Exxaro Resources Limited (EXX) Earnings Call Transcript & Summary

It's with mixed emotions that I say this morning, good morning, ladies and gentlemen. I'm closing a chapter in my book of life today, this being my last day at Exxaro. And we'll be beginning a new role and a new chapter on Monday, the 21st of August, when I started my new role as the CEO of the Minerals Council of South Africa. It has been a glorious decade for me at Exxaro, and it has certainly been a blessing to serve you under this brand of Exxaro Resources for these past 10 years. Some of the pages in this new chapter have already got some scribbles and I don't think it will take a genius to guess what that would be. But most of these pages are blank, and these are the opportunities that lie ahead. I look forward to continuing to serve you and the country in this new role, because there but for the grace of God, I go. I wish Ms. Ling-Ling Mothapo, my successor, greater success in her role as Chief Investor Relations and Liaison Officer for Exxaro. So with that, let me welcome you all to Exxaro's presentation of our interim financial results for the period ended 30 of June 2023. I didn't see the Chairman, but I did see our lead independent, Ms. Geraldine, welcome, and other Board members who may have joined us here or online. I'd also like to acknowledge our guests who have joined us online and on Chorus Call. Thank you very much to all of you for your continued interest in Exxaro and for joining us this morning. And I think as per normal practice, a safety briefing is appropriate at this point. Please note that we have not planned any emergency drills for today. If the alarm is activated, we do need you to respond, but to respond calmly. Safety marshals will assist you with evacuating the building and accompany to the designated assembly points where a roll call will be conducted. We will -- we should all remain at the assembly point until instructions are issued to reenter the building. And please note that we do have medical personnel on site should you require any medical assistance, please let us know. And I think with the safety notes, we always forget about those people who will be online in terms of, okay, what should they do? I think for those who will be online, we will attempt -- we will communicate with you in terms of the stop and start of the session, so that you're not hanging. In terms of ablution facilities, as you exit the building, with the doors behind you, to your right, there's a passage with ablution facilities on your right. And it is important that I should make mention of load shedding. We do not envisage any load shedding. However, should we experience power outage, do not despair. We do have generators on site, will kick in within 3 minutes starting with the emergency lights, plugs, and then the WiFi. So then moving on to the presentation. I think it's worth just as a preamble, say that when we ended the presentation in -- for the final year, we kind of shared with you what we saw coming in the first 6 months. And that was obviously to a degree what the potential events of these first 6 months would be. And beside that foresight, it was still a challenging period. But certainly, as you will see from the presentation, the early value coal strategy continued to deliver and deliver on the mark. And so to tell you more about this delivery, our CEO, Dr. Nombasa will take you through the macro view and highlights, and sure then be followed by Riaan -- by Kgabi, sorry, who will then present the operational performance, and then Riaan will present the financial results, and Nombasa will come back to do a close. So with that, Nombasa, if I can invite you to please take us through your presentation.

