Q3 2019 Earnings Call
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[noise] welcome everybody to these events to discuss MTS third quarter, Twinkie, 19 financial and operating results as usual I must remind everyone that except for historical information and your comments made during this call may constitute forward looking statements important factors could cause good called the actual results to differ materially from those contained in <unk>.
Rejection wonderful looking statements. This enjoying imply certain risks I am also discussion which are available in our annual reports on form 20-F or the materials for have distributed today.
Yeah, just about any obligations to update any previously made for like looking statements spoken on this conference call or make any adjustments to previously my statements to reflect changes in risks you can find copies of the presentation materials Houston referenced in this conference call on our Investor Relations website.
Today's presenters are I didn't see kornya, president and CEO or.
And he collects supposed to vice president for custom experience and Marketo and that's again like you want to myself to vice President for Telecommunications and then they Kaminski Vice President Finance now I will hand to told that don't exceed to keep Oh.
As usual I only want me to begin with Google highlights why are we missing on the will then give would you build business and financial update finally, I will wrap up before we take questions I'm happy to report that we successfully we deemed Oh My me until mid 2019 in the leave it at the moment all sorted itself results.
So caught them.
Total group revenue was up 4.6% year over year infill wells on reaching 134 billion notebooks.
Good evening, you gross was supported by core operational performance, you know largest markets as well as a noticeable contribution from MTS bank.
Additionally, we saw we'd be de growth accelerate to 5.9% instilled quarterly year over year to reach 62.8 billion little books.
We also made good progress on our long term strategic initiatives.
Can you can make CVT, we continued investing in fourg and that sort of development and we'll launch they feel five jupiler zones in Russia would stop six do you could get coverage.
He meant the payment we pointed you. Good mission is all in U.S. print them for me. There you got it brings to the team gets off when this speaks volumes and I'm confident she's the rights fees, who leads our in force in this area.
<unk>, Yeah, we feel the deepened our integration with MTS bank at both in the organizational and product level.
It would be to be did you, though we continue moving oh.
The national wide middle wins in the Middle things network.
Which has now reached it on 30000 base stations with the label function mind itself.
Finally, more recently in artificial intelligence, we were happy to be won the six founding members in the one its silicon would be returned to join the Russian artificial intelligence I, Yes. We're in for this will give the right.
Even year industry Association, who joined actions aimed at simplifying the rollout of what if you sold intelligence technology in Russia.
With that I will spend at all with the slow.
Thank you Galaxy.
In Q3, we continue to take steps to refer show brand and has enhanced the user experience across the MTS ecosystem.
Let me go over if you off the highlight.
For years ago, we launched our MTR cuts back loyalty program and we're now focusing on rapidly expanding participation in line with our overall that consistent strategy. We're seeing rapid progress in Q3 were reached 4.2 million participants and more recently in October we passed the major milestone.
5 million registered users.
Our loyalty program is also a key enabler for us as we gain traction and Dave the banking in June we launched cares about granted virtual debit and credit card quota.
We're taking a digital first approach to the consumer experience. There's just a few clicks the customer can apply for virtual card get approved and begin making purchases by Apple Google play, we already seeming seem promising early results and since the launch of arc aspect carts monthly issuance of virtual cards.
By the bank have more than doubled.
In Q3, we also continued to see growing adoption of our my MTS SAP, reaching over 19 million active users by the end of the quarter.
My MTS, no prime or digital gateway for customer care as well as a key ecosystem hub for cross selling services, we're making good progress in driving penetration, which now is reaching a substantial share of our subscriber base.
Turning to entertain them in Q3 with Honda time, you're running agreement for a major new via via venue in Moscow, It would be MTS life Arena.
The new facilities plant you opened its doors next year, and we'll have a capacity or allow 11.5 thousand people.
From a product standpoint, this will be complementary to our life experience show services, including you ticketing. It will also provide a flagship platform for brand positioning and product promotion for the 20 million residents of the Moscow Metro area.
Now, let me hand, it over to NASA for business update.
Thank you Paula let me begin the pressure contra revenue in Tempe, Andrew.
This past year over year, so a 121 one non vehicle.
This was driven both by our core connectivity business as well as is our contribution from does about.
We saw double digit top line growth year over year would be bill in Russia grew 3.2% year over year, two to 7.3 billion about this margin slightly increasing to 47%.
As expected.
Mobile service revenue growth accelerated into free reflecting ongoing price adjustment in the industry as well as easy call as it relates how do we began to moderate.
