Challenges sparks creativity and illuminate stc's path to excellence and innovation, as it strives to strengthen its position and redefine the future of ICT in Kuwait by delivering cutting-edge solutions with enthusiasm and unwavering dedication

Dr. Mahmoud Ahmed AbdulrahmanChairman

Dear shareholders,

I am delighted to present the Annual Report of Kuwait Telecommunications Company for the fiscal year ended 31 December 2023. This report is a glimpse of stc’s latest accomplishments in pursuit of expanding its operating model and managing its internal operations in accordance with its corporate strategy that is designed to keep stc abreast with the worldwide rapid development of the telecommunications sector and thus, meet the shareholders’ aspirations. This year, with the changes and operational challenges in the telecommunications sector, stc has been able to deliver the highest level of services with full flexibility, remarkable innovation, and enduring excellence by focusing on cutting-edge solutions, enhancing customer experience, and embracing technical developments. stc’s continued efforts are reflected by seizing all the available business opportunities, with an aim to elevate the Company’s operational and financial performance in order to achieve its corporate strategy and create an added value for its shareholders. Hence, stc seeks to maintain its leadership role in shaping digitization in the region, to fulfill customers’ needs and exceed shareholders’ expectations, supported by its strategy.

The Telecommunications Market & the Global Macroeconomic Challenges

In 2023, stc began a new era of developing its corporate strategy “LEAD” for the three years from 2023 to 2025. LEAD is crafted to play a prominent role in sustaining stc’s leadership position and placing it at the forefront of the best ICT and telecom companies in Kuwait. This strategy has shown promising signs during its first year in 2023 of yielding outstanding operational and financial achievements, which paves the way for stc to lead the market in the upcoming years by upgrading its core services, expanding its operations, in addition to delivering the best services and cutting-edge technologies in response to the increasing demand for digital services and innovative corporate business solutions.

The Telecommunications Market & the Global Macroeconomic Challenges

With the rapid development of the telecom sector, stc has consistently demonstrated its commitment to innovation and superiority in addition to investing in the latest technologies that have helped the Company strengthen its service offerings and ensure maintaining its leadership position amongst telecom operators, whereby the working team has proved its ability to proactively adapt and address challenges while leveraging those challenges as opportunities for growth. It is essential to highlight the importance of strategic partnerships and acquisitions in capitalizing on potential growth opportunities within the telecommunications and ICT sectors. This is particularly notable in the business segment, a key pillar of the Company's corporate strategy aimed at attaining leadership in the local market by delivering exceptional services to fortify stc's internal capabilities, enhance market share, enrich customer experience, and reinforce infrastructure to effectively meet the evolving needs of individual and corporate clients.

Creating Shareholders Value

stc’s executive management demonstrated its unwavering commitment to create a value added for its shareholders through the execution of several strategic decisions which resulted in an impressive operational performance and strong financial results during 2023. It is worth mentioning the crucial role of our subsidiaries, namely (e-Portal and solutions by stc), in realizing these milestones and propelling stc toward sustainable growth through providing high quality increasingly innovative products and services to the enterprise sector in Kuwait. This has effectively enabled stc to capture the growing potential opportunities in the enterprise sector in addition to elevating its capabilities and enhancing the working environment.

Proudly speaking, stc’s outstanding financial results throughout the year and distinct brand emphasize Company’s strong financial solvency position and the implementation of its flexible operating model. Whereby, stc managed to achieve a total revenue of KD 351.4 million for the year ended 31 December 2023, where EBITDA reached KD 85.1 million with an EBITDA margin of 24.2%. As a result, stc recorded a net profit of KD 32.7 million. On the other hand, shareholders’ equity increased by 1.0% at the end of 2023, reaching KD 243.9 million, with a book value of 244 fils per share.

The Board of Directors has recommended distributing cash dividends of 35 fils per share representing 35% of the share nominal value for the year ended 2023, subject to the approval of the Ordinary General Assembly of the company. This decision was based on stc’s belief in its long-term viability, strong financial position, and the ability to generate cash flow in the upcoming periods. In this regard, stc’s management ensures developing long term financial policy to balance between its operational and financial performance that would positively reflect on its solvency and enhance its market position as a leader in the telecom industry and a pioneer in the digital transformation.

