Aluminium Bahrain B.S.C. (ALBH) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Aluminium Bahrain Webcast for Q2 and H1 2022 Financial Results. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Anoop Fernandes. Please go ahead.

Hello, everyone. This is Anoop Fernandes. And on behalf of SICO, I welcome you all to Aluminium Bahrain's second quarter and first half 2022 results conference call. We have today with us Ali Al Baqali, CEO; Bryan Harris, CFO; Eline Hilal, Director of Investor Relations; and Ahmed Qader, Manager of Finance. So without further ado, let me hand over the call to Alba management. Over to you, Eline.

Thank you, Anoop. Good morning and good afternoon, everyone. Before we start our presentation, I would like to set the tone on what we should be doing next. Please note that upon finishing from covering IR presentation for the second quarter and the first half of 2022, [ Melanie ] will be currently managing the audio questions while Anoop will be managing the webcast questions and of course Alba management will be addressing the questions received either through the webcast or through the audio. And without further ado, we move into the content slide which is the Slide #3. So as usual, I will be covering the industry highlights, what has happened in the industry -- aluminium industry in the last couple of months, followed by Alba's major highlights for the second quarter. After that, our Chief Financial Officer will be covering the Alba's results for the second quarter in detail, so please prepare your questions. And in the last 2 section, it's going to be our Chief Executive Officer, Ali Al Baqali, who will be giving us some insights about what to expect with respect to the aluminium industry for the remainder of the year, and what are Alba priorities for the rest of this year. And within the appendix which is the last section of this presentation, we're having Alba's financial results for the first half of 2022. Please note that in the section industry -- for the industry highlights, the excerpts or what you are seeing over here is actually based on CRU market intelligence. So moving on to Page #5. If you look at the title of this slide is today the economic uncertainty which we are all currently seeing has taken its toll on the global aluminium industries and as a result, the aluminium consumption was down by 2% year-over-year. As we note, the weak economic activity, higher inflation and the rising interest rates have started to hit all manufacturing industries worldwide, and this has affected the consumer demand negatively as buyers are forced to cut back on nonessential items. In respect to what has happened in the United States, the demand continues to be resilient, plus 7% year-over-year unlike other countries around the world, supported by a surge in the construction and transport sectors. With regards to the Middle East, the demand was up by 3% year-over-year, supported by higher consumption in the United Arab Emirates, plus 5% year-over-year, and Bahrain plus 4% year-over-year. When it comes to China, the demand was severely impacted by strict pandemic lockdowns and logistics issues. And the demand as a result was down by 6% year-over-year. Numerous sectors such as construction, packaging and consumer durables have suffered the most among the major industries in China. For Europe, the increase in the cost of living has weighed down on consumer spending in the last couple of months as the risk of recession increases, and we have seen the demand in Europe going down by 4% year-over-year. Moving on into the production slide, which is on Page #6. So the world market supply was up by 3% year-over-year. The macroeconomic factors continue to pressure the markets worldwide and that has resulted in an unclear direction and price trends in the commodities, aluminium being not an exception. For China, China was a net exporter as its output reached record level, up by 4% year-over-year. And if you remember in the previous slide, we have stated that the China's demand was down by 6% year-over-year, so for sure China had to export the metal outside China's vicinities. But demand has not followed despite having the supply at record level. The demand has not followed the same path due to the impact of lockdowns as stated in the previous slide. Europe leads the world ex-China output with its production down by 5% year-over-year and this is mainly because of the power crisis that we are currently seeing in Europe. The Middle East, the supply jumped by 5% year-over-year, led by higher production in the UAE, plus 11% year-over-year. And with the world market consumption down by 2% and the world production up by 3% year-over-year, the world market was in surplus with China and without China. Moving on into Page 7 for the LME and the premium. The LME in the second quarter of the year has averaged close to $2,900 per metric ton, up by 20% year-over-year from the previous quarter in 2021. The LME inventories hit record low at almost 0.5 million tonne, down by 76% year-over-year and down by -- from 0.6 million tonne by Q1 2022. With respect to the premia, which what you see in the bottom of the chart, the chart in front of you for major Japanese ports, U.S. Midwest and DDP Rotterdam, we note that the MJ -- the European and the U.S. premium remain high to compensate for the freight costs and higher gas prices, while the MJP ports almost remained the same from Q1 2022. Moving on into the alumina price, over here, we're giving you the alumina price as a percentage of the LME. This is, by the way, Page #8. So if we look at the top chart, which is for the LME trends. The LME trends in the LME price average in Q2 as stated previously almost $2,900 per metric ton versus $3,267 for Q1 2022, so as you see that was a sizable decrease in the LME price. With respect to the Alumina Price Index, it was $465 per tonne for the Q2 of 2022, which corresponds to 16% of the LME price for the same quarter. Moving now to Alba's highlights, which is on Page 9. So all Alba's highlights, these news have been made public previously. And we're just reiterating what has happened in the company in terms of operational update and ESG update in this coming section. So with respect to safety in numbers, so we do believe Safety First and Safety Always. If you look at the left chart in front of you, we have finished the second quarter of the year with 0 LTI and 3 recordable injuries versus Q1 2022. Total injuries were 5 versus Q1 2022 and versus 34 for the year of 2021. If we look at