Good afternoon and welcome to Ooredoo's Financial Results Call. My name is Andreas Goldau, and I'm in charge of Investor Relations. Today, I'm joined by Aziz Aluthman Fakhroo, CEO and Managing Director of the Ooredoo Group, who is going to start the presentation with an overview of the consolidated results and the strategy, followed by a presentation by Abdulla Al Zaman, our Group CFO, who is going to talk us through the operations. As always, we keep the presentations part brief to allow ample time for your questions. Please do type your questions into the Q&A section of this Zoom seminar at any time. The presentation is available on the Ooredoo website at ooredoo.com, as well as on this webcast. The recording and transcription of the session has started now, so by attending this session, you consent to being included. Please do note the usual disclaimer on slide number two.` On that, I will hand over to Aziz. Good afternoon, everyone. Welcome to our investors call. Last week, we announced a groundbreaking transaction that will lead to the largest TowerCo in the MENA region. I'm obviously very pleased with this announcement. I must reiterate that we are still in exclusive negotiation with our future partners of Zain Group and TASC Towers Holding. As you may appreciate, this is a complex transaction, and it represents an important milestone for all parties. We're aiming for definitive agreements to be completed during the third quarter of this year. In terms of transaction structure, a new JV will be created. It will operate as an independent tower company with its own dedicated management team, focusing on increasing the value of its asset. Ooredoo will contribute its towers assets in Qatar, Kuwait, Algeria, Tunisia, and Iraq. The transaction concerns only the passive infrastructure. Each of the operators will retain its active equipment on each site. To give you some context, when the transaction completes, TASC Towers Holding will have 30,000 sites across six countries: Qatar, Kuwait, Algeria, Tunisia, Iraq, as well as Jordan, contributed by TASC. Oman is running a separate process, as you know, due to regulatory reasons. This will create the single largest TowerCo in the MENA region. This transaction will allow us to achieve three things. Firstly, it will unlock value for our shareholders. The transaction has a cash consideration as well as an ownership stake to participate in the future upside. Secondly, we will be able to optimize our capital and cost structure. Let's not forget the synergies that we will generate by combining our tower portfolio of Asiacell and Zain in Iraq. This will drive an environmental impact with a reduced carbon footprint. Here are the key highlights for the first half of 2023. As you can see, we continue on our good performance for the first half, which has delivered an increase in revenue with a solid EBITDA margin, free cash flow, and net profit growth. We'll take you into more details later. The key highlights are: increase of 3% of the top line to QAR 11.4 billion. Reported EBITDA remained flat at QAR 4.8 billion. Reported EBITDA margin at 42%, free cash flows up by 2% to QAR 3.9 billion in the first half. Reported net profit is up by 20% to QAR 1.8 billion. Normalized net profit are up also by 20% at QAR 1.6 billion. Other significant updates include the tower transaction, which I has already touched on, and the appointment of our new Ooredoo Palestine CEO, Samer Fares, on May the 15th. He was previously the Chief Legal and Regulatory Officer of Ooredoo Algeria. As mentioned before, for the first half of the year, our revenue is up 3% to QAR 11.4 billion. Here are the highlights in more detail. I would just like to draw your attention on the fact that our EBITDA, at QAR 4.8 billion, is flat as reported numbers, but up by 4% on a normalized basis. Our EBITDA margin is also up by 0.4 percentage point on a normalized basis. Another key highlight is our customer base, which encompassing of IOH now is at 156.2 million subscriber or a 3% growth. This is a similar breakdown for Q2. Our revenue is up by 4% to QAR 5.8 billion. Our EBITDA on a normalized basis is up by 7% at QAR 2.4 billion. Our EBITDA margin is up by 1 full percentage points on normalized basis. Our free cash flows are up by 17% at QAR 1.9 billion on normalized basis. Our net profit is up by 26%, roughly at QAR 0.8 billion on a normalized basis. As mentioned previously, for the first half of the year, our revenue is up by 3%. On a quarter-by-quarter basis, it's up by 4%, mainly driven by Iraq, that grew by 26%, Algeria, that grew by 11%, Kuwait, that grew by 6%, Maldives, that grew by 9%. In the quarter, Qatar's revenue was negatively impacted by highly competitive environment in the consumer space. Discontinuation of the Transit business, the reporting of Fintech separately into new entity, partially offset by higher handset sales. Myanmar and Palestine's revenue increased in local currency, it was negatively impacted by FX depreciation of 34% and 