AECI Ltd (AFE) Earnings Call Transcript & Summary

Okay. Good morning, everybody. Welcome to the hybrid event, which is obviously virtual, but also in live. We have decided to get everybody back. Our operations are 100% back to utilize; our people are all back producing, looking at customers, looking after customers. So welcome all this morning. Thank you for making the effort to be here. Just remember all protocols relative to COVID are to be observed. There is sanitizer available; mask, if you really need; and of course, just observe the distancing. So welcome, everybody. This is our '21 results, and I welcome you all. Obviously, lots of hard work. So we've got the accounting team here. We've got our favorite auditors here. And of course, online, I have my full Board and the Chairman is online. So if there's any questions later on, he'll be able to answer. We also have the Chair of Audit, Philisiwe. She is also online. And we have Chair of Rem and Risk and Social and Ethics. So they're all there. And I also have about 400 of AECI colleagues also have dialed in so that we -- everybody gets the same message. So I'm going to kick off with the results. We have an agenda. There is something for you to write on to really check the numbers. I know that you all scrutinized them already. But they are -- it all should -- it is tying up with the commentary. We released results at 7 a.m. this morning, and the reaction so far has been reasonably positive. I'm going to go through the results. I think, overall, if I take us, I think, in my view, relative to the circumstances of COVID, and obviously, in South Africa and a lot of our operations going through 3 waves last year and all the supply, demand, prices, we came out reasonably well, but without lots of challenges, right? And hard work. So I have the whole Board. We have 3 non-execs that are obviously based in America, South America and also Australia. And they've been really put in place to help us with the strategy as we look to globalize, especially around explosives. So -- and Mark will be talking about that. So welcome to all of them. We have the whole executive here. They all joined us. So they also can answer some questions and a lot of them are doing the presentation and helping me with that. But also you will notice we made an announcement about 10 days ago on the new CFO. And obviously, that is Aarti, and she is currently the CFO of the JSE. So she joins us on the 20th of May. It's when she joins us officially. And I'm sure she's just raring to go, to understand the manufacturing business, and I think there's great opportunities for that. But most importantly, we also unlock Mark to further embed his career and giving him one of the largest operations in the group. And the one I'm really excited about -- I'm excited about them all, but we're actually giving him the mining business, and there's an international strategy with that. So there's various aspects. So Mark is going to be dealing with that, and he'll talk about that just now. COVID. COVID is still with us. And I'm saying to you a little bit earlier on, I can't believe 2 years was probably passed since we were last here and doing something on a live and starting to get out of the offices and seeing customers. So it's been like a blur, but it's still with us. We had over 1,500 of our people around the world that were infected. And unfortunately, we lost 12 of our colleagues and our sincere condolences go out to them all and their families and their loved ones. And it's never hard or never easy to express that sadness that exists. And I'm sure all of you here today and online would have lost somebody very close to you with this pandemic. I am happy to say that on the fourth wave, we didn't have any loss along the organization. It seemed to be milder, and it seems that the vaccination has helped us a lot. Currently, we're estimating about 60% of our workforce around the world is vaccinated, but we are moving to a mandatory vaccination policy as of the 1st of April. And we'll be endorsing that. We are giving a grace period of about 3 months. So we're giving people another opportunity because most of the stats are showing it has actually helped in terms of ICU admittance and also death rate. So we're endorsing that. It's still paramount is the safety of our people. And as you know, in the manufacturing sector, people are very in a close proximity most of the time that they work in. So I think that's -- and I think there's another pressure coming from the mining sector. They were not allowing anybody on the mining benches nor on in the mines or underground without being vaccinated. So we also have to adhere to customers' practices, and that's the normal practices that we're seeing on a global basis right now. All right. So performance, and I think really, Mark will unpack that, but really, the health and safety of our people paramount, and of course, the rollout of vaccinations, also spoken about. But we were really challenged with impacts in raw materials, shipping also in terms of containers. And in sometimes, we had to buy raw materials at extremely high prices. So you will see, and Mark will elaborate, it has cost us a little bit in working capital, and that's really to make sure, and sometimes we were just grabbing shipments as when we could get them to ensure that none of our customers were forced to stop due to no supply. So we've done our BCM. Our sourcing offices did a great job. We ensured none of our customers ran out. And remember when hard lockdown came, we were actually classified as essential services, which obviously helped us in the results and -- as we went into 2020. But it also -- the water supply, mining, Eskom, which were all big customers of ours, all were put as essential services, the agricultural sector. So we have to continually supply those services, and we never let them down. There were some really close calls in terms of raw, especially for some of the key suppliers, but we actually got through that. It is still with us. Let's not underestimate. It's also affected customers, chips for the automotive industry, car parts to get a brand-new car now, there's quite a long waiting list if you can get one. And -- so we're still seeing a real choke up in the system relative to equipment. And even the mines are battling to get engineering spares, et cetera, to actually help them unwind and open up their pits as well. So we've seen, it's all sorts of things that have actually been affected by this. But we've done well through it all. Insurance claim, Mark will just touch on that. We are progressing with that, but we are letting it going through its due course, arguments for and against, but hopefully, we can get some sort of resolution this year. Mark is probably our aim. Overall results. I think, 8%, ZAR 26 billion sales would be affected negatively by rand dollar because the rand actually strengthened in 2021. If you look, and I'll show you that. But also, we saw high ammonia prices, which also sort of probably offset that in dollar terms. But generally, the rand was up in terms of revenue, which was quite pleasing. So we saw volumes start to come back in a lot of the sectors and EBITDA was up. The profit from operations was way up, but you must take into account that impairment that we took in the previous year. Mark will obviously give you the comparisons in terms of underlying. ZAR 11.16 is obviously HEPS. But I think from that, most importantly, we also declared ZAR 5.05 dividend. So I think that's an increase in about 20% year-on-year, Mark, if you take the total dividend paid in the first 6 months and obviously in the second 6 months. So we still want to reward shareholders in the dividends and for investing us. And I think talking to a lot of the shareholders out there, they really anticipated and look forward to that dividend payments. And we -- and of course, with the cash balance that we have, we'll probably continue with that. Cash generated still very healthy. As I said, probably we could have generated ZAR 1 billion more. However, working capital constraints pushed us to make sure we had that stock. And of course, gearing 24%, I think, end of last year, 22%. And of course, net debt to EBITDA smaller than 1. So financials in a very good state. If you looked at the results overall, and I'm giving you a quick pace, is probably our mining sector up, agree -- and I think a really great result, especially around the extraction chemicals. Explosives battled that last quarter because ammonia prices escalated, doubled and tripled in prices. And of course, some of the contracts on the continent have a 3-month lag in getting those contract prices through. So on the way up, you end up being behind the curve. However, on the way down, you actually gain some ground. So that's what's affected probably in the last quarter, although volumes outside of South Africa were there. And then I think, from my point of view, if we looked at the overall chemical business, excellent results relative