Hellenic Telecommunications Organization S.A. (HLTOY) Q4 2022 Earnings Call Transcript

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Hellenic Telecommunications Organization S.A. (OTCPK:HLTOY) Q4 2022 Earnings Conference Call February 23, 2023 10:00 AM ET

Company Participants

Michael Tsamaz – Chairman and CEO

Babis Mazarakis – Chief Financial Officer

Panayiotis Gabrielides – Chief Marketing Officer, Consumer Segment

Evrikos Sarsentis – Head of IR and M&A

Conference Call Participants

Stamatios Draziotis – Eurobank Equities Investment

Osman Memisoglu – Ambrosia Capital Ltd

Georgios Ierodiaconou – Citigroup

Clara Ng – JPMorgan

Evgeny Annenkov – Bank of America

Operator

Ladies and gentlemen, thank you for standing by. I’m Mina, your Chorus Call operator. Welcome, and thank you for joining the OTE Conference Call and Live Webcast to present and discuss the Fourth Quarter 2022 Financial Results. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Michael Tsamaz, Chairman and CEO; Mr. Babis Mazarakis, Chief Financial Officer; Mr. Panayiotis Gabrielides, Chief Marketing Officer, Consumer Segment; and Mr. Evrikos Sarsentis, Head of IR and MA.

Mr. Tsamaz, you may now proceed.

Michael Tsamaz

Good afternoon, good morning to everyone for the call. I’m pleased to welcome you to OTE’s fourth quarter and full year ’22 earnings call. I’ll focus my remarks on full year highlights, and Babis will talk specifically about the quarter before returning to your questions.

In 2022, OTE had another robust year. We were pleased to have met all the targets we have outlined throughout the year. Thanks to this performance, we’re starting the year in good shape, see to continue growing in the future. This is particularly important as we anticipate that the months ahead might be somewhat more challenging. Economic conditions around the world are not getting any easier. The geopolitical environment remains volatile. And here in Greece, the competitive environment remains intense, but we are ready for all these challenges all we knew.

I’m going to give you my take on what I view as key developments of 2022. Even if we did return to a more normal situation after 2 years of funding disruption, 2022 has not been an easy year. Our good performance is a testimony to the determination, passion and entrepreneurial spirit of everybody at OTE. I’m certain that the shareholders of this call will join me in thanking the men and women over there for their contribution.

Going back to our full year performance for the group as a whole as well as for activities in Greece alone. Full year savings and EBITDA were up about 4%, an appreciable performance in the current environment. Reported free cash flow reached nearly EUR 600 million, up 24% over the previous year, in line with our target. This enabled us to simultaneously pursue our ambitious investor strategy as well for our shareholders.

We are convinced with the superior execution across the board as specified by a great majority of our customers as our key brand differentiator. It is the therefore our intent to continue deploying systematically throughout our networks and in our customer service touch points. We have made great strides in this respect in 2022. As you know, building a stable fiber to the whole infrastructure is the most important weapon at our disposal, and we’re working on this development at a steady pace.

Last year, we passed an additional 350,000 homes to reach a total of almost 1 million homes. We are planning to add another 450,000 homes in the current year. Even more worth noting is the home utilization is rising as we grow our throughput. Even though the government program subsidizing fiber take-up has expired in Q3, we recorded significant additions in the fourth quarter, illustrating the appeal of ultrafast broadband. We anticipate that the new launch plan later this year will once again supercharge demand.

In the meantime, the reliability and convenience of service, together with targeted campaigns and competitive pricing support this growth in our customer base. Fiber to the home might be the more sophisticated weapon in our arsenal, but it is by no means the only one. The total number of fiber subscriptions, including fiber to the home and fiber to the curb has — was not far from 1.5 million at the end of 2022, a major increase year-on-year.

They represented nearly 2/3 of our broadband base. Our offer to double the speed led to sharp growth in a number of high-speed users. First and foremost, it was moved to reward our customers in case they’re loyalty over the years. Throughout 2022, we also continued enriching our TV offering. We did so with incremental content, notably the addition of 8/14 Greek Superleague football teams, for which we enjoy exclusive broadcast rights. We also broadened [indiscernible] streaming services and as a result, growth in our TV subscriber base continued during the year.

