Taaleem Holdings PJSC (TAALEEM) Earnings Call Transcript & Summary

Hello, everyone. This is Mirna Maher from EFG Hermes, and welcome to Taaleem Holdings's Second Quarter 2024 Results Conference Call. I'm pleased to be joined today by Alan Williamson, Taaleem's CEO; Arnaud Prudhomme, CFO; and Nora Ghannam, Senior Investor Relations Manager. We will first start the call with a presentation, and then we'll open the floor for the Q&A session. Please go ahead.

Shukran, Mirna. As-Salaam-Alaikum and Meharba Ramadan Kareem from the Taaleem management. It's our pleasure to thank you for joining us today, and we are here to celebrate another good quarter for Taaleem, and we will also look at sharing with you a comparison between H1 and H1. So double-digit pretax growth, we're very pleased with the picture that we're presenting. What I want to focus on, on this slide is the small percentage growth in relation to H1 to H1. So enrollment up 33.2%, mainly in the government private partnership. But importantly, for the financial strength and profitability of the company, a growth of 1,300 additional students in the private schools. Revenue up versus H1 '23 by 15%, EBITDA up 32.5% and net profit 53%. Just a health warning on the net profit like we're obviously very happy, remember, our business model, the school business model is 10 months of revenue and 12 months of course. So we can't simply take a quarter and multiply it by 4. But in terms of H1 to H1, a very strong performance and CapEx, as you see, beginning to be deployed in relation to the exciting strategy and with the building of DBS Jumeira, starting DBS Mira and the design of the 2 new super premium schools, we will come to that later in the presentation. And 6 new government public private partnership schools, 4 of them ESE, 2 of them Charter. In terms of capacity utilization, again, the percentage that I want to focus on is the growth of the premium schools. So closing capacity from 75% to 83%, a fantastic performance for us. And then the EBITDA margins H1 is something that we stay focused on as a KPI, so up by 5.3% in terms of EBITDA and net profit up by 8.3%. As you can see with that growth of private school enrollment and in the premium schools closing the capacity utilization that children getting older, then we also see a 14% growth in profit per student, another KPI that we focus on. So as I said in the introduction, the key for us here in terms of the ramp up, obviously, very proud and honored to continue to engage with all 3 government partnerships in Abu Dhabi, in Dubai and at the federal level, but really for the profitability of the company, that growth of 12,600 students to sitting today in excess of 14,000 students, that really is the growth that makes a profitable difference. On the right-hand side at the top quadrant, you will also see the reputation of Taaleem continues to improve and improve and improve. And that's shown by the fact that 20% of our new joiners are coming from expats. They're arriving in the country and choosing Taaleem. New entrants coming up from the KG offices, some of them will be new expats or new Emiratis coming into our schools. But you will see that 40% in our private schools are coming from the competition. So our reputation continues to improve and the good news is that in terms of attrition, it continues to decline, which is great news. Overall, 2.5% decline in attrition and fraught between the private schools and the Dubai schools project, which we often see as part of our private portfolio. More forensic look at this, again, the key thing for us is the top of the diagram is obviously good to see the Dubai schools and Dubai as a government partnership school closing capacity utilization before we expand these schools in partnership with the Dubai government, but the key thing is the 1,300 additional students coming into the private schools, and we'll break that down for you by curriculum because it's a favorite question of investors at this call, and we'll break that down later in the presentation. In terms of the strategy, you'll see a time lapse of DBS Jumeira going on. As I speak, we are doing extremely well in relation to the whole strategy and the development of the whole strategy. You'll see the first image of the additional building, state-of-the-art building in Greenfield International. We have the school is now full, and we're putting in 500 additional seats. In relation to Jumeira, it's almost finished, we will be finished by May in relation to handover. Actually, if you walk through the school now, there's huge progress there, especially our foundation unit is completely finished. So we actually filmed some marketing media in it the other day. DBS Mira, we are now on site. We're in Mira, in the community, in the sand pit that will become the school, exactly the same stage as we were at Jumeira. So again, hoping that Mira -- not hoping, expecting that Mira will be handed over around the same time as Jumeira, important for enrollment. And also 2 new super premium schools. We do apologize we have been, for the last couple of quarters, promising you the announcement of the brand name, a top U.K. school coming into Abu Dhabi. I'm working on that for Dubai. We can't announce that yet. We are fully