My name is Clare Chin, Head of Investor Relations at Axiata Group Berhad. Thank you for standing by, welcome to Axiata's first quarter 2023 results briefing. Today, we have present with us, Vivek Sood, Group CEO. Dr. Hans Wijayasuriya, Group Executive Director, CEO of Telecom. Lila Azmin, Acting Group CFO, Group Chief Development Officer. As well as representatives from our OpCos. There will be a short presentation followed by a Q&A session as usual. Lastly, two housekeeping reminders. You will be on mute throughout the presentation, note that we will end the call promptly in about an hour. Without further ado, I would like to hand the conference over to Vivek, please. Thanks, Clare. A very good afternoon to all of you, good morning to those who are on the in Europe or U.S. time. I'll go through a few slides on executive summary, I hand over to Lila to cover the financial part of it. This first quarter has been little different in the sense we have a large OpCo, which is Celcom, which is not consolidated into our results compared to last year. Hence, our performance is being reflected specifically on revenue and EBITDA on the on the continuing business. Whereas when we report the PATAMI number, it does take into account the share of profit from CelcomDigi as well as on the base number, full year for first quarter Celcom 2022. The year has been first quarter, we did deliver a strong performance when it come to revenue and EBITDA, with around 7.9% growth in revenue and 7.6% growth in EBITDA. Our profits were at MYR 74 million. Coming out of from a fixed gain, a marginal gain this year versus a loss which was incurred last year. If you recall, last year in March is when we were hit by a significant depreciation of Sri Lankan currency. Flowing from EBITDA and FOREX losses, and lower taxes, also we've been offset partly by the CelcomDigi results, where the share of profits is lower than what we had done in the first quarter coming from 100% ownership of Celcom. On an underlying basis, our profits have been... Our revenue was a very strong growth of 19.7%, EBITDA growth around 16.8%, contributed by all OpCos except ADA and Ncell. ADA has been mainly because of the renegotiation of contract on A2P SMS business between ADA and XL in the first quarter. The profits were impacted mainly on account of high net finance costs and lower share of profit coming from CelcomDigi. Cash flows were also lower, again, because of higher CapEx, early advanced CapEx into the markets and higher net finance costs. As I said earlier, FOREX translation, specifically on the revenue and EBITDA line, coming from Sri Lanka as well as Bangladesh were the main impact when you look at the growth on an underlying basis versus growth on the reported basis. The cash flows were behind at around MYR 352 million, and gross debt of to EBITDA was 3.6x. The increase in gross debt to EBITDA from 2.9 to 3.6 is mainly contributed by deconsolidation of Celcom effective 1st December last year. We're also expecting the MYR 2.4 billion shareholder loan which was given to Celcom consolidated now as part of CDB to be paid soon, expecting in this quarter, by the end of this quarter. Before I go to the operating companies, I'll not spend too much of detail here because that I think would be covered between Hans and Lila. Just a summary from my perspective, I think the businesses which did well during the quarter were XL, Smart, Robi. All three of them showed excellent top line and profit performance. The businesses which remain average are edotco, Boost and ADA. While some of them have shown a good top line growth, but impacted on profits because of the higher costs as well as the higher capital CapEx investments. The businesses which we have to focus on for recovery are Dialog, Link and Ncell. I'll not spend time on individual lines because the details will be covered as we go through the specifics. Let me come to the last two sections. I think the communication which we gave on 10th of May regarding the delayering exercise, which is creating a wholesale FibreCo and a Converged ServeCo in Indonesia is one of the critical moves for us, which we believe is gonna help in creating further value of our import operations in Indonesia. Focus on scaling up the fiber to home with the plans of around 8 million home passes in next five years. Overall on KPIs, we still believe that the KPIs which we said at the beginning of the year, which is low single digit revenue growth and the high single digit EBIT growth is going to be maintained. With that on financials, I'll hand over to Leena to take you through that. Good afternoon, all. Thank you for joining the call. I think go straight to the reported results. Year-on-year, as Vivek mentioned, the revenue grew by 7.9%, which is driven by all of our growth, except for Dialog, Robi, Ncell, and ADA. As you can see from the graph, PATAMI has also increased by 100% versus a loss incurred in Q1 2022, from -MYR 43 million to a profit of MYR 74 million. This is flowing through from a higher EBITDA and lower Forex losses and lower taxes. This is also moderated by the share of results of CelcomDigi for Q1 2023, which was lower than the PATAMI contribution from Celcom as a subsidiary back in Q1 2022. We see also the weakening of frontier market currency relative to Ringgit Malaysia has resulted in adverse translation impact on revenue and EBITDA. Next. If I go to the underlying performance for Q1. Year-on-year on constant currency, revenue ex device, as Vivek mentioned, has grown strongly by 19.7%, contributed by all OpCos except ADA and Ncell. Growth is largely coming from Dialog, where revenue increased by 31.1%, mainly contributed by hubbing and data revenue. Also edotco increased by 26.4%, mainly due to inorganic acquisitions of towers in Philippines and also Indonesia. Further, we consolidated LinkNet, three months revenue post its acquisition last year in June, which was not shown in Q1 in 2022. ADA's revenue, as mentioned just now, was impacted by the renegotiation of contract with XL, where the revenue sharing reduced. Ncell's top line was also impacted by the call rate revision in Nepal. On the underlying PATAMI, this has reduced by 79.4%, mainly due to the higher depreciation and amortization, increase in net finance costs and lower share of results of CelcomDigi of MYR 160 million in Q1 2023. The increase in net finance costs, maybe