VEON Ltd. (VEON) Q3 2026 Earnings Call Transcript

6, 7, 8, 9, 10. Testing, testing.

Hello and welcome to Vion's third quarter 26 results presentation. For those of you who have joined the Zoom webinar, if you would like to ask a question, you can use the raise hand button, which can be found on the black bar at the bottom of your screen, at any time to join the queue to ask a question, and you will be called upon during the Q&A session. For those of you watching on the webcast, if you would like to submit a written question, please use the ask a question tab at the top right of your screen. These questions can also be sent in at any time during the presentation. As a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Anand Ramachandran, you may begin.

Thank you. Good morning and good afternoon, everyone. Welcome to Vion's third quarter 2026 earnings call. I'm Anand Ramachandran, Group Chief Corporate Development Officer. Next to me is Khan Tarzioglu, a Group CEO. Next to him, Burak Hozar, a Group CFO. Khan will start off, cover strategy and operation, Burak the financials, and then we'll take your questions. In response to your feedback, we have made three enhancements to our disclosures this quarter. First, we are providing like-on-like growth figures for revenue, EBITDA, and profit, together with reconciliations. Second, EBITDA margins for financial services, digital life, and digital enterprise, the three pillars of our digital business. And third, we are providing standalone financial information for our digital operator and financial services businesses in Pakistan. The aim is simple, to show you more about how these businesses perform. Today's presentation includes forward-looking statements and non-IFRS measures, reconciliations, and risk factors are in our earnings release and SEC filings. With that, let me pass the call to Khan.

