ArcelorMittal South Africa Limited (ACL) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Tami Didiza, responsible for stakeholder management and communications at ArcelorMittal South Africa. I will be facilitating the proceedings this morning. Thank you for taking the time to join us as we present our year-end financial results for the period ending 31 December 2024. We appreciate your interest in our company and are honored to host you this morning. Please note that the live recording of this presentation will be available on our website at www.arcelormittalsa.com. You can also access the presentation slides on our website as we speak. Ladies and gentlemen, our presentation panel will be led by our Chief Executive Officer, who will take us through an overview of the results, including operational and market review. I will provide insights on the social aspects. And our Chief Financial Officer, Gavin Griffiths, will take us through the figures. The CEO will return to discuss how we are transforming the business for sustainability and growth, followed by the outlook for the year. We will then open the floor for your questions. [Operator Instructions] Ladies and gentlemen, let's get started. Please welcome our Chief Executive Officer, Kobus Verster.

Thank you, Tami, for the introduction. Good morning, ladies and gentlemen, and thanks for joining the presentation. And welcome to our Board members, senior management as well as to the media and shareholders. 2024 saw both ArcelorMittal South Africa and the steel industry in SA face their greatest challenge since the events after the financial crisis of 2008 and '09. Internationally, the spread between steel prices and the raw material basket remained under pressure. And countries rushed to protect their steel industries against unfair trade and policy practices. Looking at the overall business. Crude steel production and sales volumes were down 6% year-on-year, with production volumes increasing by 12% in the second half due to better asset utilization in our Flats Business. Average steel prices decreased by 4% in rand terms, down 3% in U.S. dollar terms. Our domestic raw material basket remained flat in rand terms, while international raw material basket decreased by 13%. The company posted an EBITDA loss, before the -- for -- providing for the costs associated with the wind-down of our Longs Business, of ZAR 1.8 billion; and a headline loss of ZAR 5.1 billion as a result of the extremely weak trading environment, the once-off blast furnace impact of ZAR 670 million, large losses in the long steel operations and inventory disposal losses taken to improve liquidity of ZAR 1.5 billion. Net borrowings prior to the capitalization of accrued interest were flat for the last 3 quarters at ZAR 3.8 billion, ending at ZAR 5.1 billion after accruals capitalization. ArcelorMittal South Africa continued to receive support from ArcelorMittal group through shareholders' loans and subordination of debt. Regarding our longer-term sustainability and growth objectives, the company has continued to advance the bankability of its portfolio of high-payback projects. To support the implementation of these projects and the realization of the benefits, we are working on a potential recapitalization as a funding solution, which will also address the company's balance sheet resilience. Looking at the Longs Business and the wind-down process. Following the announcement on the 6th of January, the company has continued collaboration with an interministerial task team led by the IDC to develop solutions. Part of the wind-down implementation process, specifically the decommissioning of physical assets or plant stoppages, has been delayed by approximately 1 month to enable the fulfillment of additional orders, prioritizing automotive and vulnerable supply chains; and continued discussions with the South African government on the future of the Longs Business. Extended operations have been enabled through funding support of ZAR 380 million from the IDC in the form of a shareholders' loan; and the settlement of the ZAR 950 million IDC loan, extended from the 1st of June this year to the 1st of September 2026. A Section 189 notice has been issued, and the consultation process regarding the large-scale retrenchment process has commenced and is continuing. The Longs Business will only continue with structural changes and financial support that will be underpinned by a long-term sustainability of that business, as the company does not have the appetite to carry any further financial risk associated with the continued operation of that part of the business. Looking at the international environment. On a positive note, the World Bank reports that global growth stabilized at 2.7% last year and inflation and interest rates declined gradually. The World Steel Association reports that apparent steel consumption for the year decreased marginally by 0.9%. China steel consumption remained weak, down 4.8%, due to its ongoing property crisis and weak infrastructure demand. This has led to higher and very disruptive exports from China. China steel exports hit a 9-year high at 111 million tonnes, an increase of 23% over 2023. These high levels of steel exports pressurize international markets. Referring to the graph on the top right-hand side: The spread between Chinese export hot rolled coil prices and the international raw material basket is substantially below the 7-year average and at unsustainable levels. Turning to the domestic market. The South African economy is struggling to gain momentum. Country which regard their steel industries as strategic, like the U.S., Brazil, the EU and others, have acted speedily against unfair trade flows. Unfortunately, South Africa's response has been slow and insufficient. The 9% provisional safeguard duties on hot rolled coil and plate imports expired on the 20th of January this year. ITAC's commitment to undertake a review of South Africa's steel tariff structure is welcomed, but the time lines are challenging. The highest priority is the revision of the scrap pricing policy, that's the PPS and export tax; and related administrative policies. The graph on the bottom right depicts the substantial discount of local scrap prices versus international prices caused by the implementation of the PPS and the introduction of 20% tax on scrap exports. Looking at the international price trends, we see that steel prices were down more than steelmaking materials, with iron ore down 8%, hard coking coal down 18% and scrap down 9%. I will now hand back to Tami to take us through the safety, environmental and social performance of the business.

