MTN Group Limited (MTN) Earnings Call Transcript & Summary

Good afternoon to everybody, and welcome to MTN Group's results for the 6 months ended June 30, 2022. I trust you're all safe and well as we continue to navigate life as we currently know it. My name is Thato Motlanthe, and I'm the Head of Investor Relations for the MTN Group. And it's my pleasure to welcome you to this afternoon. I'm pleased to say that we're moving forward in hosting in-person events, given that the COVID restrictions have been lifted. And I'm happy to be joined by a slightly bigger crowd this afternoon, which includes some MTN colleagues as well as a handful of shareholders who have agreed to come in today. A warm welcome also to the MTNers across our markets as well as everyone who's dialed in through the webcast and listening in and tuning in on BDTV, or the MTN Group YouTube channel. In terms of housekeeping, let's start with that, on the screen, you should be seeing our standard disclaimer and safe harbor statement on the screen, and that covers the presentation for today. And for those of us in the auditorium in the case of an emergency, just to remind you, there's an exit door to my right and one at the back. So just turning to the period under review. For the 6 months past, we have brought continued challenges across the globe for companies, including MTN. And our business has been fairly resilient, as you have seen from our results. And I think it's a testament to the teams across the MTN markets who have continued to roll up their sleeves in meeting these challenges. I think that's enabled MTN to lead in the current environment that we find ourselves in. We're driven by the belief that everybody deserves the benefits of a connected life. Turning to the agenda for today. The program will run as follows: MTN Group President and CEO, Ralph Mupita, will come up, and he'll give us a strategic and operational overview. Following this, Tsholo Molefe, Group CFO, will come and give us some financial highlights, and then Ralph will come back to the stage to give us some of the key focus areas for the coming year. We'll then open up the floor to questions for Ralph and Tsholo. And just to note for those of you who've dialed in through our webcast, you're able to submit your questions through that platform, and we'll then read them out for you. Finally, for those of you who are tweeting during the session, the hashtag is MTNINTERIMS22, and for our Twitter handle is @mtngroup. And I think at this point, it's my pleasure to welcome Ralph on the stage. Thank you.

Thato, thanks very much and extending my own appreciation to everybody who has taken the time to dial in. Firstly, thanks to the 17,000 MTNers across our 19 markets, who produce the excellent results that Tsholo and I have the pleasure to share with investors. We trust that you've had opportunity to go through our comprehensive SENS document. It covers the detail around how we've delivered in what was quite a challenging macro set of conditions, which I'll talk to. So to the MTNers, extending my appreciation for all the hard work that you've done to deliver these results. Before I talk to the operational and strategic review, just to start with the operating context that these results were delivered enormous amount of geopolitical, macroeconomic and regulatory challenges that we faced in the 6 months under review. And we've put them into 4 main buckets or factors that impacted our operating results. Firstly, the macroeconomic conditions, I guess, they're all well known to those who are listening in. Elevated inflation, rising interest rates were common themes across pretty much all our markets. There was weakness in local currencies against the U.S. dollar and for many against the rand, and the availability of ForEx, particularly in a market like Nigeria was quite challenging during the period. Supply chain was another factor that we had to contend with. Supply chain disruptions, delays in shipping of radios and essential equipment experienced particularly at the start of the Ukraine crisis. And we've also had to deal with challenged availability of high-end devices, given chipset shortages across the globe. Within our sector, we had to contend with regulatory developments. The main ones really being around SIM registration directives that have come into key markets, particularly in Nigeria and Ghana. For both of those directives we, as MTN are fully being in compliance with. And then we have to deal with new mobile money taxes in a couple of West African markets. Firstly, Cameroon, also Benin and then in quarter 2 of the period under review, a 1.5% electronic levy implemented in Ghana. The final set of conditions that we had to deal with were really related to energy and power. And obviously, with many of our networks relying on diesel, we did see pressure in the cost of delivering our services from rising our network costs. And in South Africa, particularly, we did have on-grid power constraints, that in May and June were particularly challenging, affecting the level of network availability that we are used to. Just to give stakeholders a comparison, in South Africa, we have a grid that was designed for power -- 100% on-grid power, and you've got to juxtapose that with Nigeria, which is grid with 17,000 towers that runs 95% on diesel and generators. So the challenges for South Africa were quite severe, particularly in quarter 2, we experienced Stage 2, Stage 4 and Stage 6 levels of load shedding in the last 3 to 4 weeks of the half -- sorry, of June. So these are the conditions that we operated in. And under those conditions, we had very strong results that we delivered. And I'll position these results under 4 main categories: solid operating performance. And some of the key metrics that we look at, which gives us the confidence around the investment case of MTN is continued net subscriber growth that we've seen, up to now 282 million subscribers across our footprint. So that's an addition of 9.2 million subscribers. Data growth across our network averaged 43.3%, showing the continued demand for our services and the level of low Internet adoption that is still within our markets. And then, the fintech ecosystem continues to expand and grow. If one looks at the transaction volumes that we saw at over 6 billion transactions in the period, that grew a very healthy 31.5%. The pressure of new mobile money taxes as well as a decision that we proactively took to cut P2P pricing to maintain our competitive positions impacted the service revenue in fintech that was recorded, and Tsholo will cover that in a level of detail. So that -- those are the main points from an operational highlights point of view. On strategic priorities that we have set out as part of Ambition 2025, a couple of points to mention. The fintech and fiber structure separations are progressing well. We are seeing progress in our drive for localization in key markets, and we did conclude transactions in this period in Ghana, specifically to lift up the local shareholding to 23.7% in the period. And we have received a binding offer for 100% of MTN Afghanistan. It has been part of our strategy to focus on the African continent and exit, in particular, the consolidated subsidiaries that we previously had in -- sorry, in MTN, looking at our exits that we've already completed in Syria, Yemen and now having the binding offer, which we are in progress in terms of working through the issues related to getting to a final share purchase agreement. In terms of the financial resilience