Corporate Governance

stc is committed to adhering to the rules and regulations of corporate governance set forth by the Capital Markets Authority in Kuwait which aim to bolster transparency, protect shareholders’ right, and enhance the overall work environment within the company. In alignment with the latest regulatory changes mandated by supervisory authorities, stc has conscientiously implemented all laws, regulations, and systems that align with its values and professional principles geared towards the advantage of the company's shareholders. A detailed Corporate Governance report, to be presented in a subsequent section of this document, will provide a comprehensive overview of our operational framework, offering further insights into our commitment to governance excellence.

Corporate Social Responsibility

Driven by stc's keenness to consistently cater to its customers, employees, suppliers, community, and all relevant stakeholders, stc has directed its attention towards a holistic Corporate Social Responsibility (CSR) program. This initiative actively supports a variety of endeavors in alignment with its core principles and commitment to the well-being of the community and the environment.

Consequently, throughout the year, stc in collaboration with charitable and humanitarian associations, governmental entities, and the private sector, has launched a series of campaigns and initiatives aligned with its values. These endeavors aim to uphold its leadership role in serving the local community and environment in Kuwait. The initiatives are designed to make positive contributions and enhance awareness of critical issues impacting our society, focusing primarily on specific areas such as health, environment, entrepreneurship, sports, and education.

Furthermore, this year, we have decided to expand the scope of our corporate social responsibility program to cover various environmental, social, and governance aspects, in alignment with the increasing global focus on environmental, social, and corporate governance factors. The dedicated teams at stc tirelessly devote their efforts to complying with the latest local and international trends, assessing company’s implementation of environmental, social, and corporate governance factors, aiming to protect stakeholders, manage human resources effectively, preserve natural resources, encourage reduction of waste, and promote recycling initiatives.

By leveraging the technological expertise of the company, stc diligently strives to uphold the highest ethical standards in its interactions with employees. Additionally, the company aims to enhance its environmental footprint with the ultimate goal of contributing to societal well-being across all dimensions.

Appreciation

On behalf of the Board of Directors, I would like to thank His Highness, the Amir Sheikh Meshaal Al Ahmed Al Jaber Al Sabah and H.H. the Prime Minister Sheikh Dr. Mohammad Sabah Al-Salem Al-Sabah his distinguished government for their continued support to the telecommunications sector, which puts our precious country on the map of the advanced and developed countries in the field of telecommunications.

I would like to express my sincere gratitude to all members of the stc family for their dedication, hard work, and significant sacrifices throughout the year 2023, particularly in the face of the challenges we have encountered. I wish to highlight their continuous enthusiasm and commitment in ensuring the success of stc during times when the global economy has been significantly affected. A special thanks goes to our loyal customers for their unwavering trust in stc, motivating us to deliver the highest-quality services. I extend my deepest appreciation to our valued shareholders for their continuous support and trust. We are confident that this commitment has played a pivotal role in empowering stc to sustain its successful trajectory of growth over the past years.

Promising strategic partnerships aimed at building new horizons that enhance stc's performance as a leader in ICT, in addition to enriching its offerings and expanding its scope of operations

Eng. Maziad AlharbiChief Executive Officer

Dear shareholders,

The year 2023 was marked by the achievements of Kuwait Telecommunications Company (stc) presented in a number of financial and operational milestones that would drive the Company to lead the telecommunications and ICT markets in the State of Kuwait. As a result, stc has maintained its competitive position in the market by adding value to its shareholders and providing the best in class offers and services to its customers in the wake of an era of unparalleled technical developments and the global trend towards digitization. As part of its commitment to excellence, innovation, and regeneration, stc is keen on empowering individuals, businesses, and the community as a whole to thrive in an interconnected world, alongside providing them with traditional communications services. As a step in the company's path to continuous development, stc relies on its internal capabilities and advanced infrastructure in building its strategy, plans, and future vision. This is aimed at providing the best-integrated technical and database solutions for businesses, specifically designed to meet the needs of our customers. The strong results achieved by the company during the fiscal year ended in December 2023 have also demonstrated the efficacy in implementing stc's corporate strategy and its ongoing efforts to leverage the available capabilities and embrace potential opportunities in the telecommunications market. Through which stc would be able to maintain its prestigious position in the ICT and telecommunications market.

