Enerjisa Enerji AS

IST:ENJSA.E

Earnings Call Transcript 2023-Q2

[Rawand Faraj, executive]

Good evening, dear investors and analysts. This is Rawand speaking. I welcome you to Enerjisa Energi's earnings results call for the first half of 2023. I would like to start with the opportunity to briefly introduce our new CFO, Dr. Philip Ulbrich, who has joined us from E.ON in June this year. We welcome him to the organization and look forward to work with him closely.

Philip has extensive experience from the energy sector as he has spent almost 2 decades within the industry in various global roles, both across Germany and from as well as overseeing investment activities in areas as San Francisco, in U.S. and Tel Aviv in Israel. His background and latest position as Senior Vice President for Business Controlling Digital at E.ON will be a valuable addition to the Enerjisa management team, and we are confident that our company has a bright future under his leadership.

The call will be presented by Philip and myself for 30 minutes, and thereafter, we will open the line for Q&A. Now without further ado, over to you, Philip.

[Philipp Ulbrich, executive]

Thank you for the warm welcome, Rawand, and hello to everyone also from my side. I am Philipp Ulbrich, the new CFO of Enerjisa Energy, [Foreign Language]. As this is my first earnings release call in the new role, let me say some words on my background. I started my professional career after a Doctorate in Economics at the energy company, E.ON, where I've spent my last 18 years working in various finance roles.

Between 2009 and 2013, I held a position as Head of Finance for E.ON's activities in France. And in the following 10 years, I've held various roles based in Germany, overseeing international finance activities and projects. This includes, among other things, also managing E.ON's international innovation and acquisition portfolio, as mentioned by Rawand and also large international projects.

Most recently, I served as the company's Senior Vice President, Business Controlling, so as the CFO for the Board area digitally. At this moment, having spent 2 months in my new role, I'm still in the stage of getting to know our wide organization and process this year as well as understanding the specific business and macroeconomic dynamics that currently prevail.

Already today, I can share with you that I very much appreciate to work with the Enerjisa team. I'm deeply impressed with what I've been seeing during my visits in Istanbul, Ankara, Adena and Hatay. And I can truly say that this is a company that is very well positioned in its markets and has a highly dedicated and professional team. What is also evident to me is that Enerjisa is a company that goes above and beyond what is expected in terms of challenges and difficulties.

Now moving on to our presentation. Let me start by giving you a highlight of the major developments of our first half 2023 financial results, as you can see it on Page 2. We have now received the official decision from the regulator on how the earthquake-related expenses are to be handled and compensated for in the regulatory framework. Via this, earthquake-related costs are classified as a pass-through uncontrollable OpEx and thus have for the majority of the items, no impact on our financial result.

We welcome this decision and see this as a testament for the pragmatic and supportive framework we are operating under, which underpins Energisa's robust profile. Underlying net income grew by 118% year-over-year in the first half of 2023, driven by strong earnings growth from all 3 segments and a relatively lesser increase of financial expenses.

Free cash flow in the first half of 2023 increased to TRY 2.2 billion compared to negative TRY 4.5 billion in the first half of 2022, driven by lower energy costs and continued support mechanisms in our regulated businesses. Our leverage ratio is as low as the level of 0.6. We reiterate our 2023 and midterm outlook, even with an upward revision of the 2023 underlying net income, which is now expected to be TRY 5.026 billion, thus in the upper part of the previous guidance range.

All other parameters as operational earnings, investments and regulated asset base are expected to be in line with our previous communicated guidance. Before we look at the key financial highlights, let me please start off by sharing some details around the situation related to the earthquake that was situated in our Toroslar region at the beginning of this year.

While I was not yet in Turkey, I closely observed this tragic news from abroad with empathy and sorrow and want to express my personal condolences to all the people of this nation suffering from this event. I want to let you know that I also, as most of the -- almost 12,000 colleagues here and doing all in my power to support the rebuild, reactivation and ease these impacted regions.

From a pure financial perspective, we can conclude that the earthquake has limited financial impact on our earnings capacity and financials. The first key message that I want to reiterate today is that our regulated asset base is not impacted by the earthquake. There are no write-offs or impairments and the company's planned returns generated from the -- this space are unchanged.

This means that financial income and CapEx reimbursement, the 2 main investment return components are safeguarded. While there are physical damages to the grid, these are protected by the regulation and the insurance as we insured to the maximum amount before the earthquake. Costs related to the earthquake have mainly been restoration and repair costs in addition to the humanitarian support expenditures of providing accommodation, food and infrastructure to the people affected.

