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

Thank you for standing by, and welcome to the Dalrymple Bay Infrastructure Limited First Half '24 Investor Call. [Operator Instructions] I would now like to hand the conference over to Mr. Michael Riches, CEO. Please go ahead.

Thank you very much, and good afternoon, everyone and welcome to Dalrymple Bay Infrastructure's Results for the Half Year Ended 30 June 2024. I'm Michael Riches, CEO; and with me today is Stephanie Commons, our CFO. Today, we'll be providing an update on our financial performance for the half year, detailing our organic growth opportunities as well as providing an update on our strategic priorities and opportunities going forward. Starting on Slide 3, and most of you on the call today will be very familiar with DBI, but just to highlight the core pillars of our business. DBT is the largest metallurgical coal shipping terminal in the world accounting for approximately 13% of seaborne trade in met coal. We have a fully contracted take or pay volume of 84.2 million tonnes per annum. Our port services 20 mines in the Bowen Basin and 81% of our revenue is from predominantly metallurgical coal mines. If you like to go to Slide 5, which sets out an overview of our first half performance. We continue to grow both our financial performances and distributions to shareholders when comparing our results to the same period last year. EBITDA rose 8.6% to $135.5 million (sic) [ $136.5 million ] and our funds from operations increased to $74 million. We delivered an increase on our Terminal Infrastructure Charge to $3.59 per tonne, a lift of 4.2%. We continue to invest back into the growth of our business, with approximately $395 million of capital projects underway via our NECAP program. We generated a return of and on our NECAP investment, which will be seen by a higher Terminal Infrastructure Charge in future years. The strong financial performance resulted in $0.1075 per share being returned to security holders during the half year in line with our guidance. Our distribution TIC Year ended 30 June 2024 totaled $0.215 per security, representing a yield of over 7.2% based on the share price at 30 June 2024. Our operational highlights set out on Slide 6. As a reminder, our export capacity is fully contracted under 100% take-or-pay contracts. So there is no volume risk in our business. Safety continues to be a paramount importance at DBI. The ongoing development of our safety culture is particularly focused on preventing serious safety incidents, both physical and psychosocial. Total exports for the half year totaled 29.9 million tonnes of predominantly metallurgical coal. And the key export destinations serviced by the terminal included Japan, South Korea, India, Taiwan and China accounting for almost 71% of total exports. Slide 8 sets out key aspects of our Terminal Infrastructure Charge. As we announced in May this year, our TIC for the 12 months from 1 July 2024 to 30 June 2025, increased by 4.2% to $3.59 per tonne. Under the 10-year pricing agreement secured with our customers under the light-handed regulatory regime, the ticket is adjusted each year and comprises the following elements: a base TIC that is indexed annually in line with the Australian all groups Consumer Price Index, a Non-Expanding Capital Expenditure charge that reflects a return on and a return of the invested capital into our NECAP projects and the Queensland Competition Authority fees, which are a pass-through, of those costs. The inflation adjusted TIC, coupled with our continued investment in significant NECAP projects delivers the stable and predictable growing stream of cash flows. On Slide 9, there's evidence the stable and growing revenue profile, which is derived from our TIC revenue. Terminal Infrastructure Charge levied under our access agreements is key to that financial performance and cash flow. As mentioned, all of our contracts are on a 100% take-or-pay basis, and there is a 100% pass-through of operating and maintenance costs. Further, 100% of our terminals capacity remains fully contracted to June 2028, with evergreen renewal options in favor of our customers. The chart on this slide illustrates the positive impact having long-term locked-in pricing adjusted for inflation as on our base Terminal Infrastructure Charge and how our investment in NECAP will lead to future revenue growth. Whilst we will continue to focus on driving improvements across the business, DBI and my management team are now focused on advancing other strategies to create long-term total security holder value. On Slide 10, you'll see that our growth in revenue leads to growth in distributions. Today, we announced our Q2 '24 distribution of $0.05375 per security in line with previous guidance. The distribution will be a combination of a fully franked dividend and part