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Edited Transcript of ZAIN.KW earnings conference call or presentation 1-Aug-19 11:00am GMT

Q2 2019 Mobile Telecommunications Company KSCP Earnings Call

Aug 6, 2019 (Thomson StreetEvents) -- Edited Transcript of Mobile Telecommunications Company KSCP earnings conference call or presentation Thursday, August 1, 2019 at 11:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Mohammad Abdal

Mobile Telecommunications Company K.S.C.P. - Chief Communications Officer and Head of IR, Corporate Communications & Corporate Governance

* Mohammad Shereef;Executive Finance Director

* Scott Marc Gegenheimer

Mobile Telecommunications Company K.S.C.P. - CEO of Operations

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Conference Call Participants

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* Nishit Lakhotia

Securities & Investment Company BSC, Research Division - Head of Research

* Omar Maher

EFG Hermes Holding S.A.E., Research Division - VP of Telecom

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Presentation

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Operator [1]

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Good day, and welcome to the Zain Group Second Quarter 2019 Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Omar Maher, EFG Hermes. Please go ahead.

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Omar Maher, EFG Hermes Holding S.A.E., Research Division - VP of Telecom [2]

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Thank you. Good morning, and good afternoon, everyone. This is Omar Maher from EFG Hermes. I'd like to welcome you all to Zain Group's 2Q 2019 Results Conference Call. As usual, the call will begin with a discussion of the key highlights of the period, and this will be followed by a brief Q&A session. The link to the results presentation was provided on the call invite, and the presentation is now available on the website for your reference.

I will now hand the call over to Mr. Mohammad Abdal, Group's Chief Communications Officer. Thank you very much.

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Mohammad Abdal, Mobile Telecommunications Company K.S.C.P. - Chief Communications Officer and Head of IR, Corporate Communications & Corporate Governance [3]

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Thank you, Omar, and welcome, everyone, to Zain's Q2 2019 Earnings Conference Call. With me today is Scott Gegenheimer, our Group's CEO of Operations; and Mohammad Shereef, Executive Finance Director, as our Group CFO, Ossama Matta, could not make it due to the last minute urgent matters.

Quick introduction, Mohammad Shereef has been in Zain since 1993 and is involved in every financial aspect of the group and other operations. In a moment, we will take you through the IR presentation, which has been posted earlier today on our corporate website. And after that, we are happy to answer any questions that you may have.

During the call, we'll be making forward-looking statements, which are prediction, projections or other statements about the future events. These statements are based on the current expectations and assumptions that are subject to risks and uncertainties. Please refer to the detailed cautionary statement found on Slide #2.

With that, I will now turn the call over to Scott.

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Scott Marc Gegenheimer, Mobile Telecommunications Company K.S.C.P. - CEO of Operations [4]

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Thanks, Mohammad. Good afternoon to everyone, and thank you for joining us on today's call.

As previously shared, we are pleased that our strategic programs have gained significant traction and are delivering excellently. We have now concluded the major part of our turnaround in Zain KSA and in other key markets. It's also important to note that we have a very clear strategy to drive the business forward. We will continue our active regulatory engagement across the group, drive our digital transformation initiatives, including the expansion of our group API program, and also focus on B2B fixed play over fiber as well as our data monetization programs.

The strong quarterly results are underpinned by the consolidation of Zain KSA. And it's worth noting that in local terms, we are showing revenue growth in fiber optics and positive EBITDA and net income growth in all our key markets.

We've always set out to be an innovator and we have now commercially launched 5G in Kuwait. And this is [increasing] in the region, and the pickup is going quite well. Zain KSA will follow shortly, and I'll provide further context when I present the highlights.

Let me start on Page 6 of the IR presentation. Our group customer base increased 4% year-over-year to reach 49.2 million customers at the end of the quarter. This is mainly due to 1.2 million addition in Sudan and 600,000 in Iraq.

For the 2Q -- for the second quarter of 2019, Zain Group recorded consolidated revenue of USD 1.3 billion, so that's 65% year-over-year. EBITDA for the quarter reached USD 582 million. This is up 106% year-over-year, reflecting EBITDA margin of 43.5%. Net income for the quarter amounted to USD 165 million, and this is up 10% year-over-year, reflecting earnings per share of 12 fils or USD 0.04.