I elaborate, is mainly due to the increase in borrowings, mainly from Dialog and edotco, for its acquisitions, recent acquisitions, yeah. Increase in the average cost of debt as well. For example, Dialog's increase in NFC is due to increase in average cost of debt, from 3.14% in Q1 2022 to 8.07% in Q1 2023. They've also increased their borrowings, from MYR 855 million in Q1 2022 to MYR 1.4 billion in Q1 2023. Adjusted OCF is down 20.6% due to higher CapEx and net finance costs. Mentioned depreciation of LKR and other currencies against Ringgit Malaysia resulting in adverse translation impact on reported results. Weakening of these foreign currencies relative to ringgit have also resulted in adverse Forex translation impacting the revenue and EBITDA, largely contributed by Dialog and Robi. Year on year, the Lanka Rupee depreciated 35% to Ringgit, and Bangladesh Taka depreciated around 15% year on year to Ringgit. You see the MYR 572 transition losses there at the revenue line can be broken down to MYR 338 million by Dialog and MYR 166 million by Robi. As for the MYR 194 million transition loss at the EBITDA line, some most are contributed by Dialog and Robi as well. Next. On the adjusted OCF, this as we see has decreased by 41.7% from MYR 604 million to MYR 352 million. As you can see, from the movement of the line items, this is largely due to the higher CapEx of MYR 264 million, mainly by Link Net, XL and Smart, and also increase in net finance costs of MYR 129 million. As mentioned just now, contributed largely by edotco and Dialog. On the OpCo basis, Dialog's adjusted OCF was impacted by, as mentioned just now, higher NFC. Whilst Link Net's year-on-year movement was due to it being only adjusted for this year because last year it was not in the reporting. Next. On the balance sheet, as mentioned by Vivek, the growth of EBITDA rose to 3.6 times, adjusted for the dividend from CelcomDigi, of course, compared to 2.89 in quarter four, 2022. This rise is primarily due to the exclusion of Celcom's EBITDA post the completion of the merger in November last year. Net debt to EBITDA is actually 3.08 times. As mentioned, we do anticipate the repayment of the shareholders' loan of MYR 2.4 billion in quarter two, 2023. This proceeds will be used to partly reduce the debt. This ratio is expected to improve to 3.4 times level, with net debt to EBITDA improving to 2.9 times. If you recall, the SPA under the merger gave six months from the date of closure to CelcomDigi to repay this shareholders' loan back to Axiata. Cash balance stood at MYR 5.5 billion. I hand over to Hans to go into detail of the digital telco performance. Thank you, Leila. Starting with XL. XL delivered a strong growth, based mainly on growth in prepaid data as well as digital services. Revenue growth recorded at 11.9% year-on-year. The increase in digital services in particular was due to the higher revenue share post contract renegotiation with ADA, following the review of the contract based on market changes for the related services. ARPU also was very encouraging at 11% growth year-on-year, which augurs well for the price, the hardening of revenues as well as downstream of the price hardening that we see in the market. XL HOME, the fixed and mobile convergent service also grew 44%, which evidences a positive trend in XL's convergence trust. Downstream of revenue, EBITDA also grew to 0.9% year-on-year and margins improved by 0.4 percentage points to 47.5%. Attributable mainly to higher revenue flow through and lower sales and marketing costs, which is in fact in line with the channel digitization efforts, which XL is engaged in at present. Likewise, EBIT grew 37.2% year-on-year and the margin improved by 2 points, quite significant, ending at 11.1%. High EBITDA flow through as well as, which was partially offset by higher D&A, resulted in this improvement in EBIT margin. PATAMI grew 44% year-on-year, ending at IDR 201 million, resulting mainly from higher EBIT flow through and partially offset by higher NFC net finance cost, as well as also additional borrowings and a share of Link Net's losses of IDR 48 billion. Cash at AOFCF level 10.4% up year-on-year, resulting from the high EBITDA flow through and partially offset by higher CapEx, which CapEx grew by 24.9% and net finance cost by 12.8% in the year. Moving on to Robi. We see very robust performance in our operations in Bangladesh. However, the bottom line was clouded by Forex losses resulting from devaluation of the currency. Revenues grew 16.7% and ARPUs by 14.1% year-on-year. Good flow through to EBITDA. EBITDA growing faster than revenue at 23.6% year-on-year with margin expansion of 2.6 percentage points. The EBITDA margin now has now reached 44.8%, and we see potential for this margin to increase going forward, both due to higher revenues as well as the tight cost management at Robi. Flow through to EBIT was also very attractive with a 50.9% growth in EBIT year-on-year and EBIT margin ending up at 16.5%, improvement of 3.7 percentage points relative to the previous period. PATAMI again grew 5.5% year-on-year to BDT 420 million, resulting from higher EBIT flow through, but partially offset by higher net finance cost of 46.5% and Forex losses on the USD loans, which I mentioned earlier, which unfortunately, depressed the PAT, the PATAMI, relative to what it could have been if not for the Forex losses. If not for Forex loss, in fact, PATAMI would have grown 89.9%. Moving to Dialog's revenue momentum continues 31.3% growth year-on-year, driven by international business as well as mobile data. Are we okay? Yes. Driven by international business as well as mobile data. A very encouraging top-line growth and strong performance in the market relative to competition. At EBITDA level, however, we see a compression of margin by 12.5 points, ending up at 26% EBITDA margin. Largely due to higher direct costs, network costs, energy as well as staff costs, being driven by the inflationary environment in Sri Lanka. EBIT also depressed by 49.2% year-on-year, with the margin ending up at 5.5 percentage points. Higher EBITDA flow through and the offset of higher DNA at an increase of 9.9% year-on-year resulted in or led to the reduction in EBIT as well as in margin. PATAMI, however, grew more than 100% year-on-year to 8.7 billion Lankan rupees. This was due to higher EBIT flow through as well as a FOREX gain. You