principal repayment of the stapled loan notes. Guidance for the 12 months commencing 1 July 2024 is for a distribution of $0.225 per security, which represents a 4.65% uplift on the TIC Year '23-'24. Our distributions are framed across a predictable cash flow stream, as I mentioned, as well as our distribution policy, where distributions are guided by a payout of between 60% to 80% of FFO and target EPS growth of 3% to 7% per annum, 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 afternoon, everyone. Turning now to Slide 12, which shows our profit and loss for the half year. For H1 '24, DBI reported net profit after tax of $36.8 million, which is up 8.2% on the prior comparative period. The Terminal Infrastructure Charge applicable during the first half of this year was $3.44 per tonne, which compares to the TIC being charged during the prior half year and '23 of $3.18 per tonne, which is an increase of 8.4%. As a reminder, handling costs as shown in our P&L represent the amount invoiced to DBI by the third-party operator at the terminal, noting that, that operator is owned by a subset of our terminal users. Handling costs represent the operating and maintenance costs at the terminal, and these costs are fully recharged back to the users of the terminal as can be seen in the matching handling revenue line. And accordingly, these costs have no impact on DBI's EBITDA. Net finance costs were up compared to the same period last year due to a combination of higher rates on our floating rate debt and the carrying costs of the 2023 USPP issue with those funds invested on term deposits, pending repayment of another tranche of maturing USPP notes in September of this year. Turning now to Slide 13, our cash flow statement. Both EBITDA and FFO are up on the prior period with funds from operation of $73.9 million, up 4.2% on first half 2023. The capital expenditure represents the spend on both the annual series of a variety of NECAP projects as well as the spend on our major NECAP projects, such as the Shiploader SL1A project and the Reclaimer RL4 project. Progress on both these major projects has contributed to the increase in capital expenditure during the first half. And as a reminder, this CapEx is growth CapEx for DBI as we earn a return on and a return of all the CapEx that we invest back into the terminal. DBI had over $300 million on term deposit during the first half '24. Under accounting rules, where these amounts are on deposit for over 3 months, we classify those as a financial asset. And if the funds are then on term deposit, the less than 3 months we show them as cash and cash equivalents. So the amount that we record in our cash flow is cash withdrawn from term deposits nearly represents the term deposits maturing and being placed on a shorter term in preparation for this upcoming USPP maturity in about 3 weeks. Moving now to Slide 14, our balance sheet. Pleased to say DBI maintains an investment-grade balance sheet, and we've got sufficient headroom in all of our bank facilities sufficient to fund this substantial NECAP program that we have in our pipeline. As mentioned, we have USPP notes due for repayment, and these are therefore included as current borrowings and the AUD equivalent amount we are required to pay is $299 million. This is the amount to be repaid under the cross-currency swaps we took out back in 2012 when these notes were first issued. Under accounting rules, however, we are required to report borrowings inclusive of fair value adjustments. And I refer you to the appendix at the back of this presentation, where we have provided a reconciliation between what we statutory report as our borrowings and what the AUD equivalent of our drawn debt is. Moving on to Slide 15, which is our debt program. We continue to maintain our investment-grade ratings with both S&P and Fitch, who both reaffirmed their ratings in Q1 of this year, a BBB and BBB minus, respectively, and both ratings remain stable. As at 30 June 2024, DBI had the AUD equivalent of $2.67 billion of total limits, of which $2.16 billion was drawn, and that includes the close to $300 million, which is due for maturity in about 3 weeks. After taking into account term deposits of the $330 million and other cash of $122 million, DBI's net debt position at 30 June was $1.7 billion. And again, I refer you to the appendix for a reconciliation of net debt and our statutory report. The weighted average tenor of our debt book is 7.2 years, which reflects the strategy of seeking longer tenor debt in the refinancings that we've been undertaking since listing. DBI manages interest rate risk by a mix of fixed rate debt issuance and interest rate swaps, and we are continuing to implement a longer-term hedging strategy to align with the move to handed regulation. I'll now hand back to Michael to continue on the presentation.