Thank you, Kobus. Looking at safety. Safety remained our company's highest priority, and we are committed to zero harm. It is with deep regret that we announced a fatality occurred in the second half of 2024. We express heartfelt condolences to the family, friends and colleagues of Mr. Image Mabowa, an employee of a contractor who worked at our sinter plant. May his soul indeed rest in eternal peace. Following the ArcelorMittal group-wide audit of safety practices, we are intensifying our focus on indicators of potential severe injury or fatalities. These key initiatives include the following: enhanced safety training to reduce risk tolerance and foster safety leadership; improving the quality and frequency of shop floor audits; develop a road map for process safety; evaluating the quality and frequency of pre-job risk analyses undertaken on site; and lastly, encouraging a culture of noticing and flagging potential hazards immediately so that everyone can learn from the situation, to avoid any recurrence. Ladies and gentlemen, despite our financial challenges, the company keeps on investing on its social investment. Our current initiatives are creating positive change, and key highlights in this regard include the following: our 3 science centers that provide crucial educational support to less-fortunate schools reaching over 27,000 learners and 900 teachers; our outreach programs promoting science, technology, engineering and mathematics awareness engaging 1,500 participants through some 500 events; our Thusong Projects providing daily meals to over 2,900 less-fortunate community members; and lastly, our on-site training programs for over 1,000 learners focusing, indeed, on artisans and production skills. I'll now hand over to Kobus to provide an overview of operating environment and the market landscape.