expecting to announce the name of that school in Q3. In relation to cost discipline and efficiency, ongoing success, if you look at the STR very important KPI for us, we won't see it improve too much more. But to be honest, that growth from 2020 to 2023 and another slight push on that between H1 and H1 makes a real difference to profitability. And it's partly the maturity of the school, the children who are filling up, the older age groups in our legacy schools, where the teacher, for example, teaching chemistry to a class size of 8 is now teaching chemistry, diploma or A level to a class size of 18. So that's what's really making that difference. At the same time that we are continuing with financial prudence and a slight decline in our staffing costs and total cost. At the same time, we do want to be competitive in the market. We do need to keep the top leaders and top teachers in Dubai and Abu Dhabi. And as we're financially modeling for the budget ahead, we do need to be conscious of housing, particularly in the UAE at the present time and inflationary pressures. Just on that and not written into the presentation, we do have the ECI, because I know it's another favorite question of this quarterly investor presentations. So it's now published the ECI is 2.5% in Abu Dhabi and 2.5% in Dubai. So some of that will definitely be needed to retain the best staff, and we will put that across our private portfolio. In terms of the EBITDA margin, again, another key KPI for us. Another improvement from '22 to '23 H1 to H1, again, a dramatic 4% improvement there, but that's a snapshot. As we said, we have 10 months of revenue and 12 months of cost. So just a summary in relation to the premium schools, first of all, still 10, but actively engaged in terms of M&A. Actually, right now, slightly over 14,000 students and revenue contribution there or there about the 90%. I did say that I would break down the capacity utilization by curriculum because that's a question we are often asked. U.K. school still again, our strategy is to build new U.K. schools. So DBS Jumeira will open with 1,900 seats and that will slightly change the percentage in the U.K. cluster. IB Dubai has performed extremely well, 73% to 83%. So almost a 10% improvement in schools like Uptown, Jumeira Baccalaureate, Greenfield International. So again, as part of our strategy, we'll be putting 500 seats into -- at the IB Dubai cluster. IB Abu Dhabi remember, it's not performance of the principal at Raha School. It is the regulatory control of the ramp-up of KCC, but a significant improvement. And our beautiful bespoke and lovely American Academy for Girls, actually, again, management are delighted with a 5% improvement in enrollment in the American Academy. In relation to some of our KPIs, the result of everything I've been speaking about is that the gross tuition fees going up as I said mainly as a result of the students moving into the older age group, but also, obviously, we did have a fee increase last year. But again, performing above the percentage fee increase. EBITDA per student moving up, which you would obviously expect with everything that I've told you about in relation to revenue growth, but also in relation to cost control. And again, net profit per student also in a healthy position year-on-year. Government partnerships, 22 schools, 6 added, 2 Charter, 4 ESE. So significant rise in student numbers. I talked in the last quarterly report about Taaleem, Aldar and Bloom, all working in partnership with the Abu Dhabi government, the ESE Federal arrangement and Dubai schools. To just take a check on this program, 23,000 students, about 4,000 students were doing well. What we need to do now is slow the dramatic growth of the number of schools and focus on improving the outcomes for the students, which will bring benefits to our KPIs. We really need to start improving the Math, English, Science for students who are coming in from government schools into the Charter Program, the Agile Program and the Dubai Schools Program. So don't expect H1 to H1 next year to see a dramatic growth in government partnership, but what we do need to do is focus on the KPIs. Fantastic news today, I want to draw your eyes to the right-hand side to the graphics to the picture of the Dubai British School Jumeirah Park inspection report awarded outstanding and the whole team at celebratory education for excellence awards, the Jumeirah Park team. They've done extremely well. They won the performing arts and also had one of the best performing students in the world for GCSC exams. So very, very pleased that the Dubai British Schools Group is the only group of K-12 schools in the whole of Dubai with 2 outstanding schools. And of course, DBS is also outstanding on BSO And JAS has just been awarded outstanding on BSO. So it's not just all about the profitability of the company, although that certainly is there. First and foremost, Taaleem are here for the young people in our schools and absolutely delighted that, for example, 4 of these students are the top students in the world. And one of our students was actually the top student in the world for the examination results. I'm going to pause there, and I'm going to pass over to Arnaud to do a deep dive into these finances.