9% respectively. In general, revenue increased across all segments. Others consist mainly of Fintech revenue from Qatar. Ooredoo Money, effective January 2023, reported separately from Ooredoo, Qatar. Group delivered reported EBITDA of QAR 4.8 billion, with a healthy EBITDA margin of 42% for the first half. Group EBITDA down by 3% in Q2 year-on-year, up by 7% on a normalized basis, mainly from good top line growth. Included in the others is a negative contribution from IOH of QAR 194 million, due to the one-off gain on the sale of data centers recognized in 2022. Normalizing for this, there was a positive IOH contribution of QAR 52 million in this quarter. Oman's EBITDA was impacted by lower growth margin and higher OpEx. There is an ongoing evaluation of the cost structure to improve efficiency in the operation. Reduced EBITDA margin in Qatar for Q2 due to bad debt and competitive pressures. As previously mentioned, net profit for the first half of the year, both on a reported and normalized basis, are up 20% to QAR 1.795 billion on a reported basis and QAR 1.625 billion on a normalized basis. Here you will see, I think, a self-explanatory waterfall of the adjustments done in the first half of 2022 and the first half of 2023 as normalization exercises. The major items include the NMTC legal case gains of QAR 446 million in the Q1 of this year. Similarly, net profit for Q2 is up by 1% on a reported basis, but up by 26% on a normalized basis. The major 2023 normalization items include an impairment on the MMH investment and QAR 75 million of FX impact. Our CapEx for the first half of this year is 10% below the first half of last year. As you know, the significant seasonality and a lot of the CapEx happens between Q3 and Q4. Other major items include in Maldives, an increase of 52% in CapEx, mainly driven by a subsea cable and the completion of our main headquarter. In Iraq, this is network rollout. Palestine, Oman, and Tunisia also includes some rollout effect. What we see in Kuwait, Algeria, Qatar is a decrease in CapEx, as most of the network upgrades and the 5G upgrades were done in the previous year. Qatar also included last year some one-offs for the World Cup. Myanmar, as you know, we're managing this, this operation on the bare minimum CapEx. Free cash flow is up by 2% for the first half. Main drivers for the free cash flow performance is mainly top-line growth and lower CapEx. As previously mentioned, our consolidated customer base has grown by 3% from 54.8 million subscribers to 56.2 million subscribers. Every single market has known an expansion in their customer base. Please note that the decline in Qatar is due to a change in the definition of the prepaid base to include 90 days active base instead of 365 days, as previously reported. On a like-for-like basis, our customer in Qatar were up by 1%. As previously mentioned, IOH customers stood at 100 million subscribers. IOH numbers, as you know, are not consolidated anymore. We're currently on track to meet our guidance. Our revenue is slightly ahead by 3%, our EBITDA margin is flat, and our CapEx is down by 10%, but we're still aiming to hit the QAR 3 billion mark by end of year. Our debt profile has not changed since the previous quarter. We still are at 1.1 net debt to EBITDA ratio. 94% of our debt is a fixed rate, as you already know. We had two RCF facility expiring in 2023 and 2024. We've had their maturities extended to 2027 and 2028 proactively. Our credit rating remains A stable and Moody's A2 stable. As you know, in Q1, S&P had upgraded us. Now I hand over to Abdulla for the operational review. Good afternoon. As always, I start the operation review with our home market in Qatar. Reported revenue hasn't changed much year-on-year due to two factors. Number one, we voluntarily reduced transit revenue because it is high volume, low margin business. Our revenue or the second point, our revenue base was impacted by the Fintech carve-out. On like-for-like basis, revenue increased 4% in the first half of the year. EBITDA is at 6% year-on-year in a high competitive market and impacted by bad debt provision. In normalized basis, EBITDA was flat. On ESG, we started a recycling program for the used handset. Moving to Kuwait. Solid commercial performance in a quarter two from Kuwait. The customer base increased year-on-year by 7% as a result of the first half of the year. Local currency revenue grew by 5%, EBITDA also grew by 8% year-on-year. Next is Oman. In Oman, we are seeing increased competition after the entry of the new mobile operator, but this did not stop us from growing our customer base, which increased by 6%. Revenue remained stable, thanks for higher postpaid and handset sales. EBITDA was lower because of the lower gross margin and higher OpEx due to the reversal on bad debts provision. Moving to Iraq. Asiacell was our portfolio top performer. Our customer base grew 5% year-on-year. This is another quarter of net adds. The Iraqi customer appreciate that we have the