Thank you, Mzila. Good morning, ladies and gentlemen. Please allow me to join Mzila in congratulating our new Chief Investor Relations and Liaison Officer, Ms. Ling-Ling Mothapo for taking over the hot seat. Ling-Ling is a metallurgical engineer by training, has been with Exxaro for 15 years. During which time, she has accumulated a multitude of laudable operational and strategic accolades. Her experience and expertise will be invaluable in this role. And I can assure you, our investors, that you're in very capable hands, softer ones, of course. And let's ask Ling-Ling to stand up so you can all see her. Thank you, Ling-Ling. To Mzila, thank you for your decade of dedication. You have brought the meaning of your name to life, in forging a path and building our stakeholder affairs capacity. You leave behind you an indelible wake of great performance and awards that will ensure that you remain in the history of Exxaro. It comes as no surprise that you have been named as a custodian of the broader mining industry. And we wish you all the best in your new role as CEO of the Minerals Council. Sir, congratulations and take a bow. So we can say today CEO to CEO, right? Welcome to the club. On to the business of the day. Welcome to all of you in attendance here the connection as well as those joining us online. A special word of welcome to our lead independent, SSG as we call her, other fellow board members in attendance and to those who are attending online. A very special welcome also to the Pensioners Club. I think this club is a bit disorganized. Who is the now? Okay. Still you Dr. Con. Good to hear. At least you're always here. Okay. It is a pleasure for us to present our 2023 interim financial results to you this morning, after a year, one year of service for me as the CEO. We always welcome your honest feedback after these presentations and during our road shows to ensure that these sessions are worthwhile to all stakeholders and, most importantly, our investors. We live in a dynamic global environment. The well-known challenges presented by the prolonged and devastating war in Europe, together with its knock-on implications for broader Europe and energy security across vulnerable economies, softened and yet volatile commodity prices and high inflation are having a significant impact on the mining industry, hitting margins and cash flows. Added to the uncertainty around the intensity and duration of global macroeconomic volatility, the much anticipated tailwinds from a Chinese economic recovery have not yet been realized. And the continued increase in interest rates by the U.S. Federal Reserve contribute to the lingering retreats of global markets and softening of commodity prices. Securing a sustainable future remains a key priority for governments and businesses around the world. This translates into intensified position to coal mining and coal-fired power generation. So too, however, has the need to ensure that the future supply of critical minerals is secured in order to meet the rush to net zero emissions target by 2050. Given all the market dynamics in play, it is essential that companies have the balance sheet strength to navigate the volatility and uncertainty that I've already talked to. This means adopting a bias towards cash preservation in anticipation of headwinds. Kgabi is going to talk a little bit about this later. The preservation results in underinvestment in new projects in our sector as lower M&A activity in the industry. Although we've seen several high-value transactions within the M&A landscape, this has largely been driven by a few majors, concentrated on scarce operational Tier 1 assets. We also see governments of critical minerals producing countries altering the playing fields through the proactive introduction of structural adjustments and policies to discourage exports in favor of domestic manufacturing. And this is happening in Africa, by the way, and to control prices at the same time so that they can capture more value from these minerals. This poses a significant risk and greater competition for these minerals, thus demanding disciplined and well-considered investment strategies to meet the agency required for future supply. This provides the backdrop against which global energy businesses must operate, and why issues around energy security present opportunities for us as a business for further uptake of renewables by customers. Given this enduring state of poly-crises, we recognize that M&A decisions will need to be focused on building resilience and long-term value creation and not as an immediate reaction to prevailing volatility. The dynamics which have played out over the first half reiterate that rapid and unpredictable change will continue to unfold. Ladies and gents, with the global stage now set, we can unpack our resilient business performance against a very challenging backdrop. We've seen weakened thermal coal demand from Europe due to sufficient gas stocks, combined with materially lower natural gas prices, and improved renewable energy performance. We saw thermal coal prices slip over 60% from record highs of 2022, to a 2-year low of $99 per ton. So it is important to remember, however, that current pricing remains stronger than those we've achieved pre-2022. So if you look at the line graph on this slide, it illustrates how our portfolio of commodities deliver robust and complementary market performance, thus cushioning our margins against the cyclical nature of these commodities. You can see that the API4 price