the right image that we have in front of us, we wanted to show you that Alba has achieved for the first time in its historical commercial operations, 28 million safe working hours on 15 July, 2022. And last week, Alba has achieved 29 million safe working hours without LTI. So as of today, the company has set a new benchmark for the aluminium industry by achieving more than 29 million safe working hours. Moving on into the major ESG highlights for the quarter. We are quite humbled to land the Royal Society for the Prevention of Accidents Gold Medal Award for the 9th consecutive year. So that tells you a lot about Alba's efforts. In the last couple of years our efforts have been recognized and we remain thankful for that. We became the first company in Bahrain to refinance its existing syndicated loan of about $1.25 billion, and we have tied this to sustainability linked targets, and we have issued a press release about that. We have been also recognized as the top company in Bahrain in respect to environment, social and governance performance, and this rating was given by ESG Invest, the investment research arm of Sustainability Excellence. On 20th of June, 2022, Alba has launched its plant wide ESG campaign, "A Journey, Not A Destination." And as stated previously, we have achieved more than 29 million safe working hours as of today. The achievement of 29 million safe working hours was completed on 9 August, 2022. Moving on into Page 12, we just wanted you to see how we have launched our ESG roadmap. So back in April, we have launched our ESG roadmap. As stated previously, we have 6 major priorities. The first one being decarbonization, followed by circular economy and secondary aluminium, then collaborations and partnerships, green energy and aluminium, employee welfare, transparency, communications and due diligence. And as you have probably noted that we have been providing regular update on Alba's ESG practices and initiatives on a quarterly basis. This is just our journey. We wanted to emphasize -- reference to His Royal Highness, the Crown Prince and the Prime Minister in his speech during COP26 in Glasgow about Bahrain priorities when it comes to decarbonization. So we tried to club all our initiatives and what the company has been doing back since November 2021. So I will be going very quickly into what we have done for reference. So back in November 2021, we have issued a tender to supply and install the solar panels for 5 to 7 megawatts. The CEO will be giving whole insight about that. On the 5th of December, we have appointed acting ESG manager. I believe we are the first company in Bahrain to ever have appointed any ESG manager to look in particular at environmental practices. 12 December, 2021, our Chairman has commissioned the first of its kind in the region, the Spent Pot Lining Treatment Plant. And today, the Spent Pot Lining Treatment Plant is in full operation mode. In February 2022, we have joined our efforts with BAPCO to foster green industrial development. We have also signed MoU with Bahrain Polytechnic to develop talent. This is here more for the employee welfare and the collaboration and partnership. In early April, we have started to rely on Digital Industry 4.0 and artificial intelligence in our power stations to improve the performance. As spoken previously, we have refinanced our loan in April, and we've linked it to ESG. And in April as well, our CEO has rolled out the ESG road map to everyone in the company. We also have hosted Bahrain Association of Banks delegation to further our ESG in Bahrain and to solicit their support when needed. Moving on into Alba's operational highlights for the first half of the year. So here, we're providing you our operational KPIs for H1. Our sales volume topped almost 743,000 metric ton, almost flat versus last year, while production reached 787,592 metric ton, up by 2% year-over-year. With respect to value-added sales, it averaged 67% of total shipments versus 64% last year. And in Q2, we have achieved 70% VAP sales, which is the highest ever in Alba's history. We have also opened our sales office in Singapore to strengthen our footprint in the Asian continent. We have also signed an agreement with Mitsubishi Power & SEPCOIII to be the EPC contractor for Block 4 in Power Station 5. Block 4 will be increasing the capacity of Power Station 5 by about 680 megawatts. We have also secured a 10-year Offtake Agreement with South32, one of our alumina suppliers for the supply of alumina. With respect to the KPI, as much as I would like to give you lots of insights, I will read very quickly, and our CFO will provide us more information. What I would like to say that Alba has had a record performance in Q2 and H1. We have set a new record for the company, all thanks to Alba's executive management followed by its workforce. This performance was driven by higher LME price. Our discipline when it comes to costs as well as higher premium, the profit, of course, was driven by higher EBITDA levels, and our free cash flow was impacted by working capital changes, but it was still positive. This unparalleled financial performance has allowed Alba's Board of Directors to recommend an interim dividend of $120 million to the shareholders on Alba's shareholder register as of the record date, 21 August 2022. This dividend compared to the previous interim dividend for 2021 was higher by $20 million versus $100 million, which we have paid back in November 2021. With respect to our AL HASSALAH Initiative, which is our cost improvement program, this initiative we have launched back last year in February 2021, and it aims to have cumulative savings of $100 million by the end of this year. If we look at the left bar chart, so we have achieved in 2021 $71 million. And what we have achieved in H1 2022, $19 million, corresponding to $90 million cumulative savings as of June 30, 2022. And if you look at the target, the target is $100 million. So we still have to achieve $10 million for us to be able to match our target for 2022. If we look at the pie chart on your right side, this is how we anticipate achieving the savings from AL HASSALAH. So as you see, the major savings will come from the operations, followed by our sales, marketing and casthouse. And I have noted earlier that our VAP have reached record level to 70% of sales, followed by power, which is more about efficiency and raw material sourcing and optimization about $5 million. And with that, I will leave the floor to the CFO to take us through Alba's Q2 2022 results.

