R.A.K. Ceramics P.J.S.C. (RAKCEC) Earnings Call Transcript & Summary

Hello, everyone, and welcome to the R.A.K. Ceramics Second Quarter 2021 Earnings Call. This is Mohamad Haidar from Arqaam Capital. And as usual, for R.A.K. Ceramics, we have Mr. Abdallah Massaad, Group CEO; and Mr. P K Chand, Group CFO. Over to you, Abdallah.

Thank you, Mohamad. Good evening, everyone. I'm Abdallah Massaad, CEO of R.A.K. Ceramics. I would like to welcome you all to the R.A.K. Ceramics Second Quarter and Half Year's 2021 Earning Conference Call and Webcast. I sincerely hope that everyone on the call, along with families, are keeping safe and healthy. We continue to place great importance on safeguarding the well-being of all our colleagues, employees and families by implementing measures that reduce the spreads of the COVID-19 virus-wise, protecting the financial health of R.A.K. Ceramics. I'm pleased to report that R.A.K. Ceramics continue its strong start in 2021. Our operation continued to improve across all global markets. And we have surpassed pre-pandemic level, to record level of revenue and profitability in spite of challenges due to the second wave of COVID-19. Our total revenue for the second quarter 2021 increased by 70.4% year-on-year, which crossed the AED 700 million and surpassed pre-pandemic levels, increasing by 5% when compared to the second quarter 2019, driven by growth in all our core markets. Our total gross profit margin for the second quarter of 2021 reached an all-time high of 38.1%, driven by improved production efficiencies, decreased costs and the optimization of production lines across all our plants. The production capacity utilization for the tiles remained consistent above 95% in the last 3 quarters. Various initiatives have been taken to reduce production costs by optimizing the production line and -- to increase productivity. The UAE end market revenue in the second quarter 2021 was higher by 3.9% year-on-year at AED 143.7 million, mainly driven by the wholesale and retail business. The project channel is slowly recovering. In the first 6 months of 2021, revenue increased by 2.9% year-on-year to reach AED 306.5 million. In UAE, an antidumping duty ranging from 23.5% to 106% on importing tiles from India and China has been made effective from the 6th of July 2021, which will reflect positively on the demand of our products. In Saudi Arabia, the company strategy continued to yield results. The demand for our products continued to grow. And capitalizing on the demand, we invested in differentiated tiles and new showrooms. This will help significant brand equity in the market. We have established ourselves as a premium provider of ceramic products in the kingdom. 2 new showrooms in Riyadh are in progress, which will open in the second half of 2021, in addition to 1 showroom for a distributor in Medina. In 2022, there are plans to open another 3 showrooms. Our Saudi Arabia revenue increased by 114% year-on-year to cross AED 163 million (sic) [ to AED 148.1 million ]. The major contributor to sales growth came from our wholesale and retail business. The retail sales grew by 45% year-on-year with the introduction of differentiated tile sizes. And the second quarter revenue got impacted to -- due to restriction placed on trucks', aged more than 20 years, entry to Saudi border. Freight costs also increased significantly. Saudi Arabia had amended its import rules from GCC countries by imposing 12% custom duty effective from 1st July 2021. We are working to comply with the requirements. Actually we have 90 days. These custom will be considered as deposit, and whenever we provide our documents, these can be recovered. In Europe, the business has surpassed pre-pandemic level of operation in the first half 2021. Revenue increased by 20.4% to reach AED 215 million compared to the first half of 2019. Revenue increased by 75% year-on-year, crossed the AED 114 million. Our strategy to turn-around Europe entities is working well, as operations are yielding positive results during the year in spite of increased freight costs. In India, 2021 started with a positive business sentiment in the real estate sector, leading to an increase in demand for our products. Unfortunately, due to the second wave of COVID-19, government lockdowns resulted in logistic movement restrictions. To avoid inventory buildup, tiles lines had to be stopped from time to time. Market has started recovering well from June as lockdowns are lifted in the major states. Revenue is lower by 26.9% quarter-on-quarter, to reach AED 70.5 million. However, the