Since inception, stc has dedicated its efforts to surpass the expectations of its customers and meet their constantly evolving needs through its commitment to develop and acquire the highest professional standards in the telecommunications and ICT sectors, with innovation serving as the cornerstone upon which the company builds the fundamental pillars of its corporate strategy. In pursuit of Kuwait's future vision, stc developed its corporate strategy in 2022, taking into consideration the vital role of ICT in building the global economy and enabling digital transformation. Additionally, the strategy emphasizes the role of innovation and proactiveness in bridging technical gaps, connecting communities, and achieving leadership in a highly competitive market. Furthermore, the significant success achieved by stc in expanding its operations through the acquisition of its subsidiaries, e-Portal and solutions by stc - the Company’s specialized arms in providing integrated solutions related to the fields of communications and networks in addition to the advanced technical solutions, fixed services, broadband, integration systems, and cloud services for both individual and enterprise segments - has been a critical reason in enhancing stc's position as one of the leading companies in the telecommunications and ICT sector.

stc’s success throughout the year is attributed to its solid infrastructure and the most advanced 5G network on which the Company relies to implement its corporate strategy based on leading the telecommunications and ICT market in Kuwait. Whereby, stc delivers the best-integrated technological solutions and corporate database solutions that target and meet the needs of all the Company's customers. In anticipation of the potential changes in the sector, stc is doing its utmost to maintain its resilience and adaptability in the face of any challenges that would arise from the economic trends and the subsequent fluctuation in consumers’ needs and their requirements. Thus, stc is committed to embracing this change as an integral part of its ability to seize new opportunities and overcome challenges through conducting periodic reviews of its business model. Additionally, it employs flexible and intelligent planning to ensure the Company's continuity and resilience amid the constantly changing economic conditions; and consequently, achieve optimal results through sustainable growth.

New Prospects and Strategic Expansions

The modernization of Kuwait's digital infrastructure extends beyond building new networks, as it also provides innovative solutions and products to facilitate the rapid and dynamic transformation of the local telecommunications market. The primary objective of our strategic directions is to focus on meeting the needs and aspirations of our customers by redefining the concept of communications beyond providing traditional communication services. Therefore, over the past few years, stc has been keen to adopt the latest technologies, including 5G services, Internet of Things (IoT), artificial intelligence (AI), and data analytics, to ensure that its comprehensive and integrated technical services and solutions are at the forefront of all the available offerings in the telecommunications market. stc's ongoing focus on developing solutions specifically designed to meet the evolving needs of both its individual and enterprise customers reflects its persistent commitment to better serve its customers, being one of the main pillars of its corporate strategy. This dedication has strengthened its position as a leading company in the telecommunications and ICT market. The expansions undertaken by the Company over the past few years align with its efforts to provide the best-integrated solutions related to communications and networks, along with advanced technological solutions, fixed services, broadband, integration systems, and cloud services for both individual and enterprise customers. The Company's investments also support its desire to expand the scope of its operations and activities as well as transitioning from traditional services to providing more digital capabilities through information and communication technology, the Internet of Things, and electronic cloud services. By leveraging the capabilities of its specialized arms in ICT, stc recorded notable financial results in 2023 due to the increasing demand for the digital communications services and ICT. stc managed to fortify itself amid market and economic fluctuations with a solid infrastructure, enabling the company to excel and confront any challenges that may arise in the telecommunications market in the future.

Based on our future vision of digital solutions and the rapid development of the telecommunications sector, driven by the accelerated introduction of new global technologies, stc has significantly focused on the continual development of its infrastructure in order to consistently meet the highest specifications and quality standards necessary to provide all the communications and ICT services; being of the utmost importance for both the enterprise and business sectors. This focus aims to enhance stc's position as a leading company in innovative business solutions, by leveraging its specialized subsidiaries in the ICT and internet services. This would enable stc to create unparalleled dazzling opportunities in order to deliver advanced and best-in-class services, expand its presence in the enterprise sector, build a strong customer base, and increase its market share.