of the business, it's actually not just been maintained, it has been improved during the period. We've seen continued faster deleveraging. The holdco leverage is now at 0.8x. You all will remember that our target is to be less than 1.5x. So having a comfortable cushion on leverage is something that we've been able to achieve, supported by the cash upstreaming that we received in the period of about ZAR 12 billion, as I mentioned, ZAR 4.5 billion of that coming through from Nigeria. Continued expense efficiencies have helped us create buffers to deal with the inflation pressures and we've been able to register margin expansion in the period. And the liquidity position of the company is very healthy at just under ZAR 56 billion, which is the composite of the cash that we have as well as committed facilities. So the financial resilience is not only maintained, but actually has been strengthened. And in view of all of this, we are very mindful of our social responsibilities as MTN. We've continued in the way that we've invested in our networks have also brought the average price of data by 22.5%, continued to drive broadband coverage and contributing fiscally to nation states, paid cash taxes of ZAR 7.3 billion in the period. So these are the results that we achieved in summary, and Tsholo and I will take you through some of the details. So I won't spend too much time on the financial highlights. Tsholo will take you through them. Suffice to say that we are trading largely in line with our medium-term guidance. Service revenue at 14.8% constant currency is in line with our medium-term guidance, driven by very strong data growth, contributing ZAR 34.1 billion to overall service revenue. fintech, as I mentioned, underlying dynamics, very healthy. The growth of 14% was moderated by the P2P cuts that we took to maintain competitive positions in key markets as well as the impact of mobile money taxes. But we still feel that, that business is on the good -- on a good growth trajectory as we progress forward. We're able to eke out efficiencies as well as operating leverage to have 0.3% EBITDA margin expansion. And from an earnings point of view, very healthy underlying earnings growth of ZAR 0.661 per share, growing at 30.9% in the period. We accelerated CapEx. This time last year, we're talking about a CapEx envelope of just over ZAR 11.5 billion, and we've done ZAR 17 billion in this period, particularly accelerating CapEx in Ghana and Nigeria. And we see the data growth in both markets, reflecting that -- the investments we are making particularly in the transition from 3G to 4G networks is generating returns. As I mentioned, we've got very strong performance on the holdco leverage. Now it's 0.8x. And the underlying operating free cash flow has remained strong, growing at 24%. The reported free cash flow, as you'll see from Tsholo was impacted by the investments that we made in accelerating CapEx, but also procuring spectrum in South Africa and in Nigeria over the period, which we believe positions us well to remain competitive as we move through the technology cycles of 3G, 4G and ultimately 5G. And one of my favorite KPIs, many of you remember, we introduced ROE as a KPI at the end of 2018. It was 11.5%. Today, we're talking about an ROE expansion by 4.6% to 24.2%. So very healthy growth in underlying returns for our stakeholders. But Tsholo will cover that in a lot more detail. So covering our markets, just a couple of key points South Africa had very strong results, which Tsholo will cover in a very challenging macro. The constrained power supply as well as the case within floods that we experienced in April really were put pressure on the business. But business was still able to deliver a very solid service revenue growth, margin expansion as well as profit growth as Tsholo will cover. The main activities really were continued investment in 4G and also accelerating 5G, I think Charles and team are pretty close to the 20% top coverage for 5G already. And we appreciate the accolades of MTN being seen as having the best 5G network. As I mentioned, quite a lot of our time was focused around ensuring the network remained resilient. And we had implemented a multiphase program to ensure that the network resilience is improved over time, and we're able to get back to the world-class levels or network availability that we believe our customers have become used to. Obviously, a feature of the period was us securing the multiband spectrum in the 800, 2600, 3500 bands. We paid ZAR 5.2 billion in the Spectrum auction, again, positioning us well for continued growth across our markets. And what we also experienced, we've often spoken about our own internal measures of market shares. We did pick up in the half probably about 0.5 percentage points of market share based on our bidirectional market share analysis and maintaining the #1 NPA position. And many thanks to Charles and the team for the very solid results and Tsholo will cover the numbers a little bit later on. If we move to Nigeria, Karl and the team reported results recently. Again, the main points around the macro were related to paucity of ForEx as well as dealing with the new in SIM directive that came in at the end of March, early April, where we had to disconnect 19 million of our subscribers from circuit switch voice. We've seen very good and steady progress that's encouraged us that we should see in the second half a revenue profile that looks more like quarter 1 as opposed to quarter 2. As I mentioned earlier on, we did accelerate CapEx, ZAR 7.6 billion. So the majority of the CapEx that we deployed actually in the period was in Nigeria. And we're very pleased that we were able to have a successful launch of the MoMo PSB, very good growth we experienced in the first 6 weeks of launch, and very encouraged by the progress. This has been something that we've been talking to investors about. So now that we've launched that, and obviously, at the -- with full year results, we'll have more to say around the progress of that business. Again, very healthy data traffic growth, 79% data traffic growth over the period. We've also increased our 4G coverage. This time last year, 4G coverage in Nigeria was about 65%. It's now 75%. And again, a #1 NPS position overall as well as the network in Nigeria. Across our other markets, we saw strong overall growth, but each region experienced different pressures, and there were some nuances within the results. In the SEA region, we saw, in particular, voice pressure in a market like Uganda. But what we did also see in Uganda was an improving fintech profile after the introduction, again, of mobile money taxes in prior reporting periods and saw a very healthy fintech growth in Uganda of above 20%. Rwanda, again, very good top line growth. In Rwanda, we don't have 4G. 4G is delivered through a wholesale open access model. And the cost of that come through the P&L. So there was a bit of margin pressure as we offloaded more of the traffic on to the 4G network. And those will be some of the key features in SEA. WECA, obviously, very strong overall growth in Ghana as reported in recent periods. But pressure, as I mentioned earlier on, introduction of new mobile money taxes. The competitive position in Côte d’Ivoire is very encouraging for us. Service revenue growth in Côte d’Ivoire is approximately about 1%, but that's got many layers to it. We saw 27% growth in data traffic. So the data traffic growth in Côte d’Ivoire has been very healthy. And we are hurdling some of the P2P price cuts that we took