Thanks very much, Steph. So if I can draw your attention to Slide 17. We'll talk through some of DBI's growth initiatives and how we are thinking about leveraging our core competitive advantages to drive further shareholder returns. As we focus on generating total security holder 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. On this slide, you will see 5 of those key competitive advantage set out. Firstly, our regulatory expertise, where we have demonstrated an ability to navigate complex regulatory situations to deliver substantive value. Secondly, our capital deployment capability demonstrated through a strong track record of successful execution of multiple major projects. Our operational expertise are through our substantial oversight of terminal operations we have been able to create positive operational benefits, particularly where the balancing of the interest of multiple stakeholders in the supply chain is required. Our funding capacity. We've demonstrated successful execution of numerous debt programs, which 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 those 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. Turning to Slide 18 and beyond, we'll talk about some of the existing organic growth opportunities that sit within the business. Firstly, generally, on our NECAP program, it has been and will continue to be a source of organic growth and uplift in our Terminal Infrastructure Charge. We have approximately $395 million of NECAP projects currently underway, which will be progressively completed over the next 2 to 3 years. The NECAP program will be funded by debt and internal cash flows. DBI has delivered over $400 million of NECAP programs since 2008, underscoring our capital allocation, operational and relationship management capabilities. The investment we make in NECAP will see an uplift in future TIC, growing our revenue and cash flow base. Specifically, one of our key NECAP projects is the Shiploader 1 replacement. And I'd like to walk you through an example of how that actually takes place. So Shiploader 1 is 41 years old and due to operational requirements is being replaced with the new Shiploader. That project is being undertaken using a design-bid-build execution model. Project commenced in April 2023 with commissioning an existing machine removal anticipated to be completed by Q4 2026. Cost of the project is estimated at $165 million at P95 confidence level, including escalation and excluding interest during construction. The project received unanimous user support and therefore, will be doing prudent and 100% of actual expenditure, including interest during construction, will be added to the NECAP asset base. Project will be debt funded at approximately 75% gearing. There is exceptionally good progress on the SL1 replacement project, and we anticipate it contributing to our TIC from July 2027. A further organic growth opportunity exists with our 8X Project. DBT retained significant expansion optionality to accommodate metallurgical coal exports from the Bowen Basin. The 8x Project 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. We will continue to explore opportunities to optimize the utilization of capacity in parallel with the 8x expansion. Ultimately, the provision of capacity in the most efficient manner available will deliver the best long-term outcomes for DBI and its customers. With over 30 million tonnes of demand in the DBT Q, we believe there is the potential for the 8x project progress. However, we will assess that, as I said, in combination with looking at opportunities to consider the existing utilization of capacity of the terminal. 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. DBI is in active discussions with access seekers that underwrite the 8x FEL3 studies to determine the phasing, economics and structure of an 8x expansion if it were to proceed. We have secured all primary environmental approvals, and the QCA has ruled the cost of 8x are to be socialized. Beyond the immediate organic growth opportunities, we are looking at new opportunities for the terminal. Beyond coal, the strategic location of DBT is one of only 5 priority ports in Queensland delivers optionality for us to explore. Dalrymple Bay is ideally positioned for the export of new energy products given the port of Hay Point's deepwater nature, abundant nearby land to support development, proximity to high-quality renewable energy zones as well as our continued proximity to Asian customers. DBI envisions a future where DBT could become a multi-user, multiproduct terminal, shipping both coal and new energy products from a range of producers through upgraded infrastructure. Turning to Slide 22 and DBI's external growth opportunities. Our competitive advantages frame the external growth opportunities that we assess to drive security holder value beyond DBT. We have a range of growth filters that guide what diversification opportunities we assess. These filters are not exhaustive, nor exclusive, but act as a guide through which we consider opportunities. If an opportunity to were to sit outside one or more of these filters, we still may look at that opportunity if the overall characteristics it provides is consistent with key DBI attributes. Those growth filters that guide diversification have the following elements: High barriers to entry with outsourced operations, assets which are in the fossil fuel supply chain with a transition plan ideally, opportunities for organic growth and/or deployment of capital to existing assets to improve efficiency and customer outcomes and a quality customer base. These filters are designed to result in growth in our business, whilst enhancing the key attributes of DBI, being our long-term contracted revenue as stable and predictable cash flow, strong 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 yield and low risk, and we will ensure that any growth opportunity that we assess will be against the backdrop of increasing shareholder value. Finally, if I can draw your attention to Slide 24, which sets out some of the strategic priorities we have over the next 12 months. With our take-or-pay contracts and future earnings profile, DBI is well positioned to continue to deliver total shareholder returns. Our priorities over the next 12 months will include delivering organic revenue growth through the implementation of the approved NECAP projects, progressing opportunities to capture long-term Bowen Basin metallurgical coal production by our continued review of terminal capacity, including the optimization of existing capacity utilization and our economic assessments of the 8X project, identifying opportunities for diversification through acquisition of assets that have similar characteristics to the existing DBI business. We will retain our investment-grade credit rating and optimize our debt capital structure, both tenor, pricing and diversity of source. We will continue to explore and assess opportunities for future alternative uses of the terminals, and we will deliver whole-of-terminal ESG and sustainability initiatives. Thank you for your attendance today, and I'll now hand back to the operator to take questions.