Priority for 2023 will be to fight piracy, which represents a significant headwind. 2022 was another banner year for our ICT and more general business-to-business activities. We have positioned OTE as the key player in helping public administration and private companies get up and running in the digital world. They rate the benefits of this personalization with an award of a number of major contracts.

Full year revenues for System Solutions were up more than 30%, and we intend to continue increasing this business line, which represents an important source of future growth. In Q4 alone, ICT revenue grew 46%. In Mobile, investments are focused on the development of our 5G network. We exhibited 80% population coverage at the end of 2022 and are shooting for 90% for this year, a level already achieved in the country’s major cities. Here, too, quality and customer availability are determined by availability, reliability and speed and not just price. We are continuing to bet on the privacy of these attributes and not letting up on providing the most advanced infrastructure and best service in our market. Our market leading service will continue to support growth.

The third leg of our strategy. We’ll continue to launch traditional services for customers, leveraging our strong brand, recognition and has a distinctive customer experience. Our BOX food platform, introduced in 2019, has become a key player in this category. It now provides access to more than 11,000 shops in 76 cities. Even more impressive, our e-mobile wallet application Payzy by COSMOTE launched in the fourth quarter is not far from reaching the bar of 100,000 active customers. It is rapidly taking share in the market segment, that remains underpopulated and underdeveloped.

We still continue adding our strong foundations in both fixed and mobile as well as to our expansion in adjacent businesses. It’s for that reason that we have decided to maintain our 2023 capital investment budget at the same high level we had last year. While we anticipate to expand our fiber to the home footprint even faster this year, this is offset by lower investments in other areas, and our CapEx budget should remain stable. Underscoring our confidence in our future performances, that in the return we expect from our continued investment, we’ve also committed to a 2023 shareholder remuneration policy that includes an unchanged dividend payout of EUR 250 million, representing a more than 3% rise in dividend per share as well as a share buyback program of approximately EUR 175 million.

And now we’ll pass the phone over to Babis to focus more specifically on the fourth quarter. Babis?

Babis Mazarakis

Thank you very much, Michael, and hello to everyone on the call. As a whole, in the fourth quarter, we saw a continuation of existing trends, good revenue performance in mobile, fueled by our superior network attracting postpaid growth, very strong shifting and the fixed retail further increasing our market share of fiber subscribers with many positive long-term attributes.

Romania’s volatile period continues, despite a number of adjustments throughout the year following the split from the fixed side. Overall, through our Romanian subsidiary reached its full year targets. But let’s look at the group performance in the fourth quarter in more detail.

Total group revenues were up by more than 1% year-on-year to EUR 885 million, a continued positive trend as Greece more than offset the drop in revenue in Romania. Greek Mobile revenues recorded another quarter of steady growth. As we explained last year, retail fixed revenues were down for a number of reasons, ranging from the speed upgrades we have limited to segment customer loyalty to line disconnections as users rationalize their spending. This being said, it’s important to point out that we have managed to maintain our share of the fixed access market and to expand our share in the fiber.

The drop in revenues in Romania, despite customer growth, is mainly due to NPL cuts and the high comparison base. Group adjusted EBITDA after leases was precisely unchanged at EUR 332 million this quarter as breakeven in Romania was offset by higher EBITDA in Greece. Total operating expenses, excluding depreciation and one-offs, were less than 2%. Once again, we experienced material increases in costs directly linked to revenue growth, essential equipment purchases for our fast-growing ICT activities. The group’s EBITDA margin was down 40 basis points to 37.5% in Q4, with a drop that is due to the profit performance in Romania.

Let’s now turn to focus on Greece for a few minutes. Retail revenues were mixed with, on the one hand, another strong order in mobile and on the other, a drop in fixed of around 3.5%. Michael covered most of the broadband KPIs in his remarks. So let me just say that the slowdown in broadband revenue continued in the quarter for reasons we have explained, even as we supported and even strengthened our market share. TV revenue were essentially unchanged year-on-year as the 3% growth in subscriber base was offset by lower ARPU, partly attributable to the higher taxation introduced in July 2022. Greek Mobile service revenues grew by only 3% this quarter with even higher growth in postpaid at 3.6%.