to maintain our position in Côte d’Ivoire. What I can say is that we have a recovery plan in Côte d’Ivoire that's tracking broadly in line with our expectation. And we are seeing in terms of sub growth in mobile money in Côte d’Ivoire that's up about 37%, and the transaction volumes there are over 104% in the same period. So we should see revenue growth back at the end of the final part of quarter 4 as that recovery plan in Côte d’Ivoire takes traction. In MENA, I'll highlight the fact that MTN Irancell is growing very strongly. That service revenue growth of 32.4% was supported by an EBITDA margin expansion of 42.6%. So in a very challenging environment, that business continues to grow. And the Snapp business continues to be a market leader with over 3.3 million rides a day in the Iranian market. So very solid growth from MTN Irancell. So just moving to the fintech ecosystem. As I mentioned earlier on, we are still strongly encouraged by how the ecosystem is expanding. And one measure of the expansion is the level of volume of transaction, which I mentioned earlier, up by 31.5%. Transaction value at $116 billion equivalent was 1% up, but in constant currency was 11.7%. We've seen good growth in subscribers, agent and merchant expansions during the period. And we've spoken at the end of last year that one of the things we're focusing on is the transition from USSD to much more amplified experience. These are small numbers, but they are indicative of growth. At the end of last year, only 3% of our mobile money users were regularly interacting on the app, and at the half year, that's moved to 6%. So these are some of the numbers that we watch in terms of the progression and the expansion of our fintech ecosystem. Two important points around fintech that I would like to highlight. Firstly, very good progress towards the structural separation from our GSM business of the Opco fintech businesses. So 13 of the 16 markets have completed. So we only have 3, and that will be South Sudan, Liberia and South Africa. The rest the progress has moved on quite satisfactory. And the second point I'd raise is that we are exploring on a very bespoke basis strategic partnerships into the MTN Group fintech structure. We'd always said one of the ways for us to accelerate the development of the fintech business is to bring partners with capabilities, not really looking for financial investors, but institutions and partners who know this space, who can help accelerate. So that process has begun. And the outcomes of that we will be sharing before the end of the year. So those are 2 important points around the fintech ecosystem. In terms of accelerating portfolio transformation, 3 major points to raise with these results. Firstly, we concluded the SA tower transaction, where IHS would take operational management of 5,700 of our towers and deliver power as a service across our portfolio. And they already started in this month to take over operational control from Charles, Michael and the team. And that transaction, as you well remember, had net proceeds of ZAR 5.1 billion. The second point would be that we've made further progress in localization efforts, particularly Ghana, where we've completed transactions, selling some of the -- our shareholding to pension funds, but we've also sold to 5 SVPs of a strategic partner in nature. We have vendor financed. And now we are at the level of localization, 23.7% against our target of 30% further localization. The third point would be really around the progress we are making towards exiting the Middle East. As I've mentioned, binding offer now received, and we are in the process with a third party in discussing issues related to SBA, and that obviously will be subject also to regulatory approvals. The exit of the consolidated subsidiary allows us to reduce our footprint, focus our resources on the African continent. With respect to Irancell, I mean, this business will remain as a financial investment that we have a 49% shareholding and managing for value, as I said, this business has been growing very steadily in a very challenged environment. So we are making progress towards the portfolio acceleration, in line with the commitments that we've made to stakeholders. Finally, before I hand over to Tsholo, just to comment on what we've promised stakeholders, in particular, shareholders. We are tracking largely in line with our commitments in terms of service revenue, pretty much meeting our commitments of mid-teens group service revenue. And South Africa performing well within the guidance range. Strong growth, as I mentioned, given the challenging macro. So we saw really good growth on postpaid. We saw good growth actually in the enterprise business. The prepaid market was a bit under pressure. And in Nigeria, just a smidgen below the 20% target that we've set for Karl and the team. Accelerate fintech platform growth. As I mentioned, the ecosystem remains very healthy, but we're taking a bit of revenue pressure as we've cut P2P pricing and these mobile money taxes have come into effect. As I mentioned earlier, we feel pretty confident that we will lap some of these effects and get back to growth, particularly if we look at what we are seeing in MTN Ghana -- sorry, MTN Uganda, where we're seeing that the growth levels are back very strongly. Holdco leverage, very healthy. Asset realization, we'll put a cross for ourselves because we have wanted to have pushed ahead with Series 2 in Nigeria as well as IHS, but market conditions are not right for us to progress with those transactions, but 15.8 billion out of 25 billion is still a good achievement. And as I mentioned, ROE in the right direction, improving towards 25%. So let me now hand over to Tsholo, who will take us through the detailed financials, and I'll come back in closing to provide some comments as we look ahead. Thanks, Tsholo.

Thank you very much, Ralph. A very good afternoon to everyone here in person as well as those that are joining us on various platforms. And hello to all our MTNers, it's good to see all of you here today in person. And of course, those are on platforms, thank you very much for joining us. I'm going to take you through the financial performance for the first half of the year. I'll cover, firstly, the material items that have been as well as the significant one-offs that have impacted the reported results. I will then cover the salient items on the group income statement specifically. I will also share with you the performance of 2 of our major markets, SA and Nigeria. I will also then take you through the income -- salient items on the income statement in a bit more detail and then share with you how we've utilized the sources of cash that we've generated, how we improve the balance sheet as well as how we've improved returns for shareholders. So if you turn to material items that have impacted reported results, there are essentially 2 items to highlight here. Firstly, on the macroeconomic environment, we've seen volatility of currencies in the markets that we operate in. In particular, we saw the stronger rent on average exchange rates, resulting in a negative 2 percentage point impact on reported group service revenue relative to constant currency. But closing weaker against the dollar was impacting our balance sheet items as well as holdco leverage. We also saw ForEx losses of about ZAR 2.4 billion as a result, that's impacting finance charges. The second material item to our numbers -- that material impact to our numbers was really rising inflation and high energy cost