TAURON Polska Energia S.A. (TPE) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I'd like to welcome you to the conference call for investors and analysts on TAURON Group's H1 2020 Financial Results. The host of today's meetings will be Mr. Wojciech Ignacok, the CEO of TAURON Polska Energia; and Mr. Marek Wadowski, the CFO of the company. During the Q and answer session, we will have also Mr. Dariusz Niemiec, the Executive Director of Market Operator and Trading; Roland Makiela, Executive Director for Controlling; and Sebastian Gola, Executive Director for Analysis. My name is Marcin Lauer. I'm working for our Investor Relations team. I'd like to remind you the conference call is simultaneously interpreted into English. Outside of this session, you can also listen to our meeting via teleconference. I'd also like to encourage you to ask questions via form available on the website or the broadcast. Due to the data protection regulations, we will not give you -- give your contact details, your name, but we can provide the name of institution if you enter this information with the content of the question. Mr. CEO, please have the floor.

Ladies and gentlemen, it's a great pleasure for me to welcome you for the first time in my new role during the conference call as the President of the Management Board of TAURON Polska Energia. For safety reasons, our meeting is held by a conference call, a video conference. During the conference, we will present to you financial results and operating results achieved by TAURON Group in the first half of 2020. During my part of the presentation, I will present to you the overall financial situation of the group. I will describe the highlights and the CapEx. On the other hand, the CFO, Mr. Marek Wadowski, will describe the macroeconomic situation and present the detailed financial results broken down into individual lines of business. On this slide, we will present the financial results and the operating data achieved in the first half of this year. I'd like to draw your attention to the very good financial results on the EBITDA level which came in at PLN 2.4 billion. It's worth noting that the sales revenue went up 6%, up to almost PLN 10 billion. The net debt-to-EBITDA at the end of the first half of this year reached a safe level of PLN 2.66. In the case of the operating data, it's worth mentioning when this is the result of the market situation, the effect of coronavirus pandemic and the trading strategy of our group. On this slide, we are presenting the financial data and operating data of the company for Q2. The trends visible in this period were the same as the ones we observed during the entire first half of the year. On the next slide, we are presenting several highlights, important events that took place in the first half of this year. In March of this year, we signed a loan agreement worth PLN 1 billion total value to finance general corporate purposes, excluding the financing of the coal assets. The next important event, as part of financing of the Green Turn of TAURON, was the signing of the agreement of Polish Development Fund. The agreement defines framework conditions for the joint investment project in the renewable energy sources. It's worth reminding you that, in the first half of this year, we also reached an agreement with a workforce on reducing the work time -- working time at TAURON Wydobycie, TAURON Mining and TAURON Generation. Thanks to that, we'll be able to adjust the level of production output of our coal mines to the diminished -- the reduced demand for coal. Additionally, in the second quarter, we agreed on the changes to the collective bargaining agreements, which allowed us to dissolve provisions in the amount of PLN 530 million. I'd like to thank the workforce for this agreement as far as carrying out our allowed investment products, worth recalling. But according to the agreement of the contractor, the commissioning of the units in the Jaworzno should take place by the end of November this year. We're also running a process aimed at selling the shares in TAURON Cieplo, TAURON Heat. Now we are conducting negotiations -- closing negotiations with PGNiG, a Polish oil and gas company. Now I would like to hand over the floor to Mr. Marek Wadowski, the CFO.