[Operator Instructions] Your first question comes from Anthony Moulder with Jefferies.

So some of the NECAP levels, please, very helpful to see the NECAP balance, which I think was around that $77 million from the 1st of July, but that included that extra $21.8 million. So I guess the question is how much of the additional $0.04 in the TIC relates to just that $21.8 million, and how much of it is from an annualized spend from 2023, please?

Well, the $21.8 million only got added to the asset base at 1 July. So the TIC for -- this year, I think, has gone based on the NECAP projects has gone up by about $0.04 from last year, Anthony. So yes, most of that will have been attributable to the additional NECAP we've added. So...

Right. That's up from last year. It's just purely on that '22 is quoting for that $0.04 that ticks up for from next year. Okay. Question for Steph, please, on the net finance cost, you highlight the cost of that carry trade, you don't say what the cost of it was, but that was in place for all of the first half '24 or was it in place for the first half '24, and trying to give a sense as to what that cost was and how much because that's expected to now reverse once that's paid in a few or 3 weeks' time or so, is that fair?

Yes, that's right, Anthony. So the USPP funding that we put in place, which we left is fixed rate, was -- that all-in cost was about 8%. And then we had offset that really on term deposits, which were sitting at about, call it, 5.25% term deposits. So that's the sort of carry costs we had during the quarter -- during the half year. And so that the carry costs are coming up.

And lastly, if I can ask about the long-term strategies to grow earnings. I guess, how far advanced are some of those? Is it likely that all here, or it's something of that in the next 12 months?

I think there will be elements that we think could progress in the next 12 months. Obviously, they're subject to a variety of different contingencies. But yes, we would be hopeful that some opportunities progress within 12 months. Some will be longer term.

All right. That's useful. And lastly, if I could, the capital cost of the 8x Project has increased about 4% since December, since we last saw that cost. Are you expecting construction costs are starting to plateau now, or things getting tougher as far as construction costs of large projects, such as 8x under control?

So Anthony, all we did with that was at the original cost that we had that we reported back at December had assumed start date of April 2024, which -- that's probably not correct. So we've rolled that forward 12 months. So it's really just an indexation, just a CPI index. I think there's a footnote in there, but it's effectively a CPI indexation of by 12 months.

And I think, look, going forward, Anthony -- yes. Construction costs very hard to predict, particularly regionally because it's very labor dependent. But we would certainly hope that generally like inflation is hopefully coming down, you would expect that hopefully, the construction inflation would come down as well. So we would hope it wouldn't increase by that same proportion going forward. But until we've finally decide to proceed with it. I think, as Stephanie said, we'll just make some assumptions about possible costs when we get more progress with customers, I think we'll be firming that up to a more significant degree.

Your next question comes from Owen Birrell with RBC.

Just I guess a follow-up question on 8x. You sort of -- you confirm that the cost per tonne is going to be higher than the existing regime, but of course, the costs to proceed will essentially be socialized. So just to confirm your existing customers are going to be having to pay more for their existing volumes. Is that correct?

Yes.

And given that they already have that -- the sufficient capacity at the port to cover the 8x volumes, how are they positioned with respect to accepting 8x or not? Or are they more willing to give up their existing volumes that they're not using to forgo the requirement to establish 8x?

Yes. I think we'll certainly -- the 8x cost, the QCA has determined that they are to be socialized. So existing users have accepted that. Whether we proceed with 8x is then a function of whether we can agree arrangements with access seekers. And I think ultimately, the fact that it's been around a while, we haven't seen any relinquishments of capacity. I think existing users are willing and necessarily want to maintain their capacity at 84.2 million tonnes in total rather than relinquish it on the basis that they're actually not quite sure whether 8x will go ahead or not go ahead at present and obviously won't know that until a final investment decision is made. But today, we haven't seen any indication at all that customers would prefer to relinquish capacity than have 8X proceed.

Your next question comes from Sam Seow with Citi.

Just a quick follow-up on the interest. Thanks for the help there [indiscernible] trade part of the USPP notes. Just on the other stuff. In terms of the fair value adjustments for hedging, I guess, other costs, is there -- any color or guide you help us to understand what that's about?