to all the restructuring that we did, and we -- and the savings are there. So I think despite the customer base, which is the manufacturing sector, they did pretty well. And of course, water held their own, and they had their own challenges relative to exports, relative to imports, relative to pricing. So they're also well -- and I think most importantly, when you hear from the team, you will hear how they've positioned themselves moving into this year, most importantly. So happy with that. And then agri, flying. Local agri sector -- I know Dean is smiling under that mask, probably smiling a lot, but obviously offset by Schirm, which had its own challenges relative to automotive industry and the European markets that we saw come off last year. However, I'll comment on that a little bit later, and Mark will help, a lot of good stuff. American Schirm business, it was pumping. I mean they're battling to catch up. That USA market at the moment is fantastic opportunity for us relative to our agri and our manufacturing plants that we have there. Really great results from North America. And I think really much -- probably not where we wanted it to be or where we'd like it to be, but definitely made a profit and we saw turnaround coming. And the outlook looks for pretty more positive relative to what's going on in terms of the contracts that have all been [ net ]. So we'll start seeing a lot of benefits from much coming through. So I've probably done the whole presentation now, right? So that's basically -- and of course, the gearing would have been affected with a little bit more interest paid, and you would have picked up that tax rate a little bit higher, which obviously would have affected HEPS. But Mark will actually elaborate on tax rates, and how we paid a little bit -- about 2% more is probably the number. Zero Harm had a fantastic achievement. Neil is in the building. All the major milestones that we set ourselves were achieved. This is #1 priority for all of our people around the world. It's the safety of how we comply to the environmental issues, how we make sure our people are safe in those dangerous chemicals and explosives. And we've done a fantastic job. Neil, to your team, I think, really great and the Board have obviously supported us -- all the way with us. But 0.23 is really world-class in terms of total recordable injury rate. And that's probably the best ever that AECI has ever achieved in terms of injuries. And as I said, in '21, we had the majority of our workforce back. We had a little bit of wobbly in COVID, but obviously, COVID on a lot of people's minds, but we managed to pull that right. So very happy about that. Also, ESG is on everybody's lips. Every investor banker is talking about ESG. What I can say, we are progressing well. You are seeing -- we've -- these are 25 targets, but I need to stress here that in our integrated report and our sustainability report, we'll be unpacking these numbers because there is some production variances that affects us. So for the moment, the first half of the year, ammonia nitrate wasn't producing at the higher rate, which automatically leads to less electricity, less water, right? But with the initiatives that we have done, we will show you, we are well on the way to be achieving those targets. And probably where we haven't achieved is really on the solar power or the renewable energy, but we have 5 projects currently going at most of our sites in terms of -- and majority of them are solar. There's some interest in development about green hydrogen, green ammonia. And Dean could talk about that about innovation, but we're really doing well on ESG. The JSE have also given guidelines in terms of -- and I can imagine, with the JSE, the guidelines aren't going to be guidelines for long. So what we are going to be doing, at the end of '22, we'll be aligning totally with those guidelines that the JSE has put forward. And obviously, that includes the TSFD (sic) [ TCFD ] as well, those standards. And I know a lot of our shareholders have been asking, but we will be requiring enough, guess, that looks like -- more or less like this in terms of ESG core scorecard. This is on first year. So you'll see some of them we're well on track in achieving. We've set ourselves '25 goals -- '25 -- 2025 goals. However, most importantly, we're going to be relooking at goal for '23. It's a rolling -- moving target. So we're going to start looking at '26, '27, '28. So ESG quite high up. Probably the one that we are a bit worried about by 2025, if I'm honest with you all, is the Scope 3 emissions because that's always going to be the challenge in terms of looking at supply chain and customers and everybody aligned. So there's a little bit more work to do that. And Neil, hopefully, between you and Dean, you'll be able to sort that out in the next year or so. But we are going to be releasing a separate sustainability report as a follow-up to our first one. We're also going to be -- we were announcing -- obviously, we're aspiring to a net 0 emissions. So we kind of felt, well, what else could we do? Could we say 0 water as well? But the world has gone net zero carbon. It's now the timing. So we're now working on the flight plan of what we need to be doing to get to that point. We are already realizing the world is going to be pushing to go to 2040. It's coming, and it's going to be reducing. And as you know, our President has already announced that there are certain targets that we have to achieve that he's made commitment to on 2030. So what we'll be doing in our integrated report and sustainability report is talking you through in terms of the different milestones in terms of the different years. But this is serious. And I think for any business out there right now to ignore it at your peril. And in terms of investors, attraction of the business, I think this is really high on our agenda in the next number of years. Our business drivers, and a lot of you already have -- you've probably read this page already, is, as I said, the rand was definitely stronger, finished on ZAR 15.98. It's hovering around that ZAR 15.30. So that does affect the mining business in terms of the dollar-based earnings. So obviously, that was compared to 2020, a little bit less. And Rafael, who is from the mining business, is here. So you can also answer some questions, Rafael, about this. But you can see gold is holding. The PGMs have come off a little bit, but the basket is pretty good. And we've seen some fantastic results, right? From Kumba, from Anglo Plats and from Anglo Gold, we've seen some really good results on the back of these commodity prices. Copper, cobalt and nickel, while I can say it is affecting, we are seeing a lot more of the mines coming back in Central Africa and, obviously, projects coming back in that area as well. So quite exciting times as they're starting to come back and ramp up. Probably the big challenge for the South African open cast, and I'm talking coal and iron ore, is challenges with Transnet and, obviously, ports. So they have not been able to get the volumes out that they would like, which actually affects us directly. The other is, obviously, the amount of rain we've had has also stopped blasting the open cast, especially in this last 3 months of last year and moving the first month of this year. So we are seeing some volumes coming off, mainly around, obviously, rain fall in the open cast. But underground steaming ahead, really gold looking pretty good, platinum looking good. Our shock tube numbers are going through the roof again. So we are seeing the underground mines coming back. And, hopefully, I'm not going to steal Mark's thunder now, and the coal and iron ore, obviously, we saw iron ore coming off in terms of pricing. SA mining volumes did kick back pretty quickly last year, but you could see tailing off a little bit relative to those challenges that I'm talking to you about. And then the other one is, obviously, which affects the size and the collection is the amount of cash that's been generated by the mines in terms of minerals. And you can see that going up, but obviously coming off as some prices. But the mines are in a good space, and hopefully, we, as a supplier, can take full advantage of that. Brent crude oil does affect us. Does affect chemical input prices as well as ammonia. And you will see from this graph that we obviously were hovering around the $70, but we obviously have already hit over $100. All right, especially what's going on with Russia and Ukraine. And I'll talk about that a little bit later, the effect of -- the impact of that in our business. And I think as an introduction, I've sort of given an overall summary of the '21 year. So as I stand here, I am very pleased, very thankful for my team that are actually watching us now. A big thank you for them. But as I say, the dials went back to 0 and we start again, right? So we'll be pushing ahead. Mark, if you can -- so Mark is going to go into the performance analyzed. So Mark, over to you.