In the second half, of 2019, we observed in the Polish economy systematic weakening of economic conditions, economic downturn. Additionally, in the Q2 2020, we have the coronavirus pandemic and especially harmful economic effects of this pandemic, which led, as a result, to the drop of industrial output, monitoring output, decline of electricity consumption comparing the first half of 2020 versus the same period of last year. The decline came in at more than 5%. The electricity imports during that time went up by more than 42%, and the electricity production in Poland dropped by almost 8%. It's worth noting that the biggest drop of electricity production took place with respect to the conventional hard coal and lignite-fired generation sources. The basic financial data for the first half of this year. First of all, the sales revenue, which were higher during this period under review, thanks mainly to the high electricity sales prices and the high distribution services rate. The net result in the first half of 2020 was negative, mainly due to the impairment charges related to the assets -- carrying value of the assets. Those impairment charges came in at more than PLN 1 billion. Had we not taken into account the impairment charges in the net financial results, the net financial results would come in at more than PLN 680 million. The comparable EBITDA, so adjusted, excluding the one-off events in the first half of 2020 versus last year, shows a decline by 10%. In Q2 alone, the situation is similar as in the first half of this year. Here, we are also dealing with the decline of EBITDA -- of a comparable EBITDA at a slightly less level of 8%. Our large segment has been -- invariably, the Distribution segment. We generate 70% of our group's EBITDA in the first half of 2020. It's worth noting the growing share in EBITDA coming from the renewable energy sources segment. Similar situation we can see -- we can observe in Q2 alone. Analyzing the impact of individual segments on the EBITDA in the first half of 2020, we can see that the biggest positive contribution came from the Distribution segment, where there was a dissolving of the provisions for the employee benefits worth PLN 425 million and the Mining segment, where we reached -- we posted a positive result. The Generation segment had a negative impact upon EBITDA in the period under review. In Q2 alone, the biggest impact came from the Distribution segment and from the Mining segment. Now moving on to the results of individual segments. Let's start with the Distribution segment, which, as I mentioned, is our largest segment. The biggest impact outside of the dissolving of provisions for employee benefits were worth PLN 425 million came from the price. The positive impact of the price was due to the effect, first and foremost, that the price for distribution services last year was approved by the President of Energy Regulatory Office starting from as of April 6. So the entire Q1 last year was based on the prices of 2019. The negative decline -- the decline of volume during that period was mainly due to economic effects of pandemic and the deterioration of economic situation. The decline was almost 6% during this period under review. The main reason being the decline of volumes in the B and C groups. Both of these groups are responsible for more than 90% of volume decline. B and C groups are small and medium enterprises. We are observing a slight increase in the G group, namely the households. In Q2 alone, in the Distribution segment, we can clearly see a significant impact of economic effects of the pandemic. The decline of electricity distributed volume is almost 10%, whereas, for the entire H1, the main reasons being the B and C group declines. So small and medium enterprises consuming less electricity. Moving on to the quality parameters related to the Distribution segment. We can see that they are looking quite good. comparing it to the parameters that are outlined in the President of Energy Regulatory Office decision, we don't see any danger or any threat, but the parameters that we achieved in the first half of 2020 could have a negative impact on the tariff in the subsequent periods. We do hope that this trend will continue throughout 2020. Ladies and gentlemen, let me move to next segment, the new segment that we've been reporting for some time now. The Renewable Energy Sources segment. It's worth indicating, in this segment, we are reporting, we are seeing a significant increase of production and increase of EBITDA as well. The EBITDA growth is mainly due to the increase of electricity volume produced by wind farms. This growth of the produced volume came from 2 factors. First of all, the operation throughout the first half of this year of the wind farms that we acquired in September last year. And secondly, good weather, good wind conditions as compared to last year. It's also worth noting the positive impact of higher prices of certificates of origin of electricity. With respect to fixed costs, we are showing you the negative impact upon the EBITDA in the order of PLN 3 million. This impact was primarily due to including as fixed -- classifying as fixed cost in the first half of this year, the cost of operating wind farms acquired in September last year; and secondly, from the provision that we set, the original PLN 17 million for real estate tax for 2018, which was based on the decision of the Constitutional Tribunal regarding the definition of building structure as of July this year. In Q2 alone, ladies and gentlemen, the situation in the RES segment, renewable segment, is similar. Nevertheless, here, the result is a bit lower mainly due to setting up a provision that I have just mentioned. In the Generation segment, we are dealing with 1 one-off event, and this event will be having lesser and lesser impact on the result in the subsequent period. This was the event that involved swapping the futures contracts that had with the further hedging for prices of the CO2 emission allowances. Contracts concluded on the exchanges, swapping it with the contracts concluded with financial institutions. This way, there is no need to deposit margins. So from a liquidity point of view, it's a very beneficial solution for our group. Nevertheless, due to the swap transaction, we reported a negative impact on the EBITDA, which was due to the price differences. This negative impact will be getting less and less as we continue to settle those contract level as in the first half of this year, the impact on EBITDA was PLN 112 million coming from that source. A very significant impact up on the Generation segment came from electricity margin, margin electricity. This was a negative impact mainly due to the increase of the prices of CO2 emission allowances prices. The CO2 emission allowances prices in the first half of this year in the Generation segment went up by more than 70%. And at the same time, the production dropped by 24% due to the market conditions. We can summarize it saying that the price of electricity does not cover the cost of production of electricity, of course, mainly due to the increase in the prices of CO2 emission allowances prices. Q2 alone also was impacted by the market conditions. Here, in Q2 alone, the price of CO2 emission allowances went up by more than 50%. The decline of production came in at 22%. As a result, the Generation segment posted a much lower EBITDA than last year. It should -- one more fact should be mentioned here, namely the 910-megawatt unit in Jaworzno was not commissioned as planned in the beginning of 2020. We assume, as the CEO mentioned, that this will take place on November 15, the commissioning. However, due to sales of electricity from this year, we are repurchasing -- purchasing electricity on the exchange, getting out of our sales contracts. Therefore, the EBITDA for this -- achieved this way will be included in the entire group's EBITDA, but it will be shifted, transferred from the Generation segment to the Supply segment. So one can say that, had the unit been commissioned on time, this EBITDA would have been seen in this segment. But as it is, we see this EBITDA in the Supply segment. Moving on to the next segment, which is practically new starting from this reporting period, namely the discontinued operations. One should indicate what was the reason. The reason is the fact that we are conducting now talks with a Polish oil and gas company, PGNiG, about the potential sale of a tower on the heat subsidiary sale. And according to International Financial Reporting Standards, such as it should be reported as the assets held for sale and therefore should be treated as discontinued operations. The results of negotiations or agreement with PGNiG, we are not certain of yet. We don't know the results of negotiations. But already, we are reporting that TAURON Heat subsidiary, TAURON Heat line of business as a separate segment. The biggest impact on EBITDA came from weather conditions. As we all remember, we were dealing with an extremely warm winter this year. As a result, the heat supply, heat sales were lower. Additionally, the market is on -- the existing market brought about the situation where marginal electricity also in this segment is lower. We had -- we are dealing with a similar situation if we compare Q2 2020 versus Q2 2019. In the Supply segment, as I mentioned before, a very significant element is reporting the positive result on the transaction of repurchasing of electricity from the 910-megawatt unit in Jaworzno. The amount of the positive impact on EBITDA in the first half of this year is more than PLN 220 million. By that margin, the supply segment's EBITDA is higher. We are reporting it on -- we are showing this on the slide in the -- under the item, electricity price and volume. During this period, we were dealing with a decline of volume, the -- for the impact of this factor of -- electricity price and volume factor is PLN 115 million is much lower than the effect of repurchase of electricity from the Jaworzno unit. Property rights in the first half of this year were more expensive than last year. Therefore, this has a positive impact upon the Renewable segment, but has a negative impact upon the Supply segment. In this segment, the prices of the property rights went up by more than 30%. In Q2 alone, also, we are reporting under this segment the effect of the repurchase of electricity from the 910-megawatt unit. The impact on EBITDA in Q2 alone of this sector is more than PLN 110 million. And it's worth noting that Q2 is the most difficult one for the Supply segment due to the economic impact of the pandemic, therefore, the decline of supply volumes. However, it's also worth noting that the impact of this pandemic on this segment is much smaller than we had originally expected. We assume that the impact will be much greater, the situation will be much worse. But generally, the Mining segment in the first half, also in Q2, reported a positive EBITDA in the region of PLN 7 million in H1 and more than PLN 40 million in Q2. This was a consequence of 2 important factors. Firstly, we signed an agreement with the workforce in the Mining segment which enabled us to take advantage of Anti-crisis Shield relief package. The overall impact, inflow of cash is PLN 32 million in H2. Let me mention that this agreement covers 3 months, May, June, July. So in H2 of this year, we'll have the additional inflow in the amount of PLN 16 million. And the second important factor is the market situation related to coal, due to the much lower demand for coal, we then, TAURON Group and also nationwide, the inventory levels of hard coal are going up. The increase of the inventory levels, while taking place, had a positive impact on EBITDA due to the fact that we are not reporting the cost of producing this coal in the P&L statement. We are showing it as a balance sheet item inventory, which is related to applying the principle of the accounting, the correspondence of revenue and cost. While we are reducing the inventory levels, the impact of the operation will have a negative impact on the EBITDA. Therefore, we expect that for the entire full year 2020, the EBITDA reported by the Mining segment will still be negative despite the positive result in H2 and in -- in H1 and in Q2 alone. We can see here that in Q2 alone, the situation is similar as for the entire -- for the first half of the year, the important element is the increase of inventory levels. We are assuming that in the second half of this year, the production of coal will be lower than H1, therefore, we will not be reporting this increase of inventory levels in H2. The financial position of the group in the first half of this year was stable. The net-debt-to-EBITDA ratio is 2.66, while the maximum allowed level being 3.5. So we can say that the situation was safe. At the end of June 2020, the available sources of financing for the group is more than PLN 3 billion. In 2020 and '21, we don't have maturities to repay of any large debt amounts. The -- such large amounts comes up at the end of 2020. We are already preparing ourselves for this repayment. We have some time left so we are confident that our efforts will be successful in this respect. Let me now hand over the floor again to the CEO.