No I will call performer in somewhat better than we expected at the beginning of the.
Looking ahead, we're seeing that growth rates in Q4 will likely be at least compatible with your pre dynamics.
Turning now to retail as opposed to cost of India. In Q2, we've seen it seemed to come fall down in the rational about your wife market.
Yes, hi, based from already feel ramp up last year into FY 2019, So if the 0.6% year over year decline in sales of handsets and accessories.
For the in total we expect dynamics to be largely from.
Given this environment as well the long term trend for what slow mature we'll continue to move forward in diversifying always seemed distribution channels. These of amitiza enable optimization of our retail network going forward.
In Q3, we expanded seems sale from occupancy.
Hello.
Gordon our nation wide partnership with says noise.
As we've seen early promising results.
What the example is our partnership with gifting yet our kids in their stores are showing very healthy and direction.
Tracking interest himself even on the one also generation. We're also pushing you asked for consumer devices, such as smart fortress.
Well it all in Q3 net subscribers were up by Iraq, 0.7 million quarter on quarter, which we see us significantly achievement in competitive hopefully end markets.
Strategically what continues to focus on attraction high value possible.
In Q3, we saw promising metrics with a high percentage of when you add reminding act for at least two months year over year. The number of gross adds to convert into two months subscribers increased by 10%.
Combined these developments give us confidence in more than four hour on that.
Position.
We're confirming our guidance for 200 to 300 store closure by Bantle 2019, and dependent on market conditions Evault with Q4.
Nation welcome to target to opt to 600 total closure by Dan.
Sounds on 20, including our activity this year.
Finally, we continue to strengthen our customer relationship fundamentals sales, we have been often conversion said its national wide in Russia waiting.
Hey, good growth in our fundamental base, which for based stands at about 1 million subscribers across mobile fix and securely.
Our international markets.
Trina also saw solid performance with double digit growth in both craving energy often you take it sounds.
And that ammonia revenue was down 1.9 year over yet in the marketplace, how competition and they will have three changes or did that grew 1.7, given bipin, Kenya optics optimization.
Finally in the levels, which is not consolidated will continue to enjoy a double digit growth in revenue and high single digits.
Now I will ask Andre.
Thank you know so.
Let me start with a few highlights from the bank.
Then I will turn back to the group.
I'm just bank continued to see rapid expansion to the Swiss quota as we execute on our broader fintech strategy.
The first nine months of 2019 net interest income rose nearly 20% year over year to 8.2 billion rubles.
This reflects the ongoing growth in gross loans, which were up 49% year over here in Q3.
Taking a closer look at the breakdown the banks portfolio mix.
The growth driver was a retail loans, which grew 85% year over year to reach 79.7 billion, though.
These reflect our strategic focus on the consumer segment.
We are we are making significant progress and growing our customer base at the end of the quartet, we reached about 2 million bank clients.
Coming back to the group.
Okay perfect came in at 18.4 billion rubles, largely flat year over year when excluding the one off provision in the took what are the previous year.
Net profit was supported by strong operational performance, which was offset by negative impact from high interest expenses.
Some of this impact reflect kind your line and financing costs. The majority is it related to effort has nine reporting requirements regarding improved loan terms in particular, there was at one time the recognition in the third quarter 2019 triggered by crossing the threshold for substantial debt notification.
In addition, there was a high base effect due to the recording of improved loan terms in the year ago quota.
Turning to Capex.
Capital spending for the first nine months of the year two to six to 1 billion rubles, driven by continued investments to improve network coverage and quality.
Haptics revenue ratio stood at a healthy 16%.
Excluding the FCC deal GE payment underlying free cash flow in the first nine month of the here increased by 67% to six to 7 billion rubles versus a year ago period.
This was supported by strong cash generation in our core business.
In addition, there was a lubys effect due to relatively high acquisition activity in the nine months of the previous here.
At the same time whistle net positive cash effect related to Emptive bank funding and random activities.
In nine months of this year. The total impact defense has been going group free cash flow amounted to around ambulant items.
Turning to the bounds shipped.
In Q3, we continued to take prudent steps to optimize our debt portfolio. The reporting period, what you should 10 billion rubles in exchange three the bonds with the maturity of seven years and the coupon rate of 7.9% interesting.
But also to structured credit facilities with this bebington VTB totaling 120 billion rubles.
Total group a group debt at the end of the what are stood at 376 billion rubles with the weighted average interest threed decreasing to 7.8% from 8.1% than the second for them.