Thanks, Tami. Looking at the global steel environment from a production perspective. Global crude steel production was down to 1.8 billion tonnes. China's crude steel production decreased to 1 billion tonnes. However, globally, China maintained its market share of 55%. Surprisingly, Europe's steel output increased by 3% to 130 million tonnes and North America decreased by 4% to 106 million tonnes per year. Russia decreased its output by 7%, while Turkey increased by 9%. India's production continued to increase year-on-year, with 6% last year to 150 million tonnes. Africa's output increased by 1% to 22 million tonnes mainly due to improved production in Egypt, Algeria and Morocco. South Africa's crude steel production decreased by 5% to 4.7 million tonnes. As I mentioned earlier, internationally, hot rolled coil and rebar prices continued to decrease. Returning to our home market. The GDP growth rate for South Africa is expected at under 1% for 2024; for those of the near and sub-Sahara African markets, expected to be around 3.8%. This disparity highlights the ongoing economic challenges within South Africa, including structural issues that hampers growth. The South African steel market remain under pressure due to low or no growth in the key steel-consuming sectors. Year-on-year saw construction down 5%, machinery and equipment down 7.2%, manufacturing down 0.6%, while agriculture was down 11.6%. There was a slight upward trend in mining; and electricity, gas and water sectors. South Africa's apparent steel consumption was marginally lower at 4 million tonnes. Steel imports of primarily hot rolled coil, galvanized sheet, plates and cold rolled increased to 1.4 million tonnes, which amount to 34% of South Africa's apparent steel consumption. This data firmly underpins the urgent need for safeguard protection measures to avoid further erosion of the local steel industry. Imports increased by 118,000 tonnes. The planned closure of our Longs Business was a contributing factor to the higher imports. Within the company, our crude steel production decreased by 6% or 178,000 tonnes to 2.6 million tonnes. And sales volumes also decreased by 6% to 2.3 million tonnes. Domestic sales decreased by 8% to 1.8 million tonnes, reflecting the weaker local market as well as the impact of the blast furnace chilled hearth conditions in the first half of last year. Exports, which are made up of blue water and Africa overland sales, increased by 2% to 523,000 tonnes. Africa overland sales, which made up 45% of exports, were down 2%. From a pricing perspective, as mentioned earlier, following the international price trend, our price was down 4% in rand terms. As the only primary producer in South Africa which support the downstream industry through a formal export support program, our industry support totaled ZAR 169 million in the form of value-added export and strategic rebates. Input costs. Our raw material basket, representing 46% of the cash cost per tonne, remained flat in rand terms, compared to a 13% decrease in the international basket. Consumables and auxiliary costs remained stable, representing 36% of the cash cost per tonne. Of note are the following: The over 14% increase in electricity tariff remains a major concern, as energy costs are a substantial component of operating expenses. Dollar-denominated commodity-indexed consumables decreased by 5%. Our fixed costs were down by 2% despite inflation pressures and increased spend on maintenance. The average capacity utilization decreased from 67% in 2023 to 63% last year, including the disruptive blast furnace chilled hearth conditions that occurred in the first half in Vanderbijlpark. Overall utilization increased from 60% in half 1 to 66% in the second half, with that of the Flats Business having improved from 58% to 69%. In the flat steel operations, the successful completion of the Blast Furnace C shotcrete and hearth repaired in quarter 4 contributed to this recovery. Additionally, the major plate mill upgrade project aimed at supplying the renewable energy and mining industry is on track for a February '25 restart. With improved production volumes returning to the flat business, the business is now focusing on improving its quality, reliability and customer service. Turning to the long steel operation. Capacity utilization for the Longs Business remained stable at 61%, operating the blast furnace at the minimum technical levels due to low demand. Operations were steady in the iron and crude steel areas. And we've -- and the positive progress we made on stock and cash management through targeted inventory controls. Gavin will now take us through the financial numbers.