would recall that in the previous year we recorded large FOREX losses due to the devaluation of the currency. We also know that the Sri Lankan currency has since strengthened. I think year-on-year it's has strengthened from 360 rupees in April last year to around 310-312 rupees this year. A significant FOREX gain which has boosted PATAMI somewhat of a recovery from what we have faced in 2022. At cash level, again, -51% year-on-year. Lower EBITDA flow through and higher NFC were the main contributors to the reduction at AOFCF level, notwithstanding lower CapEx, with the CapEx controls coming in at to the tune of 18.3% year-on-year. Moving on to Ncell. Ncell's voice revenues were significantly impacted by lower interconnect rates. Revenues overall fell by 5.4% year-on-year. Core revenue by 7.9% due to the interconnect rate reduction that I just mentioned, coupled with lower voice usage with MOUs falling 15% year-on-year. This impact was, however, partially offset by higher data revenues increasing for the first time by 7% year-on-year. EBITDAs fell 7.7% year-on-year, with ending up at a margin of 55.2%, 1.4 points below that in the previous year. We see lower revenue flow through, impacted by higher staff costs and also network costs expanding by 18.8% year-on-year. Some work to be done in terms of mitigating the cost increases in the subsequent months and quarters of this year. PATAMI at -16.7% year-on-year, recorded at NPR 1.1 billion, resulting mainly from lower EBIT flow through, offset by, however, the lower NFC and lower taxes. In Nepal as well, we enjoyed a higher FOREX gain of approximately NPR 86 million on a year-on-year basis. Smart, strong performance, sustained growth in profitability, revenues. We see positive markers across the P&L, starting with revenue at 2.6% year on year, mainly driven by data revenues as well as international revenues, including application A2P and inbound roaming. EBITDA grew by 9.9% resulting from higher revenue flow through and supplemented by strong cost management as well as a one-off reversal of a revenue share provision. EBIT improved 20.3%, and PATAMI 37.2% year on year driven by higher EBIT flow through and further supported by lower taxes and the absence of one-off government grant or U.S.O clawback. Cash grew. Cash, however, reduced 29.2% year-on-year at AOFCF level, mainly due to the higher CapEx relative to the previous year, also partially offset by higher EBITA flow through. Last but not least, Link Net, our newest OpCo. We have seen some positive movement on the ARPU side with growth in ARPU from 346,000 to 330,000 relative to 335,000 IDR in the previous year. Having said that, revenues declined by 7.1% year-on-year due to subscriber churn. Forms passed have increased to 293,000 year-on-year to a total of 3.2 million as at the end of the first quarter. Homes connected have increased from 102,000 to 750,000 due to the churn impacts that I just mentioned. EBITDA contracted by 23.5% and the margins also contracted by 9.5 points to 44.7%. Performance at EBITDA driven mainly by lower revenue flow throughs as well as high marketing costs, network costs and debt. The churn impacts are being addressed through a very focused performance improvement program under the aegis of a board appointed subcommittee, which has set the company stringent targets for performance improvement over the course of this year. PATAMI declined by more than 100% year-on-year as a result of EBITDA, as well as a decline at both the EBITDA and EBIT level, which is a direct flow through, compounded by higher DNA of 20.8% year-on-year. At cash or EFCF level, we have a scenario which reflects pretty much a flat outcome with lower EBITDA flow through and higher NFC offset by lower CapEx, which with CapEx controls bringing CapEx levels to 17% year-on-year. That sums up the Telco operations. I hand back to Lila. Thanks, Hans. For the digital business, we start with Boost, which has shown a strong revenue growth year-over-year from MYR 16 million to MYR 31 million. This is mainly driven by Boost Life and Boost Credit through growth in offline payment with the introduction of merchant discount rate and also increased loan disbursement. Gross loan book has grown in Malaysia by 89% and Indonesia by 30% on a year-over-year basis. Year-over-year GPV also remains flattish at MYR 1.5 billion, whilst Boost Life users increased by 6.4% year-over-year to 10.5 million. Malaysian merchants rose by 24.9% to 586,000 for this time. To recap the quarter four 2022 revenue spike was mainly due to the Mastercard deal earlier. EBIT remained flat year-on-year as revenue growth was offset with higher OpEx from provision for estimated credit loss. For compliance with auditors, Boost has taken a higher provision upfront for its loan book. Clawback can be expected should the loans be repaid. Losses widened to MYR 52 million from MYR 48 million last quarter due to higher net finance costs. Next on ADA. Year-on-year, we see a revenue decline by 21% from MYR 189 million to MYR 149 million. Largely due to a lower contribution from the customer engagement solutions due to the contract renegotiation with XL that Hans and I mentioned earlier. With the loss of this high margin business, EBIT and PATAMI slips into losses as ADA is further impacted by higher professional fees, which is used for consultancy and technological improvement, and also Forex loss, one-off Forex loss impact within the quarter of about MYR 2.6 million. Next, we go to the infrastructure front, where we have edotco. edotco has grown its revenue and EBITDA by 14.3% and 14.1% respectively. mainly from inorganically driven acquisitions of the PLDT towers in Philippines and towers in Indonesia and higher colo rollout in Bangladesh. If we wanted to dissect, Philippines contributed to about MYR 60 million to revenue in Q1 2023, and Indonesia contributed about MYR 9 million. EBIT is flat year-over-year from higher depreciation and amortization, while bottom line turned into a loss due to higher net finance costs from increased debt of MYR 2.1 billion-MYR 5.8 billion from the recent acquisitions mentioned earlier. Also unrealized Forex loss of MYR 27 million incurred in Q1 2023. Adjusted OSCF has also been impacted by higher CapEx from Philippines and also higher finance costs as mentioned earlier. I'll hand over to Vivek for the messages on the way forward. Thanks, Lila. A