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

Thank you for standing by, and welcome to the Dalrymple Bay Infrastructure Limited H1 '26 Results Call. [Operator Instructions]. I would now like to turn the conference over to Mr. Michael Riches, CEO. Please go ahead.

Thank you, and good morning. Welcome to the Dalrymple Bay Infrastructure's results for the 6 months ended 30 June 2026 for the first half of 2026 for us. 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 first half of 2026, updating the market on the status of our NECAP and organic growth programs and confirming our strategic priorities for the remainder of 2026. In the first half of the year, we have continued to improve our financial performance and grow distributions to securityholders. EBITDA was $150.5 million, a 4.7% increase on the first half of FY '25. Funds from operations, or FFO, was $92.7 million, up 10.2% from the first half of FY '25. We continue to invest back in the growth of our business with approximately $370.6 million of approved capital projects still to be added to the cap asset base. We placed $350 million in the Australian medium-term note market to further diversify our debt funding sources at an attractive margin. Our strong financial performance resulted in a distribution of $0.135 per security being returned to securityholders referable to the first half of 2026, a 14.9% increase on the prior corresponding period and in line with our guidance. And importantly, we continue to operate in a safe and environmentally responsible manner with 0 incidents that caused serious injury. DBI has a stable and predictable revenue stream underpinned by our key contract terms with customers that include 100% take-or-pay revenue socialization, pass-through of terminal operating costs and strong force majeure protection. DBI receives terminal infrastructure charge or tick revenue on every ton of contracted capacity through the terminal, which is 84.2 million tonnes per annum. During the first half, we announced that the tick applicable for year TIC year '26, '27, which runs from 1 July 26 to 30 June 27 was $4.2 per tonne, up approximately 8.1% and versus TIC year '25, '26. The uplift in TIC, which commenced on 1 July 2026, will drive a further uplift in our revenue for the second half of the year. Under our pricing arrangements secured with our customers through to 2031. The tick is adjusted each year and comprises a base tick that is indexed annually in line with the March to March All Australia Group's Consumer Price Index, an NECAP charge that reflects a return on and a return of the NECAP asset base and the QCA fees, which are a pass-through of the Queensland Competition Authorities costs. Inflation-adjusted TIC, coupled with our continued investment in significant need cap projects delivers a predictable and growing stream of cash flows. And as a reminder, our contract terms with customers, including take-or-pay contracts and the operational cost pass-through provides an exceptionally low-risk business model for DBI. Today, we announced Q2 '26 distribution of [ $0.0675 ] per security, in line with guidance. The payment takes our first half of '26 distributions to $0.135 per security. Our payout ratio for the first half of '26 was 72.2% of FFO. Our TIC year '26, '27 guidance for distribution remains unchanged at $0.2862 per security, up 8.5% on the prior year. And we continue to target the distribution of 60% to 80% of FFO and 3% to 7% per annum growth in distributions for the foreseeable future subject to business developments and market conditions. DBI has a range of growth opportunities that are expected to underpin a continued uplift in revenue, ultimately driving improved to support growing distributions. We continue to deliver organic revenue growth we're pursuing new revenue initiatives such as capacity optimization and revised security arrangement initiatives. These initiatives involve no capital deployment and nominal additional costs, consequently delivering additional cash flow at higher margins. On capacity optimization, we have recently presented to our customers a capacity pooling mechanism and will consult with customers over the next couple of months on this opportunity. Our net GAAP program has been and will continue to be a source of organic growth and uplift in our peak, and I will provide more detail on this in the following slides. DBT itself retains significant expansion optionality to accommodate metallurgical coal exports from the Barn Basin. As a reminder, the project is expected to deliver up to 14.9 million tonnes per annum of additional capacity with the option of delivering that capacity incrementally by a phased approach. DBI's access queue has grown to approximately 33 million tonnes per annum of demand for capacity, comprising a combination of near-term capacity requirements and longer-term needs as mine developments progress. Underpinned by growing demand from India and Southeast Asia, the high-quality hard coking coal. We expect demand for seaborne metallurgical coal to continue to grow steadily through the 2030s and 2040s. The growth in our access queue, the value of recent M&A activity for metallurgical coal mines and recent announcements from metallurgical coal miners would indicate there is a strong view that the Central Barn Basin with its high-quality met coal is uniquely positioned to capture this future global demand. and the well-developed ADX project is strongly positioned to expand to meet this inevitable demand, particularly as the ADX expansion can be undertaken in stages to