Thank you, Kobus. And good morning, ladies and gentlemen. The waterfall graph at the top of the page explains the reasons for the earnings change in 2024 against 2023. The operational EBITDA loss of ZAR 1.8 billion compares to a ZAR 56 million profit the previous year. In the simplest terms, the loss was made up of 2 elements: ZAR 1.1 billion from the Longs Business and ZAR 670 million from the abnormal chilled hearth conditions which affected the 2 blast furnaces in the Flats Business in quarter 2. We will now go to the specific reasons, moving from left to right on the graph. The 136,000 tonnes of lower sales contributed to a ZAR 511 million loss in EBITDA. Local volumes decreased by 144,000 tonnes, with an 8,000-tonne increase in export volumes. Prices: We lost ZAR 1.1 billion due to falling sales prices. On average, prices dropped 4% in rand terms, contributing to the 7% decrease in turnover to ZAR 39 billion. To expenses. Variable costs decreased by ZAR 156 million mainly due to lower raw material prices. Fixed costs increased by ZAR 164 million, mainly from higher maintenance and environmental costs. Finally, in terms of EBITDA potential, the operational EBITDA loss of ZAR 1.8 billion includes the previously mentioned impact of the blast furnace chilled hearth conditions of ZAR 670 million and inventory disposal losses of ZAR 1.5 billion in strong support of improving liquidity. Excluding these exceptions, the potential EBITDA would have been ZAR 368 million profit against the prior year's ZAR 56 million profit. Included in the earnings, the Value Plan contributed ZAR 910 million, down against the ZAR 2 billion of the prior year due to operational instability. At the bottom right, we display the EBITDA [ segmented ]. Steel operations incurred a ZAR 1.9 billion loss. Non-steel operations contributed a profit of ZAR 324 million. The ZAR 114 million additional cost in corporate reflects the truing up of provisions. Bottom left of the slide, we graphically bridge EBITDA to headline earnings. Depreciation and amortization increased by ZAR 60 million to ZAR 818 million mainly due to the impairment of property, plant and equipment in 2023 relating to the Longs Business. Net finance cost was up 30% at ZAR 1.4 billion on account of higher average net borrowing levels. ZAR 1.1 billion was recognized as an exceptional charge relating to the wind-down of the Longs Business: ZAR 495 million for severance packages, ZAR 244 million for onerous contact (sic) [ contract ] accruals and ZAR 392 million in inventory write-downs. Although not included in headline earnings, a further ZAR 682 million impairment charge was recognized against property, plant and equipment for the Longs Business. On the next slide, we address free cash flow and change in net borrowings. With a free cash outflow of ZAR 559 million, net borrowings increased to ZAR 5.1 billion. Operations generated ZAR 1 billion of cash. This was composed of an outflow of ZAR 2 billion, representing operational cash losses, yet fully offset by a ZAR 3 billion cash inflow released from working capital. We paid out ZAR 640 million in net finance costs and ZAR 938 million to our CapEx suppliers. Net borrowings prior to the capitalization of the multiyear accrued interest and fees payable to the ArcelorMittal group were flat for the last 3 quarters at ZAR 3.8 billion. After the capitalization of the ZAR 1.4 billion of ArcelorMittal group accruals, net borrowings rose to ZAR 5.1 billion at year-end. As is clear, the company has received continued support from the ArcelorMittal group, with the shareholder loan increasing to ZAR 5.1 billion, which is now fully subordinated. Additionally, the IDC has restructured the ZAR 950 million outstanding at year-end of its secured short-term loan, extending the final settlement date from June 2025 to September 2026. This is in addition to the ZAR 380 million of funding secured after year-end to enable the approximately 1-month continuation of the Longs Business. To end, we look at our capital allocation. CapEx investment of ZAR 902 million is ZAR 397 million lower than in 2023. 51% was spent on sustaining operations. 25% went to environmental projects, 15% on mill rolls and 9% on expansion and other major relines. We now return to Kobus to discuss the strategic initiatives and the outlook for the coming 6 months.

Thank you, Gavin. For the coming few years, we will focus on strengthening our business model and invest to improve the quality of our earnings and cash flow and position the company for growth when it materializes. This involves 4 strategic pillar. Number one is safety. We will continue to focus on our journey to achieve zero harm. The company will use the inputs from the ArcelorMittal group-wide audit to improve its focus on reducing near-miss incidents that could have resulted in serious injury or fatalities, as well as various other safety programs. Pillar number two refers to strengthening the core business, which entails a well-considered and responsible decision around the Longs Business to stop the cash flow drain, structuring the company to focus intensely on the attractive flat steel part of the business through a structured program focusing on reliability, quality, cost competitive and customer service. It also entails working with government and other stakeholders to address the decline in the South Africa industry; and continuing to pursue and remove structural impediments affecting not only ArcelorMittal South Africa but the broader steel industry, such as unaffordable regulated factor costs or tariffs, unfair and discriminatory scrap pricing policy; and supporting initiatives to stimulate demand for the downstream manufacturing industry. As part of pillar two, we intend to deliver the Value Plan by targeting critical cost reductions in raw materials, energy and logistics to reach the second quartile of international steel cost curve. The company will position itself for economic recovery in South Africa and GDP growth that will further enhance the company's earnings through leveraging available capacity. Balance sheet resilience will be addressed through a potential recapitalization to position the company to execute. Pillar three involve the execution of the high-payback project portfolio in support of sustainability and decarbonization. Some of these projects include a 1.5 million tonne electric arc furnace at Vanderbijlpark and the refurbishment of the DRI plants; blast furnace gas recovery plant to increase electricity self generation; a new galvanizing and Magnelis line to introduce superior coating technology for the South African market; and Optigal for organic coated products, targeting import replacements. These projects are key to localization, import replacement, cost savings and volume growth in key sectors such as automotive, appliances and renewables. We will continue to focus on the execution of the first phase of the company's decarbonization road map and the off-balance-sheet investment in a 200-megawatt solar plant for the flat business. Partnerships will be pursued for some key rolling assets under care and maintenance. Number four, we'll target key longer-term initiatives and leveraging strategic partnerships. Volume uplift will be secured through downstream integration and commercial alliances. Public-private partnership on key sectors of rail network will be explored. Other long-term initiatives include Thabazimbi Iron Ore Mine redevelopment and the resuscitation of Saldanha Works to produce direct reduced iron ore for exports. Coming to the conclusion and the outlook. As I've said, safety remain our highest priority. We do whatever is required to achieve zero harm. Internationally, the World Steel Association expect a 1.2% increase in steel demand in 2025, with China continuing to play a directional role in global demand and pricing trends. From a price perspective, no meaningful improvement is anticipated in the near term. Therefore, actions by the South African government to support the local industry are vital. Key focus areas for the first half of this year: advancing discussions with the South African government regarding the future of the Longs Business. This can ultimately only evolve -- involve a long-term sustainable solution for a full wind-down. Placing the flat steel business and market coke operations on a more sustainable financial footing, with an intense focus on reliability; resizing the fixed cost structure of the company; and advancing the high-payback project portfolio, which can be executed once we've addressed the balance sheet issues. Thank you very much. We will now go to questions and answers.