Ladies and gentlemen, the largest CapEx project in terms of value carried out by TAURON is the construction of 910-megawatt generating unit in Jaworzno. The current work progress in the construction site is more than 98%. The unit is in the start-up stage now. Let me emphasize that yesterday the unit was successfully synchronized with the National Power System. The next important project we are implementing succession of the CCGT unit at Stalowa Wola. The units received their permit for operation, which is legally binding. All of the management systems have been completed, and the first have been completed. We are -- we have entered this unit into the hot start-up phase. On the slides, we're also showing the projects that involve implementing heat production at the 460-megawatt unit. It was the picking and backup boilers at the Lagisza pipeline. As you can see, this investment project has practically been completed. The final item presented on the slide is investments related to the adaptation of generating units to the operating conditions, which will come into force beyond 2021, so that we could meet the debt conclusion requirements. In the first half of this year, we spent PLN 135 million on this project. The CapEx of TAURON Group open in the first half came in at PLN 1.8 billion. Similar as in the previous period, the largest CapEx was allocated to upgrade the grid assets and installing new grid connections for your customers. The CapEx in the Distribution segment came in at more than PLN 900 million. The CapEx in the Generation segment came in at PLN 700 million, including PLN 300 million spent on the construction of Jaworzno generating unit. Ladies and gentlemen, this is where we'd like to finish our presentation, and we are ready to answer your questions now.

