National Atomic Company Kazatomprom JSC (KZAP) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to Kazatomprom's 2022 Full Year Results Conference Call. My name is Yerlan Magzumov, and I'm the Director of IR at Kazatomprom. Thank you for taking time on the day to join us. [Operator Instructions]. Our call will begin with a presentation by CEO, Mr. Yerzhan Mukanov, followed by an opportunity for your questions. If you joined through the Kazatomprom's website or through our company's page under London Stock Exchange website, note that there will be slides displayed during the remarks. These webcast slides are also available for download in English and in Russian as PDF called, 2022 Full Year Conference Call slides. Note that our press release, full version of the 2022 full year operating and financial review, along with our audited 2022 financial statements for 12 months ended 31st December 2022 are now available on Kazatomprom's website. Participating in today's call, we have Yerzhan Mukanov, CEO. Ruslan Beketayev, Chief Financial Officer; and Alisher Taizhanov, Chief Commercial Officer. This call is open to all stakeholders with a question-and-answer portion intended to be an opportunity for members of the investment community to engage with the management team and ask their questions. This conference call may include forward-looking statements. These statements include all matters that are not historical facts, but their nature forward-looking statements involve risk and uncertainty, and they are not guarantees of our future performance. The company does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved. I will now turn it over to Mr. Mukanov.

