Good evening, ladies and gentlemen. My name is Clare Chin, Head of Investor Relations at Axiata Group Berhad. Thank you for standing by and welcome to Axiata's first quarter 2022 results briefing. Today, we have present with us, Dato' Izzaddin Idris, Group CEO. Vivek Sood on my right, Axiata Group CFO. Datuk Idham Nawawi, Celcom CEO. Jennifer Wong, Celcom CFO, as well as our representatives from our operating companies dialing in. As usual, there will be a short presentation followed by a Q&A session. Lastly, two housekeeping reminders. You will be on mute throughout the presentation. Also note that we will end the call promptly at 7 P.M. this evening. Without further ado, I would like to hand over the conference to Dato' Izzaddin. Sir, you can. Good afternoon. Is that recording? Good evening to all of you. Thank you for joining us on this call for the first quarter results. We had an AGM, as you know, this morning, and an EGM that followed for the PT Link Net Tbk acquisition. Happy to report that all resolutions were passed. On the first quarter results that we announced yesterday, you can see that our first quarter results were affected by the foreign exchange unrealized foreign translation losses. I mean, I don't have to emphasize that anymore to you guys. What it is is non-cash element of Forex losses. That's why we recorded loss of MYR 43 million. Forex losses in total is about MYR 392 million. Yeah. This is stemming from the Forex losses at Dialog and at Axiata itself. Dialog, it has a forex-denominated U.S. dollar loan, hence, the translation to FX losses that have been recorded because of the depreciation of the Sri Lankan rupee. Underlying first quarter results certainly very encouraging, driven by the improved operational performance across all OpCos except Ncell. Challenges in Nepal continue. On a constant currency basis, year-on-year revenue excluding device grows by 7.8%. EBITDA margin is stable at 44.8%. Underlying PATAMI grows by 30.7%. Now, a bit of you know, the explanation there because there is no accelerated depreciation of 3G assets in 2022. The thing is the numbers are offset by higher tax from Cukai Makmur. We estimate that for the full year, edotco as well as Celcom will have to pay something like MYR 100 million in total. We've made a provision of about MYR 23 million in the first quarter. Now, adjusted OCF rose to about MYR 904 million. This is largely due to higher EBITDA and CapEx phasing. Grossed EBITDA is just a shade below 2.5. Actually 2.49x. This is the mother of all guardrails that we observed because of the rating agencies' S&P prescription, if you like. The higher cash flow is a result of higher EBITDA from Celcom and edotco. Happy to report that the good operational performance at Celcom continues. There are earlier concerns about the quality of the subscribers, level of bad debts and inventory management. That's all under control. Good job to the team at Celcom. Cash balance stood at MYR 5.8 billion, slightly below the year-end number of over MYR 7 billion, but that's attributable to the continuing CapEx investments we need to make in XL. Company by company, if you look at Celcom, as I've said, maintaining positive momentum. A bit distorted because of the 3G accelerated depreciation in 2022. There is also lower direct sales marketing costs, and PATAMI rose significantly, but offset from the higher tax from Cukai Makmur. XL Group revenue growth, although there's a slightly higher OpEx spend in terms of higher sales and marketing costs due to the expansion of the distribution footprint. EBIT reduced by 12.2% as a result of network investments that we have to make. PATAMI was affected by the higher finance costs and the one-off gain from Pico cells in quarter one the year before. Robi, the performance of moderated by the intense competition, I mean aggressive competition. You can see that, data revenue has gone up significantly by 14%. This is in line with the higher data subscribers and usage. EBITDA rose by 4.9% attributable to lower direct and staff costs. Overall, EBIT declined slightly because of higher amortization from the new spectrum that was acquired last year. Dialog, yes, this is a story that featured prominently during the Q&A session at the AGM today. Shareholders were concerned about developments in Sri Lanka. We've all read about what's going on there. Now, the good news is operationally, Dialog seems to be doing very well, or rather steady performance. Group. You can see there's strong growth across all segments of mobile, fixed, and broadband, and TV. EBIT growth lagged by about 2.1%, grows by 2.1%. That's a result of higher direct and network costs. For PATAMI, flipped reversed into a loss of LKR 15.8 billion Sri Lankan rupee, as supposedly. Now, this is affected by the non-cash Forex loss arising from the US dollar-denominated debt. We will touch a bit more about Dialog and Sri Lankan economy, macro economy challenges, and all that later on, yeah, as considerations for 2022. Ncell, as I've mentioned, international long distance revenue came down by about 16.2%. That affected data growth. Notwithstanding, data growth 90.8%. EBIT down by 20% as expected by higher network costs, and bottom drop slightly by 9.6%, as a result of lower tax. Sorry, slides. Smart, this is a good description. In the past quarters, as Clare would tell you all, you know, we keep using the same, well, adjective to describe steady performance on all metrics. That's the good news. They continue to, you know, being able to consistently maintain the revenue growth, higher subscribers and usage. EBIT growth muted slightly at about 2.5%, higher direct costs at D&A and bottom line rose by about 23% as a result of investment impairment financial services. Yeah, this is the Pi Pay wallet business in quarter one 2021. So there isn't any such investment impairment in 2022, so a bit distorted by that number. Boost steady growth in GTV. We're happy to report the GTV grew by about 25% to MYR 1.4 billion as a result of higher offline transactions for the payments business, increased loan disbursements at Boost Credit, resulting in net loss of about MYR 48 million in the first quarter. That's because of a Forex recognition in the year before. Boost live users went up to 9.9 million, and Malaysian merchants went up to 469,000 merchants. ADA happy to report that ADA continues to maintain the revenue momentum. Year-on-year revenue doubled to MYR 89 million, and this is driven by the improved contribution from the customer engagement business as well as the contribution from the e-commerce enablement business from the acquisition of Aver Asia. Bottom line drops slightly to about MYR 6 million as a result of higher taxation, Forex loss. I guess the big item here as far as ADA is concerned is staff cost. That's a feature of their P&L. You know, they went through the same experience as a lot of tech companies. Staff churn in excess of 30%, and that's a pretty