Enerjisa Enerji A.S. (ENJSA) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to Enerjisa's Full Year 2019 Consolidated Financial Results Conference Call and Webcast. I now hand over the call to Michael Moser, CFO of the company. Sir, please go ahead.

Thank you very much, and hello, everyone. This is indeed Michael speaking. So let me start today's earnings call released by just looking back at the beginning of last year in order to give you a proper context. And of course, also to appreciate the financial results we have published today. Overall, the past year was characterized by the aftermath of the financial crisis of 2018 in Türkiye. The year has therefore started with many uncertainties around the recovery path of the Turkish market. Regardless of the macroeconomic, we have shown our robustness and capabilities by outperforming on our promises to you and close the year with an impressive financial performance. Just to highlight three of these. Bottom line earnings grew by more than 60% year-over-year to now significantly exceeding TRY 1 billion. The free cash flow after interest and tax for the first time in the history of Enerjisa has turned positive and is even exceeding the amount of our dividend payment for 2018. Thirdly, we are able to propose TRY 0.60 dividend per share, representing a 50% year-over-year increase and a significant real growth rate. Let me now come to the financial highlights, which you see on Page 3. In Q4, we have continued our almost linear earnings path for operational earnings and closed the year with TRY 4.6 billion a year-over-year growth of 20% and in line with our guidance despite the significantly lower-than-expected inflation for 2019. Our underlying net income growth rate has again accelerated significantly to an impressive 61% year-over-year, reaching TRY 1.175 million at year-end. Q4 contributed overproportionately to this increase as we increasingly benefit from the lower financing rates and lower inflation-related valuation expenses. Furthermore, and as expected, we have started to recognize the deferred tax asset for our holding company in Q4, significantly lowering our average effective tax rate for the full year. As a result of this, let me personally call it outstanding bottom line earnings development, we are able to increase our dividend proposal for the year 2019 to TRY 0.60 per share. This represents a 15% year-over-year growth in cash returns for our shareholders. Last but not least, we are happy to announce our first cash positive year in the history of Enerjisa with the operating cash flow, not only covering investments as well as interest and tax payments but also exceeding our dividend payment for the fiscal year 2018. Similar to prior years and as expected, this cash performance was enabled by a very strong cash flow in the last quarter of 2019. With respect to the market environment, which you can see on Page 4, the swift recovery of the macroeconomic situation in Türkiye during 2019 is very visible. Inflation rates dropped by around 10% from around 20% in the beginning of the year to around 10% at the end. Interest rates fell even further by around 14% as the market expects inflation to further drop within 2020. As I already stated in previous quarters, this development not only widens our marginal investment spread, but at the very least, opens a window of opportunity for us to reprice our existing loan portfolio at significantly lower rates. With regard to energy procurement costs, we have seen a relatively modest increase in line with inflation over the year since energy demand has contracted in line with GDP development and FX rates remained relatively stable. In contrast to this, the regulator has increased tariffs by 15% in Q3 and Q4. Bringing residential tariffs back to a cost reflective level and increasing commercial and industrial levels enough to restart the liberalization process. Finally, the regulator has further decreased the late payment penalty rate from 2% to 1.6% per month, in line with lower market lending costs. The level remains sufficiently high to discourage late payments of all market participants. And now coming to a more detailed explanation on our operations. And by this, turning to Page 5. I start with our distribution business. Investment activities have slowed down compared to last year, as we have already seen in the previous quarters. The gap has narrowed compared to the first half as CapEx execution has accelerated post elections. However, they remained low in line with our tactical decision to prioritize cash generation and debt consolidation versus earnings growth. Since the macroeconomic environment is changing, significantly as outlined before. This prioritization is under review for the year 2020. Despite the reduction in investment volume, our ramp continued to grow by 21% year-over-year to now TRY 8.4 billion, due to the high inflation revaluation in the first half of 2019. Distribution efficiency and quality earnings have increased in line with inflation with the composition of outperformance is roughly unchanged. For our retail business, regulated volumes continued to decline compared to last year as corporate customers with consumption above the last resort tariff, limit has switched to the liberalized market in the beginning of this year. On the