Axiata Group Berhad (AXIATA) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by and welcome to the Axiata Group's Fourth Quarter 2019 Results Briefing. [Operator Instructions] Also note that the call duration will be for a maximum of 90 minutes. I would now like to hand the conference over to your speaker today, Tan Sri Jamaludin, President and Group CEO. Please go ahead.

Thank you. My name is Jamal, I'm the group CEO. Thanks for joining us for the fourth quarter 2019 results or the full year financial results. I'll go straight to Slide 1 or Slide 4, in this case. Basically, these are the 8 key messages. The first one, I think you've heard many times, we talk about Shifting Gear. Back in end of 2018 we launched the concept Shifting Gear while we want to still grow and gain market share, while our main focus shifted towards profitability. So as a result of that our -- fortunately we are still growing but EBITDA has -- and profit has grown. So you can see from the first point, EBITDA double-digit at 10.9% and revenue grew 2.3%. But if you take out device, it actually grew more than 5%. All OpCos are now profitable. I am especially pleased with the performance of XL and Robi, both had double-digit revenue and double-digit EBITDA growth. If you look at ROIC as a result of which of these 2 companies or 2 OpCos, our ROIC improved to 6.7%. We did have, of course, some surprises. One of them was the introduction of higher taxes for Bangladesh, that's [ quite positive ] tune of MYR 100 million -- more than MYR 100 million just over the last 6 months. The -- back to what I said earlier, despite the shift of focus -- our focus on profit, we still maintain or gain profit share. Out of the 6 operators -- the mobile operators, 4 gained significantly market share, including the big ones. One slight below and the other one below the bucket, which we'll explain later on. Well, in fact, the next slide basically explain those 2. We did have a challenging environment in Malaysia and in Nepal but [indiscernible] Ncell. Celcom revenue obviously impacted by the few other points as shown here, but it's very positive to note that we have decided not to go big on device. So we have curtailed the sale of device last year. And of course, that led to the revenue decline. For Ncell, we've had a lot of operational roadblocks this year [ or perhaps the first ] including our ability to expand the cost of the spectrum, which was supposed to be given to us early last year, but keep postponing, which has resulted in us in a limbo. We can't -- and we don't want to roll out too many sites because we believe we will get the spectrum. But because the issue at CGT got held up. And finally, last week, we managed to finally get the spectrum that we had asked for. That will materially change our ability to compete. That's a good news. Because of operational excellence, because of that, we deliver cost excellence, but later on, I will show you operational excellence is not just about cost, but in this context, it's about cost where we generated savings MYR 1.3 billion and that, by itself, is slightly higher than our expectation. And that led to [indiscernible] our increased EBITDA margin. Our ROIC has significantly improved quite a lot actually to 6.7%, our highest since 2016. We exited 2 of the 3 headline KPIs. EBITDA grew 10.9% versus KPI, 5% to 8%; ROIC, 6.7% versus KPI, 5.2% to 5.6%. Our revenue on the surface is below our KPI, 2.3% compared to KPI of 2 -- 3% to 4%. But like I said, ex-device, it grew actually 5.1% versus our auditor target of 4.4%. We also announced a dividend of MYR 0.095 with MYR 0.04 of interim dividend and a special dividend of [ MYR 0.005 ] If you look at the next slide, Slide 5, you could see that, this is an illustration of the Shifting Gear, the best way to illustrate to see what happened to all the OpCos, in this case, the 7 OpCos. Minus Ncell, as you can see, all had a positive growth in EBITDA, PATAMI and free cash flow. It's interesting to note that many of them, especially like XL, Robi, Smart and edotco all delivered double-digit growth in EBITDA, double-digit growth in PATAMI and double-digit growth in free cash flow. With that, I pass to my group CFO, Vivek, to go into a bit more detail on the results.