This performance was underpinned by the consolidation of Zain KSA, which resulted in an additional USD 549 million in revenue and USD 252 million in EBITDA during the second quarter.

Unfortunately, the Sudan currency translation impact for the second quarter cost the company USD 46 million in revenue, USD 19 million in EBITDA and another USD 6 million in net income, predominantly due to the 38% currency devaluation in Sudan. So an average of USD 28.1 million in Q2 2018 to USD 45.6 in Q2 2019. This is SDG to USD.

For the first 6 months of 2019, the group consolidated revenue was up 61% to USD 2.7 billion. EBITDA for the period reached USD 1.2 billion. This is up 109% year-over-year, reflecting an EBITDA margin of 44%. Consolidated net income increased 13% year-over-year to reach USD 321 million, and earnings per share for the first half stood at 22 fils or USD 0.07.

The performance was underpinned by the consolidation again of Zain KSA, which resulted in an additional USD 1.109 billion in revenue and USD 507 million in EBITDA during the first 6 months of 2019.

For the first half of 2019, foreign currency translation impact, predominantly again due to the 43% currency devaluation to Sudan, an average price of 26.5 SDG to USD into the second half -- within the second half of 2018 to 46.5 in the first half of 2019. And across the company, USD 101 million in revenue, USD 44 million in EBITDA and USD 15 million in net income.

Moving on to CapEx. The group CapEx for the 6 months, this includes Zain KSA, reached USD 214 million, accounted for 8% of the total group revenue. Mohammad will provide a little bit more country breakdown on the spend, that includes the 4G expansion and the 5G rollout in our key markets.

Group data revenues, excluding SMS and VAS, increased 114% year-over-year for the first half and represented 36% of the group consolidated revenue. Again, it should be noted, the substantial growth percentage is predominantly due to the consolidation of Zain KSA results with substantial investment in network upgrades and expansion and growth in the enterprise. Data-related revenues also contributed to this growth.

Taking a look at some of the major highlights in Q2, we will start with Kuwait. As I mentioned, we have commercially launched 5G, and we're focusing mainly on the fixed wireless 5G and the demand for the service is quite robust there. We are focusing on B2B and value management, which has played a key part in delivering the excellent results for this quarter.

Regarding the tower deal in Kuwait, IHS has secured the license to operate tower company service in Kuwait, and we expect the tower deal to close by year-end.

Also to note in Kuwait, in mid-July, the regulators launched attendance of the section of MVNO licenses and we expect the award to be given out of the approval in Q1 2020. We're currently studying all the conditions set by the regulator.

Regarding KSA, Zain KSA had acquired extensive 5G infrastructure across the major cities in the Kingdom. And the 5G service were launched for test users in Neom airport in June. We're seeing speeds exceeding 1 gigabyte there, and we're gearing up for full commercial launch in Q3 of 2019.

Regarding the tower sales there, before we disclosed this, the regulated authorities rejected the IHS license applications. Nevertheless, we believe this is a temporary setback as IHS has now taken necessary steps to reapply and we're still confident this transaction will materialize soon.

Zain Saudi, Zain KSA has made an early voluntary repayment of the Murabaha financing agreement, which is SAR 300 million in the quarter. This demonstrates a strong cash generation for the business, bringing the total payments made during the past 9 months to SAR 1.4 billion.

Moving on to Iraq [4G] license, there's ongoing discussions that are being held with CMC. CMC has appointed PWC to study the terms and conditions for the grant of the 4G license and we expect the license to be granted in Q1 2020.

Overall, a robust set of results. We confirm that our digital transformation program, efficiency drive, and our growth strategy is on track to deliver our very ambitious financial targets.

And so with that, I'll hand over to Mohammad to discuss the results in more detail. Thank you.

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Mohammad Shereef;Executive Finance Director, [5]

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Thank you, Scott, and good afternoon, everyone. As you all are aware, Zain continues to perform extremely well across all key operations given the competitive and challenging nature of the dynamic industry. The strategic consolidation of Zain KSA back in Q3 '18 has boosted the group results on many levels and continues to do so.

As advised in our Q1 call, the group applied the new accounting standard IFRS 16 related to leases from January 1, 2019. Accordingly, during Q2, the adoption of the standard led to a benefit of KD 18.4 million, USD 61 million in EBITDA; and KD 1.5 million, USD 5 million in net income.

