...Welcome to Telkom's Interim Results Analyst Conference Call. All attendees will be in listen-only mode. There will be an opportunity to ask questions when prompted. If you should need assistance during the call, please signal an operator by pressing star and then zero. Please note that this event is being recorded. I'd now like to hand the conference over to Serame Taukobong. Please go ahead, sir. Thank you, Kylie. Good afternoon, everyone. Welcome to our Q&A session for the FY 2024 interim results. On the line I have with me Dirk Reyneke and the investor relations team. Dirk is our CFO. We published our interim results this morning. This will be a Q&A session, but I will start with giving highlights of the results. The first half of the year saw the economy struggle to grow with high inflation environment, propelling the highest interest rates we've seen in South Africa in the past 14 years. We, however, have delivered solid results, earnings, despite the tough trading environment. Load shedding has been a recurring feature for a period, load shedding days increasing by 79% and rebased our operating expenditure, placing pressures on margins. We are investing in alternative backup energy to reduce diesel usage in response to recurring load shedding. Revenue perspective, group revenue from total operations advanced by 2.5%, driven by growth in mobile traffic, monetization of the rollout in fiber infrastructure, and growth of the IT business. Revenue from next generation entities grew by 8.1%. Total operating revenue from OpenServe declined by 2.7%, impacted by legacy revenue declines. Next generation revenue, on the other hand, increased by 6.9% for OpenServe. Telkom consumer revenue grew by 1.4%, driven by the value compelling propositions on our mobile business. Total external revenue from mobile operations grew by 4.1%, with mobile service revenue growing by 0.8%. Revenue increased marginally for BCX, primarily due to the double-digit growth in the IT business, but was offset by legacy declines in converged communications. Revenue from continuing customers increased by 6.8% for SwiftNet, while the total revenue was impacted by terminations and marginally reduced to 1.2%. Group EBITDA increased by 1.7%, as cost reduction initiatives bore fruit, partially offset by inflationary increases and resulted in operating expenses increasing below inflation. EBITDA growth was limited by higher bad debt provisions. Excluding the restructuring costs, free cash flow was positive ZAR 570 million, and was primarily driven by a significant increase in cash generated from operations due to efficient working capital management and increase in profit before taxation. Our capital investments had a CapEx to revenue ratio of 14.4%, which is below our guidance, but it is strategic in terms of the cyclical nature of capital expenses. Strategy update: We are embarking on a journey to transform and reorganize Telkom as an I nfraC o, as core. To this, to harness synergies across businesses while maintaining each business unit identity and disposing of non-core assets. The journey of Telkom tomorrow is anticipated to be in full effect by the end of 2025. In terms of commitment to realizing asset value, we've made progress on our value unlock strategy, with SwiftNet now being in the final stages of disposal and have entered into an exclusivity agreement with the preferred bidder. Accordingly, SwiftNet has been classified as an asset held for sale. Once the InfraC o structure is in place and the disposal of SwiftNet is concluded, we will consider further opportunities to realize value in relation to the minority partnership for Openserve and strategic partner for BCX. This concludes my remarks. I will now hand over to the operator for Q&A sessions. Thank you. Thank you very much, sir. Ladies and gentlemen, if you'd like to ask a question, please press star and then one on your telephone keypad or the keypad on your screen. A confirmation tone will indicate that your line is in the question queue. You may press star two to exit the question queue. Our first question comes from Nadim Mohamed of SBG Securities. Please go ahead. Good afternoon. There are two questions from my side. Firstly, if I look at SA Mobile, it seems like, if I look at the Q2, we had a slower customer acquisition, but ARPU is ticking up on a quarter-on-quarter basis. So I want to understand what could be driving that. Is it more of the Airtime Advance and Mo'Nice resonating in the market? Or are you seeing a very different picture when you look at it on a 30-day active subscriber basis? And then just secondly, if my calculations are right, it seems like the EBITDA margin in Q2 was 25% improved level. That seems, you know, quite substantial. Just wondering what some context on that number. I mean, are there any one-offs in there that may be exaggerating it or pushing it down? You know, is there a sort of sustainable way to look at for the rest of the year? Thank you. ... Thank you. Dirk, I'll take the first question. I think if you look at, thank you very much for that, Nadim. On the mobile perspective, we did do a significant clean out of our base. What we have seen is certainly a far bigger