Thank you, Eline. Good morning or good afternoon to everyone, and it's a pleasure to be able to take you through the Q2 results. It has been a tremendously volatile quarter and for the market. And Alba has been able to capitalize on this to deliver one of its strongest quarters in its 50-year history, not only from an operational and ESG point, as Eline has mentioned, but also financially. So beginning on Slide 18, taking you through the metal sales bridge. You can see going from Q2 2021 with the higher LME prices and premiums and VAP, in particular, there was an increase of $408 million in Q2 2022 compared with the comparatives. That's an increase of 42% in metal sales. This was obviously mainly driven by the increase in LME, which contributed $297 million and that was a 20% increase. There was also the product mix, which is basically increasing the level of VAP sales as well as pricing power, which is the increase in premiums and then a small increase in volume. So we obviously did see prices coming down from the highest over the course of Q2, but we're still able to reap the benefits of that. But obviously, future quarters will be more challenging in terms of the LME prices. Looking at then the sales by product line in more detail, you can see on the green side, value-added increased and liquid metal and commodities decreased. This is good news because obviously, we attract more premium from our value-added sales. So the premium chart that you can see on the right-hand side, you can actually see that the actual premiums attracted per metric ton actually more than doubled versus the comparative period, and that was driven by 2 things: one, the shift in Alba from commodities to VAP, which attracts higher premiums; and secondly, obviously, the tailwind of the global markets premiums having improved substantially from last year. Looking at the cost side. Again, comparing Q2 2022 to 2021. As you can see, an increase from $603 million to $764 million. So that's an increase of $161 million or 27%. So you can see our -- although the costs did increase, that increase was significantly less than the 42% increase in revenue. So our costs were well contained. The main increases in the costs were relating to the raw materials themselves. So you can see -- so when you think that overall, our cost increased by $161 million, $141 million plus $38 million, so $179 million was actually due to raw materials and then $10 million due to the increase in energy costs with our gas price increased by $0.25. Other than that, actually, we recorded savings. I said plant savings was actually improved by $18 million. And this was mainly driven by one-off gains that we made on foreign exchange, which are set off against those plant savings. Looking then at the EBITDA bridge, we improved our EBITDA by $204 million. So we recorded EBITDA of $554 million for the quarter. Obviously, another record for Alba net increase of 58% over the comparative period. That was mainly driven by the increased metal sales, which we took you through on the previous pages, offset slightly by the increase in direct costs, but also a substantial increase in selling expenses as global markets for freight have increased dramatically, almost double when you look at shipping costs and when you look at container costs, those have increased across the board for all exporters and all industries. And obviously, with Alba's shift towards VAP sales, things like trucking costs do increase as well because we are delivering to final customers to attract stronger premiums rather than simply selling it to traders. Looking at our cash flow bridge on Page 22. You can see a very strong cash flow from operations of $530 million. A lot of this was absorbed through working capital changes, increases in accounts receivable and inventory. The compelling reasons for both the accounts receivable increase, as you'd imagine, when the price that we sell our goods for increases dramatically with higher aluminium and premiums. So the amount that our customers owe us will automatically increase. And then also with the shift to VAP sales, we obviously give those final customers payment terms, which aren't given when we sell for cash or to traders for lower premiums. And inventory, again, as we've shifted from traders to final customers, that means that we are carrying more inventory on ships and in warehouses and also the inventory cost increased because of the increase in raw material prices. So as our raw materials increase in value, so obviously, the dollar cost of the raw material of the inventory goes up as well. We obviously continue to spend on track with CapEx. We are now beginning our CapEx spend for Block 4 or Power Station 5 project as well. We were able to make significant inroads into our debt. During the quarter, you can see our net debt service during the quarter reduced by $336 million, so a substantial reduction in debt, and obviously, that includes the interest payments as well. And that took us from a cash balance of $346 million in Q1 to a balance of $156 million in Q2. You can see on the right-hand side, our free cash flow actually more than tripled versus the same period last year from $51 million to $165 million. So looking then at a summary of the income statement. If you're looking just at the first 2 columns, Q2 versus the comparative, revenue obviously jumped by significantly from $984 million to $1.384 billion for the quarter. Obviously, that was mainly due to the increase in the alumina prices. Just for your context, so you can see the average cash LME was $2,882 for Q2 compared with $2,399 for the comparative year. And for reference, today, the LME has dropped down to $2,468 as at the end of yesterday. So EBITDA, we reported $554 million compared with $350 million for the comparative and profit was a record $484 million, up from $246 million for the comparative quarter. So with that, I'll over to our CEO, Mr. Ali Al Baqali.