Thank you, Yerlan. I'm delighted to welcome and thank everyone for joining our conference call today in the review of Kazatomprom's operating and financial results for full year of 2022. Along with discussion of Kazatomprom's 2022 full year results, which were released earlier today, we would like to update stakeholders with our view of recent market developments, including the notable risks and uncertainty that the industry has been managing over the last year. I would like to start today's call with a discussion of the significant events that has recently taken place in both Kazakhstan and Internationally. We have seen some tragic events unfolding in the region since the start of 2022. And whilst the impact of Kantar has resulted in a wide range of liberal reforms in Kazakhstan. It's difficult to predict the possible impact and consequences of the Russian-Ukrainian conflict. We still hope a peaceful resolution comes very soon. [ Trade restrictions ] and sanctions against Russia that have been put in place by various countries to date have not been directed at the uranium and nuclear industries. Kazatomprom remains prepared for changes to the risk profile. As noted in March 2022, during our annual results call for 2021, the 4 key areas we are carefully monitoring include Kazatomprom's partnerships and joint projects with Rosatom and its subsidiaries, financial risks and exchange rates fluctuations, supply chain challenges and the availability of key operating materials and risks to our primary transportation routes through Russian territory. A high-priority risk analysis is being carried out on a continuous basis with respect to compliance with the sanctions. In addition to the mining corporations, the company also has access to uranium enrichment services at the Russian enrichment plant. The risk of secondary assumptions impacting Kazatomprom in connection with Rosatom and the Russian nuclear fuel cycle remains remote at this time. Throughout 2022, it became apparent that our concerns about currency exchange rates and inflationary pressure was not just local, but global too. As both developing and developed economies across the world experienced unprecedented inflation and rate hikes. With respect to the disruption of supply chain and our access to the materials we need to develop wellfield and produce uranium, the situation is under the special control of the management. We have embarked ambitious problems to build a sulfuric acid plant, a new processing plant and bring the piping production in-house. These measures will definitely secure and satisfy a bulk of Kazatomprom's requirements in key materials and equipment. And finally, the areas that saw the most attention throughout 2022 was the transit of our uranium products through the territory of Russian Federation. This route has been used as primary route as usual course of business in 2022, and we don't expect significant challenges. As we have reiterated of discussions with nearly of all stakeholders groups, should our access to the primary route become limited for any reason, we have a number of mitigation plans that are ready for deployment. They include the Trans-Caspian International Transport Route, an alternative route successfully used since 2018 that does not enter a Russian territory. Kazatomprom also continues its work on diversifying and improving its transportation capabilities. As such, we are currently working to establish the transportation rules through China and Turkey. It is important to reinforce our message that we will continue to take all necessary measures to minimize potential risks and prevent any potential negative impact on our business and customers. To date, our risk management processes and mitigation plans to address the existing and emerging risks have remained robust, and the company continues to monitor the situation. Turning to the primary topic of today's call, I will touch on a few key market developments and briefly review our results for 2022. A key factor that has contributed to the improved market fundamentals and the more bullish outlook for the nuclear industry over the past several years has been the international focus on the social and environmental impacts of energy infrastructure. Those discussions have become even more pronounced amid the growing focus on energy security and diversification in relation to the Russian-Ukrainian conflict. Kazatomprom recognized the significant role it plays in helping the world transition away from reliance on fossil fuels. Unlike many other industries that are having to out the cost of their strategies and reassess the value proposition in the ESG context. We, as uranium miners find ourselves in a unique position. ESG has always been well integrated in our business. Environmentally, all of Kazatomprom's mines employs a best-in-class institute recovery mining method that minimize impact on the environment by diversity, water resources and public health. And in terms of governance, we strive to implement international best practices. Recently, we had a first independent director joining our Board of Directors, which now consists of 8 members. All the Board committees, including audit, are chaired by IMF. In line with our long-standing commitment to sustainable development in ESG, the company continues to endorse the medium- and long-term ESG goals with specific quantitive and qualitative targets. As such, in 2022, the company approved a strategy for decarbonization and achieving carbon neutrality by 2060, and completed significant milestones within the frame of the ASP road map, aimed at an improving environment as social stability in the regions of the company's presence. In March 2022, we also officially became a full member of United Nations Global Compact, the world's largest corporate sustainability initiative, which confirms our commitment and to the 10 principles of the UN Global Compact and support for the global ESG agenda, goals and initiatives of the United Nations. As recognition of our efforts in ESG, in December 2022, Kazatomprom received its first independent ESG rating from S&P