Sorry, I just didn't catch the end of that, Sam?

Yes. Just any color that might help us understand any other costs associated with kind of like that double up of debt and that might reverse out in future periods?

Sure. Okay. So yes, so we've got -- I guess between now and 2026, we've got the fixed rate notes that we've got in place. That's the $530 million of the USPP we put in place. And as I said, that was sort of around the low 8% mark, all in. For the rest of it, it is all back in float rate, and we do have the $1.45 billion of hedges that we put in place at 87 basis points. We also do have some reverse hedges about $300 million of reverse swaps over that because so that we weren't over-hedge because we left that -- those notes fixed. So they're probably the 3 components of the hedging between now and 2026. Beyond 2026, there's a whole range of different forward start hedges that we've put in place beyond that. But they've been done at sort of rates that are not dissimilar to what you'd probably see on some of the forward curves anyway that gives a bit of guidance.

Just to add to that, Sam, we'll still retain some cash, which will be used over the course of next 2 to 3 years to fund the NECAP program. So there will be a little still an amount of interest income coming through the loss at the debt. But as you said, there won't be the extent of, sort of, yes, sort of, the debt that was -- the interest costs that have been incurred against the USPP and then effectively, the carry cost for putting it onto the term deposit. I think that was a very wise decision at the time to upscale the USPP given we could and where markets were at the time. But I think you should probably assume there won't be any sort of -- that to any meaningful extent will not occur going forward.

Okay. Okay. That's helpful. And then maybe just on NECAP, while we're there, there's a big bump hitting the asset base, it looks like in '26, '27, how should we think about the CapEx profile to deliver that? Is it fairly even from here? Or is there a specific or period you call out where there's a big bulk in CapEx to deliver that NECAP profile?

So just as a guide, if you read the fine print, of that $395 million that we do have in the pipeline, only about $38 million of that's been spent as of 30 June. So the majority of that will be spent over the next couple of years. So it does give you a bit of an idea of the scale of spend that we will see. So there'll be a significant ramp-up in NECAP spend over the next couple of years. And we do expect that sort of level just because of the major projects that we've got coming up, that there is the opportunity, depending on sort of timing and cash flow availability to -- for some of the other bigger projects to come in over the next 5 years as well. So there'll be another Shiploader replacement, for example, is planned over the next 5 years.

That $395 million [indiscernible] be about $350 million should be relatively the same over the course of the next 3 years, Sam. So it's not front-end loaded. There's not a whole bunch coming out next year and then small amounts in '26 or '27. I think you can assume it's relatively consistent over '25, '26, '27.

Yes, it is a big step up from...

But it's a big step up...

We're about [ spending ] last 35 months.

[Operator Instructions] Your next question comes from Nathan Lead with Morgans.

Michael and Steph, just 2 or 3 for me. So first up, in the accounts, there's $31 million of cash that's been received underneath the 8x expansion underwriting agreements. Can you talk through what DBI's obligations are on [ NECAP ] receiving that cash and whether that will end up getting returned to the customers if it doesn't go ahead or you get to keep it? Or how does it work?

Yes, sure, Nathan. So the $31 million was effectively cashing out the bank guarantees. So there was -- as we've always said, that the study cost for 8x were fully underwritten. So we are currently holding that, I guess, in lower bank guarantees as cash. And probably the real benefit for us is there's a small amount of interest income, and we can use it as cash in our business to lower gearing or et cetera. So it's effectively free cash. What we do have is a matching obligation. So there's a matching liability in our accounts to potentially repay that. So that's why you're not seeing that money come through a revenue line. The circumstances in which we would have to repay it is if we make a decision not to go ahead with 8x. And so we effectively stopped work on that project altogether. Then we get to keep those funds because the study costs are fully underwritten. In the event that we decide to go ahead with 8x, then the costs of the studies that we've done get rolled into an 8x asset base, in which case, those funds would go back at the completion of the 8x project when we would seek to finalize the 8x project and start earning revenue from all the funds that we spend on 8X, we would then refund that $30 million back to the customers [ access seekers ].

Okay. So sorry, if it doesn't go ahead, though, the $31 million you going to keep or you going to return?

We'll keep it. Now, we would keep it, but -- and we look at it -- yes, it will be booked as revenue then.

The expense has already been [ incurred ], obviously.