Digital Transformation

Digital transformation has contributed to a global revolution of how telecommunications companies operate, which has been pivotal in developing stc's corporate strategy focused on the digital services. This, in turn, has forced stc to adopt a digital culture across its operations in addition to instilling it in its work environment and performance culture. stc has been also keen to integrate sustainability principles into all the Company’s business plans in an effort to satisfy its customers by providing them with the best-in-class digital solutions and communications services while taking care of the environment and protecting its human capital. stc has therefore, developed all its internal systems and plans to keep abreast of the best digital developments with an aim of enhancing its adaptability and continuous improvement of its services and operations as well as providing the best service to customers in an effective manner.

stc constantly seeks to adopt a flexible and sustainable framework as a comprehensive, digitized approach that permeates all aspects of its operations with the aim of strengthening its brand globally and creating new growth opportunities to enable the Company to thrive in the long term in a highly competitive market. The importance of harnessing digitization and digital technologies in driving sustainability and enhancing environmental stewardship through optimal source management is the main reason behind stc’s embrace of the digital culture. Digitization also supports the Company's operations by providing timely data for an optimal corporate governance process, ensuring compliance with ethical standards, enhancing transparency, facilitating communication with investors and stakeholders, improving cost and accelerating the proactive integration of sustainability practices into its core operations. This will thus serve as an incentive for stc to effectively highlight consistent sustainability performance, in turn affecting the company's investment decisions and market demand for its services.

“LEAD” Strategy

In the face of the global prevailing high inflationary environment and potential economic changes, stc remains steadfast in developing its corporate strategy and refining its business model to maintain its resiliency in adapting to the ever-changing market conditions and addressing potential crises. stc’s prudent planning would enable the Company to reach operational excellence and achieve strong financial results.

As a result, stc launched its new corporate strategy "LEAD" for the years from 2023 to 2025, which enabled the company - During the first year of implementation - to achieve remarkable strong results, which, in turn, contributed to strengthening stc’s position as a leader in the ICT market. It is crucial to highlight the importance of LEAD strategy in serving stc's ambition to drive its business to the forefront of the ICT market in Kuwait as well as reflecting the vision of the Board of Directors and Executive Management aimed at enriching the rights of the Company's valued shareholders and enhancing its competitive position by capturing promising investment opportunities.

Driven by stc’s key strategic pillars, we will strive to achieve the Company's goal by capturing growth opportunities across the youth sectors as well as small and medium-sized enterprises to enhance the performance of the consumer sector. Furthermore, stc is constantly making use of the internal capabilities of its subsidiaries - specialized in providing ICT services - in order to enrich its portfolio of ICT products for the business sector, especially following the high demand for digital services and integrated technical and commercial solutions.

Our primary concern is the implementation of a productive and digital operating model for stc with our unwavering commitment to enhance profitability, increase the potential of our employees, enhance their future professional skills and work on the sustainability of the Company, in addition to the hard work that our subsidiaries are eager to do with their ability to deliver solutions in the telecommunications and ICT markets.

Financial Performance of 2023

In line with Company’s aspirations to add value to shareholders and exceed customers’ expectations, stc was able to generate strong financial results in FY2023. Whereby, stc recorded the highest total revenue since inception to reach KD 351.4 million with a growth rate of 4.5% in 2023, compared to KD 336.4 million last year. stc’s robust outcomes are attributed to the smart packages designed to cater the needs of the individual sector, the huge support of the integrated technical solutions provided by its ICT, ISP and business solutions subsidiaries, the recent excessive demand on the integrated business solutions, and the continuous increased demand on the traditional telecommunications services in the Kuwaiti market. Additionally, this growth in revenue was achieved with the significant support from the increase in stc’s customer base which has reached 2.3 million customers by the end of December 2023, representing a rise of 0.5% compared to last year. The growth in revenue was also a result of the positive impact due to the consolidation of e-Portal’s financials, which was fully acquired by stc on the 6th of April 2022.

I am also delighted to shed the light on stc’s ability to play a proactive role in offering the best and most sophisticated services to our individual and enterprise customers in the highest possible quality in order to preserve the company’s position amongst the top in the market, in the light of the current difficult economic conditions and inflationary environment. Accordingly, stc’s EBITDA witnessed a growth of 3.7% to reach KD 85.1 million in 2023 compared to KD 82.0 million in 2022. As a result, the company’s net profit during 2023 reached KD 32.7 million (earnings per share 33 fils).

The continuous update of stc’s long-term financial policy, short and long-term digital transformation strategy along the previous three years was the main attribute that facilitated the ability to keep pace with the most recent developments in the telecom industry. stc succeeded in not only satisfying and exceeding the needs of its customers, but it has also demonstrated its ability to build a wise financial and operational plan based on the Company’s cost optimization program. This, in turn, had a significant role in enhancing stc’s solvency and strong cash position.