Good morning, everyone. This is my last presentation as CFO. So I am looking forward to doing this and then from there, you go straight into the mining presentation. I think what's important is to just try and analyze the results as to where we are and what had actually happened for the year and then compare ourselves to 2020 and then take you to a 2019 comparison. A lot of shareholders, bankers are always asking how are you -- have you fully recovered from COVID or haven't you? So if I take you just through the numbers, what we can see, on a reported basis, we're actually 8.8% up on -- versus last year on EBITDA, 20% on profitability and about 26% on HEPS. Last year's accounts were impacted by some abnormal adjustments other than just the COVID that we are talking about. So last year, we had some impairments of goodwill, which was about ZAR 821 million related solely to the Much Asphalt write-off of goodwill. And the balance came off out of the project Optimum that we drove where we had actually written off and written down some of the assets and goodwill that we had in there. And then we sold the business last year, and that business made give or take about ZAR 50 million EBITDA. So that income had fallen away. And that was our paper chemicals business, which we sold for just north of ZAR 208 million last year. We made ZAR 102 million profit on that. So that was the results, if I had to compare it. So what I want you to remember, last year, we did say that we lost about -- and we estimated this loss about ZAR 500 million worth of COVID losses that we had brought through. So just bearing that in mind, if you take that into account, we're probably short of about ZAR 150 million. That's where we haven't caught up on our returns. So the real asset test is how do we perform against 2019? So 2019, which is pre pre-COVID versus COVID, and what you can see in 2019, we did -- we tried to normalize those results, and we had an impairment that we took through in 2019 that was the [ SEP ] business that we impaired in 2019. And then we sold our JV that we had with Brenntag, Crest Chemicals. So that we made a profit of about ZAR 234 million. So that gave us our normalized profits. So if I look at where we are, we're probably off the mark by 4.6%, 5.8% on profit and about 3% on HEPS. So give or take, if you put that together, about ZAR 150 million shy of where we should be. So we haven't quite got back to pre-COVID levels. And that's various reasons. And my colleagues, as we go through, we will highlight some of those areas that -- where we're still finding a bit of challenges. If I just take you to the earnings analyzed, I did speak about HEPS and EBITDA. But what's good is that our RONA is starting to return. We're sitting at about 14.3% RONA post COVID. And hopefully, that will start building to our targets at RONA. I've always said, we're trying to get to about 20%. And I think that's important. The trading cash margin, that's improved and hopefully continue improving. The 1 disappointment for us, and it's not really a disappointment, you can see the negative and the positive side. We did spend a bit more on tax. The tax rate was about 34.4% -- 34.7%. And what typically happened was, I've always said to you, we try and bring cash back, and we have been able to draw some cash back from our subsidiaries. And typically, you are paying some level of withholding taxes on that. So it does increase your tax rate, and also the mix in foreign jurisdictions between South Africa because you're always benchmarking it against the 28%. So that's also increased the tax rate. I still maintain, they are a good forecasted tax rate for AECI, the group, if I balance it off, it is about 32.5%. Yes. So cash management. So it's -- we did spend some cash. We've been very disciplined around capital expenditure for a long period of time since 2016. And we spent ZAR 777 million. Most of that CapEx was spent on sustenance CapEx. Now remember, last year, we had shifted some CapEx from 2020 into 2021. Because of COVID restrictions, we could not execute the #9 nitric acid upgrade; statutory shut, that we could not do. So we did that in 2021. We've also completed the air emissions abatement project during the year, which we started off, I think, late in 2019. We were able to complete that. And we also spent a bit of cash on replacing some of our MMU fleet. Now that's been a challenge. Mark spoke about that earlier on. We're struggling with trying to get -- it's part of the automotive sector. So we tried -- we're struggling with sourcing components and our suppliers are. So that will be a struggle as we start spending some money on our MMUs. And those MMUs will obviously be deployed on some of the new projects that we are embarking on going forward. The net working capital percentage did deteriorate to about 17.6%. And that was largely on the inventory line. And I'll spend a bit of time on that on the next slide, and I'll tell you how that inventory is broken up. Our borrowings has remained solid. So we were at about 27% gearing at half year. We've improved that to 24%. I did forecast us to be roughly at about 20%, and you'll see why we haven't quite got where we should be. So we ended on 24%, still solid performance, and we still have a lot of cash that we can utilize going forward. Cash interest cover, very healthy, 18.6x from 18.5x. And if I look at the foreign dividends, this is what I was talking about, that has partly impacted our tax. Our foreign dividends, we moved up from $20 million to $25 million. So that has attracted debt. And from SANS Fibers, we were able to draw another $6 million. So we not only bring -- we bring cash in from all our foreign subsidiaries and that is our cash position going forward. You would see that we had delivered -- well, declared a dividend of ZAR 5.05. It's not [indiscernible]. Someone told me this morning it's -- and that's a 1.6x cover, and that's give or take roughly about a 6% yield. So it's still a healthy dividend. It's 20% up on last year. If you look at the full dividend and on a final dividend, about 7% up. So just talking about the inventory movement. Right through the year, the treasury department in AECI has been very focused on how we actually deploy cash within our business, and our Financial Directors out there have also been very disciplined. But we started gearing [indiscernible], and one of them is really around pricing. We have started seeing significant price moves in ammonia being a key one, and other chemical raw materials of commodity prices. So what you can see is, of our balance sheet movement of ZAR 1.1 billion on inventory, our cost was ZAR 836 million. And as Mark said, wherever -- in certain raw materials, wherever we could get raw material, we actually decided to bring that ship in and keep it in our warehouses for future deployment. And that we're starting to benefit from now in the first quarter. Where some of our competitors don't have stock, we've actually got the stock to actually sell. So that has been quite a big movement. You would see later on, I do present the ammonia graph. And that has moved 69% on average in rand terms over the year. But just since the end of the year to now, it's gone up a further 42%, okay? And obviously, the Ukraine issues are going to have other impacts going forward. So I don't think this is going to stop. So we should not be expecting that this is going to be a massive inflow next year. I think the situation is going to be out there and could potentially get a little bit worse. I don't think we're the only ones in this boat. Just to tell you how we've utilized our cash, we generated ZAR 3.3 billion, healthy generation. We have spent a bit more on taxes. Remember, last year, we got a few deferments. We have spent those -- we've actually paid the cash out this year. We spent ZAR 1.1 billion on working capital, as I showed you earlier on. CapEx is a little bit higher. However, and we'll talk -- and you'll see a lot of the outlook statements. Next year, we are going to spend some money on, some growth CapEx is coming through. So we are seeing opportunities out there. There's nothing else to highlight. The gearing is still solid at 24%. If I just look at our debt profile, I've put this up. We ended at less than 1 on the covenants that we need to be at 2.5. So it's a very healthy position to be in. We're -- we've actually settled during the year on our term loans, about ZAR 1.9 billion that was settled. I know all the banks are going to ask us when are you going to refi? I'll leave Trevor to that. He and I've had some long discussions about it. So he will talk to you about that. We have raised some overnight borrowings of close to ZAR 0.5 billion. Okay. So we're well within our covenants and all of you will get covenants compliance letters later today. So -- and I think we -- our debt for the years going forward looks like it's well under control. Yes, if I can just take us performance by segment. Mark did cover this earlier on when he spoke. We've our pillars that we have, our strategic pillars, all 4 of them have actually delivered quite well. The only red mark is really sitting on the Agri Health pillar. And that was largely the Schirm Germany performance, and I will talk about that later on. But otherwise, it's been a very healthy performance coming from all our business segments. Okay. Let me put my hard hat on. I'm now going into mining. So if I -- if we go into the mining results, what we are -- what I can say is that our revenue base has performed healthily, but really on the back of a very strong ammonia increase that I did speak about. It has driven our ammonia volumes up. However, you would have seen in the commentary, our volumes were down. And that's very evident of what's happening in the mining industry. The mining industry is currently really being driven by strong commodity pricing. The volumes have either been flat or negative. And that's what we are seeing out in our mining revenue here. Still very healthy, delivering a -- the mining -- our mining business has delivered an EBITDA of ZAR 1.8 billion. If you take that as a cash performance, strong cash generation and ZAR 1.3 billion of profits, 14% up year-on-year. And the positive part about this is that we're still above 10% trading margin. So it's a very healthy trading margin that we're driving. And working capital, as I said earlier on, is really being determined by