Dalrymple Bay Infrastructure Limited (DBI.XA) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Dalrymple Bay H1 '25 Results Presentation. [Operator Instructions] I would now like to hand the conference over to Mr. Michael Riches, CEO. Please go ahead.

Thank you, and good morning, and welcome to Dalrymple Bay Infrastructure's results for the 6 months ended 30 June 2025. I'm Michael Riches, CEO; and with me today is Stephanie Commons, our CFO. Today, we will be providing an update on our financial performance for the first half of 2025, detailing our organic growth opportunities as well as setting out some of our key strategic priorities for the remainder of 2025. For those of you less familiar with our business, DBI through its foundation asset, the Dalrymple Bay Terminal provides 84.2 million tonnes per annum of port capacity to customers that ship predominantly metallurgical coal through the terminal. The terminal is the largest metallurgical coal export terminal in the world and over 14 -- and represents over 14% of global seaborne metallurgical coal exports. The port is fully contracted at 84.2 million tonnes per annum of volume via 100% take-or-pay contracts. The terminal services 21 mines owned by 11 customers across the Central Bowen Basin, Australia's premier metallurgical coal region. Now I'll move into the first half of 2025 highlights. During the first half of 2025, we continued to improve our financial performance and grow distributions to shareholders. EBITDA rose 5.3% versus the comparable period in 2024 to $143.8 million and our funds from operations, which I'll refer to as FFO, increased by 13.8% to $84.1 million. On 1 July 2025, our Terminal Infrastructure Charge, or TIC, increased to $3.72 per tonne, an uplift of 3.6% compared to the TIC that applied from 1 July '24 to 30 June '25. We continue to invest back in the growth of our business with approximately $405 million of capital projects underway via the non-expansionary capital program or NECAP. We generate a return of and on our NECAP investment, which will be seen through a higher TIC and thus higher revenue and cash flows in future years. The strong financial performance has allowed DBI to announce today a Q2 '25 distribution of $0.05875 per security, resulting in $0.1175 per security being returned to security holders in respect of the first half of the year, in line with our guidance. Importantly, we continue to operate in a safe and environmentally responsible way with 0 incidents that cause serious injury and 0 environmental incidents. We have just received results from our safety review through Sentis, which rates DBI at a citizenship level for safety, the highest rating issued by Sentis. DBI is the only company to receive this rating from Sentis, who has rated over 150 companies globally. I'd like to take a moment to highlight some of the key attributes of our business model that delivers a predictable revenue and cash flow stream. Firstly, our take-or-pay contracts, where regardless of the amount of coal shipped through the terminal or the coal price received by our customers, DBI receives a TIC on every tonne of contracted terminal capacity. The terminal's capacity of 84.2 million tonnes per annum is fully contracted to 2028 with all customers having evergreen renewal options. Secondly, we have CPI indexation. Through the agreed pricing arrangements with customers implemented under the light-handed regulatory framework, the base TIC increases annually by inflation to 2031, providing long-term revenue certainty. Pricing beyond 2031 will deliver -- will involve direct negotiations with our customers. Our NECAP expenditure on sustaining capital at the terminal receives a return on and return of the capital invested. Through the process of obtaining strong customer support for all NECAP projects, DBI has never had any capital expenditure not included in the NECAP asset base. On 1 July 2025, a further $30.4 million was added to the NECAP asset base. DBI takes no operational risk. All costs of operating and maintaining the terminal are passed through to our customers. DBI takes no operational performance risk nor any risk on increases in operating costs. We have strong force majeure protection for terminal disruption, including for weather events and events arising from operator performance, which ensures continued receipt of contracted revenues despite terminal disruptions. And finally, DBI's revenue is protected if terminal capacity is not fully contracted through a socialization mechanism. For example, if capacity due to nonrenewal of contracts at the end of mine life was to occur, the TIC is proportionately increased for continuing customers to ensure revenue not received on uncontracted capacity is fully compensated. These core components of our business model deliver a highly predictable cash flow, which underpins our commitment to distribution growth to our security holders. DBI receives the TIC revenue on every tonne of contracted capacity at DBT, which is, as I mentioned before, is 84.2 million tonnes per annum. The TIC is take-or-pay and provides a predictable revenue and cash flow stream. Under our pricing agreements secured with customers through to 2031, the TIC is adjusted each year and comprises 3 elements: the base TIC that is indexed annually in line with the March to March Australian all group CPI; the NECAP charge that reflects the return on and of the NECAP asset base, as I've described above; and finally, the QCA fees, which are a pass-through of the Queensland Competition Authority's costs. The TIC to apply for the year from 1 July '25 to 30 June '26 is $3.72 per tonne, which is up 3.6% versus the TIC that applied for the same period over '24 and '25. The chart on Slide 11 illustrates the positive impact of our inflation-linked pricing model and how our investment in NECAP will lead to future revenue growth. To place the base TIC uplift and NECAP contribution into perspective, every $0.50 uplift in the TIC adds approximately $42 million to our revenue base. The unique nature of our business, where operating and maintenance costs are passed through to the customers delivers DBI an effective EBITDA margin above 95%. And through disciplined cost management, we've continued to be able to deliver a reduction in our G&A costs, which is 9.2% lower in the first half of 2025 than in the first half of 2024. DBI's operating model provides considerable cash flow leverage to rising revenue, which in turn continues to support distribution growth. Our new revenue initiatives are beginning to deliver additional revenue beyond the TIC revenue. DBI today announced a Q2 '25 distribution of $0.05875 per security, taking total distributions referable to the first half of 2025 to $0.1175 per security. The first half '25 distributions reflect an FFO payout ratio of 69.3%, in line with DBI's distribution policy, which includes maintaining a payout ratio of 60% to 80% of FFO. DBI continues to target DPS growth of 3% to 7% per annum for the foreseeable future, subject to business developments and market conditions. I'll now hand over to Stephanie to talk through our financial results in more detail.