liberalized market side, corporate volume growth is only moderate. Also, we are able to retain a good part of the last resort tariff customers. We are also more selective in terms of profitability and working capital requirements. As a result of this, volume is only slightly increasing, but profitability is significantly above prior year. Coming to Page 6, talking about operational earnings. Operational earnings have increased by 20% to TRY 4.6 billion. As in previous years, the key growth driver is first and far most CapEx-related earnings and distribution, including financial income and CapEx reimbursement. On the retail side, growth comes from the Regulated segment as a result of significantly higher average sales prices, which increased around 25% year-over-year driven by regulated tariff developments and overcompensate any volume decline. For the liberalized market, the higher margin drives the year-over-year development. Let's now dive into our Distribution business on Slide 7. Operational earnings increased by 17%, while the operating cash flow remained flat. As indicated on the previous slide, the key earnings growth contributor on the distribution side has been higher financial income. This earnings item has increased 14% compared to last year, which is a result of higher rep, partially compensated by the lower nominal return rate due to lower inflation expectations. CapEx reimbursements increased by 33%, in line with actual CapEx spend in the prior regulatory period as well as inflation on the initial real CapEx allocation for the current regulatory period. Within the efficiency and quality earnings bucket, the composition almost remained unchanged. Overall, the main contributor remained theft accrual and collection income. Growth for this regulated mechanism, in particular, came from the higher power price level. CapEx outperformance decreased compared to last year, in line with a slowdown in CapEx execution as well as a slight reduction in the outperformance margin from 7% last year to 5% this year as a result of indexation mismatches. Contributions from OpEx outperformance remained constant at 5% of the OpEx allowance and therefore, increased with the inflation indexation of the allowance. P&L outperformance increased slightly from 1.1% last year to 1.2% this year. However, with the higher power price levels, the contribution grew by close to 20%. Quality bonus income has increased by close to 40% overcompensating the lower CapEx outperformance as we were able to retain 3.5% as additional bonus from our revenue requirement, up from 3.2% last year. Furthermore, we were able to recognize another TRY 48 million of quality bonus in December that relates to the fiscal year 2018 and which we consequently treated as an exceptional item. When translating operational earnings into operating cash flow, we have to deduct the financial income earned but not yet cash effective. As expected, this adjustment is still growing since we are recognizing financial income in our P&L on a rep basis that has been grown at an accelerated pace compared to regulatory expectations over the past 3 years, and we are still spending new CapEx despite the depletion of our initial accumulated CapEx allowance. As a consequence, tariffs have to catch up on our earnings recognition. As always, when we then reclassify CapEx outperformance, as this is a deduction from CapEx rather than an operating cash inflow. Additional, we have to add net VAT. Before arriving at operating cash flow, we then take account of working capital to arrive at the operating cash flow of TRY 2.4 billion. This represents a doubling of cash generated in the first 9 months of 2019. In part, this was achieved by a reduction in working capital by around TRY 300 million purely in Q4. The total change in working capital at the end of 2019 now stands at round about TRY 850 million and mainly comes from 3 key items, which I want to tell you in the following. First, tariffs, not yet reflecting our earnings recognition. Similar to financial income, tariffs are adjusted for some of the outperformance related mechanisms exposed, making them not immediately cash effective. This is especially true for the theft accrual income for which the regulator has no ex ante expectation and is therefore not included in tariffs. Since this mechanism contributed significantly to our overall efficiency and quality earnings, working capital is built up until tariffs are adjusted accordingly. Two, tariffs not reflecting our actual costs. The regulator uses assumptions regarding our volumes. Energy procurement, unit costs and transmission fees in the tariff calculation for each quarter. If any of these deviate significantly in reality, then the tariff needs to be adjusted ex post accordingly. Payment shifts either due to payment term differences between energy procurement sources and material and service suppliers. Cash effective CapEx also remained flat between the years despite the reduction in investment volume. The reason is that few payments shifted to the next year, and consequently, the reduction in investment volume has been offset by a higher portion of current year payments. As a result of both, the free cash flow of the Distribution business remains significantly positive at around TRY 800 million at year-end. Coming