Thank you very much, Kobus and Gavin. [Operator Instructions] I know it takes time to type those questions. I'll give it [indiscernible].

Yes. Here is the first question, from anonymous. "Have you studied what makes China export so much tonnes, when ArcelorMittal South Africa is struggling to produce budgeted? What measures are in place for ArcelorMittal South Africa to get to the budgeted tonnes?" Kobus?

Thank you, anonymous. I think, firstly, China exports about -- at the highest level, last year, 111 million tonnes. So roughly about 10% of its capacity. So it export those volumes at losses. It doesn't really impact them dramatically. I think it's also a well-known fact that currently a small percentage of Chinese mills are actually making profit, if you look at the current spreads between raw material basket and the Chinese prices. In terms of the -- our own production, I think we need to be honest that we had 2 major events last year. The blast furnaces did impact us severely, but in addition to that -- so we've spent a lot of money in refurbishing Blast Furnace C, so the upstream operations are actually performing very well. We've also spent around ZAR 500 million in terms of plate mill upgrade as well as work done on the [indiscernible] mill, so we are comfortable that we should soon see reliability. In addition to that, we've also made increased spending in terms of maintenance last year, but we also made some major management and structural changes to increase the focus on that side of our business.

Thank you very much, Kobus. A question from [ Rowan ]: Can you give an indication of the profitability and sustainability of the Flats division and its prospects if the high-value-add projects implemented?

[ Rowan ], I think fundamentally the flat products is, underlying, profitable. I think, last year, I -- those 2 blast furnace events cost us ZAR 670 million. So one should take that into account, but in addition to that, as we mentioned in the presentation, we have dispatched a lot of material, old stock to reduce inventory. So it's a conscious decision to take income statement losses but -- to generate substantial cash to protect the balance sheet. So longer term, if you look at AMSA and Flats without Longs, the business is actually in good shape. The projects that we've listed there in the presentation are all strongly accretive from a earnings perspective, very high returns; and should have been done a long time ago, but as a result mainly of the Longs drain, we just didn't have the capacity to do that. And most of those projects are also not volume reliant. And pretty much, we will rely on available volumes and a bit of import replacements.

Another question from [ Rowan ], on the balance sheet. "Can you give any detail on the potential recapitalization?"

I'm not -- difficult to give numbers at this point in time, but I think it will be material in nature. The business cannot sustain its levels of debt. And we also have to take care of not only the debt -- some of these investments. So hopefully, towards the mid of the year, we will be able to give you better guidance on that.