IFRS 16 for H1 of 2019 is as follows: KD 37 million, USD 121 million in EBITDA; and KD 3.2 million, USD 11 million in net income. The group's leverage, that is net debt to EBITDA, including guarantees, currently stands at 2.2x, which is below the industry average. And we aim to further reduce such level to minimize associated costs.

Let's move to Slide 14, Zain Kuwait. Operationally, Zain Kuwait remains the most profitable company within the group and continues to maintain its market lead in both value share and customer base as it now serves 2.8 million customers. From a local market perspective, that is getting even more competitive, Zain Kuwait market leadership is reflected by the fact that its revenue represent approximately 40% of the total market revenue and 60% of the total net income in the Kuwaiti telecom market.

For the second quarter of 2019, revenue grew by 6% compared to Q2 '18 to reach KD 83 million, which is USD 274 million, mainly on account of the solid progression in data revenue. EBITDA jumped by 16% to reach KD 33 million, USD 108 million, on account of improved gross margin and, of course, the benefits obtained on implementation of IFRS 16 amounting to KD 2.5 million. Net income increased by 10% to reach KD 22 million, USD 74 million, including a benefit of only KD 1.3 million on adoption of IFRS 16.

For the first 6 months of 2019, revenue dropped by 6% to reach KD 165 million, USD 544 million, mainly due to the additional enterprise revenue, which is MEW project and bulk sales during H1 2018. If we were to exclude the one-time MEW project revenue and bulk sales of KD 20 million, revenue would have grown by 6% year-over-year. EBITDA for the period increased by 18% due to improved gross margin and benefit obtained from the adoption of IFRS 16 amounting to KD 5 million. Net income increased by 10% year-over-year to reach KD 44 million, USD 144 million, including an IFRS 16 benefit of KD 2.6 million.

To support our focus on enhancing data revenue and launching 5G services, Zain Kuwait invested USD [26 million], approximately 9% of its revenue in CapEx during H1 2019, growing its digital platform and implementing an entire range of data monetization initiatives. The benefits of such investments and focus are reflected in data revenues that grew by 9% and now represents 37% of total revenue.

Closing on Zain Kuwait, I would like to mention that we expect a growth in our sale in the second half of 2019 and the gain for the sale will be reflected accordingly.

Saudi Arabia, which is on Slide 15. Zain KSA continues its incredible run, highlighted by growth in all key financial indicators, and thus, reporting its best-ever Q2 and H1 results. The Saudi telecom market is very competitive, and the team's effort is evident as the operation attained a double-digit growth in the revenue, EBITDA as well as its fourth consecutive quarter with a net profit. Revenue for the quarter increased by 11% to reach USD 549 million compared to Q2 '18, driven by the revamped postpaid consumer segment and the new revenue stream such as FTTH, DIA and IBS. EBITDA jumped by an impressive 53% to reach USD 252 million, including IFRS 15 benefit of USD 36 million, reflecting a healthy EBITDA margin of 46%. Net income for the quarter reached USD 35 million, including IFRS 16 benefit of approximately USD 3 million compared to the loss of USD 10 million during Q2, mainly attributable to the positive EBITDA performance including benefit from regulatory agreement, that is the CITC waiver and a reduction of royalty fees from 15% to 10%.

Impressively, for the first 6 months of 2019, revenue increased by 17%. EBITDA for the period jumped by 60%, and net income soared to reach USD 69 million compared to USD 31 million loss in the same period for the prior year.

As you all know, the Kingdom's mobile users are very, very data hungry, and we need to continue to invest in network updates and expansion to meet this growing demand. In line with the operation's vision to provide the best services to customers, the operations will be launching commercial 5G services in second half of the year. For the 6 months, we invested USD 111 million, 10% of revenue in CapEx, and the data revenue represented 40% -- 44% of the total revenue.

One relevant and positive point I wish to highlight that the ARPU in KSA increased from USD 18 to USD 20 over the last year, 11% year-over-year growth, indicative of the success of our focus on postpaid lines and data monetization initiatives.

The company is in much stronger financial position now, evidenced by an early voluntary payment towards the senior Murabaha financing agreements amounting SAR 300 million in Q2 '19, reflecting the company's solid cash flow generation, and thus, bringing the total repayment amount to SAR 1.425 billion in the past 9 months.