These costs will be, with the official decision from the regulator, communicated 2 weeks ago, compensated as they are from now unclassified as pass-through uncontrollable OpEx and thus to be matched with additional regulatory revenues. This relates to the cost of TRY 780 million booked in our Q1 results and the further expenses in Q2, which have no negative net income effect in our first half of 2023 results.

This is because they both now have been mitigated with the additional income accruals that will be received with certainty in the future. The same compensation metric is also valid for the TRY 60 million theft and loss related expenses occurred in the first half of this year due to higher theft as consequence of interrupted retail reading activities. These will also be compensated and the effect will be reflected in our Q3 results.

The only OpEx-related negative impacting of our business is the TRY 98 million of humanitarian aid, which the company has voluntarily given to its employees and their families, which is a temporary expense and outside the company's regulatory activities.

For this reason, these TRY 98 million are adjusted for nonrecurring items and not part of our underlying net income. We expect these expenses to be more or less in the same magnitude also during the second half of the year and also then to be classified as one-off adjustment.

Before moving to the financial highlights, also note that we don't expect any changes to our total investment budget as a consequence of the earthquake. I also want to share with you on our continuous efforts in the most impacted regions. In this regard, one important step was the opening of our new customer service center in Hatay, which you can see here on the pictures on the lower right hand.

This was an important step back to normalization, not only for our employees, but also for the people of Hatay. Therefore, I was personally on site in the middle of last month, together with our CEO, Murat Pinar, and almost the entire management team for the opening of this important new facility.

Now let's turn to Page 4, where I will walk you through the highlights and key developments of our first half 2023 financial results. Operational earnings were up by 49% year-over-year, reaching now TRY 9.9 billion. The main driver is the TRY 1.5 billion addition to the financial income from the new IFRIC methodology introduced in Q3 2022.

In addition, customer solutions were significantly and contributed TRY 0.5 billion, thanks to new solar PV projects together with the related gains on FX hedges. Further on, please note that the negative effect stemming from the TRY 780 million OpEx costs booked in Q1 related to the earthquake has now been mitigated as previously mentioned.

Underlying net income, that is our adjusted net income figure, grew by 118% from TRY 1.3 billion in the first half of 2023 -- sorry, the first half of 2022 to TRY 2.8 billion in the first half of 2023, mainly due to a far lower increase in financial expenses compared to operational earnings. And thanks to lower combined net of cash loan and bond interest costs as well as lower customer deposit valuation expenses.

Free cash flow came in at TRY 2.2 billion, translating to an increase of TRY 6.7 billion year-over-year. On the back of support from the regulatory mechanism, compensating for the insufficient tariff levels, which was not yet introduced to the same extent in the first half of last year.

As highlighted on our last call, the Q2 energy tariff levels for end users were decreased by the regulator, effective as of April 1. With it, our free cash flow also declined in the isolated second quarter of this year by roughly TRY 0.9 billion, but nevertheless, remained a positive level year-to-date.

I would like to reiterate our communication in Q1 that the positive free cash flow observed in the first quarter is not the proxy for the free cash flow levels going forward. As these are during these extraordinary times of the energy market, highly dependent on the regulatory compensation schemes.

Regardless of how long these are expected to continue, we still see that our business is operating cost effectively and with solid returns and all working capital fluctuations will regardless of the size in the end be compensated with interest over time. Our strong earnings developments, together with our positive cash generation also translates into a decrease in leverage.

Our leverage ratio, so net finance debt over operational earnings came down from [ 1.5% ] in the first half of 2022 to 0.6% in the first half of 2023. This is a further decrease from the already low leverage achieved in December last year, which was 0.7%. Please note that while we don't provide a leverage target, we anticipate that this will increase going forward.

As we continue to see attractive margins from our investments despite the increase in debt and current market rates. While the low leverage has been supportive in terms of prudent risk management during extraordinary volatile times, it is not reflecting the debt-bearing capacity of our robust business model. Therefore, I prompt you to expect that leverage will continue to be on these low levels as it has been in the last quarters.

Now let's have a look at our operations on Page 5, starting with distribution. CapEx came in at TRY 3.7 billion in the first half of 2023, up from the TRY 934 million figure during the same period of last year. The main drivers for the TRY 2.7 billion increase are higher inflation as well as the low activity level at the first half of last year. We see no changes in our investment plans and therefore, yet again reiterate the guidance for investments, which is TRY 11 billion to TRY 15 billion for this year.