high number to manage in terms of staff costs. Far as edotco is concerned, very strong operational performance, driven by the acquisition of Touch Mindscape, and organic growth in both colo and new P2S sites. Now, just to highlight this, as of the year end, as you are aware, we completed this transaction on December 24th. For the period 2021, we had to include the debt amount as a result of the acquisition, but we were not able to record or consolidate the EBITDA numbers. I'm happy to report the first quarter, their EBITDA is about MYR 30 million if I'm not mistaken. We continue to make sure that the revenue flow through and lower staff costs continue, but are being slightly impacted by the higher finance costs because of the acquisition of Touch Mindscape. The good news is tenancy ratio, and this is another metric that we should track. In so far as edotco is concerned, has moved from 1.57x- 1.63x in the first quarter. Overall, we are confident of meeting the 2022 headline KPIs that we've announced, but mindful of risk factors. We're rather cautiously optimistic for revenue ex device growth and EBIT, but we think it'll be in line with the headline KPIs. Risks for 2022 include macroeconomic challenges, especially in Sri Lanka, sustained global chip supply issues and regulatory uncertainties. I think in so far as supply chain is concerned, it goes beyond chips. Floods also very significant. In Malaysia, supply of chicken is also causing price of chicken to go up to 11 million per kilo. I do go to the market. Just so you know. There are issues on Dialog for 2022 dividends because of the pressures on the transition loss and dividend track. A lot of companies, in fact all companies, organizations in Sri Lanka are unable to remit U.S. dollars. The good news is, as the key shareholder, majority shareholder of Dialog, we're providing the necessary support to the Dialog team. The vision of Axiata 5.0 continues. We're executing for next as the integrated annual report sort of describe our efforts for 2021. This will continue in 2022. Various acquisitions that we've made. The PLDT towers by edotco. Happy to report that we should be completing that transaction in phases. Because the handover of the towers will spread between this month, June, September and year-end. If you like, the debt that will be consolidated will be over a period of time. I think the point to note here is that whilst we have made an acquisition 100% of all the towers, we've always been in talks with several parties to take a stake in this SPV that holds the tower assets in Philippines. That's the first thing. We hope to make appropriate announcements shortly, so that will enable us to de-gear ourselves from the debt that was raised to buy over these assets. The second bit is, it is a standalone acquisition in the sense that it has no recourse. There's no support that Axiata has to provide to edotco. They set up this SPV to incorporate this acquisition and hopefully, it will be self-funding, so to speak. As you know, on the ninth April, we announced the successful announcement of the digital bank license. One of the five digital bank license has been issued by Bank Negara Malaysia. In Asia, we've completed the acquisition of Hypernet Indo Data. It's part of our enterprise proposition. We've announced the Link Net acquisition. The shareholders today has approved this acquisition. One of the two vendors, one vendor is CVC, the other vendor is First Media. That's a subsidiary of Alibaba. They are going to be our shareholders on sixth of June. Once that deal is completed, we have an obligation to undertake the mandatory takeover offer, and hopefully we can complete the mandatory takeover offer in the third quarter. CelcomDigi merger, another question, that was prevalent during the AGM. As you know, this is the first time a major transaction of this nature, MYR 60 billion in value that's been done. Understandably, the MCMC took a bit of time to try to evaluate the issues to make sure that it is not anti-competitive. We have been engaging with the MCMC on the statement of issues that was issued on April 1st, and we hope to conclude this soon. Hopefully we can complete the whole acquisition by the second half of this year. We've also announced today, launch rather, our net zero carbon roadmap. We're committed to achieving net zero emissions no later than 2050, with a near-term target of 2030 to reduce operational carbon emissions by 45% from the 2020 baseline. We've completed the 2020 baseline, basically using 2020 as the anchor year, if you like, and moving on to improve the carbon emissions by 45% by 2030. Fun fact, based on the analysis we've done for Scope 1 and Scope 2, the carbon emissions tally up to 1.2 million tons of carbon dioxide equivalent, tCO2e. We've also announced today the key objective strategy for climate action, which includes carbon emissions reduction, avoidance and removal. I think, on this one, I think we need to be mindful that, when it comes to reducing and, you know, pursuing a net zero carbon roadmap, there'll be investments that we need to make. But at the end of the day, if we are serious about, climate, you know, concerns on climate issues, this is something that every other company should pursue. Yeah. The threat is real. The point I'm trying to make is that, the investment we make will be much more if we have to do it five years, 10 years down the road. That's how I would see, the investments one is making so far as climate action is concerned. Now, on that note, I would like now to hand over to our Group CFO, Mr. Vivek Sood. Thank you, Dato'. Good afternoon, evening to all of you. Let me start with the results. Firstly, the reported numbers. The quarter on a year-on-year basis showed a revenue growth of 6.7%, EBITDA growth of 7.7%. On quarter-on-quarter, a drop of 6.3% on revenue, EBITDA minus 4.7%, partly because of the seasonality. Quarter one is generally lower than quarter four, and also on account of translation of currency from the operational currency to our reporting currency. So that's the impact on the revenue. Profit, as Dato' mentioned, has been impacted because of the unrealized forex losses. Most of it is unrealized. I think it's around MYR 14 million which was realized. Large part of it, around MYR 390 million, large part of it comes from the depreciation of LKR, which happened around the close, end of March. Between December and March, the LKR depreciated by around 31%. That's correspondingly resulted in a loss on PATAMI of -MYR 43 million. On an underlying basis, the business grew 7.8% ex device and 7.4% on EBITDA. Margin remained fairly stable, in fact better than previous year by around at around 44.8%. Underlying PATAMI grew by 17.7% and EBITDA contribution from all OpCos, excepting Ncell, resulted in overall profit improvement during the quarter compared to last year. If you look at the numbers on the left, most of the OpCos showed a high single digit or