Q4 2022 VEON Ltd Earnings Call
Speaker 1: detail over the next hour. Our teams delivered 2022 priorities despite numerous macro and geopolitical challenges.
Speaker 2: In the fourth quarter, we have strengthened our position further and accelerated our growth, positioning us as we start 2023.
Speaker 3: For this, I would like to thank all of our teams and especially our colleagues at Kiavstar in Ukraine for serving our customers with essential connectivity and increasingly relevant digital services.
Speaker 4: I would also like to thank our leadership team who are joining me on the call today, and especially to our group CFO Sargano Kandan, who will pass his CFO duties to our group Chief Internal Audit and Compliance Officer, Joep Brackenhof, on May 1st.
Speaker 5: Allow me to thank Sircan for a very successful three years and continue to serve Vion in an advisory capacity. And cordially welcome you all to his new position.
Speaker 6: With that, let me turn to review our performance.
Speaker 7: Let's start with a snapshot of fourth quarter.
Speaker 8: In the quarter, Vion accelerated local currency revenue and EBITDA growth and continued to gain market share in each of its markets.
Speaker 9: Our top-line growth in local currency for Q4 was 18.6%. This is double the growth rate that we achieved in Q4-21 excluding Russia.
Speaker 10: Five of our countries reported a double digit increase in revenues in local currency and Ukraine revenues grew by 8.7% year on year, a strong performance given the unique set of challenges in the country.
Speaker 11: Service revenues for the group were up by 19.2% year on year in local currency.
Speaker 12: Group EBITDA for Q4 was up 30.1% and the group EBITDA margin was 48.2% which is 2.9 percentage points higher.
Speaker 13: In the fourth quarter, year-on-year revenue and EBITDA performance was impacted by several extraordinary non-recurring items. Excluding these, group total revenue increased by 15.4, EBITDA increased by 7.4% year-on-year.
Speaker 14: Higher 4G penetration, higher relevance of our digital operator offerings in line with our new 1440 strategy, fair pricing for the true value we deliver and good cost management has enabled us to deliver growth despite macroeconomic headwinds.
Speaker 15: In Q4, we did not shy away from investments where we saw the growth potential. Group CAPEX was $263 million with continued investment in 4G, most notably Ukraine, Bangladesh and Uzbekistan. Its intensity stood at 22.1% with a margin of $2.5 billion.
Speaker 16: international tier one US and European banks.
Speaker 17: All local country operations remain largely self-funding.
Speaker 18: Before we dive into the details of our performance, let me recap the developments around the sale of our Russian operations.
Speaker 19: On November 24th, we announced that, following a competitive process, Vion has entered into an agreement to sell its Russian operations to certain members of the beeline Russia management team at an enterprise value of approximately $5 billion as of December 2022.
Speaker 20: On February 7th, the Russian regulator issued its approval of the proposed sale.
Speaker 21: In line with our previous communications, we anticipate that the remaining closing conditions will be satisfied and the transaction will complete on or before 1 June 2023.
Speaker 22: The removal of the Russian operations from VION's reported financial and operational performance reduces the group's revenue and EBITDA in absolute terms.
Speaker 23: However, without the Russian business, DION has a healthier balance sheet and is a faster growing company with greater room for growth in six emerging markets.
Speaker 24: Vion's pro forma leverage ratio, including the incremental approximate $1.8 billion of debt extinguishment from the sale of Russia, would reduce materially. As Vion management, we continue to believe that the proposed sale represents the optimal solution for all stakeholders.
Speaker 25: including shareholders, employees, creditors, and most importantly, our customers.
Speaker 26: and the group will be well positioned for faster growth with a strong balance sheet after the completion of the transaction. We are also pleased that V-Line Russia will be a sustainable company on a stand-alone basis, continuing to serve its customers with quality services in the future.
Speaker 27: Now let's move on to the details of our operational performance.
Speaker 28: As of the end of Q4, our operating companies serve 157 million customers with 4.2 million more subscribers year on year.
Speaker 29: While expanding the base, we have also increased RPU across all R markets, ranging from 5% to 22% year on year.
Speaker 30: In 2022, we added 14 million 4G customers, and 4G subscribers now account for 54% of our total subscriber base, up 7.5 percentage points from a year earlier.