to Retail, on Page 8. Our Retail business showed a very strong earnings growth of 43% to TRY 559 million in 2019. Different to the first 9 months of 2019, growth in Q4, especially came from the Liberalized Market segment with the current constellation of tariffs and procurement costs, allowing for a significant increase in profitability. OpEx remains nominally flat between the years, pointing to further efficiency gains in real terms. Next to an increase in gross profit, also bad debt-related income grew significantly as payment behavior even improved on an already high level, while late payment income significantly increased on the back of a higher late payment penalty rate. For the operating cash flow, cash generation again accelerated in Q4 as the procurement volume from the regulated wholesale company, EÜAS, significantly exceeded expectations. Furthermore, tariffs remained higher than the regulated revenue requirement leading to further positive price equalization effects. Overall, the Retail business, therefore, closes the year with a free cash flow of TRY 1.7 billion or around 3x operational earnings. Now let me come to the bottom line development and outlook, which you can see on Page 9. As I indicated earlier, our underlying net income growth has accelerated substantially in Q4 of this year. From a pure stand-alone quarter perspective, this is both due to increasingly lower financing rates as well as lower inflation valuation expenses, but also due to the low comparison base from last year. For the full year 2019, our bottom line earnings increased by more than 60% to now around TRY 1.2 billion. Below operational earnings, the main effects were as follows: Depreciation grew by TRY 150 million, which was mainly a result of the implementation of the new IFRS 16 standard, that capitalizes rent expenses and therefore, reclassifies operating expenses to depreciation and interest expenses. Also, we refinanced our loan portfolio, again, at significantly lower rates in the second half of the year. The cumulative average loan financing rate ended up at around 18%, which is 1% higher than in 2018 and leading to around TRY 200 million higher net loan interest expenses. Since marginal rates in the second half of 2019 were significantly below the average rate of 18% and we are already fully funded for 2020, by the way, you can expect the average financing rate to fall substantially in going forward. The higher loan interest expense in 2019 was overcompensated by lower inflation, revaluation expenses of our outstanding bonds and customer deposits. Our other financial expenses remained flat, although lease interest expenses were added under the scope of IFRS 16 and significant one-off expenses were incurred to reprice our loan portfolio prematurity. Both of these were fully compensated by higher financial income on receivables against the price equalization system that mostly came from 2018 and contributed significantly due to the high interest rate level for most of the year. Finally, the effective tax rate for 2019 is now 25% and therefore, 6% lower than previous year. As guided before, we achieved this by starting to recognize the deferred tax asset at our holding company thereby starting to use the tax shield of our financial expenses of this legal entity. Talking about economic net debt on Page 10. As the company turned cash positive in 2019 and the free cash flow after interest and tax payments even exceeded the dividend payment for the prior year. Economic net debt came close to peaking and only increased slightly by around TRY 500 million. The remaining increase comes from the following key effects: I just mentioned now 3 key effects: First, with the implementation of the new IFRS 16 standard, we start to capitalize the lease expenses and therefore, at TRY 166 million lease liability to the balance sheet and our net debt definition. Second, customer deposits showed a new increase of around TRY 200 million in 2019. And third, the remaining increase is mainly a function of interest accruals, not yet paid in cash, especially related to our bond inflation component. On the final page of today's earnings release, I would like to put the year 2019 into the context of our overall track record. Since our IPO, we have promised a steady and strong earnings growth until the year 2020 to you. We have now just completed the year 2019 and therefore, started into the last year of the third regulatory period, and we are very proud to say that we significantly exceeded our promises by more than doubling our operational earnings and tripling our net income over the past 4 years. This constitutes a very strong real earnings growth and directly translates into a strong real growth in cash returns for our shareholders, as we are also delivering on our promise to share 60% to 70% of our bottom line earnings as dividend. Finally, all of this is in the context of an increasingly solid balance sheet with our debt factor falling even below 2x of the year 2019. This leverage situation, first of all, protects us increasingly from any volatility of the Turkish debt capital markets, and secondly, provides us with significant headroom to think about further growth opportunities going forward. Dear operator, we can now take questions from the participants. So thank you very much.