best data service in the country. We have provided outstanding customer experience. Revenue grew 10%, thanks to higher data usage that are no longer applicable in data. EBITDA improved due to higher revenue. Our continued efficiency effort were reflected on the EBITDA margin. Turn to Algeria. Algeria gave a solid performance, up 3% on local currency. Local currency revenue growth was driven by data bundle. The Algerian dinar appreciation contribute to 8% increase in reported revenue. EBITDA improved due to higher data revenue and lower OpEx. Just a few days ago, we announced a new appointment of COO, Roni Tohme. Congratulations, he was the former CFO of the company. Next is Tunisia. Ooredoo Tunisia remained the leader in the mobile market. A strong fixed revenue was offsetted by Softer Mobile business, where we saw discount on data bundle. Local currency revenue was down by 1%. We face challenge of currency depreciation. EBITDA was down due to bad debt provision in the quarter one. Excluding this first half, EBITDA margin is 40%. Myanmar, in spite of good financial result in local currency, currency devaluation had an impact on the reported number. Despite challenges like FX and cyclones, the EBITDA margin remained strong. No new development with regard to the sales process is still ongoing. We are still waiting for regulatory approval. Next, Maldives. In the Maldives, we continue our network investment that help us gain market share, growing revenue and increase profit. Next, Palestine. In Palestine, revenue was up in local currency term. Again, FX depreciation impact the reported result. Our improved offering and amazing customer experience led to a fifth consecutive quarter of customer net adds. EBITDA and margin improved due to the strict cost control. We appointed Samer Al-Fares as Ooredoo Palestine new CEO. He joined from Ooredoo Algeria and also has experience working on the headquarter in Doha. Next, IOH. Our Indonesian asset performed strongly. I'm very pleased with the solid growth rates across the board. IOH has updated the guidance for EBITDA margin to mid-to-high 40s. EBITDA margin in H1 stood at 46%. This conclude my operation review. Back to IR team. Thank you. Thank you very much, Abdulla. Before we go to the Q&A part, I would like to highlight some conferences that are coming up in the second half of the year. We're probably gonna attend the Bank of America MENA conference in Riyadh and in Dubai, early November, and we're also planning on attending the Qatar Exchange event in New York on the 20th and 21st of November. We're gonna host the Capital Markets Day. The details will be announced in due course. Now we come to the Q&A part. Your questions can be asked on Zoom, or just raise your hand and we open the audio lines, or simply type your questions in the Q&A box. If you're dialing in via phone, you can push star nine to ask a question. Welcome again to the Q&A part, and I'm delighted to have the whole team here with me. We are joined by Aziz, our CEO, and we also have the Deputy CEO, Sheikh Mohammed, with us, our Group CFO, Abdulla, Deputy Group CFO, Eyas, and our Head of Strategy, René Werner. We're gonna open up the panel for your questions. As I said, you can type them, and we already received the first one, so you can just raise your hand, and then we open up your microphone. I'm gonna start with the first question from Wei Chow. He's gonna ask about the prepaid revenue, the change in customer base definition from 365 days to 90 days, out of the total drop in prepaid customers of 120,000. What's the impact due to the change of the base definition? Abdulla, do you want to comment on? Yes. Yeah, most of it is coming from the definition. Most of the, the drop is only due to the definition. If we actually use the old definition, our customer base is up 1%. Exactly. Great. That covers the first question, and he had another question: What is the impact of the discontinuation of Transit on overall revenues in Qatar? Abdulla? This is approximately QAR 82 million. Yeah. As you know, Transit's business is close to zero margin. Yes, this is right. Maybe we can define it as a high risk, low margin. Exactly. Okay, moving on, what drove the drop in postpaid customers in Opco Qatar? Well, sure, you want to- Yeah, this is, it's been, you know, the market-driven, highly competitive market, as addressed by our MD. There has been some changes also in our plans, which has been introduced in late March, and that's we see the impact going forward now. Excellent. We got some questions from HSBC, from Madhi Singh. He continues on the topic of Qatar. Why did revenue decline and margins are lower? We thought post-Cup, post the World Cup margins should improve. Is competition getting tougher? Yeah. Competition is getting, in general, tougher in general market or Qatar. Margins are also slightly dropping because we're growing on B2B, which is recurrent revenue, but at a lower margin. If you allow me here, even if we normalize the revenue to