Thank you, Anand, and good morning, everyone. We had another strong quarter. Let me start by explaining how we define our business at Vion today. Connectivity is the foundation of our business. Not the destination, but the foundation. It gives us scale, distribution, and trusted relationships with our customers. A super foundation enabling low-cost customer acquisition, know-your-customer abilities, and unbelievable distribution capability. On top of that foundation, we built our three digital growth engines. Now reaching more than 220 million customers. Digital services deepen engagement, engagement increases loyalty, and loyal customers stay longer and spend more. This is the source of sustainable growth and cash flows, which we reinvest and continue more value for our shareholders. We believe we are in the very early stages of this opportunity. This quarter shows the model at work. Revenues grew 17.2% and EBITDA grew 10.1%. Digital revenues grew by 46% and now makes up 27% of revenue with a 36% margin. Excluding Kazakhstan, where EBITDA declined, Due to isolated issues, mainly due to taxation, impact EBITDA, our EBITDA would have grown 18%, and margins were sustained year-on-year. To be clear, we are comfortable with the year-on-year trends and expect the margins to improve from here. Growth is turning into cash. Operating cash flow is up 47% year-to-date, and leverage is low at 1.05 times, with a four-year average maturity across the board. Our strong cash generation allows us to increase returns to shareholders. Having completed $200 million of buybacks since August 24, we have doubled our annual commitment to at least $200 million a year. Year-to-date, we have already executed $200 million of buyback and canceled 1.5% of outstanding ADSs. We are halfway through our current program, which remains in execution. Our performance gives us the confidence to raise the midpoint of full year 26 revenue and EBITDA outlook. Beyond these results, we are also building the next components of the flywheel. In addition to what is on the slide, we today announced the closing of the OLX transaction, a leading classified marketplace platform acquisition in Kazakhstan, further expanding our digital ecosystem. We also announced an agreement to take a controlling interest in Jungo TV and All-Women Sports Network. All-Women Sports Network and Jungo TV brings unique, cost-effective, sustainable content to more than 80 million entertainment customers in our markets. It also provides our platform's outreach across 65 countries. This is a bridge to audiences well beyond our footprint, particularly to more than 30 million strong diaspora from our markets having access to digital entertainment and augmented by our financial services, especially remittances. I would like to draw your attention to the fact that part of the consideration is settled in 1.2% of our existing Kyivstar shares at a reference price of $18, a 39% premium to yesterday's close, with a 12-month lock-up and orderly sell-down rules. We are focused on three objectives that we pursue consistently. Build AI-based digital banks, expand the digital ecosystem, and drive consolidation in our markets. Let us look at the numbers in more detail. Third quarter revenues was $1.31 billion, up 17.2%. EBTA was $577 million, up 10.1%. Telecom and infrastructure revenues grew 9.2%, while digital service revenues grew 46%. Digital service EBITDA up 54% to $128 million. Group net profit was $225 million. Like-for-like, revenues grew 15.8% and EBITDA 9.8% for the quarter. For the first nine months, like-for-like revenue grew 16.4% and EBITDA by 12.3%. Group EBITDA margin was 44.1%. Burak will take you through the details later. This page shows our revenue does not depend on any single market. Pakistan led the way, with revenues up almost 29 percent and EBITDA up 26. In Kazakhstan, EBITDA is still below last year as we absorbed the VAT impact and the last year's tax rebates. I am happy with the recovery quarter-on-quarter as we act to rebuild momentum. In Bangladesh, revenue held broadly flat in a soft economy with persistent energy outages as an added challenge. Yet, this was the fourth consecutive quarter of year-on-year growth. Importantly, our digital businesses continue to grow strongly in all five markets. We are applying a consistent playbook and adapted to local market conditions. Our partnership with Starling Mobile delivers results. Starling direct-to-device services now connects over 13 million subscribers across our markets with services now live in Kazakhstan, Bangladesh, alongside Ukraine. Let me be clear on how we see satellite, not as a competitor. But as a perfect addendum to our terrestrial networks, running on our spectrum, over our customer relationships, compliant with sovereign license requirements. For a country at war like Ukraine, for the vast distances of Kazakhstan, for a market where energy outages interrupt the networks like Bangladesh, or floods and earthquakes that happen, the value of uninterrupted connectivity is priceless. And because it sits on our spectrum and our core network, satellites extends our reach. It does not replace it. This is where we are a pioneer in our industry. 6G will be all about weaving terrestrial and satellite networks into one seamless layer of connectivity. While everybody talks about it, we are executing on that vision today. Digital continues to scale and now reaches more than 221 million customers, including 64 million digital-only users. The quarter-on-quarter movements reflect seasonality in the timing of marquee events like FIFA World Cup or cricket tournaments. Underlying momentum remains healthy and strong. And that engagement is translating into profit. Third quarter digital revenue rose 46% to $355 million. EBITDA rose 55% to $128 million and 36% margin. For the first nine months, that is $1 million of revenue and $346 million of EBITDA. For the first time, we are disclosing EBTA margins for the three digital engines, and they are healthy across the board. Financial services at 32.7%, digital life at 39.6%, and digital enterprise at 37.5%. Thank you. And with last 12 months' capex, intensity of just 6.9%, digital services scales on efficient capital and generates cash. Digital is now a substantial, profitable growth engine, and we see significant runway for growth ahead. Multiplay is the flywheel in action. Multiplay customers have grown from around 35 million two years ago to almost 45 million today. That is over 50% of our smartphone user base. Compared to voice-only customers, they generate 4.2 times the average revenue per user and churn at half the rate. Over a lifetime, that is an 8.4 times value. As customers adapt digital services, they use more data and voice and spend more with us and stay longer. That is why Multiplay customers already generate significantly higher value. Financial services is one of the clearest examples of our flywheel in action. We have brought our financial services assets together under Vion Digital Financial Group. which already serves 60 million customers, one unified group strategy executed locally. Pakistan proves it can be done at scale. So let me tell you more about it. In Pakistan, we have built a complete financial ecosystem over $400 million of revenue and nearly $50 million of profit in nine months. It runs at scale, with more than 65 million registered accounts and 1 million active merchants. Over the last 12 months, the value of transactions on our platform was worth around 17% of Pakistan's gross domestic product. Given how large this business has become, we are adding more granular disclosures so you can better evaluate it against peers. Nano loans show the engine at work. They make up $166 million of our $486 million loan. But the real story is velocity over 230,000 loans a day, resulting in total disbursements of over $400 million in the quarter. These are four-week loans turning over and over again, helping customers meet everyday financial needs. Like a taxi driver covering his fuel in the morning. Like a small business owner purchasing ingredients, fulfill customer orders, and repay the loan from the proceeds. These are small transactions individually, but at scale, every cycle multiplies through the economy. It is critical that we grow with credit discipline.

None alone requires credit.

Measure to final outcome reached 93.2% up 1.7 points. NPL ratio for term loans fell 2.3 points to 8.1%. And our loan to deposit ratio of 47% sits comfortably in the range you would expect of a best-in-class bank. JASSURE, formerly TPL Insurance, extended our financial services ecosystem. We start where we can leverage our connectivity platform to remotely monitor the risk. Connected cars for motor insurance, connected devices for handset protection, and mini health and life packages for our subscribers. I hope these disclosures make the value drivers easier to access and show the discipline we bring as we build financial services across our footprint. Bangladesh is where we will execute this playbook next. We recently launched MuktoPay, our digital payment service, and Bangladeshi Central Bank has now approved our digital banking license. The opportunity is substantial. 180 million people, a large diaspora sending money home, and a big portion of the population still outside the official banking system. We see significant opportunity to expand, access, and advance financial inclusion in Bangladesh. I will now pass the call to Barack to run you through the financials.