first half of 2021 revenue increased by 93% year-on-year to AED 167 million and higher by 17.4% compared to the first half of 2019 and thereby surpassing the pre-pandemic level. Our Indian operations continue to post positive results since the last 3 quarters. In Bangladesh also, government imposed intermittent lockdowns between April to August 2021. Production line has to be stopped from time to time, impacting the revenue during the quarter. Revenue is lower by 11.4% quarter-on-quarter, to reach AED 66.5 million, while it is higher 214% year-on-year. And in the first half 2021, revenue increased by 68% year-on-year. Our tableware business has shown positive performance during the quarter. Production has been optimized to match the increased demand as the market situation across the world is gradually improving. Tableware revenue in the second quarter 2021 increased by 35.9% quarter-on-quarter and 160% year-on-year to reach 58 -- AED 55.8 million. In the first half of 2021, revenue is higher by 33% year-on-year, to reach AED 96.9 million. Our faucets revenue increased by 17.9% year-on-year in the first half 2021 to reach AED 78.5 million, mainly driven by all markets. In China, we sold the assets and have received full consideration, recording a gain of AED 50.1 million, during the quarter. The lease agreements of our hotel assets have been discontinued, as the lessee has not -- was not willing to run the hotel during -- due to COVID-19. Therefore, we have de-recognized the excess lease rent recognized in earlier years amounting to AED 27.2 million, in line with IFRS 16. Despite the continued pandemic, our liquidity position remained at a comfortable level. We were able to increase our cash flow from operation activity from AED 191.9 million in June 2020 to AED 305.9 million in June 2021. Working capital days have reduced from [ 196 ] days to 176 days during the quarter. Net debt-to-EBITDA also improved from 2.79x to 2.04x during the quarter. Accordingly, the Board proposed to distribute semiannual cash dividend of 10 fils per share for first half of the year 2021, subject to the necessary regulatory and statutory approvals. Now please allow me to take you through our financial highlights for the second quarter of 2021. Total revenue increased by 70.4% year-on-year to reach AED 700.8 million. Quarter-on-quarter revenue decreased by 3% due to lockdowns in India and Bangladesh markets for the second wave. Tiles revenue increased by 63.9% year-on-year to reach AED 472.7 million, driven by all core markets. Our sanitary ware revenue is also increased by 72.5% year-on-year and 1.1% quarter-on-quarter to reach AED 139.7 million, driven by Europe and Middle East markets. Tableware revenue improved quarter-on-quarter by 35.9% and 160% year-on-year to reach AED 55.8 million in the second quarter 2021, as the market situation across all our core market is gradually improving. Total gross profit margin in the second quarter 2021 increased by 9.6% year-on-year and 3.1% quarter-on-quarter to reach an all-time high of 38.1%. Our tiles gross profit margin increased by 11.8% year-on-year and 4.2% quarter-on-quarter to reach an all-time high of 39.7%. Gross profit margins in 2020 were impacted due to the plant shutdowns. The sanitary ware margins in the second quarter 2021 increased by 10.3% year-on-year and 0.4% quarter-on-quarter to reach 36.5%. The tableware margin improved quarter-on-quarter by 7.5% to reach 37.7%, while it is lower by 10.5% year-on-year due to lower productivity. Our reported net profit stands at AED 94.9 million, outperforming pre-pandemic level of net profits compared to the second quarter 2019 profit of AED 73.4 million. The second quarter 2021 net profit margin increased by 18.3% year-on-year to reach 13.5%. Like-for-like net profit is also higher than pre-pandemic level, increased by 48.3% compared to the second quarter 2019 to reach AED 77.6 million. Like-for-like net profit margin increased by 14.4% to 11.1%. Net profit after minority in the second quarter 2021 was AED 87.8 million. In the second quarter 2020, there was a net loss of AED 11.6 million. Margin in the second quarter 2021 is 12.5% compared to a negative margin of 2.8% in the second quarter 2020. Our EBITDA is at AED 129.9 million compared to AED 40.5 million in the second quarter of 2020. Margin is 18.5% compared to 9.9% in the second quarter 2020. Our net debt level decreased by AED 125 million to AED 1.02 billion compared to March 2021. Thank you for listening. I will now hand over to Mr. P K Chand, our CFO. Please, P K.