In June 2019, Zain KSA signed a new Islamic 2-year renewable Murabaha junior credit facility agreement amounting to SAR 2.25 billion, with a syndicate of 5 core Saudi Arabian and regional banks to refinance a USD 600 million facility. This facility was oversubscribed significantly. This allowed us to reduce the Murabaha profits to recognize savings over the period of the loan.

Moving to Slide 16, which is Zain Iraq. Given the improving socioeconomic conditions of the country, Zain Iraq is slowly but surely growing to levels that justify our faith in the great opportunities [of Islamic] and telecom markets. The operator's customer base increased 4% to reach 15.3 million, representing 31% of the -- 31%, the highest of the group's total customer base. For Q2, specifically, the intense competition continued to impact the top line, which came 8% lower compared to last year at USD 260 million. However, EBITDA for the quarter increased by 14%, mainly due to the lower OpEx on account of the cost optimization initiatives and benefit of USD 9 million on adoption of IFRS 16. EBITDA margin grew to a healthy 43%, and net income for the quarter increased by 7% to reach USD 10 million, even with the negative impact of USD 600,000 for IFRS 16.

For H1 2019, revenue reached USD 522 million, a 6% drop year-over-year, mainly due to the market competition as mentioned above. However, EBITDA increased by 14% due to the cost optimization initiatives implemented to the operation as well as the USD 17 million benefit of the adoption of IFRS 16. Net income rose by a remarkable 39% to reach USD 25 million, including negative impact of USD 700,000 to the bottom line due to the adoption of IFRS 16. The operator invested USD 38 million, 7% of the revenue in CapEx to support the increase in data demand. The team in Iraq is focusing heavily on the enterprise B2B segment, and this is proving to be very profitable growth area in both service and data revenues.

Going to Slide 17, which is Zain Jordan. Zain Jordan continues to maintain its market leadership, now serving 3.7 million customers. Revenue for the second quarter increased by USD 2 million compared to Q2 2018, mainly due to 7% growth in data revenue, despite the new regulated lower interconnection rate, which was effective from January 1, 2019, whereby the rate changed from 11.66 to 8.46.

EBITDA jumped by 16% on account of decrease in OpEx, lower utility costs and benefit on adoption of IFRS 16 amounting to USD 3.6 million. Net income increased by 17% with the no material impact on bottom line on account of IFRS 16. Revenue for the first 6 months was stable at USD 240 million. EBITDA increased by 17%, mainly due to improved gross margin and decrease in OpEx and lower utility costs as well as the benefit of adoption of IFRS 16 amounting to approximately USD 7 million. Net income for the period increased by 9%, with IFRS 16 having no material impact on the bottom line. EBITDA margin for the year remained a healthy 47% with the data revenue growing 4% year-over-year, represents 40% of revenue.

Sudan, which is on Slide 18. As you know, the country has recently experienced many issues, and the performance of the operation is commendable given the exceptional circumstance there. The official currency exchange rate has strengthened by 6% in Q2 compared to Q1. That is the 47.5 to 45 against the U.S. dollar, which is encouraging. And we are hopeful that the recent agreement between the Army and the civilian bodies result in further strengthening of the currency and better socioeconomic conditions.

The operator is performing exceptionally well in local currency terms, but a significant 43% currency devaluation in Sudan during 6 months ended June compared to H1 2018 affected both group's and operation's financial results in U.S. dollar terms.

For H1 2019, the local currency, in SDG terms, the operator's revenue grew by 45% year-over-year, down 18% in U.S. dollar terms; EBITDA increased at 36%, down 23% in U.S. dollar terms; and net income increased to 31%, down 30% in U.S. dollar terms. The adoption of IFRS 16 had no material impact on the operation.

Data revenue accounted for 16% of total revenue and grew 31% in SDG terms. The operation serves around 15.1 million customers, which grew by 9% year-over-year. The operator's customer base is second largest within in the group, which represents 31% of the group's total customer base.

With that, I will hand over to Mohammad Abdal for Q&A.

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Mohammad Abdal, Mobile Telecommunications Company K.S.C.P. - Chief Communications Officer and Head of IR, Corporate Communications & Corporate Governance [6]

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Thank you, Mohammad. With that, we'll now move to the Q&A session. (Operator Instructions)

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Questions and Answers

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Operator [1]

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(Operator Instructions) We take our first question today from Ramesh Babu from HSBC.