Thank you, Colin. For the third quarter, revenue grew 17.2% to $1.3 billion, and EBITDA grew 10.1% to $577 million. EBITDA margin was 44.1% against 47% a year ago. As Khan pointed out, this reflects the increasing contribution by digital services to group revenue, as well as the VAT increase in Kazakhstan. which was one of the drivers of lower margins in Kazakhstan. In the third quarter, telecom and infrastructure delivered a 47.2% margin. Digital EBITDA, growing at 54.5%, delivered a 36% margin. Third quarter profit was $225 million, against a loss of $127 million a year ago. Which carry non-cash charges for the Kyiv Star Listing and the currency trust-related adjustments from the sale of Kyrgyzstan operations. For the nine-month period, last year's figures included a $502 million gain on the sale of our Pakistan towers. On a like-for-like basis, nine-month profit grew 25.5% year-on-year. Turning to cash, operating cash flow rose 39.4% to $450 million, and 46.9% to $1.3 million for the nine-month period. Free cash flow, which we previously called equity-free cash flow, was $201 million. Last year's $303 million included $230 million of asset disposal proceeds. This year, that figure is $61 million. Excluding these, free cash flow grew 91.8% year-on-year. Our underlying cash generation continues to strengthen, and asset monetization supports this. We will keep executing on both. For us, asset monetization is not one-off. It is the systematic delivery of our asset-like strategy executed with discipline. Moving to the balance sheet. We ended September with $2.03 billion in cash, including $755 million at headquarters and $532 million of Pakistan banking deposits. Net debt excluding visas was $1.78 billion. Leverage improved to 1.05 times. We repaid $210 million of syndicated debt in the court. Average debt maturity is now four years versus 2.7 a year ago, and 4.9 years at headquarters versus 2.3 a year ago. Let me pass the call back to Khan on capital allocation now. Thank you, Burak.

Let me step back and show you how we think about capital allocation. It starts with cash-generating strength of our businesses. Telecom and infrastructure gives us scale and predictable cash. Digital services adds growth at scale. Together, they are turning earnings into cash. As you can see, operating cash flow at $1.3 billion, up 47%. We are, of course, focused on converting operating cash into free cash flow. We invest. Where returns are visible and hold CAPEX intensity inside our guided range. And we unlock value from our assets. When an asset is worth more to someone else, we monetize it and recycle the capital. We have three clear priorities for pre-cash. First, shareholder returns. We have doubled our buyback commitment to at least $200 million a year. Year-to-date, we have already executed $200 million and canceled 1.5% of outstanding ADSs. Our current program will repurchase and cancel 2.9 million ADSs, roughly 3.8% of issued shares. We have repurchased 1.5 million ADSs to date, roughly halfway through, and the program remains in execution. Every single share we buy back will be cancelled. Second, a strong balance sheet. Our leverage remains conservative at 1.05 times, supported by a well-managed maturity profile of four years. And third, invest for growth. Investment that strengthens our core, scales digital, and deepens our relevance to customers. Capital discipline is the first filter we apply. We pursue opportunities to meet that bar and walk away from what does not. So message is simple. Growth creates cash. Cash is allocated with discipline to accelerate value. And we will deliver on all three. Returns to shareholders, balance sheet resilience, and growth. With nine months of the year behind us, our performance gives us the confidence to raise the lower end of both of our revenue and EBITDA guidance. We now expect full-year revenue growth of 16 to 18 percent and EBITDA growth of 10 to 12 percent. Capex intensity, excluding Ukraine, is unchanged at 15 to 17 percent of revenues. This is a disciplined upgrade supported by My performance year to date. Finally, I look forward to seeing you in New York at our Capital Markets Day in 10 days, where we will lay out the next chapter of Neon's strategy and our plans for creating long-term value. Let me leave you one key message. Connectivity is the foundation and grows organically. Digital services accelerates our growth. The flywheel results in double-digit growth and rising cash flows. Thank you. We are now happy to answer your questions.