due to the macro challenges that we've seen. We saw upward pressure on our operating expenses. We've also seen significant once-off transactions that have impacted these reported items -- that has impacted the reported results. And a couple of items to note here. Firstly, we recognized an accounting gain on disposal of the SA Tower of about ZAR 261 million with a net cash proceeds of ZAR 5.1 billion. MTN Afghanistan has now been reclassified as held for sale. As a result, goodwill as well as investment impairment losses has been recognized totaling ZAR 945 million. Upon completion of the disposal of Afghanistan, we expect that the FCTRs, which have a foreign currency translation reserve gain of about ZAR 674 million will be released to the income statement. So the significant once-off items have had an impact on our expenses, our EBITDA, EBIT as well as headline earnings per share. If we then move on to the income statement for the period. On the right-hand side, you will see we're showing the movement year-on-year, both on reported as well as in constant currency. We delivered service revenue growth of 12.8% to ZAR 92.5 billion on a reported basis and 14.8% growth to ZAR 91.6 billion in constant currency. And this is in line with our medium-term target and was largely driven by double-digit growth from Nigeria and Ghana. We also saw a healthy top line growth in all our regions contributing to the overall service revenue growth. On a reported basis, EBITDA before once-off items, which I mentioned in the previous slide, grew by 13.7% to ZAR 44.1 billion; and in constant currency, EBITDA increased by 15.1% to ZAR 43.84 billion. This was really driven by healthy operational results across all our markets. The increase that you see in depreciation, amortization and goodwill was moderate at 3.1%, and it was mainly due to CapEx additions, goodwill impairment on Afghanistan, but set off by the transfer of SA Tower assets, which, as I said, held for sale, which are no longer being depreciated. Net finance costs increased by 7.7% in constant currency, and this was largely due to ForEx losses of ZAR 2.4 billion, as I indicated, increased borrowings largely from Nigeria at slightly higher interest rates, which led to the increase in the average cost of borrowing. The share of results from associates and joint ventures increased by ZAR 8.2 billion -- 8.2% -- sorry to ZAR 1 billion, driven primarily by the underlying performance from MTN Irancell. Income tax expense grew by 34.9% year-on-year, and this was largely due to withholding taxes that were higher on the -- as well as taxes paid on the sale of SA Towers as well as an increase in nondeductible expenses. We had group effective tax rate reported at 44%, and this was largely due to higher profits generated, the utilization of deferred tax assets not previously recognized. And on a normal basis, our group effective tax rate was about 37%, which is really in line with our guided range of mid- to high 30s. There was also a significant increase in noncontrolling interest of about 57% during the period, and this was largely due to higher profits, but also the localization that we did in Nigeria, Ghana as well as Uganda. Adjusted headline earnings increased by 30.9% in the period, and this was really positively impacted by the adjustments of nonoperational items totaling ZAR 0.94 per share, and I will unpack that in a later slide. I will now unpack our group service revenue growth in more detail. As you can see, data was the biggest contributor of growth followed by solid growth from fintech as well as voice now showing moderate growth. Voice, as you can see, grew by 1.9%, and this was really supported by voice traffic of 2.4% increase year-on-year and was negatively impacted by the performance of MTN South Africa as customers migrate now to voice over IP and also due to the general economic pressures that in South Africa. Data revenue grew 35.9% and this was driven by a surge in data traffic of 43.3% and really underpinned by active data subscriber growth of 16.1 million, closing the year at 130 million subs. Digital revenue also increased by 6.7%, supported by improved uptake of our digital offering. Fintech grew by 14%, and this was driven mainly by the base growth of 24%, taking us to 60.7 million users. We also saw wholesale revenue growing by 6.5% with steady national roaming performance, particularly in MTN South Africa. Other revenue, which includes mainly as well as enterprise connectivity group 24.3%, benefiting from increased data usage at the back of strong performance in fixed access data, cloud and security as well as hosting services, particularly in South Africa and sometime around that we're starting to see in the SME segments in other markets. Before I continue with the group elements of -- with other elements of our group performance, I would like to just touch on South Africa in a bit more detail. As you can see, this slide illustrates the service revenue expenses EBITDA as well as CapEx during the period under review. As you can see that MTN as I indicated, delivered 14.1% increase in service revenue overall. And if I impact this further, voice revenue, you will notice that declined 7.5% year-on-year. As I indicated, the decline was in line with the steadily declining voice revenue trends we see in the market due to growing VoIP as well as data substitution. This was also driven by network interruptions due to load shedding impact in South Africa. And as I indicated, the general economic pressures on consumers. Data revenue grew by 14.6%, supported by a 41.5% increase in data traffic as well as growth in data -- active data subscribers of 15.3%, now totaling 18 million subscribers. SA experienced strong digital revenue growth at 8.3% and the trend is expected to continue as we see RMS increasing by 52.8% during the period. Fintech's revenue, which comprised airtime lending fees specifically, had a slight decrease of 0.9% as customers also start prioritizing spend due to the economic pressures. Wholesale revenue was broadly flat, but impacted mainly by the decline in Cell C revenue. MTN SA recorded ZAR 1.2 billion roaming revenue during the period, which was down 9.3% relative to the same period last year. We do continue to account for Cell C on a cash basis and still had some unrecognized roaming revenue close to about ZAR 300 million. Looking at expenses for SA, you can see that cost of sales grew by 8.3%, and this was mainly due to device cost of sales which grew by 13.2% due to increased subsidized devices to remain market competitive. Device gross margins also declined to -- close to about 7 percentage points as a result. Commission expenses were also up in South Africa by 5.1% due to device distribution and activation commissions during the period. Operating expenses was broadly in line with inflation, increasing by 6.1% due to increased network and operating expenses, which were up 13.9%, predominantly in rent and utilities and maintenance. We've had additional expenses for generator fuel particularly as we cushion the impact of load shedding that we experienced in the period. MTN SA EBITDA margin, as a result, declined by 0.6 percentage points to 14.8%. Amidst this, however, we've seen a very good contribution or a contribution towards expense efficiency in South Africa. We saw a ZAR 3.2 billion spend in terms of capital expenditure, excluding leases with a total of ZAR 9.6 billion, including IFRS 16 leases of about ZAR 5.1 billion from the SA sale and lease back of the towers to IHS. The CapEx excluding