Thank you, Bryan. Before I will take you to the industry perspective and Alba priorities, I would like to highlight that in first half of 2022, we broke all the records in Alba history for the last 51 years, but this is not -- will be the case in second half of this year because of the LME still volatile due to uncertainties in the market and due to fears of the big recession, as well as the continue of the Russia and Ukraine war, this is also a market, especially the aluminium industry and a big question mark. And definitely, the higher interest rate in the market also affects the economy. Also, the economic slowdown is likely to be strengthening the U.S. dollar. This is normal and as normally, you can see if the U.S. dollar is more strong than all the commodities will -- the price will fall down. And this is like an opposite directions of the price versus the commodity. Also, we see the disruptions of the Russian gas supplies because of the Ukraine-Russia war is affecting also all the industry in Europe and mainly the aluminium, and we can see also some cut of production mainly in the primary and even from the downstream, we see a lot of cancellations and this indication that there is a recession start or low demand in some of the value added products. Also, we can see also the premium, which means the price above the LME has also started declining or reduced, and this also shows that the demand is not as strong as the H1 we are forecasting. And the LME price until the end of the year, if you notice that it's ranging between $2,200 to $2,400 and we hope that this -- that will continue until the end of the year. If we move to Page 26, talking about the major raw materials price trend, we can see that in this month -- on -- in the last month, we see the alumina price as reducing a little bit in the range of $330, which is approximately around 13% of LME, which is -- this is the trend in the historical view. However, on the other hand, the major raw materials like aluminum fluoride, Green Petroleum Coke, Calcined Petroleum Coke is increasing the price in view of a lot of factors and mainly because of the oil price is increasing, that's affecting also the byproduct or other product of the oil as well as also the logistics make the major raw material more, which means challenging and this is also affecting the logistics and the price at the same time. Moving to Alba priorities, really, as Eline stated in the beginning, we are focusing more on the ESG road map, and we did a lot of campaign inside Alba and outside Alba and we meet many stakeholders. And Eline, as she stated, one example is meeting all the banks in Bahrain to share with them our road map and the way forward in order to always having a green financing in the future for any project related to environment and even for regular CapEx requirement. We are pushing for this -- towards in order to achieve Bahrain vision also to achieve 0 emission by 2060. We are working very hard in order to exceed the production plan of this year, which we targeted at 1,560,000. And with AL HASSALAH, as Eline stated, we are on the right track to achieve the $100 million by the end of this year. One of the top priorities also for Alba despite all the challenges, we are still looking at an upstream opportunity to secure almost 1/3 of our requirement of alumina and either by having a minority joint venture with an established alumina refinery or to have a long offtake agreement with also to secure that quantity. Eline also she stated that we are increasing our value-added product for this year to achieve above 70%. And we are -- by this, we already capitalized on the certificates and the skills available in Alba, especially in the technical side in order to make this happen by having a lot of trial orders in order to prequalified our product further with the new customer. As also Eline stated and Bryan, we completed Block 4 financing, and we are hitting the ground and definitely, we are going to inshallah to achieve it on the plan by having a Block 4. Block 4 is additional Block 4 the existing Power Station 5. It will add around 680 megawatts extra to our electricity that will make Alba more efficient. Also, for Line 7, we are still working with Bechtel in order to get the first draft of the prefeasibility study. And the prefeasibility will address all the requirements to have Line 7 in a place and we are targeting our initial plan is to have it similar to Line 6 in terms of capacity and efficiency. By this, I -- on the end of the presentation, and I will leave the floor to Eline to have the sessions of questions and answers. Thank you very much.