[Operator Instructions] The first question comes from Ekaterina Smyk from Bank of America.

I have several questions. The first one is on your outlook for year 2020. I mean, you usually have this slide, the last one slide showing your projections for the next year as well. Can you please share what are your expectations in terms of operational earnings, underlying net income, now get at least the sort of the minimum growth projections here. And the next question is on your investments CapEx spending for the next year. I mean, in the middle of last year, you were sort of saying this you were promising to -- you were prioritizing deleveraging of investments. And of course, the [indiscernible] was favoring that. But given that the market trends resourced, right, and then we are seeing a substantial reduction in cost of debt. Would you now sort of change that and again increase your investments at least to the level of allowed CapEx? And the last question is on the potential regulated return for the next period? I know it's too early to disclose any numbers here, but if you can just guide sort of when we can expect the next period return to be announced? Is that October, November of this year or we can hear something on that earlier?

Thank you very much for your questions. I'll just start with the last one and then go to the second one. Dividends, yes, right. So in December this year, we can give you more insights on this one. So we kindly ask you to wait until that. Your second question, dealing with CapEx spend and your observation, which is fully right, we will increase the CapEx spend going forward and are doing this in a, let's say, very flexible way, depending on not only the interest rate situation, but also then on the development of the macroeconomics. So going forward, also, this I can confirm.

All right. Ekaterina, this is Chris speaking. Then let me take the first question and maybe add 2 comments on your second and third question as well. Now regarding the outlook for 2020. What we can say today is that as in the past, I mean, we have a midterm outlook out in the market, communicated before, communicated last year, actually upward revised last year until the year 2020. So as long as we do not revise that, this outlook still stands. Obviously, that does not give you a specific number or specific range for the current year. But as in the past years, we would like to wait until the first quarter results to guide the market on this. The reason, as in prior years is simply that for operational earnings, a lot depends on the development of inflation given our inflation indexation mechanisms in our revenues. And on the bottom line, a lot depends on the further development of loan rates and our ability to kind of execute on that opportunity. So also for that, we are simply, right now, not yet prepared to give you a concrete range for the full year. Simply because we also don't like to revise ranges all of the time during the year. But to answer this positively, what you can rely on is that as in the past, we will provide a significant real growth rate in bottom line earnings so exceeding inflation. And I think for bottom line earnings, the last thing that we did say is that between the years '18 and '20, we want to provide at least a 30% year-over-year CAGR. We have significantly overdelivered on that in the current year. Exactly, let's see what that comes to the next year. Don't forget that this year, we had the very, let's say, favorable constellation of still benefiting from high inflation rates from the beginning of the year, but at the same time, already benefiting from significantly lower loan rates in the market. So that constellation of course, was a particular one and that explains to a large extent how we delivered a 60% year-over-year bottom line earnings growth. And that's the constellation that obviously, you cannot expect in every year to hold. But still regrowth, significant regrowth will be provided. The second thing that you can continue to rely on is that our leverage, in terms of debt factor, i.e., relative to operational earnings will continue to fall. In absolute terms of net debt, I think what we have shown this year is that we now peak net debt and we are basically expecting to remain at this level also now in 2020. That brings me then obviously to our CapEx plans. That's the last unknown that we haven't talked about. Right now, the only thing that we can tell you is that indeed, your observation is fully correct that today's investment spread again, allows -- economically allows a higher investment volume, and that is also what we are targeting for compared to the year that we just closed. However, how much we exceeds the prior year, that is still something under discussion and subject to our discretion as a company and needs to be balanced with a lot of other things as well. So wait until Q1 for a concrete guidance on this as well. Finally, then regarding the WACC for the fourth period. I think I can use the same argument there again. The investment spread has changed a lot over the past 2 years. Today's situation is very different from last year and the year prior to that. We need to see and the regulator, obviously, needs to see what situation is really sustainable in the market to ultimately decide what investments what WACC rate is a realistic one in order to incentivize a certain investor behavior. So in other words, if we come to the conclusion if the regulator comes to the conclusion that refinancing costs in Türkiye in the mid to long term, indeed, remains at very low levels as we see them today in the market, then a lower WACC rate would be fully reasonable and sensible and would actually provide us with at least the same investment spreads that we have realized in the current period. So not a downside to us but a neutral news to us. If the regulator on the contrary comes to the conclusion over the year that this is not sustainable and the real cost of financing should be more towards the historical levels we have seen in the past, then most likely, the WACC rate as we saw it in the third period remains to be a reasonable one. So what we would ask the market to do is really to focus on the spread between the WACC and our financing costs rather than the WACC rate only.

Right. Can I just follow up on this next regulatory period, do you see potential for increase of real allowed CapEx, I mean in real terms?

We do, we do. I mean, very obviously, you see us -- or you saw us already front-loading and overspending on our original allowance for this regulatory period. And for us, from a pure, let's say, negotiation perspective, that is, of course, what we will enter the negotiation with, i.e., make it clear to the regulator that our regions obviously have a demand that exceeds the allowance we have received so far. And in order not to create these deviations going forward that we would like the regulator to reflect this to the next regulatory period. And then the question whether, again, we will overspend that new allowance. So that is then something to our discretion and that is something that will depend and on the new WACC being set and our actual financing costs. So that's the secondary decision but the first one is that we have -- at least we think we have very good arguments to convince the regulator to see that a higher initial allowance is called for.