Thank you. At this time, if you would like to ask a question, please click on the raise hand button which can be found on the black bar at the bottom of your screen. When it is your turn to ask a question, you will receive a prompt to be promoted as a panelist. Please accept, wait a moment, and once you've been introduced, you may unmute yourself, turn your video on, and ask your question. Written questions can be submitted on the webcast by using the Ask a Question tab at the top right of your screen. As a reminder, we are allowing analysts one question and one related follow-up today. If you wish to ask more questions, please raise your hand again and rejoin the queue. We will pause for a moment to allow the questionnaires to enter the queue. Our first question comes from the line of Barat Nagaraj at Canto Fitzgerald. Please unmute your audio, turn your video on, and ask your question.

Hello. Hi. Thank you for the presentation and congrats on another good quarter. I have one question on the EBITDA margin that you said is set to expand from here. Did you mean at the group level and what are the drivers for that? And related to that, I just want to understand from a Kazakhstan point of view, is 40% the new kind of structural margin post the VAT reset or is there any path back towards the mid-40s or higher? Thank you.

Thank you very much, Bharat, for the question. Now, Kazakhstan had a very specific, you know, quarter where we were impacted by the revenue side, VAT increase, and last year's tax rebates coming in on Q3. So that is, you know, kind of an isolated case. And as I mentioned, if you would exclude that, our EBITDA growth was also around 48 percent year on year. And I believe from this point on, naturally, there will be a dilution impact of the 36 percent margin digital business. But I still believe that we will be from 44 onwards, improve the EBTA margin despite that. And frankly speaking, you know, the impact in Kazakhstan will also improve over the time as we normalize the impact of price increases, as well as the tax rebate normalization.

And just to add on top of that, the Kazakhstan impact is a little bit visible between Q2 and Q3, where the margin has improved in Kazakhstan. Yeah, true.

Thank you, Barat.

Thank you. Our next question comes from Jake Ng at Newstreet Research. Please unmute your audio, turn your video on, and ask your question.

Hi, just two questions. Thanks for the additional disclosure on Starlink direct-to-sell customers this quarter. Are you seeing this direct-to-sell service support higher pricing or help attract new customers in your markets? And secondly, Could you share how overall consumer output, so including both mobile and digital services, trended in Pakistan and also Kazakhstan in 3Q? I think you previously used to disclose this metric for each country.

Okay. Let me start with the second question you asked. I will check our disclosures, and we will provide, if need be, also the country-level multiply ARPUs. But it is a very, very similar picture in all the countries that we operate in. We actually see the customers who also consume our digital services consume more data and generate about four to almost 4.5 times more ARPU, and same impact on the side of the churn. So it is quite a standardized, actually, multiple, as we say. With regard to the Starlink, you know, naturally, the answer is when you are in a country, in a landmined area. Lack of coverage like Kazakhstan because it's too big, or you are in a country where networks may be on and off due to energy outages. Having been connected is a priceless value addition to the value proposition. So you can imagine that we are currently enjoying a period where we are the only operator which does this. But I believe over the time, people will see more offers of similar nature. But I do see that as a major differentiator of the customer acceptance, excitement. I was in Dhaka actually two days ago, and I have seen literally some customers trying to get outside of the coverage area just to see the satellite sign on their phones. So I think this is really an exciting offer that we brought to these markets. And as I mentioned, terrestrial and satellite network integration is what the main feature of 6G will be. And we are demonstrating that even today, there are opportunities to show value in this technology. And because it uses our spectrum, our core network, and because licenses that we have basically complies with national security rules, it is a perfect fit. We do not see as a competitor on the other side. It is a complementary service.

Jake, mobile ARPUs are something we've disclosed at the country level. So for Pakistan, you will see they grew 7% year-on-year, and clearly combined with the subscriber growth, they drove a 14% increase in telecom and infrastructure revenues for the Pakistan digital operator business. Kazakhstan, they were down 10% year-on-year, and that's obviously driven by the VAT impact, as Khan pointed out, and the fact that we are looking to improve tariffs, and that's taking us a little more time than we thought. But let's take it offline for any other metrics that you want to know. It's all available. I'm very happy to take it offline.

Thank you. Thank you, Anath. Thank you, Jake.

Thank you. Our next question comes from Ali Zaidi at INA. Please unmute your audio, turn your video on, and ask your question.