Human Capital Development

stc’s success during the financial year ended December 31st, 2023, reflects the dedication and commitment of its talented teams who own extensive experience in various fields. Driven by the global digital transformation, stc will continue to enhance a culture of collaboration, diversity, and inclusivity to attract and retain top talents. Additionally, stc is keen on empowering its workforce by providing them with the latest tools, resources, and training programs they need, which is a pivotal element in driving innovation and achieving exceptional results. Over the past years, stc has also focused on strengthening its internal capabilities through the acquisition of its subsidiaries, leveraging the diverse expertise of its teams.

stc's initiatives, investment decisions, and daily activities encompass the company's ambition to contribute to the digital transformation process and lead sustainable economic growth in the State of Kuwait. As part of our commitment to supporting the national workforce program "Kuwaitization" aimed at increasing the employment of citizens in the private sector, stc has established a program to substitute Kuwaiti labor as one of the fundamental pillars of its human resources strategy. By the end of 2023, the percentage of Kuwaiti workforce in stc reached 63.4% of the total company employees.

Appreciation and Gratitude

In conclusion, I am pleased to express my gratitude and extend sincere thanks to our valued customers for their loyalty and trust in stc, which enabled us to achieve these results. I would also like to express my thanks and appreciation to the Board of Directors, the executive management, and every member of the stc family and our partners for their support and contribution through outstanding teamwork in achieving this remarkable operational performance and the success of the company. This is achieved through their collaboration, enthusiasm, complete dedication, and continuous support. As a result, stc has now become a leader in providing innovative digital communication services. We are confident that, with your support and our productivity in implementing the new company strategy, transformation plan, and investment activities, stc will be able to move forward in achieving its future goals.

Strong financial and operational performance achieved by stc with the support of its solid financial infrastructure and prudent strategy focusing on innovation, strategic expansion, and maintaining the Company’s resiliency

Mr. Khalid Fahad AlmayoufChief Financial Officer

Overview

The strong financial results of Kuwait Telecommunications Company (stc) for the financial year 2023 demonstrated the Company’s competency to achieve its strategic objectives, in the light of the intense competition in the telecommunications sector in the State of Kuwait, supported by wise financial plans. This was also a result of stc’s commitment to periodically update its prudent financial plans in line with the Company's prominent investments, in accordance to both the local and international trends in the sector. I am, therefore; pleased to announce the growth in profits and cash flows, in addition to shedding the light on the Company’s continuous direction to reach operational efficiency through its adherence to the cost optimization program.

In light of these achievements, stc has an unwavering commitment to implement its new corporate strategy “LEAD”, which was developed in 2023 revolving around leading the telecom and ICT markets in Kuwait by offering innovative services, growing priority segments and deploying an effective and digital operating model. This vision is seamlessly aligned with the Company's strategic achievements, in which the focus was on enabling digital transformation and expansion of the ICT sector through stc’s subsidiaries specialized in providing corporate solutions and ICT services in Kuwait. Throughout the past years, stc’s recent acquisitions have succeeded in strengthening our operational framework, delivering comprehensive services and integrated solutions in the ICT field, as well as developing technical capabilities and digital solutions the has been designed for the enterprise sector.

stc’s success during the year resulted in the inclusion of the Company’s shares in a number of global indexes, according to the periodic review of those indexes. Wereby, stc shares were listed in various FTSE global stock indexes in March 2023, in addition to their inclusion in several MSCI indexes in November of the same year.

Robust Financial Performance

During the year 2023, Kuwait Telecommunications Company (stc) was able to achieve the desired results and strengthened its financial position. The company realized significant growth in both net profit, EBITDA, and EBITDA margin. It's also important to note the crucial role of "LEAD" strategy in achieving these results by capturing growth opportunities in the Company's core operations, which has resulted in growth of the customer base. stc also focused on expanding its operations and providing the latest integrated innovative solutions and technical offerings by leveraging the expertise of its subsidiaries specialized in providing services to the enterprise sector. Furthermore, stc achieved these results with the significant support from its digital transformation strategy, utilizing the capabilities of its 5G network and offering a diverse range of smart packages specially designed for the consumer sector. The thing that has led to a significantly increased demand for traditional and digital communication services.