little bit touching upon the efforts in Indonesia to create a fiber point converge serve port. As we explained earlier. The plan to deliver 8 million home passes for XL are already in place. The steps are being taken now to carve out, we do expect by the end of the year, we should be able to finish the carve out exercise. I think delayering of Indonesian assets, in our view, will eliminate value as well as provide strategic focus to Link Net as a wholesale provider, not only for XL but also other potential ISPs. This will also allow us to tap growth potential under the underpenetrated fixed broadband market and drive scalability and unlock OpCo synergies where the assets on both sides and go-to-market efficiencies can be best utilized. These maximizing synergies will reduce cost of implementation. We are already seeing the effect on the cost of home passes with focused negotiation intervention from Axiata Procurement Center. In addition to that, I think there is the potential to accelerate fixed-mobile convergence and fixed broadband play could be done. As you know, XL has been doing a reasonable good job on fixed-mobile convergence, but with this, they will be able to accelerate in the market. Having said that, I think as a company we run a high leverage balance sheet. This will periodically come down, starting with the repayment of some of the loans once we get the shareholder loan from Celcom, and also some efforts on monetization of the assets as we see going forward. The. The KPIs which we set at the beginning of the year, mid-single digit revenue growth and the EBIT growth of high single digit, I think we're still maintaining that. We believe that we will be able to deliver on those KPIs. CapEx still remains at MYR 7.1 billion, though there would be an accelerated investment coming in Link Net to provide that home passes for XL to use it. Like any other business, the risks and opportunities exist. I think the currency effect and increasing interest rates we do see playing out to our performance through the year. Though some of the markets specifically, for example, Dialog, we are cutting down on the USD exposure, but that would have an offset of increased interest rates from local borrowings, which will come. Regulatory risk, I think, there's nothing new, but we are seeing post-COVID the demand from the regulator on quality of service requirements would mean more capacities to be put. Industry landscape, this is both positive and negative. I think consolidation in the markets is helping. We are ourselves looking at consolidation in Sri Lanka, as you're aware. I think the market consolidation in Indonesia so far has played well when it comes to the price rationalization. Future investments will be impacted because of the balance sheet limitations. I think our focus would be to continue driving the deleverage of balance sheet. Having said that, I think we do see EBITDA growth remaining strong to support the ratios on the leverage, which we wanna maintain. Opportunities, I think rationalized competitive landscape. Having consolidated in Malaysia, consolidation happened already in Indonesia. We've done that in Bangladesh and now focusing on Sri Lanka, I think should make a much rational environment for us to operate on. Synergistic benefits between XL and Link Net, I think we should start seeing once we have finished the delayering exercise and potential monetization opportunities post-delayering. As I said earlier, the combined operations between Dialog and Airtel Lanka should not only provide synergies but also should help in rationalization and market repair in a highly strained market environment. That's pretty much, from us here. I'll hand over to Clare to open up for Q&A. Thank you. All right. Thanks, Vivek. Moving on to the Q&A session. As per our usual practice, we are also joined by our OpCo colleagues, including from Link Net, represented by CFO Kanishka Wickrama. Feel free to direct some of your questions to them also. To ask your questions, you may choose to do this verbally. Just raise your hand and wait till your name is called for your turn. Otherwise, you can type your questions into the text box too. Let's start with the Q&A session. We see a hand raised. Maybe we start with Luis from Citi. Luis, your line is now open. Hi. Hi, good afternoon, and thanks for hosting the call. I have three questions. The first one is towards Link Net. Can we get more color on why there is such high churn, given that, you know, there should be strong organic demand for fixed broadband in Indonesia? If we can get sort of an outlook for the coming quarters, like is the first quarter like the bottom of the performance in your view, operationally? The second question is at the group level. You've maintained guidance for revenues and EBIT, given the momentum you're probably gonna see in the coming quarters. Could we have some rough guidance on finance cost direction for the full year, given that is the drag on profitability in the first quarter? Last question is, given that pressure on the bottom line, any indications for how you'll decide payout for the full year? Thank you. You take, Hans, do you want to go? Yeah. Okay. I will take your first question with respect to Link Net and the churn rate. First of all, we need to acknowledge that we have a performance issue there, which as I mentioned during my presentation, we are addressing through a very focused and aggressive performance improvement plan. However, tracing back on the reasons, there are several pivots in the Indonesian broadband market that we have to take into consideration here. One is that during the COVID period of 2020 and 2021, what we might call a pandemic bump in the demand for broadband services. The gross adds as well as net adds at Link Net were double those in the previous pre-pandemic year. In a sense, exceptional growth, period of exceptional growth. Post-pandemic, I think demand, especially in residential areas, normalized to pre-pandemic levels, resulting in the propensity for churn. Add to this pre-pandemic and post-pandemic dynamic, this period also represented a period when many new competitors joined the market, and they all focused on the same high network zones where Link Net was present. Link Net was in the process or is in the process of converting its HFC infrastructure to fiber, whereas many other new players came in with fiber