Aurizon Holdings Limited (AZJ) Earnings Call Transcript & Summary

Well, good afternoon, everyone. It is 2:00. So let's get underway. My name is Tim Poole. I'm Aurizon's Chairman. On behalf of our Board, welcome to our 2024 Annual General Meeting. I'd like to introduce Laurie Anno, an Aurizon employee, who will provide the acknowledgment of country today. Welcome, Laurie.

Thank you, Tim. I am standing up. Sorry about that. My name is Laurie Anno, as Tim said. I'm a proud Kalkadoon and Waiben man. My mother is from the Kalkadoon plane in the Mount Isa region, and my father is a Waiben man from the Torres Strait Islands. My story begins at birth. I was instantly connected to country literally, born on the banks of the Leichhardt River in the middle of Mount Isa. Yes, mom didn't quite make the hospital in time. At 5 years age, my father took me up to Thursday Island, known as Waiben by the locals. I remember sitting on a weaved mat and being acknowledged and welcome back home -- starting to get nervous. Sorry about that. I remember sitting on a weaved mat and being welcome back to my homeland and being blessed by the elders. This was a moving experience connecting me back to the community in the Torres Strait. Being an Aboriginal man and proud of my culture, the spirit of the land to protect us and the connection to our ancestors. As a Torres Strait Islander, the clear blue waters in the strait are sense of calmness. My heritage is Waiben, which is one of the Western islands with its own history. I'm a rare First Nation man, rare because I can't dance nor can I play the [indiscernible]. That's true. But however, I was told I've been -- that I can paint. My outwork has been displayed on multiple Aurizon reconciliation plans, company shirts, like I am wearing now, locomotive cars and across several depots on the eastern side of Australia. Aurizon is a large company that spans over the land from the East Coast to the West Coast, either way, showing their resources around the world by land and the water that's around us. I would -- that brings us to the acknowledgment. I would like to acknowledge the people that are the traditional owners of the land we meet today and acknowledge any First Nation people here present today and acknowledge the land at which Aurizon travel across each day. I would like to pay my respect to our elders, past, present and encouraged to learn about the land that you are from. Thank you and [indiscernible].

Thank you so much, Laurie. It's an absolute highlight of our AGMs and you did a fabulous job. And I'm also told by our team that the T-shirt that Laurie is actually wearing, he actually designed that. They're quickly becoming collector's items and highly sought after within Aurizon. So congratulations on so many fronts, Laurie, and thank you for being with us today. Much appreciated. I'd now like to have a representative from Karstens, conduct a short briefing to explain the emergency and safety procedures for this venue. Thank you.

Good afternoon. It's an honor to host you again this year here at Karstens. So just a bit of housekeeping. So gentlemen's toilets on this side here. Ladies toilet, left, then left on the far side of the complex. If you need any help with any coffee machines or anything like that, staff are available to help. So please don't struggle, just ask. In the case of an emergency, there is a beep beep sound, which means get ready. So if a beep beep sounds, just get your belongings together. [indiscernible] means we're leaving. So stand up and exit through this fire exit here. Anyone who was not able to go down 24 flights of stairs, wait to the side and staff will come and assist you. Okay. Thank you for coming to Karstens today and enjoy your stay.

Lovely. Thank you so much. The notice of meeting has been provided to all shareholders and published on our website. It sets out the items of business and resolutions that will be put to the meeting today. The agenda for today's meeting is on the screen now, addresses will be given by myself, Andrew as our Managing Director and CEO; and Marcelo Bastos, who is standing for reelection today as well. We will then move to the business of the meeting where we'll take questions before voting on each of the resolutions. I'd now like to introduce to you our Board of Directors and others up on stage with me today. So closest to me is Andrew Harding, our Managing Director and CEO. Andrew, it's great to have you in the room with us this year as opposed to stuck in the room outside last year. Next to Andrew is Marcelo Bastos, then we have Russell Caplan, Tim Longstaff, Sarah Ryan, Lyell Strambi and Samantha Tough. And next to Samantha is our company Secretary, David Wenck. And next to David is James Coe, who's our Head of Investor Relations and plays probably the most important role today, which is moderating the questions that will be coming in. Members of Aurizon's Executive Committee and our team, our senior leadership team are also in attendance today. And I encourage you to find them during the coffee and refreshments afterwards and ask them about our company. We also have Matthew Donaldson and Allison White of Deloitte with us today. They're our external auditor. And they're here and able to answer any questions regarding the audit of the company's financial report for the year ended 30 June 2024. I'll now turn to my meeting address. Aurizon has performed solidly over the past year, increasing company profits and returns paid to shareholders. Earnings before interest, tax, depreciation and amortization, which we call EBITDA increased to $1.62 billion, which was 14% higher than the previous year. This is a record result for group EBITDA with our Coal, Bulk and Network businesses each contributing to the uplift. With a higher return -- with a return of higher cash flows, I should say, and reduced gearing, the Board was able to increase the dividend payout ratio to 80% for the final dividend, and we announced an on-market share buyback of up to $150 million, which, as we hear today, is over 50% complete. Total dividends paid for the 2024 year was $0.17 per share, which was 13% higher than the previous year. On behalf of the board, I'd like to sincerely thank our teams across the country for their effort and commitment in delivering services to our customers safely and reliably, work that underpinned our operational performance, our financial results and increased returns to shareholders. The Board is pleased with the progress being made on delivering our strategic initiatives, including the investments we are making to support growth in Bulk and containerized freight. We have ambitious growth aspirations for both businesses through to 2030. This is based on the forecast growth of rail freight markets and a rise in opportunity to deploy its high-quality assets, a national footprint and capability and a great workforce to win new customers doing more work for our existing customers and grow our business. We acknowledge that the bulk and containerized freight businesses are not generating the volumes and the returns we expect. Nevertheless, we remain very confident about the opportunities before us. We are committed to our significant expansion in non-coal bulk and container traffic and in leveraging the footprint, rolling stock fleet and terminal assets we enjoy as Australia's largest rail freight business. A good example of this is the work we are doing with Tarcoola-to-Darwin railway we acquired in 2022. This is a nationally significant infrastructure asset, a north-south supply chain for Australia, linked to our nation's northernmost port at Darwin on the doorstep of Asia. Asia is the home of our largest trading partners, buying Australia's high-quality commodities in resources and agriculture and delivering to our shores, everything from motor vehicles, telecommunications, electronics and solar panels through to clothes and footwear. Most of these inputs arrive in Australia by container, and that number has doubled over the past 2 decades. At Darwin port, Aurizon has installed mobile harbor cranes and established a stevedoring operation to enable a seamless connection between rail and shipping. Our investments are designed to capitalize on the latent capacity of the rail corridor and the port with the opportunity over the coming decades to significantly increase export and import volumes through Darwin. In July, our containerized freight team commenced trials with major car importers through Darwin as we work towards delivering regular volumes of land bridging freight by rail to southern markets. The ramp-up of national linehaul services for containerized freight was also completed in May of this year. This means we are serving all major capital city markets together with import and export terminals. Despite a softer economic environment at present, we see a strong future for container traffic in Australia. This is based on the underlying long-term strength of the economy and the competitive advantage that rail freight offers as the nation pursues efficient, low-carbon supply chains -- just about to sneeze. The use of rail is both logical and essential, particularly over longer distances when you consider each freight train can carry the equivalent of 150 semitrailers and generates up to 95% less carbon emissions compared to road transport. In a broader sense, the Aurizon business reflects the resource wealth, an economic opportunity for Australia with our exposure to the range of high-quality commodities this country produces. We see this in the products we carry on our trains across our track infrastructure and through our terminals and portside assets. These include metallurgical and thermal coal, iron ore, bauxite, copper, rare earth, grain, phosphate, fuels and chemicals. Our strategy is to ensure we are well positioned to maintain our strong performance and presence in traditional markets and to grow further in those that are emerging for both Australia and Aurizon. This recognizes Aurizon's leading position in delivering coal haulage and infrastructure services for customers, together with our aspirations to achieve a larger share of the available bulk haulage and containerized freight markets, as I outlined earlier. Since the last AGM, we have farewell Sam Lewis from the Aurizon Board after almost 9 years of outstanding service. Sam was the Chair of Aurizon's Audit, Governance and Risk Management Committee for almost her entire time on our Board, a job she did exceptionally well. I'd like to thank Sam for her contribution to Aurizon and wish her the very best for the future. In closing, thank you to our shareholders for your continued support. Our company has resilient earnings and great opportunities for growth. We are guiding towards a further uplift in EBITDA this financial year and aligned with our capital management framework, we are committed to providing increased returns to shareholders through dividends and share buybacks. Thank you and I'll now pass you over to Andrew for his address.