double-digit growth coming in during this quarter on a year-on-year basis. On a quarter-on-quarter basis, except Dialog and edotco, there was a marginal dip across all the OpCos. As far as our initiative on costs are continuing, which we saved around MYR 241 million during the quarter, all of which large part of it came from CapEx saving around MYR 163 million and around MYR 78 million coming from OpEx saving. EBIT growth, strong growth compared to last year at 44.5%, mainly coming on improvement in EBITDA to the extent of 7.4%. In addition to that, EBIT improvement also came because last year, Pacific and Celcom, we had accelerated depreciation impact in quarter one, which wasn't present in this particular quarter. That EBIT improvement translated down to higher PATAMI of around MYR 370 million translating into around improvement of around 70.7%. Now just to give you a perspective on the movement from last year to this year, mainly coming on account of EBITDA, as I mentioned earlier. Also on account of the impact of accelerated depreciation, which was around MYR 194 million taken last year during the first quarter. As far as the reconciliation between the reported numbers and underlying numbers, the largest part is around MYR 4.4 million on account of Forex and derivatives impact coming in this quarter. Essentially, on account of the unrealized translation losses from Forex movement. If I look at the adjusted OCF, adjusted OCF is basically EBITDA minus adjusting for the lease liabilities. If you look at adjusted OCF from last year at MYR 710 million, we improved to around MYR 904 million, mainly coming out of the improvement in EBITDA and also lower CapEx during this first quarter compared to last year on the same quarter. By OpCo, significant part of the improvement comes from XL, and that's essentially on account of the CapEx, which is more a phasing issue, I would say, or a timing issue than real saving coming out of the OCF. Still fairly strong cash generation during the quarter of around MYR 904 million. As far as balance sheet is concerned, I think one of the concern raised by some of the investors is being on our ability to support the expansion of the growth plans we have. As far as this point is concerned, I think the balance sheet still remains fairly strong at two point... Under 2.5x debt to EBITDA, gross debt to EBITDA, and under 2x on net debt to EBITDA with around MYR 5.8 billion cash. The borrowings are around 45% in local currency and remaining around close to 55% in foreign currency, and mostly USD, with around half of it has been hedged as we speak. The good news is our most of the borrowings have been on fixed interest rates. Even though interest rates are going up, the impact has not been that significant so far. The other point is that our tenure of our debt has been fairly long, with more than 65% of our debt more than two years maturity. I think balance sheet has been fairly stable, with cash balance around MYR 5.8 billion, March ending. Let me quickly run through performance of each of the OpCos. On a year-on-year basis, Celcom grew 5.2%. On quarter-on-quarter basis, there was a dip around -3%, and that's mainly on account of one-off revenues coming in in last quarter of 2021. As far as EBITDA is concerned, Celcom did see the impact and a 3.6% improvement on the EBITDA, mainly coming because of the lower cost of sales and the devices in the first quarter of this year. Translated into improved FCF at around MYR 598 million, around 16% improvement, and also translating into improved profit for the quarter of MYR 260 million in quarter one 2022. We did consider in our accounts around close to MYR 23 million effect on account of Cukai Makmur. We estimate the full impact for Axiata for the year would be anywhere between MYR 80 million- MYR 100 million for the full year. XL good revenue growth on a year-on-year basis, around 7.9%. Though coming out of the expansion activities, specifically on distribution on network, translating into lower improvement on the EBITDA as compared to the revenue improvement. As I said earlier, phasing issue of CapEx translated into improved FCF of around IDR 1.9 trillion. Slightly lower profit because of higher finance costs, net finance costs. Most of the debt in Indonesia has been on floating, which we are trying to move to fixed. Also last year we did have some one-off gain coming out of sale of Pico Cell, which is basically the building solutions in quarter one last year. Robi, I think the performance impacted by intense competition in the market. Intense competition comes from the fact that all the operators did acquire spectrum last year. There has been a fair amount of high growth happening on the data consumption in that particular market. Having said that, still, the improvement coming in the revenue of around 2%, a much stronger outcome coming when it comes to the EBITDA improvement. That's largely coming on account of lower direct costs as well as staff costs during the. However, EBIT getting impacted because the higher D&A driven from the additional amortization from the spectrum which was purchased last year. FCF remains fairly stable with CapEx in line with what the plans are, translating into improved profits by around 16.1% over last year at around nearly BDT 400 million. Dialog, I think this has been one operations which has got contradiction. Operationally, extremely good performance with revenue growing at 16.6%, contributed across all lines. However, impact came from Forex and also on account of the OpEx, mainly coming because large part of the OpEx in Dialog is also USD denominated, and effect of the inflation in that particular market. Rise in D&A effectively on account of the investments made last year resulted in overall loss of LKR 15.8 billion for the quarter. If you exclude the Forex impact, it was still a strong performance and profit of around LKR 4.3 billion in that particular quarter. I think in terms of performance, operationally good performance, but the headwinds on account of the current macroeconomic factors is something which impacted the results and this is something which we are watchful will have impact during this year on overall performance of Dialog. Ncell, I think this is one market where we've struggled. This quarter was impacted by lower international long-distance revenue, which is something which we expect overall deterioration in the long ILD traffic. However, the business was also impacted because of the regulation introduced in lowering the interconnect rates, which had impact on revenue as well as profits. Because of the lowering of the rates, the company had no choice but to also lower the on-net rates, reducing the margins on the voice business. I think we still struggle there. While there is an improvement happening on the data monetization side, but it has not been sufficient enough to take care of the lowered international traffic as well as impact on the