networks from get-go. These are some of the factors, and I would also add to that, the fact that Link Net was a premium provider of premium services, highly priced at premium levels and rich in terms of the breadth of services ranging from broadband to pay television as well. The emerging trend with additional transient that we are seeing is there's a movement from pay TV towards OTT services, which strip out some of the premium potential of Link Net. These changes have challenged us now to reset, to adopt multiple approaches to improving the operational metrics and bringing performance back to where it was previously. As Vivek mentioned earlier, we have, in addition to addressing the performance issues and churning net adds and bringing EBITDA back to where they are, in addition to that, we have embarked on a transformation program whereby we would do a structural delayering, focus Link Net on broadband access on a wholesale basis, and transfer the ServeCo or the ISP to XL, where XL would be a Converged ServeCo serving both mobile and fixed customers. That's the major step in terms of realigning our assets in Indonesia to best suit and best respond to the new market environment. Thanks, Dr. Hans. Lila, you want to cover the interest costs, finance costs? I think on the finance cost direction for financial year 2023, I think for we think or you may refer to the current quarter run rate where we reported about MYR 540 million finance expense. I think you can use that as a for the full year 2023 while we manage our finance costs. I think you can see that for balance sheet, most of our borrowings are also hedged. About 40% is hedged. We are trying to manage this going forward to the end of 2023. Sure. I think with the last question on performance of the profit for full year guidance, I mean, we don't give a guidance on profit. What we have given a guidance on EBIT. As you can see, there would be an effect of interest costs coming in for the year based on what Lila just mentioned. We do expect ourselves to be able to hold on to dividend per share commitment of around MYR 0.10 for the year. There are likelihood of lower taxes compared to what we had earlier. I think that's how the profits would be arrived at. EBIT, as I said, we do expect high single-digit EBIT growth. Okay. the MYR 0.10, dividend minimum is intact. Thank you. Okay. Thanks, Luis. Let's move on to the second question coming through from Foong at CIMB. Foong, you just unmute now. Can you hear us? Hi, Foong. Can you hear us? Maybe we'll circle back. Okay. We come back. With Foong. Foong. May perhaps, suggest that you may want to dial in again. Maybe we move on to Prem from CGS-CIMB. Welcome back, Prem. Thank you. Welcome back. Hopefully you can hear me. Yeah, we can hear you, Prem, very well. All right. Thank you for the opportunity. Sorry, I'm going to jump on this Link Net bandwagon as well. I suppose the key question here is, given the performance that we've seen from Link Net, do you think there is a need for us to potentially do some form of an impairment, down the road or even sooner rather than later? That's 1. 2, with regards to the monetization of your assets, do we feel that given the current state of the balance sheet, that we're being forced to do things at lower price points than we would have loved to do it at? Or is demand sufficient to allay that fear for those assets? I suppose, you know, this then leads on to the most dangerous of the questions, which is, do we think we are being hamstrung in some way, given the current balance sheet? Should we look at some way of monetizing something or even shock horror going for additional funding? On LinkNet impairment, I think we do an assessment on a quarterly basis, based on what is the most recent discount rates, risk factors, as well as cash flows. As at quarter end, we had a decent headroom before any impairments could be instituted. We will continue to monitor that. As far as LinkNet is concerned, you would realize the structure, the format of LinkNet as an organization would shift once we have a split between the fiber wholesale and the retail or the ServeCo, which would be XL. Based on that, in our view, the value, given the opportunity and the existing customer base, which is already there with LinkNet, the value would be preserved if not improved by doing this restructuring of the operations of. on the fiber side in Indonesia. We don't see any immediate risk, but we will keep assessing as we go along on a quarterly basis. Now, I mean, we say that our balance sheet is stretched, but in reality, I mean, at 2.9x is not an unsustainable situation. The reason why I say is that, given the growth which we are delivering on EBITDA, this is something which should organically improve unless we have to borrow new money to invest. Having said that, we think in the current environment, we need to have a decent headroom available all the time to look at strategic investments and opportunities as we go along. I think it's not an immediate concern. We are not going to sell our assets at cheap price just because we want to, you know, improve our balance sheet. I don't think balance sheet is a big issue per se, but we need to have flexibility to be able to maneuver through difficult times as well as look at strategic opportunities as and when they come. That's why balance sheet improvement, Prem, is important for us. In addition, obviously, as I said, you know, we will be getting these funds coming in from CelcomDigi. Some of the assets in future is not necessarily to do with monetization in itself, but also to do with getting strategic investors, which we've done in the past as Axiata in our different operations. We do get strategic investors. We could get dilution of our stake to allow a new investor put in money in the company, as well as our ability to monetize through secondary sales. That we will keep evaluating as we go along all the time. It's not an immediate concern for us. As I said, it's not that, to delever we are gonna sell our assets at cheap price. It's more, as I said, opportunity for future investment that we want to improve our balance sheet. Perfect. Thank you very much, and good luck. Thank you. Thanks, Prem. Okay, maybe we'll circle back with Foong from CIMB. Foong? No? All right. Okay, maybe we'll come back after Izzati then. Hi, can you hear me? Yes, let's have Peelu. Yes. Hi, Izza. Hi. Hi. Yes. Three