Speaker 31: Supported by more 4G users in our base and their higher ARPU level, Vion's underlying data and digital revenues, excluding Ukraine, rose 25% year-on-year in local currency terms.
Speaker 32: As previously stated, our target 4G penetration level for the group is 70%.
The continued investment in 4G is an important enabler of this growth and our digital operator strategy, which I will expand in the next slide.
In Q4, Leon companies continue to successfully execute our digital operator 1440 model, leading to market share and wallet share gains in each of our operations.
Multiple subscribers who consume at least one of our digital services on top of 4G data and voice increased 40% year-on-year and reached 28 million.
In the fourth quarter, our pool of multiplay customers was 3.6 times the R-pool of voice-only users, while their churn was just 40% of what we saw with voice-only users.
With higher ARPU and lower churn, these customers account for 22% of Vion's total subscriber base and deliver 39% of our subscriber revenues.
I'm also happy to note that our digital operator 1440 model, successfully implemented across our operations, was recognized as the best mobile service for connected consumers at Mobile World Congress in Barcelona.
Now let's look into the performance of our operations, starting with a key of the key financials for each one of them.
In the final quarter of 2022, in our markets, service revenues grew 19.2% year on year, with a growth range of 15 to 30% in five of our countries and almost 9% in Ukraine. This was driven by a larger subscriber base.
higher 4G penetration, increased engagement with our digital applications, disciplined inflationary pricing, resulting in higher Rproof and greater share of wallets.
On this slide, I want to cover the same metrics, but for the full year. In 2022, each of our operations achieved significant growth, both in terms of financial performance and operational metrics.
You will note that the same five operations are double-digit growth companies, not only in the fourth quarter, but also for the full year.
The growth range is from 12 to 25 percent for the full year. The fourth quarter performance in the previous slide is in fact an acceleration of growth for all of our operations.
Let me explain the run of impacts on EBITDA which might have caught your attention.
Kievstar continues to support its employees and the community at large with charitable donations and the staff care program impacting full year FTA by almost 1 billion dreamland.
Normalized for these impacts, fully Revit-TA would have grown by 1%.
Bangladesh EBITDA was negatively impacted by 1.3 billion taka of minimum tax based on gross revenue. Normalized for this, Bangladesh EBITDA would have seen 4% year on year growth.
Kyrgyzstan EBITDA was also impacted by one of items in 2021. Normalized for this, Beeline Kyrgyzstan's local currency EBITDA would have increased 19% year on year.
Now I want to take you through individual performance for each of our major markets and we'll start with the brain.
Thank you.
We have lost three colleagues over the last 12 months in Ukraine, and I would like to start by acknowledging their service to our customers.
Our team in Ukraine continues to do a tremendous job keeping Ukrainians connected and putting employees' safety first.
Nearly 90% of KFSTAR's radio network sites were operational at the end of December .
In Q4, TF Star agreed with international partners to extend ROM-like home offers through the end of 2023, keeping displaced TF Star customers connected to Ukraine.
In 2022, 7.3 million unique TSI subscribers benefited from roaming services.
We would like to thank all our partners, fellow competitors and industry associations for their continued support. Inside Ukraine, national roaming and infrastructure sharing continued, ensuring maximum coverage for Ukrainians and KyivStar as the market leader continues to join forces with its competition to serve customers better.
I am delighted to see this kind of cooperation in our industry when customers need it the most.
with a focus on establishing connectivity and enabling high quality mobile internet as wisely as possible.
KSR continues to invest in 4G infrastructure.
KSR's 4G customer base grew by 1 million subscribers over the year and it accounts 53% of our subscriber base now.
This allows us to help Ukrainians maintain access to essential services with digital healthcare, infotainment and educational services inside and outside Ukraine.
In August 2022, TF Star announced an investment in HealthSupreme, the country's largest medical information system and a leading digital healthcare provider.
With 23 million registered users, HealthC enables access to 1,600 public and private medical institutions, 49,000 doctors.
Halsey reported nearly 1.6 million appointments booked and conducted through the platform in Q4 only. KF Star TV, where zero-rated educational content is also available, reached 1.1 million monthly active users end of December .