Thank you very much to the Management Board for the presentation. We have more than a dozen questions, a few of them are related to the situation, the impact of pandemic on the financial results of TAURON Group and the situation of TAURON Group in the first half. This was already discussed in the presentation. But Mr. President, please provide some extra information, if we may.

TAURON Group undertook a number of preventive measures aimed at protecting the employees of individual subsidiaries of TAURON Group. A dedicated crisis management team was set with its task being to assess the situation of individual lines of business of our group, individual subsidiaries. We have anti-crisis teams. We implemented the necessary organizational changes in the individual subsidiaries to increase the security, the safety. In the Mining segment, reduced the work time and the wages were reduced by 20% for a 3-month period starting from May 1. Similar in the Generation segment, from May 1, the wages were reduced by 10% in this case and the working time was reduced. These measures allowed us to acquire funds under Anti-Crisis Shield in the region of PLN 50 million, as mentioned by Mr. Wadowski, the CFO. However, as far as financials are at concerned, the COVID impact was -- starting in the Distribution segment, we observed a significant drop of electricity volumes delivered to the consumers in the region of 6%. In the Supply segment, we are observing around 6% declines in the supply volumes on an annual basis. And also, we're observing an increase of applications requested by the customers to extend the payment terms. And the group estimates that the impact on first half on EBITDA was about PLN 140 million. As of August 19, entire group, we have 66 employees infected and 305 persons under quarantine. The largest number of persons infected is in the mining company 18 persons; in the Distribution, 15 persons. From the beginning of the pandemic, we introduced remote work where it was possible in the distribution and production companies. Thanks to the enforcement of all the measures, we didn't observe major hot spots.

Another question. Are there terms of the transaction or potential heat sales, a TAURON heat sale to Polish oil and gas company? If so, please provide those terms or provide me maybe the date when you most suspect to complete this process.