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Unidentified Analyst, [2]

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My question is on other income. In other income, I guess, you put even like management fee -- you added management fee into other income. Can you just give the split over there? What is the [expansion] net? And what is the management income that you've got in that?

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Mohammad Shereef;Executive Finance Director, [3]

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Management fees are eliminated in the consolidation level. There is no management fees included in 2019. Of course, yes, in 2018, there are management fees for KSA. Now the difference between this one is, last year, we took a provision, approximately KD 17 million. So that's why you can see last year, there was a negative, and this year, there is a positive.

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Operator [4]

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We now move on to our next question from Nishit Lakhotia from SICO.

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Nishit Lakhotia, Securities & Investment Company BSC, Research Division - Head of Research [5]

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Just actually 2 questions, if I can. One on the development on Zain Saudi Arabia regarding the capital restructuring there. What's the status? Anything you can let us know in terms of the price issue. And is there any regulatory holdings still or you expect that the time line that you can give us on this aspect? That's my first question.

And the other on Zain Bahrain. I know we don't really discuss Zain Bahrain much at the group level, but just want to know what's happening with the Bahrain operations in terms of what's your outlook on the growth within Bahrain of this entity given that there are split of operations on one of the incumbents here? So in terms of the enterprise business, what kind of opportunity do you look at? And also in terms of upstreaming of dividends, it seems like the operations was having very healthy cash flows, but the dividends are very minimum, and you obviously control the Board. So what's your outlook on that in terms of possible higher dividends as well from the entity?

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Scott Marc Gegenheimer, Mobile Telecommunications Company K.S.C.P. - CEO of Operations [6]

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Thanks, Nishit, for the questions. On the Saudi Capital restructuring, we are still in progress on that. Truthfully, it's a little hard to give guideline on the time frame for it because the approvals are still pending, all the government approvals. So I really can't add too much on it, but it's in progress. We hope that it moves forward soon.

Regarding the upstream and the dividend, I kind of look at these as separate issues. Obviously, we're upstreaming the cash from the operations. When it comes to dividends, we generally have a dividend policy. And we have not, for this year, specifically talked to the Board about what they want to recommend to the shareholders. But generally, we're paying out 70% to 90% of our net income in dividends. And we expect to see the same kind of dividend payments going forward.

Regarding your second question, overall in Bahrain, obviously it's still a fairly small market for us. But at the same time, it's quite challenging having a 3-player market in such a small market. We have done a lot of restructuring there. We focus on our digital transformation. And so we've seen some kind of swings, not so much on the revenue side, but a little bit on the profitability there as some of our programs, where maybe we're closing some shops and doing some other stuffs, pushing things to the digital stream. So some of the expenses that come through maybe a little quicker than some of the other quarters. So you've kind of seen some fluctuations on it. But we do continue to see some room for growth there, mainly on the enterprise. Obviously, there's been a separation, a functional separation in the telco between the fixed and the mobile and now we're getting more access to the fixed. So we're now focusing on enterprise there as well. So hopefully, that answers your questions.

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Operator [7]

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(Operator Instructions)

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Omar Maher, EFG Hermes Holding S.A.E., Research Division - VP of Telecom [8]

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I thought maybe while we wait for questions, this is Omar from EFG Hermes. I have a couple of questions. So first of all, it's mainly on Iraq. Obviously, revenue was soft and -- revenue growth and margins are soft in the first quarter and we're hearing market dropped the price due to price war in Iraq. So maybe if you can validate this, whether it's correct or not? And just to understand from your perspective, there are 2 big operators in Iraq and there is smaller one obviously that's more focused on (inaudible) correct. So would it make more sense seeing where Iraq is coming from in terms of coming from a lower base after recovering from the security situation that it had a few years -- for the few years? Wouldn't it make more sense to focus on enhancing margins and ARPUs rather than look into price wars and fight for territorial market share? So that's one on Iraq.

And then on Sudan. Thank you for the update that you provided during the presentation earlier, but maybe if you could provide some color on what's going on in the market, specifically like how demand is reacting? Or how demand is behaving from the consumer side in light of the [product] sensibility that would present? Is it a case of increased traffic and communication during these times? Or are you seeing any challenges in terms of -- logistical challenges in terms of distributing the [10,000 in products]? And whether you're having difficulty importing CapEx? Whether there's any improvement in taking money out of the country and so on?