A very good afternoon to all of you. Let me start with the first slide, which is on the reported results. The reported results are based on the MFRS 16 [ as we drafted ] including the MFRS 16 impact and this does take into account some of the one-offs during the year 2019. So if you look at revenue for the year, on reported numbers, grew by 2.9%. EBITDA grew by 27.4%, but a significant part of that is coming from the MFRS 16 impact. As you know, the accounting now requires part of the leases being taken down below the EBITDA line. PATAMI for the year moved up from minus MYR 4.7 billion to around MYR 1.4 billion. Now the exceptional items in the reported results include the gain of disposal of M1, which is around MYR 113 million, divestments of some of the digital businesses which was MYR 367 million and disposal of rights -- Idea rights, which is around MYR 96 million. But more important is the next slide, which is on the underlying performance for 2019. The revenue grew by 2.3%; quarter-on-quarter, 1.5%; 2.3% if I exclude the devices because our device sale in 2019 was much lower than 2018. Excluding devices, the revenue grew at 5.1%. All, of course, showed positive contribution on revenue, except Ncell -- Celcom, which was minus 3.9% for service revenue, but on the overall including devices, it was around minus 8.9%. And Ncell was minus 4.3% coming from core mobile. Though ILD also continues to slide, which is in line with what was expected as people move from voice calling to the WhatsApp or Internet calling. EBITDA, a very strong performance for the year at 10.9% growth, arriving at MYR 9.3 billion EBITDA. Double-digit EBITDA growth coming from XL, Robi Smart and edotco. XL delivered highest revenue and EBITDA ever. Cost excellence program, if you recall, we have put down MYR 5 billion program way back in 2017. That continues to deliver in line with what the plans were, and we have delivered MYR 1.3 billion of cost saving during the -- cost saving and avoidance during 2019, split 50-50 between CapEx and OpEx. And consequent to the factor that the OpEx savings continue, we kept more or less our cost flat, resulting in 3 percentage improvement in EBITDA margin to 37.9%. PATAMI remained flat compared to last year at MYR 1,025 million. The factors which lowered down the PATAMI even though we had a strong EBITDA performance, is being the elimination of M1, which was contributing around MYR 112 million last year, which we didn't get because of the sale. And we were also impacted, as mentioned in my last call also, that the impact of the new taxes, which were introduced in Bangladesh, which impacted around MYR 106 million, and M&A expenses, which were on account of the merger discussions we had with Telenor of around nearly MYR 50 million. So excluding that, we would have seen around a 30% improvement in profit margin -- in profits in 2019. On a normalized basis, which is after factoring in the MFRS 16 impact, the normalized PATAMI is MYR 960 million. If I go to the next slide, which basically shows a waterfall between 2018 and 2019. EBITDA contributed to an increase in profit by MYR 891 million, mainly coming from XL, Robi and edotco: around MYR 400 million from XL; around MYR 370 million from Robi; and MYR 160 million from edotco. Digital businesses lower losses compared to 2018, contributed around MYR 53 million. Depreciation continues to -- impacted by the investment, which we've been making in our infrastructure, which is MYR 235 million. Finance cost of MYR 114 million increase is mainly coming from XL where in 2018, we took a decision to move to local borrowing instead of ForEx borrowing. So what doesn't get reflected here is the impact, positive impact on the ForEx. But because the local borrowing rates are higher than USD borrowing rates around nearly [ MYR 130 million ] is an impact in XL. MYR 162 million is mainly M1, which I talked about. And then MYR 387 million taxes, largely coming from the increased taxes in Bangladesh and also taxes in Indonesia, which is because of expiry of the carryforward losses coming back from '14 -- year 2014, '15. And then -- so that's basically broadly the waterfall between the MYR 1 billion PATAMI in 2018 to slightly above MYR 1,022 million PATAMI in 2019. When I look at the next slide, which is talking about PATAMI on the actual reported basis. The waterfall shows MYR 577 million, which is mainly coming from the disposal of M1, disposal -- divestment of ADS noncore businesses and selling of Idea rights, which is around close to MYR 100 million. And rest is all the others and the MFRS 16 adjustment. If I go to the next slide, I think, in good -- from a CapEx intensity standpoint, fairly flat compared to last year, 25%. But a good development on the free cash flow, which has moved up on a pre-MFRS basis to around MYR 4.3 billion and OFCF up by around close to MYR 1.1 billion, which is 7% of the revenue. So if I go to the next slide, I think this slide is just to explain how our efforts on cost has been impacting the profitability and overall cost. Overall, on a BAU basis, our costs remained more or less flat, in fact, marginally lower. And some of the increases on a BAU is mostly coming out of, for example, in XL we did change the management agreement, which has a slight impact in 2019. In addition to that, we've added around MYR 286 million of cost during the year on new sites in -- mostly in XL and Bangladesh. So if you look at -- after the new sites, cost increase is around 1.5% net against