questions from me. The first one, I guess, with Celcom's deconsolidation, all eyes on XL Axiata. I recall the emphasis for Axiata has always been you wanna be strong number one or strong number two in any market you have presence. XL, I guess, has been pushed down to sort of distant number three for mobile with the recent merger, right? How do you plan to address this and strategy to also lower their leverage ratio? I suspect the conversation about their Fixed-Mobile Convergence and everything might have CapEx implication as well to XL. That's the first one. Second one, Indonesia home broadband ambition of 8 million. The whole market for home broadband looks pretty competitive with many players. Do you expect there'll be more consolidation for this segment in Indonesia? Lastly, since we have Supun in the call, will be great to get some color on the cost escalation in Sri Lanka. I recall in the investors day, I sense the risk for frontier markets sort of easing dialogue, talking about initiatives to keep costs tight. Can we expect margins to decline further, or this is the bottom for first quarter for Sri Lanka? Maybe I'll take the first one on Indonesia and XL in particular. You're right. In a third player position, there are challenges which need to be addressed from the point of view of scale and also the motivation or imperative of moving towards an asset-light formulation. This is exactly what XL and Axiata, with the delayering strategy that we have announced, is exactly one of the directional moves that we are taking by helping XL to move in an asset-light direction with respect to its converged play. Using LinkNet as a wholesale fiber provider, the LinkNet would then drive high utilization of its infrastructure across multiple ISPs. thereby the delayering outcome or the delayering upside that we would get as a combination of assets would address part address the problem that you very correctly pointed out. This is a journey, and you would see that going forward as well, we would look at all opportunities to have a larger scale in terms of operation as well as higher utilization of any capital investments that we put in. Right. What about the mobile side for XL? The mobile side. Yes. We have seen from XL's results that, XL is performing very well in the market on the mobile side. I think the question is now XL is number 3 with the recent merger in IOH, how do we address this, and the strategy to reduce. I think it's we want to be number one or strong number two player. We, in Indonesia, we were relegated to number three post the merger between Indosat and Hutch. That's pretty much the reason we had to find a different spot to excel in that market, and that's where the Fixed-Mobile Convergence is our strategy to focus. Having said that, I think despite the fact that we are relegated to number three, XL continues to do well in that market and continues to gain share. I think that focus will continue. In addition to that, the driving cash flows and profitability of the business is also something which we are focusing on. Supun. Supun, do you want to chip in on the cost escalation question? Yes. You can hear me? Yeah, we can hear you. Go ahead. Yeah. Overall, economy has seen fairly good stabilization of macro indices in Q1, going into Q2 as well. Exchange rate has improved as mentioned by Dr Hans. This, what we have reported in Q1, I probably believe is kind of the bottom. In terms of EBITDA margins, we are looking at more turning it around and starting to pick it up, going into Q2, Q3. Largely due to inflation stabilizing now. Point to point inflation now going down to 30% in the last month. Exchange rate stabilizing, the price levels have started to come down. The main challenge in the market is because of the heightened inflation, consumer affordability is getting challenged. That's why some challenge in terms of growth that we are seeing in the market. Overall cost is under control, and we believe that we can start lifting the margins with multiple initiatives on cost reduction, simplification of the network, shutting down 3G, also rearranging some of the infrastructure in television platform would help in the coming quarters. All right. Thank you. Thank you. Thanks, Izzati. Hope that answers your questions. Okay, we'll try again, Foong. Third time lucky, perhaps. Yeah, hi. Foong. Yeah. Thank you. Now we can, but you're still a little faint. Oh, okay. You'll have to be a little louder, Foong. Okay. Can you hear me better? Is this better? Yes. We can. Okay. Yes. Okay. Three questions from me. Firstly, regarding the balance sheet, I know what you mentioned earlier on, Vivek, with regards to the gearing levels still not being at unsustainable levels. Can I just sort of ask for additional color, right, in terms of, like, the ceiling for gross debt to EBITDA, based on your debt covenant or, you know, if you, if you want to maintain your current debt rating, right, how high can you know, have your gross debt EBITDA at? That's the first question. Second question also just on LinkNet. Is the churn rate improving on a month-on-month basis so far through this year? When do you think this will start to stabilize? When we look at the plan to accelerate the rollout of the network, it's quite substantial. We're talking about 1 million new homes passed every year for the next five years, which is quite a few times multiple of what they used to do. In terms of the investments that are required, you know, how much would that be? Do you think that this can be debt funded entirely at the Link Net level, or do you need to put in more money or you can get strategic investors to come in? That's question number 2. Finally, for edotco, we talked about potentially getting strategic investors in previously at the Philippine level. Any updates there? Yep, those are my three questions. Thank you. Sure. Who'll take the first one? Hi. Hi, Foong. Leila here. I think from the loan covenant that your question on the compliance side, all of our OpCos actually are complied with all their covenants under their financial agreements. I would like to draw the attention that you mentioned just now about our gross debt to EBITDA. It is going down with the shell-less loan repayment by CelcomDigi to 3.4 times level. Also our net debt to EBITDA will be improving to 2.9 times. Just to note, the rating agency's threshold for Axiata is