Thank you, Tim, and good afternoon, ladies and gentlemen. Today, I will share more detail on our business and safety performance, together with some of the great work the teams are doing in sustainability. We are seeing positive safety outcomes for our people and the business with continuing improvements achieved during the year across our 2 primary safety metrics; total recordable injury frequency rate, TRIFR and potential and serious injury and fatality frequency rate SIFR. In FY 2024, the TRIFR improved by 15% and SIFR improved by 29%. Our safety strategy continues to build on 3 key focus areas, putting in place simple, effective systems and safety processes, understanding and controlling hazards and safety risks and continuing to build leadership and capability with a strong infield presence. In addition to operational safety initiatives, Aurizon has also commenced a major education and awareness campaign to support improved level crossing safety. Respect the sign. Lives are on the line. This represents an ongoing commitment to education and awareness. Level Crossings remain one of the greatest risks for Aurizon train crew with near-misses, unfortunately, almost a daily occurrence. As you will see, this campaign is told through the eyes of those directly impacted by level crossing events especially train crew and the first responders that see the impacts of near-misses and collisions. Here is a snip from one of the campaign videos. [Presentation] I am immensely proud of the courage of our people in sharing their stories and taking these important safety messages out there into the community. During Rail Safety Week in August, our teams visited schools across the country in regions and communities where we operate with presentations reaching thousands of students, many of them will soon be new drivers. Others are a little younger. We are now told are now constant backseat reminders for mom and dad at every level crossing they approach. This local engagement, we seriously believe will help make a difference in the communities in which we operate and where our people live. We know that level crossing safety is a complex issue where a range of measures are needed, including technical, enforcement and awareness initiatives. Aurizon is determined to play our part and to support the collective efforts by industry, government and other agencies to improve safety outcomes for our train drivers and the general community. As the Chairman reported, we delivered a 14% increase in earnings in FY 2024 with strong cash flows, enabling a lift in dividends and the announcement of the share buyback. I will now provide a snapshot of the performance for each of our 4 business units and how they are positioned for the year ahead. Our Bulk haulage business delivered a 7% increase in earnings in FY 2024. This was driven by strong volumes for minerals and iron ore, partly offset by lower grain volumes and weaker volumes in Bulk East and West. We've seen volume growth in the Bulk central business that was acquired in 2022 and which enjoys income from both above and below rail. Pleasingly, we secured a number of contracts which you can see on the screen. We have quality assets in the Bulk business and a great opportunity to expand volumes, revenue and profitability. We know the growth trajectory has not met expectations to date, yet the assets, the investment and business strategy we have in place, are the right ones to deliver on its potential. We look forward to sharing more news about our progress. Our Coal haulage business had a strong year lifting its earnings by 16%. New volumes were transported for a number of customers, again seen here on the screen, together with securing some important contract extensions. Coal haulage remains core to our business and our continued success. Demand for high-quality Australian coal remains strong and Aurizon is committed to our customers in delivering industry-leading performance. We know the demand profile will change as the global energy transition progresses, but equally, we believe that coal as a source of energy and steelmaking will be part of the mix for decades to come. Since establishing the containerized freight business in early 2023, the team has done an excellent job in mobilizing rolling stock and resources as well as securing track and terminal access. The ramp-up of national linehaul rail services with cornerstone customer TGE on board from day 1 was completed in a little more than a year. During that time, our focus has been on standing up the schedule and delivering capacity for TGE. We've recently added more customers on a spot basis. Our overall utilization rates are lower than expected at this time and occurs in the context of a softer economic environment, but we are confident of meeting our targets. We also have a deliberate strategy to ensure we have available capacity as we further explore the land bridging opportunity. As Tim indicated, trials were undertaken midyear for the transport of imported motor vehicles through Darwin to interstate destinations. Aurizon has the advantage of packaging up an integrated customer solution across the supply chain. This means a rise in infrastructure and stevedoring services at Darwin port; Aurizon trains operating south across the 2,100 kilometers of Aurizon managed rail corridor and connecting with our national interstate containerized freight network to reach major cities via rail. Our aim is to provide an efficient and resilient supply chain for customers, one that saves precious days compared to traditional shipping schedules and at the same time, unlocks capacity for shippers through better fleet utilization. The trials have been successful to date and we look forward to progressing this opportunity. Now turning to Aurizon Network. Our coal infrastructure business that remains a mainstay of our portfolio and generates more than half of total company earnings. As a reminder, the Central Queensland Coal Network is Australia's largest rail supply chain for export coal with 2,670 kilometers of track, connecting customers from more than 40 mines to 5 export terminals. This infrastructure remains a critical part of Australia's coal industry with the majority of coal transported over the network being high-quality metallurgical coal used to make steel. In FY 2024, Network earnings increased 14% which was primarily driven by an increase in the allowable revenue in the regulatory agreement we have with our customers. Tonnes carried by rail operators of Aurizon Central Queensland coal network increased to 210 million tonnes in FY 2024. I want to spend a few minutes providing an update on decarbonization initiatives for our fleet. As we drive towards our target of net zero operational emissions by 2050. This is an important piece of work for Aurizon and the past 12 months have seen new solutions take shape. We are under no illusions about the technical challenges in this space. Australia's rail freight industry can't simply buy suitable, ready-made locomotives off the shelf to replace all of the fleet -- all of the fleet. It's hard work. There's no instruction manual on how to build this technology. That's why our teams, together with technology partners are building locally, the prototypes needed. Locos that are suitable for the range of halls, the long distances and the harsh operating environments. Next-generation locomotives are being designed to replace diesel fuel with totally renewable energy sources. That's one train carrying the equivalent of 150 semi-trailers worth of freight. We are working on 3 key platforms. So we cover the different needs of our customers. The first is the Battery Electric Locomotive called BEL for short, in collaboration with Progress Rail. This is underway in a workshop about 30 kilometers from here, it involves retrofitting an existing diesel loco with battery technology. We expect a range of about 250 kilometers. The prototype is expected to be ready for on-track trials in mid-2025, then it will be heading West to go into service with our long-standing customer, South32, for holding alumina products in Western Australia. This trial is an important stage as we assess the pathway to commercialization. The second technology we're developing is the Battery Electric Tender or BET, essentially a big battery on wheels. It's being designed to deliver additional battery capacity to the BEL coupled to the locomotive with the aim of extending the range to about 850 kilometers. Work started in March this year at our workshops in Townsville in collaboration with Alta Battery Technology. We're aiming for on-track trials in early 2026. The third solution we continue to explore is the Hydrogen Electric Tender or HET. The design includes a hydrogen storage and fuel cell charger on wheels, which would extend the range of the BEL for the longest haulage tasks. We've completed a feasibility study and are working with technology partner First Mode, to investigate packaging options, including fueling infrastructure and liquid hydrogen technology. We're also working on new solutions with First Mode for regenerative batteries that capture the energy currently lost through braking and in traveling down hills. This has the potential to deliver significant carbon reductions in the short term. Aurizon is committed to taking a leading role in accelerating decarbonization in Australia's freight sector. This commitment is anchored in the belief that through this work, we can deliver mutually beneficial outcomes in contributing substantially to reducing transport sector emissions, benefiting the environment and the community in delivering efficient low-carbon supply chains supporting the continued global competitiveness of customers in the Australian economy, and in developing sustainable technologies that provide Aurizon with a competitive edge in highly contestable freight markets. In looking forward, I reaffirm the guidance we provided in August with group earnings before interest, tax, depreciation and amortization expected to be in the range of $1.66 billion to $1.74 billion. At the midpoint, this is $76 million higher than EBITDA in FY 2024, which, as Tim indicated, was a record result for Aurizon. Finally, I extend my thanks to our teams across our national footprint for their dedication and commitment to their work each day. We have outstanding capability and coupled with quality assets and infrastructure this stands us in good stead for continued growth and commercial success. I'm also immensely proud of the role Aurizon and our people play in local communities right across Australia. More than 80% of our 6,000 strong workforce live and work in regional communities where our business operates. This means we are not only making a major economic contribution to regional Australia but also delivering a positive and ongoing benefit at a social and community level. Thank you, and I'll now pass back to Tim.

