ARPU increase. Is there any other is there a third question from Ziyad? Yes. That's very clear. The first question is on the allowance for impairments, the decrease in impairments for receivables? I think I have maybe someone from EJ or Quite not sure about your question, impairment on receivable or impairment as a general. No, no. Allowance for impairment related to the receivables, but it's fine. So just one more question also with regards to the $750,000,000 power sale in Indonesia. Can you give us some details on the leaseback costs, the structure, how much do you expect to pay per year on leasing back these towers? Somebody can answer that question, Azis. Do you have that or I ask EJ to answer that question? Let me pick this up, Dola. I think the exact details will be eventually released by IndoSat, Viridu. But as a concept, what I can tell you is the process was more to fix the lease payments and get bids based on the lease payments, which we had bidded out. So it was not that the lease payments were to be bid by the bidders, that was already fixed in the RFP process. So it was benchmarked to the market rates and then the highest bidder was selected based on the process. But more detail, of course, Indusat would release in due course on that. And I can probably pick up your question on the impairment as well. The receivables, if you recall, the COVID started in Q1 of last year and the risk on bad debts have increased as a result of that. Some of that is getting reversed. Recoveries have improved in some of the OpCos. So that is partly the reason why you see some improvement in that. That's very clear. Is it possible to quantify the reversal in the Q1? I think we can pick that offline with the details with Andreas there. Okay. We have another question coming up. Jessica, if you could unmute Selman Baba. If that's not working, let me just take another question. In the meantime, we have a question from Nishet from CECO. How do you plan to hedge the expected significant impact on earnings forex it from the Myanmar kjat devaluation? Maybe I can take that one, Andreas. Sure. So the FX loss which we get from Myanmar is related to their dollar payables. A big part of that is their IFRS 16 leases, which came into play once IFRS 16 was implemented recently. As far as hedging is concerned, there are no hedging instruments available in the Myanmar market. So that's a risk which we have to live with. What is done proactively in the country is to look at contracts which are dollar denominated and see if these can be converted to local currency and there's a proactive work being done by the team on the ground to do that not only now but for quite some time. For example, even for the tower leases, a certain portion which is linked to local costs is paid in local currency. So that's a continuous effort. Unfortunately, there are no hedging instruments in that market. So that's a risk which will continue. The only way to reduce it is to reduce the dollar contracts and dollar payables, which is not always possible. A lot of vendors don't want to take that risk as well. So that's part of the overall risk, I think, of the business there. All right, good. Thank you very much, Ajay. Any further questions? Please raise your hand or type your questions. One comment on the conditions of the Indonesian tower sale. The details will be shown in the financials in the future, but the deal is not that different from the last Tower deal that we had there. So you can expect more of the same impact. Yes, Tyler, we can hear you. Okay, perfect. Hi, and thank you for the call today. I had just a few questions related to Oman. The first one is in regard of your of the VAT that got implemented on the 16th April. I was wondering if you passed through the full VAT in your prices. And the second question, again, related to Oman is the 5 gs license. Can you give us a little bit of detail about what's the conditions there? Because I understand that you have a commitment, you and Omen Tel to build around 4,400 5 gs station over the next 5 years. But I was wondering if there is an annual fee to pay related to that because I haven't seen any license payment fee related to that. So maybe if you can clarify. And also, just a final question in Oman, if when do you expect the 3rd player to enter and to start operating? Is it Q3 or Q4? I mean, if you have any sense on that. I can answer that question. The VAT is live right now and almost since 16 April, and that's in regard to the Brat. In regard to the tower deals of the 5 gs and the licensing, we have paid that already. And yes, there is a commitment to the regulator over there to build approximately, if I'm not mistaken, the number of towers. I don't have the number of towers, but yes, there is a plan to do that. And in term what was your third question? The timing of the new entrants? The timing of new entrants as our as per the latest update is will be on the quarter 4 of this year. Okay. So just Maybe just some additional information just to clarify. So VAT is in place and we have implemented that in our pricing system, and we are actually ready to increase our prices by 5%. So we don't No, that all the way, the 5% being pushed to the customer. So the price is not Yes, exactly. Yes. Yes. So it's cash neutral there. Of course, we have to see how the customer behavior reacts to that, but that's the situation. Now with regards to the spectrum fees, we paid 7,500,000 Omoney reals already, and we have to pay an annual fee of approximately 1,000,000 Omoney reals for that. Thank you. It was very clear. I see we have Mohammed Siraj in the list. How much