Ladies and gentlemen, as of now, we are conducting the negotiations with the Polish oil and gas company, PGNiG. We extended the exclusive rights to these negotiations up to roughly September this year. We don't know yet the results of those negotiations. We are expecting that if we agree -- come to an agreement on the terms of a transaction, of a deal, and if a deal were to take place, the deal would take place at the end of the turn of the year, at the end of 2020, beginning of 2021. However, at this point in time, it's difficult for us to determine what the results of talks conducted will be. Once we reach the agreement, we will provide the appropriate information to you.

We have several questions under a single packet, so I'd like to read them one by one. How come you had such a good supply segment result, PLN 173 million of EBITDA, despite the pandemic? What is the impact of lack of the operation of Jaworzno unit? Let's start with those 2 questions.

As I have already mentioned, in the first half of this year, due to the fact that we are repurchasing electricity sold from the 910-megawatt unit, we posted quite a positive -- materially positive impact upon the earnings in this segment. The total impact, only due to the repurchase of electricity, the PLN 226 million during that period. I'm talking the entire first half of 2020. This result was possible, thanks to the market situation. Because on one hand, we are dealing with a situation where the electricity price is unfavorable for our units. That's why we have such a large decline of electricity production nationwide from the generation in conventional sources based on hard coal. But on the other hand, if we're dealing in such a situation where we sold electricity and we cannot produce it, so repurchasing, buying back this electricity gives us a positive effect. So this way, it's an effect of market situation and the actions that we are taking in the trading area with respect to repurchasing electricity that we had already sold from the 910-megawatt unit. Had it not been for this factor, of course, then the Supply segment's earnings would have been much lower. We do expect that, thanks to this operation, for the full year, the impact on the EBITDA of 910-megawatt unit will be practically unchanged versus our original assumptions. We had assumed EBITDA of more than PLN 300 million this year, and we do expect that the market situation will enable us to post such results. It does not mean, of course, that for the group we perceive it as a positive development in such a way. But thanks to the market situation, we are able to maintain the EBITDA result. But of course, we do want this unit to be commissioned as soon as possible.

Thank you. And what is the current net value of TAURON heat assets after including the impairment charges when the transaction deal with PGNiG? And does the company want to sell its stake in Stalowa Wola project?

The carrying amount of assets after impairments are just 1 -- a little more than PLN 1.3 billion. The transaction with Polish oil and gas company's being negotiated on exclusive -- on an exclusive basis. So it's difficult to determine what the results of the talks will be. As I mentioned before, once we know the result of those talks, of course, we will disclose this information to you. With respect to Stalowa Wola project, let me remind you, whether the company, at the end of May 2019, published its strategy where we included an element of divesting the shares in the Stalowa Wola CHP. We continue to maintain our strategy. Nothing -- we're upholding our strategy. Nothing has changed in this respect. If we are conducting negotiations, we have an advanced sales process, of course, we will disclose this information to the market.

Thank you. Another 2 questions. Are you conducting the process of divesting the coal mines now or liquidating the coal mine? Do you expect the return of -- by the Energy Regulatory Office in 2021 under the RAB model?

In the Mining segment, a lot is dependent upon the result of agreements that are now being discussed by the Polish mining group. We do assume that the decisions reached by the Polish mining group will have an impact upon the entire hard coal mining sector in Poland. And from my point of view, the way we see it is, whatever actions we take will, of course, be aligned and subordinated or in line with those agreements reached at the Polish mining group. It's difficult for us to determine what the result of those decisions will be, but this will be a very important element impacting the entire hard coal mining segment in Poland. That's why now we are not conducting any divestment or liquidation of the coal mines process. According to the strategy, we were analyzing the possibility of selling the Janina coal mine. It didn't take place. We continue to analyze the opportunities, possibilities that we should take into account in terms of the mining segment. As I had already mentioned before, for us, the most important thing is the result of talks held at the Polish mining group, PGG. In case of the Distribution segment, it's difficult to say at this point in time whether this model will change in 2021, the current model, RAB-based model. If I were to make a bet, I would probably make a bet that the -- this transition solution will be in place, but I can't -- I'm not able to exclude any ultimate solutions being implemented. However, the transition solution also for 2021 alone is potentially possible.

Thank you. There are several questions regarding the Financial Shield. How much, according to the Management Board, can the company get in aid from the Polish Development Fund, PFR, Financial Shield in Q3?