what's happening in the ammonia increase. But there is a very good momentum and discipline within the mining business around working capital. So if we look at the segmentation of mining, so what we can see here and what this graph really shows is our agility as a business. It's our diversification as a business. So we are represented in all these major minerals, either in South Africa or globally. More importantly, we also spread around more than 22 countries around the world. So if you take the gold business, gold has largely remained flat as a percentage of our sales. However, our gold is really based out of West Africa, where we're seeing good growth and also have come back in underground mining in growth. So that has been positive. The other positive part has been our PGMs. We've seen good growth out of PGMs, largely from the underground mines and just from our northern neighbors in Zimbabwe. So we have seen some good growth out of there. Our coal business has been positively impacted by what we're doing in Australia, and I'll show you some pictures later on as to how successful we have been in recent times in that market. But our growth has been coming out of that. And copper has really been solid out of Central Africa. We had a solid performance out of copper and diamonds, and we're seeing a good return to diamond mining. Disappointment for us is that we would have liked to have been a little bit bigger in iron ore. And we are making some strides in that area, again, around iron ore. It was obviously based on the loss of the contract that we had last year. It's exactly what I was telling you about ammonia, that moved about 69% up on average and a further 42%, so this is a challenge for us. And why is it a challenge other than just working capital? It's a challenge for us because, as Mark said, especially outside Southern Africa, we have a 3-month lag on pricing. So what happens is as prices go up, our increase only goes up 3 months later. So that has a lag on pricing. There's a lag on margin. So it is something that we are very cognizant of. But we obviously get it back as prices come up. And obviously, 1 day, whatever goes up, does come down, and we will pick it up as it comes down. Foreign revenue, once again, talking to our diversity. We're 61% outside South Africa, very positive, and we continue to grow in those areas. Unfortunately or fortunately, does it -- depending on which side of the fence you're sitting, we did have a stronger rand through the year, so it did impact revenue. I did speak about the solid cash generation. The working capital was a challenge through the year. I think it is going to be a challenge going forward. Our CapEx, I did speak -- we have spent some money on CapEx. And as I said, it's still very disciplined. We're still spending CapEx in line with depreciation, and that's what we'll drive going forward. One of the projects I didn't speak about was the UBS automated bagging plant. These are the pictures that you can see there. This plant is now completed. We've really started to fill it up. We've doubled the volumes in this plant. And on UBS, and I will talk about it later, we have got a very focused team that's deploying this in the underground mining as we speak. The investment in HVO, Hunter Valley, I will talk about that later as we go through. Yes. So South Africa, has been a tough environment to operate in. The coal mining sector, especially in the fourth quarter, was impacted by rain, but more so our customers really experienced issues around the rail network and the terminals. So it has impacted our volumes in that area. So other than coal, just on iron ore, we're back in the Northern Cape. We're asked by a customer in the Northern Cape to support them. They've had some issues, so we've been there since October last year. And yes, it's looking positive. Underground business, back on top. As the commodity prices have increased, underground mines have turned around. There's been strong comeback in underground mining, and we've been able to support those underground mines. And as I said, our UBS volumes, we've got -- this is technology that we have, it's technology that we believe in, and it's something that we are busy rolling out right now. Ammonium nitrate sales, that's increased and that's -- we call it industrial sales that has shown good increase. We have supported some of the players in the market as some of them ran short due to technical issues. And ammonia supply through the year, lots of shareholders have phoned me and asked me what's happening with ammonia supply and AECI. We've been uninterrupted around ammonia supply. So we have continued being supplied by a supplier in ammonia. So that has been great. And then we've had seen some significant safety stoppages, Section 54s, as we call them, especially in the fourth quarter. Central Africa, great -- good recovery on the back of commodity pricing. We have rolled over some of our contracts, but we have seen some challenges. There has been some challenges around some competitors coming through on spot pricing deals to our customers. We are very wary of what's happening there, but it's all based around ammonia. So wherever we are, there's always going to be competitors, but we have seen that in recent times. In West Africa, all our major contracts, we've been able to roll over those. What -- unfortunately, we've seen some operational issues at some of our customers. But more importantly, francophone West Africa sociopolitical issues. You would have seen in the press significant issues in Mali, Burkina Faso, those areas have been challenged over the last few months. So that has challenged us. Asia Pacific, all a good new story. That's Indonesia and Australia. We've been able to renew our contract with KPC. It's another 5 years on the ground, and that's on the back of our partnership there. And we've put in a BBRI granulator at our BBRI plant. Remember, that's a JV relationship, so that granulator should be up and running towards the end of the year. That will allow us to expand our volumes in that market, because currently, we are supplying emulsion type product. Now we'll have dry product that we'll be able to spread around that region. Australia. What can I say? It's been a great performance, unbelievable -- I said unbelievable performance. We've rolled over the fees contract. And what is that? Now let me tell you what that is. Those photographs that you're seeing online there, those photographs were taken yesterday. That's the deployment at HVO. We delivered our first bit of product on the 1st of March at HVO. That's the team out there getting ready to deploy, and that's us in the pit. And what you can see is the scale of the pit. So we started deploying, pumping down the hole and hopefully, by tomorrow, Rafael, we'll have our first blast on that pit. So a really excellent job by Jaco, Duncan and his team in Australia. Latin America. Yes, it's been very hard for us to build that business through COVID. Now that restrictions have fallen away, we're well on our way to starting to build that business. We're entering quite a big tender process in the next month or 2. So hopefully, we'll be able to secure some volume going forward. Chile, we have identified a site. We've started the planning phase of that plant. And hopefully, that plant will be up and ready in a year's time. So when I stand here next year this time, that plant should be up and running. And hopefully, we'll have customers to support that. We have fulfilled some export orders in Peru, that has started. So we started building a market around that. And we've been able to support the Peruvian market out of Brazil in packaged explosives and electronics out of South Africa. So that's going to be an absolute positive story going forward. I'm looking forward to supplying into that market. Mining Chemicals business has been -- has had a fantastic performance. [indiscernible] and his team have done a brilliant job, and our customers have really taken advantage out of a local supplier. And we've been able to support our customer base, both in flocculants and depressants. We've really shown a good robust recovery, and that's based on the recovery of the platinum market. What we have seen is the solid xanthate markets, and this is solid xanthate. This is a pelletized product that has been debottlenecked. Our plants are all optimized now and ready to support the export market that we will -- and we've really started benefiting from that in the 2022 year. So -- and some of our customers that were on care and maintenance are out of care and maintenance now and [indiscernible] and his team are busy supporting them. The emulsifiers business that has been challenged due to the surface mining has been a little bit lower than where we would like to be. But we are starting to see some good export orders coming through on the emulsifier business. And the team out there are very positive about this business going forward. And we're not going to the outlook statement, I will tell you what we're doing in that business. So if we look at the outlook of mining, we -- supply chain is going to be an issue going forward. However, we are well positioned to supply our markets. So where we may have some challenges out of Ukraine and Russia with ammonium nitrate, we will be able to utilize our plants, and we will be able to take some of our products from South Africa and be able to service our markets in -- especially in the African region. We're well positioned on the HVO project. I've just showed you, we've deployed there now. So we're looking forward to some positive volumes. We're mobilizing currently. Megan and her team are currently building -- putting in a plant in Botswana and that's going to be great to support some of the copper markets in that area. We've been able to secure some volume in the underground business. And Ghana, we've just been able to secure contract in Ghana, and it's one of the bigger gold mines out there. So that's looking positive going forward, as well as Zambia. I did speak about CapEx. I'm not going to spend too much of time on that. And what I did want to tell you is that if we look at -- so what we have been doing is that our R&D team has been working quite hard. And what you have in front of me here is, #1, this is the wireless detonator. This is still in trial phase, but it's certainly something that we are looking to deploy in the...