exclude the transit revenue and the mobile money services, actually, the revenue is flat, the revenue numbers. Thank you very much. Yes, Aziz, any updates on the Myanmar exit? We're still pushing and coordinating as much as we can with the local regulator to finalize their approvals. Unfortunately, it's a slow and tedious process. Yeah. To Myanmar, of course, the government extended the state of emergency and has canceled the elections. We are waiting for some news there. There's an accounting question. Which are the other associates excluding Indosat? Their contribution seems to have improved. It is, it is Starlink, I can see it, and the other one was, it's Mobile Money, is it? No, I, I think for the associate is Intaleq, mainly. Intaleq. Intaleq has contributed around QAR 11 million in the EBITDA numbers. Just as background information, Intaleq is an adventure, a joint venture that we have with Aspire in the area of sports and event management, and they've been very active during the World Cup and still ongoing as well. Next question is on the dividend outlook from Madhi, especially given the strong growth in normalized net income. What is the policy? Is it based on reported or normalized net profit? Can you confirm the payout ratio for 2022? I can do that straight away, that's 60%. What's the outlook on 2023? Maybe question for Aziz. We have this question every time. It's normalized pay up to 60%. As you've seen, we've been always at the maximum of the payout ratios for the last 2 years. Further than this, we can't comment. As you know, that dividend policy is prerogative of the board. Management recommends, it's a bit too soon to be discussing dividends. Great. We move on to the Tower business and the recent announcement there. Can you remind us, what is the rationale behind the tower transaction, given that you are contributing towers into a JV and have more towers relatively to your partners? Do you plan to keep the majority stake in the joint venture and thus keep the towers on the balance sheet? That question from Alexey Philippov. We'd like to expand. We can't say much more than what we've currently disclosed. We're in exclusive discussions with Zain and TASC. We will end up with equal stake with Zain. It will therefore become a joint venture, so it will be off balance sheet. As you have rightfully noted, we're basically contributing mostly 20,000 towers, and they're basically contributing 10,000 towers. At the end of the day, it will be a cash and share transaction where we receive shares in the resulting vehicle, plus an equalization payment. More than this, unfortunately, right now, I can't comment. I'd love to, but I can't. Yes, we-- I can only repeat it, the type question. He's asking what's the impact on EBITDA and net income if you deconsolidated, and the Bloomberg range citing the past between QAR 3 billion and QAR 5 billion. He's asking if that's a value, valid valuation range. Like, more than what is disclosed currently in our statement, we can't disclose, whether in terms of valuation range and even in pro forma impact to the accounts till the assets are not closed, we can't disclose those. Fair enough. I believe the same call is also happening next Monday, but we're in the same situation there. We have a question with regards to the Iraqi business in Nigeria. Despite the improvement in EBITDA, the net profit is not showing the corresponding increase. Can you help us explaining the reason? For which of? Nigeria. Nigeria and Egypt. Nigeria, we don't disclose the net profits. Yeah, exactly. I don't know from where we conclude that it's not affecting the net profit. Arab, it's really, very good growth in top line, and, it's been really going down there with the bottom line. We see a very good progress in Arab, supported by top line. Okay. We have a very forward-looking question from Ziad Itani. I'm pretty happy in no comment answer again, but I ask it anyway. What are the plans for the potential proceeds of the tower deal? Would you consider one of dividend? Again, same element. We do not comment on dividends. This goes to the prerogative of the board. In general, as a statement, as the management, as you know, sales of towers are accompanied with long-term leases. use of the proceed will be a preference to reinvest these proceeds in higher rates of returns investments than the underlying lease we're sustaining. that's to avoid destroying value over the long term. Okay. To avoid sounding like a broken record, we're going to skip the next tower to you question. There's another question here: Are you considering any other M&A expansion outside of your current markets? Again, this is a question we get every time. We're value, very value conscious for our, our shareholders. We've been looking at a lot of opportunities, I think over 30 opportunities in the past 2 years. Till date, no opportunities has ticked the box in terms of, being value accretive to, our shareholders and to Redefine in general. We keep, our eyes open and we'll