you are you can raise your question. Hello? Yes, it's Yagat. Yes, we can hear you. Okay. I just had one more follow-up question on Aira. With regards to the $234,000,000 license payment, was this entirely paid from cash in Asia, Sal? Or did we see some downstreaming from Qatar to that subsidiary? And also, is it a bullet payment? Is it going to be an installment? Because it seems that the net debt to EBITDA increased because of this. So I assume it was a onetime payment. And also on Eira, since we're discussing this market now, why did we see the BRL200 1,000,000 FX loss and dividend receivables from that entity back in Q4. Is there any issues in repatriating cash generated in Aira? And is this improving now? And if so, why? The historical FX loss was because of the devaluation done by the Central Bank in quarter 4 last year. So we have dividends receivables still from Iraq. You'll recall that about 4 years back, we were not able to upstream dividends from 2017 onwards. We've been doing that on a regular basis, but still there is some amount still available for us to upstream. So the un upstream part had an impact for us because of the devaluation. But we are continuing to stream upstream dividends on a regular basis, but the amount will take maybe a year or 2 to deplete completely for the current rate that we see. The payment, of course, for DKK234 1,000,000 was done completely from Asia Cell itself. They had all the cash they were prepared for them. It was a bullet payment done in the beginning of this year. Okay. That's very clear. Thank you. And one more question. When it comes to 5 gs coverage and Tata, are we now at full coverage? Or do you expect more CapEx deployments toward that? And is it possible to give us an indication on the normalized CapEx intensity we can expect and potential one offs in preparation for the World Cup? In Qatar, we are at almost 99% coverage of the populated area. In terms of the CapEx, we're always in guidance of support and of the ratio between 15% to 20% of the revenue. And we always remain in mind and top priority is provide the best infrastructure and productivity for our customers throughout the country and also being prepared for the big transit one. Okay. And what about the World Cup preparation? Could we see a one off investment, material investment? Or for that matter, any potential ICT business sizable revenues? Yes. Still, there is always ongoing investment and hand in hand with the Supreme Committee of the World Cup. We also have our big joint deals that with road trip company like Microsoft and all that really enhance the infrastructure of being a digital partner and having a digital hub of the country as well as finding a very well prepared infrastructure for the country and also that's helping World Cup. So we have always ongoing investment. It is still we can see a bigger investment in regards to the World Cup, the relation that I've just mentioned about a new club being the source of being a digital country and helping that for a very robust customer also the customers' B2C and B2C. Great. Thank you. Thank you very much. We have one more audio question. Jessica, if you could open up the microphone for Varunu. Hi. Thank you very much, gentlemen. I have a couple of questions. First question is related to margins. Since we have seen a healthy improvement in EBITDA margins in Q1 2021, how can we think about the sustainability of this margin through the rest of the year? If you can see if the margins are not being able to sustain, what would be the headwinds for the margins going forward? And my second question is on if you can answer that question, I'll ask the follow-up question. In terms of Please go ahead. Abdallah, go ahead if you want. Go ahead. I said in terms of margin, as you highlighted, Q1 is pretty exceptional if you're looking at 6% post FX or 9% margin expansion EBITDA margin. There are some one off items in there. We're not revising our guidance for the year, but predicting the year, especially that we still have uncertainty due to COVID is hard, where we think we could see a conservative view of margin is between 2% to 3% expansion. That's quite helpful. And second question is on Iraq. Since you have taken a hit from the revaluation, what is the possibility going forward for you to increase prices in your various plans to offset this impact? Well, currently, we are having help from McKinsey, okay, to reevaluate our marketing strategy. And we are expecting that we'll turn around and do a better job, Insha'Allah, in the coming months because we are focusing on the market strategy to launch and to modify certain product to contribute, as you say, to the devaluation of the currency and overall to improve the top line. All right. Thanks a lot, gentlemen. Thank you. Right. Maybe I'll read one of the typed questions here. Uma Maha from EFG is asking, what are your turnaround plans in Kuwait to counter the revenue decline? This is bearing in mind that SDC Kuwait's revenue did not decline as much as Redo's in Q1 2021. Okay. So let me take that questions. In Kuwait, in STC, if we compare STC to Redo, both the dropout, the percentage in Kuwait is 7% wherein STC is around, I think, 6% year on year. And EBITDA both increased and that's really you can see we have a very well planned when it comes to the EBITDA and cost optimizations. So that's based on the numbers that we have recently published. If I take what is the plan or the counter or what is the counter, let's say, plan for the revenue decline, we have a robust plan in Uyghur Kuwait and that is driven by our group strategy that has 4 pillars and 1 