respond incrementally to demand signals. This continues to represent a significant opportunity for DBI, Queensland and Australia, and it will be important that all stakeholders work together to deliver the right policy settings to encourage the necessary investments. And finally, 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. And in doing so, we remain mindful of the key attributes of our existing business and any opportunities pursued will consider those factors. Now I'd like to talk about our key organic growth opportunity, which is our nonexpansion capital expenditure. And our neck program has been and will continue to be a source of key organic growth and uplift in our revenue. As amounts are spent on net cap interest during construction or IDC, accrues at an agreed rate until the expenditure is added to the NECAP asset base. This compensates DBI for the cost of debt funding and provide a return on equity during the period of construction. Once added to the NECAP asset base, the expenditure -- and the return on invested capital set at the 10-year Australian government bond rate, which is reset annually plus a margin and a return of the invested capital in the form of the depreciation allowance. NECAP spend includes both regular and major project expenditure. Outside of major asset replacements like SL1 and RL4 spend on regular NECAP projects is typically between $30 million to $50 million per annum. Capital spend on the project is added to the NECAP asset base on 1 July, the year after the project is commissioned with the return on and of that capital delivering an uplift in the TIC. $97.8 million, comprising $91.3 million of project costs and $6.5 million of IDC was added to the NECAP asset based on 1 July 2026, resulting in a $0.15 per tonne increase in our TIC. At 1 July 2026, the current NECAP program had a total of $370.6 million in projects underway, which is still to be added to the NECAP asset base. and that excludes IDC. We anticipate approximately $300 million of project costs to be added to the NECAP asset base on 1 July '27, which combined with the expected IDC on this spend should deliver an uplift intake of approximately $0.53 per tonne from 1 July 2027. As a reminder, our pick for the current year is $4.02 per tonne, and we will then on 1 July '27, at the $0.53, if all things continue to progress as expected, together with the inflation uplift on the base TIC component. A new $38.5 million regular NECAP program, which we call NECAP [ Series Zed ] was unanimously approved by customers on 13 July 2026. Turning to a couple of our key replacement projects. So ship loader replacement involves the replacement of ship loader 1 with a new ship loader and that commenced in April 2023 under a design bid and build model. The SL1 replacement program is approximately 90% complete, with the ship loader having completed its commissioning in Western Australia where it was built and is awaiting shipment to Dalrymple Bay Terminal. The transit is scheduled for September and early October, with the handover to the operator expected by year-end once on-site commissioning is completed. Project cost is on budget at $165.4 million, which does not include interest during construction. $4.5 million of those project costs were added to the NECAP asset based on 1 July 2026 as we commissioned some changes to the births at the terminal with the remaining amount of just over $160 million plus IDC expected to be added to the NECAP asset base on July '27. The successful completion of ship loader 1A will provide a boring for future ship loader replacement projects. The other major NECAP program is the replacement for stacker reclaim ASR 2 with a new reclaimer, which is called RL4. The budgeted project cost is $115.6 million, and the project remains on budget and on schedule. A large proportion of that $115.6 million being an amount in excess of $100 million plus IDC is expected to be added to the NeCAP asset base on 1 July 2027. A small amount of the project costs associated with the final elements of the deep construction of SR2 will likely be added to the NECAP asset base on 1 July 2028 as that work will be completed in the second half of 2027. Overall progress -- sorry, second half of 2026, apologies. The overall progress on RL4 is 87% with the assembly of the terminal progressing well and commissioning and handover into operation expected to be completed in December '26. Big construction and removal of [ SL2 ], as I mentioned, is expected to be completed predominantly in the first half 2027, but potentially some of it into the later part of 2027. All current NECAP works have been recommended by the operator and approved by all customers, demonstrating a strong alignment of interest and efficient investment in BP. As I mentioned before, is currently anticipated that the addition of these major projects, together with completed projects within our existing regular NECAP series will deliver an increase to the NECAP charge component of the TIC by a further $0.53 per tonne at 1 July 2027. It's worth noting that every per tonne increase in TIC delivered approximately $8.5 million of incremental revenue, reinforcing the royal NECAP plays and being a significant contributor to our growth profile. Importantly, DBI has identified NECAP projects of similar capital spend to existing committed projects, which we anticipate to be committed and commenced over the next 3 to 4 years. supporting longer-term growth in our terminal infrastructure charge. I'll now hand over to Steph to talk through our financial results in more detail.