Global Ratings, which assigned Kazatomprom above the industry average score of 51 out of 100. Of note, the current global maximum ESG evaluation score for metal in mining sector is 68. Moving into a brief look at the Uranium market, long term contracting activity and the spot and term Uranium pricing gaining strength in 2022 with the financial drain score. Market participants are shifting their focus to security of supply in light of the Russia-Ukraine conflict. Demand side interest drove the weekly spot price as high as USD 63.75 per pound of Uranium in 2022. However, with the global economic slowdown and the resulting bearish trends witnessed in the capital markets through to the third quarter of 2022, the upward pressure on the spot price was eased. Spot price ended the year with USD 47.68 per pound of Uranium in average. Overall, the volume levels of spot fell well behind the up search witnessed in 2021. As such, about 60 million pounds were transacted in 2022 with a utility share in the market constituting just under 14% or about 8 million pounds of Uranium in total. This shift in the utilities approach in the performance strategies towards the primary producers is even more pronounced given the concerns about the security of supply and energy security, triggered by the recent geopolitical turmoil. As such, the supply reductions by the primary producers witnessed in the prior period now started to take a reversal as some of the producers began to restart the idle capacities driven by increased long-tail contracting activity. To secure the access to non-Russian processing services more utilities are willing to enter into the long-term commitments with Western enrichers and converters, stretching their processing capacities, which results in the need for higher volumes of the fleet. We, at Kazatomprom, are well positioned to match up growing future requirements with a reliable long-term supply of natural uranium. In terms of the term market, nearly 140 million pounds of U308 was contracted under 10 deals during the reporting period, which is the highest volume the market has witnessed since 2012. With the average term price indicator increasing by USD 52 per pound, the term market continues its rise for the third consecutive year which hints the entrance of the market into another long-term contracting cycle that takes place around each 10 years. And at this time, having set up the training arm in Switzerland back in 2018 and amendments to the transfer pricing legislation that took place in 2021, we feel comfortable of capturing the relevant sale of that cycle in the years to come. Therefore, consistent with our market-centric strategy, we expect our 2024 production volumes of about 25,000 to 25,500 tonnes of Uranium in 2024, which is roughly 10% lower than our total subsoil use contract level. Our 2023 production plan remains unchanged and 20% lower than our total subsoil use contract level, but even the target is currently subject to considerable, yet manageable supply chain and development risks. Moving into our 2022 full year results, I am proud to confirm that we once again delivered on our guidance, achieving the targeted indicators. The company's production volume fell slightly on both 100% on attributable basis during the reporting period as the COVID-19 pandemic has an impact on wellfield development in 2021. This had a lag effect on production in the reporting period as it usually takes from 8 to 10 months between wellfield development and the resulting uranium extraction by institute recovery. Additionally, attributable production was impacted by the sale of 49% share of Ortalyk LLP to CGN Mining U.K. Limited in July 2021. At this point in the year, the operations team continues to make progress on mitigating the related risk making every effort to achieve in production plan for 2023. We also have maintained our market share of natural uranium in the reporting period where we delivered Uranium under both new and existing contractual commitments to 24 customers in 11 countries worldwide. As of December 31, 2022, our inventory of finished uranium was comparable to the inventory level we held at the end of 2021, slightly above our target of about 6, 7 months of attributable production. To manage delivery risks and ensure we had uranium at the right place and time, we also did make some purchases and swaps in the market during 2022. Uranium sales at the group and cap level were on the same level as in 2021. Thanks to our commercial team's successful implementations of the sales plan and increase in the spot price of uranium, the company's average realized price in U.S. dollars increased by 31% which also led to an increase in revenue from U308 by more than 40%. We are constantly working to grow the company's customer base with ongoing negotiations in Europe, Americas and the Middle East. On the cost side, our C1 cash cost rose as expected due to higher payroll costs and inflationary pressure on cost of materials and processing increasing by 16% from just under $9 per pound last year to now just a bit more than $10. All-in sustaining costs rose even more by 28% from USD 12.63 per pound to 16.19 USD due to a more than 60% increase in capital expenditures of mining companies subsequent to a shift in wellfield development activities as well as higher purchase prices for materials, supplies, equipment and cost of delivery. All 3 cost parameters were within the guidance ranges provided for 2022. As we communicated in our previous trading update for short-term deliveries to end users, the spot price can vary significantly between the time contracting pricing is established in the spot price in the market when the actual delivery takes place. Given the time allotted by Kazakhstani Transfer Price Legislation the delivery date at which the sales revenue is recorded, could be up to 10 months from the offer date. In addition, some long-term contracts may incorporate a proportion of fixed pricing that was negotiated prior to the sharp increase in the spot price. As such, the increase in average realized prices at both the group and custom