averaged at $130 per ton in the first half, compared to the average of $264 per ton in the second half of last year, whilst iron ore fines averaged at $118 per ton versus $101, respectively, during this period. In addition to this, our domestic supply, especially to Eskom, further protects our margin from global market volatility, making our stock much more defensive. Changes in the global trade flows were evident as Australia resumed supply into China in the first half after they had been halted since December of 2021, whilst the Russian supplies to Europe and Japan reduced materially. This is why we believe that our market to resource optimization interventions must always be engaged. And you'll be happy to hear that India remains as a strong importer of our local from South Africa, and it has been as such in the past half and remains a key market for us as a company. Let's talk about our country, which really remains as a challenging operating environment. It is not business as usual, particularly when our ability to respond to the opportunities which are presented by the high thermal coal prices of the recent past and the ever shifting trade flows is constrained by subpar rail performance. We've continued to experience recurring locomotive unavailabilities due to reported cable theft, derailments, operational inefficiencies and vandalism. So it is easy to see then how the current soft pricing environment has rendered the trucking of coal, which is inherently a sub-optimal transport alternative, no longer feasible. This has further limited access to RBCT and alternative ports. Lower Eskom demand from Grootegeluk mine that Kgabi will talk about in this first half is not from a lack of Eskom's need for coal, but due to prolonged periods of unrepaired equipment at Matimba, which may be an indication of skills availability and possibly prioritization within Eskom itself. However, we have no doubt that these volumes will be required for Medupi and Matimba. And we're very confident that Eskom will resolve short-term disruptions to this uptake. The worsening electricity supply shortage has negatively impacted the South African business, and also economic growth prospects. While the supply shortages present opportunities for energy business, grid constraints, however, remain a key challenge in the rollout of renewables. We are proactively investing in and developing sites with grid capacity and appropriate energy resource levels to offset these constraints. A volatile rand will continue to have a pronounced impact on our bottom line. So as a business, we are committed to a transition journey. If you look at our ESG, ESG is core to our business and a driver of value creation across all our markets. Decarbonization of our operations and our entire -- to our entire value chain is an agent imperative to reduce CO2 emissions, which will result in the additional benefits of avoiding market barriers, fines and the loss of social license to operate. By accelerating our decarbonization plan, we can also realize cost savings, partnership opportunities and favorable financing terms. Our commitment towards managing our impact towards long-term sustainability can be seen through our FTSE Russell scorecard, which has been on a positive multiyear trend over the past 5 years. Furthermore, it illustrates Exxaro's best-in-class amongst the FTSE Russell ESG indices with an average of 4 rating over the last 2 years, compared to the global coal sector rating of less than 2.1% -- of less than 2.1. Decarbonization is central to our strategy and looks to contribute meaningfully to the energy transition through renewable energy generation for operations and other customers, alongside the production of critical minerals. The transition to clean energy hinges on clean energy technology supply chains, to source critical minerals because steel from manganese and iron ore will be required for wind turbines, plus more copper for transmission lines and offshore wind power, and even more aluminum from bauxite to support solar PV will be required. So we are aware as well of the increasing scrutiny and pressure that coal companies are subjected to. This manifests through the exit of some international investors from this sector while multinational reorganized their portfolios. As a result, we are happy to report that we have revised our Scope 1 and Scope 2 emission targets to 40%, compared to what we've reported before of 43% by 2026, due to the change in the divestment of Leeuwpan mine. We have finalized our value chain scope 3 emission analysis with the majority from our Eskom supply, very much around 97% of Scope 3. Hence, we need to pursue other Eskom suppliers to partner with us in dealing with Scope 3 emissions. On the safety front, we regret to inform a regression in our lost time injury frequency rate performance, standing at 0.08, against a reduced target of 0.05. Previously, 0.06. And this is compared to the second half of last year. We have a focused social impact strategy, which guides our efforts and resources and creating real impact as we believe in powering the lives of the ordinary South Africans through jobs creation, skills development and investing initiatives which support small businesses. Our investment of more than ZAR 8 billion over the last 6 years is testament to this commitment. We believe that diversity, equity and inclusion form the foundation of our equitable approach to a representative workforce and an inclusive culture where all employees and their uniqueness