Thank you, Ali. I think I will hand over first the floor to Melanie to advise if she has received any questions from the audio.

There are no questions at this time registered. [Operator Instructions]

Okay. Then meanwhile, Melanie, so that we do not waste time, I think I will ask Anoop to take us through the questions received via the webcast. I think at the moment, we see 5 questions on the screen. Anoop?

Yes. So the first question comes from Nitin Garg of SICO Asset Management. So is it possible to know why the receivables and inventories have increased quarter-on-quarter? Receivables increased from BHD 300 million to BHD 338 million and inventories from BHD 358 million to BHD 421 million. And related to receivables, are you facing any payment issues from the local Bahraini downstream customers?

Thanks for the questions. So I'll take it. I did go through at a high level. So I'll repeat some of that again. So yes, there are natural reasons for the increases both in the receivables and the inventory. On the receivables side, when you're obviously selling your product for much more to your customers, the amount that the [ AU ] will increase and because LME and premiums have gone up. So there's been a natural increase in the accounts receivable, but also because of the strategic shift that we've had where we've proactively moved from selling commodities, which are mainly to traders. So typically, they pay us cash upfront or in the past, sometimes even in advance. We're now selling more VAP to final customers. And so that means, obviously, we have to give them payment terms 45 days or whatever. And so we are attracting bigger premiums, but those bigger premiums do come at a working capital cost. On the inventory side, again, with the increase in raw material prices when we -- you see alumina and GPC and alloys that are increasing in their costs, that means that the carrying value of those inventories increases both for our raw materials and for our work in progress and obviously for our finished goods as well. But also, there has been a shift with the shift from commodities to VAP. It means that instead of the goods basically transferring to a buyer, trader when they leave our factory. We're now putting them on a ship. We're sending them overseas. Sometimes they are in a warehouse before going to the final customer. So again, we're getting the increased premiums, but it does mean that we're carrying that inventory for a little bit longer, but we feel that, that commercially it's better for Alba. And then obviously, there have been some, I think, well-publicized across all industries logistical constraints using ports, et cetera. And we've been able to manage that very well, but obviously, there has been some impact.

Just to add about -- we are not facing any issue with any local downstream customers, and they are all paying on time and before the time also, just to highlight.

Yes, Mel, I think we have one question via telephone. Maybe we can take that and then go back to the written questions.

Our question comes from the line of Nour Eldin Sherif from Arqaam Capital.

Congrats for the strong set of results. A couple of questions for me, if we can take it one by one. My first one is on the cash flows. So should we expect a drop in working capital in the second half of 2022? And should we expect another drop in debt for the second half?

Thanks for the question. So some of the things that I mentioned to you are almost permanent shifts. So the shift from commodities to VAP is more of a strategic permanent shift. So Alba will, in the future, carry high levels of accounts receivable and inventory because of that. Other things, obviously, will reduce though as if raw material prices fall, then we'll see falls in inventory levels as well. So it's too early to say whether it will be up or down in the next half. It depends on the prices. And the second…

For the cash, I think cash and debt, probably you can take that.