Hi, guys. Thank you for the opportunity, and congratulations on your latest results. I have a couple of questions. The first one is related to Pakistan. So the recovery rate on the nano loans for JazzCash and MMBL is around 93%. And we have seen that nano book is killing at a very fast pace. So how do you see this rate settling over the longer term? And are you happy with it? And the second question is that with Maktoupe now live in Bangladesh. How do you see the Bangladesh financial service opportunity as compared to Pakistan?

So, Ali, thanks a lot for the questions. First of all, 93.2% and improving, we are very comfortable with this rate. And, you know, there are two important elements of our financial services business. And it is our ability both to acquire merchants, so there is a small business element to that. And then there are transaction, of course, you know, value that we drive, and then the nano loans. And all these three, including the store value capabilities we have at MMBL Bank in terms of taking deposits, are extremely accurate. And this is the model we are now exporting to Bangladesh. Bangladesh is slightly smaller population compared to Pakistan. But from an economic activity perspective, I consider Bangladesh actually at par. And the opportunity is definitely as big as Pakistan. And also, we should not forget that there is another market that we are up there, and that's the diaspora and the remittances flowing into Pakistan and also Bangladesh. In both of those countries, $60 billion each is the amount of remittances flowing. Most of that money is flowing to our customers' wallets. And now with Mukta Pay, we will also take our fair share. And as we deploy our digital bank in Bangladesh, we will have the same capabilities of also storing value on our bank accounts.

Kaan, if I may add, given that we're disclosing these numbers for the first time, these recovery rates did not happen by accident, right? These have been, over the years, a build-up of proprietary data-driven credit models, now utilizing AI analytics capabilities, built on tons of customer transaction behavioral data. I would, in fact, encourage all of you, invite all of you to visit Pakistan and the team, and this is something which is to be seen to be believed. So, as Khan pointed out, these are skill sets, specific... behavioral assets that we've built up over a period of time. And we believe these are unique differentiators that lead to these kind of numbers that we can proudly show for the bank and hopefully sustain over time.

Thank you so much. Thank you, Ali.

Thank you. Our next question comes from Ahmed Mustafa at Enam. Please unmute your audio, turn on your video and ask your question.

Hello, everyone. Thanks for the presentation. After two shows... First, could you walk us through the commercial rationale for creating Vion's digital financial group and how you expected to improve growth and profitability? And second, on just cash, you have mentioned that around 46% of transaction value is currently chargeable. So how much scope is that there to increase that share? And what would be the main drivers?

So, let me take all those questions. So, you know, the Beyond Digital Financial Group, as we scale our assets, clearly Pakistan, we've proven that at scale. Bangladesh, we now have the license. It's something we want to do in the other markets as well. So, there's a lot of... I guess, pretty specific skill sets to do with the financial business. We don't run the business like telcos. So kind of bringing it across into a separate group to leverage, you know, the common knowledge we have, to leverage best practices. You know, this will be, as we said, one strategic framework, but run very locally with local nuances in mind. So that's the real intention of kind of bringing these businesses under the DFG, so that we can exploit synergies, avoid mistakes, and learn from each other's best-in-class habits. And obviously, over time, you know, as we look to create value in these assets and illuminate value in these assets, these give us extra optionality to do so. Second question is a very interesting one. Yes. Look, the market's still at a very early stage of growth. We're probably still scratching the proverbial tip of the iceberg. 15% of GDP is where transactions are at. So there's a combination of looking to encourage customer adoption and therefore offering a bunch of things for free or at very nominal rates. And second, obviously, working with the government to encourage financial inclusion. So I'd like to see this as one potential indicator of both volumes, because we want to drive financial inclusion in the market. And these are things that we want to do. Obviously, over time, as we grow the businesses, these are potential opportunities for us as well to kind of grow what we take out of it. But again, we'll be slow and deliberate over time because the primary motive to us is really to enrich the customer, be more relevant to the customer, and over time, obviously, look to create value for the customer and the economy.

All right. Thank you. Thank you, Ahmed.

Our next question comes from Vincent Fernando at ZeroOne Investment Research. Please go ahead.

Great. Congratulations, the quarter. So this is the first time we can see the Pakistan Financial Services as a full P&L. Saw that the GTV is up 79% and active merchants more than doubled. Now that you have the digital banking license and Mukto Pay live in Bangladesh. We'll see you next time. Which parts of the Pakistan model do you expect to carry over in terms of, I guess, the first things that you would prioritize as you go to other markets, such as Bangladesh? What should we look at sort of for to see the first proof of, let's say, your proven Pakistan playbook now rolling out in Bangladesh? Thank you.