In the fiscal year ended December 2023, stc achieved good financial results, spurred by high demand for digital platforms and data services, notably from the enterprise segment and integrated business solutions. Whereby, stc recorded revenues growth of 4.5% reaching KD 351.4 million at the year ended 31 December 2023. stc also achieved good levels of EBITDA reaching KWD 85.1 million in 2023 with a growth rate of 3.7% compared to 2022, despite the high marketing and sales charges brought on by the market. Accordingly, stc’s EBITDA margin reached 24.2% in 2023, with a net profit of KD 32.7 million (earnings per share 33 fils) in 2023.

stc’s robust financial strategy is reflected by the Company’s clear and accurate investment capital decisions that have been taken since launching the 5G network in 2019. Whereby, stc’s total capex spending reached KD 19.9 million, representing 5.7% of stc’s total revenues in 2023, compared to KD 18.5 million representing 5.5% of stc’s total revenues in 2022. On the other hand, stc’s total assets reached KD 447.7 million in 2023. In addition, Company’s total shareholders’ equity grew by 1% to reach KD 243.9 million, with a book value of 244 Kuwaiti fils per share. Furthermore, stc’s low debt to equity ratio of 9.4% as of 31 December 2023 compared to its peers in the telecom industry demonstrates the Company’s strong solvency position within the telecom industry in MENA region.

Financial Strategy

In response to the global and regional economic conditions, market competition, and prevailing trends in the telecommunications sector, stc is committed to the periodic review and update for its financial strategy. The overarching objective is to strategically allocate resources for the continual enhancement of its services to stay at the forefront in the telecommunications sector in addition to meeting customers’ needs and adding value to its shareholders. stc's investments in developing its internal capabilities expanding its operations are fundamental to enable the Company to grow and lead the telecommunications market. Whereby, through the implementation of its corporate strategy “LEAD”, stc has been able to strengthen its financial position, demonstrate its resiliency and ensure its continuity in various circumstances.

As part of its commitment, stc has successfully executed numerous strategic projects supported by the digital solutions aligned with the company's strategic and financial objectives. These initiatives are designed to enhance operational efficiency, process control practice, and achieve excellence in treasury management operations. The flexible operating model of stc and its subsidiaries has contributed to enhancing profitability and improving the Company's internal capabilities through effective cost restructuring measures.

stc and the Investment Society

Driven by its adherence to the global best practices of investor relations and corporate governance principles across all the Company’s activities, stc maintains the highest level of transparency in dealing with both current and potential investors. This commitment has made a positive impact on stc’s engagement with the investment community over the past years. Accordingly, the company has been successful in maintaining effective communication with its current and potential investors during economic challenges and potential risks. stc is also committed to utilizing digital platforms and various communication channels to serve the investment community and the Company's shareholders. We believe in the importance of preserving open and clear communication channels that accurately reflect stc’s position in the market, highlight its competitive advantages, and showcase the effectiveness of its corporate strategy. Additionally, keeping investors informed about our financial and operational performance is one of the key requirements for upgrading the company to the premier market in Boursa Kuwait.

It is noteworthy that stc has been added to the Premier Market Watch list – eligible companies for promotion to the premier market at Boursa Kuwait during the year 2023. stc is set to officially join the Premier market companies starting from 11 February 2024, once it meets the necessary listing requirements according to the regulations of the Kuwait Stock Exchange.

Moving Forward

Driven by the paramount importance of innovation in delivering cutting-edge services and integrated technical solutions in the telecommunications and ICT sector, stc takes pride in the notable achievements attained through the first year of executing “LEAD” strategy. Where the preliminary results have demonstrated the effectiveness of the key pillars of our corporate strategy aimed at achieving market leadership through the expansion of digital services and leveraging an efficient digital operational model. stc has also taken precise measures to ensure the continuity of the "LEAD" strategy, preparing and implementing action plans that align with the Company's strong financial position.

This success has also contributed to raising the Company’s ambition to lead the market, reinforcing its position as a leader in the ICT sector in Kuwait. stc is committed to identifying and pursuing valuable digital opportunities that enhance its market position in the telecommunications and ICT sector. These efforts align with Kuwait’s vision for a new digital economy, with enabling the integration of the digital agenda into the Company’s daily operations.