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CTC Media, Inc. (NASDAQ:CTCM)

Q1 2014 Earnings Conference Call

April 30, 2014 09:00 AM ET

Executives

Irina Faritova - Head, IR

Yuliana Slashcheva - CEO

Nikolay Surikov - CFO

Analysts

Edward Hill-Wood - Morgan Stanley

Nick Robinson - Renaissance Capital

Sergey Libin - Raiffeisen Bank

Anastasia Obukhova - VTB Capital

Olga Bystrova - Credit Suisse

Operator

Good morning and good afternoon, ladies and gentlemen. Welcome to CTC Media's First Quarter 2014 Results Conference Call. (Operator Instructions) This call is being webcast and an audio version of the call will be available on the Company's website. The call is also being recorded for replay purposes.

I will now hand over the call to Irina Faritova, CTC Media's Head of Investor Relations. Thank you.

Irina Faritova

Thank you, operator. I would like to welcome everyone at CTC Media first quarter 2014 conference call. Joining me today to talk about our results are Yuliana Slashcheva, Chief Executive Officer of CTC Media; and Nikolay Surikov, our Chief Financial Officer. You will be able to follow the webcast with presentation slides, where Yuliana will run through operational developments in the company and outlook for 2014, and Nikolay will comment on our financial results. Afterwards we will move to Q&A session as always.

We trust that you have received our earnings release, which was issued earlier today. If you haven't received a copy of the press release, it is available on our website at ctcmedia.ru. Please refer to the earnings release for the reconciliations of non-GAAP measures to the most comparable GAAP measures. I would also like to note that the live webcast with presentation of today's call is available on the Investor Relations section of our corporate website.

Before we begin, I would like to remind everyone that today's call may contain forward-looking statements based on the environments that we currently see and as such does include risks and uncertainties. Please refer to the SEC filings for more information on the specific risk factors that could cause actual results to differ materially.

And now I will hand the call over to Yuliana.

Yuliana Slashcheva

Thank you, Irina. Good afternoon everybody. Thank you for joining our call today. And I will start with the key operating highlights of CTC Media for the first quarter and I should say that we had a very good quarter and had very good sales with the increase -- with the fully sold inventory in these three months, with the sponsorship revenue growth above 50% compared to 2013 and including the growth of the pharma segment by 2%, compared to the first quarter of 2013 and 5% for the full year of 2013.

We have a very good client portfolio, which we think is stable and we’re satisfied with the proportion between top-10 advertisers and other advertisers, including the new commerce for this year and the good news is also that over 90% of our Russian national inventory is already committed for 2014 at average prices higher than in 2013. All our sales of the -- all good sales of the first quarter resulted in high revenues of the first quarter which I will cover in my presentation further.

Among other important highlights, I need to mention the launch of the CTC Love, which is a new free cable and satellite channel. We have started technical broadcasting of this channel on the February 14th and fool [ph] broadcasting on April 1st. And at the moment we have about 20% of the technical penetration in more than 70 cities in Russia and our target is to increase the technical penetration by 33% to 35% to the end of the year in order to start being measured by TNS Gallup.

We also launched our first E-commerce projects which I announced to you in the previous calls and that’s the joint project with PBIP [ph] E-commerce platform. We have created and launched our own female clothes brand called Sweet Me. This brand was incorporated into our two makeover programs on Domashny channel, Style or Exile and The Ideal Pair show. We will see the results and I will report to you about the results of the sales during our next call because we have just started.

We expect these projects to reach its breakeven to the end of the current year. We also got several projects, which hit all the high records of the audience share. Our third season of the Kitchen on CTC got 21.9 average audience share. Our new hit El Barco or The Boat as we call it here actually took the hardest time of Olympics and helped us to keep their audience share in February by getting 13.8% average share for this product in the audience of 10-45 and for Domashny we launched the new serials, the new humor serials called Svatyi or in-laws if you translate them directly. And they got 4.7 average share which is well above the average audience share of the channel.

We have launched new programming grid on Peretz. It’s very early to speak about results here because it was less than three weeks. For now, as I was stating on our previous calls we’re still experimenting with Peretz, finding the right niche and the right product for this channel. So we need to look at it for another two months to see the results of the new programming grid introduced.