Thanks, Michael, and good morning, everyone. Turning now to Slide 14, the profit and loss and cash flow statement. DBI's first half '25 revenue, EBITDA and net profit are all up on the prior period, demonstrating the resilience of DBI's business model and our disciplined focus on costs. Our TIC revenue increased to $151.1 million, driving an uplift in EBITDA to $143.8 million for the half year. As a reminder, handling costs represent the amount invoiced to DBI by the third-party operator of the terminal, noting that the operator is owned by a subset of the terminal customers. Handling costs represent the operating and maintenance costs at the terminal and these costs are fully recharged to customers of the terminal as can be seen in the matching handling revenue line. Accordingly, these costs have no impact on DBI's EBITDA. Our general and admin expenses reduced compared to the prior half year, demonstrating our ongoing cost focus. And our net finance costs were down compared to the prior year following the repayment of the USPP notes that matured in September 2024. These 2 factors in conjunction with the uplift in revenue delivered a $10.2 million uplift in FFO to $84.1 million compared to the first half of last year. For the first half of '25, DBI reported a net profit after tax of $43.1 million, which was 17% up on the prior comparative period. And DBI ended the period with $43.1 million in cash and cash equivalents. Turning now to Slide 15, capital allocation options. DBI maintains an investment-grade balance sheet with S&P and Fitch, who both reaffirmed their ratings during the period at BBB and BBB-, respectively, and both ratings are stable. DBI has $2.3 billion of total debt facilities, of which $1.8 billion was drawn at 30 June '25, leaving $510 million undrawn. Of this undrawn $510 million, $410 million is general purpose revolving bank facilities and $40 million is a liquidity facility. The remaining $60 million is restricted and is held as a debt service reserve facility in compliance with our debt documents. DBI's debt level has remained stable since listing. During this period, through increased revenue and disciplined cost management, the business has been able to invest over $200 million in NECAP and grow distributions substantially. The steady reduction in gearing is evident in the net debt-to-EBITDA chart in the lower middle of the slide, where net debt to EBITDA has reduced from almost 9x to just over 6x today. Despite the $200 million of NECAP spend over the past few years, the business has only just started drawing on its revolving bank facilities this month. The $405 million in committed NECAP projects are forecast to require approximately $283 million in future funding to complete those projects over the next 2 years, noting that $122 million has already been spent to date. If the business were to fund this future $283 million of committed NECAP from operating cash retained in the business and then draw the remaining funds using the available revolving debt facilities, the profile of future funding could look similar to the illustrative profile shown on the chart at the top middle of the slide. That said, there are several options available to DBI as to how the future spend required on committed and as yet uncommitted NECAP projects are funded. And as shown on the illustrative scenario on the net debt-to-EBITDA chart at the bottom middle of the slide, continuing to fund currently committed NECAP using available operating cash after distributions before drawing debt and assuming a distribution profile in the mid-range of the existing target would result by the end of '27, all things being equal, in a lower gearing in the business and continuing significant debt headroom for future NECAP. DBI has commenced a capital allocation review to assess the most effective allocation of debt and operating cash going forward, taking into account future potential NECAP projects, long-term securityholder value and rating agency thresholds. DBI will assess as part of this capital allocation review, whether the current approach continues to be appropriate or whether enhanced securityholder value can be achieved through an alternative capital allocation approach. Moving on to Slide 16. 100% of all of DBI's foreign currency debt remains swapped back to AUD, so DBI holds no FX risk for either the interest or principal repayments. DBI manages interest rate risk via a mix of fixed rate debt issuance and interest rate swaps. We are continuing to transition to a longer-term hedging strategy to align with the move to light-handed regulation. Post the change to light-handed regulatory framework in 2021 and the 10-year pricing agreement out to 2031, DBI introduced a policy to target 90% of drawn contracted debt to be fixed, either via fixed rate issuance or interest rate swaps. The chart at the top showing the profile of the hedged position is based on the currently drawn debt position at 30 June, which comprises all USPP notes and the chart does not include any assumptions around refinancing. At present, DBI is around 92% hedged out to mid-2029. DBI's weighted all average -- sorry, DBI's weighted average all-in interest rate for its drawn debt, including the overlay of the swaps is currently 5.6% and that will remain the case until mid next year when the 5-year interest rate swaps that were put in place in mid-'21 roll off. At this point, the weighted average all-in interest rate will increase close to 8%, noting that this represents the rate for the USPP notes that are currently on issue, which was all that was drawn at 30 June. I'll now hand back to Michael.