Please note that roughly 80% of this figure is dedicated towards our Distribution business, while the rest are investments into the new fast-growing Customer Solutions segment. Our regulated asset base increased by 50% year-over-year, reaching TRY 28 billion in the first half of 2023 compared to TRY 18.7 billion in the midpoint of last year. The RAB in Q2 is a bit lower than in Q1, where it stood at TRY 29.4 billion due to a lower inflation revaluation, [ estimated ] CPI realized lower than expected.

Efficiency and quality earnings in the first half of 2023 were negative to the tune of TRY 425 million, predominantly due to the negative OpEx outperformance. Let me please provide some context around these cost developments in our Distribution business to let you better understand the drivers behind the figures.

In Q1 2023, the OpEx outperformance was negative due to 2 effects. Firstly, the OpEx spending related to repair of the grid and humanitarian support activities as we respond to the earthquake impacting our Toroslar region. This was recorded at TRY 780 million in our Q1 results. These costs have now been reversed in our P&L.

In the light of the verdict from the regulator that these are cost items that will be treated as pass-through, lower controllable OpEx and thus be compensated to us in due time via the normal tariff mechanisms. The second effect is the increased price level of wages, fuel costs and other material components that are increasing beyond inflation.

This was recorded as TRY 258 million negative effect in Q1 and now has increased to minus TRY 1 billion in our first half results. The majority of the impact is derived from the minimum wage increases that have raised salaries for employees. For Enerjisa, the total basket of regulatory OpEx in our Distribution business increased by 110% year-over-year for the first half of 2023, while the regulatory cost compensation index was 39%, close to the mid-year inflation number.

The difference between the 2 is thus resulting in the negative OpEx outperformance seen in the lower efficiency and quality earnings in our financial results. This is an effect not specific to Enerjisa as it is a regulatory mechanism impacting all distribution and retail companies in Turkey. We have already initiated discussions with the regulator to develop a new indexation methodology that captures cost beyond CPI and our OpEx compensation allowance.

Now over to our Retail and Customer Solutions segment. In our Regulatory Retail segment, the gross profit margin increased to the high and strong level of 7.8% in the first half of 2023 compared to 7.0% in the first half of 2022 on the back of increased cost coverage for higher inflation and doubtful receivables.

Regulated volumes increased by 6% year-over-year, mainly due to an inflow of liberalized customers due to more attractive regulated prices. Vis-a-vis the opposite effect is seen in our liberalized volumes, which decreased 2% year-over-year due to the same reason. In our Liberalized segments, margins came down to 3.9% compared to 4.3% in the same period of last year.

Due to a lower portion of attractive fixed price contracts as a consequence of the illiquid and volatile energy markets observed in the last quarter of this year. Our Customer Solutions gross profit increased significantly from TRY 61 million in the first half of 2022 to TRY 183 million in the first half of 2023. This resulted in a growth rate of 200% year-over-year, driven by primarily new solar power projects where we installed solar panels in our customer facilities, providing them with access to green energy.

Please remember that in the last quarter, we stated that the growth in the Customer Solutions business is only a temporary effect as some of the solar projects were delayed and will be contributing to our financials only in the coming quarters. We are glad to highlight that these delays have now been catched up and therefore translate to the higher growth rate in Q2 compared to the first quarter of the year.

Accordingly, our solar capacity for customers reached 27.9 megawatt peak in the first half of 2023 compared to 22.6 megawatt peak in the same period last year. Our E-mobility business took a substantial leap forward in the last 12 months as the charging plug based increased more than twofold from 520 to 1,164 plugs. [ Not at least ] thanks to the tender agreement secured in the second half of 2022. We can also share the positive news that the last 6% ownership of e-charge were purchased by Enerjisa in July this year, making it now the 100% owned subsidiary. I now hand over to Rawand who will walk you through our key financial drivers.

[Rawand Faraj, executive]

Thank you, Philipp. As you can see on Page 6, operational earnings increased by 49% year-over-year to TRY 9.9 billion. The breakdown per segment is TRY 7.6 billion from our distribution segment, TRY 1.9 billion lira generated from our retail business and TRY 0.5 billion from our Customer Solutions segment.