the 5.1% increase in the service or revenue excluding devices. Next slide. Balance sheet remains fairly resilient with the gross debt-to-EBITDA on a like-to-like basis coming down from the around 2.3x to 1.8x benefit of around USD 300 million of debt during the year. The balance sheet in terms of hedging and fixed floating remains fairly in line with our plans. And company continues to have a reasonable cash of around MYR 4.2 billion in the books. I'll just cover -- while the presentation has mainly all the OpCos, but I'll just focus on 3 OpCos. But free to take questions on the others at the Q&A session. First one is the Celcom, where we did see improvement on the profit as well as free cash flow despite the market environment remaining pretty muted and impact of lower termination rates from January 2019 as well as wholesale revenue. If you recall, we did have a commercial negotiation on wholesale deal with TM on bidding, and which did have a negative impact for us, around MYR 160 million during 2019. So this chart basically says -- shows while we do see a 3.9% mobile service revenue. But if you look at the prepaid and postpaid, we are pretty much flat compared to 2018. And if I add even the MVNO, which has done better than 2018, we would be plus 1% service revenue growth in 2019. EBITDA, consequent to some of the efforts being made on the cost side, showed an improvement of 7.8% and a free cash flow of over MYR 1 billion. Our profit showed significant improvement. But last year, if you recall, we did take a write-off of some of the assets. If I exclude the write-off or the restructuring charges, the profit has improved for Celcom by around 14%. If I go to the next one, which is on XL. I think it's -- I'm sure there's already a lot known about XL performance because they did declare their results some time back. But I think we are very happy to see significant improvement in XL performance, and this is along all lines. Revenue, 9.3% growth. If we take service revenue, it's 15% growth year-on-year, and our debt are contributing to around 28% growth. EBITDA, 17% growth, moving up from 37% EBITDA margin to 39.6% EBITDA margin. And improvement in free cash flow, IDR 1.7 billion going up to IDR 1.9 billion. And profits, which has turned around from a loss last year grew a profit of IDR 713 billion in 2019. And XL did declare some dividends in 2019 after a while. Robi, again, excellent performance from Robi. On all lines, 9.7% growth in service revenue. If you take out devices, it's around nearly 10% growth. EBITDA, solid performance of 43.9% growth in EBITDA, taking margins up from 24.5% to 32%. And a free cash flow improvement from negative to around nearly BDT 10 million. But I must -- just a caveat on that. Part of free cash flow improvement is also coming from the fact because of the restrictions by the regulator, we did not -- we were not able to acquire some of the equipment, which has been deferred to 2020. So there has been an impact because of the lower CapEx relative to what was planned in 2019. And profit, really showed profit for the year at BDT 799 million. Last year, we did get benefit in Robi because of the sale of towers, which was more an internal transaction between Robi and the edotco. If I exclude that, then it is more than 100% improvement in profits for 2019. So I'll not go through all the other comp news. Maybe just touch upon the digital businesses quickly. In digital businesses, as we said earlier, our focus has been to turn these businesses profitable. It's '19, '20, '21 is what we've been targeting. So ADA business, which is our digital marketing business did turn profitable in 2019 full year, PAT positive. Boost continues to do well, growing in GTV as well as acquisition of merchants and users. Apigate, which is our digital platform business had a bit of a struggle 2019. And that's a business we are relooking at and restructuring some of the products as well as the restructuring the focus around this business. I think that's it from -- on the operations. If I can go to Slide #20, which is on our achievements against the KPI. So I'm happy to say on EBITDA and ROIC, we did much better than what were our KPIs. EBITDA, we had said 5% to 8% growth. We ended up with 10.9%. ROIC we said 5.2% to 5.6%, ended up with an achievement of 6.7%. CapEx below, but partly also because of the deferred CapEx in Bangladesh. While the revenue targets being lower, mainly because of the devices, if I exclude devices, we did grow at 5.1% compared to our internal target of 4.4%. Coming to my last slide, which is on the proposed dividend, as Tan Sri mentioned, we are declaring dividend of 86%, which is in line with last year as dividend payout ratio, which translates into MYR 0.04. In addition, a special dividend of [ MYR 0.005 ], which is basically sharing gains from the sale of M1. So this translates to around 40% of the gain on M1 which translates to an overall dividend of MYR 0.095. So that's it for me. Tan Sri -- okay. Let me then quickly touch upon before I hand it over to Tan Sri, is the headline KPI for 2020. Revenue growth 3.5% to 4.5%; EBITDA growth of 4% to 5.5% and ROIC at 5.5% to 6%. And CapEx pretty much in line with what we expected this year at MYR 6.6 billion. And this is all on post MFRS 16. So now, we would report all on post MFRS 16 [indiscernible]. But I'll not go through the risks and opportunities, it's available for you to have a look at it. I'll hand it over to Tan Sri to talk about the vision and Axiata 3.0