actually Moody's at 3 times and S&P at 4 times. This is all based on net debt to EBITDA. They also do take into account of contribution from Celcom as well. There is still room for us to actually, s orry. We are still in line with that threshold that's given by the rating agencies. Hope that's clear. Hans, on. Yeah. I'll take the question on Link Net. To your question on whether churn rates have stabilized and are back to normal or acceptable levels, largely, yes. We have set some key milestones. As I mentioned earlier, the board of commissioners has appointed a subcommittee for turnaround. We are working towards 3 key commercial milestones. First is the monthly gross churn to be below 3%, which is the level that was maintained prior to the post-pandemic pivot. This target is well on the way or rather has already been achieved in February. We are tracking very well. At the present, we are below the target, meaning ahead of the target at 2.8% as of April. The second commercial milestone was to get to positive monthly net adds, notwithstanding the churn from the COVID bump. Here too, we are ahead of plan with positive net adds being achieved since March 23. The third commercial milestone is on recovering the residential revenue run rate back to the stable run rate that we would require to drive EBITDAs in the right direction. Here, too, we are very much on track. In summary, stable and moving on positive track. With respect to the scale of rollout, you're right. It's a significant scale up. I think this is a key response to what I described previously, that the entire market has changed from being a slow-moving home broadband market to a very aggressive market exhibiting aggressive growth rates and multiple players coming. Time is of a essence, and also it's important to capture this opportunity quickly. With respect to funding, we are open to all options. As characteristic of a FiberCo, the cash flow is strong, tenants is secure and low risk. In addition, that would be an objective, especially after the first few years for multiple tenants on the same fiber, which brings about a very accretive situation in terms of returns on investment. Internal generated funds, a moderate debt level in line with benchmark. In addition, we are also open to entertain the possibility of a strategic investor at an appropriate point in time. Adlan, you're on the call? Yes. Yeah. Yes. Adlan, can you answer the question on edotco? Yeah. So Foong, I think, we were looking at some strategic partners at the Philippines level when we were doing the deal on the asset acquisition in Philippines for the PLDT towers. However, I think, that is we have actually sorted out on the funding and on the equity portion. At this point in time, I think, there's no plans for that. However, I think, we are always open to see for optionality what is available, right? To see how we can actually, if there are great opportunities that come about or something that we could potentially consider, and all that. At this point in time, nothing at that front. Okay, noted on that. Thanks everyone. If I can just throw in a follow-up question for Dr. Hans. Noted on the improvements that we are seeing at Link Net, the positive trends. Can I sort of just ask what has been done, you know, in these last couple of months, right, to have led to this positive trends? Quite a portfolio of initiatives on the gross debt side. Initiatives centered on the launch of some competitive products, taking into account the changes in the market. The bundling parameters in the market have changed significantly, moving away from pay TV bundles towards more broadband only, combo broadband and OTT bundles. Basically, reconfiguring the product portfolio. Also, at the back end, using analytics-led home pass deployment to improve the penetration and take-up rate, and also revamping the sales incentive to better suit the dynamics that we have been seeing. In terms of churn, we had to address quite aggressively the downsides of the HFC infrastructure. Here we have done some interim upgrades to the HFC to provide higher speeds and therefore improve product competitiveness. As we know, HFC at the right technology level can compete head-on with fiber. I need. That's the interim measure we have taken pending the conversion of HFC to fiber over the next few years. Also, focus retention plans for high-value customers. Like I mentioned, the migration of HFC to fiber has also been accelerated by a significant step up from approximately a seven-year migration plan being brought forward to three years. Those are some of the initiatives. On the cost side, again, aggressive vendor negotiations. We have brought CapEx for home passed down by well over 25%, based on current estimates. Renegotiating all our costs using Zero-Based Budgeting, very similar to what we did in Dialog, also optimizing the network architecture. There's a very, very broad spectrum of initiatives, with those three key commercial targets that I mentioned earlier as a first pass, proof of success. Okay. Noted on that. Vivek, just now you mentioned that, there's no need to do any sort of impairment on the Link Net investment. Is there any potential for the impairment of the HFC network at the Link Net level? No. I think, you know, HFC network, as I said, when we reorganize our operations between fiber, core, serve core and potentially looking at an enterprise as a separate entity, there would be a complete revisit of the value of the business or value of the goodwill across these elements. Because HFC is still giving us good cash flows. HFC network is still, you know, high-value customers who are giving ARPU of even IDR 1 million on this network, and we are slowly converting that HFC network into fiber. In fact, original plan was a slow one. We are now accelerating that conversion, and that conversion should help us retain those customers and get continuing cash flows from that network. As an asset, we are not looking at separately, whether it is fiber or HFC. I think it's a consolidated, cash generating unit is what we look at. We don't see an impairment per such, as such. As we convert each of those locations into the fiber, then we will have to look at what is the remaining value of that asset. Okay, understood. Thank you so much, everyone. Thank you. Thanks, Foong. Okay, I think maybe we can move on to the questions through, coming through