Looking at the main drivers of the TRY 3.3 billion increase in operation earnings, the following contributed to the growth. Our Distribution business generated growth both from its return on assets and investment activities, resulting in a segment growth of 45% year-over-year with the 3 main components highlighted in the bridge as follows. Financial income increased by TRY 2.5 billion on the back of higher inflation and investments as well as the IFRIC methodology change incorporated in Q3 last year, which alone contributed with TRY 1.5 billion of higher earnings.

CapEx reimbursement, which is a part of our operation earnings, but not included in the underlying net income increased by TRY 1 billion, partially offsetting these positive contributions in our Distribution segment was the TRY 910 million year-over-year drop in efficiency and quality due to the already mentioned effects of higher OpEx costs in light of the increases in commodity prices and employee-related wages above inflation.

Our Retail segment also contributed to increased earnings with a growth rate of 28% year-over-year, generated mainly from our regulated portfolio. Here, the gross profit increased by TRY 472 million year-over-year, thanks to higher energy prices and higher volumes as well as the increased cost coverage mentioned earlier.

The Liberalized segment also contributed to the growth with an increase in gross profit of TRY 164 million in the first half of 2023, mainly due to the low comparison base in the first half of last year, where the liberalized margins were suppressed in Q1 because of the then newly introduced feed-in-tariff mechanisms.

Moreover, our Customer Solutions segment generated an increase in gross profit of TRY 122 million on back of the high degree of growth observed in the solar PV business, thanks to the delivery of new customer projects.

Lastly, as a minor negative effect, we have TRY 69 million higher expenses due to OpEx increases in the Retail and Customer Solutions segment, which have almost been fully offset by gains from FX hedges. All in all, the contribution from all 3 segments generated an increase of TRY 3.274 billion, leading to our first half 2023 operational earnings of TRY 9.938 billion.

Now let me elaborate on the bottom line development on Page 7. Our underlying net income increased by 118% and reached TRY 2.8 billion in the first half of this year, up significantly from the 6-month result of last year, which was TRY 1.3 billion. The drivers are as follows. Our operational earnings, excluding CapEx reimbursement increased by TRY 2.2 billion on back of the drivers just mentioned on the previous slide.

Also operational, but classified as a line item in the financial expenses are our operational FX losses, which increased by TRY 560 million year-over-year due to the revaluation effect of procurement contracts in our Distribution business, which are denominated in FX prices.

Please note that there are active hedging mechanisms offsetting a large portion of this effect. Therefore, the impact observed on this line item is largely mitigated by earnings generated by FX hedges, which you will only find in the line item operational earnings.

Further on, net interest expenses of loans and bonds, including the impact of cash and derivatives, decreased year-over-year by TRY 335 million, predominantly due to a lower financial net debt in combination with a stable average total financing rate. Let me elaborate on the financing costs by first explaining that the main change in our debt portfolio is the gradual shift towards a higher portion of bonds instead of loans.

This is a circumstance of the illiquid loan market in Turkey in the last months, and thus, consequently, are several successful bond issuances. [ Already ] to mention is that Enerjisa has shown itself to be one of the few actors in Turkey who have consequently managed to access debt in times of a very restricted debt market when others could not.

On July 17, we issued our latest and fifth consecutive bond for this year with an amount of TRY 3.1 billion. The interest rate and maturity were 42.5% in 24 months. In this context, our debt portfolio mix shifted from a predominantly loan finance portfolio to now a more equal distribution between loans and bonds.

Bonds now constitute 45% of our debt portfolio, which is an average throughout the first 6 months of 2023 compared to only 16% for the same period of last year. Our average financing rates for loans and bonds combined increased from 23.6% in the first half of 2022 to 24.8% at the same period of this year. The increase is very limited of nearly 1.2% when comparing to the high surges in market rates for new financings in the last 12 months.

The reason for this limited hype on Enerjisa's financing rates are that our average interest rate also enjoys some loans from the last year, which have yet not fully reached maturity. Another driver is that our bond rates decreased substantially due to the phasing out of CPI-linked bonds, which were very expensive in the high inflation environment and included in the comparison base of last year.

Please note, we do not have any CPI-linked bonds anymore. Further on, financing index to the Turkish lira reference rate, which is a material part of our debt instruments increased in cost to a lesser degree than expected. This is related to the policy interest rate set by the Central Bank, which was first increased post election and thus had a limited impact on our H1 2023 results as it was in the very last days of this period.

In addition to the rates mentioned above, we also have an interest rate portion of roughly 5 percentage points, which are added to the total average financing rate of our company, stemming from the impact of cash and derivatives.