uptake of Mo'Nice. So over 40% of our prepaid purchase is done through Mo'Nice. We've also seen a good uptake in our Airtime Advance proposition, which now sits at 30% of of revenue. I think the EBITDA, I'll leave to Dirk, but it is pretty much in line with what we're seeing in the growth of our business. Dirk, do you wanna add more color? Yeah, I think, Nadim, thanks for that. In terms of the EBITDA, 21% to just over 25% quarter-over-quarter, you're correct. I think firstly driven by the restructuring costs, employee costs, which you'll recall that we said that most of those people exited only by June. So that benefit is now starting to come through for the quarter. Secondly, we saw a slightly lower impairment on assets, half on half, and then slightly lower service fees, and the service fees mostly relating to the emergency power initiatives moving from diesel to batteries. So so those are the main reasons. It's cost initiatives in quarter two versus quarter one. Yeah, I think those are the main reasons. So if you say to me, what are you model going forward? I think quarter two is closer to to reality. I don't think we're gonna maintain 25.5%-26% yet, but certainly, I think we've increased from 21%. The biggest kicker there will be or the biggest influencer of sustainable margin will be revenue mix in BCX, how soon they get the the product to services revenue mix sorted. Hope that helps. Excellent. Thank you so much. Yeah, appreciate that. Our next question comes from Myuran Rajaratnam of [inaudible]. Please go ahead. Good afternoon, and thank you for the opportunity. Congratulations, you seem to be close to some sort of closure on the tower deal, so well done on that. And secondly, also, as Nadim said, pointed out, you know, operationally you seem to be doing better than certainly what I expected at this stage of the year. So maybe just on the power saving and diesel side of things, you know, there's a double whammy, for example, in the mobile side. You know, your network availability go down, so your revenue goes down, and there's additional costs to keep the network alive, like load shedding and diesel or roaming more. Have you quantified what might be the impact in Q1 and Q2 from load shedding? Just, you know, aggregating the revenue and the cost impact. In fact... Sorry, I'm just looking at my notes here. We have quantified it. You do provide details on what the diesel extra cost is, but, I mean, it's hard to, for us on the outside to know what the revenue impact might be. I think on the diesel- Go on, Dirk. Go on. I'm just looking at notes. Now, all I'm saying is, you're right, we, we provide a number for diesel because that's direct, it's ZAR 160-odd million. I think in terms of roaming, we work on, on trends, and I'll have to come back with the actual, with the actual number. I don't have that in hand. Sure. I do have it, I do have it close by. So in terms of the load shedding impact, the split between diesel and roaming costs. So in terms of losses, we're quoting a number of ZAR 15 million. Batteries, ZAR 15 million. Site repairs, in terms of damage to sites, is about ZAR 13 million odd, and then roaming itself is ZAR 103 million. So total cost is about ZAR 163 million. Did you get that? That's for the full two quarters, right? That's for the full half. Yeah. Okay. Okay, that's very helpful. Just following, second part, second question is, you know, sort of following on from Nadim's question. You know, the second quarter EBITDA definitely picked up quite a bit. But I also noticed Q2 last year was also sort of a little peak of 24%. Now, I'm just wondering if there's any seasonality in the numbers, or is it just what you pointed out, which is, you know, the bad debts, the load shedding, the mix effects, and the fact that the employees who've been... You know, the restructuring of the employee costs, they've all left the building, so to speak, by June? Yeah. I think that's that would be the significant contributor to all of that. And, obviously, if we look at, you know, your Q1, Q2, we do see seasonality in the market, which is traditional. But the big chunk of it of of those costs has been the impact of the restructuring. Great. I think I think in Q2 of the comparatives, in Q2 of 2023- Yes. We also still had the back end, we still had the back end of a restructuring drive in BCX specifically. Yes. It was small in the bigger scheme of things, but that was, in BCX for that quarter, we still had some some some drives which which probably inflated the pie and your Q2 numbers slightly. But that wasn't the main reason for the 24% at the time. Great. Thank you so much, guys. Thank you. Ladies and gentlemen, just a further reminder, if you'd like to ask a question, you're welcome to press star and then one on your touch tone or the keypad on your screen. Ladies and gentlemen, just a final reminder, if you'd like to ask a question, you're welcome to press star and then one to place yourself in the question queue. Ladies and gentlemen, it appears we have no further questions in the queue, and this concludes today's event. Thank you for joining us, and you may now disconnect your lines. Thanks, everybody, have a good evening. Thank you.