Yes. So yes, our intention is to continue to reduce debt as much as we can. Obviously, we reduced our cash balance during the current quarter significantly, but we do intend to make further reductions in debt and obviously, use some of our funds. As Eline mentioned, there is an interim dividend payment that will be made shortly as well of $120 million. But whatever is left over, we plan to utilize to further reduce debt.

For those who have -- Nour, for those who have such as you because I know you guys have stocks in Alba, your dividend yield will be about 8%. If you divide the dividend per share over the market price, the rate is market price. It's going to be close to 8%.

Okay. And just one follow-up on the dividend. So we've seen strong free cash flow for the first half close to BHD 180 million while dividends were close -- were BHD 45 million. So should we expect a bump in dividends for the second half given the strong free cash flow that dividends were quite below this free cash flow generation?

Dividends, obviously, are up to the Board for approval, so we can't really comment on what can be expected in the second half of the year.

And depends also on the second half of the year. If we are making a lot of money, definitely, this will benefit all the shareholders.

Yes. Okay. And one more on Block 4 expansion. Can you give us guidance in terms of how much of savings that could be realized from such expansion and how much of CapEx?

I am not sure if we disclosed this before, but it will add an efficiency around 1% to our overall power station efficiency. To reduce, I think, I don't have the figure with you, maybe Eline, maybe later on she can give you a call or something to give you the exact saving. I don't have virtual.

Yes, Nour Eldin. So the capacity of this new block, Power Station 5 has 3 blocks from General Electric, and this additional block of Block 4 is adding about 680 megawatt. In terms of -- as far as we are concerned and the reason we wanted to actually add this 4th block is actually to be more efficient in our gas consumption because then we can stop relying on all the power blocks and we rely further on Power Station 5. So we optimize our gas consumption. And we do have another angle for actually building Block 4 as Alba today is actually emitting 8x of dioxide carbon per metric ton of aluminium. Once Block 4 is fully commissioned and is in operation, Alba will be able to reduce its greenhouse gas emission by 0.5 tonne of CO2 per 1 tonne of aluminium. And as you know, I mean, we rely on natural gas to fire our power station. So we always look at ways and means to optimize our natural gas consumption for us to be able to reduce the greenhouse gas emission given that power station in Alba actually are -- they contribute 80% of Alba -- to Alba's greenhouse gas emission. So the more we optimize and the more we rely on efficient power station, the less will be our greenhouse gas emission.

Clear. Just one more on the cash flow -- on the cash cost, sorry. So we've seen normalizing alumina prices, probably some lower cost for alloy. Should we expect cash cost to normalize starting Q3 and for the rest of the year?

Can you repeat the question, Nour Eldin, if you don't mind?

Yes, sure. I was saying that we've seen normalizing or lower alumina and alloy costs. So should we expect cash cost to normalize for Alba for the second half?

Yes. So I'll say as raw material prices reduced so that the cash costs will reduce as well. There is a bit of a lag effect on the raw material side. Obviously, from when we purchase to bringing in alumina, keeping it in storage and then converting it to finished products. Typically, that's the cycle of 2 to 3 months. So there is a bit of a lag, but you will then start to see reductions flowing through and reducing our cash cost.

That's clear. And my final question on the potential dual-listing? Do you have the timeline or is this actually taking place? Just some color on this one, please.

[Foreign Language] Nour Eldin, you're always ahead. At the moment, there are no updates. If you remember a couple of weeks ago back in June, we have put a statement that Alba always looked at different value-added relations into the company. So at the moment, we are looking and we're having like if you want more like a due diligence on the feasibility of the potential cross-listing or secondary offering in Tadawul. Having said that, nothing is yet firmed up. And you will be able to hear in due course about this should we receive approval from the Board thereafter to the shareholders in an extraordinary general meeting. At the moment, as a management, we're only looking at the due diligence, and we're doing some interesting analysis on the feasibility of this exercise, but we do not have yet a timeline. But for sure, whatever we have update, definitely, we will keep everyone updated pronto.

There are no further questions from the phone lines at this time. So I'll hand the call back to you.

Yes. So we have one question from [ Amit Korde of PIF ]. This is also a question from Roger Bell. Can you please update us on the new feedstock arrangement with the government? Is there any update on the price per MMBTU over the medium and the long-term? And secondly, on the gas price…