voice side. Having said that, I think company does continue to manage its spends reasonably well. Impact in EBIT coming mostly on account of the increased investments on the network side, which we've taken last year to expand our coverage edge. FCF lower mainly on account of the continuing spend on the spectrum and activating that spectrum which was bought last year. But earnings pretty much flat compared to last year. Smart, I think as Dato' said, has been a fairly stable business for us. Continues to show improvement year-on-year. Quarter-on-quarter impacted mostly because of seasonality, but remains fairly steady when it comes to the EBITDA and EBIT line. Similarly, I think the profit improvement happening because of the overall improvement in top line and increase in EBITDA. Let me go through the digital businesses quickly. Moov showed a good improvement on the revenue. Quarter-on-quarter does see a dip mainly on account of some one-off revenue booked through the partnerships last quarter with Mastercard as well as carrying out some of the government-led initiatives. So that's not been there in the quarter one, but still revenue has been growing compared to last year. EBITDA has been quite flat compared to last year. FCF, I think there's not much of CapEx in this business, and profit has been marginally lower because of last year there was some one-off Forex gain which was recognized on account of the investments made by Great Eastern which was not there this year resulting in lower profits compared to last year. Having said that, the business is still working on improving the profit margins with contribution, which is the gross margin, seeing improvement compared to last year. ADA remains strong when it comes to the performance. Overall revenue continues to be growing at a fairly fast pace. More than 100% improvement on the revenue line compared to last year. Marginally lower, even on a quarter-over-quarter basis. That's more of seasonality because a lot of marketing budgets do not come out from the enterprise customers during the first quarter of the year. EBITDA translating into strong growth in EBITDA and also profit marginally lower because of the translation losses coming from the operations which are mostly on US dollar operations and slightly higher taxes in some of the emerging markets. Where they have been making decent profits. edotco strong operational performance with around 19% growth, partly contributed by the addition of Touch Mindscape and also organic build mostly in Bangladesh during the year. That basically translated into a strong EBIT growth of 24.5%, mainly on account of the lower staff costs. I mean lower at 3.5% mainly on account of higher borrowing costs, essentially coming out of the debt-funded acquisition of Touch Mindscape. The good news has been the improvement coming on tenancies. They have moved up from 1.57% in 2021 to around 1.63% in 2022. I think there are still strong orders on new tower build, specifically in Bangladesh, which should continue to deliver good performance during the year for edotco. Moving forward, I'll hand over back to Dato'. Thanks, Vivek. I think as far as our headline KPI is concerned, we are cautiously optimistic for the revenue ex-dividend and Digi growth, in line with our what we've announced as our headline KPIs. The guidance for CapEx, while it's not a headline KPI, we've indicated MYR 7.1 billion. Out of this, about MYR 1 billion is attributable to edotco. And again, the business is very different. Nine months it takes to put up a tower, immediately after that, after commissioning, you'll get the revenue. Slightly different consideration of when, so far as edotco is concerned. Now, the considerations for 2022, as I said earlier on, macroeconomic challenges, inflationary pressures, increased energy costs, high interest rates, currency volatility, all this could put pressure on our financials. Impact of M&A transactions, I think this is key. The execution is always key to try to crystallize and extract the synergies from the acquisitions that we've made. We as in edotco, Axiata, and so on. Our sustained global supply issues as escalated by the Russia-Ukraine war. This has increased our costs. Geopolitics as well. This is going to continue to pose as a challenge. Increased taxes, potentially increased taxes, high inflation for some years in Sri Lanka. We are watching that specifically. The good news is the president has put a credible government in place. These are people with experience in dealing with the IMF and so on. We hope that is going to help provide a real lifeline to businesses and the people of Sri Lanka. As I've said earlier, we continue to provide the support for Dialog to make sure that it can continue to provide the quality of service to its customers. Connectivity, as you all know, is key in any markets, and Sri Lanka is no different. Especially in times like this when people need to be connected. At the same time, we're prioritizing the CapEx to just critical ones, especially maintenance CapEx in Sri Lanka. There is no sort of undue pressure on the balance sheet and cash flows of Dialog. Hopefully, in due course, things in Sri Lanka will turn for the better so that the business can come back to where it used to be. Just a bit on our net zero carbon roadmap we've launched this afternoon. Three objective strategy. First, to accelerate decarbonization of our network operations. Scope 1 and 2, as I mentioned, 45% from the 2020 baseline. That's gonna be done through enhancing energy efficiency, increase our renewable energy consumption from self-generation or purchased electricity. Second, strategy is to reduce value chain emissions under Scope 3. Now, this is the big challenge because Scope 3 are, you know, key third party sort of responsibility. What we do is we're gonna track our suppliers' operational carbon emissions as we progress, and hopefully this will contribute to positive climate impact across our value chain. Of course, the objective strategy is to contribute to positive climate action through carbon removal enabling and enabling avoidance through technology and digitalization. This is gonna be done by decarbonization solutions to enable efforts across society. That's something that we've announced, and hopefully we will be able to make an impact for this. That, in a nutshell, is the presentation for the first quarter results, as well as a one-page summary of the net zero carbon roadmap that we've launched today. Hand over now to Clare. Thank you, Dato'. Thank you, Vivek. We'll move on to the Q&A session. There will be two options for you to ask your question. Firstly, verbally. Click on the Raise Your Hand button, wait for your name to be called out, unmute your line and ask your question, and remember to mute your line again. The second option is, basically you can type in your question in the chat box. As usual, we are also joined by our colleagues from other, of course, Celcom