Now we are analyzing the opportunities, the possibility that the group has in this respect. What is very important is, as I mentioned before, the impact of the pandemic -- the impact of the economic effects of the pandemic, because this is most -- of most importance for the financial results of our group, is definitely smaller than we had originally anticipated and assumed. It's true, but the impact is negative, especially in the Distribution and Supply segment. The consumption of electricity dropped. The distribution volumes dropped. The electricity sales dropped. However, this impact is not so significant as in case of such industries as airlines, restaurants. Therefore, looking at the entire economy and looking at the solutions available as part of the Anti-Crisis Shield relief package, one should take into account the fact that the impact of pandemic is not so dramatic. It's not so large in our industry. And therefore, we are relatively limited in the opportunities, possibilities of taking advantage of Shield. If we looked at Q2 alone in terms of sales revenue, it's difficult to speak -- to say that, in Q2 alone, group-wide -- capital group-wide, it's difficult to notice the major impact of the pandemic. The sales revenue versus Q2 in 2019 went up by 9%. So had we not known that a pandemic occurred, probably would have -- we would not have been able to get it -- get this information based on the results. So of course, we are reviewing the options of what advantage we can take from the Anti-Crisis Shield relief package. But we are not the company, definitely, that will be the first in line to take it -- to be able to take advantage of such solutions.

Thank you. Questions from PKO BP brokerage house, 2 questions from them. Do you share the view of [indiscernible] that these are partial share in the mining assets? Due to the security of supply, we have a very good results in the -- production results in the Mining segment, despite the reduction of our working time by 20%. It was related to the favorable conditions. Were there any other factors behind it? Or what are your expectations for H2 in terms of the Mining segment?

Ladies and gentlemen, the question, how is mining -- how mining should be operated after the agreements are reached, after the talks conducted by the Polish Mining segment, Polish Mining Group, irrespective of what the outcome will be, the production of electricity from coal, including hard coal, will be an important part of structure of electricity production in Poland. It's true, but in the first half of this year, this level, the total level, total share of electricity generated from hard coal and lignite was the lowest, up to now, in the entire history, a little more than 70% it reached. Before, it was always way above 90%. However, it still continues to be a substantial share. Therefore, it's important what the model will be like in the future. From TAURON Capital Group's point of view, hard coal is needed, of course, for the units to be operated. And from the security point of view, we need access to such hard coal. The solutions regarding this aspect may vary. Those solutions might -- don't have to involve the equity ties. The contractual agreements, the sale agreements are also ties that are strong enough so that they could ensure the security of supply. It is important, not so much -- it is not so important whether TAURON Group has shares -- has a stake in such an entity. But what's important is the entire shape of the market, how the market will be organized. From my point of view, I can say that, definitely, the transition, the transformations must take into account, of course, the security of energy supply, but also taking into account the fact that, as we can see that this year, that the demand for coal is definitely lower. And also, in the case of such situation, we need to be prepared for such situation. So to sum it all up, we don't have to necessarily have a stake, have shares in such an entity. But definitely, for the security of energy supply, the important is the entire setup, the shape of hard coal mining sector and how the sector will be responding to what's happening in the environment, so how it will be responding to a transition of the entire power sector.

Another question of the analyst related to the outlook for H2.

Of course. Here, the main component that had an impact upon the positive result of both H1 and Q2 alone was an increase of inventory levels, but we do expect that for the entire full 2020 year, the EBITDA in the Mining segment will be lower and way lower, much lower. We expect, as a matter of fact, the negative EBITDA for the full year for the Mining segment. It'll be in the -- it'll be -- likely to be lower than last year, but it'll still not be a positive EBITDA. However, it's also worth noting that we have a much better production -- situation in terms of production. And here, we can say, that unfortunately, the market is not supportive of this segment because in the first half of this year we had much better situation in terms of production. Of course, had we -- we wouldn't have had such a positive result had it not been for the reduction in output. But now the production capacity is being limited due to the difficulty selling that coal. And this is the main factor that will have an impact upon the earnings of the segment and situation regarding the production for the full 2020 year.

Ladies and gentlemen, thank you very much for accepting our invitation and participating in the conference call -- video conference call. We'd like to order today to have our next meeting after we report Q3 2020 results. In your daily operations, you can contact our Investor Relations teams. Please contact us directly. And for now, thank you very much, and see you next time. [Statements in English on this transcript were spoken by an interpreter present on the live call.]