Well done, Andrew. Thank you. We now come to the formal business of the meeting. There are 2 directors standing for reelection today. Myself, and Marcelo Bastos. You have heard a great deal from me and probably enough. So I'm not proposing to say anything specifically in relation to my reelection. But of course, I'll be delighted to answer any questions in relation to my reelection in a few moments. But I am delighted to hand over to Marcelo, who will now say a few words about his reelection.

Thank you, Tim. And I'm very pleased to be here today before the shareholders after 7 years as a member of Aurizon board. It has been an incredible experience to collaborate towards the sustainability and growth of this company. Aurizon is vital for the economic growth of Australia. I'm honored to be part of this Board. The past 3 years have been dynamic and filled with challenges, which have all resulted in positive changes for the company. I can't forget to mention the continuous diversification of the company business including the acquisition of One Rail and growth of the company in the heart of Australia. Without a doubt, the reasons Aurizon has remained on track and has performed equally well have been because of all the employees, the management of the company and our Board. Everyone cooperated well for the success of the company. I started my career more than 38 years ago. I have had the opportunities to work and live in 3 different countries, in Australia for the last 17 years. I held executive and nonexecutive roles in various resource, logistics and infrastructure companies. I was a Director of Vale, CEO of BMA, President of Nickel Americas in Australia for BHP and COO of MMG. In these various executive roles, I had global responsibilities of overseeing all aspects of the businesses. As a nonexecutive Director, I'm currently Chair of Aurizon Safety, Health and Environment Board Committee, member of the Nominations Board Committee and a member of Aurizon's Network Board. I was a nonexecutive Director and Chair of Sustainability of Iluka for more than 10.5 years -- 10 years, almost 11 until this year, 2024. I have also been a nonexecutive Director of Anglo American plc listed in the London Stock Exchange since 2019, chair of Global workforce there. And recently joined the Board of IGO in Australia, where I am Chair of Sustainability. I want to recognize more than ever the importance of meeting shareholders' expectations of financial performance and care for environment, community, health and safety. I believe that I am prepared to continue to collaborate towards the success of the company as a member of the Board. I would be delighted to have your endorsement again. Thank you very much to everyone.

That was terrific, Marcelo. Thank you. I will now run through some housekeeping in relation to questions and voting. Shareholders or proxies attending in person who wish to ask a question should raise your hand with your white or blue shareholder admission card and a microphone will be brought to you. Please state your name and any organization that you represent and then please ask your question. Online attendees can submit questions at any time by selecting the Q&A icon on your device or to ask a question verbally by following the instructions below the webcast window. We have received some questions from shareholders in advance of the meeting, which we will also address in a few moments. What we're proposing to do is we will start taking questions in person from the floor and then move to the moderator to address any questions received from the shareholders in advance of the meeting or from those attending online. Voting today will be conducted by way of a poll. Lewis Brimelow of Computershare is appointed as the returning officer. Voting is now open until the close of the meeting. For those online, there is a polling icon where you can cast your vote. You can change your vote at any time until voting closes. Attendees here in person have a colored admission card informing you about your individual right to vote and to ask questions today. For those with white cards, your voting paper and instructions, including any relevant proxy voting instructions are on the reverse side of your card. Voting cards will be collected at the end of the meeting by the returning officer and his colleagues. All shareholders have had the opportunity to vote in advance of the meeting. Details of the proxy voting received prior to the meeting for each item of business will be displayed at the relevant time on the screens in the room and online. Subject to voting exclusion is detailed in the Notice of Meeting for Items 2 and 4 and shareholders having marked the appropriate box, any open proxies will be voted in favor of each resolution. For those who need to leave early, you can cast your vote online at any time while voting remains open or complete your voting card and hand it to a Computershare representative as you leave the room. I now declare voting open. [Voting]

Today, we intend to start by taking all questions on any of the items of business upfront before I then move to each item where we will show the proxy voting and ask you to record your vote, if you have not already done so. So can we please start by seeing whether there are any questions on any of the resolutions in today's... David?

I'm David Loosemore. I'm a volunteer for the Australian Shareholders Association. I was going to apologize for reading my questions from the sheet that everyone else is -- all the other speech makers today have also read their speeches, so I'm in good company that way. Today, the ASA holds proxies from 83 shareholders and ASA members for over 610,000 company shares. Firstly, I'd like to thank Aurizon for holding this meeting as a hybrid meeting to allow for maximum participation of shareholders. Computerized freight is not yet meeting the company's investment targets. What would be a realistic time frame for shareholders to see it meet them?

Thanks, David, and thanks for your attendance today. And I think I've got 17 pages here. So if I could memorize that, I'd be doing pretty well. So my apologies for having to read most of that. Look, in terms of our containerized freight investment, that is a journey that we're on. We have said externally that utilization on our trains at the moment is about 60%. We'd like to see that grow pretty quickly to around 70% because at that stage, that business will be around a breakeven business for us. And then very soon thereafter, we'd like to see it move up from 70% into that 70% to 100% range, at which point we'll start to be earning returns on that investment. As Andrew said in his presentation, we are reserving some of that capacity at the moment for our land bridging activities. We don't necessarily want to sell out the train or each of our trains at the moment at returns that we would see as subpar. So we are reserving some capacity, but we're also actively seeking other customers to come on to our service. As Andrew said, and we've talked about externally before, we have a very significant foundation customer in TGE, but we also have 9 other customers that we're hauling for and then we're delighted to have them as part of our service as well. So look, it's early days in that investment for us. We see a long-term growth trajectory for that business, and we expect it to be earning returns in the foreseeable future. Did you have another question at this stage? Or did you want to pause it?