We have two very serious appointments which took place in April. One is Ruslan Sorokin who was appointed as a CTC Media’s line producer for the whole group. Ruslan is very experienced in producing of fTV projects, working and doing a lot of projects for Channel 1 and for other channels. And Maria Smirnova was appointed as a CTC Media’s Director of Production, Acquisition and Management of Programming Rights. Maria Smirnova was running Sony in Russia before that, before joining CTC Media. I truly believe that those two appointments will seriously increase the effectiveness of the divisions which those two people will be managing.

If you look on the next slide you will see the audience share performance for each channel. I actually will not stop here for long because I already mentioned most of the projects here. But just for you to see that, the audience share of CTC, certainly declined due to the Olympics but was compensated by the very essential viewership increase. And we have delivered or we have performed our GRPs as committed to advertisers in the first quarter despite all the decrease of the audience share.

We have discovered this new hit which I’ve already mentioned calling The Boat, and in this spring we’ll have the prolongation, the new season of our previously successful hits such as Two Sons, Two Dads and also the new premier new series called Doc Walt. For Domashny, the new CEO, which I was already announcing in my previous call, I should admit that she has successfully integrated with the team of CTC Media team and the first thing she have done -- she has developed and implemented the new horizontal programming grid for Domashny, which already proved to be successful.

We are aiming -- if you remember our strategy announcement regarding Domashny, we’re aiming at making the average audience of this channel younger and I would say that we already have essential results in doing this. Thus during the first quarter we got a 3 percentage point increase in the audience of female aged 25 - 44, which is very important for us. And also of course simultaneously we had a decrease of the audience of the women from 50 to 59. So I already mentioned Peretz. I will not stop here.

On the next slide we come to financial highlights and I will pass the call to my colleague, Nikolay Surikov who is the Chief Financial Officer of CTC Media. Then I will get back to you to cover the guidance of the 2014 full year.

Nikolay Surikov

Thank you, Yuliana. Good afternoon. Ladies and gentlemen, we start financial overview from P&L dynamics. Currency fluctuation significantly impacted our reported U.S. GAAP results during the quarter as the Russian ruble depreciated by 13% year on year against U.S. dollar. 97% for total revenue and around 70% our expenses are ruble denominated.

Total revenues increased by 10% year-on-year in ruble terms to 186 million. Our advertising revenues increased by 12% year-on–year in ruble terms to 184.6 million. This result was obtained despite the airing of switch Olympics on the other channels in Russia in February and the shift of viewers’ attention in March to news broadcasts.

Our average sales have successfully achieved full sell out and sponsorship revenue growth above 50% in the first quarter of current year. The key channels of breaking revenues rose by 11% in ruble terms reflecting the growth in the overall Russian television advertisement market, increased revenues from sponsorship, partially offset by effect of decrease in target audience share number.

Domashny channel’s operating revenues were up 10% in ruble terms, due principally to the result of the overall Russian television advertising market, increased revenues from sponsorship and slight increase in target audience shares. Despite the decline in Peretz channel’s target orient share in the first quarter, its operating revenues were up 6% in ruble terms and expecting the growth in the overall Russian television ad market.

Channel 31 in Kazakhstan, operating revenues in U.S. dollar equivalent terms were down 8% year-on-year in the first quarter and up 5% in local terms, in tenge terms, principally due to increased sellout and sponsorship revenues, partially offset by a decrease in target audience share, reflecting increased competition from other channels.

Our digital media revenue now represents around 0.8% of our total revenue and increased 57% in ruble terms in the first quarter, primarily due to increased advertisement revenue. Important to mention that the current situation in Ukraine negatively impacted our sublicensing revenue. Many deals currently are put on hold. Our total operating expenses were up 4% in ruble terms for the quarter.

Now I will speak about in detail about these changes. Programming expenses were down 1% ruble terms, reflecting the timing effect of the launch of Peretz’s spring season in April of this year and focus of investment in Domashny grid, which is planned for the second half of this year. This decrease of expenses is partially offset by slightly more expenses, a more expensive programming mix of CTC Channel due to airing of more expensive foreign content. We expect our programming expenses will increase in ruble terms for the full year, however with a growth rate lower than revenue growth and at the lower pace than in last year.

Direct operating costs were up 17% in rubles, largely as a result of increases in service and benefit costs, reflecting some salary raises and headcount increased in the last year, and increases in transmission costs related to annual tariff raises. SG&A Expenses were up 18%, mainly due to timing of advertising campaigns especially for CTC Channel. Stock based compensation expense decreased by $2.8 million for the first quarter, primarily as a result of revaluation of the equity based incentive rewards granted to our employees under the 2009 stock incentive plan at fair value as a result of decrease in share price. So it’s more kind of accounting technical thing.