With its connectivity and digital offers, TF-STAR retained its leading net promoter score position, with the net promoter score position improving year-on-year in Q4 as well. TF-STAR also delivered another solid result with revenue growth of almost 9 percent year-on-year. Given the current operating environment, including increased energy tariffs, ex...
cementing its leadership position.
Revenue growth was 24.3% year-on-year, including the positive runoff impact of a favorable decision from the Islamabad High Court on pending litigation, allowing us to recognize revenues that were not properly recognized before.
Normalized for this late recognition, total revenues were up 13.2% year-on-year and service revenues increased by 14% year-on-year.
This was achieved despite the 5 percentage points increase in withholding tax and more than 40% reduction in mobile termination rates and all the other macroeconomic challenges.
Normalized EBITDA growth was 11.1%, a double digit performance despite the increases in fuel and electricity, which were higher by around 71% and 53% year on year respectively.
The growth of Jazz was driven by a higher number of 4G users.
which were up 18% year on year, representing 56% of the subscriber base. With a heightened focus on its digital operator strategy, Jazz show a 41% year on year increase in multiplayer customers who now account for 24% of the subscriber base.
44% of subscriber revenues.
We continue to lead the digital financial services in the country with JazzCash and Mobiling Microfinance Bank.
JazzCash reached 16.4 million monthly active users, enabling 2.1 billion transactions in 2022.
Mobilink Microfinance Bank, the youngest microfinance bank in Pakistan with the biggest customer base, enabled its 2.4 million clients to raise small business and nano loans with a gross loan portfolio of 46 billion rupees.
Every single day, we issue 40,000 microfinance loans to customers which are up to Rs.10,000. For Tamasha, the leading entertainment platform of the country, monthly active users increase 4.3 million. In December , total watch time increased by an impressive 9.2 million.
turning to Kazakhstan. B-Line Kazakhstan is now in its third year of market share gains.
7th quarter of above 20% UPG and remains the market leader in Net Promoter Score.
20% growth in total revenues if normalized for a change in accounting rules for revenue and recognition of bundles.
would be actually 24.5% year on year with a service revenue growth of 25.3%.
Adjusting for one-offs, B-line Kazakhstan EBITDA grew by 17.3%.
With 69 penetration of 4G users in its customer base, Kazakhstan is now almost at our target of 70% penetration. In Q4, growth in data and digital revenues was 25.3% driven by the higher use of digital applications for 32 incumbent memories facing the Th dogma from China andMaticsAgent Jim trade Cameron. <expletive>
increase in the number of multiplayer users. DTV, entertainment platform, reached 860,000 monthly active users with 61% growth year-on-year.
It is available both on mobile devices and also as an IPTV offering in large and small screens.
Beeline Kazakhstan's digital first sub-brand EZ reached 380,000 monthly active users up by six times year on year.
160,000 EZee customers are also subscribers of connectivity services with a SIM or an eSIM.
Digital services, superpowers as they are known in Kazakhstan to our customers, supported the R2 growth of 10.7% year on year.
Moving on to Bangladesh. Bangladesh reported its third consecutive quarter of double digit year-on-year growth at 16.9% in Q4 with a top-line performance which has accelerated throughout the year to 19% in December .
With accelerated nationwide network investments, BanglaLink continues to gain both revenue and subscriber market share.
We expect this to continue in 2023 as we surpass 40 million customers benchmark. In the fourth quarter, revenue market share increased by 1.4% 0.0 near and revenue growth was twice as fast as the overall market.
Bangla Link took nearly 50% share of new subscribers and became the net promoter score market in Q4 2022.
The 4G subscriber base was up 34% year on year, reaching 16.1 million. Over the past two years, 4G penetration has nearly doubled from 24% to 43%. Tofi is the number one video platform in Bangladesh.
In the fourth quarter, over 25 million unique viewers watched the World Cup on TV.
It closed the quarter with 21.2 million monthly active users, a 3.3-fold growth year-on-year, and with higher levels of engagement as the average daily active users increased by 5-folds year-on-year.
Actually, every time Brazil or Argentina played in the World Cup, we reached more than 10 million concurrent users, supported by age services scaled with Google Cloud, allowing us to monetize the advertising space on our platform.