I've got quite a few questions.

Why don't we do with one more and then we can come back to you. .

Perhaps if I can ask my next one. For the remuneration report, Director, Samantha Tough, who commenced on the 1st of September '23, does not appear to have a shareholding in the company. And our association policy is that we like to see that because it demonstrates directors' alignment with shareholders. So could you -- or could someone update us on when that's likely to happen?

Sure. And we share your view around the alignment between Board and our management team having meaningful shareholdings in the company. We have a shareholding policy for our KMP, our key management personnel, which includes our Board and our senior leadership team. For our directors, that requires 1 year's fees invested in the company's stock within 6 years of your appointment to the Board. Now we'd obviously like that to be a bit sooner than at the end of that 6-year period, but certainly, that's the policy that we have. Samantha joined our Board just a fraction over 12 months ago. So she still sits well inside our existing company policy and with the shares where they are at the moment, I'm sure she'll be in the market soon building -- starting to build her position in the company. We might go to some other questions. I think there was one -- yes, sir, we'll just get a microphone for you.

Thank you, Mr. Chairman. I think you can hear me. Ken Ryan is my name, a shareholder since you were floated. I'm a bit concerned about the containerized freight business that you've -- that yourself and CEO has spoken about. And I was here last year, and I remember you made a big thing about that, and I picked up my ears, and I thought well, that might be a very good growth asset for the company, particularly as the coal hauling business that might decline over time. We need something else to sort of take up the slack. And as you say, it hasn't quite met your expectations in the last 12 months, and I wonder why. You did mention that maybe economic conditions are part of the reason. And I saw an article in the financial review about a week ago that concerned me a bit because I'm wondering if you're telling us the full story. That article seemed to indicate that the port facilities in Darwin, including the quarantine facility there, which is a strict obligation on anything coming into the company because we don't want a foot and mouth disease and monkeypox and all these things coming into the country. But you're nowhere up to the standard in Darwin that you are in Sydney and Melbourne. And a lot of the companies are still bypassing Darwin and taking freight to Sydney and Melbourne because it's quicker because they've got better facilities. So my question is, if that's the case, how long will it take -- how many years will it take? Will I still be alive when the Darwin port is up to scratch with Sydney and Melbourne?

Thank you for your questions, sir. And can I answer it in 2 ways. Firstly, the containerized freight business that we stood up recently doesn't actually rely on volume of freight coming through Darwin to make that successful. So that was a stand-alone investment that we saw an opportunity to pursue with a very significant foundation customer in TGE, and that business case stands up on its own right now. . If we can get volume of freight coming through Darwin, that will be additive, that will increase our returns to that investment. So I think it's very important to say that business case stands up on its own right, regardless of what happens through Darwin. The other point I wanted to make is and I did allude this in my speech. We only completed the standup of our 7 services in May this year. So that's only 5-or-so months ago. So our team has done a fabulous job in standing that business up in a relatively short period of time. We've gone from nothing to 7 very significant services very quickly, but it was only done in May. So we only had the full system operating in May. And so necessarily, we're still in that ramp-up phase. And I'm not privy to your health records, but I'm very confident we'll be delivering very good returns in your lifetime because you look very fit and healthy. The other -- the last thing I'd like to say just in relation to -- that article in relation to the prospects of us bringing freight through Darwin. A lot has changed over the last 20 years since the Darwin to Adelaide line was put in place. And now you have a national rail freight company like Aurizon that controls that rail infrastructure. We have stevedoring in Darwin. We have the end-to-end solution. It's the first time since the Federal Government built that line that you actually have a fully integrated operator that can take advantage of that infrastructure and that very important infrastructure. So I can't tell you precisely when we will get volume through Darwin on to the back of our trains. But I can absolutely say with confidence that we will have product going out of Darwin and product coming into Darwin on our supply chain. So bear with us a little bit longer, but we're very, very confident that, that will be a successful part of our business for a very long period of time going forward. Yes, sir.

Hello, [ Owen Jen ], an individual shareholder. Since Andrew just mentioned the Asia market and just follow that gentleman's question about the containerized business, may I know like whether the Board will consider to introduce an Asian background Board member who can bring more diverse knowledge and background of the Asian market and the containerized business? Yes.

Thank you. And look, it's a good question. I mean we consider -- I mean we are absolute believers in diversity on our board. And that's not just ethnic background or background of origin. It's all sorts of backgrounds, it's all sorts of experiences. It's domain expertise in the particular areas of our business. So whether it's a regulatory skill in relation to our regulated monopoly business, our network business, whether it's supply chain and logistic experience, whether it's geographic diversity. I mean one of the things that we were particularly excited about Samantha, when she joined 12 months-or-so ago was bringing in Western Australian-based director back on to our Board. So look, we continually debate those things. And the point you make is one of the things that we do look at. Not specifically, but as part of a broad church of trying to add diversity to our Board. So it's something that we do definitely consider. Thank you. Yes, sir.

Thank you, Mr. Chairman. [ George Bamber ] is my name, I'm a Director of Faircase. I just had a couple of questions and a comment to make. It was nice to see the increase in results for the year, but it must be also -- remember that was on the back of a very poor 2023 results. So when you take a context over the 2 years of the result, the result wasn't anything certainly outstanding. My question is the state government resort tax, has it had an effect on your coal transportation. You're now having these containers. Is there some likelihood that you can replace some of the trucks on the Bruce Highway. We're sending cars, et cetera, up to [ Cairns ] and places north on the rail system. And the other question that I had was we seem to have a very large number of directors for a fairly small company. Now I think that sometimes, yes, you can get a diversification of ideas, but sometimes it becomes unwieldy with the number of directors. And I would also like to ask Mr. Harding, what he personally has done this year to have rights to an extra reward for his work.

Okay. Thank you. There's a few questions there. So in relation to the royalty situation in Queensland and its impact on volumes. We certainly haven't seen any volumes to date -- impact on volumes to date. Volumes are still strong and our customers are still railing very positively. So we're seeing no impact on that. We would expect that to have a more longer-term impact when new investment decisions have been made by the miners around expansions or new operations or greenfield sites. So in the day-to-day that we're in at the moment, where miners are mining their existing operations, we're not seeing any significant impact. In relation to getting more freight off trucks onto trains, well, that's our reason for being. So any opportunity that we can see modal shift, that's what we're pursuing very aggressively. And whether that's cars up the East Coast of Australia or any product, our reason for being and our strategy is all around getting modal shift. It's better for us. It's better for our customers. It's better for the environment. So we're keen to pursue that. In relation to your question around the number of directors, yes, it's an interesting one. I mean we benchmark that all the time, and we're not a large board. I think sometimes we're in a reasonably small room, and we're close too, and it might feel like there's a lot of us. But 8 directors, 7 nonexecutives plus the CEO is not a significantly large board. In fact, I do prefer slightly smaller boards. And I think we are on the slightly smaller end for a company -- for an ASX 100 company of circa $6.5 billion market cap. So -- but that is something that we check in on regularly. But we think we've got the number, 7 nonexecutive and 1 Managing Director about right. Andrew, do you want to take the question in relation...