Thanks. Thanks, Michael, and good morning, everyone. So just on Slide 16 of our investor deck. So DBI maintains an investment-grade balance sheet with the S&P credit rating of BBB flat reaffirmed during the first half and it remains with a stable outlook. We continue to maintain strong performance against all our key coverage metrics, and we have substantial headroom to debt service, our leverage covenants and the rating agency criteria. Our strong credit metrics was evidenced by our highly successful inaugural is debt issue into the Australian medium-term note market in March this year, where we issued $350 million, a 5-year fixed rate notes with a coupon of 6.234% per annum and a maturity date of 24th of March 2031. That issue was more than 2.5x oversubscribed and the bonds have continued to trade very well in the secondary market. Opening up this market is a further demonstration of our strong focus on capital management and our strategic priority to diversify our funding sources. We had $2.35 billion of total debt facilities at 30 June 2026, of which $216 million was undrawn, together with cash, that provides us with $261 million of liquidity at 30 June. Our drawn debt has a weighted average tenor of 6.3 years. And as at 30 June 2026, our all-in interest rate was approximately 7%. In the appendix, we are providing further reconciliations of our borrowing that are disclosed in our financial statements to our drawn debt. Moving on to our profit and loss. Our first half revenue and EBITDA are both up on the first half of the prior year. demonstrating the resilience of our business model, the focus on incremental revenue creation and a disciplined approach to costs. TIC revenue for first half '26 increased by 3.6% on H1 '25, in line with the increase in the TIC per tonne applicable from 1 July of each year. The increase in TIC revenue reflects the annual adjustment for inflation and the ongoing contribution of commissioned NECAP to the NECAP charge component of the TIC. H1 '26 EBITDA was up 4.7% on H1 '25, with the EBITDA margin remaining consistent with prior comparative period. And as a reminder, our handling costs represent the amount charged by DBI by the third-party operator, noting that the operator is owned by a subset of our terminal customers. and those handling costs that are charged to DBI are then fully recharged to all customers of the terminal as can be seen in the matching handling revenue line. Accordingly, these costs and any cost inflation have no impact on DBI's EBITDA. The table at the bottom right of that slide provides a reconciliation of the components of DBI's net finance costs. And in addition, in the appendix, there are reconciliations of net finance costs and income tax and how those amounts flow through into our FFO. Moving on to the statement of our cash flows. Our capital expenditure comprises the spend on our mid-cap project and progress on the 2 major NECAP projects is the principal factor in the increased CapEx during H1 '26 as compared to the prior period. Further detail is provided in the appendix reconciling our NECAP spend and our uncommissioned to NECAP. And there is also detail on the buildup of the NECAP asset base since its inception. Favorable movement in net working capital during H1 '26 of $42.9 million primarily relates to an overcollection of handling charges from customers, which since 31 December; 25, was $14.9 million, together with a net increase in the amounts owing to the terminal operator of $23.2 million. All those handling charges will be trued up by the end of August. Moving on to our interest rate and our hedge profile. 100% of all of our foreign currency debt is swapped back to [ IDB ]. There is no FX risk on either our principal or interest payments. Interest rate risk is managed via a mix of fixed rate debt issuance and interest rate swaps. Based on our current debt levels, DBI is over 90% hedged until mid-2027, over 80% hedged until mid-2028 and over 70% hedged until mid-2030. Maintaining a highly hedged interest rate position remains a priority for the business. DBI's weighted average all-in interest rate for its debt book is 7% as at 30 June 2026, and it's expected to remain at approximately this level for the next 24 months, assuming our future debt draws utilize the available liquidity. I'll now hand back to Michael.