And we see potential for further improvement if macro trends continue toward the lower interest rate environment.
No the indicator, we achieved a coupon rate of 6.8% to 5% in our most recent foundations in October with a four year maturity.
And we will continue to proactively seek timing of accuen because in this direction.
Overall, our net debt last 12 months adjusted to lead the researchers to that 1.6 at the end of the quarter, excluding the effects of effort as 15, and 16, and we feel very comfortable operating that business at this level.
Now I will turning back to at ICSI for his closing remarks.
I am I'm encouraged by our program to submit humans, given our year to date before months is well is improved visibility towards the full year. These loss I feel confident in raising our 2019 guidance to seek.
Seven to some growth in that even you and 4% to 5% growth in Maui busy.
I'm also quite that the mold that would have now complete the Dol secondly, the than bringing them in 2019. This full fuel cell can you comment for the first calendar year will follow updated three year dividend pools.
Finally, I also wanted to pick the supports you need you to think always yes steps for their patients and to beg viewing video view all fall equity capital markets strategy in October the MTS more comes from the continued stability will fall currently seeing structure on the New York and more schools stock exchanges.
We see this isn't the right in light of our new growth strategy with its focus on expanding now incidents.
Digital products and services, we will be sharing more we bought or updated strategy next week at all we invested a b in Moscow, we'll look forward to seeing some of you there. Thank you and let's open up the line for questions.
So later when nobody did you take questions.
Thank you very much ladies and gentlemen, if you have a question follow speaker. Please style zero one on your telephone keypad now tend to the Q1 FINAME has been announced you can ask a question. If you find your question is on track before I turn to speak you can die zero to come to your question, if you're using speaker today.
This is Don said before making select Gen. One moment. Please for the first question.
The first question is from zero to Thailand Bank of America Merrill Lynch Your line open.
Hi, good afternoon, thanks for the quarter for do your portray tough questions. After three questions. You. That's okay. One is on pricing in Russia. The other one on digital strategy and then on the on distribution so pricing in Russia, I do think it's possible to Shannon Bovies unlimited data price plans, which I've been around for a ballpark workers now.
Second on digital strategy.
We've seen a very strong pickup of the.
My MTS up in in Q3 can you discuss what drove this and also any progress you're making with online online sales and then third on distribution, if we see less pressure from put it in a in proposal 20 do you think it's ready to push him that you'll be able to closed on a couple of more stores. Thank you so much.
Oh, Yeah, it's Alex I'll take the first one and then slob I will talk little bit more on digital strategy and or even less so on a assuming.
Distribution.
As far as pricing concerned Oh, we see quite stable situation than the market.
We think that the market business knocked the ball we wouldn't be overly optimistic. However, we don't see that the market both sent a extremes of all competing solution. So the vitamin D is pretty much stable.
I need the new that neither too much positive we don't see material battling for you know for growth.
ER in the pricing.
But we don't see also that theory, some will be disruptive for CBS is the market.
A follow.
I'll leave it that lost any problems that consume so far there driving a lot of pool, all quite strongly higher and we see positive contributions from all.
From them into into the into ARPU and then the role to play NP four months so wed.
Whether that's where the time comes into frees up phasing out from.
Yeah Unlimited data plan, so I think it's a little bit too early.
However, it's certain stage of the market development, we might see of such.
Such as such as that.
Okay regarding the digital strategy on my MTS, but we were very happy with their current speed or.
Getting new subscribers to my MTS, but.
As we are up.
Making new developments in the in the application including.
Be banking capabilities and some other features we believed that the growth will continue about generally pretty much the same piece as as the last couple of years here, you've probably seen that it's a very steady improvement.
Regarding the E Commerce I would ask two two NASA, yes, I will just clarify in yeah. If I understand there. The question correctly. This is about.
In line sales cell site all follows shop, if if that's correct yes.
Exactly.
Okay. So.
Yes, wed run that activity a year on year growth more than 7%, but.
It's actually a revenue of handsets.
But definitely f. off what that channel we have more ambitious targets. So we do expect double digit growth of that channel in that in the economy yet.
The cost a lot of being sway actually yeah.
Making changes in that in that activity on top of the had a handset sales. We do expect some a good growth of watching part why this channel.
So right now we're quite satisfied but our ambitious is much higher than the only way we have results all right now.
Themselves team distribution.