It is a dummy.

It is a dummy. Yes. It is a dummy. And I know it does look like a missile. It isn't a missile. If there is something that you do put down a hole, either in underground mining or in surface mining. And this is the 2 component booster. And this is all in-house, our own technology, and it's technology that we're able to take globally and deploy this globally right throughout. So well done to the R&D team at the mining business. Maybe I should let this -- so it doesn't look like a rocket. So yes, so that's excellent from that side. At our Mining Chemicals business, there's a strong pipeline of R&D projects, and we have started deploying some of those projects right now. And there's -- and that will benefit our export business. What's important there is that we are putting up. We're expanding our PIpSA plant at Umbogintwini to supply the markets out there that we've identified, largely our exports and some of our surface business. So that's it for me and mining. Can I ask Dean just to come up and talk about water.

Thanks, Mark, and good luck in your new position. I can see you've already got the passion and you seem to know how to handle closet things, not just numbers. AECI Water. So despite a tough year for AECI Water, and I will elaborate soon, but revenue did grow 6%, but that didn't translate into the profitability and the bottom line. And I'll unpack as to why as the business has evolved, but a lot of you are in the picture as to what are the main reasons for the drop in our sales, and that has actually got a lot to do with the refining section, which, at 1 stage, was nearly 40% of our business. That's now -- and I will show you on the next graph. So the trading margin, I know mining is quite pleased with 10.7%. We're a little bit disappointed at 13.8%. Our benchmark is 15%, and we want to get back to beyond the 15%. And the way things are looking right now, and some of the projects and outlook, I will tell you about later will show that we should be going back to that beyond 15% trading margin. Working capital, like my colleagues have said, has been impacted, and I will unpack in the areas and the sections and the telecommunications, which -- where we were mostly affected. But overall, quite a steadfast result. This graph behind me actually unpacks what's happened in our business. And when I look at the oil and refining section, if we go back to 2019, it was 38%, and it's good quality earnings that we were getting from that market segment. It's dropped all the way to 17%, and with some recent announcements, it's more likely to drop even further. But the other positive story has been the public water, which, as you know, on this continent, is something that is growing. Water is something that we are certainly trying to push quite hard, not only in the chemicals aspect of water, but in the physical and the equipment part, and I will unpack some of the projects. Within mining, on our mining side, our local mining, similar to what Mark had expressed, local mining was slightly depressed from us from a chemical supply, but our export mining businesses in Central Africa and West Africa is really doing well, and a lot of new business have been attained in that section. The other area that we come together is we sometimes refer it to as a middle market or industrial market, that hasn't moved too much. There have been gains and losses. But ultimately, that's largely impacted by the manufacturing sector. And so if that starts growing, that usually will grow with us. But we've held quite well on to that. So when we look at what has happened, overall, public water, again, another 20%, which is a couple of years in a row now. And I've alluded to the oil and refinery section. One of the areas that we did struggle is, especially in our mining section and middle market, the customers that were impacted by COVID, a large percentage of them did not return. So that -- and, to date, we can almost say, between the oil and refining section and the COVID impact, the good thing is that a couple of years ago, we did the alignment project because if we hadn't done that, this company would have been in a lot worse shape. And a lot of those gains in the realignment has actually been wiped out by these 2 components that I've discussed there. One of the things, our business is very technical. It requires feet on the ground, so we have to travel. And although we've seen some growth in Africa, the growth was curtailed to a degree because traveling wasn't that -- as easy as it is, but it's certainly improving as I go forward. Supply interruptions, a large portion, especially on the public water section of the raw materials like aluminum and [ polyester magnet ], that was a real concern and supply chain, the issues at the harbor, but it also impacted our export volume. So you'll see on the public water, we actually were curtailed in our growth this year, not as a result of us not having the thing, but just that we couldn't get the ships to get up and the lead times to the relevant countries, but a lot of that has started improving. So with the ups and downs, the trading profit ended up flat because we -- although we substituted with higher volume growth in public water, the oil and refining section certainly has an impact on the quality of earnings. But I will show you how we're planning to overcome that. Working capital, as we've said, a large, like the rest of the group, mostly affected by the cost of inventory, not the volume of inventory. It was the cost. So overall in South Africa, if we just unpack, our South African components had a real good year. Revenue was up 30%. Public water had a great year. It's a lot to do with the rains in the country, as we said. And it does affect some of our other businesses, which I'll talk about. But certainly from this side, rains do help us in our growth. We are a high-quality business, so contract pricing and length of contracts and timing of contracts are key. And so when raw materials spike in the middle of just concluding a 6 monthly price, you find that can affect you. And it's tough when you have a good position in the market, especially in some of our market segments that we have to learn to ride the waiver. But -- so that has impacted some of our results and quality of earnings. Exports, I think I get asked in terms of public water. For now, exports is at 26% of our total business. And it is down 8%. And again, mainly because public water's growth was curtailed with shipping issues, but a very positive sign in that our mining chemical side is really growing nicely. Just on our sustainability projects and the projects that we have put together that's also going to help some of our internal objectives to give you an update. And the picture on the right is the first phase plant that we put at Modderfontein site, that's now running. I can say we've replaced close to 250 million liters of portable water that is being used on the Modderfontein site with the recycled water. And this will continue to grow to about 400 million liters, replacing portable water. So -- and it's become -- I must say, it's been one of our show pieces. We have had a lot of interested customers and clients from the mines and various other segments coming to have a look and see that. So there is other growing things. Our ultimate strategy is to have a 0 effluent at our sites, so that project is also going on. So I'm not going to unpack all of them, but we certainly are doing work. We start off in the laboratory. We then go into the pilot phase and then we go into the commissioning of industrial scale. And sometimes, it requires an EIA when we start talking. So there is sometimes a delay between 6 months and 18 months from when you initiate a project to when you conclude it. What we certainly see from within the group, we strongly believe that by 2025, all our objectives will be achieved. Outside of our group, we've actually made some good progress there. And I'm pleased to see it's not just in 1 market segment. It's actually spreading through public water, industrial and mining. So in public water, very good growth in Lesotho. We were awarded a project at the end of '21. We concluded it. And we should be finished that project. I'll show you some pics, and I'll unpack some of them. By third quarter 2022. We were -- we've been awarded a further 2 contracts, which will also finish this year. And then part of our social and CSI work, we're also involved with schools. So we are commissioning -- we're busy commissioning 2 more schools, and we should be finishing before H1. But there are quite a few other schools that we are working within the areas and within our clients that are now starting to talk to us. Last year, we completed the one in Soweto, which was really well received. In terms of the industrial side, we've just been awarded -- some of these we were hoping to have concluded before the end of the financial year, but a lot has happened between January and February. So we've been in the automotive sector. We are taking borehole water and replacing it with processed water for automotive section. Food and beverage, again, just within the last week, we've also been awarded a food and beverage, where we're taking them off portable water and replacing it with borehole water. And that those projects should be completed by quarter 3 this year. And then in the Mining segment, there was a bit of delays in some of our larger mining customers concluding the deal. But during the course of last year, we upgraded, and that's the picture on the bottom right. For those of you who know, I won't mention the name, but we've upgraded with a further 150 million liters of processed water, replacing part of a water. And we've signed a new managed, owned and maintain operate contracts. So that also brings renewal income at the same time. We've been qualified at 4 other mines, and it's across the spectrum, gold, platinum and coal. There's some quite exciting large projects, which we've been shortlisted on, and we should see how that goes. More on the softer side of things. Lesotho, our neighbors, as we were involved in some of the projects, they were going to host a sports swimming gala, and the swimming pool had no water. And so they called us. And within a space of 6 weeks, our team was able to put that facility on the right together, and let's just say the kids had a great time, and some records, most probably, were broken. And we're proud to say that's actually brought us closer to the Lesotho government and also has let kids in that region achieve something that, without the water, they would not have achieved. So that's a nice softer side of that. We completed that one in a short space. And that's, I think, what's accessing is that the team can mobilize simple units in the space of 10 days to 6 weeks. Some of the bigger projects we've got, which we'll complete this year in Lesotho as well. There are quite a few others, but I'm just highlighting these taking this -- taking river water to a 5 MLD, and we're expecting that one to complete before H1. And then we've also been awarded earlier this year in , [ our ] bank this will be a 20 MLD, which for those of you who went down to our Astron plant a couple of years ago, this is about 2.5x the size of that facility. So this is actually going to be our biggest plant that we have produced, but also we're hoping to complete this in 3Q. And I think one of the key parts about this, once we sell the equipment, which generally is a one-off sale, it comes with the maintenance, operate and manage. And then it also comes with further chemical treatment. So it builds up more chemical continuous business at the same time. There's a lot of other technical projects, and I'm pleased we did employ quite a few new skills we brought into our technical side and our engineering and equipment side, and we can see things are starting to accelerate. So these are some of the projects that we're working on in early phase with municipalities. And a key thing is bringing the technology, putting down pilot times and showing the clients that this can work, because often on paper, you never get to finish it. So we are investing into these technologies. And we're partnering with quite a few of the different municipalities, various technologies that we're bringing from our technology partners, SUEZ, and various technologies that we can get our hands on. So when one looks at the outlook for water, I think the project purpose that I've gone through all these projects will lead to about 10% of our annual revenue. That might probably going to be a question at the end for this year. And our target is to get it to above 20% in the next 2 to 3 years in terms of this segment of our business to also try and replace some of the industries that have shrunk. The public water and the mining sector, especially on exports, continues to grow. We've got our team sitting in West Africa, East Africa and Central Africa, running tiles as we speak, some quite lucrative public water things, but also on the mining sector. As we've said, the challenges we had in 2021 with passing on pricing, this has now been overcome within January. So the quality of earnings, without doing too many other things, will actually improve significantly during 2022. Green chemistry technology, we're launching a couple. As I said, we've really hired a good few scientists in the last year. And these things are looking really exciting, early to speak about, but things that I can certainly see that will grow our business, not only on a continent, but it will allow us now to actually going abroad and follow mining where they are entering as well. Again, one of the things we will have to continue to watch is our supply chain and our raw material. That is still a risk, but we have to work hard. And then the final focus, obviously, is always cash management remains a priority and, of course, trying to recover some of those working capital deficiencies that we had during the year. So that's water. And I think I'll hand over to my colleague, Mr. Murray.