Thank you, Mr. Abdallah. Good evening, everyone, and thank you for joining us. Mr. Abdallah has already briefed the summarized quarter -- second quarter 2021 performance, financial highlights and regional performance. I will take you through the half yearly results and segmental highlights, with details on revenue, profitability and the balance sheet. We will start with Slide 7, which shows half yearly financial highlights for 2021. Total revenue increased by 41.8% year-on-year to AED 1.42 billion. Last year's second quarter revenue was impacted due to COVID-19 lockdowns. Half year 2021 revenue has surpassed the pre-pandemic level, increasing by 10.5% compared to half year of 2019. Tiles revenue increased by 45.5% year-on-year to AED 992.9 million, driven by all core markets. Sanitary ware revenue is also increased by 42.2% year-on-year to AED 277.8 million, driven by all markets, except Saudi market. Tableware revenue improved quarter-on-quarter by 35.9% and 33.1% year-on-year to reach AED 96.9 million, as the market situations across all our core markets is gradually improving. Total gross profit margin in the first half of this year increased by 5.6% year-on-year to reach an all-time high of 36.5%. Tiles gross profit margin increased by 8.4% year-on-year to reach an all-time high of 37.5%. Last year, margins were impacted due to plant shutdowns. Sanitary ware margin in the first half of 2021 increased by 3.9% year-on-year to 36.3%. Tableware margin also improved quarter-on-quarter by 7.5% to reach 37.7%, while it is lower by 13.7% year-on-year due to lower productivity. Reported net profit in the first half of 2021 is AED 157.6 million compared to a net profit of only AED 10.5 million last year, after considering gain on sale of China assets amounting to AED 50.1 million and write-off of excess lease rents recognized in earlier years for hotel assets amounting to AED 27.2 million, in line with IFRS 16. Like-for-like net profit increased by AED 124.2 million year-on-year to AED 146.8 million, with a margin increase of 810 basis points year-on-year to 10.3%, mainly due to higher revenue and gross profit margins. Net profit after minority during first 6 months of this year is AED 148.5 million compared to AED 14.1 million in the last year. Margin is 10.4% in the first half of 2021 compared to 1.4% in the last year. EBITDA for the first half of this year is AED 256 million compared to AED 135.7 million in the same period last year. Margin is 18% compared to 13.5% in the first half of 2020. Net debt decreased from AED 1.23 billion in December 2020 to AED 1.02 billion in June 2021 due to higher cash profits and receipt of proceeds on sale of assets in our subsidiary in China. Net debt-to-EBITDA decreased from 3.25 in December 2020 to 2.04 in June 2021. In June 2020, net debt-to-EBITDA was 3.88x. In line with the performance, the Board proposed to distribute semi-annual cash dividend of 10 fils per share for the first half of the year 2021, amounting to AED 99.4 million, subject to necessary regulatory and statutory restitute approvals. For this purpose, a general assembly meeting is scheduled on the 21st of September 2021. It is important to note that semi-annual dividend has been proposed for the first time in the history of the company. On the cash front, capital expenditure for the first half of 2020 was lower at AED 33.9 million compared to AED 52.3 million in the last year. CapEx for 2021 is expected to be in the range of AED 150 million to AED 175 million. Now we turn on to working capital cycle. In absolute terms, overall working capital is stable at AED 1.28 billion quarter-on-quarter. However, it has reduced from 193 days in March 2021 to 175 days in June 2021 mainly due to reduction in trade receivables and inventory days. Inventory days decreased from 225 days to 212 days quarter-on-quarter due to increased last 12 months revenue. Trade receivable days also decreased from 123 days in the first quarter of 2021 to 106 days in the second quarter of 2021 due to decrease in trade receivables. Trade payable days is decreased from 69 days to 64 days quarter-on-quarter. We continue to take measures to manage our liquidity. Now I will turn back to Mr. Abdallah for his final comments on the remaining quarters of 2021 priorities before we answer your questions.