Sure. So, Vincent, first of all, you know, we believe Pakistan model and Bangladesh model could be a perfect match in terms of replication. And Pakistan model, if you look how we made our network be relevant to the country, merchant acquisition. It's very critical that we acquire the merchants. Deployment of QR code payment capabilities. On the other side, of course, launching the digital wallet and becoming a player on mobile payments. But the payments is not the real value driver for making profits. Actually, you need to be able to store value in the bank accounts, your own bank accounts. Digital banking license is critical. That's why we have MMBL in Pakistan, and that's why we were now allowed to do digital banking in Bangladesh as well. And that ability to then monetize the velocity that will be driven about from your shopping window, which will be... The marketplace. So actually, the one component that I would like to develop also see in Bangladesh is the marketplace or classifieds. And we can carry some of our capabilities, maybe Kazakhstan to Bangladesh from that regard. But our flywheel is very simple. The Foundation Telecom acquires the customer, has the KYC component. The shopping window is the marketplace. And the bank, basically, from the shopping window, takes the business opportunities, and the money flows from a merchant bank account on our bank to a merchant bank account, to a consumer bank account on our bank. Money stays with us, but we make the money from the velocity through nano loans and payments. And as long as we can build this flywheel, which we have successfully done in Pakistan, we will successfully do the same in Kazakhstan, Bangladesh is a huge opportunity for us.

Okay, thank you. I'll save my other questions for offline. Thank you.

Thank you, Vincent.

Our next question comes from Himanshu Porwill at Gramercy. Please unmute your audio and ask your question.

Hi, good morning, good afternoon. Thank you very much for the presentation and congratulations on strong results. I have a question on financial services. I see it currently accounts for almost 13% of your total group revenue. What is your target going forward, especially considering the Pakistan financial services? Could you elaborate on the average loan size? What sort of provisioning coverage do you have on the book? And what is the headroom versus the minimum capital adequacy ratios? And if you expect any?

So, Imanju, I would suggest that from a midterm outlook perspective, this is best to be shared at the capital market state and days from today. So, let's wait for that because I don't want to give any, you know, selective disclosures at this stage, but from a, you know, market perspective. I believe financial services business in the countries that we operate at, in emerging and frontier markets, is a bigger business than telecoms. I will just stop there.

But does it not produce the tail risk of operating like a bank or financial services rather than a telecom company?

Well, you know, I don't see that as a risk. I see that as an opportunity. And we will operate our telecom companies like a telecom company. We will operate our banks like a bank.

And on the capital equity ratio, we will be looking not to go below 15%. Whether this will need capital injection? No, the current velocity of our business is enough to sustain that capital ratio. But at the same time, again, if we go into digital banking after getting the license in line with our growth projections, we might be injecting capital into that bank. But definitely that would be not more than what we see today.

And one of the reasons to start providing this level of detail is just to get people familiar with the amount of discipline we bring to the business. So, provisions, ECL, look, we don't want to overload people with data, but we can assure you in the 20th, you have data for last year. It's all pretty stable, and we will start providing more detail on this as we go along. So, I'd rather say that, look, we want to get people used to, you know, the kind of data we are providing. We'll take your feedback on what additional data we can provide, because our intention is to assure you of the discipline that we bring to this process. As Khan pointed out, there's a significant opportunity for us, and this is something where we see a significant tailwind and significant scale for us to look to operate in, but at the same time, we want to do it with significant discipline, and that's why the disclosure, so we can take investors along and assure you that we will do it in the right way with the right absolute capital discipline.

Another data point to add is today, 89% of the loans that we give out at MMBL is collateralized.

And what's the average ticket size to do? Is that something you can share?

Yes, the average ticket size for the nano loans was... 600 rupees, roughly, give or take. And, you know, it was 5,700 rupees. Sorry, average loan size. The average term loan size was 634,000 rupees. It's in the earnings release. Average nano loan size was 5,700 Pakistani rupees. You know, that's roughly around 20 US. So it's all available in the earnings disclosure. And yeah, this is the kind of information we want to get you more comfortable.

The term loan average says around $3,000, right?

Got it. Thank you very much.

Thank you. Thank you, Imarsha.

Your next question comes from Dan Ritzdale at Addison Group. Please go ahead with your question. Dan, please unmute your audio.