Thank you, Alan. Good afternoon, everybody, and Ramadan Kareem. So on this slide, I want to draw your attention about the growth of the underlying business following the tax -- corporate tax, which has been introduced in the UAE. It applies to Taaleem since September 2023 onwards. And you might remember that we have recorded in Q1 two levels of tax, corporate tax. One is the current tax. It is still sitting below 9% at the end of the quarter 2, might go up to 10% or close to 10% depending on the timing of the expenses and the recognition of the revenue. But we had, in Q1, recognized a one-off event, which is driven by accounting mainly. The IFRS standards to that will apply. And this one-off event, which is not translating into a tax payment to the tax man has obviously significant impact on the results. So when do you adjust our results from this deferred tax, which is again a one-off only in Q1, you see that our adjusted net profit is absolutely fantastic. The growth is close to 40%. The net profit margin adjusted as well is driving by more than 530 basis points, which is huge. And the adjusted profit per student, again, when we do this, is growing by 4.5%. All what has been presented by Alan leads to an earnings per share, which is sitting at AED 0.14 at the end of the quarter versus AED 0.13 at the end of the previous financial year. Now moving to another view of the financial performance. It shows how selling the business is our joinees as well and our operational excellence. You can see that revenue growth has reached close to 16% whereas we have been able to contain the expense growth to 7% and shows in this validation of our business model and from cost efficiency measures that we have taken. This has led to an expansion of the EBITDA margin that you can see at the bottom of the table. We are close to 40.5% at the end of the 6 months period versus 35.2% in the previous quarter. And finally, when you look at the net profit after the current tax, so before taking into account the deferred tax is one-off event, as I had mentioned, we are close to a growth of 40%. Moving now to the balance sheet. So we have a strong, healthy balance sheet, which enabled us to fund the growth strategy of the business. The movements during the period from September last year to end of February shows, in fact, is a reflection of the execution of the strategy. First, we have started again to take some debt on the balance sheet, moving up from close to AED 28 million at the end of -- at the beginning of September to AED 95 million now. All of this is related to the funding of the school DBS Jumeira. The second thing is we are using the cash from the IPO. You will see big movements. It moved down from AED 702 million at the beginning of the period to close to AED 600 million. This is due to cash used to fund the different projects we have ongoing, DBS Jumeira, DBS Mira for the design. We have as well invested in some CapEx for the Dubai School PPP. And the third element, which is to be noticed, we have signed a new lease, which explained why the lease liabilities are moving up. The new lease for the super premium school in Dubai, which is shown here and it was signed in December '23. All in, as you can see, the bank covenant allows us a lot of additional leverage and combined with the cash we have, obviously, we have a huge room for maneuver in terms of seizing opportunities in the market and continue to execute the strategy. On this one, it's just a focus on the cash situation, the movement in cash, which are not including on purpose, restricted cash which is put aside for managing the Charter school and the ESC program. We have an increase of AED 31 million. It covers different movements, which are presented here. One of them, again, which is very important in terms of cash is the fact that we have invested further into the execution of the strategy with AED 128 million CapEx, plus, obviously, we benefit from the remuneration of the cash deposits following the IPO. And as we deploy the cash, these are reduced, but for the time being, it generated a significant amount of cash. This explains why the net debt position remains negative because on one side, the strong cash position and the low debt situation at the other end. Finally, the free cash flow to the firm. You can see that the cash conversion sits at a lower level than in H1. It's typical in H2 at this part. It's typical at this period of the year. No conclusion to be drawn from this. It depends really on the way the EBITDA evolves and the free cash flow to the firm as well. Finally, a focus on the CapEx. In terms of maintenance CapEx, we are sitting in the historic level between 2%, 2.2%. As you can see in H1, where we had 2.2%. And for the rest, the expansion CapEx, it reflects the execution of the strategy. We are spending more than AED 118 million or AED 107 million exactly for the expansion. It's for DBS Jumeira, the expansion of the Dubai PPP schools with investment in line CapEx, the expansion of Greenfield International School and the design phase of DBS Mira. Turning finally to the outlook and the guidance for '23-'24. Given the strong start to the year and the solid momentum sustained in Q2, we are confident we can continue to have a revenue growth, which will be -- which will reach the double-digit number. The EBITDA is expected to land between AED 260 million and AED 260 (sic) ¶ million. The CapEx -- maintenance CapEx will stay at historical level similar to the previous year, around 3% of the operating revenue. The expansion CapEx for the full year should reach around AED 310 million. The free cash flow to the firm will sit between 82% to 84% of EBITDA, which is typical and on the same high level. Net leverage will continue to leverage the balance sheet as and when we need funding for the development of the new projects. But as you can see, the ratio are very strong and give us ample room to continue to leverage the balance sheet. And finally, for the corporate tax, as I mentioned, we target a current tax rate of around 10% and the deferred tax one-off adjustment is only again a one-off adjustment reported in Q1 and will impact only Q1 and the rest of the year, but not the following year. Thank you Alan.