Actually add visitation does not need for this quarter from the last quarter and et cetera yesterday. The competition on the market as will mentioned, we are ready to optimize our retail chain as soon as we're happy with the quality of our sales and if the alternative channels, which while developing is known to be inc. as well.
Yes.
Our consumers.
Right now we are satisfied with their results as you see outlets subways here on the rule by.
700.
7100 people.
So we are comfortable.
Im not going from analog TV to close shops.
And our intention to close as I mentioned in my speech in the timing, yes up to 600 shops.
Thank you somewhat helpful.
Okay.
The next question is from Onsite survey Jack Yes your line open.
Hi, Thank you a couple of questions for me please.
Two on Ukraine, so you've accelerated quite significantly.
Whereas your competitors actually slowed down in the third quarter do you attribute this purely the distribution efforts.
No.
Network in the second quarter would you attribute this to and then if you could update us.
The sale of potential sale.
Of this operation because the local authority gave approval for a change in control.
Second question is.
If you could.
Just.
Walk us through your thinking now around dividend.
A question.
Given the fact that you said earlier this year that you would not continue any sort of buybacks.
Thank you.
So, let's see on the Ukraine I think.
Be a significant we see we're seeing that.
A lot of activities, which we initiated a in the past now but evening results a into before amount so fall Ukrainian business unit.
That includes the rollout to fall in that look this includes a is strengthening in the fall distribution.
With the includes yeah, Oh, yes activities related to we think supplying pediatrician that's been the themes and smart phone penetration into our all customer base in Seoul, and so forth. So all the set of that.
TV to switch we have been baking.
Including it competes it from that political alone. So we are.
Spot in terms of for our network with the leader off the market doubling the results.
And now we see acceleration or fall for growth.
No I view it is throwing off before mums in terms of topline and really busy in Ukraine and very much the despite would that be formats and believe that.
You know this trend.
Well, Chris <unk> potential to continue.
And we'll see strong fourth quarter already lost in Ukraine is low.
It's part of rail.
Potential Ukrainian sale law, no concerned beauties, amassing a bit we can.
They all do you.
Oh the specific at this conference call today.
So we are always approach to our geographical expansion you or.
You know why severe sees the opportunistic.
It is we were seeing many times so depending on the specific.
But unions too so we might have come through that.
More movements you the expansion or.
Reducing or geographical.
However, we will do come through on that there are certain talks or.
Both the Ukraine.
Our broadening.
He did then progression.
We are we seek to our dividend policy, which was.
Now on the for some time ago.
No we don't see.
Right now, we don't see any indications or any reasons for in all four.
Oh, changing or we don't have any.
The reason to who to upgrade this.
It kind of a moment.
I was thinking of there being an upgrade but intensive yet the flow over the past few years or the previous pork you always paid.
Got it right at the floor ipads in one of the results with that they were pretty extensive buyback.
Going on so now that you.
Explicitly said.
The buyback potential for paying above the dividend policy for my real question.
So the question, whether we are planning by Bucks. So right now there is nothing my cannot exclude that or will you nor will we can and debt that is the part of our dividend policy, we're seeing that.
We can meet to certain dividend payments and there are three something in that he some upside potentially on that though it included in the form of buybacks. However at this point of time, we don't have any specific decisions.
For all for that.
Thank you very much.
Your next question is from an accidental panelists Renaissance capital your line is that isn't.
Yes, good afternoon.
So two questions from my side first one.
It's probably a bit specific but will be great. If you can help.
I'm sorry.
So the question is on the impact of the closing of the stores. So just.
Can you help us to estimate actually the financial impact of each store closure on your results and in particular do you typically closed the store and the rental agreement expires and you don't need to lease termination fee for the closure and if that's true but sort of.
Kind of.
Monthly or quarterly seating.
You might current envisage if you close stores that might be helpful. Just to get the kind of five.
Rough estimate of the impact and the second thing on the why Biggie number which came pretty strong I think in the fourth quarter. So.
And then Theres, obviously, some operating leverage behind but if you can share some additional color on what really drove why be improvement in the fourth quarter in Russia, and Ukraine outside of their revenue generation initiatives. Thank you.
Thank you for the question a ines I will take the first one on retail optimization, so actually I would like to say that.
Then we.
Say about retail optimization will morphine is not about just a saving on the rental costs, we actually.
Not trying to push.
Their market itself and also our efforts an hour.
Aim from.
Just portion sales to the things out to get them cost that much. Yes. So we actually we'd like to move our self and also to show. The good example to the market that it's not a more on getting into some new customer throb the on retaining our own. That's why we think that is it will bring the whole a market a more.