Thank you, P K. We have implemented measures across all our core markets to improve brand visibility, customer service and production efficiencies, which have increased revenue and profit, setting the stage for long-term growth. While our recovery in 2021 continues, we are closely watching the situation in India and Bangladesh and monitor the health and safety of our employees. Looking ahead, for the remainder of 2021, our priority will be to protect our market share, continue to improve overall productivity and efficiency, turn-around the performance of our tableware business and improve the profitability in our core markets. As discussed, the supply chain management remains a challenge which affects our production costs as well as outward freight costs, but we are working hard to manage the situation. Thank you for your time. Now I would like to hand over the call over to the operator and open the line for questions...

[Operator Instructions] Our first question is from Pratik Khandelwal from Al Rajhi Capital.

Congrats on the great set of numbers. So I just wanted to ask about the Saudi market. Like what exactly happened there? And if you can give a breakup on the -- was the revenue driven by price, volume? And which segment in particular? That's the first question. And the second question is regarding the tariff increase which was done by Saudi. So how is it impacting you going forward? Like what's the kind of an impact, if you can quantify something over there?

Thank you for your questions. You know -- and we already, the last few years -- actually since the start of the restructuring of the whole Saudi market. For us -- and as you know, Saudi is one of the most important markets in the region. And for us, as we discussed, our company in Saudi is performing well with the differentiation of sizes, as well the implementation of the antidumping on Chinese and Indian manufacturers in Saudi. This has created a further demand on both quantity and the differentiated product which we launched. So the growth is driven both from the volume as well as value. And here, what we mentioned, now in UAE and other -- in UAE they implemented, starting 6th of July, the antidumping this year. So with regard to the tariff, actually the Saudi custom requires then, yes, any company, even from GCC, to export to Saudi, they have to have a minimum 45% value added in the manufacturing process as well as 25% local -- employing local people. Now as R.A.K. Ceramics, we have 65%, our value added in the manufacturing process. And therefore, the local requirements -- so we already attested this certification [ and sent ]. Because we have more than 45%, our requirement in local go down to 10%. And then we have 90 days to submit. Now we are paying 12% when we have 90 days to comply. And whenever we submit the complying and -- as it is written, that we can claim back everything paid. So for us, we are working to provide or to comply with the requirement here. I hope you -- I answered your question.

Yes, yes.

Our next question is from Divye Arora from Daman Investments.

Congratulations for the great set of results. So if you can give us some color on your core markets other than Saudi and UAE, so India and Bangladesh. So obviously we saw the COVID ravaging the situation over there, and lockdowns and all. In India, the things have gone much better now. A lot of cities are out of the lockdown, barring a couple of them, so what are you seeing there in the third quarter? How much recovery should we expect in third quarter? Can we expect a number like first quarter? Or it will take a couple of more quarters from here. And also, in Bangladesh, what are you seeing? That's on India and Bangladesh. And on the UAE itself, when we look at the second quarter. You made around -- you did around AED 110 million in revenue. When we go back to 2019, the average was AED 150 million a quarter, so still this is like a big decline from those levels, more than 20% decline. And now you're talking about the antidumping duty which has started at the beginning of July. So when do you expect this revenue to recover to the levels of 2019? How many years it's going to take. How much can be the impact of antidumping duty? And have you already seen some impact over the last 1 month? Or there are inventories available with the importers, so the impact will take around 4 to 5 months for you to see.

Thank you for your question, but the second part of the question, if you allow me to answer first. Because you asked many questions there. And then as you said, yes, the UAE market, which it is the least market performed vis-á-vis 2019, yes. All markets improved from 2020, but vis-á-vis 2019, the UAE does not yet come back to the level it was. And mainly this lack of demand is coming from the project sector. So our wholesale and retail improved, but the project sector -- we all know that there was a freeze on projects, but the good news in UAE also is that the real state sector improved. And you see the prices. The demand in UAE is picking up. Then this will reflect, for sure, increase in demand going forward. What you mentioned later is the impact, and this is also a very good news for us. It's the impact of antidumping in the UAE market. And you answered yourself by, for sure, initially there will be a lot of inventory with traders. The improvement in demand, we'll see in few months going forward. And we are expecting that, by next year, the demand will pick up in UAE. So this is going. I hope I answered you on the second part of the question. Now the first part, which is...

Sorry, just on the UAE again. So you are saying that demand is going to pick up next year, so when do you expect to hit the 2019 levels? It will -- take you 2 years from there? Or could we...

Look. I -- honestly, I don't want to throw only, yes, answers. Look, we are working hard. As we always say, we are realistic. So we are working hard. We see that now the demand for real estate and the projects will start, already starting again. Will -- this will recover the demand. Plus, the antidumping, it will add on the demand on our products, as we are local. And we will not be -- with antidumping, for sure, the import will reduce. So without mentioning a time, I -- that's why I said, by next year, I perceive that the demand will pick up again. Now we are seeing -- we will be seeing some recoveries during this year, but the impacts, we'll see it more visible or more relevant in next year. Now going to...

And the impact of antidumping -- sorry. Just to follow up: And the impact of antidumping should be lesser on you because you don't really play in that segment, right?

Yes -- well, what do you mean? I did not answer you here -- I didn't hear you. Sorry.

Sorry. So you were saying that -- what I'm saying is that -- the antidumping duty, is it more on the tiles which are at the lower end? That's where the dumping is happening, where you don't play, and...