from last year was lower than the increase in the spot mark price for uranium due to the significant spot price volatility in the uranium market in 2022 and 2021. During the reporting period, many deliveries were based on contract price mechanism that established a contract price for the delivery set earlier in 2021 when the market price was lower and prior to its sharp increase. As you can see, taking into account the lag effect, our realized prices converted with a corresponding spot prices in quarter 4 of 2022. As per our updated sensitivity table, which provides some color on what our average realized price would be if the average annual spot price reaches a certain figure, is now much more exposed to index. This certainly represents our success in commercial negotiations with the end users, where we ensure certain floor level to hedge against the falling market. Regardless of such lagging effect between spot price at our realized price, our financial results for 2022 were very strong. Revenue rose compared to the revenues period to just above KZT 1 trillion, driving a rise in operational profit of 91% and a more than doubling of adjusted net profit to about KZT 465 billion. This figure was achieved without the significant items having a onetime effect as was the case in the previous years. These impressive results reflect the considerable improvement in the uranium market over the past year, supported with our ability to deliver custom plans materials through the Trans-Caspian International Transport Route. Capital expenditures of the mining entities increased by 61% compared to the previous period. As mentioned, both due to increased spending on well construction to achieve production targets for '22 and '23 as well as to prepare for production expansion to minus 10% from subsoil use contract in 2024. Beyond the operational and financial results, let me highlight several corporate developments. First, Mr. Mazhit Sharipov of custom from sale up until July 4, decided to resign from his role with the company for personal reasons. Subsequent to the reporting period in early January 2023 Mr. Askar Batyrbayev decided to resign to pursue other opportunities. While Mrs. Kamila Syzdykova decided not to return from parental leave choosing to spend more time with her family. Alisher Taizhanov was appointed as new Chief Commercial Officer; and Ruslan Beketayev was appointed as new Chief Financial Officer. In July of the reporting period, we completed the payment of dividends for 2021. The 52% increase in the dividend payments included the proceeds from the sale of Ortalyk to CGN Mining. To note, net debt to adjusted EBITDA ratio in 2022 remains negative. We'll announce information on dividends for 2022 in April of this year. Beyond the company developments, the government of the Republic of Kazakhstan announced the additions and amendments to the country's tax regime as part of its post-January inventory forms, according to which, the calculation of the mineral extraction tax base and rate have changed effective 2023. According to the changes, the MET or uranium is now based on market prices multiplied by the amount of uranium mine at a rate of 6%. MET expense is, therefore, expected to increase in absolute terms due to the incorporation of the spot price into the formula. However, as disclosed previously, the exact impact cannot be estimated at this time. And finally, as mentioned, we are maintaining our production and sales discipline. Reviewing our outlook for this year in accordance with our market-centric strategy expected terminal production and sales metrics are set at slightly lower level at this time compared to 2022 actuals, while financial metrics of our performance are expected to be higher. The decrease in production guidance for 2023 in comparison to [ actuals ] of the reporting period is mainly due to a continued delay in the wellfield commission schedule and limited access to certain key materials including sulfuric acid and equipment. The decrease in the expected U308 sales volume for 2023, both at the group and custom global level, is mostly due to the increase in sales in forms other than us weight, including but not limited to fuel pellets produced from Kazatomprom's natural uranium concentrates. Also, we do expect the sales metrics to have an upside potential given the increased interest from the demand side of the market. Guidance on total capital expenditures on 100% basis for this year increased significantly in comparison to 2022 actuals to cover the shift in the well field development schedule inflationary pressure on production materials and reagents as well as an increase in well construction activities and mine development cost of JV Budenovskoye LLP and JV KATCO LLP for a total amount of approximately KZT 70 billion. We remain confident that we can deliver on expectations based on the current trends of production, sales and cost, as we do assume supply chain and wellfield development risk will not increase significantly through 2023. Nevertheless, it should be noted that the challenging situation with the supply of raw materials and inflationary pressure is expected to continue, which could affect the company's financial operating performance, respectively. Summarizing today's call, I would like to highlight that despite recent management changes, Kazatomprom's market-oriented strategy remains unaffected. Our focus will continue to be on the highly marginal segment of the nuclear fuel cycle, which is a uranium mining. As always, we are committed to the high standards of ESG in all aspects of our business. Open and constant communications are crucial during the times of ongoing uncertainty and elevated geopolitical risks, and we will remain committed to business continuity and transparency. We're eager to keep working with new and existing global customers to provide the uranium required to meet the anticipated demand growth and help the world achieve it net zero energy security objectives. Thank you for your interest and attention. We will now be happy to answer questions from today's call participants.