is valued. We are proud of the meaningful progress we have made on creating an inclusive and equitable organization through our DEI enabling initiatives. From a governance perspective, significant progress has been made to ensure that we have a fit-for-purpose regime of policies and procedures to enable DEI. Implementation of these policies will strengthen our position as an equitable, fair and empowering organization. Now coming to our operations. The team was able to respond with resilience and tenacity to the macro dynamics already presented. We have delivered a remarkable cost containment performance, that saw a rand per tonne to decrease by 3.1%. We have to mention that one as well, 3.1%. While coal mining inflation increased by 9.7%. We effectively contained costs at 12.8% below the coal mining inflation. And this is really admirable performance by Kgabi's team, given the prevailing global inflationary pressures I've already talked to, and also the rising distribution costs that we've experienced. We have achieved a record average realized price of 98% against the API4 index. Very proud. And an increase of 8% compared to the second half of last year, really well done, to Sakkie and his team. This sterling performance was enabled by our robust and diverse co-product mix on the back of our Early Value Strategy, coupled with our market to resource optimization initiatives. The core business delivered a 4.7% production decrease due to short-term disruptions due to uptake at Eskom, which I've talked to earlier, logistic challenges and geological conditions that we continue to experience at Matla. This remains a solid result, and we commend the team for this performance, especially in light of the logistics constraints that we experienced on our export sales. We've delivered wind energy, which has decreased by an average of 8% compared to the second half of 2022. This performance of the energy business is within the seasonal trend range. Achieving results such as these against the current global backdrop does not happen by accident. Great results don't drive themselves. Great results are driven by the people of Exxaro. As I have already mentioned, our ability to contain costs, coupled with higher prices despite operating in a high inflationary environment save the day. We continue to create shareholder value. As you can see, our group EBITDA decreased by 9% to ZAR 7.7 billion from the previous half, mainly attributable to the decrease in coal EBITDA, driven by lower export prices and lower sales volumes for both domestic and export sales. Our group EBITDA margin increased by 5% to 40% due to good cost management. Delivered headline earnings for the period of ZAR 24.43 per share, 6% lower compared to the second half of last year, including a contribution from SIOC and Black Mountain equity interests. We achieved an annualized return on capital employed of 36%. This achievement is attributable not only to our high basket price performance, but also to our efforts on efficient capital deployment and cost management, as I've already mentioned. These will be critical areas of performance as we embark on our growth journey ahead of us. Given this performance and considering the unfolding uncertainty ahead of us, and our growth aspirations, it is my pleasure now to announce the dividend as declared by the Board of ZAR 11.43 per share, based on our dividend policy, which copies will elaborate on, at least we still put something on the table. So thank you for that. This has been a year of going back to basics towards zero harm, especially when we experienced that fatal, which was really unfortunate. And I really want to reiterate our determination towards sustaining zero fatality across all our operations. Our people are the heart of our business. And ultimately, their safety, their well-being is our true defense. The resilience of the core business continues to be tested through upturn and downturn cycles. What is clear is that, when tested, the business emerging stronger, demonstrating our ability to generate sustainable earnings despite international price fluctuations. A key pillar to this performance being the robust earnings from our divest product portfolio. In terms of our proactive and deliberate actions, the adoption of our Early Value Strategy, combined with the market to resource optimization has borne fruit because of our high-quality product mix, resulting in a best-in-class price performance. So Kgabi, take us away.

Thank you, Nombasa. It's good to sit between the 2 CEOs also. [indiscernible] We have certainly experienced a very challenging period during the first half of the year, as highlighted by Dr. Nombasa. But I'm proud to be associated with the operations team, who has demonstrated tremendous resilience and responded positively to the significant challenges we have faced in the first half of the financial year. We have challenges with Transnet declining performance as Dr. Nombasa has highlighted, inflation pressures, and the declining export prices. Despite the above, we still managed to achieve the following results. We had good performance in all areas on our health, environmental and community scorecard. And despite our lost time injury frequency rate increasing to 0.08, we are still committed to 0 harm. I always say safety will harm volume. Our operational performance was hampered by the following: lower Eskom offtake as well as Transnet freight rail challenges. Despite the above, we managed to maintain costs within the coal mining inflation, and