Our effective tax rate was down to 31% from 36% in the first quarter last year, primarily due to the change of our approach to a recognition of foreign tax benefits for offset against U.S. taxes based on a comprehensive examination that we performed of certain positions taken in our historical U.S. income tax filings. We have liked this approach for the recognition of such tax benefits last year and will apply them prospectively. As a result our first quarter net income was up 27% year-on-year in ruble terms to $31.2 million.

Now moving on to cash flow and balance sheet items. Our net cash from operating activities was up year-on-year to $32.4 million and primarily reflected the joint effect of higher cash receipts from advertising sales and lower cash spending on the acquisition of programming and operating expenses.

Net cash used in financing activities amounted to $27.4 million for the first quarter this year, slight increased from $24.9 million in the first quarter last year, and resulted primarily from the dividend payment of $27.2 million, $6.9 million of which represents dividends to one of our stockholders that have been blocked due to U.S. sanctions which I accounted for as restricted cash in our balance sheet.

Our Board of Directors currently intends to pay cash dividend of $0.7 per share or up to approximately $109 million in aggregate during the year. This means 11% growth year-on-year and the Board also declared cash dividend of 0.175 per share, approximately $27 million in the aggregate to be paid in June.

We therefore generated $31.4 million of free cash flow in the first quarter this year, comparing to $14 million in the first quarter of last year, and ended the period with net cash position of $195.2 million compared to $107 million as of the end of the last year.

Now back to you Yuliana.

Yuliana Slashcheva

Okay, thank you Nikolay. If you look now at 2014 guidance, you will see that we have done the update on two lines of the guidance. The first one is the Russian total TV ad market. We expect the growth in the Russian TV advertising market to slow in the remaining quarters of 2014 due to many different reasons, including the macro factors and that is why we think that it’s more likely to be lower end of previously indicated range of approximately 5% to 8% for the full year. But we do keep the range but think it will be most likely to be at the lowest level.

CTC Media will strive to outperform the markets and the second line which we have updated is an OIBDA margin. In our OIBDA margin we have already included the multiplex -- expected multiplex expenditures for this year and we stated now -- we’ve guided is the range of between 28% and 30% depending on the actual multiplex cost, and the amount of sublicensing revenues which we will earned from Ukraine during the upcoming period or that would give you approximately 30% to 32% range if you exclude the digital multiplex cost.

We still don’t know the exact cost. As was guided by the government, they could be up to $25 million this year. That’s it. All the other guidance remain as they were announced before and we are now ready for your questions. Thank you.

Question-And-Answer Session

Operator

Thank you. (Operator Instructions) And our first question comes from the line of Edward Hill-Wood from Morgan Stanley. Please go ahead with your question, sir.

Edward Hill-Wood - Morgan Stanley

I have two questions, please. Firstly, I just would like a little bit more color on the comments about your forecast for advertising, or for the television advertising market this year. As you say, it's going to be, you think, towards the bottom end of the previous range. Could you just give us a sense of what you’re seeing so far in Q2 and are you seeing any meaningful change of advertiser behavior, and maybe just a bit of color about some of the potential fluctuations there, and whether or not you think it could actually fall below that range at some point through the year.

The second question just goes back to your very strong cost control on programming. I was wondering whether you could give -- provide some color of whether or not you are seeing broad inflation rates for content or content inflation, dilutes in Russia amongst your competitors as the macro environment has become more testing? And whether or not you think your spending plans will put you at somewhat of a disadvantage in terms of audience share. Thank you.

Yuliana Slashcheva

Thank you for the questions. I will take the first question and Nikolay will take the second one. Regarding the advertising, the advertisers’ behavior in the second quarter, it’s very easy to say at the moment because we are only leaving [ph] less than like one months in the second quarter. So the advertising behavior seems to not to change dramatically yet. However we do get different signals from the market from some of the advertising agencies was to represent big multinational clients that there could be some insignificant reduction of the budgets due to the slight decrease of the consumer demand and the sales on the consumer goods previous in the previous quarter and that is why we of course are very sensitive these kind of signals.