[Operator Instructions] Our first question is coming from Alexander Pearce from BMO.

So I was actually hoping could you provide an update on just the capacity of the Trans-Caspian Route as it stands? And also maybe you can just comment on some of the alternative routes, for example, with China and timing for when we may get an update in terms of the capacity on some of the alternative non-Russian routes.

We got a quarter for this day. Today, the quarter is around 4,000 tons of U308 weight and we are still discussing with Azerbaijan site, Azerbaijan government about this quota for our future deliveries. Thank you.

And is it possible to give us an update on kind of progress on some of the other routes and maybe when we may hear update?

We are still discussing with our Chinese partners about the transit via China, and I don't know when, but we are discussing about that.

Okay. Maybe if I can just follow up with the second question. Just in terms of the CapEx that you've identified for KATCO and Budenovskoye, is it possible to provide a breakdown split between those 2 assets? And how much of that I think $70 billion mentioned is split between those 2 projects?

Again, Alex. So unfortunately, for the purposes of confidentiality, we can't disclose the split between the 2, but you can make your own assumptions on that. And adding to Alisher's point on transshipment through Chinese and Turkey territory, we can say that we are working on these routes, and we will keep our investors updated on any progress.

The next question is coming from Ildar Davletshin from Wood Company.

So my first question is regarding your 2024 production target. So you are planning quite a considerable increase. I realize that it's partially driven by the launch of Budenovskoye and ramp-up at other assets. But I just wanted to understand how confident you are in this 25-or-so thousand tonnes target given that this year, you are expecting a small decline relative to 2022. You did mention still challenges in supply of some critical materials and lag and drilling activity. It feels like it's a bit straight, but maybe I'm wrong. So I'd like to understand your kind of confidence level in 2024 production target. And maybe if I may, also a second question, just to come back to the previous question on the CapEx. So could you maybe break down the expected CapEx between maintenance, would you need to maintain flat output? And any additional CapEx that comes on top as the growth CapEx? That would be very helpful.

So let me start answering the question, and my colleagues can join. So the first question was -- and thank you for your question, Ildar. The first question was about how confident we are in our production plan for 2023 and 2024. And as you can see, Ildar, from our guidance, we are significantly increasing our capital expenditures. And these capital expenditures will go both into our current projects and our expanding projects being JV Budenovskoye and JV KATCO. So we are quite confident at this moment that we can deliver on our guidance announced previously. Should there be any additional challenges or any additional risks to our production plan for 2023 and 2024, we will more certainly notify the market on this one in our trading updates or in our operating and financial review. Now turning on to your second part of the question. I heard that was how -- like if we can provide the split in our guidance of how much our guidance -- of our CapEx will be directed into the current operations and well construction and how much will be -- will go into the sustaining. So on this part, we unfortunately do not provide the split, but basing on our historical results, and our results for 2022, you are free to make your own assumptions and make your models. We are also happy to provide you additional help in the way we can do in a fair way to provide you our help.

The next question is coming from [ Evan Zhang ] from Bank of America.

Hi, everyone. I've just got one question on EBITDA numbers. So EBITDA number is very strong compared to last year and versus consistent estimates. But I can see net cash position seems a bit light. Could you please give us a bit of update around here, please?

Sure, Zhang. So as you can see from our operating and financial report, and you can analyze it, the part on the working capital. There was a shift in the working capital. And the working capital itself is pretty cyclical. And there can be time differences between the deliveries and the cash receipts from those deliveries. From the working capital table, you can see that our receivables have increased 23% from the previous year. So part of our decrease in net cash position is attributable to that as well. Also, you can see that our inventory has increased and the inventory that we will use for our day-to-day operations, which will then be converted into the receivables and our revenue. So if that answers your question?

The next question is coming from Anna Antonova from JPMorgan.

Two questions from our side. First, on the production and sales guidance for this year. So can you please perhaps comment on what are the run rates of production and sales you're seeing in Q1 given that 2 full months are really behind us? So perhaps how they compare to your expectations and how they are running versus your guidance this year? Are they basically in line or a bit lagging given the seasonality or a bit ahead of your expectations? That's the first question. And the second one, could you please comment on the market environment? Has anything changed in your -- in the market conditions since the last call that you had? So perhaps do you see any signs of utility companies that are engaging more actively in recontracting talks or not? So any comments on that side would be also much appreciated.

Thanks for the question. Just answering to your first question regarding how -- what's the pace of our sales in accordance to our guidance. So our sales are not evenly distributed through the years, it mostly depends on the request of our customers, from our schedule of deliveries. So, like at the year-end, we plan to be in the range that we have indicated in our guidance. Secondly, answering to your question. Just let me double check. So your question was how does the utility act now in terms of geopolitics and if they do restructure their portfolio of purchases rate?

Yes, if you could shed some light on what's the market sentiment now? Is it better or worse than in the end of last year and what may be main trends that you're currently seeing in the market that you would like to highlight to us?