Thanks, Steph. And finally, just to reiterate our strategic priorities for the remainder of FY '26. With our take-or-pay contracts and future earnings profile, DBI is well positioned to continue to deliver long-term growth in total securityholder returns. Our priorities over the remainder of FY '26 include delivering organic revenue growth through new revenue initiatives and the inclusion of the cost of completed NECAP projects in the NECAP asset base. Completion of shiploader 1A and reclaim the 4 NECAP projects on time and on budget. We will continue to progress opportunities to capture long-term bond base and metallurgical coal production by our continued review of the use of terminal capacity, including optimization of existing capacity and our economic assessments of the ADX project. Further assessment of refinancing opportunities will continue to improve our balance sheet flexibility reduce refinancing exposure and access other sources of debt capital to reduce interest costs over the long term whilst maintaining an investment-grade rating. We will seek to identify opportunities for diversification through acquisition of assets that have a similar risk profile to the existing DBI business and which enable value to be created through our competitive advantages. And we will continue to explore and assess opportunities for alternative uses of DBT while delivering whole of terminal ESG and sustainability initiatives. Thank you very much for your attention, and I'll now hand back to the operator. I'm very happy to take any questions.

[Operator Instructions]. Your first question comes from Matt Ryan with Berrenjoey.

I just had a question on the access queue. It looks to have increased slightly over the past year. So just hoping if you could give us some color on the conversations that you're having with your customers at the moment and how they're feeling about the volume outlook?

Yes, sure, Matt. I think, yes, the access has grown by probably 3 million or 4 million tonnes over the last sort of 6 to 9 months. That's principally associated with new capacity that customers are seeking, I'd say, in the near term, probably the next 1 to 2 years. Principally, arising from customers who have, I guess, acquired new mines, so part of the M&A activity that's happened and those new owners of those assets looking to drive further value in those assets and looking for additional capacity as a result. So that's the principal reason for the increase in the access. I would say that the longer-term investment in new mine development still remains at the level it's been at for a period of time as customers continue to look at those investment -- key investment decisions. But where there is capital that has already been investment invested in existing mines. We're certainly seeing a drive towards increased efficiency and additional throughput to bring down there, ultimately, their fixed cost of production per unit down and obviously improve their own profitability, and that's really driving the access queue.

That's helpful. And just I guess, the frequency of conversations around 8x. How would you sort of rate that at the moment, perhaps relative to the cost station in the past?

Yes. I think on the -- as I said, on the longer-term larger new mine developments, conversations continue, but again, probably at a at a level where there's no real meaningful commitments by those customers at the moment. And I think it's been well expressed by many of them as to the challenges around -- particularly around royalties at the moment, which are probably inhibiting those investment decisions. In terms of -- yes, it's smaller, more near-term capacity actual discussions, we certainly had more frequent and more, I guess, real discussions with customers around the progress of potentially a phase of ADX to meet those future customer requirements that are more near term. So I think we can see the potential for at least a phase of ADX in the nearer term, potentially longer term, I think we continue to see that more fulsome completion of ADX across potentially after 15 million tonnes being a longer-term increase in capacity of the terminal until some of those investment decisions are made by customers with new mine developments.