Lower or higher end. On -- the end where there is an antidumping goes from 23.5% to 106%. No doubt that we will benefit because we are producing locally. And this is what's happened with us also in Saudi because, the antidumping, it will apply everywhere. So we will have benefits, but that's why, with the availability of stock with the trader, this will take this year to absorb the quantity. And this is why I'm staying we will see improvements in demand, but next year, the visibility will be even more on increasing our products in the UAE.

All right. India and Bangladesh -- sorry.

If you allow me now, I'll move -- yes. So I will move into India and Bangladesh. The good news in both India and Bangladesh, even though there was a second wave with -- which affected both countries and we had to reduce our production from time to time because we were not able to supply because of the no possibility to transport the products, we did even better in both countries than 2019. And this, we -- with improvement in manufacturing, with efficiencies which -- with our investments and the strategies implemented, it's working. And I do see, the improvement which you saw in the first 2 quarter, you will continue -- we will continue to see this improvement going forward, at least during this year, for sure. I hope I answered your question.

Our next question come from Sameer Kattiparambil from EFG Hermes.

I have 3 sets of questions. First, on your -- you mentioned about this truck shortage, had some challenges. And also there were higher freight charges. Could you quantify how big that impact is on your costs side and on your margins? And how long do you think this is going to sustain, especially on the truck shortage side? Second question is on your growth plan in India, UAE and Bangladesh plans. What kind of capacity addition are you planning in those markets? Third is on your sanitary ware business in Saudi, which has been growing despite strong construction activities. Any specific reason? That's it from my side.

Look, Sameer, I will answer -- me and P K, on this. On the shortages of trucks, already these have been resolved, and today, we have enough truck available. And even the price came down, but initially when the implementation happened that no trucks aged more than 20 years can enter Saudi, at that time, the trucks available in the UAE, they were, most of them, old trucks. And with the period, the transportation companies already replaced their fleet with a newer fleet. So this problem happened, already cost us more because we had to divert to the containers for some of the quantities and paying higher costs per truck, but this is solved today. P K, on the [ figures ]?

Yes. As far as the amount is concerned, it can be -- or what was the freight extra cost, that was close to AED 15 million to AED 20 million, but that does not include only Saudi. It also includes the higher freight costs for the shipments to Europe. So since, Saudi has been sorted out, but as far as the shipping or freight costs are concerned, it is still on the high side, so we hope that, yes, it should rationalize.

Your second question, Sameer, was on the capacity additional in India and Bangladesh. So -- and look, we are -- we don't have yet a plan for the expansion. If you see today, in India, our Samalkot plant is not fully utilized. So we are using almost 50% of the capacity in Samalkot. And we are doing improvement and studies to change some technology where we will -- we're able to be competitive. Where we are fully utilizing the capacity is in Gujarat, in Morbi. And also there the utilization as well as the sales improved. So we are now studying on additional capacity either to add in our Samalkot or to move it to Morbi, which we did not yet finalized. In term of Bangladesh, also it is the same. Today, we are utilizing fully our capacity. Unfortunately, we don't have extra land available to increase the capacity in the same premises. And therefore, we are in the process of acquiring land, and we will be working on adding the capacity. Whenever the figures are available, we will announce it. In term of the sanitary ware. You see, the sanitary ware -- look, if you see, yes, Saudi is the only market maybe we degrow in sanitary ware because our main market for sanitary ware is Europe. And we had a lot of demand increase in our sanitary ware, especially the WCs. And therefore, we did not put pressure to increase in Saudi. It does not mean that we will not increase, but honestly, we are fully utilizing the capacity of WCs and we cannot add more. Therefore, we took a decision to increase our capacity in UAE by 250,000 pieces, which should be ready in the next 6 to 9 months. And therefore, we are working hard on the strategy to improve our sales in Saudi in sanitary ware.

Okay. I have one follow-up question. You mentioned about the trucking -- or freight charges already gone high. Were you be -- able to pass-on any of these costs to your customers? Or are there any chance to pass it on?

Yes. Sameer, we are -- you know is -- there is a lot of products mix within the ceramics. We have thousands of SKUs. Yes, we are -- we still -- we are implementing between 3% to 5% increase in prices. In some markets, it is not enough, especially that the major, as I mentioned, challenge in any -- running any industry today is the hike in prices of raw material; as well as the challenges in supply chain, especially increasing the containers freights, especially from East to West. And our market to Europe is our -- one of our most important markets. And therefore -- the transportation has gone up very high. We do expect that the transportation costs will have to stabilize at a time. Meanwhile, we cannot increase our prices more than 5%, but we are trying also adjustments to this to add [ like some fairly ] transportation costs wherever we can.