So essentially, my variable pay that I was rewarded hinges around a number of variables. The first one is safety performance. So the business displayed extremely good safety performance during the year. It's something I spoke proudly of in my speech. And there's a reward that flows through to that. That's small, though by -- in comparison to the reward that flows from how well the company achieves its goals from a budget point of view, EBITDA outcomes. And essentially, if you look at in a good year, I'll do well as the shareholders will do well. And in a poor year, I won't do well as the shareholders won't do well in the poor year. That's fundamentally how the performance package works.

Thanks, Andrew. Next question from the room is David.

David Loosemore, Australian Shareholders Association. I've got a question for Director, Marcelo Bastos. Thank you for speaking to your reelection. I think you outlined your skills and experience well. Could you give us -- give the meeting a couple of specific examples of where you've added value to the company?

Thank you very much for the question. Look, as Chair of the safety, health and environment, I have worked very hard with the executives to help and support them on what the company has achieved. So that's something that I'm proud for them, of them, but I took part on. The other thing is with my extensive background in mining, I have -- coal, not only coal but all other commodities -- I have brought all this experience in many decisions the Board has made, acquiring One Rail is one of them and all the contracts in the Bulk materials that I have helped as much as I can. But yes, I'm very proud of everything that I have being part in this Board. The Board is not executive, and that's the other thing that I bring to the table. I have been an executive or I was an executive for a long time and have been a nonexecutive for quite a long time as well. So I can differentiate very well what's the role of one and the other and work in collaboration with the executives. So those are the things that I'm proud of, bringing my experience. .

And can I just add from an independent or reasonably independent point of view. As Marcelo said, that he said it very modestly. I mean he is the custodian of our safety culture around the board. He chairs that committee. He does a fabulous job working with our team and continually and constantly reminds us about the importance of safety. And that's an incredibly important role. The other major thing that we all noticed, it's incredibly helpful to have a former customer sitting around our table. As we think about what we need to do to do the very best for our customers, the best service, the best offer, the best communication, the best reporting, having someone like Marcelo, who in his life was the leader of the BMA business, BHP Mitsubishi business here in Queensland, which is our largest customer is incredibly helpful and we get incredible insights. The third thing -- and again, Marcelo is too modest to say but he's probably one of the most experienced mining executives in Australia. And so when we talk about new opportunities, and we want to understand the viability of the new opportunity with almost certainly, Marcelo, at some stage in his career has looked at that opportunity from a mining perspective and can give us very good feedback on whether or not that's a viable opportunity to go for. So he's an immensely valuable director for us. David, did you have anything else you wanted to ask at this stage?

Yes. This is a comment, not a question. I've read a few remuneration reports from companies each year. And I'd say that your report is easier to follow than many of the others. So thank you for that. For the remuneration framework to align with all ASA guidelines, the deferral for short-term incentive would be 50%, not 40%. But overall, we support it. The ASA prefers that the Board's skill matrix identifies the skills and capability of individual directors so that shareholders can make informed decisions about how directors add value to the company. Chairman, you've said you won't serve a full term before retiring. Could you please outline for the meeting, the Board's plan for renewal to meet diversity and skill requirements?

Yes, sure. That's a constant job for the Board, and we are actively working in that space at the moment. We have a few skills that we're keen to add to our Board. Over the last 12 to 24 months, we have lost a bit of regulatory experience from our Board. And we will lose a little bit more of that experience over the next 12 to 18 months. So that's a skill that we're looking to add to the Board. But over and above that, one of the first jobs we need to get on to later this year and early next year is obviously to look at my successor. We believe that, that successor currently sits on our board. And so we'll be working through that process. Once that process is finalized, we'll be then looking to see what we need to do in addition to the regulatory skills identified, what other skills we then need to bring on to the Board. So that's the process we'll go through over the next 6 to 12 months. And it will be -- there's a reasonable amount of work to do in there. Thanks, David. Any other questions in the room before we just check in online. I know there are a few questions online. I will come back and just check finally on the room. But James, maybe we can go to online questions.

Yes. Thanks, Tim. We've got a number of questions came -- e-mailed ahead of this meeting and that we've received online during the meeting. Our first question comes from shareholder, Hunter McKay, who asked, is there any update on the acquisition of Flinders Logistics? And does Aurizon intent to make similar acquisitions in the future?

Thanks, James. So in relation to Flinders, that is a matter that's currently before the ACCC. We have been working on that through the ACCC process for some time. It's a little hard to be definitive, given we are working through an external approval process to give certainty around when that process might conclude. But we are hopeful that it will be concluded this calendar year, and we still remain hopeful that we'll get approval to complete that acquisition. In relation to whether we're considering other similar type acquisitions, shareholders will be aware that we have made similar type investments over the last few years in various regional ports. So we made an investment, a small investment at Townsville, which has been a very worthwhile investment for us. We made one at the port of Newcastle. We have put new capital and equipment and people into Darwin as part of our stevedoring operation and integrating that supply chain. And then at the other end, we hope to do it at Flinders to complement that supply chain. The way we think about these opportunities, we are trying to offer the very best services and complete services for our customers. So if we do see other small and appropriate acquisition opportunities that will mean that we can do better things and more things for our customers than we will look at them. We don't have any that -- a high priority for us at the moment, but these things do come up from time to time, and we will consider them as appropriate in the future. Thanks, James.

Thanks, Tim. We have 2 questions from Ms. Natasha Lee. First one is, I note the level of female representation on the board 25%, where as best practice is 40%. Will the Board commit to a 40% target? And will the Board also commit to achieving a greater level of diversity across the board to be representative of the community?

Yes. So dealing with the second part of that question first. In relation to the previous question, yes, we are absolutely committed to continuing to add to the diversity on the board. So I won't repeat what I said there. . In relation to female representation on our board, as shareholders would be aware, we have lost a couple of female directors from our Board over the last 18 months or so. Samantha came on our board about 12 months ago to replace one of those directors, but gender diversity and further gender diversity is absolutely on our agenda. So all of the skills and experience I talked about before, including geographic and ethnic background and so on, that's all in the mix. But gender diversity is absolutely front and center for us. Whether or not we get to 40% or not, it's actually hard, given the maths. We certainly take the view that we have no problems with equal representation. We have no problems with those numbers. It just sometimes depends on the movement of people and how that works. But given that Russell and I will probably be the next 2 people to leave the Board. There's probably a pretty good likelihood that we will start to adjust those percentages over the next 12 months or so. Thanks, James.

Second question from Ms. Lee is I note that employee expenses rose by around 11%. Can you explain the reason for this as it seems in excess of increases in wage growth?

Yes. I mean that will be directly relating to the growth in our business. So we have stood up a containerized freight business. We have expanded our business in our Bulk business and in other areas of our business. So yes, there will be a certain component of that relates to inflation and the cost coming through our various enterprise agreements. But with the growth in our business, you will see an absolute increase in our wages expenses.

Two questions from Mr. Kevin Daly. First has 2 parts. Is there a correlation between Chinese GDP and Aurizon's volumes carried? And is there any sign of a pickup in thermal coal volume exports from the Hunter Valley?