Your next question comes from Anthony Moulder with Jefferies.

If I can just follow on from that. So it sounds like you've got 33 million tonnes of people that want access to 33 million tonnes that is being pushed out. How do -- how should we think about those 2 factors? I would have thought that Amex was still thought about in not nearer term, but the next few years as opposed to -- it sounds like it's more of a longer-term consideration from today?

Well, I think, Anthony, when I say longer term, I mean we've been working with customers since 2023 on ADX when we completed our feasibility study. So all of that is done, they obviously needed to be some updates to that. I think, as I said, there's definitely capacity when I talk about the near term, I'm really talking 1 to 2 years for ADX, and we're looking at options with customers about how we could deliver that capacity requirement within 1 to 2 years. But longer term, I think it really becomes a question more complete construction of ADX would take us 3 to 4 years. If you assume that customer decisions around 1 of capacity, which would really depend on major new mine developments progressing like Whitehaven Winchester South, like Sanmar Eagle Downs. If they were to make those decisions within the next 12 months, we could see a completed within 5 years, call it, by -- 2031. But they've been looking at those projects for a number of years. I think last year, coal prices were certainly a key factor as were royalties -- and I think as you can appreciate in the industry has clearly indicated, the royalty regime is a challenge for existing mines, but we certainly see where capital has already been invested. There is the potential to look to work that capital harder, increase throughput and therefore, require additional capacity, where it's new capital, becomes much harder. It appears for those miners to justify the investment in new mine developments, and that is making the decision on a full completion of ADX, I guess, a longer-term prospect. And our view is that there will be demand as we approach the global demand for metallurgical coal from the seaborne export market through the late 2020s into the 2030s, the key question for policy settings in Australia will be, we're the best place to capture that demand, both from the quality of the coal we have our proximity to the locations where that demand is going to arise. And key will be getting the policy settings right to encourage investment in new supply to -- in order to meet that demand. We think it will happen. We thought it will happen for a number of years. It's really just getting those key policy settings right. And I think when we do, there's certainly indications from the miners at the as capital they're willing to invest, but it needs to meet, obviously, their return hurdles.

Of course. Any conversations with the owners of the Hay Point terminals and other ways to deliver that kind of capacity growth?

I think the owners of the 8-point terminal being for those who don't know, BHP and sit through the bits of BHP special Alliance joint venture. That terminal has been owned by those 2 counterparties for 50 years. I think they still see significant value in the supply chain, logistics and operational strategic value in their ownership of that terminal and has never been open to open access during their ownership despite at various points in time, the production being lower than the capacity of that terminal. So I suspect they will continue to look at it as a strategic asset for utilization by BMA.

Last question if I had the optimization benefits during the half. How are you thinking about whether or not that's fully scaled to what you hope to deliver from optimization benefits in the terminal, please?

Yes. I think largely, so other revenue for the half was $2.9 million. I think we indicated that at the end of last year, that we expected the run rate to be $5 million. So we're a little bit ahead of that. I think there's probably a little bit more that we can capture over the second half of the year, and we continue to pursue initiatives, as I mentioned, with -- we are looking at a number of options with customers to create win-win opportunities for ourselves. So I would think, in the second half, we will -- should be more than $2.9 million. We take it through for the full year, so $5.8 million in total, probably not materially more. But again, as we introduce these initiatives in the second half and they start to create value, we'll see additional value come through in FY '27.

Your next question comes from Andre Fromyhr with UBS.

Following on from the conversation about the demand in the Queensland coal market, I guess one of the themes that we learned from the horizon results a week ago, with a tendency for some customers to scale back what they're willing to commit in terms of take-or-pay and maybe even taking some risk in the spot market. That's for the haulage part of it. seen any feedback or have we had conversations with your customers about that willingness to commit to certain levels of capacity?