The customer base also expanded in both segments on a year-on-year basis. In a less important quarter, roaming revenues were also up, bringing the annual total above prepandemic levels for the first time. In the full year, digital roaming were more than 20% higher compared to the peak 2019 level. All mobile usage KPIs are pointing into the right direction. Michael gave you the 5G coverage metrics. I put out that our download speeds are twice as fast as the rest of the market. We will continue to provide the best experience, top customer service and most advanced network, as we are confident that these represent the best retention tools at our disposal.

Wholesale was down 5% on lower international traffic, which, however, has limited the impact on profitability, while other revenues were up a very strong 19%, boosted once again this quarter by significant ICT revenues. As a result, total revenues increase were up over 2%. Total operating expenses, excluding depreciation and amortization and one-offs, in Greece, were up 1.5% following the 2.2% increase in top line. We were able to lower the credit loss provisioning as we have been particularly cautious in the early part of the year. In addition, the drop in our indirect operating expenses reflects our good control of our cost base, including material savings in our energy cost through our contracts.

Personnel costs were up nearly 4%. However, adjusting for the one-off impact related to the spin off benefit of certain operations in the same quarter last year, personnel expenses would be down due to the benefits of the voluntary retirement plan earlier in the year. Greek adjusted EBITDA after leases totaled EUR 332 million, up materially by more than 3% in the fourth quarter. In Romania, total revenues were down nearly 12% mainly due to the heavy toll from termination rate cuts, given the mobile-only nature of the business. In addition, the top line in Q4 last year included the contribution of MVNO revenues, which was discontinued in Q4 of 2022.

TKRM posted another material increase in its total number of subscribers, including a 7% rise in postpaid customers. Total operating expenses, excluding depreciation and amortization in Romania, we are up nearly 2%, largely reflecting higher device costs themselves due to the new commercial initiatives. As a result, Telekom Romania Mobile achieved a breakeven in EBITDA after release in the fourth quarter due to a number of reclassifications with one-offs between quarter 3 and quarter 4. Romania’s EBITDA in the last 2 quarters has been volatile. However, at EUR 38 million for total year, it reached its full year target.

Looking at the rest of our P&L, depreciation and amortization was up sharply in the quarter and full year, reflecting the EUR 116 million impairment of our business in Romania. Interest expense of nearly EUR 15 million was up in the quarter, mainly reflecting discounting effects related to personnel advances.

In the full year, however, interest expense was down 11% as we continued lowering the cost of our debt, despite interest rate increases. Following refinancing activities set in the year, we should not need any additional resources in the short term, and we expect interest expense to decline further in 2023. Income taxes were down 3% in the quarter and down 29% in the full year, mainly reflecting the lower profit before tax and the negative impact of the deferred tax asset base, which was reported in 2021, resulting from the corporate income tax rate reduction at the time.

Now turning to cash flow. Adjusted CapEx was EUR 199 million, up more than 24% from the fourth quarter last year. This increase reflects continued investments in the expansion of our fiber-to-the-home infrastructure and the enrichment of our TV content. Full year adjusted CapEx amounted to EUR 638 million in line with our guidance. As you have seen in our news release, we expect CapEx to remain approximately at that level in 2023. Adjusted free cash flow after the lease was EUR 153 million in the quarter and EUR 654 million in the full year, while full reported free cash flow was up nearly 24% to EUR 597 million, also in line with the target and the remainder was supported by one-off cash tax benefit we had in 2022 in excess of EUR 100 million.

In 2023, we expect positive free cash flow of approximately EUR 500 million. This incorporates improvement in operational performance, lower financial expenses, but higher income taxes as in 2022, we had this one-off cash tax benefit, which, of course, is not repeated in 2023. You are now familiar with the shareholder remuneration target that rounds out our guidance for 2023. We have made some minor changes to our remuneration policy to make room for a higher percentage of the total to be used for cash dividends, reaching almost 60% this year, which results instead to a 3% increase in the cash dividend per share. And we have announced a share buyback program of approximately EUR 175 million, which we anticipate launching in the coming weeks.

So to conclude, our operating remarks, we are now confident that all we have done this year is to segment customer loyalty, sometimes at the expense of incremental top line growth as necessary as well as we have done to keep our cost base lean and will pay out in 2023 and in the future. The expected growing uncertainties at the macro level is in our bucket. At this point, Michael, Panayiotis and myself, with all our colleagues at the table are ready to take your questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] The first question is from the line of Draziotis, Stamatios with Eurobank Equities.