Thanks very much, Stephanie. I'd now like to take some time to talk you through DBI's growth initiatives and how we are thinking about leveraging our core competitive advantages to drive further security holder returns. DBI has a range of organic growth opportunities with varying degrees of capital intensity that are anticipated to underpin a continued uplift in revenue, ultimately driving improved FFO to support growing distributions. Our optimization initiatives represent the first opportunity with no additional capital or ongoing operating costs. Initiatives focused on optimizing the use of terminal capacity have been implemented with further initiatives in train, including the potential for a capacity pooling mechanism to be applied at DBT. The initiatives currently implemented are anticipated to deliver a further meaningful uplift in revenue in the second half of the year with an additional uplift in FY '26 expected. Secondly, our NECAP program continues to be a strong driver of growth. We have an active NECAP investment program of $405.5 million of committed CapEx with approximately $122 million invested to date and around $283 million still to be spent on those projects over the next 2 years. These NECAP projects are anticipated to contribute to an uplift in TIC of approximately $0.63 per tonne when completed and added to the NECAP asset base on 1 July 2026 and 1 July 2027. Beyond the current committed NECAP program of $405 million, we have identified through our asset management planning further NECAP projects of a similar capital investment quantum to existing committed projects that are required to be undertaken by 2031. And thirdly, the 8X Project represents an expansion of terminal capacity, which will involve significant capital. The 8X expansion project provides the option for a stage expansion of capacity to meet additional demand for coal exports that are currently not contracted through our existing 84.2 million tonnes per annum of capacity. The 8X Project can be undertaken in stages to meet capacity requirements as they evolve. DBI will, however, explore all options to meet the demand for capacity through measures that are less capital intensive prior to embarking on the 8X Project. And now take you to Slide 19, talk in a bit more detail about the non-expansionary capital expenditure we have underway. Our NECAP program has been and will continue to be a source of organic growth and uplift in our terminal infrastructure charge. As mentioned previously, it is important to remember that DBI earns a return on and of that NECAP expenditure with the TIC adjusted each 1 July to account for NECAP projects commissioned during the previous 12 months. NECAP also includes an interest during construction component, ensuring a return on capital expended whilst projects are being undertaken. DBI has successfully delivered over $430 million of NECAP projects since 2008 and has never had any capital spend not approved for inclusion in the NECAP asset base. All current committed NECAP projects have received unanimous customer support. DBI's capital allocation, operational expertise and relationship management has ensured an efficient delivery of the NECAP program, adding meaningful value to customers and security holders. With approximately $405 million of committed projects underway today and based on current asset management plans, a similar amount of capital spend projected, but is not as yet uncommitted in the next 5 years, NECAP remains a significant growth driver for our business. Turning to Slide 20 and the 8X Project. The terminal retains significant expansion optionality to support increased metallurgical coal exports from the Bowen Basin. 