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Scott Marc Gegenheimer, Mobile Telecommunications Company K.S.C.P. - CEO of Operations [9]

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Thanks for the question on Iraq. Iraq has been a tough market for us. There's no question about that. And you're right, there has been a price war there. It started towards the end of 2018. And based on our previous experience in some of the price war that's going on with the competition, we had to respond quite strong in order to protect our base. The price war ended a few weeks after making our moves and the market became a little bit more rational. We still have quite a few customers that are on some of these lower tariffs because of the price war, but the market is definitely becoming more rational. And we have been focusing more on value management activities in order to continue to grow our revenue. But the competition is very tough there. I mean truthfully the competition tends to think more about market share than they do about profitability, and we tend to think more about profitability on our side. So it's been quite challenging for us to continue to try to attack the market. So we've been focusing more on value share there. So hopefully that answers your question.

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Omar Maher, EFG Hermes Holding S.A.E., Research Division - VP of Telecom [10]

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Are you seeing the third smaller player moving down into your home (inaudible) something that is -- basically heating up the price wars? Or are you clearly pretty much focused on (inaudible)?

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Scott Marc Gegenheimer, Mobile Telecommunications Company K.S.C.P. - CEO of Operations [11]

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We have seen Korek, the third player. They moved a little bit in our [territory], but not as much as you would think. I think one of the issues you see in Iraq and in general is that the market shares between the operators are significantly different between the territories. If everyone had similar market share across all markets, then you wouldn't see as much of a price war. But when some markets, for instance, our stronghold is the Southwest, so if we have 80% market share and a person has 5% or 10%, he can go in and cause price disruptions. And that's what we've seen in the last couple of years there. The markets are starting to be -- the market share is starting to be more evenly split across the whole country. And so you're seeing a little bit less when it comes to the price wars. But that's one of the big issues around there. But no, we have not really seen Korek come too much into our markets lately. It's mainly Asiacell being fairly aggressive in the market. Hopefully, that answers your question.

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Omar Maher, EFG Hermes Holding S.A.E., Research Division - VP of Telecom [12]

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That's great. And on Sudan? Tell on the operation.

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Mohammad Shereef;Executive Finance Director, [13]

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Yes. Sudan, the operation, in local currency terms, it performs very well. It's all high double-digit growth even in this condition. But repatriation of the money, yes, it's an issue, repartition. What we are doing is we are investing in the network and such so that we get to know whenever the situations -- we hope that the situation will be better soon. And other properties also we are investing in the fixed assets as well as in the network. So that's what we are into, attract -- to obtain a more value.

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Omar Maher, EFG Hermes Holding S.A.E., Research Division - VP of Telecom [14]

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Are you having difficulties importing the equipment to the country because of the tense situation?

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Scott Marc Gegenheimer, Mobile Telecommunications Company K.S.C.P. - CEO of Operations [15]

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No. We're not having any issues importing equipment into Sudan. The only issue is getting hard currency to pay the CapEx. And sometimes, you have to go into the gray market or black market to pay higher rates than your exchange rate. So that's one issue on there. Although with our vendors, we generally make them pay -- take a lot of the invoice or the cost equipment in local currency. So that's helped us minimalize some of the FX risk there.

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Omar Maher, EFG Hermes Holding S.A.E., Research Division - VP of Telecom [16]

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And just one last question. Would you be able to highlight the gap between the black market rate and the official rate at the moment?

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Mohammad Shereef;Executive Finance Director, [17]

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Yes. I know officially -- I mean the rate what officially is now, it's 45. But black market, it generally depends, sometimes 70, sometimes 80, and it's black and unofficial.

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Scott Marc Gegenheimer, Mobile Telecommunications Company K.S.C.P. - CEO of Operations [18]

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Part of the issue is how much you're trying to get in the market as well. So when you have large denominators, sometimes it goes up and then comes down. So it's hard to give you the exact numbers.

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Operator [19]

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There are no further questions over the telephone at this time.

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Mohammad Abdal, Mobile Telecommunications Company K.S.C.P. - Chief Communications Officer and Head of IR, Corporate Communications & Corporate Governance [20]

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Okay. Thanks, operator. Thanks, everyone, for attending the call today. Please refer to the Investor Relations website for additional updates, and feel free to contact the IR team for further information. We look forward for your future participation in Q3 2019 update. Thank you all for joining again, and have a nice day.

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Operator [21]

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Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.