Thank you, Arnaud. So just in conclusion, as you've just heard from Arnaud, very strong financial performance, whether you look at Q1 to Q2 or H1 to H1, our margins are up across all of the key KPIs for us. We are still, as you can clearly see, delivering on the strategy of driving up capacity utilization, as I highlighted. The key for us is the change from 75% to 83% capacity utilization in our private schools. And as you also heard delivering on the Greenfield strategy, DBS Jumeira all but finished and waiting to be signed off. DBS Mira exactly the same position that Jumeira was last year. So truly expecting to be signed off opening in September 2025. And as you heard from Arnaud, the design and land of the super premium schools in Abu Dhabi and Dubai very much on track. And hopefully, as you see in the top quadrant of this slide, an announcement about super premium brand in Q3. But I want to also focus and end the presentation by saying, again, as I said earlier, that the business of education is simple and complex. It's simple in that it's all about delivering high-quality education. Taaleem have always claiming themselves on being focused on our young people. And if we're focused on young people, then we will be a successful business. And we've shown that today by delivering to you the news of DBS JP moving to outstanding. So another very strong quarter for us and half yearly reports. And thank you for joining us today. We're very happy as always to take questions. So I'll pass back to Mirna in order to facilitate a discussion.

[Operator Instructions] Jonathan, I think the raise hand function is now working. Jonathan, please go ahead.

And congratulations on fantastic Q2 results. I just wanted to do a follow-up question on the huge net cash position that you have? And are there any updates regarding how you are going to deploy that cash? Are you any closer to that? I know it's a tough market. That's 1 question. And another question you're guiding for double-digit revenue growth. I mean obviously, that's definitely the case, but would it be more like in line with H1, say, 15% revenue growth, 30-plus percent EBITDA growth? And given that you're going to be opening roughly 2 schools every year for the next several years, is it safe to assume that your mid even to a high-teen double-digit growth will persist over the next 5 to 7 years? You're adding 6, 7, 8 schools over the next half decade.

Yes. Thank you, Jonathan. I'll just quickly cover the first part of the question, and Arnaud can cover the more detailed analysis of the cash. In terms of M&A, again, a bit like declaring in Q3, the name of the super premium school, as you know, because we met in several investor meetings. We are actively and always have been actively looking at IMs, looking at opportunities in the market. But whatever opportunity is, it has to be value accretive, and it has to fit the expertise of our management team, the capacity of our management team, but also perhaps the right diversification of the portfolio should that be what's right for the company at that present time. So again, we -- it's not that we are not working on that in a very competitive market as you alluded to. We are making progress, but at this stage, we're not in a position where we can announce that. But absolutely, we remain focused on deploying some of that cash in relation to M&A.

So to further the question on the cash, you know we are -- as a business, this is a business which is generating naturally, I will say, a lot of cash. The second thing is we benefit from the fact that through the IPO, we have raised significant amount of equity and cash. This cash is deposited on a daily basis when there is any excess versus working capital requirement into plain vanilla products, which are remunerated. Currently, we are sitting at around AED 600 million of cash. It is, in fact, used as and when we need to fund the development activity. So DBS Jumeira, DBS Mira and the rest of the CapEx I mentioned. In addition to that, obviously, the -- when it comes -- an M&A transaction, we will use as well this cash to fund it partially. In all cases, as we discussed in previous calls, we use a mix of debt and equity. So the -- I would say the fact that we declined -- the cash declining will take some time, but we planned in the coming years, depending, obviously, on the timing of any M&A transaction, we plan to have it fully used in terms of IPO cash.

Okay. Got it. And on the guidance, I mean, again, double digit, I'm guessing 15%, in line with H1. 30-plus percent EBITDA growth in line with H1. I'm guessing that seems fair. I mean you do imply that with the EBITDA guidance of AED 260 million to AED 265 million.

Yes.

And this is -- again, and this is something that you can do consistently for the next 5 to 7 years -- 10 years, sorry. Is that safe to say, given the addition of 6 schools so far for the next -- over the next 3, 4 years?

I think you raise a valid point, which is because we open a school, we have a J curve. So it has an impact on the result. But at the same time, what we're trying to do and to achieve, and it is what we have done so far in the past is to be EBITDA positive in year 1. So any time you open a new school, again, you generate new EBITDA and you prepare the future growth. The second element, I would say is when we look at our 5-year strategic plan, we consider that we are in a position to double or more than double our EBITDA and our net profit before tax during that period. We want to derive from this. We don't want to derive from this, and we are confident we can execute this. Then obviously, year after year, we might have some variations, but all in, we continue to grow all across the period.