Stamatios Draziotis

The first one would be the obvious question about shareholder remuneration. Could you just shine a light on your decision to distribute a lower amount this year versus 2022? I mean it’s clear you voted for a similar payout as a percentage of free cash flow. But just wondering, given net debt actually fell in 2022, what exactly made you decide not to use this surplus to maybe smoothen out the variation in free cash flow generation, at least partly offsetting the swing of the EUR 100 million swing year-on-year stemming from the difference in the cash tax? And maybe — I mean, are you may be setting aside a few extra million to potentially further accelerate or bring forward the fiber to the home deployment in the next couple of years? So that’s my first rather long question.

And secondly, just wondering about competition. We’ve seen quite aggressive offers recently on the fixed side. Do you feel that competitive dynamics have intensified lately? Or do you think this is more of a seasonal issue, maybe also partly related to the changes in the Greek market after the merger of two your competitors, in which case, we should expect these pressures to tail off in the coming quarters?

And lastly, on the OpEx front, just wondering what your expectations are regarding payroll, in view of the new labor agreement and energy costs, given the hedges you have in place?

Babis Mazarakis

I will try to answer one by one. So on your first topic about the shareholder remuneration policy, a couple of points you have there. First of all, the swing between 2022 and 2023, there’s drop of about EUR 100 million in the overall, let’s say, free cash flow generation. I would like to highlight again as we did in our speech that this is not due to operational issues. This is due to the fact that in 2022, we had the significant tax rate, which, of course, is not repeated in 2023. Therefore, if you look at for like-to-like, the payout which is about 85% of payout of free cash flow to total remuneration policy is not changed, it remains the same. And it follows the shareholders remuneration supportive and we announced last year.

But I think the one thing that we need to highlight is that we added much more flexibility in this year’s remuneration policy in order to be able to split whatever amount we distribute towards the dividend part in order to ensure that the dividend part on a euro per share basis will reflect the growing trend of the business and actually will grow from year-to-year. And according to the numbers we announced, the cash dividend per share distribution will be 3.3% higher versus 2022. Obviously, that means that there is a smaller amount for share buybacks. But the total amount for share buyback is still significant enough to compensate on this front.

To your other point, why we don’t see the 100% in order to make up of the difference is that the policies have to have some consistency year-by-year. And therefore, I think we’re going to appreciate that we have a consistent approach, which we share about 85%, a little bit increased versus last year to this front.

Competition, just to highlight part, the competition is not something new. It didn’t come to our life now. It’s always been there. It’s equally intense in fixed mobile and other segments. And what we are observing is maybe a spike because of the developments in the market in the last couple of quarters. Admittedly, in Q4, we also had the continuous transformation of the business from the traditional fixed lines to data comps. That’s why we also now inform about the total amount that is being affected, if we also add the data comps.

Starting of the year, we expect that the next couple of quarters we’ll live along these trends, not only on fixed, but also on the other front. If we look at the trends in Q4, we should expect to see the same trends in the next couple of quarters of the year, before probably tailing off towards the second part of the year.

And I think the most important part here is that the success of our commercial activity is demonstrated by the fact that we are keeping our — not only we are keeping our market share of the fixed customer base, but also we are monetizing increasingly the utilization of the fiber to the home, which is something that I think is very important to note. It’s in our press release, that the utilization rate during the year is 16% in the fiber to the home, a significant number if we take into account the rapid development of the rollout.

OpEx is a continuous effort. I think every quarter in the many, many years in the past, we have discussed about the continuous efforts to drive the entire OpEx down. We are managing through our transformation program that we are running. And every year, we have an improvement on this front. 2023, it’s a year where we will absorb also the payroll effects, although not much of our employees are in the basic salaries because this affects — the move in the basic salary affects the people that are in the basic salary, in the starting salary.

But all segments are under continuous scrutiny. In order to keep our trajectory of our OpEx savings, we also expect to keep this year, in 2023. So if we bring all things together, I think that the competitive pressures will always be there, and we’ll have some time where we have some spikes, and we need to do specific commercial policies in order to defend. But on the other side, our total commercial policy is not just fixed, it’s also mobile, ICT and other segments that are compensating on the trends. Again, apologies for the long answer, but it was a long question.