As a natural risk mitigation of the current illiquid and volatile funding environments, we have had several points during the year, cash at hand to finance upcoming working capital needs, especially as access to debt could not always be guaranteed. The current figure as of the end of Q2 are TRY 6.2 billion lever of cash and TRY 1.6 billion of derivatives.

As such, our total all-in financing rate for Enerjisa, net of cash and derivatives are 29.5% in the first half of 2023, which is a 1.4% increase compared to the first half of last year. Going forward, we expect our financing rates to increase more in line with observed trajectory of interest rates on the market.

This is due to the recent increases in the policy rate impacting our [ Teleref-indexed ] financings as well as higher bond rates, especially as CPI-linked bonds were not as predominant in the second half of last year as it was in Q1 and Q2 of 2022 and thus will provide a lower positive comparison base effect.

Now back to our underlying net income bridge, where our bottom line also benefited from lower deposit revaluation expenses of TRY 300 million year-over-year due to a lower inflation index. Please remember that the calculation metric for indexing our customer deposit is the 2-month lagging inflation rate, meaning that half year revaluation of customer deposits are incorporating the 6-month inflation rate between October and April, which is 20% now in 2023 and was 55% in 2022.

Other financial expenses increased by TRY 445 million, mainly due to the base effect related to last year, where interest income generated in the retail business were absent in the first half of this year. This is because last year, energy procurement prices were higher than the end user tariffs and thus created negative cash flows and consequently, higher interest income on the outstanding price equalization receivable owed to us by the regulator.

This year, the situation has much improved, and our positive cash flow from our regulated portfolio have not required a compensating interest income and thereof, the negative year-over-year comparison of this line item.

Lastly, turning to Page 8. Before presenting our new 2023 guidance, I want to walk you through the major changes in our net debt position. Our economic net debt increased by 5% year-over-year, going from TRY 15.2 billion in December 2022 to TRY 16.0 billion at H1 2023. Accordingly, our leverage ratio decreased to 0.6x on the back of our strong operational earnings expansion, outpacing our accumulated debt development.

Free cash flow before interest and tax was strongly positive and reduced the debt level by TRY 5.6 billion year-to-date. Net interest payments increased our debt with TRY 1.6 billion. Likewise, our tax payments increased by TRY 1.8 billion because of the higher earnings base. Change in customer deposits were TRY 1.1 billion, mainly due to the revaluation with the inflation as well as the additions of new deposits from customers.

Please note that the dividend related to the fiscal year of 2022 was approved and paid out to our shareholders in April and is thus now reflected in our first half results net debt position. This effect consequently further added to our debt by TRY 2.7 billion.

Lastly, gains from FX derivatives contributed positively to our deleveraging with TRY 0.8 billion due to the higher FX rates and increased amounts of forward contracts. I now hand over to Philipp for providing you with our latest guidance.

[Philipp Ulbrich, executive]

Thank you, Rawand. Let me now finally walk you through our outlook and comment on our guidance. Firstly, we again reiterate our midterm outlook for 2022 to 2025. We confirm the compounded average growth rate of 30% to 40% of our operational earnings and 25% to 35% for our bottom line, namely underlying net income.

In addition, we reiterate our 2023 guidance and further enhance our underlying net income range, which is now expected to be in the upper part of the previous outlook. Thus, our updated guidance is as follows. Operational earnings in 2023 is reiterated and expected to be in the range of TRY 20 billion to TRY 24 billion.

2023 underlying net income is now expected to reach TRY 5.0 billion to TRY 6.4 billion. This is an updated guidance with an increased flow of the previous wide range of TRY 4.5 billion to TRY 6 billion. Our 2023 regulated asset base guidance is kept unchanged at TRY 30 billion to TRY 35 billion. And so is our investment guidance of TRY 11 billion to TRY 15 billion.

Please remember that we highlighted that roughly 80% are up-related investments in our Distribution business and the remaining 20% are related to our new fast-growing Customer Solutions business. The latter will be recorded in our financial statements as net working capital in the line item operational cash flow instead of a CapEx classification due to the fact that the customer solution assets are handed over to the customer at completion.

The main parameters to impact our outlook going forward will be the key energy regulation parameters as tariff levels and energy procurement costs as well as the inflation and the interest rate environment subject to monetary policies, decided by the Central Bank.