70% of ToFi customers are not yet telecom consumers of Bangla Link. New costs associated with nationwide 4G network rollouts and acquisition of new customers and with the minimum tax on gross revenue paid in Q4. ABTA decreased 9.7% in Q4.
In 2023, February year-to-date EBITDA is up 8.8% which demonstrates the underlying trends. Uzbekistan. Beeline Uzbekistan reported record high top-line growth of 30% year-on-year into 4.
which is also its fourth consecutive quarter of growth, about 20%.
EBITDA increased 14.4%. With these results, Beeline Uzbekistan sustained its leading position in subscriber market share, gaining 1.9% of subscriber market share year on year.
and Beeline continues to be the market leader in terms of net promoter score in December 2022.
4G subscribers reached 5.5 million, supported by the continued 4G rollout and attractive digital operator offers.
This represents 4G penetration of 66%, a 5% point increase year on year.
We are happy to see an 8.7 year-on-year increase in RPOOP and a 42% year-on-year growth in data and digital revenues.
Now let's take a look at some of our digital products in greater detail.
Digital operator 1440 stands for being highly relevant to customers.
every single minute of the day. Our digital applications drive this engagement.
On the fintech side, Jazcash is the number one fintech service in Pakistan, serving 16.4 million customers, partnering with 186,000 merchants, up 42% year on year.
The total number of transactions processed by JazzCash in 2022 reached 2.1 billion, 22% higher year-on-year.
Gross transaction value for the last 12 months was close to 4.2 trillion Pakistani rupees with 31% year-on-year growth.
This transaction volume represents approximately 7% of Pakistan's GDP.
Jazz Cash and Mobiling Microfinance Bank provide the best experience in digital banking from nano loans to payments, debit card management to merchant services from SME loans to QR based collection systems.
D-Line Kazakhstan simply a digital only neobank have 246,000 users in December 2022 and the total value of transactions grew to 167 billion Tengye.
Customers are enjoying the benefits of domestic and international remittances linked to their mobile phone number, overdraft offers, in-app gamification campaigns, and payments for their online purchases.
In 2022, Simply was named the best fintech app by Visa International in Kazakhstan.
I have already expanded on our leadership in mobile entertainment, most notably in Pakistan with Tamasha, and with Tofi in Bangladesh, and with BTV in Kazakhstan.
Let me pause here and hand the call over to Sircan to discuss our 2022 financial results in more detail. Sircan. Sircan.
Good morning and good afternoon to all participants. On the following slides, I will elaborate on the financial highlights for our full year results in more detail.
As Khan mentioned already, the classification of the Russian operations as assets held for sale and discontent operations in Vioen's reported financial performance reduces the group's reported revenue and a bit sign up for returns.
For the full year 2022, we reported double-digit local currency growth in both revenues and areas of business in lands famous for its XI, S&P,efined bonds Topo, Japan, Clear disappointing
Local currency savings revenues were up 13.9% EUR per year and local currency EBITDA was up by 12.6% EUR per year. For the full year capex was $1.5M.
Sorry, for the full year, CAPEX was $823 million, up by 2.9% year over year.
The higher reported EBITDA and stable CAPEX compared to last year resulted in 746 million USD, unlevered free cash flow whereas EFCF for the year was $142 million.
Moving first to revenues on slide 20. In 2022, we saw solid revenue performance across all our markets.
Kazakhstan, Uzbekistan, Kyrgyzstan, Bangladesh and Pakistan all stood out with double digit growth.
In Ukraine, we achieved 8.2% euro-over-year revenue growth despite the challenging operating environment.
This is a testament to our team in Ukraine. In Pakistan, revenues were up by 14.3% euro per year. This strong revenue growth in Pakistan comes despite the negative impacts of changes in taxation legislation and the reduction in mobile termination rates.
Pakistan revenues were positively impacted by a favorable decision from the Islamabad High Court on a pending litigation, as a result of which a related provision on revenue inhibitor was reversed.
The overall revenue performance for the year was supported by strong 4G adoption, a continued increase in usage of our digital services and various pricing initiatives.
This strong performance has continued into 2023 with year to date February local currency revenues up by 15.2 percent year over year.
We also saw good momentum across most of our markets in terms of underlying EBITDA, which I will cover on the next slide.