So in relation to Chinese GDP, I'm not sure we've actually ever studied a direct correlation between Chinese GDP and our volumes. But there's no doubt that we -- we are a service provider into the mining industry. We like to hold a range of commodities, including grain and phosphates and other things. But the lion's share of our volume is minerals. And so necessarily, we will be -- our volumes will be linked to Asia, particularly. So not just China, but many of our other trading partners. So I'm sure someone out there can probably do the regression for us. And -- but there's no doubt that our -- the performance of our business and the volumes in our business are inextricably linked to Asian demand.

Second question from Mr. Daly. What impact does inflation have on Aurizon?

Yes. No, that's a very good question because you will have seen some of the impacts of inflation going through our accounts over the last 12 months, given we have been in a higher inflation environment. So starting with the negative, as I talked about before, higher inflation means a range of cost increases. So whether it's labor expenses or a range of consumables or other things that we buy, there's been a necessarily higher increase in the cost of those items. Our procurement teams do a wonderful job in trying to minimize the impact of that, but necessarily higher inflation, mostly a higher cost base run through the company. But on the offsetting side, we do have mechanisms in operation -- in our operations contracts, our above-rail contracts where we can pass on higher inflation through, we have higher inflation mechanism through our revenue agreements. And then in our network business, where we have a regulated return, higher inflation generally means a higher weighted average cost of capital, which flows through to higher revenue and higher profit. So a very significant part of the increasing our profits over the last 12 months is directly related to the higher back or weighted average cost of capital we have in our network business, which is a direct result of inflation being higher in that WACC calculation. The final thing I should say is that is also partly offset by higher interest expense. As inflation has gone up, base rates have come up and our cost of interest has gone up as well. But that has been more than offset by the higher revenue we've got out of our network business. So we say in summary -- I know it's a very complicated answer, but we say we're actually a very inflation-protected business through the way our business is structured, both above rail business and our below rail business. Thanks, James. I should say. Is there anything you want to add to that? Because you get asked that question all the time from the analysts.

No, that was exactly -- yes. The inflation flows through in different parts of the business both for above rail and our network business. The following question is, Tim, come from Stephen Mayne. The first one is given we claim to have $4.4 billion in net assets and a market cap of around $6.5 billion. There's no suggestion that Aurizon is overvaluing assets. However, I note in the key audit matters section of the annual report values CQCN at almost $5 billion. In light of changes from climate change and decarbonization efforts, if a write-down of the scale of $2 billion took place for the CQCN asset, would this impact banking covenants or any pay arrangements for senior executives?

So if we get a $2 million write-down in our CQCN assets, that would necessarily have an impact on the share price, which would be -- which would have an impact on remuneration, one of the remuneration settings for our LTI is TSR. So you would expect that, that linkage to play a role and would be a negative impact. . But over and above that, a $2 billion write-down in our CQCN asset would be a very, very significant. There have to be something very significant underlying going wrong to require that sort of write-down. Probably the most robust conversation we have with Deloitte's and Matt's smiling at me, is around the valuation of CQCN, particularly in terms of the long term, it's a very long-term asset and trying to predict the volume of coal, both metallurgical and thermal across that system over a very long period of time is, to a large extent, crystal ball gazing. But what we can say is most of the value of that asset, we will recover over the next 20 to 30 years. And based on all of the work we do, and we've recently published our 11th version of our sustainability report, and there are some outstanding analysis in there about the future of both met coal and thermal coal. We are very, very confident about the future of both of those commodities over the next 20 or 30 years. Personally, I'm very positive about those commodities for a much longer period of time that but once you go beyond 20 or 30 years, you start to lose a little bit of credibility. But we think and we appreciate that the energy transition is on, and it's going sensibly and progressively but we also think metallurgical coal, which is essential for steelmaking and thermal coal, which is essential for Asian countries to go through their own energy transition will be very significant parts of the energy and steelmaking mix for a very long period of time. So it's a very theoretical question. We can't see it happening, but there would be significant impacts if that scenario did play out.

Related to that question, could the auditor and both the Chair comment or whether or not they believe the CQCN is salable at $5 billion. And are there any other assets on the balance sheet that you believe are undervalued against market value?

Yes. So in relation to -- I mean, we're in the land of speculation around valuations. But we would contend with a regulated asset base around the number that Stephen's talking about in his question, we would -- we think that if we put that business up for sale around 1x regulated asset base, we'd get killed in the rush. So we think that's if anyone was ever to try and buy that asset, like other regulated assets in Australia or similar quality, they have to pay a premium to 1x RAB. And so we certainly wouldn't be interested in selling it at that price. And we think if we put it up for sale at that price, we get killed in the rush. So we don't think there's any risk around that valuation, and we're very happy to have it on our balance sheet at that level. In relation to any other assets that are undervalued in our financial statements, that's I think the better way to answer that question is, we look at our share price. We think about uses of our external or excess capital and what the Board has done recently saying we do have excess capital and how do we best deploy that. We've looked at what we think is our own internal valuation. We think we look at the share price, and we're happy to buy our shares in the current market. So what we've done is we've announced a $150 million buyback, and we're very happy to buy our shares back at the current price because we think they're compelling value. And we'll continue to do that while we see that value.

Thanks, Tim. The following 3 questions relate to voting ahead of today's meeting. Do you know who delivered the 14% vote against Tim Poole's reelection? And also who delivered the 7% vote against Marcelo's election?

The short answer is we don't. And we actually won't go and interrogate that. I know some directors who probably would go and interrogate that, but I don't propose to and I don't think Marcelo has got any interest in doing it either. So rather than looking at it as a 14% vote against me, I prefer to think about it as 86% have voted for me. So -- but yes, I think that's enough on that. Thank you.

The next one is still from Stephen Mayne. This one will be straightforward to answer. Did any of the 5 main proxy advisers, ACSI, Ownership Matters, Glass Lewis, ISS and Australian Shareholders Association recommend a vote against any of today's resolution. And if so, what reasons did they give?

Yes. So we engage with each of those organizations, and we thoroughly enjoy those engagements. And we do have copies of each of those reports and all those organizations named recommended to vote in favor of all resolutions. So you're right, James, that was an easy one to answer. .

The next one will be similar. Did Aurizon engage with each of our 6 substantial holders ahead of this meeting, being Vanguard, BlackRock, State Street, L1, Coopers and Mondrian?

Yes, we did.

Following question also from Stephen Mayne. Well done, Tim for flagging in the notice of meeting that you intend to retire at the end of 2024 after notching up more than 10 years of good service to the Board. Does he believe the next year is currently on the Board? And are there multiple viable successors or will the Board be looking outside for the next Chair?

Yes. So I think I alluded to this before, but just to be completely clear again, we do consider that the next chair of Aurizon to succeed me. He's currently sitting on the board. And so we believe that we will be making an internal appointment at the appropriate time. Thanks, James.

Could -- Tim, please comment on how it works living in Melbourne where Aurizon does not have any operations. And of course, Aurizon is a Brisbane-based company, including exposure to the Queensland political system and infrastructure. Has he plugged into the Queensland political scene and does he see any risk or opportunities ahead of the upcoming state election?