Yeah, it's very positive to see the growth in digital services and the margin expansion, particularly in fintech. We've obviously seen the IPOs of Etel Money, seen the IPOs of Mint recently, you know, healthy multiples, and it does look as if international groups are attracting higher multiples than single country. I was interested to see that, yeah, the sort of consolidation of your fintech. And I was just wondering whether those IPOs had sort of shifted your thoughts about the potential valuation, the timing and structure of a valuation crystallization event in fintech.

Yeah. Now, I have been also very closely monitoring the valuations of both Gcash and Airtel money. I think they are encouraging, and it shows actually the potential of the business. Clearly, you know, we see, we tackle our markets, market by market, but on the other side, we are not blind that there are synergies, there are best practices, and there are capabilities when it comes to credit scoring and loyalty technologies. So as we build our businesses, we will create the right synergies, and especially when it comes to international money transfers and remittances, by definition, this is a capability that we have to build at the center in a very strong way with AML. So that's why we brought in a chief payments and digital assets officer, both addressing the capabilities in terms of remittances, including either fiat currency or stable coins. And that will be the first steps towards creating a multi-country financial services group. That's why we named it Beyond Digital Finance Group, and it will be our value generating unit in the future.

Thank you very much.

Thank you.

Your next question comes from Stella Cridge at Barclays. Please unmute your audio and go ahead.

Hi there, everyone. Many thanks for all the updates today and the additional disclosures as well. I wondered if you could ask about the Uzbekistan market. You announced the acquisition there. If you could talk about this entity, what the market share is at the moment, what kind of opportunities you see in Uzbekistan, perhaps the EBITDA contribution that we could include going forward and how this will be funded. That would be great.

Super. Stella, thanks a lot for allowing me to talk about Uzbekistan a little bit. Uzbekistan is a remarkable transformation story. In the last nine years, the new president of Uzbekistan, Shevkat Mirzozoev, has turned into a closed economy, almost at the level of North Korea, into a globally connected liberal economic platform. And in the same time, this double-landlocked country turned itself into a well-connected country to the digital economy. And we see this transition, and as a 40 million population country, growing 1 million a year represents a huge opportunity. Still, the penetration rate of mobile services is below 100 percent, is actually around, you know, high 80s. And I truly believe that the structure of the culture, very similar to Kazakhstan, with high family values, and we know how to play in these markets, providing real value for the families and fix mobile convergence. The acquisition we have done, Perfectum, is a very good example of that. Perfectum is the only standalone 5G operator in the region, actually, and maybe one of the handful ones around the world, and it gives us a unique spectrum fleet. Already deployed standalone 5G network, and ability to deploy very fast fixed wireless access solutions for a fiber-poor environment. So that's why I consider Uzbekistan as one of our star growth markets of the future.

From a funding perspective, half of the acquisition will be funded from the HQ Cash, half will be debt that will be funded through the operations.

And in terms of EBITDA that it might bring from the closed day?

Let's wait on for that at the right point in time, Stella, when we provide the guidance for next year, it'll be included as part of that.

Okay. Thank you, Stella.

Your final question of today comes from the line of Adrian Cundey at Emerging and Frontier Capital LLP. Please unmute your audio and go ahead.

Hi, I'm Khan, Barack, Anand. Greetings from another frontier market of Vietnam. Most of my questions have been answered by yourself, by earlier participants, particularly as relating to Perfectum and to the Bangladesh Digital Bank and Wallet, but maybe I could ask a little bit, something a little bit more granular on Perfectum. Clearly, from what I can tell, it's very much a spectrum-driven acquisition and network assets. It puts you on par or better with both Uztel or Mobius and the other operator in the market from that capacity. So maybe could you give us some idea on what your sort of 5G CapEx in Uzbekistan might look like in the coming year, in the coming year or two, in terms of also your consolidated sales in that market, given its low customer base? And just from an accounting perspective, you've bought an asset with debt and equity. Is there any risk that you might have to look at some kind of impairment on have you paid any goodwill that might result in impairment or does the spectrum that you've acquired in a network sort of increase the overall value of your existing respect footprint and there's no risk there? That's on Uzbekistan. Just on Bangladesh and the digital bank and the wallet, what kind of sort of capital base do you think that financial services is going to need this year, next year, and the year after over three years? And how much is that sort of relative to your existing EBITDA in the country?