Moving on to slide 21, which looks at our EBITDA performance in greater detail. Local currency EBITDA was up by 12.6% Euro per year, which is a strong result considering the headwinds we face in 2022.
Although this was impacted by a number of one-offs, which Khan has already covered in his section, the underlying performance remains strong. In adjusting for these one-offs, normalized local currency EBITDA would be up by 6.7% over a year, which is still a very solid result.
Energy costs increase across the group by around 30% year over year, which is a significant increase for this expense line negatively impacting group ebitda margin.
We remain focused on implementing planned cost efficiency measures across the group. Project Optimum delivered a $95 million in savings in 2022 with cost intensity improving by 2.5 percentage point euro per year in local currency. This strong operational performance has also continued into 2023.
and year-to-date February local connectivity was up by 11.8% year-over-year. Turning now to slide 22, I will cover some important balance sheet metrics.
Our total cash position stands at $3 billion with $2.5 billion at the headquarters level. This is held in both US solar and Euro and highlights the group's continued strong liquidity position.
The material decrease in gross depth and net depth was largely attributed to the classification of Russian operations as assets had foreseen.
as well as to the quarter-over-quarter depreciation of the Russian ruble against US dollar, resulting in lower reported currency levels of bank loans denominated in ruble.
As we have reported, the schema arrangement was approved by the UK courts and the amendment to the notes will become effective upon receipt of the final licenses.
We expect to receive all these licenses very shortly. Moving now to slide 23, which shows our depth and liquidity positions in more detail.
As I said earlier, the significant decrease in debt was primarily impacted by classification of Russian operations as held for sale. Our gross debt, including leases, decreased to $7.5 billion with a total cash position of $3 billion. As I previously mentioned, the total debt was $3.5 billion.
$2.5 billion of total cash is at the HQ level. While we are aware of the negative cost implications of carrying such a large cash balance, we believe this is reasonable and justified considering the current situation in the markets.
Our net debt currently stands at $3.7 billion excluding leases, plus $800 million in capitalized leases.
Moving on now to slide 24, which summarizes the depth and liquidity of our operations in Russia.
At the end of 2022, the business recorded a growth step of $3.2 billion.
The sale of Russia is expected to be concluded at an enterprise value of around $5 billion based on 31st December for X-rays. Moving to slide 25, here we outline the group's depth maturity.
As you can see from this chart, we have a favorable maturity schedule for the near term, with $1.4 billion of debt maturing until the end of 23. Meanwhile, the RCF can be rolled each period until final maturities in 24 and 25. You may also see on the left-hand side of the slide,
our current cash position of $3 billion. With the implementation of the scheme of arrangement regarding 23 bonds, the maturities on $1.2 billion in the on holdings bonds will be extended from February and April 23 to October and December 23.
once all relevant licenses are obtained. I would also note once again that we continue to meet all our legal obligations for all interest and principal payments due on our debt on a timely manner.
Let me now hand back over to Kan for 23 guidance and closing remarks. Thank you, Sircan. Let me do a quick recap of our guidance for 2023. Our 2023 local currency guidance for both revenue and ABTA is 10 to 14% growth.
VioN's 2023 outlook for the group capex intensity will be in the range of 18 to 20%. With our February to date growth standing at 15.2% year on year for revenue and 11.8% for EBITDA,
we have an encouraging start to the year. With this, we are returning to provide guidance, and I'm pleased to note that this guidance is in line with the growth ambitions we have stated in our Capital Markets Day back in December 2021. In other words, we are picking up where we have left off. Let me also talk about our...
need and we are providers of an essential service.
We operated with this awareness in 2022 and this service continuity will remain to be a top priority in 23. Throughout this challenging year, we are protecting the good standing of our company, maintaining appropriate liquidity and capital structures.
had been a top priority and I'm happy to say that we have successfully delivered on this.
We promise to continue to drive growth with 4G and digital operator focus and have ended the year delivering on this promise as we elaborated in greater detail earlier on this call. In 2022, maintaining a disciplined approach to our portfolio was a must.
We concentrated in larger markets conducive to digital operator value generation and have successfully divested Algeria and Georgia operations. Now moving on to 2023, let me set our priorities for this year as well. Concluding the sale of Russia business as an optimal solution for all states.
growth opportunity, delivering best-in-class connectivity and digital services to our markets with our Digital Operator 1440 strategy.