8X is expected to deliver up to 14.9 million tonnes per annum of additional capacity with the option of delivering that capacity incrementally via a phased approach. With demand well in excess of 15 million tonnes in the DBT queue, we believe there is potential demand for the project. The timing of that demand is subject to a variety of factors associated with current mine expansions and new mine developments. The development of 8X will involve a cost per tonne of capacity that is more than previous expansions. DBI will, therefore, likely require, subject to the structure of financing, a TIC per tonne that is higher than the existing TIC. A range of alternative financing options in addition to traditional debt and equity financing are being explored. As mentioned, we continue to explore opportunities to optimize the utilization of existing capacity in parallel with the 8X expansion. Ultimately, the provision of capacity in the most efficient manner available will deliver the best long-term outcome for DBI, its customers and its security holders. As we focus on generating total securityholder value, we will naturally explore opportunities to grow our business in alignment with our current risk profile. Our competitive advantages will be key guides in the opportunities we consider. Those competitive advantages include: our regulatory expertise, where we have demonstrated an ability to navigate complex regulatory situations to deliver substantive value; our capital deployment capability demonstrated through a strong track record of successful execution of multiple major projects; our operational expertise where through our substantial oversight of terminal operations, we've been able to create positive operational benefits, particularly where balancing of the interest of multiple stakeholders in the supply chain is required; our funding capacity, where our successful execution of numerous debt programs has created access to multiple debt capital funding sources; and finally, our key relationships, which have been developed with customers and key stakeholders over many years, allowing constructive and positive negotiations that have delivered win-win outcomes. Applying those skills and capabilities to enhance and/or unlock the value in other businesses or assets will be the lens through which we assess opportunities. In doing so, we remain mindful of the key attributes of our existing business and any opportunities pursued will take into account those factors. Our competitive advantages frame the external growth opportunities that we assess to drive shareholder value beyond DBT. We have a range of growth filters that guide what diversification opportunities we assess. Ultimately, we are looking for assets with the following characteristics: high barriers to entry with outsourced operations; presence in the fossil fuel supply chain where our cost of capital is likely to be more competitive; opportunities within the assets acquired for organic growth and/or the deployment of capital to improve asset efficiency and customer outcomes; and a quality customer base. These filters are designed to guide growth in our business while retaining the key attributes that define the value of DBI, including long-term contracted or regulated revenue, stable and predictable cash flows, high credit quality to support debt funding and limited operational risk. We are incredibly conscious of the unique investment proposition of DBI at present with our strong distribution growth and low risk and our assessments of growth opportunities will be done with a focus on increasing securityholder value. And finally, the strategic priorities over the remainder of FY '25. With our take-or-pay contracts and future earnings profile, DBI is well positioned to continue to deliver growth in total securityholder returns. Our priorities over the remainder of FY '25 will include: delivering organic revenue growth through new revenue initiatives and the implementation of approved NECAP projects; pursuing opportunities to service long-term capacity needs of metallurgical coal producers in the Bowen Basin through a continued review of terminal capacity utilization, including the optimization of existing capacity and the economic assessment of the 8X project; identifying opportunities for diversification through disciplined acquisitions informed by DBI's competitive advantages and defined growth filters; retaining our investment-grade credit rating through the optimization of DBI's debt capital structure, including in relation to tenure, pricing and the diversity of funding sources. We will continue to explore and assess opportunities for future alternative uses of DBT. And finally, as we move to the new sustainability reporting, we will continue to focus on delivering whole of terminal ESG and sustainability initiatives. Thank you. And I will now hand back to the operator and look forward to answering any questions you have.