Thank you, Vivek. In the interest of time, I know some of you have to move on to the next presentation actually from another company. So I will go through very quickly. Slide 25, basically, I have gone through -- you have seen this before. Just to reiterate our focus on the 3 businesses. We have the digital businesses, how we involve from a mobile-centric company to converged digital operators, being #1 and #2. And also being the top 1 or top 2 performance in all the respective markets. And in many cases, maybe not yet -- but not every year, But if you look at the last many years, indeed, we are -- we have been really the top performer in all the respective markets. On the digital businesses, so far so good. In Boost and ADA, as mentioned by Vivek, [ something ] just very quiet on our figures, but we are still very much on track. And last but not least, the infrastructure company, the edotco, Vivek did not go through the details but you can see the numbers from the previous chart, it's double-digit revenue growth, double-digit EBITDA and double-digit profit growth, and it's moving extremely well. The next slide is just to give you a preview of what are the positives we want to do over the next 2 to 3 years. I, again, in the interest of time, I won't have time to go through all of that. If you look at the left part of the chart, the focus, of course, is financial performance. It's very important. We want to improve our profit and free cash flow without sacrificing too much of the market share. So that's so far the last 2 years, we have been doing exactly that. The next 7 -- -6 items is all about, how do we build an institution for the future? Again, in the interest of time, I will not go through all of that. But just to give you a flavor, of course, a basic transformation of all the OpCos that we have to do, as I mentioned earlier, operational excellence is something Dato’ Izzaddin will go through a bit more. It's going to be the new DNA for us. We're also relooking at how do they engage with the operating companies given our operational excellence that we are embarking on. Our digital -- digitization and analytics are the same, everyone [indiscernible] same thing, but we are now very confident that it can become our biggest differentiator with -- by 2023. So we are not talking about as good on the rest, but we are talking about the best in the respective markets, and maybe of global standards. New growth areas, especially enterprise we are working on, to some extent [indiscernible] budgeted it. And of course, we have to do support on organization to gear up for the future. Lastly, we have not forgotten that something that we -- has been done to materially [ effect ] our industry structure and therefore, our business is the industry consolidation. And related to that is how do we optimize our portfolio within the group. So the next chart, I wouldn't try to elaborate, just give you a flavor that we are moving a bit beyond right touch. We do not believe in full centralization, but we believe that there's a sweet spot in between where we are today and centralization, given the fact that with the concept of operational excellence, a lot of synergy can and still have to be done, especially in IT [ than ] with procurement. I think we have done an average job so far. I think we have a lot more to be done and we have kind of tried the best formulae, what we call the collective brain, where we get the CTOs, the CROs to collectively come up with the best design [ for our business ], will come up with the best procurement -- how you procure, the best centralization of IT and so on and so forth. Again, maybe perhaps during our sessions later on, we can go into more detail. Let me go through the 3 recent announcement, we have made sometime in January. First, of course, you've heard the announcement of the Deputy Group CEO, and we have also declared or announced up front that he will be GCEO by January 1, 2021. So the next 10 months or so, there will be a nice transition plan where we will make sure that all the stakeholders and all the operational business operations, all of this will be done quite [ tactfully ] to ensure a very smooth transition. We also announced that Dr. Hans, who has been the regional CEO, to take care of all the telecom businesses, [ the 6 of them ]. And given the focus on IT and network. At the same time, trying to balance between that and what is bad commercially. We have asked the CEO of Smart to work on top of his current job for the next 2 years to really look at how we run our IT network. So that was a -- sorry, Thomas Hundt, who is the CEO of Smart, is known for his technical and commercial capability, balancing very nicely between commercial and technology. So the CTO and the CIO on the group level will report to him. And of course, in more detail -- I'd like to give a bit more detail on Dato’ Izzaddin's background. I won't go through all of this. You probably know him already by now. As you know, he was the Group MD and CEO of UEM Group. He left at the right time before all the [indiscernible]about PLUS. Good timing. And also before that, he was the CFO of Tenaga. So I think he can talk via his cellphone. But I guess, it's the best time now to pass to Dato’ Izzaddin to give you a bit of flavor that -- what he intends to do.