4. We will remain focused on active portfolio management and the pursuit of opportunities to realize the value of our infrastructure assets.
5. Lastly, but importantly, we are focused on unlocking further value for our shareholders, scoring and planning for local listing opportunities, and returning value to shareholders.
Let me once again reiterate my thanks to our employees and especially Sircan who helped us successfully navigate some challenging times as our group chief financial officer. As a friend and a colleague, I look forward to working with him in your advisory role, Sircan. And once again, welcome to our new chief financial officer role to the role.
Hi, good afternoon everyone. Just to remind you if you have any questions, if you can please submit those through the Q&A function on your Zoom. There have been a number of questions that have come through. Maybe let me start, Khan, actually for the first question for you. Can you maybe just talk a little bit about your guidance again? We obviously saw you had a very strong start to the year in January and February .
10 to 14 percent cumulative average growth rate. And I think it's prudent to start with this guidance, given the complexities we have in many of the macroeconomic situations. But I'm encouraged with this strong start for the year as you said.
Thanks Kon. Sirk, just a question for you. When do you expect the scheme to become effective? Maybe some time around the timing of the licenses and also particularly around the amendments becoming effective as well. Thank you Nick. As you know the scheme has become effective from the 31st of January .
When the UK courts approve the scheme, we anticipate to receive the related licenses from related authorities. Once we receive all the licenses or we receive the confirmation that there is no need for a license, the amendments will also be effective.
In the meantime, we are enjoying the extensive period. If we cannot receive all the licenses until May the 2nd, this effectiveness will go away. However, we consider that this will be a very unlikely scenario.
Thank you Sir, again. Kon, back to you. Can you maybe comment on the status of the tower transactions across solar markets? Sure. We are committed to our strategy of being an asset light operator. And we will be focused on looking for monetization of our tower assets.
This is not as a matter of a need for cash generation. Actually, we are disciplined in terms of having clear demarcation lines for different types of business models.
Tower operations, infrastructure operations are fundamentally different, and today's realities are putting telecom operators in a position to de-layer themselves. No operator is rich and luxurious enough to have exclusive networks.
Towers in the hands of capable independent tower operators represent a much bigger value and operational efficiency. This is why we will continue on our journey for monetizing our towers. This includes Pakistan, Bangladesh, Kazakhstan and Uzbekistan operations.
And we already have also a tower company in Ukraine, and we are looking forward to the peace and the next monetization opportunity there. Thanks, Kon. So I have a question for you. Can you comment a little bit about the current operating environment in Pakistan, particularly given the current macro and geopolitical challenges that we are all reading about?
even more important for the markets. We are closely watching the macroeconomic situation and the foreign current account deficits.
taking the necessary measures to make sure that our values are not eroded by the inflation.
And our teams are focusing on making sure that our customers are provided with high-quality services and with the right prices.
Thanks, Kon. So, Ken, just to you, what will happen to the remaining bonds on completion of the Russian transaction, those bonds that are still remaining and maybe still outstanding to Russian investors? Nick, any bonds and bank loans at the level of PGSV Impolcom will stay with the PGSV Impolcom at closing.
and any bonds issued or bank loans raised by Vion Holdings PV will remain as Vion Holdings PV depth. And after the closing of Russian transactions, we will review Vion's longer term capital structure in more detail and once we have the better visibility about access to capital markets after the closing.
bank loans raised by Vion Holdings PV will remain as Vion Holdings PV depths. And after the closing of Russian transaction, we will review Vion's longer term capital structure in more detail. And once we have the better visibility about the capital markets after the closing.
I guess there's sort of a link to that question. Have we had any discussions here with the rating agencies around that? No, we have not started a formal discussion with the rating agencies yet, but we anticipate to have better visibility about the capacity to go back to the market after closing the Russian transaction.
Thanks, Sir Ken. Colin, back to you. Could you maybe update us on your, you know, we've spoken before about the listings and facilities and potential timing. Could you maybe give us some comments around that?
Sure, all companies in their respective countries, JAZZ in Pakistan, Bangalaling in Bangladesh, Beeline in Kazakhstan and Uzbekistan, they are among the largest enterprises in these countries and they are blue-chip.