of 2 of the 4 pillars are the improving and enhancing our core. And that's through, honestly, a very smart investment of 5 gs recently. We have done a very smart and good investment in 5 gs and trying to monetize that by providing a very innovative and creative product and offers by having solutions and basically, honestly, having more content and giving more value for money, and that can help you for uplifting your prices as well as we are taking an advantage also being having our subsidiary, Fasilco, which is the fixed arm, having that infrastructure to help us, honestly, targeting and entering a segment of fixed and B2B in a very enhanced and allocated or let's say overall portfolio that can provide customers for fixed and mobile, either B2C or B2B. That were part of the 1 in shop strategy, 1 stop shop strategy by Orito Kuwait. On top of that also, we have a pillar of group strategy, the first strategy in 2022 and 2021 is the digital. And that's where Orito Kuwait is really working hard for providing a very solid digital journey. And that's through also our first digital product in its kind launched in Kuwait called Anna. And that's something we are really relying in Redo Kuwait to capture a better market by having a digital product and services. And that will, of course, bring in more efficiency and less cost when it comes also to customer acquisitions. So these are a robust plan that we are having to counter the decline in the revenue and also EBITDA. Having said that, we have seen an obvious performance of critical weight of enhancement on EBITDA margin despite and outstanding of 28% despite the drop in the top line. And that's always we have seen, sorry, that's continuing quarter on quarter until quarter 4. But in quarter 1, we have seen a very good move in order to Kuwait and also in the market where there has been some, let's say, positive or recovery of the COVID-nineteen. It's still the country suffering from the lockdown, but that's all operators are already suffering from. But we are always looking into more efficiency and a new way or digital ways and new innovative ways of enhancing our top line and looking into a very proper smart segmentation as well. Thank you very much, Sheikh Mohammed. We have one more question from Ziyad. I just read it out here. Is there a scenario where the merger with Hatch will see you, we do forego control of the merged entity and no longer consolidate? What is the reason for the delay? Is it price related or structural? I'll take this one. Ziad, as you appreciate, we can't comment on the merger terms till they're inked, signed and executed. At that point, we'll disclose them completely. For the time being, it's too premature to disclose. The reason of the delay, actually, merger discussions are advancing very well. As you appreciate, it's a complex transaction where you want to lay out plans and detail as much as you can pre merger in terms of a merger plan, in terms of synergies, management, cost optimization, etcetera. And this is quite a hefty work. And due to travel restrictions in Indonesia and COVID, we suffered a bit of delay in the due diligence exercise. But we're very confident that we will get to successful transaction within the revised time line. Thank you very much, Aziz. I'm afraid there's not much more that we can say about it at the stage. We have one follow-up. Question. Any plans to introduce microfinance, remittance services, details on the partnership with MoneyGram, the penetration of the U. S. And outlook? I'll take just a high level and then maybe some more detail. MFS is a core part of our strategy. If you look at a lot of the markets we operate in, actually, underbanked countries, bank credit card penetration rates below 20%. So MFS payer pillar, which we're trying to develop across all our markets as fast as possible, and we've been very successful to this. Depending on each jurisdiction regulation, we need to sometimes partner with some local financial providers or international ones and also for technological reasons. More details on MoneyGram, I'll let someone take that. Yes, I think I can take that. So we have a very successful journey, specifically with Doritos Papar when we see a big spike on money remittance and that during the pandemic and that's successfully with the money our partner Wealth MoneyGram. And we always see this as part of our digital journey as he's also said, our MD, always a big part of digital journey is the entertainment, e gaming and also the financial service. And Ritu Qatar is leading as one of the opcos into that journey as well. Great. Thank you very much. I think that answers the question for Sjeerd. I don't see any more questions in the typed area. Do we have any more audio questions? If there are no further questions, then I would like to thank you all for joining today's call. Please refer to the Redo Investor Relations website for further updates and additional information. Do follow us on Twitter redoir. Feel free to contact the Investor Relations team for any follow-up questions that you might have. We're looking forward to your future participation at either the AKAM or the BOA Conference or at our next quarterly call with the first half results at the end of July. And please do check out our new ESG report. And do remember us for the Institutional Investor Magazine vote. That's valid only for the equity investors and analysts, not for retail investors, not for retail staff and also not for the debt investor, therefore separate survey. Thank you very much for your participation. That concludes our call for today. Thank you. Thank you, everyone.