created value through record price realization. In summary, we have achieved good financial results with robust margins. I will now go through the details of our performance, firstly, focusing on safety, environmental and social. On the safety front, we achieved 0 fatalities for the first half of 2023 against an unfortunate industry total of 22 fatalities. Certainly, we are still reminded of our last fatality, which occurred in August of 2022. We, however, recorded a total of 6 lost time injuries, resulting in a lost time injury frequency rate of 0.08 against the set target of 0.05. Management launched additional safety campaigns at all operations to improve our performance in the next 6 months as people remain our biggest asset. And we strongly believe our vision of 0 harm is achievable. On the environmental side, we improved our performance on a number of metrics. Firstly, rehabilitation showed an improvement of 3% in terms of land rehabilitated versus land disturbed with 20% now rehabilitated. We have maintained the outstanding environmental performance by ensuring we have no Level 2 and Level 3 major incidents. Our water intensity has improved by 25%. This was mainly attributed to improving recycling of pit water at our Grootegeluk operation and the implementation of mobile water treatment plant at our Belfast operation. Our operational decarbonization focus is bearing results. This is largely due to the implementation of the energy efficiency measures at our operations resulting in a 13% decrease in carbon intensity. Our social performance remains in line at ZAR 896 million spent. Our small enterprise support initiatives benefited 73 SMMEs. We sustained 608 jobs, and skills development initiatives supported more than 1,517 beneficiaries. Now looking at our production and sales. Our production declined by 4.7%, as highlighted by Dr. Nombasa, during the first half of the financial year, with Grootegeluk down by 754,000 tonnes, mainly due to 1 million tonnes lower sales to Eskom, resulting in us having to match production to sales. Belfast operation increased by 159,000 tonnes due to the ramp-up after the fatality in August 2022. Matla production was 418,000 lower due to the geological conditions, as mentioned by Dr. Nombasa, at our Mine 2 and Mine 3. Leeuwpan increased production by 253,000 due to the commissioning of the cash and scaling plant. And finally, our buy-ins from the Mafube JV declined by 483,000 tonnes due to TFR challenges and some equipment availability issues. On the sales front, the Grootegeluk domestic sales were negatively impacted, reducing by 1 million tonnes, largely due to lower uptake from Eskom's Matimba power station caused by unplanned downtime on [indiscernible] which is expected to return full service in early September. The Mpumalanga domestic sales were softer on the on the back of the production challenges at Belfast in Q1 and Leeuwpan in quarter 2. Matla sales were softer on the back of the production related mentioned challenges above. Our export performance remains a function of available logistical channels and cost, which currently makes transport to some ports economically challenged. In the light of the reduced coal prices, we have temporarily stopped trunking coal and are, therefore, expecting a similar level of sales for the next 6 months. We continue to explore economically viable alternative routes to export coal. We forecast production to increase by 7.8% and sales by 11.5%, mainly due to the following: an increase at Grootegeluk resulting from the latest 2023 offtake plan received from Eskom. We believe that Eskom requires the coal, as is indeed for the energy security. An increase of 32% in Belfast production in the second half due to the successful onboarding of a new contractor in the second quarter. Matla is going to increase production by 700,000 tonnes to 3.4 million tonnes, while the geological challenges improving. We've moved to more favorable areas. Now moving to our export performance. As highlighted by Dr. Nombasa, the coal price, I mean, in financial year -- half -- second half year financial year '22, it was at $265, and now we're talking $130. It's almost 50%. And despite these international coal prices correcting materially in the last 6 months, our discipline in executing our market-to-resource optimization strategy and the very good performance of our sales team, which is led by Sakkie, have enabled Exxaro to achieve a record price realization against the API4 index across the total sales portfolio, significantly increasing from 90%, which was our high last year, to now 98%, as can be seen in the bottom-right graph. Turning to the top right graph, you will notice the benefits of our Early Value and market-to-resource optimization strategies. You can see that the sustained increase in the quality of our sales mix augments the strong product portfolio performance from our mines very well. In spite of softer European demand, we were able to increase the RB1 portion of our sales mix to 70%. And this is expected to further increase in the second half of the financial year. Turning to markets, you'll see in the panel on the left, which is a dark blue color, we've managed to increase our India and Asia sales, while sales to Europe have been softer. Our agility and the flexibility in markets continue to serve us well in the turbulent times. Indian demand for South Africa coal recovered as the international coal prices reduced with Exxaro sales increasing significantly from 7% to 32%. We were