leases was in support of the continued investment that SA continues to make in 3G and 4G sites as well as touching the acceleration of the rollout of 5G, a total of about 443 a tonne during the period. This resulted in CapEx intensity of about 13%. In the next slide, we can see that all of MTN South Africa's business units really delivered healthy and sustained growth. So just a few comments to make here. Encouragingly, you can see that the consumer prepaid business was up 1.2% in the first half. This was also supported, as I indicated earlier, by strong data consumption, but partly offset by the pressure that we've seen in voice revenue. The consumer postpaid business also delivered service revenue growth of 5% in a challenging environment driven by growth in subscribers as well as sustained uplift in data consumption. Enterprise service revenue remained on a strong positive trajectory, up 20.7% in particular. The strong mobile growth in enterprise business benefited from strong data and product proposition as well as distribution channel expansion, while the growth in ICT business was mainly driven by the strong recovery in connectivity. If we move on to Nigeria, most of you will have seen the reported results sometime last week, so I will briefly touch on just the salient points here. MTN Nigeria delivered another solid performance with double-digit service revenue of about 19.9% in constant currency with voice, data and fintech being the main drivers of growth. You can see that voice delivered 2.9% increase in service -- voice revenue delivered 2.9% increase due to higher usage in this active SIM base driven by improved network quality with a 5% increase in minutes of use from the existing base. The total subscribers increased by about 7.6% year-on-year despite the ongoing effects of the [ new ] SIM registration requirements. We saw strong data revenue growth of 52.5%, underpinned by increased usage from the existing base with impressive data traffic growth of 79.3%, supported by acceleration of 4G rollout in particular and enhanced network capacity. When we look at fintech revenue, we see a commendable growth of 27.8% due to sustained growth in the use of extra time in particularly up 26.6% and the use of product fintech services by consumers. If we then look at the total expenses, we see an 18.8% increase largely from cost of sales growing by 22.9%. And the cost of sales was largely driven by higher commission and distributions, which were up 17%, and this is due to increased airtime sales as well as activation commissions following a year-on-year increase in gross commission that we -- gross connection sorry, that were lower in the prior year. So the prior year low base was really associated with the NCC ban on SIM sales. We also saw aggressive data device sales coming from Nigeria relative to last year following the lifting of the ban on SIM sales. Regulatory fees also went up by about 19.8%, in line with the increase that we saw in service revenue. When we look at OpEx increase, we saw 16.6%, broadly in line with Nigeria inflation due to higher network costs from accelerated site rollouts, the rising energy costs as well as the devaluation of the naira and the CPI impacts on the PTS lease rentals. MTN Nigeria continues to implement the expense efficiency initiatives and aimed at driving margin expansion, and we saw margin expansion of about 0.5 percentage points during the period, ending at 53.6% EBITDA margin. This was despite the impact of high energy costs due to the macro, which impacted the margins by about 0.3 percentage points. Capital expenditure in total was ZAR 11.5 billion with about ZAR 7.5 billion on CapEx, excluding leases, as I indicated, driven by the acceleration of 3G and 4G sites with CapEx intensity of about 21.5%, excluding leases. If we now look at the fintech business in a bit more detail, you will see that fintech now contributes 9% to total group service revenue, and it rose by 14% in the period as we continued to scale up our mobile financial services. The growth in fintech during the period was impacted by the introduction of the e-levies and MoMo taxes in our markets as well as pricing pressure due to increased air competition. Despite these challenges, we are pleased that we managed to maintain a growth in active users of 24% to 60.7 million active users. The bulk of the fintech revenue came from with global services at 60% of the total fintech revenue, which declined from 65% in the same period last year, while payments and e-commerce contribution increased from 11% to now 14%. EBITDA growth of 4.6% is really in line with the solid service revenue growth with pro forma EBITDA margins at about 42%, declining from 3.7%. And this is largely because our EBITDA margins were starting to see a rebase as the growth picks up and we start allocating the full cost of -- associated with running business. Importantly for us is tracking the adjusted free cash flow, which grew by 2.1%, which is a key metric given the economic of the business, which is capital-light. So EBITDA conversion to cash flow is a very important metric that we look at, which is strong during the period. Now if we go back to the group expenses, you will see that the group expenses were well managed in a very challenging macro environment. In the first half, our cost of sales was up by 11.5%, largely driven by the increased commission and distribution, as I mentioned earlier, mainly in Nigeria, Ghana, Uganda as well as increased handsets, as I indicated in -- largely in Nigeria and South Africa specifically. The main drivers of commission and distribution have indicated them, and it was really due to increased activation commissions and increased sales in particular. We saw the introduction of new dealer commission structures in some of the markets as well and also the impact of growing our MoMo business. Looking at operating expenses, we see an increase of 15.6%, and the main impact has been on our network expenses as a result of high inflation and high energy cost due to the macro challenges. We saw the effect of ForEx and [ supply ] some of our tower contracts, thus increasing the network costs. OpEx growth was also driven by litigation -- higher litigation cost, particularly in the MENA region, increased professional fees as we accelerate our initiatives on Ambition 2025. So we do look at measures that we can put in place to contain inflationary pressure. We continue with our continuing -- we continue to with our efficiency program and to be capping these inflationary pressures. During the period, we managed to realize ZAR 1.9 billion worth of efficiencies with the largest savings recorded being from MTN South Africa, MTN Sudan as well as MTN Nigeria. These savings in OpEx were largely in the mobile and IT roaming as well as sales and distributions in particular. So far, we've been able to achieve about ZAR 5.6 billion, well in excess over ZAR 5 billion medium-term target that we had given. The results of the [ EEP ] can also be seen on the improvement of the total cost to revenue ratio that you see on your right-hand side now at 54.7%, which has improved from 57.2% since the introduction of our cost-saving initiative. We will continue with these measures to contain inflation, really focusing on renegotiation of inflation indexed contracts, pricing negotiations to leverage economies of scale, staff optimization initiatives as well as digital transformations. If we look at our group EBITDA and group EBITDA margin. On this slide, you can see that the drivers of group EBITDA