So let me start with you, Uzbekistan. When, you know, we looked into the opportunity in Perfectum, you know, clearly spectrum was one of the attractive things. But the other thing is the synergies that we will be able to drive from merging the two networks and also deploying the fixed wireless capabilities in addition to our fiber assets. So the synergies and the spectrum well justifies the position. But we have to keep in mind that still there is another privatization going on with Mobius. We would like to see, you know, what is the outcome of that. And I still believe that there is further room in the market for a market consolidation of network companies, network infrastructures. It is really important that countries like Uzbekistan adapt a network sharing strategy in order to maximize the network performance, accelerate the deployments, and lower, basically, the cost of the networks. And we will be actively looking for further consolidation opportunities or network companies, infrastructure company formations. So, but currently, even if nothing more happens, we are very happy with the perfect asset in terms of the spectrum it provides us and the ability to create synergies from our joint networks coming together. With regard to Bangladesh, how much capital you will need. The secret sauce of digital banking, and specifically AI-driven digital banking, is not only about the bullets and payments. It's about ability to store value. And when I talk about store value, there are two important components. One is the float that you will have on your digital wallet and where the float sits. Because as the float sits in bank accounts, and as the merchant acquisition drives more posts, and the posts also drives bank account volumes, practically you create a very balanced portfolio of deposits, funds. And then, within the central bank regulatory environments, you can leverage that and create already a very sustainable and strong lending power. So, I do not see any significant deployments of our own capital into this, but of course, utilizing a systemic credit scoring and well-managed capital adequacy ratio is going to be critical for successful operations. But that's why when we enter into markets, we always go through digital banking licenses. I do not think standalone digital wallet businesses is credible in terms of driving nano lending type of opportunities.

And on the capital, it's not a triple digit million. I mean, there's definitely a business case that we sent in to the Bangladesh Central Bank to get this digital license. We did not disclose the amount, but it's not definitely a triple digit million, as I said, for the capital.

So Bangladesh Burak generates $200 million give or take EBITDA per annum. So it's probably going to be, you know, like Burak said, it's much lower than a three-digit number and there's probably ability to stagger it over time. So relative to the EBITDA, it's not going to be a number that moves the needle significantly either way. So that's probably the best way to leave the answer for now.

And on the accounting question, we are currently going through the purchase price allocation, but eventually we are acquiring a business, not asset. That's how we will account for it. And any impairment, if any, will be determined after a year, according to the business plans we set for the entity and the synergies that we will get into operation.

Now, Nats, I think it's a positive move across the board, and I think in Bangladesh, going hand-in-hand of a license puts you in a better place than a, say, Bcash standalone, because Bcash has to answer to its bank, and you're going hand-in-hand with a bank and a wallet. So, All good. And congratulations on what was a pretty good result over the quarter, certainly operationally. And hopefully we'll be a little bit more accurate on the net income line next time. But we were spot on on EBITDA, so we're happy.

And I look forward to seeing you in New York. Thank you very much, Adrian.

Thank you for your confidence. I'm flying from Vietnam to New York on the 15th, so I might turn up tired, but I'm going to be there.

Thank you so much. Looking forward to seeing you there.

Excellent. Bye-bye. Thank you. We have one additional question from Himanshu Porwal at Gramercy. Please unmute your audio and ask your question.

Hi. Yeah, just wanted to follow up a bit about your refinancing. I mean, any plans to refinance or pre-fund your headquarter maturities?

Thank you, everyone. Again, we just, as we said, we closed a syndicated loan in the headquarters. We are looking into it. Definitely, our target is to keep the maturity level above four years, which is the current level today. So, there is no need. What I always said is we have this 1.5 cap as a ratio in terms of our... Net debt to equity, EBITDA ratio. So eventually, if something comes up that is worth investing in, we will be looking into getting into more debt, but there is no refinancing considered at this point.

I guess the other way to look at this question, Imran, as we've discussed before, we would want to keep our credit investors well updated with what we do. You've been very loyal to us. You know, we are a company that does many things. So if ever there is a need to raise capital, we can move very quickly. And therefore, we'd want to keep all our stakeholders, you know, fully updated on what we are doing. And therefore, keep your comfort levels with us, you know, at an optimal level. It just increases our flexibility on the financing front.

Thank you.

We have no further questions at this time. I will now hand back to Anand Ramachandran for closing remarks.

Well, thank you very much, as always, for taking the time to attend our call. As Khan pointed out, we look forward to seeing all of you, if not a whole lot of you, in New York in 10 days' time, when Khan will be talking about the next chapter at Beyond, and we'll be talking about a bunch of the businesses that we spoke about today in more detail. As always, any follow-up questions, we are here. Thank you again, and goodbye till the next time.