[Operator Instructions] The next question comes from Koray Pamir from Unlu & Co.

My questions have already been answered. Thank you very much for the detailed explanation.

The next question comes from [ John Aligos ] from QNB Finance Invest.

Most of my questions have already been answered but I have just follow-up questions on [indiscernible]. You explained well the reason behind the decline in the CapEx outperformance for this year. But this contribution in the last quarter is very limited. I mean, it's just around TRY 1 million, I think. Is there any specific reason for this contribution, this recontribution? Or it's just about only about the lower CapEx level? And I'm also wondering the reason of the negative contribution of OpEx out performance in the last quarters. I think it's something related with the methodology but can you give some little bit guidance on that?

Sure. Happy to. For -- let me start with OpEx outperformance since that really follows a very systematic pattern over the past years also. OpEx outperformance generally is low in the last quarter because of the phasing of OpEx. A lot of our OpEx spending simply are clustered towards the fourth quarter, since the allowance is linearly spread over the year. That means OpEx outperformance in Q4 traditionally is low. Finally, on the OpEx outperformance, note that our actual OpEx is always a result of our decisions on what efficiency and quality earnings to increase. Since we are constantly optimizing the overall mechanism, sometimes we need to face off between different items. And this, for example, in a certain quarter, we see an opportunity or a need to increase OpEx to, for example, lower effect in loss rates with additional personnel being deployed in the field. And this will hurt our OpEx outperformance but to the benefit of the higher, for example, second loss outperformance. If we see the net of the two being positive, then this is a good business case for us. So very completely now in Q4, we have done exactly this. We have increased meter reading rate in order to increase our theft accrual income, and this came at the cost of higher OpEx, but to the benefit of a higher contribution from theft accrual income. On the CapEx outperformance side, CapEx in the fourth quarter, the CapEx accrual in the fourth quarter, not the payment was relatively low. So that meant a relatively low contribution for CapEx outperformance. The second reason why CapEx outperformance is not linearly faced is that as we indicated in the past, CapEx outperformance is also a question of indexation mismatches. Regulated unit prices are indexed annually once a year while our actual unit price is obviously vary quarter-by-quarter. And therefore, you do not have a constant linear performance quarter-over-quarter that has up to the year. So different quarters contribute differently to our overall CapEx outperformance. Maybe one additional reason for that is that, obviously, also the characteristic of our projects every quarter is not the same. So there are quarters where we are spending more on personnel versus material depending on the unit cost and the relation between the actual unit cost and the regulated unit costs, we have some quarters where we had -- where it seems that we have a very good CapEx outperformance and others that seem lower. So all of these items are hard to predict and plan and they lead to a certain fluctuation in the contribution quarter-by-quarter.

[Operator Instructions] The next question comes from Cenk Orcan from HSBC.

I have 2 questions. First one on the cost of funding. You already mentioned you are fully funded for 2020. In terms of the average interest rate on your loan portfolio, which stood at around 18% last year, what's -- what would be an approximate number to expect for this year? How much room do you have there? And secondly, the effective tax rate, you've seen a major decline last year. Is it fair to assume a further decline this year towards 22% corporate tax rate? Or you have no room there?

Yes. Cenk, thanks for the question. Both got good one, for the interest rate, you're right. As Michael said, for the year 2020, we are done funding our needs. That does not mean that we stop our funding activities because, obviously, as you are aware, the market environment has moved on also since the beginning of the year. So from today's perspective, again, certain loans in our portfolio may seem attractive to be refinanced. So we will further optimize our rates. But if you already just look in our audit statement that we published yesterday night, then you see that at the cutoff 31st of December, our average loan book had a rate of, I think it was 15.9% also. So already significantly lower than the 18.1% that we showed to you for the full year 2019. So you can definitely expect rates to decline on average in the year 2020. But as I already said to Ekaterina's question, right now, we are not yet prepared to give you an answer to basically guide you on a concrete average rate that we think is achievable for the year 2020 for that too much has happened and there are too many uncertainties, and therefore, the likelihood is too high that we need to revise our guidance again. So for now, take the observation that end of December, we are already significantly lower than 18%. And we see opportunity in the market to optimize our portfolio further. I think that gives you already a pretty good idea. On the tax subject, like we said, we started to recognize a deferred tax asset this year for the first time in our holding company. This enables us to bring down the tax rate to 25%. Why not to 22%, which would be the marginal income tax rate. The reason is simply that it is the first year where we are starting to be able to recognize it, which from an IFRS perspective means nothing else, then within a 5-year horizon, we now see enough taxable income in our holding company so that we are able to start recognizing the deferred tax asset with every year that we now go forward, that requirement then by definition is fulfilled. And therefore, going forward, you indeed should expect the tax rate to then come down fully to the 22%. And then in the following years, even to 20% because, at least as of today, the expectation in Türkiye is that the income tax rate will be lower to 20% margin range again.