Thank you, Tan Sri. Hi, good evening. On the next slide, 30. I guess, the advantage I have is that I've been on the Board of Axiata since November 2016. And what I have been brought to do since before January, so that's 29, 28 days ago, is to engage with all the staff in the various companies. We've done all the [ town halls ] with all the staff, including Indonesia and Sri Lanka. We've yet to do the ones in Nepal, in Cambodia as well as Bangladesh. But I think what's key is to explain to the staff how the transition between Tan Sri and myself is going to take place over the next 10 or so months. Of course, the other bit that I'm trying to do in the next 2 months is [ to raise ] the people's engagement, namely the regulators, key institutional shareholders, research [ MDs ], I think Clare will organize some -- several meetings with yourselves in the next 2 months. And of course, the focus areas is deep diving into the work that is the main pillars of Axiata 5.0. Transformation, yes. There will be a few companies that I am particularly keen on [ the middle movers ], no prizes for guessing, it's actually Celcom and XL. XL is on a good trajectory, whereas Celcom needs a bit more focus given the issues challenging its businesses. Implementation is key like all things in life, operational excellence. I'll take you through the 5 pillars on the next slide. Now in terms of organization, one of the boxes I tick, if you like, is the strength, capability and commitment of the team at Axiata. Notwithstanding that Tan Sri and I will review the organization in a deeper manner to see if there are tweaks that we need to make to deliver Axiata 5.0 over the next 3 years. Of course, optimizing the portfolio of investments we have, I'll touch a bit of that in terms of the Robi listing. And as far as the risk and compliance framework, I think it doesn't -- it -- sorry, it's very important that I have a good understanding of the risks and what makes the organization tick to better serve the organization. So as far as the compliance issue is concerned, I think some of you may be aware, there is a new provision in the MACC Act that comes into effect on first of June. So the Board, Tan Sri and myself, we want to make sure that we have the adequate procedures instituted across the organization. Moving on to the next slide. Now as Tan Sri mentioned just now, I think the misnomer about operational excellence is that we're just cutting cost. Now the aim is to become the lowest-cost producer relative to customer promise and customer experience. So it is about striking a balance between what would be a sustainable cost structure, making sure that the costs, or the OpEx spend is on the areas that matters. At the same time, making sure that we have profitable growth. Now in between that, we must make sure that the customer is satisfied in terms of our expectations. The classic example is about watching a video on your handset, whether it's 360K or 2K or 4K, it makes no difference. So we ought to be able to deliver to the customer satisfaction. I think digitization and analytics has proven to be a useful tool in our [ digitization ] business as well as our micro lending business. We've been able to successfully develop algorithmic bending and mapping out customer preferences so that the advertisements we do for certain customers are well targeted. Of course, organizational excellence entails a culture change, and therefore, a journey. The good news is Axiata has a strong platform to be able to excel in these various processes and business that we're involved in. And we have today announced the listing of our Bangladesh business with the Axiata Limited. We plan to raise 10% of the enlarged paid-up involving 523.8 million shares on the public exchange Bangladesh. Proceeds of MYR 255 million will be deployed towards CapEx. There is no [ offer facilities of all new ] shares. And our shareholding will be diluted down to 61.8% There will be no material impact to Axiata earnings and Axiata will remain a controlling shareholder post IPO. Barring unforeseen circumstances, we expect the IPO to be completed by -- towards end of this year. We will -- this will be the fourth largest in Bangladesh corporate history and Robi, based on the IPO price would be the 11th largest listed company in Bangladesh [ It goes without saying ], the benefits of the IPO, I think something like 1,413 employees have participated -- will participate in this IPO and it gives them the opportunity to participate in the growth of the business as well as inculcate the ownership amongst the employees. On that note, I know we have a bit of time for Q&A. Over to the administrator.