CMO, Allan. XL, we have CFO Pak Budi. edotco, CEO Adlan. ADA, CEO Srini. Boost, CEO Sheyantha. As well as, Dr. Hans, Group EVP. Feel free to direct your questions to them as well, if you wish. Let's move on to the Q&A session. We have first question perhaps coming from Foong, CIMB. Hi, Fung. Good evening. You might want to unmute yourself. You're muted. Yep, I can. Okay, yeah, I just got myself unmuted. Thank you for the conference call. Firstly, for Celcom. If I look at the service revenue, it fell by about 3.5% Q on Q, going from 4Q to the first quarter of this year. Looks a little bit softer than what your peers reported for the quarter. Appreciate if you can give us a bit more color as to that trajectory. Was there a pickup in competition for Celcom or perhaps the MVNOs, any softness in terms of the performance there? Secondly, on Dialog in Sri Lanka, apologies if this was already covered earlier. What has the revenue spec been in May so far from the economic crisis? With regards to the U.S. Dollar denominated debt that they have, when is that due? Third question for Boost, now that you know it has won a digital banking license, what do you expect in terms of the earnings trajectory? And any change to the breakeven timeline that was previously guided? Yep, those are my three questions. Thank you. Okay. Here's the advantage of chairing this session. I can direct the questions now to Datuk Idham, and second one to Vivek, and the third one to Jusnita. Sorry guys, I've been doing a lot of talking today, so give chance to everybody else now. Yeah. Datuk Idham. Yeah. Thank you, Dato'. Thank you Foong for the question. Yes, it's slightly softer if you see it across, compared to the others. There are a couple of reasons. Of course, in Q4 last year, we had a very good quarter, so there was quite a good quarter that we have compared to the industry. And then what also happened towards the end of last quarter or the beginning of the first quarter, we have seen also the competition responding to our offer to the market. Which we decided not to respond just yet, but because we think whatever that we offer is still very, very competitive. But I think that's caused slightly softer than the rest. However, I think some of the latest trend that we see in the past couple of months, that we're seeing that whatever the decisions that we have made to hold on to our own tactics and strategy was the correct decision. Yes, it is. It is due to some of the response from the competition, but we decided not to respond just yet. Okay. Any comments on the MVNO softness? On the MVNO, there is nothing out of the ordinary that I've seen at this point in time. When the competition responded to our offers, it not only touches Celcom, but also the offer from the MVNO as well. Yeah. Okay. Yeah. Vivek, take on the second question on the Dialog. Yeah. I think as far as the revenue is concerned, I think it's still holding well across lines of businesses. I think that's been fairly okay. I think where we are seeing a bit of a challenge is the impact on cost and our ability to pass on the effect of inflation to our consumers. The reason for that is in Sri Lanka, we require the regulatory approval for any price increases. As far as the debt is concerned, we have around close to $144 million of debt, out of which close to $72 million is the shareholder loan given by Axiata, which is for a period of three years. That can be managed because it is between the two companies. In addition to that, the balance there have what we call a syndicated loan, where there is a payout every quarter of around $18 million. 18. $18 million. That's next one is to be paid in July this year. But the good news is that we've been having discussions with IFC to step in. IFC it's in the final stages of discussion. Would provide around $150 million of a long-dated debt for us in Sri Lanka. That should basically take away major impact on account of realized losses coming in in Sri Lanka. I think that's a large good news. Jusnita, do you wanna take the third question on the digital bank plans? Breakeven timeline insofar as Boost is concerned compared to the previous guidance that we have given to the market? Yes, yes, Dato'. Foong, thanks for the question. I think in terms of earnings trajectory overall, the digital bank obviously helps us because it. If you think about our earnings trajectory, the primary lever is really our lending business in terms of growing our top line and also flowing through the bottom line. The constraint in that has always been, you know, how much of funding we can source. The digital bank gives us the ability to deposit rates, right? From a three-year perspective, the trajectory shifts to a much higher trajectory than it would have been had we not got the license. Now, having said that, in the short term, yes, there will be some startup losses because, as opposed to our existing lending business, we have to build some infrastructure, et cetera, obviously in the bank that is needed to operate a bank. Yeah, in year one, there may be some losses that were not originally forecast in our trajectory. Having said that, a lot of the investments we would make are CapEx, so a lot of that will be depreciated over time. Net-net, what I would say is it definitely puts us on a higher earnings trajectory. I think that was the question. In terms of the immediate profitability, I think there may be some startup losses which we will have to bear next year. I think the good news is that a lot of the infrastructure that we have already is in place in our lending business. If you really think about core banking system, some of the additional infrastructure, a lot of that would be CapEx. Net-net, I don't see a very, very significant impact. Overall, I think the key point is, it really puts us on a very, very much higher earning trajectory over the next three years than would not have been the case if we didn't get the license. Very good. Thank you. Pho? Yeah, if I can follow up with two questions. Firstly, maybe for Jusnita again. Just to clarify, when you mentioned some startup losses in year one, are you referring to year one of commercial operations or this next 12 months before you start your operations? So that's Sure. Question number one. Sure. Secondly, for Celcom, just going back to the earlier comments in the PowerPoint about the enterprise business, I mean, the comments in the PowerPoint about the enterprise business, just wanted to get an understanding of the contribution from Bridgenet Solutions and Infront and in the quarter, and how do you expect enterprise to grow and what contribution to revenue are you targeting over the next two to three years? Uh, So- Sheyantha. Sheyantha first. Sorry. Foong, my, yeah, a very short answer. Yes, it's year one of commercial operations I was referring to. Okay. Okay. Yeah. Okay, Sheyantha. Okay. Thanks, Foong, for the follow-up. Yes. At this point in time, our enterprise