Stamatios Draziotis

There are long type of questions. I appreciate the response. Just a quick follow-up. Regarding the — I mean there’s obviously an amount which relates to surplus cash relating to the previous years to which you referred in the past other source of potential top-ups, let’s say, in shareholder returns. Are you thinking — is this something you’re still — is that still on the cards, at some point in the future? Is there any specific time line?

Babis Mazarakis

I think on that one, as we also said in our remuneration policy, any surplus that’s been created will be judged in the coming periods in the next years. What is that, that needs to be done because every year is a different one. And in the midterm, we will decide and we’ll announce, of course, what the surplus will be done. So for the time being, year-by-year, without considering the surpluses, the effort is to have a consistent remuneration policy that will strengthen the cash dividends appropriately in order to denote the growth trajectory of the company.

Operator

The next question is from the line of Memisoglu, Osman with Ambrosia Capital.

Osman Memisoglu

Just coming back to this 3.5% decline you kindly shared retail fixed service revenues with data comp. Could you share with us what this figure was for Q3? And then how you envision this figure evolving over the next few quarters? That’s first one.

And then second one is, on roaming. I’m not sure if you would care to share us the absolute number for the quarter? And finally, just want to make sure if there were any one-offs? It was a very impressive cost performance in Q4. Just want to check if there were any one-offs we should not extrapolate?

Babis Mazarakis

To the fixed side, the Q4 numbers, including the data comps, were not much different versus Q3, more or less in there. And we should expect to see a little — I can’t comment on the exact percentage, but we will experience the same intensity on all of our segments in the coming couple of quarters where we have the visibility. And this one is, again, targeting to keep our ground on the customer base and especially drive through this, the fast migration of our broadband customers into fiber to the home and the higher speed in the upper end of the broadband market.

With roaming, quarter 4 is the poorest quarter in the year together with quarter 1. But even with that one, we posted an increase of 60%. It was higher by 60%. And for the total year versus 2021, our total roaming revenues reached about EUR 55 million, up almost 50% versus 2021 and up about 20% versus 2019, just to give you the core trajectory of the roaming business. And this one is reflecting mostly the increasing number of visitors.

Your last question about OpEx. Q4 certainly benefited from — when it’s compared not only with Q4 of ’21, but also with the previous quarters. It’s benefited by the declining trends in energy, which were posted in Q4. So to your question whether it is a one-off or not, nobody can say, but due to the current price of energy, which is pretty much similar with Q4, this trajectory continues. But further outlook is as good as it might be with any forecast about the price of the energy.

On the rest part, I want to clarify again that on the personnel cost, we compare Q4 ’22 with Q4 ’21. In Q4 ’21, we had a one-off — Q4 ’21. So the comparison base, we had a one-off due to the spinoff and the pricing of the indemnities that we did, with the separation indemnities. And that one is not, of course, repeating this year in Q4. So even payroll costs would be down by almost EUR 5 million to EUR 6 million, if we didn’t have this wind.

On the other front, in Greece no other plan of we had in Q4. And for the completeness of the answer, still we are reporting, of course, the OTE Group in Romania. There have been some seasonalization in bookings of some expenses provision between Q3 and Q4 of 2022. This is why the EBITDA swung a lot between Q3 and Q4. So one would take for Romania at least for the previous year, the average of the 2 quarters in order to get a little bit of better understanding of the roaming rate of our Romanian business.

Osman Memisoglu

Understood. Maybe just to follow-up on Romania since you mentioned it. What’s driving very briefly the impairment?

Babis Mazarakis

The impairment is mostly an annual account verifying exercise that we do. It has to do with normalizing or briding line, the accounting current value with the current performance of the company. So that this one we had in our books at much higher value for Romania than from the past. And now we had to correct it by adjusting for the post separation period after we sold the fixed line business. And this is just an accounting transaction, which is necessary in order to have the proper reflection of the value of the Romanian business in our books.

Operator

The next question is from the line of Ierodiaconou, Georgios with Citi.

Georgios Ierodiaconou

I just wanted to get a bit of clarification around the fiber upgrade cycle that you mentioned already. If you don’t mind giving us a bit of an indication of what kind of penetration you get year on? You mentioned, obviously, with the pace of the rollout is difficult to have high threshold, but I guess a year or two from the earlier times when you rolled out fiber, can you give us a bit of color as to the potential? And also, if you don’t mind giving us some indications around your expectations of the voucher program, if that’s finalized, whether there’s anything that you can share in terms of the timing at which it could be implemented?