Yes. Thank you. So like I know [indiscernible] is a must. Among the nuclear fuel cycles, [indiscernible] of nuclear conversion enrichment has still been most in focus given the current geopolitics. And what do we see that the existing supply chains of nuclear fuel cycles are being reengineered because despite there is no sanctions against nuclear fuel cycle against the components of Russian nuclear fuel cycle. Some of the utilities are trying to look for different suppliers of net conversion in the Russian services. So still, what we see, we do still focus on that. They're just looking for different opportunities, how they can contract for themselves those services. And after that, they would go from the top to down, like started sourcing to go through the industry first and then go to the conversion and after that, they'l go to uranium, the useful way to [indiscernible] use. But definitely, the last year and early this year, we have seen some newcomers at market, like in the companies who have been purchasing most of the fuel assembles before is in the finished good. But like in the last year and earlier this year, we have seen some of the customers who haven't been at an open market of neither a conversion or uranium before they start to look for the market -- they start to look for services and for uranium at an open market now. I hope to answer your question.

The next question is coming from Chintan Khamar from Credit Suisse.

I noticed in the Q4 consolidated financial statements that you placed a commercial bond for $50 million, which was repaid in January this year. I guess in the context of a pretty healthy cash position, is there any portion of your cash that might be restricted or we should consider inaccessible in the short term?

[indiscernible] speaking. Yes, Addressing the question here. We did actually draw 50 million covers of commercial papers in late December. But this is only done in order to cover for short-term cash shortages that's it, and none of our cash is actually restricted.

The next question comes from Grace Symes from Energy Intelligence.

My question is -- my first question is about the proposed sulfuric acid plant. And if you can give any more detail on that in terms of time line or cost or any detail really. And then my second question would just be on the proposed China and Turkey transport routes. Do you know if these would be a lot more expensive or take longer than the route to St. Petersburg or what the comparison would be there?

So let's start from the first part of your question, the approximate time line of sulfuric acid plant. As of now, the sulfuric acid plant is on the stage of technical and economic evaluation. And when the stage will be completed, we'll phase into another stage of preparing the documentation pertaining to the construction of the sulfuric acid plant. Approximately in 2025, the end of the 2025, the sulfuric acid plant, if no significant supply chain challenges will happen. Approximately, at this time, we expect that the plant will be commissioned. And in 2026, it will go into the full production capacity. The financing of that project most probably be that we will engage in the financing with commercial party. But at this point, the exact structure cannot be disclosed. And I'm sorry, I didn't get the second part of your question.

Yes. The second part was just in terms of the China and Turkey transport routes, do you know if these would be much more expensive or take a lot longer than shipping through St. Petersburg?

Yes. it's [indiscernible]. Thank you for the question. So answering to your question, transit through the China or Turkey will take longer or would cost more. It's hard to be it now because we're still discussing these options. And -- but speaking about the logistics wise, if you go through Turkey, we will access the Mediterranean sea right directly. So we will use in the vessel from the Mediterranean sea rather than from Black sea, which should take less time for us. But again, we're working with our partners on that, and it's too early to discuss now if it would be more or less efficient in terms of price.

That concludes the question-and-answer session from the English audio line. I will now pass the call back to Mr. Magzumov to take questions from the webcast participants.

Thank you, operator. We have several questions that were sent in the webcast participants. So act as a moderator for this part of today's call and the following Q&A in Russian line. The first written question from the English webcast participant is going from a private investor. Can we have any indication regarding the possible amount or range of the dividend? I can answer this question only partially. We can say that the notification for the Annual General Meeting will be sent in April, and it will contain interested -- information that you are interested in. Second question coming from private investor. Is it possible to give any guidance for the sensitivity of the forward order book to changes in the U308 price? That is to say how will Cap's realized price change for the range of U308 spot prices. In our operating and financial review, report, we do have a sensitivity table as well as in our presentation, conference call slides, and you can see sensitivity table there. Annual average spot prices will be on the left side and our consolidated average realized prices will be on the right-hand side. The next question comes for the private investor, Malik. Your all-in sustaining cash cost is expected to be up more than 60% in 2023 versus 2021. How much of this increase do you think relates to Russian-Ukrainian conflict and which could be reversed if a resolution comes to the conflict? In other words, is U.S. dollars per pound is $20 per pound, now a new normal? Or could it be reduced meaningfully from a peaceful resolution?