No, we haven't had any discussions with customers where there's been an indication of scale back of capacity. In fact, as the AXQ has grown or AXQ has grown, you say there's more demand for permanent capacity at the terminal. We haven't seen any material transfers on a temporary basis of capacity where customers are looking to transfer capacity because they don't utilize it. Obviously, there has been a period of that with the -- on Northern Grove closures at various points in time. We think with the Delmar acquisition of those mines, you see there's an intention to get both of those mines operating at full capacity going forward. So whilst I think from the horizon perspective, as I understand it, it's around above a contracting and not contracting as much above rail capacity on a take-or-pay basis. due to the increased competition and the capacity in the above rail market. We haven't seen that translated in any way to any relinquishment of the bean relinquish capacity, but any changes in people to customers' demand for capacity at the terminal. And we wouldn't expect I think, to see that. As I said, I think we're seeing the potential for greater throughput through the terminal over the near to longer term rather than reduced throughput. And I think if you look at Horizon Networks forecast for tonnage through the Goonyella system in '26, '27. It's actually gone up from their forecast for tonnage in '25, '26. So the network is actually expecting greater tonnage through the Goonyella system. And obviously, it's a system with a primary or the premium hard coking coal. And we expect to see that increased tonnage resulting in that we are seeing it resulting in that additional demand for capacity.

So, and then I think you made reference to, let's say, completion of shiploader 1, the replacement and what you learned from that before moving to what shiploader 2 and possibly 3 replacements applying. But just wondering if you could share any updates on the feasibility work you've done on those opportunities and what the time line might look like for them?

Yes, I think, shiploader 2 will be the next shipload of replacement. We're working with the operator at the moment around potential timing of that. And whether it's a replacement or refurbishment and how we look at the requirements and the whole of life cost. I think as we indicated, we expect net cap projects over the course of the remainder of the 2020s with that equivalent sort of $400-odd million to currently at NECAP projects. Shiploaded 2 will be part of that. We expect it would be the proposal to customers would happen probably over the course of the next 1 to 2 years. It's still a little bit up in the air at the moment because we're just trying to work through what is the life, what can we do around maintenance of that asset over the near term to potentially delay capital spend. So I think you will see over the course of the next 12 to 24 months decisions around what we do on shiploads 2 and shiploader 3 will not be long after that, given the for those who have been to the terminal services to birth and therefore, the volume of gold that's gone through shiploaders almost the same as what's ship loaded to is delivered, although it's about a 10-year younger asset, but it will need replacement in reasonable within the next 4 to 5 years as well, we expect.

Okay. And then just one more, if you don't mind, and probably one for Steph. Just wondering if you could help bridge the guidance on the all-in interest rate, which 6 months ago, you were sort of indicating would be more around 6.5% from midyear now it's around 7%. To what extent is that just the prevailing movement in base rates at the time that you roll the hedges?

Yes, sure. So quite a bit of on the unhedged component of those base rates. So that's contributed -- they've obviously at a lot higher than expected. -- the AMTN that we did in March, we did leave half of that at a fixed rate, which was clearly substantially higher than what we had at the time. So if you keep in mind up until sort of mid-June, we were sitting at about [ 1.2 billion ] of our hedges, we're sitting at around 89 basis points and then the base rate on the fixed component of that AMTN was more like 4.6%. So that certainly contributed to the much higher step-up. And then probably the remainder is to do with the repayment on the USPP just repaying that out, and there were certainly savings in terms of the margins, but some of the other margins that were entered into as part of that refinance and we're various some of them were on the 5-year debt and some of them were on sort of shorter 2-year notes. And so to the extent that some of that debt was drawn on the 5-year debt, the margins were a little bit higher than but the all-in was at the time. So as we were drawing debt on that, it was probably more expensive in.

[Operator Instructions]. Your next question comes from Ian Myles with Macquarie.

Quick one on your NECAP spend. You've got approval from customers at sort of [ $71.4 from 1H '26 ] that was on Slide 10. I'm just sort of trying to get my mind around, are we seeing probably a structural up to NECAP being on a month -- on a yearly basis to moving into $50 million or $60 million per annum?