[Operator Instructions] Our first question today comes from Anthony Moulder at Jefferies.

If I can start with just capital allocation review. Obviously, there's a lot of growth options ahead. 8X optimization, I guess, doesn't take a lot of capital, but 8X would be the most capital intensive. Can you give us some more time frames on how you're thinking about the timing of the 8X expansion, first and foremost, please?

Yes. Sure, Anthony. I think 8X has certainly been delayed from when we expected it to occur. I think that's a function of 2 key factors. Obviously, the current coal market as a result of sort of global geopolitical influences, I think, is pricing has been a little bit depressed and that has certainly been a factor in some of our customers' views on their existing expansion projects and new mine developments. And then secondly, I think generally, the approvals environment and litigation proceedings have certainly slowed some of our customers' development planning. So I would expect that in the first half of FY '26, we would see customers becoming more engaged on 8X and looking to negotiate with us on both the timing, the size and the pricing around 8X. I think that will happen at -- during the first half of FY '26. Probably it's been a year to 18 months delayed from where we would have expected. And it could be further delayed depending on what happens in the coal market. Obviously, people have seen results that have been put out by a number of customers over the course of this results season, which suggests that there are a variety of factors that are impacting future investment.

And linked to maybe optimization, you're delivering or talking to $2.1 million of revenue optimization benefits in the second half, not a lot in the first half, but growing, obviously. But is it the potential of the benefit of optimization delaying 8X further than 1 year or 18 months?

No, no. I don't think so. I think the optimization, as I've described, is incremental. It will add value to us and to customers, but it won't be huge amounts of additional capacity for customers. And as such, I think if we do see new mine developments, for example, like Whitehaven's Winchester South or Stanmore's Eagle Downs, the amount of capacity they will require will necessitate an 8x expansion. And the size of that expansion, I guess, will be very much determined by the needs of those particular customers. I don't see optimization impacting 8X in any meaningful way. It's more getting better utilization for existing customers, yes.

And our next question today comes from Cameron McDonald with E&P.

A quick question just relating back to the 8X. So if you've got that additional 14 million tonnes, what are the other components within the supply chain that would need to be expanded? And could that further delay any potential delivery of that additional 14 million tonnes? So I'm thinking more around is there -- does the network have that level of spare capacity? And does -- are there available train sets to service that? Or would you need Aurizon to actually further develop the network and/or other suppliers of the above rail haulage to invest further as well?

Yes. Thanks, Cameron. I think -- if I can take it in 2 components. I think first on the rail network. If you look at the utilization of capacity of the network compared to actual available capacity or the amount of capacity in the network, there's certainly potential, I think, for there to be sufficient capacity in the network to support an 8x expansion without any material expansion of the network. That will depend on customers' utilization of their existing capacity. I think the network has an even bigger issue around underutilization. And I know from statements that have been made by Aurizon that they are looking at ways that, that can be better addressed. If it wasn't, contracted capacity certainly meets the current capacity of the network and that would, therefore, mean that there would be -- need to be an expansion of the rail network. Similarly, I think there is probably some underutilization in above rail rolling stock capacity at the moment. Whether or not there was required expansions in that space, I suspect is a matter for those customers who are looking to expand as to which rail operator they want to work with, what that rail operator is using contracted position is and their rolling stock capacity. I suspect there may need to be some enhancement of rolling stock capacity. But again, there's underutilization at the moment and it will be a question on the extent of the overall capacity that was required. So in short, I can see over the next 12 to 18 months, the potential for this process of optimizing capacity across the whole system, facilitating a situation where we may need to expand the terminal, but other elements of the system, whilst needing some expansion, perhaps don't need the same expansion capacity as required at DBT.