Our next question comes from Alok Nawani from Ghobash Group.

Congratulations also on a very good set of results. And I have 2 questions. The first one is on your EBITDA margins. How sustainable do you see current levels, considering you do want to maintain market share? And perhaps pricing might be a bit of a consideration to be able to do that. That's one. The second one is you've made substantial progress in terms of reducing your net debt levels, so I was wondering. Where do you see them in the near term? Or are you comfortable with the current levels, or do you actually have plans to continue reducing it? And perhaps, if you could quantify that, that would be very useful.

Again in term of the EBITDA margin, look, we are -- as we say, we look forwards. And then according to the present scenario, without any surprises -- the last 2 years, we are working with surprises. We cannot plan without considering any changes. Especially, the virus is changing. Variant is coming, but in terms of our strategy, it was always to optimize our costs, improve efficiency, differentiate ourselves and try to maximize our margin to create the best value for our shareholders. So within the current EBITDA margin, well, we do see that it is a sustainable -- at a sustainable level. In term of the net debt, look, the strategy of the company is -- one is to reduce, exit noncore. And we exited. And within this quarter, we have good news on exiting or selling the assets in China and we generated the cash. Meanwhile, we are looking to grow. And we will be looking to increase our capacity in UAE in tiles, in UAE in sanitary ware, which we will be doing. Plus also we have plans to grow in other markets. So with this level, it is -- the 2x net debt-to-EBITDA, it's already a very good level, which within -- or if you take the -- our track record, we reach up to 4x net debt-to-EBITDA. And even last year, we reached 3.8x. Now it's 2x. It is a very comfortable level for us.

Great. That's very useful, but on the back of that, I just have a follow-up. You mentioned the CapEx this year will be around AED 170 million or so. Could you give us a more medium-term guidance considering you do want to grow? And I'm just wondering if -- these levels of CapEx requirements and the way you are progressing. Is it fair to assume that the interim dividend that you have given out can comfortably be achieved? I'm not talking about a Board decision, but from a management comfort point of view, I just wanted to get your sense because your EBITDA levels are healthy and your payout levels are also [ comfortable ].

Look, if we look at the CapEx. As we mentioned that AED 175 million will be required, yes, unless we have a major -- we have to look for organic and nonorganic opportunities to grow. And whenever we find a good opportunity which will create value, this is what we are looking at. Considering the dividend this year, you have to consider also the AED 50 million which we received from China included. So if you see our record in dividend: Even though, last year, we paid 7.5% (sic) [ 7.5 fils ], but -- it was always between 15 fils to 20 fils per share, what is something that -- we see that it is sustainable, especially that we have a dividend policy of 60% minimum of our net profit.

Great.

But you know that the process or that dividends is a Board decision. And it will be taken [ on a year-on-year ], depends on the results and the requirements.

Our next question is from Zeeshan Bagwan from Abu Dhabi Capital.

Most of my questions have been asked. I have just one more -- one follow-up question. So I just wanted to understand what's the -- what are -- the company plans or progress is around setting up production facilities in the Saudi market.

Look, we -- thank you, [ Zeeshan ]. For us -- we mentioned that we are progressing with -- since the last 3 years, progressing with our plans to set up a factory. We are following up. We've made some progress, but till now -- whenever we get all the necessary approval and defining the location, we will, for sure, update you on this, but our plan is still there.

All right. And just a clarity to the question asked by a previous participant: So the company would continue to pay semiannual dividends. And would it be at the same rate like 10 fils, what we saw for the first half?

Look, we cannot have any guidance on the dividend. The dividend is a decision of the Board. This year, from what we see, the Board saw that it is we -- it depends on the approval of the general assembly because we need to change our article of association to be able to pay the semiannual dividend, as well the approval of the AGM. For this year, what we are saying, that the semiannual 10 fils means you can expect something at least the end of the year, for sure, but we cannot give a guidance or a decision. It's the Board's decision, but when we are changing to pay a semiannual dividend, I can expect that, the semiannual dividend, without defining the amount or the percentage, it will be there.

Our next question is from Yawar Saeed from International Securities.