Yes. I think that's -- thanks, Ian, for the question. I think that's likely to be the case over the course of the next few years. So 2 key approvals for NECAP that has happened in the last sort of 3 or 4 months. One was NECAP, which I mentioned, which was $38 million, which is a regular series of a variety of different projects. And as -- mentioned, we would see regular sort of sustaining capital at that $30 million to $50 million per year. Over the course of the next few years and the other key component to make up that sort of $70 million that you mentioned and is our [ gallery wrapping ] project which this year, we will start the first component of that is $32 million. That project probably has sort of 5 to 6 years to be completed because we have to wrap the steel work across the 3 outloading galleries on 3.8 kilometers of Jetty, together with some of the still work on the burst as well. So it will be a long-term project. The initial project of $32 million is really going to give us an indication of what the long-term cost will look like. So it's not to say that it will be $32 million each year for the next 5 to 6 years as we complete this project start getting a better understanding of access together cost of access -- how access is undertaken in line with operations. We'll get a better feel for the annual spend on gallery wrapping. And then when we go to customers, at the end of probably this time next year or maybe a little bit earlier, we'll be able to put that next phase of gallery wrapping up, and that will be probably more aligned to an annual spend over the course of the next 5 years. So I think you should expect regular spend of that $30 million to $50 million and then a gallery wrapping project and on top of that, it's hard to know exactly what that will be each year, and we'll get some better clarity of that as we work through the projects. So hopefully, that gives you a bit of a sense of what the net cap as we said, is going to look like just regular our major asset replacement over the next 4 to 5 years.

Is it fair to assume that gallery wrapping is probably bigger $100 million now as a total project. So you'd probably see previously it was around $100 million, but also bit larger.

It could be a bit larger than $100 million, yes. Yes.

Okay. That's fine. And in terms of your debt book, you've always had the option to potential go and relook at some of your USPPs and repurchased again some of those USPPs. What do you need to sort of see in the debt markets to maybe make that or bring that decision forward in the next couple of years.

Thanks, Ian. The debt markets at the moment for refinance are actually very favorable, as you've seen both from our refinance in December last year and also the A market that we access this year. So I think the debt markets themselves are very favorable. It's more around the cost of repaying those notes. And particularly the cross-currency interest rate swaps that sit over the top of that. The notes themselves at the time they were issued in '21 had quite low coupon, so the make holes on those are quite low. But because they were swapped back AUD dollars and on a float rate -- so though the flow rate has gone up substantially, and the foreign currency is also a lot higher. So what we've got now is both of those working against us -- so we would need to see the treasuries and the base rates in the Australian market substantially come down so that the make holes on those cross currency interest rate swaps are a lot lower. So we're running the numbers each month at the moment on that, and it still doesn't make a lot of sense. It's still in the tens of hundreds of millions of -- tens of millions of dollars.

Yes. I think NPV-wise, it still doesn't not stack up. As Steph said, if we saw Australian base rates come down, and U.S. treasuries stay a little bit higher. So the make oil still on the notes themselves were relatively low, but the costs on the cross-currency interest rate swaps were lower. That would start to make sense. So it's probably the key thing that would be a treater for us potentially refinancing. And to the extent that we see further margin compression across bank and capital market markets than of assistance as well. So it's not something that we -- as Steph said, we look at it every month because it's -- if things move in the right direction, it's something that we could move relatively quickly on, but it's still not an NPV positive outcome at the moment.

I simplify that net to the current dollar U.S. dollar currency moved down. So a lot of currency was just the same prevailing rates would be in a scenario?

It doesn't really help us a lot and just because we -- yes, we have to refinance the notes in U.S. dollars, and we got the cross-currency interest rate swap support the U.S. dollars back to AUD. So effectively, wherever the rates move that might help us a little bit, but it doesn't actually make a material difference for the math.