Okay. And then just on the $60-odd million you've spent in CapEx for the period, can we get a more sort of granular breakdown of the larger components of that? So how much did you spend on the Shiploader and the reclaimer during the period as an example?

Most of that would have been on the Shiploader and the reclaimer. So those 2 projects in total are about $280 million. Most of the $60 million will have been spent on those. We have spent some on completing some NECAP projects, which were included in the asset base on 1 July 2025 and some that are contributing to ongoing NECAP projects like pile driving and the like. But I suspect -- I don't have the exact numbers, Cameron, but it's probably in the vicinity of $40 million to $50 million of the $60 million would have been on those 2 major projects.

And then just a last sort of more granular question for me. Just in terms of the expectation for the full year with your interest costs, maybe, Steph, can you give us a guide on -- obviously, you're spending more capital. So we're thinking that the interest rate -- interest cost should be incrementally higher than the first half?

Yes and no, Cameron. The amount of interest that we're paying will be higher and we'll be drawing it from the revolving facilities. But to the extent that we are spending -- we are drawing to fund the NECAP program, we continue to capitalize interest into the -- effectively into the cost of the intangibles that sit on our balance sheet. So that doesn't get expensed through our P&L until such time as those projects are commissioned and earning revenue. So what you'll probably see is the more construction WIP, if you like, that we have building up, the higher the amount of capitalized interest that we'll be recording in our accounts. And so the amount of interest expense that goes through probably won't change a lot. But in terms of the amount of interest we're paying, yes, that will go up. But as I said, it's -- the amount going through our P&L for expensed probably won't change that much.

And our next question today comes from Owen Birrell with RBC.

I just wanted to get a bit more color around the NECAP opportunities that you're talking to by 2030. I'm assuming that provides a bit of that uplift in the NECAP chart that you've got towards the back end of the decade in terms of that sort of gray block in -- was that Slide 11. I'm just wondering whether you can give us a sense of what those projects are?

Yes. Sure, Owen. So we're doing some work right at the moment, actually the NECAP project in itself, assessing the requirement for a new Shiploader potentially at the terminal. So we expect that at least one new Shiploader will be required by 2031. So that will be similar cost to the existing Shiploader that we're building. Secondly, probably the other major component of the NECAP over the next sort of the period from sort of '27 to '31 will be a project, which we describe as [ gallery wrapping ]. So as you'll be aware, the jetty runs 3.8 kilometers out to the berths. We have the conveyors along there, which are all supported by steel structures. We're currently doing some work on assessing whether it is better to wrap those structures like we do with the piles effectively as a way of preserving them from corrosion for potentially 20 to 30 years rather than painting them every 10 years. That work is ongoing. We expect to put a proposal to customers in the second half of this year. And if that were approved, we would expect the NECAP for that to be over the course of at least the next 5 years in the vicinity of $100 million. And then you'll have our general NECAP programs of somewhere between $25 million to $50 million per year as well. So that takes you from -- so you add the -- call it, $165 million of a new Shiploader, $100 million potentially in gallery wrapping from '27 to '31 and annual NECAP projects, you get sort of close to around that $400 million range.

That's excellent. Just a second question from me with regards to potential future opportunities. And I know it was good to get that, I guess, the criteria in which you're filtering your options with respect to future opportunities. I'm just wanting to get a sense of scale. In other words, I guess, what's -- how small is too small and how big is too big in terms of potential, I guess, acquisition opportunities that you'd be looking at or investment opportunities you'd be looking at?