And then the second question is more broader, and I know it was a bit asked earlier as well. Whether you’re seeing anything in the market that concerns you in terms of ARPU trajectory in either fixed or mobile or whether you expect that at some point, we will continue to see 3% or 4% growth in mobile and they may be fixed as well could start to improve once the costs get easier?

Babis Mazarakis

Allow me to try to answer the first one. And please correct me if I don’t get the entire size of the question. So I understand that the question was around the utilization of the fiber to the home and the way this is being absolutely attributed. First of all, we mentioned that our penetration at the end of the year was at 16%. And this is just how many customers we have over how many homes we have passed.

Now we have to think here that the rollout because of the buildup since we started about March last year to build the network on full scale, had mountained at the end of Q3 and Q4. So we added out of the almost 910,000 customers we have passed, almost half of them, they were passed in the last 4, 5 months or a little about 40% of them. So you can think that the 16%, although it looks low, it’s good because the utilization, when you build the network very fast, comes with a little bit of delay.

However, now that we have a critical mass of about 1 million homes and all the publishing machine is working to sell and connect to these customers, we expect this utilization rate to rise in the high 20s in the coming or at least above — around mid-20s to be honest in 2023. So that was the split of your first question.

On the second part, on the second question about the trajectory, I think we have reflected in our comments that we feel that in the mobile, we continue to drive the ARPU monetization and also our customers base. Thanks to our network and of course, the brand name, the network and the customer service that we have. And that’s not only evident in our customer base, but also the size of the business roaming revenues also reflect the better capture, specifically to reach the islands.

So if we look at the main segments of the business, we expect to see in 2023 to continue to grow our mobile business. Now to which extent? This will depend, of course, on the dynamics in the market. And as also we mentioned in the next couple of quarters of this year, we expect fixed to move along the same lines before tailing off in the second part of the year. And the rest of the business like ICT is growing satisfactorily, covering also the new projects we are getting through the — because of the digitalization effort of the country, but also because of the proven record we have in delivering the projects that we undertake.

And of course, we have also our smaller digital businesses, like the BOX and Payzy, which are — although they are small, they also start getting some interesting size, which, of course, they will pay off in the coming periods and years.

Georgios Ierodiaconou

Just to follow up on the voucher program, whether the timing is now a bit more easy to predict and whether the terms are finalized in terms of the program itself?

Babis Mazarakis

Yes. Well, it’s been in progress, I would say. It’s not something that we don’t expect to come before, let’s say, the quarter 3, after summer. That’s our — it’s something that, obviously, the country would be beneficial with the covering and to the citizens and the consumers. It will drive the pickup of the fiber to the home. But we expect this to be launched towards Q3 and maybe the latter part of Q3.

Operator

The next question is from the line of Ng, Clara with JPMorgan.

Clara Ng

Just two questions from me, please. I saw that Vodafone is increasing prices in enterprise segment. And given the new portfolio from Nova, which is a bit competitive, are you seeing B2B less impacted by their entry and hence, there’s more room for like price increases versus B2C? Second question is just on the free cash flow. Do you see any upside risk to that in any case like throughout the year? If there are upside, would you consider a change in the shareholder remuneration at that point? Or is that not really on the cards?

Babis Mazarakis

First of all, on B2B, our position in B2B is not one dimensional. It’s multidimensional. So depending on the segment, small businesses and medium businesses and high businesses, we have a series of offerings and products that we are doing with our customers, which, to my point, that creates a stronger bonding rather than just pricing. Obviously, there are always customers that are making the adjustments based on pricing. But so far, in terms of what’s happening in the market, we haven’t seen any adverse offer in B2B. On the contrary, B2B has been growing, if we take out this technical adjustment between voice lines and data comps.

On the free cash flow, our guidance for the year is the best guess we have and the best estimate we have so far looking at the way it’s been developed. Obviously, risks have been calculated in this amount. So unless something dramatic happens, very dramatic, we don’t see any reason why we should not hit it. And obviously, this is in line with our overall remuneration policy. So this would be the amount we have set without risking or revising them.

Operator

[Operator Instructions] There are no further audio questions. I will now hand over to management for questions from our webcast participants.