Actually, we would like to say that the all-in sustainable costs does include itself all our cash costs, also the CapEx cost. As it was disclosed in our report review that the CapEx for the next year does include the additional CapEx -- capital expenditures for our development and also expansion of the subsoil use contracts. Also, we would like to say that all-in sustainable cost is -- we are not planning to keep it at the same level. It is much more higher due to these several investing activities. Also, we would like to say that all-in sustainable cost is much more higher, not only related with the Russian and Ukrainian conflicts.

Thank you, Mr. [indiscernible]. The next question comes from a retail investor, Thomas. How management may command latest weakness of the Kazatomprom share price? And I can answer that question myself. The latest weakness of the Kazatomprom share price is most as we see for ourselves is related to the market fluctuations and uncertainty on both capital markets and uncertainty that investors feel in the region. The next question from the same investor. Are there any information you can chat about new energy? Has any contract being signed with that new company? How Kazatomprom will benefit from operations with a new energy?

Thank you for the question. Speaking about the new energy, I need to mention that in that front, we act to roll the first one as being one of the cornerstone investors and with other companies. And then secondly, has been a supplier of uranium for that fund. Speaking about the development of the company and what the progress of signing the new contracts of the progress of there to attract the new investments? We can ask you to contact managers of a fund company called [indiscernible]. We can additionally provide in details of the website and contact information if it would be required. I hope it answers the question.

Thank you, [indiscernible]. The next question comes from Richard Winzel. The question is, the management turnover has been higher than expected over the last 18 months. Please, can you explain why turnover has been so high? And what confidence can we have that the management will be stable from now on. I can answer that question, and our team members may join as well. As for the management turnover, as it was said in the conference call -- during the conference call, this management turnover has been due to personal reasons for the CEO -- for our previous CEO. Our previous CFO decided to stay on her parental leave and not to return and be with her family. And as for Mr. Askar Batyrbaye, he has chosen to pursue other opportunities. Our new upcoming Chief Officers are now part of our team, and we do not really comment on any new upcoming changes. As of now, we feel confident that our management team is more than able to deliver on our guidance. I hope that answers your question. The next question comes from private investor. Can you please provide an update on your new physical uranium fund?

Yes. So thanks for the question. So as I mentioned, we at Kazatomprom has been one of the cornerstone investors of the front and secondly, being the supplier of uranium for the funds. So we do have a right of the first refusal of site money for the -- getting the uranium [indiscernible] a new investment to purchase uranium. The developments and further improvement of the fund or being managed by the company called [indiscernible]. We can provide the details of that company and we can provide the contact information, and they would be able to answer to this question on the progress of the additional investments to the [indiscernible] uranium fund?

Thank you, [indiscernible]. The last question comes from Canara Bank, Mr. [indiscernible]. Please comment on the spike in profitability in Q4 2022. Based on your financial statements, adjusted EBITDA margin is close to 100% in the second half of the 2022, what's the reason? Is it just KATCO recognition? What was adjusted EBITDA in Q4 2022? I think I can answer that question myself. So in the operating and financial results that we provide, we provide our half year results and full year results. Using reverse engineering, you can reverse engineer the amount of second and third and fourth quarter adjusted EBITDA. Unfortunately, we do not provide any quarterly results in our operating and financial review, only the financial statements. But the methodology for EBITDA and adjusted EBITDA are in our operating and financial review. So you can reverse engineer that. As for JV KATCO recognition, we can say that 1% additional will be recognized starting from '22 and ongoing. I hope that answers your question. This concludes the question-and-answer session in English. The English line will now be disconnected. And we will start our Russian Q&A in about 10 minutes. [Operator Instructions]. I will turn the conference back to Mr. Mukanov to close the English session.

Okay. So ladies and gentlemen, thank you for participants to this meeting. So again, we're very glad to present to you our financial results of Kazatomprom for the last year guidance. So again, thank you for your attention. Have a nice day.