[Operator Instructions] And we can now take our first question from Piyush Choudhary from HSBC.

Three questions. Firstly, what factors are driving the ROIC outlook of 5.5% to 6% in 2020, which is lower than 6.7% for 2019? Secondly, the CapEx guidance of MYR 6.6 billion, could you give us some split among the OpCos? And thirdly, could you share the outlook in terms of revenue growth for Celcom and Robi in particular?

Vivek, can you answer the first 2 questions?

Yes, so first one, Piyush, for 2 factors. One is we -- as I said earlier, that 2020, because we would report our numbers on both MFRS 16. Our MFRS 16, as you know, the financial leases gets classified as debt, and that has a negative impact on the ROIC. So around 0.3% impact is around close to 0.7%, actually. The impact comes because of the reclassification from pre to post in 2020. So that's one major factor. Second factor is that our investments, we continue to focus on investments in some of the markets. For example, in Indonesia, we continue to have a level of investments higher as we continue to invest in ex Java. So we -- our strategy focus around that hasn't changed. Third point is that, in Bangladesh, because of some of the deferment of CapEx from 2019 to 2020 because of the restrictions that the regulator had put until we had resolved this whole BTRC audit issue, does mean that the CapEx in Bangladesh remains inflated. So these are the 3 main factors, but the main factor is -- mostly account -- around the accounting change from a pre to post MFRS. If it was still on a like-to-like basis, then we would have been better than last year. CapEx guidance, just to give you a bit of a breakup: CapEx would be around slightly over MYR 900 million in Celcom. XL will be around MYR 2 billion. All this is in ringgit terms. Smart would be around MYR 320 million. Dialog, we're looking at around 6 -- MYR 700 million. Robi, as I said, because of the deferment, would be around MYR 1 billion CapEx. Ncell would MYR 400 million. edotco would be MYR 900 million. And the others, which does include the investments, enterprise, et cetera, would be around MYR 200 million. So that's the breakup of -- approximately of the MYR 6.6 billion CapEx guidance for next year.

So your question -- may I answer your question?

That was very -- yes, yes, sure.