Yes. So those study costs, which are currently sitting as an intangible asset, they would be expensed and the revenue would come through as cash.

Okay. Great. Second question -- sorry, Michael.

No, I was just going to say, we never have to give the money back to the customers. If we proceed, obviously, then it comes into the overall project cost, which we would fund effectively. So we go back on that in those circumstances, but we would then earn a return on and of that capital that would be expended just like any other aspect of the project.

Great. Excellent. Second question is, obviously, your corporate costs are pretty skinny, very high EBITDA margin business. But just give us a bit of an update there. Is there any kind of lumps and bumps or step changes coming through that, that we should be aware of?

No, no, very -- yes, we've recently sort of gone through a bit of a quick look at business plan, and we do expect corporate costs to remain pretty steady. We don't expect any big uplift on those. If anything, we expect them to sort of stay steady, maybe even a bit down.

Yes. Okay. And then just a final one for me. Like if you do go ahead with 8x, it's obviously a pretty chunky amount of CapEx. But obviously, you talked before about how you can stage it. But I mean fair to say you'd need a capital raising to be able to fund it? Or is this something you can fit within your cover metrics -- coverage metrics for your credit rating?

I think it all depends on the arrangements that we come to with customers and how we look at the most effective way of financing this...

Phase 1 is about [ $500 ] million.

But I think, yes, there are multiple ways we could look at actually financing it, whether it's through debt and our own equity, whether it's a combination of debt equity and contribution from customers, yes, there are multiple different options we've got there. And I think at the time, and we're certainly talking to customers about what represents the best economic outcome for us and for those customers as well. So yes, there's the potential for an equity raise, but I wouldn't say that is certain at all. It really depends on a number of different factors. So even if it were to go ahead, you may not see an equity raise.

There are no further questions at this time. I'll now hand back to Mr. Riches for closing remarks.

Thank you very much, everyone. I guess maybe we'll just check if there are any other questions. I'm not sure, Nathan, when you wanted to go back into the queue whether you had any other questions, but very happy if there are any other questions.

Your next question is a follow-up from Nathan Lead with Morgans.

Sorry, I was just being polite there. Slide 22, I'm just interested just in comments there. I suppose you've put all the sort of qualitative bits around that slide. But there's nothing in there in terms of metrics that you're really looking at for investment. Any comment there on you're looking for incremental cash flow per share or NPV or IRR or whatever it is. I mean can you make a comment on that front?

Look, I think, obviously, we're absolutely focused on total security holder return. And we're -- as just demonstrated, we're focused on long-term value. So we do have some views on where -- we will look at stuff that makes sense and stuff that doesn't, absolutely. But in terms of trying to identify well is that a particular DPS or is it an IRR. I think it depends on the nature of the transaction, what it's going to deliver long term for the business. And how that can be done most efficiently. So we definitely have some views on metrics understandably and what we look at. But I don't think there's -- as I said, the list of these filters and the metrics is not exhaustive or exclusive. We look at each one on a case-by-case basis, make an assessment that we can generate long-term security holder value and then think about the metrics in that context.

That's great. And is there any opportunities that are active at the moment you're looking at?

Yes.

Care to elaborate further in terms of what space that might be or...

I think you assume that they're in the -- they have -- not the characteristics that we've described in here, but they remain very preliminary and...

There's nothing imminent, Nathan.

Yes.

Your next question is a follow-up from Owen Birrell with RBC.

I was just following on from Nathan's question just before. Again, all these sort of qualitative dynamics here, do you feel you need to own other assets or are you happy to take more minority shareholdings in assets if they meet these requirements?

Yes. Again, no, we don't have a requirement about having a total or majority control. If there are assets that have these elements that we feel -- we have the right partners in that business to deliver long-term security holder value, then we absolutely look at those things.

There are no further questions at this time. I'll now hand back to Mr. Riches for closing remarks.

Well, thank you, everyone, for your attendance. It's much appreciated. We're very pleased with the results for the half year, and I was here for 2/3 of the half year. So the team has done a fantastic job over the 6 months for myself. I have a great deal of confidence in the prospects of this business, the opportunities that it presents. And certainly, the team here is very, very much focused on delivering that long-term security holder value to all of our security holders. And we think we've got lots of potential to do that over the course of the next 6 to 12 months, in particular. Thank you all for your participation.

That does conclude our conference for today. Thank you for participating. You may now disconnect.