All right. Thank you. Good afternoon, everyone. Okay. So it's my privilege to talk a bit about the agribusiness and the chemical business, which I must say that my team and our colleagues that I work with have done a fantastic job. But maybe let's just start with Agri Health. So revenue slightly down, and we'll unpack it as we go through the presentation. And, of course, EBITDA and trading profit quite a bit down. And Mark will cover that when he talks about what's happened in Sherman, Germany. Right. On a very positive note, and I have to say once again to Quintin and his team and our AECI Plant Health business, they've done a splendid job, outstanding performance on the back of the strong demand in South Africa. And of course, the very favorable climatic conditions that we've had. And with La Nina being around, I mean, we can see the rains out here again. There's been high demand in the agricultural sector. All regions, as well as all crops, which is nice. Because in the past, we always talked about the Western Cape, et cetera. We've seen good demand throughout, and we're getting good support here. Revenue up a 13%, and our trading profit in that business, up 24%. And that's really on the back of a lot of the technical work that's been done with our in-house products as well. The results underpinned by strong sales from our in-house formulated products. These are our owned products that we're formulating. Some of them generics, but again, a good strong focus on our liquid bulk nutrition as well, which we produced out at our Modderfontein facility. And then, of course, this continued focus on our green chemistry products as South Africa and the world is moving in this particular direction. And again, we see the growth that we've had in our biostimulants business as well, which is quite exciting. And our biostimulants really -- there's a big demand there to produce products, which really are focusing on good plant nutrition without destroying the environment as well. These are products like organic acids, amino acids and things like that as well. Okay. Additional product registrations received for both the local and the international markets. I think I mentioned the last time, really focusing on the U.S. market, which is a big market, but we now have a total of 31 registrations in the year, which, I think, is fantastic. The focus is a very focused approach, really on the West Coast side, so that's the California regions. And again, we're always surprised when we see the order of magnitude and demand of agrochemicals going in this region as well. Okay. Again, working capital, our supply chains, I think, very well managed as well under the year, under the circumstances, really utilizing our China office, which I've got to give credit to. And then, of course, good data management, because that's a big issue in our agricultural business. So our customers and our agents and the farmers ultimately have been paying their bills and have generated good cash flows for the business as well. Just the outlook on plant health. The strong momentum has continued into 2022. I think the forecast of La Nina is right through this summer season as well. So we just hope there's not too much rain now for the farmers, but I think they're enjoying the conditions. Of course, we expanded the synthesis plant. This is an [indiscernible] business as well. We debottlenecked that plant, and we increased that capacity by 30%. And these are products obviously for the South African market, but also destined for this international market that we're trying to grow as well. Again, further registration as I've mentioned in the U.S., I think, so we set quite a good foundation for that West U.S.A. market, Quintin and his team, and now really is to establish the commercial presence. We're working with more of the independent agents in the region and, ultimately, we've got to find what's going to be the right footprint for us for this business in the U.S. market. The Biocult expansion, that should be completed by the end of 2020 -- by the end of the first quarter 2022. And, of course, that's a 70% increase on our biological range of products, which hopefully was going to -- we'll see the benefit of that this year as well. Then, of course, our Khula App that we talked about the last time. This was really to access that emerging farmer. That's performing in line with the expectations as well. It's still small at this stage, but we're seeing the pull, and also it's granting us that access to help develop that emerging farmer. Okay. So that's really the South African business. Mark, I think I'm going to ask you to chat about Schirm before I go into chemicals.

Yes. So the positive part of Schirm is it did make a positive EBITDA. However, we were challenged in Germany through the year. And it hasn't been a great year for Germany. And if we look at where the problems when I did say in the first half of the year, we were challenged by the demand of sugar beet herbicide. And if you recall, if you've been following the Schirm numbers, we did set up this plant solely full for that product in the early years. So -- and that was really due to high inventory levels, lower demands, et cetera. Raw material supply shortages out of Europe, it's a generic story right throughout. And I think with -- and what's going to exacerbate issues is around what's happening out in the Ukraine, and that could be a positive and a negative story. Automotive sector, I think the automotive players can tell their own story. We've seen our being to Germany in 2 or 3 occasions now over the last few months. And the automotive plants were either running or they were not. So there are lots of stop, start, very inconsistent automotive sector right now. Mind you, there's a huge demand for these hard assets out there. So if you can manufacture a car, you're definitely going to sell that car, both in Europe and in the U.S. The sanitizer sales that we had. Remember, we made a lot of money out of that in 2020. That did not repeat itself at all. I think they had too much stock in place as is. And then we've had -- if we talk about waves of COVID, the German wave was quite different to the South African waves where we had significant lockdowns. And we found that customers were not interested in actually changing supplies at the time. So there were a reduction in tender processes. It was hard to see customers. It was hard to run production trials. I remember, we now went to Germany in October, I was almost the first person that the customer had seen in months -- in 15 months. So they weren't really actually entertaining that. I must say a lot of that has disappeared now, and we're able to run business fairly normally. On the other hand, the U.S. business, that has been fantastic. It's just the herbicide, the super concentrated herbicide plant that we put in last year, that's absolutely full, and it's full going forward. What we can see there is that we have bought a facility towards the end of last year. We concluded the transaction in Benton, Illinois. We haven't paid much for that facility, but what we are seeing is we're repurposing that plant to -- into a herbicide facility, and that will be ready this year. So if we look at the outlook, Trevor is leading a very motivated team. Trevor is South African that's gone to Germany, and he actually leads a brand-new sales, finance, COO role is new, and that team has been totally refocused. On the tender side, we had secured -- and this is really good positive news. We've secured a new tender with a blue chip player. That was done last year, really. We have been able to land some really good contracts in the last few months. And the German sales team has really been pushing the topic through, and we are getting in front of customers. And what we're seeing in Germany is that there's a good move of product from the East back into the Western markets. So that's what's going to drive the German market going forward. And our sugar beet herbicide customer has confirmed volumes for the year ahead, and we see a positive growth in the automotive industry coming through. The tender pipeline looks healthy. And hopefully, going forward, I can give you a lot more good news. On capital side, we've -- as part of our acquisition process in 2018, we have just finalized the acquisition of the warehouse, which we bought back -- which we bought from Imperial. Now that transaction was finalized. That's for 13,000 pallet spaces, and that's all dangerous goods. Now there's a shortage of dangerous goods space in Germany, and that's why we think this is going to be strategic for us going forward. And we're really starting to see that this warehouse is being filled up. The U.S., Illinois plant is a lot more exciting. And what we are seeing is we've been approached by 2 big customers right now looking for long-term contracts. We are going to have to put some capital behind it. I haven't quoted a number yet, but it does look positive stronger for longer. So we are in discussions with that team right now. So if we can go into the chemical side, Dean?