But we need to see how the situation will be developing further and that is why and we also very much rely on -- as always rely on the forecast given by our consultants in the sales the company the company Video International which have announced their forecast for the market growth at 5% for the full year and actually didn’t change for the cost after the first quarter. They still exist. It would not go further than 5% according to their forecast. Anyway we keep the range because we want to see on the real developments of the situation.

Nikolay Surikov

Okay. Second on the inflation effect on our programming expenses, we need to mention that around 40% of our programming expenses actually are dollar denominated because these are purchases made from majors from, U.S. majors. So of course we have significantly, a slight increase of the dollar exchange rate to ruble. Of course we’ll have additional pressure on our programming expense inflation. So this is speaking about the foreign content.

Speaking about local content, as of now we do not see any new behaviors -- new signs of behavior the local producers. Everything goes in the same way as before. For some products we have some inflation for other products. We don’t have inflation at all but some more expensive products are replaced by less expensive products. So we’re usually managing our grid as a whole. So for us it’s more important to have to reach our targets -- budgeted targets of gross margin from the grid rather than from each title. So we’re just looking -- again we’re looking in the grid as a whole and if the total margin is acceptable for us, we accept some inflation if it exists on the special product.

Edward Hill-Wood - Morgan Stanley

Okay, that's really helpful. If I could just ask one final one, if I may, just on the sublicensing revenues from Ukraine. Last year it was around $26 million of sublicensing revenues and other revenues. I was wondering if you could give us an idea of what you think the contribution to EBITDA those revenues were, please.

Yuliana Slashcheva

We can actually only talk about last year because we don’t know of course the situation for this year yet but last year -- the percent -- our total revenues for sublicensing were about 2% of the general revenue, of the total revenue we currently expect the proportion to be below 1% this year. And in the first quarter we only received 0.2% of our total revenues from sublicensing. So that’s obviously decreasing and we don’t know how the situation will -- whether the situation will change and when.

Nikolay Surikov

I can add also couple of points about the OIBDA effect of sublicensing. Based on the accounting principles, we are using U.S. GAAP accounting principles, the average profitability or marginality of sublicensing is more or less the same as for TV. So we’re actually allocate the cost of production or the cost of acquisition as separate title and we allocate this cost between two revenue streams, TV stream and sublicensing.

Operator

Thank you. And our next question comes from the line of Nick Robinson from Renaissance Capital. Please go ahead with your question, sir.

Nick Robinson - Renaissance Capital

Just two questions please. Firstly, with regards to the statement in your results announcement on the U.S. sanctions, you mentioned you have been taking some measures, putting some measures in place. Could you enlighten us as to what those measures are? Give us some ideas there. And then the second question, talking of sponsorship revenues, could you elaborate for the CTC channel, how much was the contribution from sponsorship revenues or maybe if you could just talk about the growth in advertising revenues for the CTC channel, excluding sponsorship, that would be very helpful.

Yuliana Slashcheva

Okay. I will take the first question regarding the sanctions and Nikolay will check meanwhile -- will check this sponsorship revenues for CTC. Regarding the sanctions, our Board has formed a Compliance Committee which doesn’t include Telcrest members. The Compliance Committee is made up of certain members of our Board of Directors and includes Lorenzo Grabau, who is the Chairman who is and then MTG designated director and also independent directors Tam Basunia and Werner Klatten and Jean-Pierre Morel. Four members of the senior management are Compliance Committee observers.

This committee is reviewing the Company’s policies and strategies to ensure that our corporate governance practices comply with applicable laws. We are also conferring directly with OFAC for specific guidance in this matter. That’s all we are doing in this respect. Our AGM shareholders meeting will take place on May 19th and the sanctions will not affect any procedures for our AGM.

The second question?

Nikolay Surikov

The second question about the contribution of sponsorship revenue. You speak about CTC Channel. So right now the share of sponsorship revenue in the total revenue of the channel is around 5% to 7% something in between, and with the growth rate as Yuliana mentioned already of more than 50% for the first quarter of this year.

Operator

Thank you. And our next question comes from the line of Sergey Libin from Raiffeisen Bank. Please go ahead with your question sir.

Sergey Libin - Raiffeisen Bank

A couple of questions as well. First of all, on the guidance. So you said you expect programming costs to grow slower than revenues but at the same time you still expect the slight margin decline this year compared to the previous year. So, I was just wondering why and what cost items do see the accelerated inflation? And secondly the question regarding the Kitchen The movie, which apparently starts in cinema tomorrow, so how do you participate in the project and what kind of revenues or profits are you expecting to get from that?