Yes. So we do actually have operations in Victoria now. So Stephen, you need to get up to speed. We -- our containerized freight business does originate and terminate in Melbourne for some of those services that I talked about. So -- but look, I think Andrew probably enjoys having me in Melbourne compared to being based in Brisbane, but looking in this day and age, with the travel as easy as it is and communication systems as easy as they are. I think the next Chairman of Aurizon could sit in any of the major states of Australia and do their job effectively. So I don't believe location is a particularly important issue for one particular director or the Chairman. As I said before, we think geographic diversity is important for our Board, but that can be covered by the board in whole as opposed to one particular director. The other point I'd make is it was interesting, 3-or-so years ago, we actually found ourselves with no Queensland-based directors, and we worked hard to fix that. In fact, we encouraged Kate Vidgen to relocate from Melbourne to the Gold Coast, which she did. It actually had nothing to do with us, but she did actually relocate to the Gold Coast and Sarah Ryan joined our Board about 5 years ago and is based in Queensland and helps enormously in that space. But the overarching comment I'd make about Queensland and Queensland politics is, look, if there is to be a change in government, there are always risks and opportunities. We monitor those closely. There's nothing specifically that we're concerned about at this stage, but our team has regular and ongoing dialogue with all governments in Australia and we value those relationships deeply and work on them very hard. Thanks, James.

The next question relates to our long-term incentive grants to the Managing Director and CEO. Could the CEO please summarize past LTI grants as to whether they have vested or lapsed. And the second part of the question, has the managing directors and CEO ever bought or sold ordinary shares in the company on market without relying on an incentive -- an incentive scheme?

Yes. Actually, I'm glad Stephen's asked that question. It's a very good question. I'm delighted and I am actually going to answer it, and you can have broader reply, Andrew, but I don't have the exact numbers in front of me, but let me answer it this way. In Andrew's tenure, which is coming up 8 years, he would have received an almost immaterial amount of shares through the LTI scheme. That would be a very, very small number. He has received some, but they'd be a very small number. There's 2 bigger parts to Andrew shareholding. One is at the end of each year, if there's a bonus pay, so short -- we call that a short-term incentive, part of that bonus is deferred for a period of time, and it's deferred into Aurizon shares. The shareholders and proxy advisers and so on are very keen to see that deferral into shares because they say it promotes great alignment. So we do that. And so over the years, as Andrew has got a short-term incentive payment, he's built his shareholding through that STI deferral mechanism. The other very significant part of Andrew's shareholding is a few years back, Andrew bought 1 million shares and not $1 million worth, 1 million shares using his own money and very significant -- which is a very significant investment for him in the company and a very significant vote of confidence in the company at the time. So the short answer is, Stephen, Andrew has invested very significant amounts in -- of his own money in Aurizon shares. And that's the major reason why he's a very significant shareholder in Aurizon. Andrew, do you want to add to that?

No, you've said it all.

Don't you want to talk about the challenges of your internal investment committee to get that approval?

No. Definitely not publicly.

Excellent. James?.

The 3 final questions from Stephen Mayne before I'll ask if there's anyone on the line with the question. Following on from a number of takeovers of ASX-listed companies and a lack of new floats. Does the Chair view this as a problem? And importantly, relating to Aurizon, would a potential takeover be subject to Queensland government approval and/or would the foreign bid be [indiscernible]?

Yes. So as a lover of markets and particularly listed markets, I am a little concerned about the hollowing out of the ASX. So that's a personal view, that's not an Aurizon view. And I'm hoping that the IPO pipeline does expand over the next 12 to 24 months, and we can see new companies come on to the market. And I'm sure, David, your membership would be keen to see a greater deal flow of companies coming to the ASX. I think some very good companies have been taken off the ASX and some very good ones are a bit reluctant to come on to the ASX at the moment. So a personal view, we'd like to see -- well, I'd like to see more of that. In relation to Aurizon and the take -- or potential takeover of Aurizon, there is a 15% shareholder cap that currently sits in place. So if there was to be a bid for Aurizon at some stage, there would need to be an approval process going through with the state government. We see that as something that could be negotiated. It would be probably quite similar to when ANZ recently took over Suncorp Bank. There was quite a long process, but there was an approval given ultimately by the Queensland government. So these things happen from time to time. We don't see that as a significant deterrent. It would be a step though in a process.

And the final 2 questions from Stephen Mayne relate to the format and the operation of the AGM. Thanks for disclosing proxies to the ASX, along with the formal addresses ahead of this meeting. Will you also consider disclosing how many shareholders voted for and against each of the items in addition, of course, to the total vote count?

That's a good point. How many shareholders, we'll take that on board and have a look at it. I don't see any reason why we wouldn't. So we'll have a look at that for next year.

Great. And the final question from Stephen Mayne. Will you commit with this excellent hybrid AGM model for next year as well?

So we haven't made a decision about that, but I think you should look at our recent history, which is now several meetings post COVID, which is we quite enjoy the hybrid setup. I think trying to allow more shareholders to participate, both to hear the presentations or see the presentations online and in the room and ask questions whether they're in the room or wherever else they are, we see value in that. Our team does a wonderful job putting these AGMs on and they do a lot of work. So if we can get more people involved in interacting with the AGM, we see we might get more value out of them. So without wanting to make a decision for the Board before it's considered it, I'd say we'd probably continue with the current arrangements.

Thanks, Tim. That brings to the close to questions that I have online. And I've also been informed there's no telephone questions. So back to you.

Okay. So I might just check in from the room, whether there are any other questions Yes, there's one at the back. .

Just to make sure you've got some gender diversity in the questions. And this comes from having the great advantage of going to the Investor Day in Darwin. So Andrew, these questions are probably for you. Just on the capacity because that One Rail acquisition gave you the national network, you are the only national train network and it gave you access to that east-west line. I'd really be interested in hearing the momentum of the take-up in capacity. We understand that maybe things are quiet, but where is that momentum coming? And also with TGE, has now that business, all the business that they had with Pacific National, has that come over to Aurizon? And also, could you give some color, please, on the expressions of interest? Because we've heard of these expressions of interest now for a while on the land bridge and you've got the trial of the cars. What's happening there and what needs to happen for those to crystallize? And one last question is, what is it going to take to get more trucks off the road and on rail? And what initiatives can the company look at with governments, whatever on that?

Thank you. Andrew, you [indiscernible].