So overall, can we say that you'll continue to see earnings benefits from the tax line and the financial expenses line throughout 2020? Is that fair?

Correct. That's -- yes.

[Operator Instructions] The next question comes from Ekaterina Smyk from Bank of America.

I just wanted to ask another question regarding your strong massive, I would say, free cash flow generation in the fourth quarter. I understand that part of it was driven by one-off things. But I'm just interested what amount can be is reversible? The positive -- like what are the positive contributions that had that supported sequential in the fourth quarter and can be reversed in the first quarter? For example, like unpaid CapEx, what's the amount of unpaid CapEx rolling over into the next year or any other ones.

Okay. Yes. I'll try to answer that question. Honestly speaking, I think it is inherently difficult to make a cash forecast for a single quarter, simply due to the regulatory mechanisms that we are subject to and let's say, our inability to control tariffs. And ultimately, tariffs for us are cash collections. We are not the ones setting the tariff. It's the regulator setting the tariff. So in principle, this can be as surprising to us as it is to you. We know from a regulatory mechanism perspective, that cash is never lost but only delayed. And as long as the delay is paid to us in terms of financial income, we don't necessarily mind the delay, but that makes the individual quarter -- that makes the individual quarter forecast for cash flow very difficult and not very reliable. So let me try to guide you slightly differently. What I said before is for the year 2020, expect that our net debt level will remain roughly flat. What does that actually mean? That means that from a cash perspective, we should be balanced, i.e., we should be able to finance everything that we need CapEx and dividends by the operating cash flow that we generate internally. So the dividend payment for this year is now proposed. So we have that in the presentation in front of you. The CapEx, today, we are not able to give you a number yet. However, we already indicated to you, it is going to be a higher number than what you have seen in 2019. On interest and tax, I mean I think tax, that's a question of what your earnings expectation is, but if earnings are increasing and most likely, our tax payments are increasing as well. On the interest side, interest payments hopefully are reducing because we would not expect a higher net debt level and if our average rate declined, then so should our interest payments decline. And therefore, whatever number you get from that addition, this should be basically our operating cash flow for the year 2020. If that were not true, then my statement regarding the debt would not be true. So this is a way of almost reverse engineering, basically, at least a reasonable guideline for our cash situation in 2020.

There are no further questions in the conference call. We can now switch to the written Q&A.

Yes, let's do that. Okay. Then let me just read the question out loud, for everyone hears us. The question is what should be expected regarding price equalization effect in 2020, given that we saw a very significant reversal in price equalization in 2019, which was one of the key reasons why we saw such a strong cash flow from our Retail business in the year we just lost. The answer to that question is, naturally you should not expect to see a significant effect, at least not a positive one. Simply because there was not a significant negative one in 2019. So there is no reason to expect a significant reversal of that in the year 2020. However, what we can -- are not able to say right now because that, again, is not in our control is whether tariffs in the development over the next 4 quarters, will always be fully cost reflective at any point in time. If they are not, for whatever reason, then we would build up again a price equalization receivable and therefore, you would see a negative price equalization effect in our cash flow reconciliation. We currently do not see any reasons for this because we do not expect a significantly volatile power price environment, as we have seen in the year '18, especially. So in the absence of that volatility, there is no reason to expect a big difference between tariff levels and procurement prices. Furthermore, we also currently are not in front of, let's say, a politically charged environment in Türkiye in the form of elections also. So also that does not give any reason to expect, let's say, a political behavior in the short term. And therefore, I would say from today's perspective, this should not be a key topic that you will hear us discussing in the year 2020. Okay. I think that was the only written question moderator. Are there are any further questions from the audience?

We have no other audio questions.

Okay. In that case, I think then we would close the call, given also that we now reach the full hour. Thank you very much for participating and taking the time to listen to the call and asking your questions. And we look forward to see you on the road.

Ladies and gentlemen, this concludes today's webcast call. Thank you for your participation. You may now disconnect.