Our companies in the respective countries, JAZ in Pakistan, Bangalaling in Bangladesh, Beeline in Kazakhstan and Uzbekistan, they are among the largest enterprises in these countries and they are blue chip brands.
As we see these countries building their capital markets infrastructures, we play it is an important role and opportunity for us also to consider local listings, to tap into local investor base, which is growing in a fundamental way. So these will be the plans and preparations that we will do this year and we will keep of course the investors.
posted on the developments. Thank you. Second, just to talk about once the Russia transaction is concluded, how that will impact beyond the liquidity and deposition? Yeah, sure. Under the agreement, if the buyer is the total consideration for the stake in...
Nipocum is 130 billion ruble and based on the end of December fixed rates, this represents around 1.8 billion US dollars.
And it is expected that the total consideration will be paid by the buyers by taking on and discharging certain beyond holdings debt by VIMPLECOM. And if we take into consideration this 1.8 billion dollar plus around 3.2 billion US dollar debt including capital leases in VIMPLECOM balance sheet.
we are talking about around 5 billion US dollar debt to be discharged from Vyond Holdings consolidated balance sheet which is a quite material amount for Vyond.
Thank you. And so a second statement, would you consider buying back your longer dated bonds given the current pricing and our liquidity position?
As I mentioned in the presentation, currently we are focusing to ensure that we keep a strong liquidity. And as I said, we are keeping around 2.5 billion US dollar liquidity at the HQ level. However, having said that, we are currently evaluating various options around our long-term capital structure. We don't have an actual
Thank you. Kon, maybe could you just please comment on our ability to increase prices, particularly considering the current inflation levels and some of the challenging macro environments in some of our markets? It is really very critical for us to be able to, disciplined way, increase our prices in line with the inflation as the inflation rate.
countries in telecom sector. And this actually gives us room to improve our pricing as we enrich our offers and provide more relevant digital services to customers bundled with our offers. Thanks, Kohan. Sir Ken, could you maybe comment on some of the ongoing cost initiatives in our cost initiative program?
Yeah, sure. As I mentioned in the presentation, we keep very focused on implementing the cost initiatives across the group. And in Project Optimal, we delivered around $95 million cost savings in 2022. And we expect that this kind of savings will continue in 2023 and also in the upcoming years as well.
And understandably, we incur some one-off cost, extraordinary cost in 22, which will gradually reduce in 23 and the next year as well.
Thanks. And then second, another important question that has actually come through from a number of people now is obviously given everything that's going on in the banking environment. Can you comment on which institutions are holding our cash and in what form our cash is held at the moment?
Unfortunately, I cannot name these institutions, but what I can say is all are kept in Tier 1 international banks in the US and Europe .
and also our cash is fully held in US dollar and euro.
and we do not have any cash in bonds. They're all invested in demand deposits plus money market funds. Thank you, Shukin.
And, Kon, can you maybe just give us a bit about the timing on when we expect the racial transaction to close and just, you know, an update on the process and what is still needed today?
As we have announced on February 7th, we have received the approval of the transaction by the Russian regulators. Actually, the approval was given to the buyers so that they can start the process. And as we have earlier stated, we expect this transaction to be closing after the necessary procedures.
on or before June the 1st. Thank you. And then Kon, still with you, the turnaround in Bangladesh has been very, very strong. Can you just comment around this and really, what's driven this very strong turnaround? What we have seen in Bangladesh actually almost like a blue ocean market opportunity.
improvement in the way our net promoter scores work and availability of our services also improved. Most importantly for the six consecutive quarters, Bangla Link's network has been voted as the fastest network in the country and as I mentioned during the last quarter we almost
acquired 50% of the new customers in the entire country. All these things is a combination of well-timed investments, brilliant execution by the local leadership team, and also excellent innovation on our product portfolio.
That's great. I think that's all we have time for from a question perspective. There are one or two outstanding questions that have come through and I'll get back to those individually. I just want to thank everyone for dialling in. I appreciate your attendance on the call. Thank you very much.
That's great. I think that's all we have time for from a question perspective. There are one or two outstanding questions that have come through and I'll get back to those individually. I just want to thank everyone for dialing in. Appreciate your attendance on the call. To Kon and Serkan, thank you very much. Thank you.
Thank you.