in absolute terms and in terms of the margin, overall group EBITDA on our underlying operations was 15.1% in constant currency. The growth was broad-based really across most markets led by the performance in Nigeria, the WECA as well as the MENA region with a growth in WECA mainly being from Ghana. The group's reported EBITDA margin slightly improved to 45.3% before once-off items. At an operational level, the EBITDA margin expanded 0.3 percentage points -- with 3 percentage points with positive contributors from all the markets, except for SA and SEA region, as I indicated. The margin expansion was supported by really solid service revenue growth and our expense efficiency program as well. Looking at the headline earnings pressure, in particular, you can see that this analysis provides a reconciliation of the attributable earnings per share through to adjusted headline earnings per share, which gives more visibility on operational performance. The difference between the attributable earnings per share, which grew by 200.7% and basic headline earnings per share, which grew by 46.5% is due to the significant transactions mentioned earlier, such as Afghanistan impairments and the gain on disposal of towers, really resulting in a basic headline earnings of ZAR 0.567 per share. A further adjustment on the reported headline earnings per share for ForEx losses as well as IFRS 2 charge in Nigeria, specifically in Ghana, specifically, resulted in adjusted headline earnings per share of ZAR 0.661, giving us an increase of 30.9% increase, which is really an indication of positive operational earnings momentum and the challenging trading conditions. If we then move on to CapEx, we can see that we capitalized ZAR 17 billion during the year across the market, achieving a CapEx intensity of 17.5%, excluding leases. We accelerated the rollout of 3G and 4G sites in support of the growth that we are seeing, mainly in markets like Nigeria, Ghana, South Africa and Uganda. We also rolled out a total of 1,700 3G sites and just over 7,900 4G sites and also accelerated 5G sites, mainly in South Africa, adding to a total of 530 sites and also improved on the modernization of our network. So the network connectivity CapEx, which is the [ run ] transmission core inside infrastructure, as you can see, accounts for 74% of the total CapEx with the balance being investments in IT, including the development of product tools to support our growing platform business, accounting for 26% of the CapEx. We focus on investing really in faster-growing areas, and we accelerated the CapEx to also mitigate the supply chain as well as the foreign exchange volatility. Our group CapEx guidance for 2022 has been revised up to ZAR 35.3 billion due to change in currency assumptions as well as accelerated CapEx to support the growth that we are seeing. However, we do expect that CapEx intensity will reduce over the medium term as the business continued to grow with group CapEx intensity anticipated to move from 18% to about 15% over the medium term. Moving on to our cash flows. As you can see, operating cash flow before the spectrum acquisition, as Ralph indicated earlier, grew by 24% with spectrum acquisitions, particularly in Nigeria and SA amounting to ZAR 7.3 billion. This led to operating free cash flow decreasing by 76.1% and was also impacted by the accelerated CapEx and pressure on working capital due to advance payments to vendors to cap against the impact of ForEx as well as advanced ordering of material to manage supply chain shortages due to the global crisis. So in the first half, we saw ZAR 4.3 billion of working capital outflow, largely due to those timing effects relating to payments to vendors as I indicated. Working capital does remain a key priority for us as we continue our efforts to preserve cash in the macroeconomic environment. And we expect to minimize this impact on the working capital in the second half with a number of cash release initiatives looking at supply chain financing and handset receivable financing, among others. The key cash outflows that we saw include taxes paid of ZAR 7.3 billion, and this included the tax paid on the SA Tower proceeds, net interest paid on borrowings of ZAR 5.2 billion as well as payments for CapEx as I indicated. The movement in financing activities of ZAR 523 million was largely driven by a net inflow of borrowings of ZAR 2.4 billion and settlement of lease obligations of ZAR 3.5 billion. During the year, we actually had borrowings -- new borrowings of ZAR 8.1 billion, which has offset settlement of ZAR 5.8 billion. This was also impacted by the net inflow of about ZAR 569 million, mainly for the purchase of treasury shares and proceeds from localization. Other investments of ZAR 5.6 billion were mainly driven by the proceeds from disposal of SA Towers, ZAR 6.4 billion, and this was impacted by the outflow of restricted cash in Nigeria of about ZAR 2.6 billion and the realization of some short-term investments of about ZAR 1.4 billion. Other of ZAR 533 million relates to the cash balances sitting in Afghanistan that we've now classified as held for sale, therefore, reducing the group cash balances. Moving on to the holdco debt. We continue to improve the strength of our balance sheet, with progress on upstreaming and faster deleveraging of the holdco. On the top left-hand side, you can see that the progress -- you can see the progress that we've made in the last 3 years in reducing the holdco net debt now sitting at ZAR 28 billion from ZAR 55 billion in 2019. The group leverage was maintained at 0.4x since the previous year and improved from 0.8x in 2020, supported by strong cash positions, while the holdco leverage improved to 0.8x from 1x last year, but also improving from 2.2x in 2020. Holdco leverage was positively impacted by the progress that we made in upstreaming cash from markets, in particular, a significant cash upstream from Nigeria of about ZAR 4.5 billion. We have also made improvements in our debt mix with 58% of our debt now being denominated as we continue to reduce our exposure to U.S. dollar debt and improve the funding mix at the holdco level. We have a healthy maturity debt profile as you see on the top right on our ZAR denominated debt at holdco level. Our U.S. denominated debt is made up of the Europe bonds maturing in 2024 as well as 2026. With a combination of current market conditions as well as our cash position, we have an opportunity now to -- for an early part payment of the U.S. debt through liability management, which we are exploring. Now to conclude on my presentation, let us look at the progress we've made on the ROE. We see an increase from 19.6% in December 2021 to 24.2%, largely driven by operational earnings growth from the consolidated subsidiaries. The notable drag on ROE were a higher group effective tax rate of 44% and movements in noncontrolling interest, driven by the Nigeria, Ghana and Uganda, and localization reduction in shareholding, included in other nonoperational items largely attributable movements directed to -- directly in equity. Items that impacted ROE positively were the FCTR movements with an impact of about 0.8%. This was due to the devaluation of currencies across various markets and most notably Ghana. The devaluation loss on our investment in IHS has also resulted in a 1.2% point impact. We are pleased with the ROE evaluation -- evolution, sorry, which is improving towards the 25% target that we have over the medium term. Ladies and gentlemen, that ends my presentation. I'll hand over to Ralph.