Thank you, Mark. All right. Chemicals. So revenue, ZAR 6.46 billion, up 19%. And you can see the great recovery, of course, in the EBITDA and the trading profit as well, with a trading margin of 9.1% and a slight increase in the working capital. So let me tell you a little bit about the Chemicals business. So first of all, excellent year-on-year improvement across the Specialty -- the AECI Specialty Chemicals business, the industrial chemicals, AECI Food and Beverage, those were the 3 businesses that were part of our restructuring -- our realignment project. And of course, AECI Sans Fibers in the U.S. had a wonderful performance as well. So credit to the teams that are running those businesses. The business realignment project is completed. I think I mentioned before, we did achieve that ZAR 100 million structural savings and benefits. And that really came from obviously a head reduction but also some of the good projects that we put in place as well. Quality of earnings improved, which is fantastic. Remember, we had this TP margin expectation of 10%. I'm glad to say, in those 3 businesses that we worked on, we've achieved that as well. So to Roger and to Neil and to Hugo, it was a hard grind to make those changes and restructure the business, but the gentlemen have done a fantastic job with their teams. We've also seen some improvement in the AECI manufacturing sector. Supply chain, we've been talking about this a lot. Supply chain challenges impacted the inventory levels. But I think, again, we did a very good job utilizing the China office in making sure that we source the products that we need. And, I think, of course, we did not let customers down. I think Mark has alluded to that a number of times as well. Better performance from the Much Asphalt team as well. So well done Benny, and Dean will talk about that a bit later. They maintain their costs very well and, of course, volume recovery, but not at the 2019 levels. So just a little bit of info on the individual businesses, specialty chemicals, real good focus on margins and diligent cost control. We had very good growth in the consumer business. The coatings, paints and coatings, people are actually spending a lot more money on their homes as well. And then, of course, in the metal coating side as well, I think there's been a shortage of glass. So we've seen an increased demand in packaging for using metal coatings as well. The consumer business, we expanded into East Africa as well. And we've got a very good sales executive that goes up there regularly and has really developed our market position there. And then, of course, momentum gained in the new product approvals for the European and the U.S. markets. We've got some nice specialized products now that we are going to try and sell into those markets. Industrial Chemicals, again, we've said along -- we said this at the half year as well, higher sales volumes of sulfuric acid and sulfur. We are also further growth in that home care market as well, which is great. We'll also debottlenecked the plant this year, so that will open up our opportunity to manufacture and sell most days, which is a high demand product at the moment. Exceptional performance by the bulk traded business, which we only started a year ago as well. So we've been able to increase that basket offering. And of course, we've introduced new products as well. Steady volumes in the foundry and timber side as well. We've seen an improvement there as well and a sharp recovery in the phosphoric acid market as well. Our food business, growth across all the food categories. Again, there's been this focus on our food systems, which we've seen good growth in our traded business, particularly our health and nutrition portfolio as well. The beverage side, a consistent improvement, particularly in the traded side. We did see a little bit of slow demand in the formulated users, and that's really got to do with, obviously, the current economic climate in South Africa, where people are spending less money on juice. We mentioned before, our Sans Fibers, superb performance, and this is really on the back of the strong polyester sales in the U.S. Good working in capital management, because they've got some challenges there. Strong position, the local supply for that North and Central American markets. And again, we're also well positioned to work on our Origin project as well. So the outlook for Chemicals really the growth trend is established. I think we're going to see this continue in the niche market that we operate in. There is a stronger demand for locally manufactured products, and we've got to make sure we take advantage of this. Maybe just some good export opportunities. And also, we are making some small investment on our juice plant down in Cape Town really to derisk the raw material supply. And there you can see still some of the supply chain challenges that we have. And of course, Dean has mentioned, of course, the impact on the oil refineries because there are suppliers of customers to us. Right. Mr. Mulqueeny, I know we're running out of time. I'll let you handle Much.

Thanks. So just quickly on Much, okay, just in the interest of time, but Much has a good turnaround, especially from quarter 4 last year. We had the highest December and January, and February looks super solid that we've had even since Much has been in our hands. We have spoken about the issues with the refineries, but this has also impacted the Much thing that now we are importing bitumen. So we had to set up the infrastructure and the people, but that seems to be all well taken care of. It will have, going forward, an impact on our working capital within Much because usually you just got everything locally. The Metro work and the Department of Transport and the provincial work is really picking up. SANRAL, for us, at this stage is still slow, although there's been quite a few big projects left and people have spoken about it, and that usually means 6 to 18 months for the asphalt work to take place. Much also went through not just sitting on its laurels, but a big cost drive as well and realignment. So certain of our facilities in Gauteng, we've mothballed for now, and there's been some realignment of certain costs. And that has a huge impact because it's actually taken the breakeven volumes to reduce it by about 10% to 15% on the Much side, which holds us good for when the volumes return. The bitumen rubber, which is the picture on the right, that CapEx we made, that thing is delivering above the business case, and we're actually looking at extending that technology. So the outlook for Much, I think we won't get there this year, but we certainly see from the projects that -- and the work that's happening from our teams and the kickoff for the year that things are looking a lot better. The mobile work, for those who don't understand, we have these permanent plants throughout the country, but we also have 5 mobile plants who've been quite quiet. The one has been located in the [ eMkondo ] area, some previously known as Petroteq. That one is really starting to move now, and that one more likely is going to become a permanent facility in that region, supplying the [ newstrade ] area. But this month already, we've had the team from Much and Benny's team speaking to me just saying these are really the 4 other mobile units have been -- already been in full demand. We may have to start looking at a fifth unit. So that's the sign that the mobile units go to the outlying areas that are not in the central Durban PE Cape Town area. So that's also looking extremely positive. And those are slightly improved margins in that. So the entry into work, although it will take a long time for the full-scale bitumen work to be done or asphalt work, what we're seeing is the off-shoot roads have already started. So like our Pietermaritzburg plant has had a bumper. It's done nearly the year's volume in the last 3 months. So that certainly will help that part of our business. And then, of course, the bitumen rubber, which is the new technology, which we're still seeing a high demand for, it gives you a quite road and various other performance enhancements. So we think Much is going to get there. And we really think by 2023, we'll be back in business. Thanks, Mark.