on the chat box. The first one we see is from Supri from TNB. On the high churn rate in Link Net, is it industry-wide or just Link Net? Would this high churn rate be a one-off event or would continue going forward? We can ask Kanishka to answer this. Kanishka. Yeah. Thanks, Vivek. The churn rate actually peaked up in quarter three and quarter four, and as Dr. Hans explained, we have seen the churn rate coming down at this point in time. In the month of March, actually, we have hit the lowest churn rate that we have seen in the last 12 months. About overall, I think, once again, as Dr. Hans explained, we had a one-off gain during the COVID period in 2020 and 2021, where the gross settles, gross adds actually doubled up during, due to the high usage of fixed broadband, which caused the usage of that churn. I assume there should be a similar impact in the other players as well. Thanks. Thanks, Kanishka. I think we do have a second question coming through from the chat box also. This is from EPF, Suhaili. For Link Net, what is the strategy going forward? As per my understanding, competition is getting intense in the broadband market. Does management see a downside risk to the broadband ARPU in general? Maybe, Kanishka can comment. Kanishka. Yeah. The competition is going up. We have seen that in the market. Maybe one thing to explain that is in the past, we have been playing in a premium area where it is always broadband and pay TV bundled together. Hence, we have started a broadband or plus OTT, which we call a skinny bundle product, launched in January, which is picking up quite well at this point in time. Yes, we have looked at the market, we are from ARPU point of view for broadband only, we are at the market range, compared to the other operators in the market. Well, I would sense the ARPUs would come down. I think as we explained, I think we going forward with the transition of these customers to XL, the Fixed-Mobile Convergence play should be able to hold on to the ARPU, which is what we are seeing on the XL side. The ARPUs there are better than the pure fixed broadband ARPUs. I think we have also to recognize that the penetration level in Indonesia. Still low. ... less than even half of regional peers. There's a lot of upside in the market and we need to be cautious obviously, so as to avoid oversupplying this market, I think there's a lot of headroom for growth. Okay, thank you. I think we move back to questions, Arthur from Citi. I see his hands is raised. Perhaps you have a question for us. Yes. Sorry to belabor the point in Excel. Can we just get some clarification on what happened post-acquisition? Basically you're not seeing this kind of reduction in any other regional market post-COVID, nor its local competitors, such as IndiHome. Were there any discoveries post-acquisition that had required aggressive disconnection policies versus those adopted by the prior shareholders? In addition, why are we not seeing gross additions as compensating, considering that the market remains under-penetrated? Thank you. One second. Yeah. so to answer your question, whether there were any specific corrections, to what we expected, in, in the post-acquisition phase. none, nothing specific other than the assumptions, of cross sells and the continuation of the COVID, growth curve and the retention levels. So there has been a step change there. Um, and like I mentioned earlier, there are multiple contributors to that step change. One is the post-COVID, transition, but also the exite-- the downsides of the HFC network. Multiple players attacking this niche high value segment, all, almost at the same, same time. So the whole migration project, which Link Net had to complete, in 2021 and 2022, due to having to vacate the PLN poles. So there were assumptions on the growth rate fundamentally and the churn rate, which were not met, but we need to adjust, and that is exactly what we are doing to a new norm in the market. In terms of new rollouts, the scale-up of the new rollouts beyond the acquisition assumption of around 300K per year to the levels of 1+ million, that is what we are planning out now and equipping ourselves with the capacity on ground to take up that additional rollout. But at the 300K level, we are satisfied with the new gross add, but we on the new home passes. We are cautious in terms of applying the right products in the right locality in order to control the churn rates, given the current churn rate we are seeing in the market. Understood. Can I ask a question? Yes. Are we seeing any pickup on the ads? Gross adds. What's holding back the gross ads? We haven't in fact from a sales strategy point of view, we are keeping net adds as our definition of success and not over-fueling the gross add engine. Because at the end of the day, what we require is lower churn rates, higher net adds. We have actually brought the net adds back to the 2019 levels, which is exactly where we wanted to be just prior to the bump in during COVID. That is a sustainable level of net adds on this footprint. Now, as our footprint increases, our aspirations for net adds will increase, and we would apply similar gross to net ratios in terms of our marketing investment, as well as not to overheat the gross add engine and drive a washing machine, so to speak. That is what we would want to avoid at this point in time. Understood. Hope that answers. Thank you. Understood. Thank you. Thanks, Arthur. I don't see any further questions. Let me just double-check. No. Yeah. I think we don't have further questions. Okay. , pass over to Vivek for closing remarks. Okay. Thanks, Clare, and thanks everyone joining this, the investors analyst call. I think, the year started, I would say, a mixed with steady performance. I think there's a lot of work we need to do on certain operating companies, specifically Link Net, which has been talked about. I think we are seeing early results, as Hans alluded on the recovery plan on Link Net, and this has been extremely important and a lot of focus from our side. In addition, the transition from the current operating model to a fixed FiberCo ServeCo, again, is an important move which we need to deliver during the year. I'm quite hopeful that we will see positive traction going forward during the year as far as the operations in Indonesia are concerned. Thank you very much, all of you, for joining us today. Thank you.