be opportunistic if needed. Thank you very much. Alessandra David, would like to know if there's an update on data centers and their performance and development. You want to take it, or I can? Mm-hmm. Yeah. We're in the process, basically, of carving out the operations. There is a process, as we have commented earlier, that is ongoing and we're running. We'll come back with probably news when it's the right time in that process to comment on this. As you can see in the region, data centers get increasing focus, so we think we have an attractive asset there, and we have also demand from the external market, growing that asset even organically, further in the region. We're quite optimistic about the development of our data center operations. Thank you very much, René. There's a question again with regards to the reclassification of the revenue definition, customer definition in Qatar. Is there any one-time revenue ARPU benefit of the change? Yes, it's clear, a positive upside in the, the ARPU, that's clear because of the outcome or result of that formula when you're, when you have those customers. You can also. Yeah, I see Madhi has raised his hand there, so I'm gonna open up his microphone. Madhi, if you unmute, then your line should be open for an audio question. Yes. Hi, thanks, Andreas, for taking my question. I'm gonna keep harping on that dividend point because I'm still not clear. 2022, the normalized net income was QAR 2,821. Am I correct on that? Off memory, probably, yes. Yes. Yes? If I calculate the payout ratio on that, that payout ratio comes to 49%, not 60%. No. If I remember correctly, our normalized last year's payout ratio, and it was just to have a round number on the dividend, we're actually at 58% or 59%, close to 60%. Yes. The lid 0.5%. That is on reported net income. Your EPS, clean EPS, normalized EPS is QAR 0.88, and your dividend was QAR 0.43. I mean, either I'm missing something or there is some- We will be more than happy to furnish you with the information needed. I have no problem with that. Cool. let's, let's, yeah. Please, if you could, you know, clarify that, that would be great. Sure. Second question is on the tower transaction. Without sounding repetitive there, just, you know, the way the transaction is structuring, are you trying to keep it earnings neutral, or is there a risk of like accretion, accretive? How do you think this transaction will be overall? We believe that the transaction will actually generate substantial value on both sides. On the OpCo side, because once we carve out the assets, there will be mutualization of assets between the different operators. Give you very simply, in most our geography, a tower is not just a steel structure, it's a diesel generator. It's logistics to fuel that generator. It's 24-hour security. That cost is then divided by the number of tenants. There will be enhancement on the OpEx side to run the number of sites. Also, on the tower side, and that's why we also elected to keep a significant stake. There's a lot of synergies. As you neutralize sites, what happened is you reduce the number of ground leases you're paying, and you're increasing the yield per tower at a much higher multiple than a telco is currently paying. We actually believe that this is going to be a very accretive transaction, both for the ongoing telco operation, but also for our remaining stake within the TowerCo. Just to clarify there, that obviously sounds like a great plan, but doing all of that would probably take some time. In the first instance, let's say the first quarter post-transaction, do you expect that to be accretive right from there? Do you expect the synergies to build over a period, and then, you know, maybe in year one or year two, end of that, that's when you get to? Just, just to clarify, in Q4, right now, we signed exclusivity. What we're looking to do is to sign final documentation. We don't expect to close any market before next year, because we need the regulatory approvals. Once a market is closed, the actual, the operational benefits and consolidations can start quite quickly. Overall, the materialization of synergies should appear over probably a two years period. Okay. Very, very clear. Thank you very much. Thanks, Madhi. We're gonna have another audio question from Bahrain. Nishit, from SICO, please, I'm gonna unmute your microphone. Yes, thank you for the opportunity. A couple of questions. One, first, again, on the Qatar market, can you be more, give more clarity on what the bad debts were? Because it seems to be sizable in 2Q. So if you can just quantify, what was it regarding, where is it coming from? What's the strategy on, perhaps, dealing with the competition, given that it's become, pretty intense? Any, any strategy that management want to share, for your home market? That's the first question on Qatar. Second, given that there was recent in Iraq, sanctioning of some 14 banks, is there any issues with, upstreaming of dividends that you see in Iraq? Also, regarding