Ill say association.
And not just the there.
Saving on that rental cost.
Yes.
And also this is the second one I'd say about pension time, yes, and get that question is influencing that the closure, yes of course out because this is dan to of the year and also need to taken so far in some.
Rent timing, that's why in Q3 that the results made the not sorts staining in terms of number of the shops for close but as we mentioned we are absolutely keep all obligation on our.
How to say App.
Now airports and.
Voice that will do coming that will walk us close till the end of the up too.
From 202, or 300 to our stores as a promise.
And actually the question on the weaved into third quarter I think the answer is actual there's no specific or one off effect. There weve. The dynamic is a reflection of the strong performance on the revenue level. It was a very good the quarter for us.
In Russia, both the end Ukraine, so actually that's its effects correctly.
Theres, a nothing nothing on top of that.
Okay got it thank you.
Your next question from jobs that are that pick that I spoke at your line now open.
Yes, thank the flow from Goldman Sachs can you elaborate on Q3 free cash flow dynamics looks like.
Significant increase how much of that pays the vinyl Stephen and what do you expect for Q4 and.
Going forward into 2020 at least in terms of that Directionally, the free cash flow progression and also secondly, hypothetical they gain on Ukraine.
What would be perceived used for in case, you dispose Ukrainian business, if we are talking about potential buyback dividend.
M&A and de leveraging I can you outline some of that priority of between those four.
Thank you.
So this is Andrew let me start with the free cash flow dynamic.
Again this quarter was a very good for us.
And the in free cash flow as well as I said in my speech actually should took taken to count the effect of the bank because of course, the free cash flow of the banks is a bit different than the fixed little separation company like this so if I if I talk about the third quarter itself. The effect of the bank is around 10 billion rubles, if I take it.
Now the rest the is coming from our operational business, which is a.
Our retail network and the and the promotional business. So again, there there's no specific or one of item there.
And the second question at the very speculative is they said there is nothing specific we.
Where is it to tell you all at this moment. So there is no sense and speaker leasing and on that.
Okay.
The next question from Maria Fernanda, Yes.
Yes.
Yes, Hello, I have a question on Fiveg.
Yes.
Could you probably update us on what is the current stage English.
Patients discussions, which direction will be used and I can tell from Tobey developed in Russia, and second is there any visibility on when.
The first spectrum auctions.
Thank you a alexey on Fiveg right now or their position of the government on how to distribute five juice because I'm was not finalized in all all players in the markets into discussion how we can join our forces in order to <unk>.
Four players in the market, how we can join our forces in all the talk soon they read a busy will be developed month or fall fiveg in the country, including clearly clearing up the spectrum all from.
Merely did you use where you'd easily.
Right now I really want.
We see that.
There are three brands, which are really one for all fiveg discussion like in at least in short term a in Russia.
This is 3.5, which you saw.
Pretty much occupied by our the use so it's more freely you're not freely available we will not be freely repayable in the nearest future 4.9 wishes, partially or can be use the all in a newly mucosa blended.
ER wins here Vince's 5.29.
So all these are the position of the going on the let let alone is not to Europe as well.
So to summarize I think that Oh, we'll probably by the end of the year early next year, we'll see you know the position of the governor on how the C approach with the five Julie spectrum and at this time.
Similarly consulting between all cheap oil play out as in the market than the government or how to all fell four to encourage the development of fiveg in a in the country.
Okay. Thank you.
The next question is from onsite SURVIAC PBS your line is now.
Hi, Thank you just the strip full up on the unlimited Theres for me. Please if you could.
Close.
Percentage of the total bases on these today and what sort of usage you see on these numbers the.
Jeremy.
Base.
By which in fact I'm asking have you seen any pressure on the capex from diesel so fine. Thank you.
Yes.
Okay.
Got it Slava I will turn that on on the percentage of subscriber base.
I cannot give you do you the exact number but a pretty sure that it's below 20% of the base definitely because its high ARPU tariffs and so on going very fast at the same time. They use the usage depends very much on the region, but it's usually does not exceed 20 gigabytes and we actually see that people, but when when.
When the subscribed to these tariffs that we will see there.
Usage going up but not.
Not drastically so.
It doesn't really that much the quality of our network Thats why we kind of keep this this position that long, but I would.
Secondly opinion, if I look say that we think that the market will come at some point to the stage, where the these tariffs could be lifted.
And.