Okay. I'm just going to close off the last few slides and maybe a video or 2 just to wake us up before lunch. We have put that growth offers. It is in play. We have made investments. And you've seen the areas that we're starting to look in terms of those sustainable projects and investments going forward. So this is really exciting. The 2 that we have invested in is Origin and Clariter. I'll give you a little bit more feedback on that now. But also, interestingly, we are looking at projects like green hydrogen, green ammonia, storage of energy. There's a lot of good stuff coming, green cities taking effluent and obviously turn it into energy, great opportunities that the teams are looking at, and we have got allocation of capital that we have available to put into these startups and these opportunities. So that's a big focus for us. Going back, let me go back. Origin is -- is this the video coming up now? Okay. If you can just look at this. We did report back about the new Pioneer plant. This is just a quick update, but they did raise a lot of money out of a spec. They've got hundreds of millions of dollars. The Pioneer plant is going up. They've got committed orders to -- and I'll show the amount. And also the first plant is scheduled to be built in Louisiana. And obviously, this is just a bit of a feedback on that plant. [Presentation]

Okay. So exciting stuff. It gives us lots of options. We can co-invest in bigger plants, but also we can -- we have got rights to get some of the polymer coming off. And we're also setting up trials of our Sans business so to take that polymer and obviously have green fiber. And of course, there's a big pull. So exciting stuff that we like. Just saying that, obviously, the Pioneer plant is up there, and obviously, Louisiana, Origin 2, the main plant is scheduled to be finished in 2025. So lots of opportunities. And you can see their order book has already gone up to ZAR 5.6 billion in commitments from the likes of Pepsi, Nestle. They've actually pulled them in, in terms of the packaging going forward. As you might recall, this takes wood chips, waste product from the forest industry, and actually convert it into plastic and renewable plastics. So it's actually not from a carbon and oil-based refinery. So big [ kilos ] there, quite excited. The next one is Clarita, and a bit of an update on here. [Presentation]

Yes. So that's the other one that we're very interested in. We have obviously been working on a co-development project with them. So it's those final products coming out of those type of plants, where do we add value in terms of solvents and waxes, cleaners, decreases, et cetera. But also we have -- and, of course, that plant is -- that's the pilot plants that are currently in East London. So the idea is to ramp up bigger plants around the world. Obviously, there's plants earmarked for Europe and North America. And we have options to co-invest in those exciting projects. So really some really good sustainable new chemistry opportunities, and I'll keep on updating you through the balance of the year. So that brings me to the last few slides, the outlook and focus. COVID is still with us. The aftermath or after fix and, obviously, we look in, is there going to be a new variant that comes, a strain. But obviously, we're pushing that all our people get vaccinated and their families. However, the thermal and after effects, talking to a lot of the economists now, some are talking end of '23 when the supply chain gets back to normal and more into 2024. So we are way off, and there is a glut in the world economy relative to -- in terms of supply chain, it just seems to have slowed down and stopped. So those are going to be challenges. The social, political, and Mark alluded to Africa on the continent, Burkina Faso, [indiscernible] Mali, and everybody is now and everybody's looking at what's now with Russia and Ukraine. So that impact we have to take into our strategy. In South Africa, we have electricity issues. It affects our market. It impacts investment. Reliable infrastructure, and really, what I'm talking about here is roads, rail, ports, we really have to clean up our act if we're going to attract now. In the SONA where the President has announced focus on these areas, and of course, he's also asking the private sector to get involved. But we're really going to have to sort these strategic key points in South Africa for us to get back investment on track. Unemployment, inequality is at the top of everybody's agenda. Because we would hate to see what happened last year down in Kwazulu-Natal and [ Gauteng ] reemerge. And of course, there's a lot of political undercurrents happening in South Africa right now. So we need to watch that. Nonetheless, there is growth. Probably South Africa won't grow at the same rate as some of the international markets. And you can see our push into other markets, geographies in our sweet spot. So we're going to be continuing to do that. You've heard lots of projects, lots of new business, lots of new mines. So I think that's going to take us into 2022 with a good momentum. It's how we're going to build on that. Commodity prices will still remain high, and we are seeing new mining projects starting to come online throughout the world. We are going to be focusing and we like -- we've done well in Australia. We're going to probably prop that up in terms of people and resources and assets and CapEx. We also -- Mark's -- one of Mark's areas of focus is going to be North America and Canada. We think that's a great opportunity from an infrastructure and explosives into infrastructure, but also mines that are being built there. So there's great opportunities there. And, of course, he's South America. Sustainability is on the agenda. I've demonstrated that there's going to be lots of opportunities of what we do about water, agri, mining in terms of the new products and services that we offer. Zero Harm is key to us. It's an immovable priority, and it is. It's key that we actually reduce recordable injury rate even further. And we're looking at those ESG goals in terms of the TCFD and obviously, JSE. That will be something that we're going to drive throughout the near new year. But I really think it's about cash management. And we've demonstrated we've been very good. And Mark has alluded to, and I know there's a lot of bankers in the room. Ian and Trevor, you'll be getting lots of knocks on your door straight after this presentation. And then I think most importantly is how in probably by June, we want to have an Investor Day again. So we're going to take you and show you. We're going to actually also talk about the strategy that I've spoken about in my previous presentation, how that unfolds in terms of our aggressive growth strategy on an international basis. But also at that time, I can give you a trading update prior to the June close. So from me, I think that's the last of my slides. And I thank you. So usually, there is lunch, and you're all invited to lunch. Please, we do understand if you do or you don't, but you are invited. There is some questions that we have -- if anybody has questions from the floor, we'll take some of those as well. So Fulvia, you're sort of giving me hand signals.

Yes. I think, Mark, let's first go to the conference call, if there are any questions there.

At this stage, there are no questions from the lines. I'll hand over now for questions in the room. Thank you.

There are some questions, which have been forwarded. I'll Start, Mark, from [ Stephen Mankis ] from [indiscernible] is asking, I think, just to clarify, the revenue from gold mining where the geographies of those are? Then there are some questions from [indiscernible] who got a few questions. It appeared last year that excluding COVID, underlying earnings had grown off the 2019 base. This year appears to show a decline compared to the 2020 COVID adjusted performance. Should we be looking at the full year '20 COVID-adjusted performance as the base? The next 2 questions are still from him are on Much Asphalt. How challenging is it to import bitumen? And secondly, is your current storage capacity enough to cover the anticipated increase in capacity utilization? Or will further storage capacity be required as you ramp up?

Maybe just ask the Much one, and then I'll give my colleague a couple more minutes to think about his answer. But Dean, maybe just talk about the bitumen, which is close to your heart.

Yes. So the importation of the bitumen is done in conjunction sometimes with the refineries on the back of, so there's some collaboration that is happening in the industry because we all invest together. And regarding the second point, there will be some infrastructure that is required within us to increase our capacity, remembering that bitumen has to be heated. It cannot just stand in a tank on its own. So there's some heating capacity and then expansion that will be required going forward, yes.

Okay. Mark, there are 2 questions there on the gold and the underlying performance.

Yes. So [ Stephen Mankis ], the gold from South Africa was in the underground part of the graph. And our gold revenue has an exposure to West Africa and South African underground for now, and East Africa part -- a small part of it, yes. So if we go to [indiscernible] question. [indiscernible], there's a lot of numbers gymnastics to play around -- to look at whether you bring the COVID into the underlying. I think it's a combination of both. So I said we're probably about ZAR 150 million short. You're saying, give or take, ZAR 280 million short. It's probably a combination of both if you look at. But at the same time, you need to do some inflation adjusting, some capacity that has been removed out of AECI. So it's a very subjective number. So if I was you, I would use, as a base number, I would probably add on another ZAR 150 million to ZAR 180 million there or thereabouts.

I think, Mark, we've run out of time.

Yes. Is there anything from the floor that we can quickly answer, or we are around. So you're most welcome to come and ask us directly. But if there's nothing, we can adjourn the meeting. Thank you for your attendance. It's really good to see faces again. Very happy. Obviously, we just got to be alert, and we'll see you in June, hopefully, with an update and also a strategic Investor Day, and we'll probably take you to one of those sites that we've been talking about. So thank you. Thanks, everybody. Thank you.