revenue is still predominantly our mobile enterprise plus the connectivity revenue. The two acquisitions came in. Yes, they contributed to about 30 million, about perhaps 15% of the total enterprise revenue. The current enterprise revenue is around 12%-13% of the overall Celcom's revenue, and we hope to see this grow to about 15% and north of 15%, maybe reaching 18% within the next couple of years, yeah. Okay. Yeah. Yep. Yeah. Thank you so much, everyone. Yeah. Very helpful. Thanks, Pho. Next, Claire. Okay. Next, we have Hong Jin Hao from M Invest. Hong, please, unmute your line and ask your question. Hi. I think Isaac from Affin Hwang is first. Yeah. Isaac? Yeah. Hong, you wanna go ahead first since you- I guess one question is on Dialog. Given the economic uncertainties right now in Sri Lanka, would the group expect any impairments into that segment? I noticed that Dialog actually raised additional $72 million drawdown of dollar loans in the first quarter of 2022. Would that further strain the balance sheets of the groups and also incur further Forex losses? That's all. Yeah. I think the first question on impairment, I think we've done our analysis as part of the quarter earnings. We still think there is enough based on that, there's still enough headroom available for us to have any shocks on impairment coming in. I think we are closely watching it, but there's sufficient headroom to call for avoiding any impairment. As far as drawdown is concerned, I think the MYR 72 million is mostly to replace the existing loan which I talked about, which was the syndicated loan. This is where Axiata put in the shareholder loan to pay down the existing syndicated loan which is being due every quarter at around MYR 80 million. Overall, debt to EBITDA has actually come down for Dialog. Having said that, yes, the March exchange rate was around 292, which is currently at 361. There would be further impact coming in quarter two on account of the translation of the loan into the local currency. Does that work, Hong Jin Hao? I see. Thank you. Thank you so much. Very clear. Thank you. Okay. Let's move on to Isaac. Yeah. Okay, Isaac, from Affin. The line is. Hi, good evening. Thanks everyone. Two questions from me, please. First one is on the—both on Dialog actually. First one is in term of the operating cost. Can we just roughly know how much of it is U.S. denominated? And on the local denominated cost, what are the cost inflation should we expect comparing on a year-on-year basis? That's question number one. Number two is on accounting related. Can you just share with us what's the average exchange rate that you're booking for the Dialog revenue for the Sri Lankan rupee? Because if I compare the revenue in ringgit term year-on-year based on the account, based on the report, it's still very firm. So I was wondering what's the exchange rate. To follow up, last question, what's the book value for Dialog at the moment? Thank you. Let me start with the first one. I think around 43% or 45% of the OpEx for Dialog operating cost is on USD, mainly for the network IT, PMC, the content cost for their TV business. I think that is the US dollar exposure on the OpEx side. On the CapEx side, around close to 80% of the CapEx is U.S. dollar. As far as the inflationary impact is concerned, currently the inflation in the market is around 30%, mostly driven by the increase in food price and energy. The effect for us would be largely on account of energy and increase in staff costs relating to the effect of the overall affordability, which would be there. At this point in time, we are seeing around close to 13%-14% impact coming onto our cost side on account of total inflation. As far as the Forex is concerned, you are right. On a P&L line you do not see that kind of a big impact on account of cost because it's on the averages. As I said earlier during the presentation, on a quarter-on-quarter basis, the impact was around 30% depreciation, which at this point in time is around 63% depreciation. The impact is largely coming on the balance sheet side, not that much reflected into the operating expenses yet. Thanks. How about the book value for Dialog Axiata? Do we have that? What is the book value? MYR 1.5 billion. Ringgit. ringgit at group. Basically, there is sufficient headroom in the carrying value. At this point we see low risk of impairment coming through on this Dialog. Thank you. That's all for me. Thanks. Thanks, Isaac. Thanks, Isaac. Oh, okay. Sorry. Aishwarya. Next. Yes. The next question coming through from J.P. Morgan, Aishwarya. Please go ahead, Aishwarya. Aishwarya. Aishwarya. Hi, can you hear me? Yes, loud and clear. Okay. Hi. This is Aishwarya from J.P. Morgan. I had a question on the debt maturity profile. Could you shed a little more color on that? Regarding your borrowings, most of them are in USD, like majority of the borrowings are denominated in USD with 32% still unhedged. Is there any plans to convert that into RM debt going forward? I wanted to know about what you think about the anticipation of interest costs in the rising interest rate environment. That's it for me. Thank you. As I said in the presentation, the debt maturity around 65% of our overall debt is more than two years from maturity. Large part of our debt, which is really the U.S. dollar debt, is actually 2026 and beyond. In fact, $1 billion is 2050 maturity. I think most of our debt is on fixed interest with long duration, which is there. The average maturity, if I look at it, is around close to nine years. As far as the borrowing is concerned, I think, yes, we have around 55% or nearly 50% on USD borrowing. We do have unhedged position, but if I look at the natural hedge, around 50% of that is hedged, because there are markets where we have U.S. deposits, to use as natural hedge. Now the question, where do you want to convert into ringgit, I mean obviously we don't want to convert into ringgit because the payments are all in dollars. However, we do look at our hedging on a periodic basis. At this point in time, I think the overall view is that this is a short-term impact and the cost of hedge is fairly expensive in the market. Not much of it, given the duration as well, not much of it is going to be impacted, on a realized cash flow basis. It's more a mark-to-market impact which will be coming into the P&L. Your last question was on the higher interest rate expectation. I think we do expect interest rates to go up, but I think as I said, around close to 60% of our debt is on fixed interest rates. If the interest rate has to go up, we would not have that material impact because of the fact that we are fixed because locked in. It's okay, Aishwarya? Aishwarya, you're okay? Yeah. Yeah, makes sense. Just a quick follow-up on that. Are you also planning to increase the leverage in the future to fund the, like, keep the dividend to the shareholders at the same run rate? I don't think we would be borrowing money to pay dividend. I mean, I think that would be the last thing we would do. I think we are going to leverage up for some of the M&A transactions which we are currently carrying out. That would be the effect. Most of these M&A transactions also come with cash flows and EBITDA for those acquired entities. All right. That's really helpful. Thank you. Thank you. Thank you. All right. Thank you. Our next question comes from Rahman from Khazanah. Rahman, please go ahead. Team. First of all, my heart goes out to you guys because this is a very challenging macro situation. My question relates to Dialog, and first question is, what's the plan to minimize the impact of unrealized Forex losses, so that Axiata still has room to maintain dividend payments for 2022? Second question relates to operationally in Sri Lanka itself, right? What's the plan to ensure continued inflow of revenue given that the macro situation is volatile and also to continue delivering connectivity services, right? 