While Enerjisa is on a long-term basis, well protected from increasing inflation rates, the rapid change of interest rate can translate to short-term deviation to our growth rate in the upcoming years to both an increasing or decreasing outcome.

We are, therefore, as other corporations in Turkey, closely observing the debt market regulations and policies, and we will continue to actively lobby for safeguarding a regulatory environment that encourages to deploy the necessary investments into the electric grids that are the backbone for Turkish industry and its growth as well as ensuring that the people in this country have secured access to energy.

Before now opening up the Q&A, I would like to share with you some news regarding our Investor Relations organization. Rawand has decided to move on outside Enerjisa and will join E.ON in September in a leading position with further information to be released later on.

I would like to express my sincere thanks to Rawand who has extraordinary commitment to our company. He has made significant contributions to the successful transformation of our business with a high level of professionalism and passion. Rawand has demonstrated his ability to effectively work in a dynamic international environment and will be an important addition to the E.ON team. I wish him every success in his new role.

I would like to, at the same time, also announce and welcome to the investor community, Rawand's successor, Cem Gokkaya. Cem is currently Enerjisa's Corporate Finance, Treasury and Risk Director, and will take over the responsibility for Investor Relations and Tax in addition to his current role.

In Cem, we have a very experienced colleague who has been with the company for 15 years, while in the same time, gained international experience from assignments in the U.S. and Brazil. Welcome, Cem, and I look forward to meeting all of you in the upcoming investor events. Together with Cem, [Foreign Language] and the rest of the Investor Relations team. Rawand, now back to you for a last time to start Q&A.

[Rawand Faraj, executive]

Thank you, Philipp, for the kind words. Let me please also personally thank all investors, analysts and colleagues for my time here at Enerjisa. I am confident that Enerjisa has a remarkable future ahead of it, and I have no doubt that the company will reach new heights under the outstanding leadership of our CEO, Murat Pinar, now together with Philipp Ulbrich and the rest of the almost 12,000 dedicated colleagues across the group. Thank you. We can now start the Q&A session.

[Operator]

[Operator Instructions]

[Unknown Analyst]

I have 2 questions. The first one is on the revaluation impact on the operating [ plus ], it was lagged in this quarter. Is this related with the authorities revision in its inflation expectation or the actual declining trend in the inflation figure on a year-over-year basis. I just want to be sure about that.

And the second one, I just missed [ on the part ] for the customer solutions contribution. And I also missed some other colors, sorry about it. Can any just quantify the reason behind the quarter-over-quarter increase in this data?

[Rawand Faraj, executive]

Thank you, [ John ]. Regarding your first question regarding the revaluation of RAB, please note that it is inflation related but is related to our expectation of inflation. I think for all of us, inflation in June, which is the main metric for our regulated business came in to a lower degree than previously expected. So this is the reason for why it went down versus Q1.

However, versus prior year, it went up 50%. So there is a strong growth compared to the same period of last year. Related to your second question regarding customer solutions, the growth there is heavily related to the projects delivered in our PV business.

In the previous quarters, we communicated that we see a strong growth because we had a strong backlog of projects to be installed, delivered and thus generating earnings. In the last 3 to 6 months, there was some projects that were delayed, which now has been partially catched up. And in addition, there's -- the interest has increased for this type of portfolio. In the future, we will see more strong growth coming from this segment. I hope this answer your questions.

[Unknown Analyst]

For the second question as a follow-up, as much as I understand that it deviate basically in the coming quarters [ involving ] our digital projects. But in the long term on a year-over-year basis, we will see the growth. Is this correct?

[Rawand Faraj, executive]

This is fully correct. Please note that for this specific business, we generate earnings and cash from the installations for a long time because not only did we install it, we also maintain it. So there is a maintenance contract there. However, we generate a large portion of the revenues when we hand over and give the plant to the customer.

So therefore, depending on how this profile looks when new sites are installed and handed over, there will be fluctuations. But please recall our previous communication where we gave an indication of roughly TRY 4 billion to TRY 6 billion of revenues until 2025. So this shows a rapid and continuous growth going forward. But it will also mean continuous investments into this area.

[Operator]

It seems that we have no further questions for now. I would like to thank you very much for your attendance on behalf of IR team and our management of course. If you have any more questions, please feel free to reach out to the Investor Relations team, and we are available for your inquiries or alternatively, you can reach us via e-mail, phone call. We are available at any time. Thank you for your participation. Once again, have a loud night. Bye.