Yes. There's a lot to answer there. So I'll go from the last question to the first question. More trucks from road to rail depends on a lot of factors. If the -- probably the most difficult issue that's come up in the last couple of years, is the resilience of the rail network east, west and the north coast line in Queensland to large outages due to weather. So the line near Kalgoorlie was cut for 4 weeks and the North Coast line has been cut a number of times to adverse weather. And from getting product that is currently moved on truck to then get it onto rail, the beneficial owners of that product are worried about the reliability of that coming through and not having a mad scramble that occurs if the railway line is cut for a significant period of time. So rail resilience is probably become the key issue. So that's something that is going to be a bone of contention or something that the federal and various state governments have to work their way through with the assistance of rail companies over a period of time. To crack that, and I think you crack everything else, the actual competition from a cost point of view and for the right distance is absolutely there. So it comes back to that reliability of supply issue and various -- a number of senior people in the trucking industry have said they understand their ultimate -- they have an ultimate need to put product onto rail, particularly in response to the issues, the challenges of climate change and emissions and that, that will occur more rapidly if that resilience issue is met. And that's a key issue. And that was actually said at the Australian Rail Association meeting 6 months or so ago and made the newspapers as well. From a expressions of interest point of view. So one of the challenges I have speaking about publicly about this is that no one else has to talk publicly about what they're doing with their business development pipeline. So I necessarily have to be a little bit sensible about how I talk about things. But the reason that we spoke up about the multiple car trials that took place in Darwin was to point to the fact that other organizations that have got busy jobs, day jobs and don't want to go wasting money or their own time are very keen to try the opportunity out of Darwin and actually spend time, engineers and commit product and do a test. So if you think about that in the process of someone comes up with an original product idea, you float the product to a group of people, somebody says, actually, I might try that. You do essentially what was a number of quality trials, then you're moving closer to the end state of actually having some sort of contractual commitment to product moving. So I should give you a picture of where we are in that scheme of things. And we're dealing with way more than just one -- there was 2 trials, and there's a larger number of interested players in the offerings that we can make out of out of the Darwin land-bridging idea. So it gives me great confidence that it is only a matter of time. I keep telling Gareth Long, who is in charge of the area, not a lot of time, but it's a matter of time before we actually land some obvious examples of that in the space, I'd be -- you can never -- I wouldn't want to pick an actual date, but I'll be sad to be asked the same question next year without being able to point -- at the AGM without being able to point to an example or 2 practically and publicly in answer to your question about where we're going because you can see us move along that process. To say anything more would be -- would breach too many confidentiality agreements. I can't quite remember the question, I wrote TGE down, but about TGE, the main issue around that contract from an exclusivity point of view was our ability to stand up to the full service offering. So in April, we stood up a full service offering. So our part of getting to that point doesn't mean we don't have to continue to improve the service offering and those sort of things. But the initialization of that contract has been now being done by Aurizon. Plenty more things to do to improve it and keep customers happy -- keep that customer happy and earn more customers, but that large step is done. It took 12 months, which I think in the scheme of rail probably globally, other than if you went to China, is probably as fast as you'll ever see it done. So very proud of the team for doing it. And have no doubt they're setting themselves up for great success going forward. There was a question about capacity, which I can't -- I didn't write down capacity of what.

[indiscernible] Melbourne. How is the momentum picking up in the capacity on that line? And also just on the TGE, does that mean that you have got to transfer the transitioning of all the business that TGE had with Pacific National?

So that's what it -- getting to a full service offering comes with an exclusivity and that was in April for TGE. So from a capacity on the East-West line, the general freight market is softer. We talked to any of the freight forwarders, they'll tell you that the general market is softer. That should not surprise anyone because the general rail economy is softer taking a battering from higher interest rates. So -- but that's a short-term thing, and you'll get those cycles from time to time. The real thing that you're doing when you're investing in a long-term thing like any rail activity and particularly a rail standing up the containerized freight business, you're actually placing a bet against the growth of the Australian economy. So if we think the population is going to increase in Australia that people are generally going to spend the same amount or more over time, then that's what's going to drive how good an investment that is from a capacity point of view across the country. It will have tailwinds from the better carbon emissions, so you should be able to see more road to rail over time, provided that the liability factor actually plays into it. And that's how I see that all coming together. Thank you very much for your question -- series of questions. .

Thank you. Are there any other questions in the room?

Just on the great location that you have had at the Darwin port, when you took over that Qube location, are you happy with how that -- the capacity and utilization of that is being used?

Yes, we are. The Board is actually -- we've actually been to a -- I mean, Andrew and I've been on multiple occasions, but we actually held a board meeting in Darwin earlier this year and visited that operation, spoke to the people that came across. And so far, that's been a very good investment for us, both in the short term and also strategically for the long term. It's interesting that before we own the One Rail business, Qube was doing all of the stevedoring or most of the stevedoring for the One Rail business in Darwin. And Pacific National, probably their most significant competitor was actually breaking up their trains in Adelaide when they got to Adelaide. So it was actually quite an interesting situation when you had a business and there, 2 major competitors were actually impacting their business at either end of the line or supply chain. We're in the process of changing all of that. We're doing the stevedoring in Darwin. And we're in the process of organizing ourselves to do our own activity in Adelaide, so that we've got complete control of that supply chain. That's important from an efficiency and a profitability point of view. But as you can imagine, it's also important when you're going to talk to potential customers to come on to the service, it's very important that we control everything so we can design the right supply chain for their needs. So it's -- we're a few years in, but we couldn't be more happy to have that -- I mean we call that now Bulk Central. We couldn't be more happy to have Bulk Central as part of our portfolio. It's an incredibly important part of their business, and it will be for a very long period of time. Thank you. There don't appear to be any other questions. So to everyone that has asked the question, thank you very much. Those were terrific questions. And I'm happy to answer any others when we get outside after the formal part of the meeting. Given that we have now answered the questions that have been put forward, I will put each of the resolutions formally to the meeting. So Item 1 is to receive and consider the financial statements, directors' report and independent auditors' report of the company and its controlled entities for the financial year ended 30 June 2024. As there is no vote on this item and all questions have been answered, I declare that the reports have been received and considered. We'll now move to the next item. Item 2 relates to the adoption of the remuneration report for the financial year ended 30 June 2024. This is a non-binding ordinary resolution and details of the proxies received are now up on the screen for you to view. The Board recommends that shareholders vote in favor of its adoption. A voting exclusion applies to this item and any votes cast by those who are excluded from voting will be disregarded. Please record your vote now or any time until polling closes. Item 3A relates to my reelection. This is an ordinary resolution and details of the proxies received are now on the screen. The Board, with myself abstaining, recommends that shareholders vote in favor of this resolution. And again, if you can, please record your vote now or any time until polling closes. Item 3B relates to the reelection of Marcelo Bastos. Again, this is an ordinary resolution and details of the proxies received are now on the screen. The Board, with Marcelo abstaining, recommends that shareholders vote in favor of this resolution. And again, if you can please record your vote. And then finally, Item 4 relates to the grant of performance rights to the Managing Director and CEO. As explained in the Notice of Meeting, these performance rights will be granted in accordance with the terms and conditions of the company's long-term incentive plan. This is an ordinary resolution, and details of the proxies received are again on the screen in front of us. The Board, with Andrew abstaining, recommends that shareholders vote in favor of this resolution. The voting exclusion applies to this item. Any votes cast by those who are excluded will be disregarded. And again, if you can, please vote on this resolution. This completes the consideration of all items of business for this meeting. As the poll will be closing shortly, I ask everyone to finalize their votes. Once the poll is closed, shareholders, proxy holders and other representatives will no longer be able to submit their votes through the online meeting platform. Please ensure that you have cast your vote on all resolutions. For those in the room, please complete and sign your voting cards as required and put them into the ballot boxes held by Computershare attendants as you leave the room. If you require assistance in the room, please raise your hand and a representative from Computershare will be more than happy to assist you. I'll now take a very short pause to allow for final voting. [Voting]

Given that I've been hopefully guiding you through it along the way, that might be enough in terms of a pause. So I will now declare that the poll has closed and advise that the results of the voting will be notified to the ASX and placed on the company's website as soon as they become available. As there is no further business, I declare the meeting closed. Thank you for your attendance today to those in the room and also to those that have dialed in online. To those here with us in Brisbane, please come and join us outside for some afternoon tea and meet the Board and some of our senior management team. Thank you very much, and good afternoon.