I can answer the question to you very directly, and then I can pass to Idham to elaborate. So for Celcom, we believe that we are aiming towards low single-digit growth for revenue ex device. Of course, it does include also in mobile, enterprise and fixed, too. And for Robi, we are looking at, at least mid-single-digit growth. For AGB, for Axiata, it delivered, as published the headline KPI, is 5.6%, right? So let me pass to Idham, the CEO of Celcom to give you a bit more color on the Celcom growth.

Yes, as Tan Sri said, I think we are looking at the low single-digit growth overall. If you look at it in terms of the -- our core mobile consumer business is -- most likely will be more -- that was the flattish side as you have seen what's happening in 2019 on the industry. But we're looking at new source of growth, especially in the enterprise market. We're seeing some contraction, especially in the enterprise market, not just in the mobile but also in the solutions space. We've seen a double-digit growth that we've seen from 2018 to 2019. Another source of growth that we're looking at is in the home market, especially the fixed wireless area. We're making some modest growth now in 2019, I would say, and we are looking at -- now, even in 2019, we're starting to get into a run rate of possibly around MYR 100 million a year. So this is new areas of growth that we're looking at. And of course, there are other areas, such as the growth in our MVNO business and also some of the new brands that we are launching soon in the market.

Okay. I'll comment to just -- sorry, just a correction. Our headline KPI is 3.5% to 4.5%. I'm not sure where the 5.6% came about. So...

We can now take our next question from Arthur Pineda from Citi.

Firstly, on Celcom, the momentum was quite firm, posting normalized PAT and EBITDA growth, even though your revenues were actually contracting. Now that's in direct contrast to peers, who were actually shrinking their profits alongside EBITDA. What's driving this differential? And do you think this growth can be sustained? Second question I had is with edotco. Sorry, just if you can remind me, is there any intention to do anything with this asset soon? Or are you looking to first grow the business before actually trying to monetize? And last question I had is with regard to the parameters for consolidation. Would you be willing to consolidate assets in the region if it would mean near-term dilution for the assets? Or would you actually prioritize profitability in the near to medium term?

I'll let Jennifer, the CFO for Celcom, to answer the first question.

While we have not managed to grow in terms of our revenue in 2019, but we have done a couple of things in terms of cost optimization. We are starting to see some wins in terms of the cost optimization that we have actually embarked on quite a while ago. As we said, more than a year ago, we're starting to see some much small results. This reduction continued to -- we should continue to see this reduction over the next couple of quarters as well. And we think that there's more room for us to actually do more initiatives in terms of the cost.

If I were to add, we've also have been focusing more towards our more profitable products, and that's one thing that we're doing, and reducing less -- the less profitable products, especially the prepaid side. That's why we've seen some of the planning in terms of numbers in prepaid. And also, some of the growth that we see in the MVNO also is helping out in terms of margin as well.

Okay. On the second question, I had heard something to do with monetization in edotco. There's no immediate plan per se as we speak right now. We are in a good shape right now. In a way, because they're going -- doing so well, we want to find where the right time to do any kind of monetization. And also, we have a couple of M&As that we're looking at this year and next year. So -- and there are plenty of them, actually. So I guess it's not the right time to do anything with regard to monetization. However, if you mean monetization as in new investor coming in, maybe there's a possibility. But not so much of the -- if you mean monetization as listing at this point in time. Of course, this can change. I don't think that -- anything can happen, as we evolve and we review our business, but nothing is imminent at all. On the consolidation. It's a good question. Some of the consolidation we do will -- might affect our profitability short term. Our focus on profit, very clear for the whole group. In fact, your question on Celcom is also -- you could see that we are very -- we are driving the EBITDA and profit growth. We do not necessarily want, however, to lose market share because we want to at least maintain market share but focus on EBITDA profit. So coming back to your question. The -- however, if we believe that the right thing to do is sacrificing short-term profit for medium-term consolidated -- medium-term profit and future-proofing our business, we might still consider consolidation. So it's not necessarily -- yes, so no at this point in time.

Next question comes from Alex Goh from AmBank.