Yuliana Slashcheva

I actually can start from the second question. The Kitchen Movie was produced by the productions like outside production companies. We have all the TV rights, exclusive TV rights for this movie and plans to use it in our agreed for -- like an significant number of times and of course all the profit we will be getting on our TV broadcast of this movie. We are not participating in the cash process -- in the cash from the Motion Picture showing in the cinemas.

Sergey Libin - Raiffeisen Bank

Okay.

Yuliana Slashcheva

And…

Nikolay Surikov

Yes, speaking about the OIBDA margin behavior, so the mains reasons actually for that it was decline as we mentioned already the significant anticipated decrease of sublicensing as a result of the Ukrainian situation and also this -- I would say not a huge growth of our revenue Kazakhstan as a result of significant dramatic changes in competitive environment in this country.

Sergey Libin - Raiffeisen Bank

Okay.

Yuliana Slashcheva

But again I would like to add that we don’t expect and don’t see any exploration of any costs which we had except for the multiplex payments which accelerate because they were relevantly small last year and will increase definitely increase this year, we don’t know to what extent yet but as I said could be up to $25 million. But all the items of course are very, very well managed and controlled. More than this we have current program of cost reduction in place and we’ll do our best to compensate the expenses for multiplex by reducing some other costs within our budget.

Nikolay Surikov

And another separate item that we need also to mention, which has negative effect on our projections is the increase of stock based compensation expenses because of this additional new program that we launched and additional stock options granted to our employees. So comparing to last year the expense will be higher, but it’s like a proportion and the effect is not so significant.

Operator

Thank you. And our next question comes from the line of Anastasia Obukhova from VTB Capital. Please go ahead with your question.

Anastasia Obukhova - VTB Capital

Could you please answer three questions? First of all, could you please disclose the substance of the sponsorship revenue and what percentage of contribution do you expect for the full-year 2014 versus the full-year 2015? The second one, is there any seasonality in acquiring foreign content throughout at least the historic run and do you expect the seasonality to be pronounced in 2014? That said, do you acquire more foreign content in the first half, for example, to program your schedule for summer, when you normally air the reruns of the domestic content or you have some other format policy? And the third question could you please kindly update us on the pipeline you filmed over the past say year-and-a-half as the last kind of big update we received in October 2012? So what has been filmed of the domestic content, the format and during which period do you expect to launch the cost structure, do we see the actor salaries rising or film production equipment rental expense rising, et cetera?

Yuliana Slashcheva

Thank you, Anastasia, so should we start with the sponsorship because we actually already covered the issue of sponsorship.

Nikolay Surikov

So the contribution, speaking about CTC channel, which is the major channel in January, most part of our revenue is from 5% to 7% and speaking about…

Anastasia Obukhova - VTB Capital

For the full year, right?

Nikolay Surikov

Yes, correct.

Anastasia Obukhova - VTB Capital

And the substance of it?

Nikolay Surikov

Yes, the substance is actually -- our normal contacts with our clients in the special program they are presented as a sponsor of the show with sponsor of some movie and the price for this mentioning of the name of the company is much higher than the price of the usual ordinary advertising clip.

Anastasia Obukhova - VTB Capital

So is it your own shows that are used in-house or this is produced by your order from other producers?

Nikolay Surikov

No it’s always produced by other companies. So we don’t have our own production of shows.

Anastasia Obukhova - VTB Capital

Okay.

Yuliana Slashcheva

Okay. Regarding the pipeline of the products, we do have a lot of premiers and a lot of continuation of our hits with the new season’s plans for this year up to 10 -- minimum 10 premiers by the end of the year will take place including continuations of proven hits like Molodezhka, Kitchen. Two Fathers and Two Sons start this week, the new season starts.

The Last of the Magikyans we have just finished showing last week. That was very successful. We will have the new series of Voroniny. We will have the new series of The Street Light, which used to be a very popular project from CTC. We also launched the new premier this spring we launch a new premier of the series called Doc Walt. We’re also are now filming the continuation of the Day After which was a proven success. You remember I was telling about the product when we tried to exchange the Hollywood movie in the particular plot where we use a Hollywood movie to Russian produced product which was called Doc Walt -- sorry was called Day After and that was very successful. And we now do the second episode season of this series. So we do have a very big pipeline and that is why we really expect our share of CTC to be flat in comparison with the last year.