'Cause the country has got power cuts at the moment, and I'm sure that affects network quality as well. Those are the two questions from me. Sure. Rahman, and to you as well, last few days of Shawwal. As far as the Forex losses, yeah, unrealized Forex losses are debt by nature. They're unrealized, and in our minds it's just accounting treatment. I understand where you're coming from because if the unrealized losses are great or high, profit comes down, therefore there's no reserves to pay dividends. We are rather, well, I wouldn't say banking on, but you know, if the CelcomDigi Berhad merger goes through, we would record a gain of about MYR 13 billion. And if it goes through this year, we would have the reserves to pay, you know, the dividends that we have undertaken. Yeah. I mean, the good news is, in Malaysia, we can use retained earnings to pay dividends, unlike other countries, other jurisdiction. If the concern is dividend, we believe we will have the reserves to do that. Yeah. The unrealized Forex losses will remain unrealized transaction losses. At the end of the day, if you think of minimizing the impact of unrealized Forex losses, as Vivek alluded to, this relates to our dollar loans. If your dollar loans have maturity beyond two years, hedging cost is gonna be expensive. You know, it's a no-win situation with the providers of hedge structures and, you know, swaps and caps and collars and what have you. We rather because it's not a pressing matter, but hopefully the merger goes through, then we record the reserves to pay the dividends. Yeah. Vivek, do you wanna take on the questions on Dialog? Sure. I mean, I think, as Dato' said, I think dividend payment, our challenge would be not necessarily payment because we still have a fairly strong profit generation if you exclude the unrealized losses. The challenge we will have is to convert that dividend into dollar or ringgit to get it to our group level. I think that's something which we will have to work on at this point in time. Looks like a difficult situation. Operationally, I think Dialog has been doing fairly well when it comes to running a network and ensuring that the quality of service is provided to the consumers. They've taken initiatives around, you know, moving to batteries, lithium batteries, and also converting some of the towers to solar towers. I think something like 3,000 towers in all they have. Half of them, they are looking at moving into lithium batteries, which would reduce the requirement of you know, diesel or something by at least three to four hours. I think that's something which is being invested. We see not only advantage from a short-term perspective to give consumers the quality of service, but also long-term benefit of having that into place. Secondly, obviously, given that this is essential services, they are able to organize diesel for running the generators and ensuring all the towers uptime remains, the network uptimes remain strong. Having said that, there would be some impact in some of the markets which has an impact on the overall uptime percentage, but it's still not something which is alarming. I think the management and the team there is working very hard to ensure the network, and the quality of experience is provided to the consumers in these difficult times. I think the priority as far as we are concerned is, at this point in time, is to conserve cash, and that's what kind of is being focused. CapEx also we are looking at more on a case-to-case basis where the need is versus giving a, you know, blanket budget to invest onto the network. But it is being looked at case to case, ensuring the necessary capacities are provided in places where it is required. Rahman? Sir, no further questions for me. Thank you very much, and good luck. Thank you. Thank you. All right. Thank you. Okay, we'll move on to the chat. We have a question from Izzati from Macquarie. How much of shareholder's loan Axiata plans to advance to Dialog for the full year 2022 to support Dialog? Is there an estimate? Full amount is $90 million, isn't it? Yeah. I think we have an approval from the board of providing $90 million shareholder loan. So far, around $72 million is being drawn by Dialog. Having said that, as I alluded earlier, we are actually in the process of finalizing around $150 million loan from IFC, and that should be coming in place by middle of June. Once that happens, there would be paring down of the shareholder loan as well as accelerating the syndicated loan to be carried out by Dialog. I think to me, this is a great effort from the team in these difficult times, able to manage to get IFC to step in with the long-dated funding for Dialog. Once IFC comes in, I think the shareholder loan would be slowly pared down, so would the other syndicated bank loans would also be pared down. Izzati? Yeah. Okay. Thanks, Vivek. Basically, it's on the chat group. Sure. We'll move on to the other question from AIA, Finn. Mm-hmm. With the purchase of PLDT tower assets, we saw gearing increase. If the acquisition of Link Net goes through, it has gone through EGM today, gearing will increase further. Is Axiata comfortable with this? Any plans to de-gear in immediate terms? Okay. My turn to speak. Very good question, Kian Heng. I think the point, as I mentioned earlier on, is that edotco is able to raise the funding from local banks to buy over the assets to part-fund the acquisition. That's in pesos, which matches revenue. Secondly, edotco is also able to borrow U.S. dollars to raise equity to fund this acquisition. Now, what I must put on record is that at the outset of this process of what PLDT has undertaken, there were 16 bidders, very big international names, infrastructure funds, tower companies and so on, and it all boiled down to edotco plus the other party. Yes, gearing will increase, but the point is, we are in discussions because when these parties realized that they're not in the running, they've approached us and wanting