increasing in prices, are you now able to increase prices without any restriction by the, you know, the regulator on your packages? That's the second question. Third, again, on the TowerCo, regarding the JV, once it's formed, will it be open to acquiring more towers, or this is the tower base that the JV will have? Will you be open to selling your stake in the JV to another operator as well and diluting? How will that strategy be with this JV that is getting formed for further acquisition or divesting? Okay. Let's, let's take a break and then start with the question. The first one was on Qatar, the bad debt impact and the competitive environment in the Qatari market. Who wants to take it? Do you- I can take it. When it come to the bad debts, it's cleaning our books, and it's been very long pending bad debts, and this is a strategy that we are taking also management. When it come to the market, you know, post-World Cup, we have seen a dip in the market. We have seen also a decreased number of population. A very competitive market, as explained also by the speakers here. However, we are really looking for our strategy, which we mentioned in more speed, looking for the more value that's to our customer. We're looking very healthy also to our channels of sales, and that's where you are providing if you want, until the end of 2023. However, also, we are planning for the workshop that we are having next next month, and looking to this three-year strategic planning, and that's to be taken or considered taken into account for the three-year business plan. There was a question: Do you experience any impact from sanctions in Iraq? Just got a message from our treasury team. The upstreaming is progressing as planned and no problems. No issue in Iraq in terms of upstreaming. There was also a question, I think, on price uplift in Iraq. Across all of the trends, we try and to maximize price uplift across all our portfolio constantly, but then we have to do it in a measurable manner and not to also deteriorate our competitiveness and our market positioning. It's something which is a constant, delicate exercise of fine balance, and I think the numbers in Iraq show that we're doing a very good job there. I think his third question was regarding towers and JV. Yeah, look, again, I'm limited, first of all, into what I can say. We just signed exclusivity, this TASC, ending, to create from what is going to be just. This will have an independent management, will be considered a joint venture and, as a subsidiary- Apart from that, looking forward, I do appreciate your enthusiasm. Looking down the line, could be acqui- acquiring, new territories, et cetera. I think it's extremely premature to have this discussion as a transaction. We haven't even finalized, final documentation. Can I just follow up on this tower thing? I mean, given the earlier strategy of possibly becoming asset-light and monetizing on the passive infrastructure, these kind of JV structures would just mean moving from your main, you know, from one company to another, but still holding the asset. Isn't this a bit of a different strategy now instead of because you are just partially, possibly monetizing, but you're keeping a decent chunk still through the JV on your books? Well, there, there's a couple of, there's a couple of points here. One is a deliberate choice not to monetize 100% today. As explained to a previous of your colleague, there's a lot of value to be unlocked across portfolio consolidation in the TowerCo itself, and we don't see the purpose, especially we're not doing sales of towers to deleverage our balance sheet. We're currently running at 1.1 times that debt. Monetizing 100% today is not the most efficient, especially with believing quite a lot of synergetical value on the table in the next few years. That's number one. Two, it is an asset light, as these assets will not be controlled by us and will not sit on our balance sheet at the end. These will not be impacting our balance sheet, whether in terms of leverage or in terms of depreciation going forward. Okay, thank you. The question regarding the dividend, we have the answer? Please, begin. I want to highlight I think we highlighted before, the difference in the normalized profit for dividend, we always exclude the impact of the forex. If you go to last year, it was QAR 2.8 billion, and it has forex impact, QAR 512 million. If you normalize, it become QAR 2.3 billion, and you find that it was 59.something of that QAR 2.3 billion. I hope it's clear. Thank you for the clarification there. If there are any further questions, raise your virtual hands or type the questions in the Q&A part. I don't see any further questions. I would like to thank you for your participation. Our next call is probably happening at the end of October, tentatively scheduled for the 31st of October. If you have any further comments, feedback, questions, feel free to reach out to the investor relations team at any time. Thank you very much. Thank you.