Thanks very much, Tsholo, for providing our stakeholders with that tour de force on our financial results. As you can see, a lot of work underway in the first half. And I trust now that you have a very comprehensive view on the underlying financial dynamics in the business. Before we move to Q&A, maybe just a couple of points as we look ahead. for the balance of the year and a few comments around the investment case that we still believe remain super strong for the MTN Group. As we look into the second half of the year, again, there are 4 factors that we think will determine the operating strategic progress and financial results of the group. Inflation and currency movements, we believe, will remain a headwind that we will need to navigate. Sub-Saharan inflation is expected to remain relatively elevated as food and transport inflation works its way into wage inflation. So I think that's something that we're very alive to. And in the foreign currency or exchange rate volatility that we experienced is something that we are taking a view that the challenges we received in the first half will be maintained. Supply chains, we don't see any relenting on supply chain disruptions, particularly with zero COVID policy in China, creating disruptions, particularly around chipset shortages. In terms of the SIM registration, as I mentioned earlier upfront, this is something that we take very seriously. Our businesses will be very disciplined in meeting the directors both in Nigeria as well as in Ghana. The Ghana SIM registration deadline has been extended to end of September. So and the teams are very focused on that. And then obviously, the energy and power that we faced in the first half is something that we will still face as we go forward, and the South Africa on-grid power constraints are also items that we believe we need to anticipate that they will be with us for some time to come. Having painted these as context issues for the second half, what are we doing about it as the MTN Group? We have, in summary, 8 actions that are clustered under commercial supply chain network and financial resilience that we are focused on executing. So starting on the commercial side. Obviously, we are experiencing elevated inflation. And we've always said that as part of the financial model for MTN is that over the medium term, we are growing service revenue above blended inflation. We do believe that we do need to look at selective pricing reviews across some of our markets, particularly in the higher inflation markets as well as continuing to accelerate our efforts around CVM and moving towards much more personalized offers to our customers. We've invested a lot in that over the years, and we should start benefiting from that going forward. So that's the first action that we're taking. The second specific to South Africa because South Africa is really our device market, is managing device subsidies, particularly at the lower end of the devices, 2G, 3G. We did suffer some device margin erosion in the first half, and this is something that Charles and Dineo will be managing in the second half. When it comes to supply chain, obviously, with our scale, with partners, we are able to push forward for advanced purchase orders for both capacity, resilience and critical spare parts. And that we advanced from our team that are stationed in Dubai headed by [ Durkof ] who heads up procurement from the MTN. So those will be 2 very specific initiatives that we're driving to mitigate some of the risks that we see. On the network, obviously, a large part of our network is under towerco agreements. We saw that Nigeria was fairly resilient because -- we do get power pretty much as a service and where there are opportunities to renegotiate tower contracts, we are very focused on ensuring that they remain optimal for us in terms of being able to absorb some of the potential pressures on margins over time. And then in South Africa, as I mentioned, upfront we have a multiphase program to improve the resilience of the network that is under execution. The first 3 stages of it all deal with battery. The first phase is pretty much completed. The second phase will be completed. Charles in the room, so can take more of the questions. The second phase, at the end of this month; third phase, end of September. And in that time, obviously, IHS is taking over operational control of our towers and delivering power as a service. And then finally, on financial resilience, 3 main broad actions. One is continued expense efficiency initiatives. Tsholo gave you the update on what we achieved in the first half. Working capital, supply chain financing initiatives, these are also areas of focus. And to the point that Tsholo raised, we have sufficient cash resources for us to continue to explore liability management of our 2024 and 2026 bonds as and when appropriate as we want to bring down the hard currency exposures on to the balance sheet and continue to improve the profile of the group. And as we've mentioned in the sense, we are looking to upsize our DMT and note program. It has been ZAR 30 billion, and we look at -- sorry, ZAR 20 billion, and we'll be looking to upsize that to about ZAR 35 billion to create the flexibility that we would like at the holdco level. Now coming back to the investment case. And this is a slide that I think I started with, with the full year -- 2021 full year set of results, as an underpin to the investment case that we put out to our stakeholders, on why we believe that MTN is a growth story and is well positioned, given its size and scale and its market positions to be able to deliver digital and financial inclusion to many of the customers that we serve across the African continent, whilst delivering superior returns for our investors. And on the left-hand side of the chart, you see the same chart that we had for the full year. We've now extended it by 2 quarters, basically continuing to track a pre-COVID and a post-COVID effect on the demand for data services. There is a narrative that says the data services were really expanded as a function of COVID lockdowns. What we can say as we look at our data is that we're in a different position as MTN, different position within our markets, where we're seeing sustained demand for data services. And as you can see in the kind of oval circles, we were looking at quarterly progression in the time post lockdowns across our markets we have seen an acceleration of 883 petabytes of data, traffic across our networks are post what we see as the easing of lockdowns. We see a similar trend on fintech transaction volumes, which is an underlying or indicator of sustained growth over the medium term. Again, 2.7 billion transactions in the period post the lockdowns. And actually, in this last quarter, it was ZAR 3.1 billion worth of transactions. So the point that we've made around the investment case that we see structurally higher demand in our markets for data and fintech, maybe quite uniquely from other markets we believe still sustains the investment case. Hence, we're making the investments in network and IT that we've made. We've put in ZAR 17 billion. We are forecasting that we'll do ZAR 35 billion because we believe there's demand and then the return profile will come in line with our medium-term guidance. So in conclusion, a couple of points I'd like to make. Firstly, solid operational performance against a challenging macro. I think you will [ continue ] with that. We are continuing to execute on our strategic priorities and we're really pleased with the progress that we've made around the asset realization program in spite of the challenging markets. The financial resilience of the business not only maintained, it actually has been enhanced in the period, better leverage across the group. We've got a healthy liquidity position. We have the cash resources to do liability management to improve the financial profile of the business. And whilst we do all of this, we're able to create shared value with our stakeholders more broadly, reducing the cost to communicate, increasing broadband coverage and contributing. And we are convinced that notwithstanding the headwinds that we see in the second half, we will maintain our medium-term guidance. Our medium-term guidance is a 3- to 5-year view. South Africa, as you have noted, in our outlook, we say that if we see the same level of and the same types of load shedding in the second half on the first half, we will slightly missed the guidance on the service revenue level, but with all the initiatives that we have, we will look to maintain the EBITDA margin within the 39 to 42 range. Nigeria, we believe that we'll see a better revenue profile. Q2 -- sorry, Q3 and Q4 looking more like Q1 as opposed to Q2. So better growth there. And overall, we believe that we'll start to lap some of the pressures that we saw in a market like Côte d’Ivoire at the back end of this year into early next year, we come back to growth at the service revenue level, not just the underlying drivers. And the Board anticipates that we will be able to meet the dividend that we announced for a full year of ZAR 0.330 per share when we report full year results in March of next year. We have a very strong cash position. And the ZAR 0.330 is well covered by the earnings that are being generated and the cash that's coming to the group. So with that, as final remarks, I just want to thank you for listening. I'll call on Tsholo to join me on the stage. We are -- we do have in the audience here at 14th Avenue other executives. So we have Charles Molapisi, can talk to you about network resilience. And Dineo Molefe, our CFO from South Africa. Jens, our Group COO, is in the room. Mazen, our Group CTIO; Ferdi, our Group CRO, is also in the room. I see Nompilo and Kholekile. So we have pretty much most of our executive committee here in the room and they can help us take some of the questions. There are 2 questions that we anticipated we should answer right upfront because we can feel pent-up demand to ask those questions. So we will spare you the effort of asking the question and by providing you with the response. The first is really around the rates we repatriated out of Nigeria. I understand there's a fascination around that. So for clarity, we took ZAR 4.5 billion of the ZAR 12 billion plus of repatriations came on Nigeria. The rates in Q1. The average was around ZAR 490 million. Q1 looked more like ZAR 480 million. And as we got to Q2, it looked much closer to ZAR 500 million. So for those who are obsessed with that rate, there you have, we've told you the rate at which we repatriated. One or two of you told me that there's an absolute fascination around the rates. So we will help -- spare you of asking the question. The second is really around Telkom. We did issue a cautionary weeks back. Once we had engagements between our boards and the Telkom Board where we issued a joint cautionary to progress work towards a proposition that we felt would be compelling for all stakeholders. Obviously, under cautionary, we can't say much, and there has been a bit of press commentary today around Telkom. We provide no comment other than to say that we remain engaged in the processes that we agreed with Telkom to continue the process of evaluating a proposition and see where that ends over the next couple of weeks, et cetera. So trying to spare you all from asking a very obvious question that I think is pent-up demand. So with that, open up for questions. And Thato, are you going to direct the questions or how do you?