to take a stake in the SPV. We plan to de-gear, first of all, at that level to make sure that the gearing levels is comfortable at edotco. You know, if currently we're 100%, we're quite flexible between 51% and above all the way to. Yeah, from, you know, scaling down from 0% to 49%, so that we will still control this assets. Yes, if the Link Net goes through, gearing will increase further. In the circular, we alluded to the fact that gearing will go up to 1.4% from 1.17%. Now, as I made mention, I mean, that's assuming 100% debt, yeah, that we borrowed. True. We're comfortable with that. However, with the CelcomDigi merger, two aspects. First, we will get MYR 2 billion from the consideration that Digi will pay us as the vendors of the business of Celcom. Secondly, there is a MYR 2.4 billion shareholder loan that Axiata has extended to Celcom. That shareholder loan will also be repaid. We will have MYR 4.4 billion cash to, well, reduce the debt. Yeah? We continue to look at how to monetize some of the investments we make. Edotco as well, because edotco has identified certain focus areas and non-core countries, yeah, that it could monetize its investments. I think the challenge is if you look at current situation, you know, if an asset or business is in distress, whatever that may cause the business to be in distress, their valuations will be very soft. So we want to time it in such a way that we can capture the sort of right valuations, yeah? In so far as the negotiations with DNB is concerned, when you say state purchase service agreement, you mean state purchase as in the equity stake and service agreement as in the RAU. Both are currently ongoing. We are subjected to an NDA that Celcom has signed with DNB, so we're not allowed to make any comments on that. Suffice to say that we acknowledge the deadline of June 30 that the minister has reaffirmed. We're working towards completing the negotiations to ensure that we will first of all have a chance to purchase the equity in DNB. At the same time, make sure that the service agreement, the commercial terms of the service agreement or the RAU, Reference Access Offer document, the agreement, will enable us to provide affordable, high quality 5G services to the consumers. I think I'll pause there. I'll invite Dato' Idham to add on this if you wish. I think that's what completes within the NDA that we have to abide to, yeah. Yeah. If there's any at all, that is just to say that we are in the process. We're still in the process in terms of looking at this. Yeah. We will follow the process and to see where it leads us. We trust NDA review, but I'm allowed to speak to the Chair of Celcom. Okay. Yeah. CelcomDigi Berhad merger. Thank you. The next question is from Paul, from CLSA. Any updates on the CelcomDigi Berhad merger? Again, as I've mentioned earlier on, you know, the process has taken a bit of time. Understandably, it's the first of its kind and the size and magnitude of the transaction at MYR 50 billion. MCMC has issued a statement of issues to us. As you know, that was on April 1st, wasn't it? Yeah, easy to remember date, right? We've responded. They've come back, and we're responding again. That's part of the process that's ongoing as part of this merger exercise. We are optimistic that we should be able to close this because of the responses we are giving, we have given, 'cause the last round of submission was yesterday to MCMC in response to their statement of issues. The way it works is the MCMC raises the statement of issues, highlighting concerns, areas of concerns. We would have to respond to, suggest how we're gonna mitigate those concerns. If they accept that, then the deal is done. The approval will come. I mean, I don't wanna put words in their mouth, but that's our understanding of the process. We are targeting to complete by the second half of this year. The good news is the planning has started long time ago. I'm very optimistic that the integration team are still raring to go, very, very upbeat about the whole exercise. Yes, it has taken some time and, you know, some challenges in terms of keeping up the momentum, but I like to think that the two teams are blending in very, very well together. Hopefully we get approval, and we can roll out the integration on, you know, to ensure that day one will be seamless. Okay, very good. That looks like the last of the questions, unless we give maybe another 10 seconds if there's any last-minute new questions. Last 10-second question. I always answer longer than 10 seconds. The 10-second and last minute. Okay. Is there one on the chat? No. No one? No. Okay, good. No. Okay. Okay. Perhaps, Dato', if you have any closing remarks. Yeah. Again, we are very upbeat about the operational performance of the group of course in the first quarter. You can see the results. The underlying PATAMI is very encouraging. We have concerns about what you know is in store for the next three quarters. We believe this is a business that has been proven again resilient to challenges such as lockdowns, pandemic, and even in Sri Lanka today. It is an essential service you know to the point that while others have challenges getting diesel supply you know the government needs to also prioritize for Dialog to get the supply to make sure the quality of service is maintained for the consumers. There are concerns, as I've alluded to just now, considerations, if you like, supply chain issues being one. The rest of it are high interest rates and so on. You know, we planned for that in 2020 when we took on the $1.5 billion U.S. dollar debt locked in the interest rates. Now, of course, that's the bit that's unhedged because you can't hedge a 10-year and 30-year exposure. It's not practical, if at all possible. Yeah. Balance sheet-wise, we're happy with the balance sheet, the capital structure. We're comfortable with the debt levels. We are taking stock of the acquisitions that we're making to make sure we can extract the values. The teams are upbeat about making sure that, you know, acquisitions of the last six to eight months of the tower assets in Johor, the tower business of Touch Mindscape and all the PLDT assets, as well as the remnant assets from Axiata. Yeah, about 1,000 towers. It's about now sort of taking stock, try to extract value, make sure we did take advantage of the economies of scale. Hopefully the synergies can be realized sooner rather than later. On that note, thank you for your attention, your attendance this afternoon. It's been good seeing all of you. Selamat Hari Raya for those of you celebrating Hari Raya. A lot of open houses in the last minute. Unfortunately, we don't have one for corporates this year. Perhaps next year. You know, we're having a staff Raya on Monday. Anyway, so thank you again, and see you all. Thank you. Thank you to the team that's been on the call. Adlan Tajudin, Shireen Kandiah, Srinivas Gattamneni, and everybody else. Yeah. Thank you. Thank you. Bye.