Yes. I think in terms of too small, I think anything sort of less than $100 million doesn't make a lot of sense to us unless it was something very easy and very adjacent. And we thought, well, it's worth doing and it delivered a return more than our NECAP return. So -- but anything over $100 million, we think is well worth doing. Obviously, we'd assess the amount of effort that was required to both undertake that transaction and then execute on the returns on that transaction. In terms of maximum size, I don't really have a maximum per se. We think it really depends on the nature of the asset. If it was something very much familiar to us, it was aligned to our existing business, then it could be quite substantial because we'd understand it very effectively and very well. If it was starting to shift away from our existing business, we're clearly going to be more disciplined and size somewhere in the range of $500 million may be the sort of cap that we might look at $500 million to $1 billion. So it really depends on the nature of the opportunity. I think the more familiar we are with the nature of the asset, the more it's aligned to our existing risk profile, the lower the execution risk on it, I think the more comfortable we get that there could be -- we could potentially invest to a significant extent. And again, we'll be very disciplined about how we think about those things. So I guess what you could take from that is if it's close to what we're doing, it could be a substantial amount. If it's other assets in the fossil fuel supply chain, it's probably somewhere between $100 million and $1 billion. And again, the size will be very much a factor in determining whether we do it would be how we feel about the execution capability in delivering overall long-term returns to security holders.

I guess in terms of the execution capability, a lot of that would obviously come down to the potential to raise capital from your existing shareholders and the broader market, I would imagine. Have you had any discussions? I imagine with Brookfield, you've already had those sorts of discussions around their willingness to support transactions of a certain scale. Just wondering if you can give us any feedback you've had with existing shareholders with regards to their willingness to fund very large sizable acquisitions.

Yes. Well, probably nothing specific that I can disclose. But what I can say is, I mean, Brookfield as a substantial shareholder has always been very supportive of the business over the long term. We feel confident that if -- like every other shareholder, if the opportunity represents good long-term value, which supports our distribution growth and is accretive that they would be supportive and there's certainly nothing to suggest anything to the contrary. In terms of the debt markets, I think one thing we're certainly seeing is those markets are definitely more open and available than they were, say, 2 years ago. There's definitely greater appetite for funding of coal-related assets and particularly metallurgical coal, where I think a lot of lenders are seeing it as part of the transition to a decarbonized future as opposed to probably 2 to 3 years ago, people were just looking at coal as coal and saying we're not going to lend. Clearly, there have been some banks that have moved away from some of the -- and equity institutions as well that have moved away from the stricter approach that they had to coal investment in the past. So we certainly see the debt markets as being in as good a position as they've been in over the last probably 4 to 5 years, and therefore, significant amounts of capital available both across capital markets and banks. So I think the funding will absolutely be a key element to execution. But at this stage, I think we're better placed as a business than we ever have been before to be able to execute both from a debt and equity perspective.

And apologies, one very last question, if I may. Your appetite to work as part of a consortium.

Yes, always open to all options. We don't discount anything. I think if it's the right partners who can bring the right attributes to the business case, then absolutely happy to work with them. And that there may well be opportunities in that space, particularly if the funding requirements are significant, then working with partners represents a very good opportunity to reduce some of that execution risk into the future.

And our next question today comes from Sam Seow with Citi.

Just quickly on NECAP. My understanding was -- my working assumption was that kind of $0.60-odd uptick in FY '27 was relatively fixed, but noticed in your NECAP schedule, you've kind of got that NECapEx there for $40 million. Just wondering, is there any more kind of uncommitted NECAP in the backlog that kind of drop into that schedule near term?

There may be a small amount. So NECapEx, yes, we'll definitely finish all of it by 1 July 2027, I think or if not all of it, substantially all of it. So that will drop in, which is why we've got $405 million, whereas if you looked at the half year, we had a [ $300-odd million ] number, which took out the amount that has been added on 1 July '25 and then the new NECapEx. There will be some new projects next year. For example, gallery wrapping, we think, will start next year. And so there'll be some of that added to NECAP in 1 July '27, we expect. So that $405 million could be -- and I expect will be slightly higher than that. But it won't be substantially, Sam. I would think the $0.63 represents the $405 million. We may get another $25 million, $30 million added to the NECAP base on 1 July '27 potentially, which would increase it slightly more.

Got it. That's helpful. And just in terms of capacity pooling and optimization, just to clarify, this is revenue above and beyond TIC. And how material can we get that? It looks like, obviously, it might annualize at $5 million in '26. But just any kind of high-level thoughts around whether we can -- that line can be material above TIC?