Just stool full to add on a slower requirements. There are some creative blends you now for all in all said, the tariffs, which physic higher usage.
Your customer then and limit the tariff plans.
Thank you very much.
The next question restaurant Egan Jones I guess from your line is now open.
Yeah. Thank you very much one technical question can you. Please update us on your second thoughts.
This annual sick with share so.
They have been.
Sufficient number of times, but it seems to be.
Limited for older sums up.
What are your plans for this.
Okay.
I think is actually the answer is the same as it used to be strategically we believe that it will be how it would be a good if we can say cancel them, but so far there was no immediate.
Decision taken on this a on the assumptions.
Okay.
And.
Any any timeline for offices, because clearly one of the kind of concert tickets.
Uh huh.
You pay dividends to yours.
I'm going to company those dividends are getting.
Talks and Oh counseling, Cheryl will be one that was a ways to optimize this.
I would have done them taxation.
Actually I don't want to speculate on the and the future decisions again I will repeat the so far there was no decision on that Oh this aspect because.
In terms of the the most critical issues I think for US. It was it was this year to identify our capital markets directed strategy was to considering the ethic. There that we should that youre raising but so far there was no decision yet.
Okay. Thank you very much.
At the moment.
Question as a reminder, if you will actually ask a question. Please press star one on your telephone keypad.
Your next question is something that you bought Inova Citibank and networking.
Hi, Thank you very much for the productivity.
Okay very quick question on MTS Bank, and you mentioned that one of the drivers of the loan book Cross is.
The.
Cash back.
I would just wondering if okay, great on the barrel several inquiries and all my colleagues how much of that is coming from the.
Cashback versus the yeah I'll make.
Okay.
And that are driving bad and second what you see as an acceptable cost of risk.
Going forward and maybe a question on a same topic, but the thing that do you expect to lumber to continue going at the same rate as we have seen telfair, maybe not pay attention by then.
Times.
Thanks.
Excuse me could you repeat the second question, we didn't get quite yet.
Susceptible cost of risk for you going forward, especially as we go into the environment, where that device that coming down overall on the market.
Okay. Thanks.
Okay.
On a if you have to for MTS Bank will now gets booked program is the right now obviously limited.
More so for up by TC been Salto 5 million customers that we should we shop God.
Clients, which are possible for loyalty program marketable kroger them.
Coming more from a from the bank so banks because the mine the contribution into that.
And.
As far as for our cost of risk.
In the bank, the we show or of course del Friscos British show in our Npls in our disclosure.
We believe that we do we had a conservative level.
At this point of time.
Well for very high coverage.
Oh, they show as well.
In in the sense. So we are for the next year, we continue to be.
Relatively conservative for approach speaking did you know the spaces at this stage of the market development, So we oh, peaking.
You know not peaking additional risks.
In Unix funding, all but pool. So we are even the decreasing beauties, which were peaking.
Is it blends for the fourth quarter and going forward.
Our comparatively to the level of 46, we've been taking last year for example.
Thank you.
The next question is from second even I didn't bank. Your line is open.
Yes, Hello, Thank you.
My question results from MTS Bank and its impact on the free cash flow.
Banks impact this 10 billion rubles, and I wanted to ask to give some breakdown on that.
It's kind of warm off.
Sure.
Seasonal or if its are occurring.
Probably what effect do expect for the whole here.
Maybe the dynamics for the next year.
No that's.
That would be very helpful.
Okay. When when I was talking about the impact of for MTS Bank on the free cash flow actually if you look at the at the cash flow breakdown, you will see is perceived clients, which or which are about the bank deposits and loans. So when I was giving a their numbers can be renewables does actually the amount that you can see.
And of course this is the reflection of the liquidity managed by the bank. So this is the deposits. They can buy the bank from the interbank market. For example, so again this is the the standard the activity of the bank and Oh, how the bank manage its own liquidity. Therefore, while we are well would consider there.
Free cash flow impact I would rather take it out and consider the freecell free cash flow of operational business with or without this without without this impact.
Okay. That's very helpful. Thank you.
As we have no further questions I would like to have back to the speakers.
Okay.
Ladies and gentlemen, thank you very much for listening if you have any further questions. We welcome you to contact MTS Investor relations at anytime.
As a cost of the discussion will be available soon on our website. If you wish to the political in the meantime, appreciate the interest and wish everybody a pleasant day. Thank you.
Ladies and gentlemen, thank you for your attendance. This call has been concluded you may disconnect.