A question from [ Rene ]. "You mentioned a lack of appetite to continue Longs production. Is that decision exclusively out of Newcastle's? Is there potential for specialty longs coming out of another plant?

No. I think we have made up our decision in terms of Longs purely because it's not sustainable for us. Obviously we've been approached by government and an interministerial committee in trying to address some of the structural issues and see how we can find the middle ground. To the extent that, that happen, then most probably we'll have to find a better solution for [ the mechanics ] of the business. To the extent that the wind-down continue, we will reassess some of the stand-alone assets on a plant-by-plant basis to see whether there's life left in that asset with a different input mix. I think AMRAS rail is a typical example of that potential.

Thanks, Kobus. From anonymous: Please, can you provide further information on what is being considered in the recapitalization?

Yes. I think it's roughly what we've -- I've just answered that question [ brought up ].

Thank you very much, Kobus. From anonymous: What is the progress on receiving the ZAR 1 billion bailout from the South African government?

I mean I've also read the ZAR 1 billion. I was not aware of that. We're in multilevel discussions around structural issues, around recapitalization, around funding of the projects. There's no ZAR 1 billion bailout discussed.

Thank you very much, Kobus. That is very clear, no bailout in discussions. The next question: When will further information be provided to shareholders?

If that's in terms of the recapitalization, I think, as soon as we have, well, something [indiscernible].

Thank you, Kobus. From anonymous: What percentage of iron ore requirement will come from Thabazimbi's redevelopment?

I would guess [ around about ] 60% of our requirements will be able to come from Thabazimbi. There's quite good resource, quite good prospects. So the mining team of ArcelorMittal group [ of London ] is currently actually here, assisting us in working on a pre-feasibility study. And also, once we have better insights into that, we will make that available, but at the moment, it's a very positive prospect for us.

Thank you, Kobus. The next question: Who is leading the government deliberation of Newcastle?

Well, it's largely, I mean, the interministerial committee. That consists of both the departments [ linked to ] labor, transport, electricity [indiscernible]; as well as sub-departments; as well as the [ SMEs ]. So there's a person designated to coordinate that. And then a lot of discussions is also [indiscernible] with the IDC.

Thank you, Kobus. "Can you provide some insight into the difference between the international RMB cost decrease versus the RMB cost change experienced by AM?

Yes. I think our -- over the last 5 years or so, we have largely moved as far as possible to localized, rand-based supply of raw materials; specifically iron ore, coal; also started to regionalize our coking coal and hope to regionalize more of our coking coal. We have already done a lot of coke. Now to the extent that the international raw material prices drop: Ours are not that sensitive to that prices, more linked to a local inflation. So we have a raw material basket benefit, but to the extent that international prices drop, then our benefit -- or our relative benefit reduces.

In similar manner to policy that enables low-cost local scrap in South Africa, do we believe government will enact policy which will enable low-cost local iron ore?

I think they are considering it but probably will take a long time. I think, to the extent that you want to attract beneficiation of your local raw materials, you have to create an environment where you can have some level of competitive advantage. So to the extent that you have a competitive disadvantage from a energy perspective, from a rail cost perspective, your discount to iron ore should be big to attract additional investment, but I think, longer term, this is sort of noises that start being made by government.

Thank you, Kobus. Will the discussions with government lead to a material change to the Newcastle closure decision? What are the minimum requirements that ArcelorMittal South Africa require to reverse this closure decision?

I think we've -- we said what are the structural issues. Electricity is too expensive in South Africa. Rail tariffs are too expensive in South Africa. Our level of safeguard protection, versus other countries, are low and also not being policed adequately. The scrap discount given to competitors is unfair and large. So a combination of those and fundamentally the growth. The steel demand is too low. So it's not a single solution. And you can't get 100% of these things, but [ we just ] find something that collectively addresses the competitive disadvantage of the Longs Business.

Thanks, Kobus. "Should ArcelorMittal South Africa receive the safeguard protection, would you be willing to guarantee to the local market?"