Nikolay Surikov

And could you maybe repeat the third question to [indiscernible]

Anastasia Obukhova - VTB Capital

Yes, the pipeline. I also was asking to comment on the cost structure. Do you see in terms of the producing the content, like actor salaries rising or staying flat or as soon as the majority of the movies are made on the imported production equipment, do you see like rental expense growing or the cost of equipment growing, impacting then, actually the margins, the profitability of the content assumed? And the third question was the seasonality in buying out and acquiring foreign content. Is it skewed to the first half, second half?

Nikolay Surikov

I see. I will start with the simple one with the second question. We don’t have any like special seasonality on acquisitions. It mainly depends on the request of our programming guys, whether they need to cover some time slots so we don’t have really no seasonality at all. On a day by day basis they’re just looking on the future upcoming grid and if they see any slots vacant slots they trying to like to understand what content can be put into this slot, whether from library or we need to acquire something. So actually for each channel, for each month, the station can be different.

So speaking about seasonality, we can say that there is no any seasonality. Speaking about the production expenses again depending on the separate type of – if the title became popular, of course actors would like to earn more. So how we are dealing with this -- with some production companies we’re signing the contracts for the season and we exclusively mentioning in the contract that there is no -- for example there is no inflation for the second season or we accept very little inflation for the second season and the problem of actors salary growth in this case is the problem of the production company. So from our perspective we do not see for some type of -- we will not see any increase, significant increase in expenses and cost of production as a result of big success of the project.

For other products where we don’t have such a clause for the second and the third season, there is a risk and if the calculated forecasted profitability of the product is not acceptable for us from our budget perspective, we just cancel this project and we continue to production. So it’s simple.

For us just to sum up, we are looking on the grid and in general in total for the channel for month at least on a monthly basis and if the grid mix and the mix of profitabilities of different products in total gives us an acceptable level of profitability for the channel we are accepting this product.

Operator

Thank you. And we currently have no questions coming through. (Operator Instructions) And we do have a question coming through from the line of Olga Bystrova from Credit Suisse. Please go ahead with your question.

Olga Bystrova - Credit Suisse

Can you talk a bit about why your advertising revenues have been quite volatile relative to the market in the fourth quarter and in the first quarter? In the fourth quarter, if I understand it correctly, you have lost quite a bit of market share. I don't remember exactly what was the reason for that to be honest so maybe you can remind that and in this quarter you have outperforming the market, at least given some estimates from VI, of 7% to 8% growth over the overall market in 1Q. What is the reason for such volatility? And should we expect that to continue, so it would be less predictable or you think it will basically be -- you will start performing more in line with the market? And I think the second question is when you were talking about your expectations for the slowdown in TV ad spend, you said that besides macro there are some other reasons for slowdown, if I am not mistaken. I don’t know if that was a sort of -- if maybe you can elaborate what could be the other reasons for TV ad spend slowdown this year in addition to macro. Thank you very much.

Nikolay Surikov

Yes, thank you for the questions. Speaking about the first one if you remember we had significantly outperformed the market in the fourth quarter of 2012. That’s why the fourth quarter of 2013 we had like underperformance of the market. So it’s more the question of comparison like technical and mathematical comparisons. The first quarter of this year was significantly affected by Olympics and the news and all the situation with Ukraine and growth potential of the audience to the news blocks on other channels.

So I would say that right now these two quarters like the first quarter of the last year and the fiscal quarter this year are quite unusual from mathematical perspective. But going forward if nothing will happen significantly, the dynamics of the audience shares and the financial rate of the revenue figure comparing to the market should be predictable of course.

Yuliana Slashcheva

Okay. And answering your second question I actually only meant the macro factors. I mentioned the consumer demand for example and the consumer behavior for main consumer goods and services in the first quarter and forecasted macro and the GDP growth for the general market. Those are the only factors which can influence the growth of the market at the moment and we are very attentive to all the happenings and analyze the situation on a day by day basis but can’t share any other concerns with you at the moment.

Operator

Thank you. There are no further questions. I will hand the call to Irina Faritova. Thank you.

Irina Faritova

Thank you everybody for joining us on today’s call and have happy May holiday. Looking forward to meet you on-coming weeks. Goodbye for now.

Operator

Thank you, ladies and gentlemen for joining today’s conference. You may now disconnect your telephone lines.

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