Okay. Yes, that will make sense. And one last thing on M&A, would you consider anything outside of UAE? And would you consider something outside of K-12 like, say, nursery, prekindergarten?

Yes. Thank you, Jonathan. I've made it clear despite the press headlines because they always pick up on any pause in my conversations on this that there is more than enough growth in relation to our 5-year strategy, in relation to all the economic indicators about the ongoing growth of the UAE across all of the federal entities, but in particular, growth in Dubai and Abu Dhabi. So our strategy to 2026 is fixed on Dubai and Abu Dhabi. As you're aware, Jonathan, we are already looking at 2027, which again will remain focused at the present time on Dubai and Abu Dhabi. The economy is so strong. The growth of young people requiring schools that the -- if you like, the undersupply of schools and barriers to entry for companies not in the strong experience position of the likes of Taaleem and Aldar, et cetera. Mean that absolutely our strategy is focused on the UAE. In relation to, for example, stepping out of K-12, that's kind of what I was hinting at in relation to a slight diversification of the offering and one that is in our interest. So obviously, if we did diversify into the early years, you're feeding into the pipeline of 4 new schools with 8,000 seats plus any school M&A. So that would be something that, again, we're investigating, but evaluating. I'm not making a commitment on that, but certainly, I think that is possibly a greater opportunity for us than, say, at the present time, and I'm not seeing into a crystal ball, into the future, but at the present time i.e. the next couple of years looking at KSA.

Okay. Excellent. Congratulations again on the very good Q2 results.

We'll take the next question from Nikhil Mishra.

Congratulations on a very good set of numbers. Couple of questions, if I may. First on for the upcoming new school, how should we look at the ramp-up in terms of number of students, margins, et cetera? And secondly, given that you yourself have very significant growth plans and a lot of new schools are also coming up in the region. Do you see any risk of overcapacity from, let's say, 3- to 4-year perspective? Just your views on that, please.

Thank you. Look, in terms of enrollment projections for each of the 4 new Greenfield schools or indeed even for the expansion of Greenfield, we business plan very carefully. We look at the area, the price point, a bit market research, actually hinting the second part of your question, what's the competition around that school. So we're going -- we're opening in Jumeira, which has a number of fantastic U.K. curriculum schools, most of them do, but not all of them do as opposed to Mira where we expect to ramp up to be slightly better because to my knowledge, we're the only school to the west of the 311 when we open that school. So in terms of the sort of business plan, I think you could look at some of the previous schools that have opened in Dubai that are premium products, and they're opening with about 200, 250 students. And at the moment, we are on track for that. If we overperform, as Arnaud says that we have a track record of doing, then we have a stronger chance of being a bit of positive. Arnaud talked about the J curve. There is a certain amount of cost that you can't control. You need a principal who is highly paid. You need a Head of Arabic. You need to put your science resources and your library resources, et cetera. So you do go into certainly a net profit J curve. But hopefully, if the numbers come through then we aim to be a bit of positive. In relation to the second part of that question. Remind me the second part was...

If you can repeat please the question?

Yes. So the second question was looking at a high level, yes, competition. You yourself coming up with a lot of schools, a lot of other international schools are likely to come up or are coming up. So do you see anywhere any risk of overcapacity of schools within this region, let's say, not now, but maybe from 3 to 5 years perspective?

Yes. Well, actually, right now, I see the opposite, and I think the Dubai population see the opposite. I mean, I was speaking to someone the other day, who's really struggling to get the young daughter into school. If you think about it, there are only 20 outstanding schools. We now have 2 of them in the context of Dubai. I think 39 very good schools and about 220 private schools. So I don't think it's just about getting your child into a school. It's about getting them into a very good or outstanding school. And DBS Jumeira, DBS Mira join the outstanding DBS brand. So by answering that question, I'm also going back to look at the enrollment in our schools. If you just go back 1 more slide and you look at the joiners mix. So in actual fact, we might take some comfort in relation to your question from the fact that there's still 40% of our joiners coming from competition. And even when there was oversupply in Dubai, our enrollment was still healthy. And that's a testament to the reputation of schools like Dubai British School, Greenfield International School. So even if you take Greenfield International School, it's not in a fantastic geographical area and DIP. And we've seen the opening of a flagship British School Durham, big name, big fees, coming in and actually our enrollment in Greenfield has outperformed Durham and done better. So there are some barriers to entry that we'll see as you're suggesting in your question, at least a 2- to 3-year delay for any international operator. We are going to be in there in '25 with Greenfield in Jumeira and 20 -- sorry, in '24 with Greenfield in Jumeira and '25 with Mira, in '26 with our 2 new super premiums that should be established and up and running in those 5 years. The only other thing I would say other than being very confident about our brand and our reputation is that there is independent research showing that with the growth of the Dubai and Abu Dhabi economy that we are looking at 65,000 young people coming into the UAE in the next 5 years. And we are only putting 8,000 seats into that market. So we're very, very confident that even if there is competition that we will continue to do well.