Sure. I think we can start and see if there's any questions in the hall for those who made the effort to come in, please.

It's Louise from Investec. I'm going to try my luck around and see I can get more color on the Telkom transaction. I appreciate you can't really say a lot, but maybe you can flesh out your rationale for the transaction. And also maybe around potential time lines, what to expect next, some of the next steps. That's the first question. And then second question is around your wholesale business. It seems there's been a slight easing of revenues and performance in that business. And it seems like slightly tracking below your Ambition 2025 strategy. What are some of the initiatives that you do have in place, especially outside of the South African environment to drive that wholesale revenue opportunity. And then on the third question around ESG. How are you currently balanced the energy efficiency targets and obviously related cost efficiencies in line with some of your longer-term ambitions around energy efficiency?

So you've asked a whole bunch of questions, but I can farm out to my team. So the wholesale one, I think Jens will pick that one up. On the energy efficiency around the networks, I'm going to ask Mazen to start to maybe on [ pillar to top and tail ]. And then maybe I'll start with the Telkom discussion rational. So as I mentioned specifically, we're not going to comment on Telkom. But what we can comment on is the global trends we are seeing that we say are going to come to our shores, whether we like it or not at some point in time. I mean, there is a trend towards fixed mobile convergence globally, as telecommunications transitions across the technologies, particularly the 4G to 5G transition. And in a market like the U.S., you do see that it has consolidated. It used to be a 4-player market. It's a 3-player market for 300 million people. China is a 3-player market for over 1.5 billion people. And what that indicates to you is that these are business -- business models that need enormous amount of scale to be able to profitably deliver the services whilst delivering the public good because this is really a private sector-funded business, if you think about it for a public good. It's capital intensive. We're spending over approximately $2 billion of CapEx. So scale is going to matter going forward. And to point that I raised that fixed mobile convergence is a thematic that we're seeing in developed markets. You are seeing it in Southeast Asia. We don't have to point you to some of the press commentary that's come. You can look also into Latin America, where you see in-market consolidation. So I mean that's influenced some of our thinking without being specific on the deal that you can well figure out what the rationale. And we do believe that there is a proposition that is good for all stakeholders in South Africa, not just shareholders, all stakeholders will be the point. In terms of timing, I mean, we are on an agreed time line path to evaluate the proposition as a joint team between ourselves, clean teams on our side, there's clean teams on Telkom side. So we're going to progress that work until we get to a position, where we think there is a proposition or not. So we're not really super time boxing ourselves to say we've got to come by time X. But obviously, these things you want to work as fast as you can so that you create certainty and lift the veil of the cautionary so that all stakeholders can have more certainty going forward. So Louise, I know that's not the answer you want, but that's the only answer I can give you, given the cautionary and the process that we've initiated jointly with Telkom. Wholesale, so mind of Jens comments on that. Jens, over to you.

Yes, happy to share a few comments. I mean overall, we are quite pleased with the development. What we need to bear in mind is that for the network as a service components that we are targeting outside South Africa, we've concluded 2 deals that have been announced, one in Ghana with Vodafone and the second one with CAMTEL in Cameroon. Other deals are pending. But these deals take time to implement. And for example, the Ghana deal is already live, but it's operating on a regional trial basis. The CAMTEL deal is going through regulatory clearance. Other deals we can't disclose yet, but we are happy with progress. It's broad-based. It's based across multiple markets. And this is really longer-term ambition to build a sustainable network sharing business across several markets. The overall wholesale numbers, we need to bear in mind are still very much dominated by the Cell C relationship in South Africa. We've talked to the unrecognized revenues. We've also, I think, talked to concessions that have been made in the context of the recap for Cell C. So there is some impact in reduced growth on those numbers, but we remain very, very confident that we're benefiting from the new stability around Cell C, and we will see sustained growth of that opportunity South Africa as well. So let me leave it there.

Mazen and Nompilo? Our champions on ESG and net zero.

Yes. Thank you for the question. On high level, so the ESG is part at the core of Ambition 2025. We have already committed the road to zero by achieving 50% reduction by 2030 and achieving 0 by 2040. So from operational perspective, from a working plan perspective, we have already set the targets based on 2021. And we started putting a plan to really achieve the results on an annual basis. And currently, there is already plans in place to achieve what really needed in terms of initially for Scope 1 and Scope 2, and we are working with our partners in terms of tower cost for Scope 3. Nompilo, to add anything?

Thank you so much, Mazen. Except for -- without repeating what Mazen just mentioned, it's important for us to mention that energy efficiency is part of strategic process around Project Zero. We are aligned on SBTI in terms of how we want to respond to it. But what I did want to mention strongly is that we're working with partners with this It's a very gradual journey when you want to achieve energy efficiency, and we are on that journey with all our partners, and we see fruits in terms of our strategy and how we're going to move forward.

And maybe I can just provide the reason there, with your -- I mean the way we look at the issues we face, Scope 1, Scope 2 are basically 20%. So it's 80% for the emissions are Scope 3, and the majority of that, if you want to kind of look at the big numbers that 80% of that would be the towerco companies. So 80 on 80, just almost 2/3 is the telco companies, who are also committing in line with the commitments we've made. The 2 major towerco companies within our portfolio. I mean they're all U.S. listed. They also have similar requirements, so they're making also the investments in this quite challenged environment. And as you well know that there is -- obviously, the carbon offsets opportunity that is also something that's possible. But I mean, right now, there is obviously quite a lot of pressure in South Africa, in particular, because we are actually moving to alternative non-grid power to be able to maintain the network availability. Question for Tsholo. Checking in the half?

All right. For Tsholo, there are a couple of questions actually. So the first one is -- can you provide a bit of color on the liability management -- liability management, which you've mentioned? Is the plan to extinguish cash -- to use existing cash to take out or part of the 2024 and the '26s? Would you look to refinance a portion and maintain a presence in the international debt markets.