I don't think it's a single event. Remember safeguards is not for ArcelorMittal. It's for everyone, so all steel producers are benefiting from that [indiscernible] in terms of the Long product business, we have to address these structural issues. Otherwise, it's just a short-term solution.

A question from [ David Fraser ]. "Can you give us an indication of the net cash flow impact should the Newcastle closure go ahead?"

[ David ], the -- if you look at the AMSA without Longs sort of forecast model, this is continuous in Longs. AMSA without Longs and the closure of Longs is substantially more cash flow positive already in year 1.

"Can you please give insight on the increase in borrowings from IDC and group?"

Well, the group increase is largely -- it's a movement from account payables to debt. It's a mechanism -- or it's required, from an accounting perspective, to be able to subordinate that obligation, so it's not really a new debt. In terms of the IDC, we had a bridging facility. And amount outstanding is ZAR 950 million of that...

[indiscernible]

Gavin? And they've given us an extension of time in repaying that. And part of the logic in that is -- once again is Longs. If we have shut Longs as predicted, the cash generated from the closure is actually substantial, and the working capital released. Now that will not happen -- or it will happen later, and hence, we need a different repayment profile.

From [ David Fraser ] again. "Should Newcastle be closed, would you still look to source iron ore from 2 sources, or would you only have sufficient volume to pull from one source?"

[ David ], it's not purely a volume issue. It's actually a quality issue -- very difficult to source the quality from one supplier. And from a risk perspective also, ideally it will be [ due ], but we are speaking to our suppliers. We're very transparent with them on what the potential can be in trying to get to a solution that suits us best.

From [ Anton ]: In other words, should you not be able to supply, your customers can claim loss of revenue.

[ Anton ], I don't understand your question, but no.

Neither I. What is the current price discrepancy between locally produced steel versus imports?

They're largely comparable. Sometimes we keep prices stable for a bit longer and a bit more expensive, sometimes a bit less. [ This works with ] different grades of steel, so I mean [indiscernible] pretty comparable to imports, but comparing it to some international markets, still are more expensive in other jurisdictions in the country.

"What are you doing to increase staff morale, especially to ensure that you keep the required talent?"

I think, talent, firstly, acquisition and retention remains [indiscernible] especially if you [indiscernible] steel producer in the country that actually invest in training and upskilling people [indiscernible] our people get poached fairly easily, but we have a competitive package. We have retention schemes. [ Strangely enough ] [indiscernible] migration is a concern, but we work on that. We put in place things to retain skills, especially in the scarce categories. But with technicians, engineers, I think it's a problem, I will say, all over the world.

Thanks, Kobus. I'm sure you have answered this question, but let me read it. Are there talks developing [ re: scrap ] duty and the safeguards and antidumping?

I mean there are discussions. And we actually will continue with the discussions [ and pressure ]. The current [ EPS and ] export tax is totally unfair. [ It's to ] utilize scrap collectors in that part of the industry to subsidize a few that cannot continue [ instead ], but we have a small benefit to the sector, for some reason. But 30% cost-benefits is [ sporting ] so many issues.

The offer that was made to [ Arcelor ] to take over the company seems to have been ignored by the company. Any reasons?

We have not received any offer. If somebody sent you an unsubstantiated, unsupported letter: That's not an offer -- also come from somebody -- does not have any steel experience, track record, it's not serious. So we will, and always have, look at everything, offers but serious, but we have not received [ any ].

I think that was the last question. Kobus, I'm not sure if you've got any concluding remarks.

Yes. I think 2024 was a difficult year for steel internationally; particularly for us, domestically, some of issues self-inflicted, which we hope to address. And we look forward to a better 2025. Hopefully, internationally, we will see a bit of uptick in demand. And at some point -- we all hope that we will see infrastructure spend and economic growth return to the domestic market. So that's ultimately [indiscernible] for all of us to better performing. Thank you.

Ladies and gentlemen, that concludes the presentation. Once again, thank you very much for joining. We really appreciate these interactions. Have a wonderful day...