We'll take the next question from Nitin.

Sorry, I joined the call late, and pardon me if this is a repeat question. If I look into your revenues, you have other operating income in this quarter, which is AED 20 million. So the last quarter, this number was AED 1.6 million, and last year, the number was AED 7 million. So I'm just wondering what actually is this AED 20 million other operating income in this quarter? And my second question is, if I go into your G&A, it has declined year-on-year and quarter-on-quarter. Last year, it was 32%, this year it is 28%. Last quarter was 32%, it has declined from last quarter as well. So the reason is, last year, you had AED 5 million other, which is not this year. So what actually is this AED 5 million last year of -- second quarter of last year? So these are my 2 questions, which is basically related to other expense and other income.

Okay. So maybe I'll start with the G&A expense, Nitin. Why does it decrease? It's related mainly to the IPO process when -- in which we were in H1 '22, '23. So we had obviously costs associated with the IPO process, which don't -- which are not recurring in nature and that explains a lot why it is decreasing. The second thing is as we grow, as we get more volume and capacity, we are able to optimize the way we make the platform run and we make -- we can generate savings all across the platform. So when you combine these 2, that explains why the G&A expenses are going down compared -- in H1 '24 compared to the previous period of the previous year. In terms of operating revenue, if I understood your question.

So AED 20 million, there was a discussion of the AED 20 million.

Yes, yes. So this -- your revenue in this quarter, it has AED 20 million other operating income, which last quarter was AED 1.6 million and last year was AED 7 million. So what actually is this other operating income and why it has gone up? So we know yearly, we get this breakdown. It says sports activity, transport income, income from conferences, uniform, cafeteria. So why it has gone up abruptly this quarter?

So you will -- I understand your point. You will find the details in the financial statements, which are -- have been made public on the website and on the FM website at our website as well. But as you say, this is related at the end of the day to the enrollment and the cost. The more students you have, the more you generate in terms of commissions related to transportation, to cafeteria, to uniforms and so on and so forth. The other thing is we have been able, following some clarification on how it would work, to generate some operating income from the Dubai School PPP. Last year, it was not clear how it will work practically and how it should be recognized financially. It has been clarified. This is another source of operating income and explains why such a variation.

Sorry. So what is a sustainable number like per quarter? So like last quarter it is AED 1.6 million, and this quarter is AED 20 million. What should we -- for our forecast, what should we think about sustainable number? Is AED 20 million sustainable number every quarter?

So if you are talking about this kind of revenue related to commissions, on transportation, cafeteria, uniform, you need to keep one thing in mind, a quarter or half year doesn't give you the full picture for the year, why? Because usually the providers are invoicing Taaleem at the end of the academic year. So mainly in July, August and usually in August for the full -- for the full year. So they start to provide their services in September, so it's '23 for this academic year, financial year, but we will be invoiced only in August. And when I say invoiced, there is a cost associated to it, but as well the profit sharing mechanism. As a quantum, you can expect something around AED 11 million to AED 15 million, depending on the year and the way parents and students are using the services, which are provided to them.

[Operator Instructions] We don't have any further questions. So I'll pass it over to you if you have any concluding remarks.

Thank you, Mirna, and thank you again to EFG Hermes for continuing to support our quarterly investor presentations. Thank you to everyone for joining the call, particularly during Ramadan. We really appreciate your support and your input. As I said, in the summary, it's another fantastic performance, and thank you for the kind words passed on by those who answered -- have asked, sorry the question. And we look forward to Q3 and hopefully, expecting to announce further growth and profitability. So Shukran Jazeela, Ma Salama.

Thank you. Thank you, everyone, for joining, and thank you, Taaleem's management for your time. This concludes today's call.

Thank you Mirna.