able to capture value in Asian markets as the pricing differentials between South Africa API4 Index and Australia API6 Index persisted. Having dealt with export, we will now look at the cost performance. We are proud that our rand per tonne cost decreased by 3.1%, despite mining inflation increasing by 9.7%. This means that effectively, we've achieved a 12.8%, and well done to the team. Looking at the bottom left corner, I would like to further highlight how we effectively manage the inflation impact on an annual basis at 8.9%. Please note that comparative values have been restated and now exclude royalties to fully align with the components that make up the coal mining inflation index. As indicated in the shaded area of the bottom right graph, our production cost only increased by 3.4%. That is our controllable cost, with major contributors being the onboarding of a new mining contractor at Belfast contributed to increased production volumes and at Leeuwpan enabling production over [indiscernible] resulting in contractor costs increasing by ZAR 14.70 or equaling about 3.1%. And increased maintenance at Grootegeluk and Leeuwpan linked to the overburdened volumes within the mining areas mentioned. Culminated in an increase of ZAR 8.50 per ton or 1.6%. The above overburdened removal activities are related to a one-off backlog and are expected to normalize. And we're not expecting impact on our strip ratios going forward. The above was offset by a decrease in fuel, which contributed to ZAR 2.90 per ton or about 1%. The transport cost of our product remains challenging, and we continue to move our volumes to where it makes financial sense to protect our margins. The remaining cost which do not directly form part of the production cost will form part of Koppes feedback. Also enabling our cost management is our evolving digital Exxaro program, which is led by [ Swanepoel ] in my team, and we are now deploying machine learning models to inform our decisions. We were able to generate insight about critical cost drivers and efficiencies which all contributed to delivering part of the cost performance reported today. We are committed to remain within our guidance of continuing to beat their coal mining inflation. It is, however, important to know that continued logistical restrictions can pose a threat to this commitment going forward if operations are continuously unable to produce a desired production levels. We will now conclude with our capital expenditure. Our total forecasted capital spend for 2023 is in line with our guidance provided in the June 2023 of the FD preclose. This is a result of the capital excellence journey where projects are constantly reviewed and reprioritized to optimize planning, timing, cost and business impact. The capital expenditure in this year is slightly lower due to the timing and optimization of various projects, with a second half expenditure expected at Grootegeluk, with a main focus prioritizing Truck and Shovel strategy. The same is expected at Leeuwpan and Belfast. Financial year 2024 capital expenditure is also expected to be in line with our overall guidance of ZAR 2.5 billion per year on average in real terms. This is supported by the capital excellence program, which is led by [ Londi ] and Mellis in my team, which maximizes value while improving the efficiency of our capital process, thus promoting a responsible capital spend approach and still maintaining our commitment to executing our Early Value Strategy. This now gives me the opportunity to thank my operations team, mostly are seated on the right, who have shown diligence and agility, they have -- during a very volatile and challenging period. And I'd also like to give a big thank you to my colleagues, I see most of them on my right, and the supporting functions that have enabled us to achieve this exceptional results in this reporting period. I now hand over to Koppes who will take us through the financials.

Thanks, Kgabi. Good morning, ladies and gentlemen. It's a pleasure to present our financial results for the 6-month period ended 30 June 2023. So the results will be compared to the 6-month period ended 31 December 2022. So the IFRS results are adjusted with headline earnings adjustments to make the results more comparable. Further details on this are included in the backup slide. So on the first slide, the high-level overview of the group results highlights the difference between our own managed operations depicted on the top left and right graphs and income from our equity-accounted investments on the bottom left graph. So following the record performance on the back of the high commodity prices in 2022, the tougher conditions we experienced in the first half of this year are evident in the lower revenue and EBITDA numbers. But despite the 21% decrease in revenue, our EBITDA only decreased by 9% and headline earnings per share by 6%, demonstrating the actions we're taking to protect our margins. We will unpack revenue and EBITDA later on. The contribution from our non-managed operations was in line with the second half of last year, and that will also be discussed on the following slide. This translated into headline earnings per share of ZAR 24.43. On this slide, you will see our financial scorecard highlighting the impact of the lower earnings on cash generation from our operations. If we look at EBITDA, coal EBITDA decreased 19% to ZAR 7 billion, energy EBITDA increased 2% to ZAR 476 million on the back of higher energy generation, while the rest of the group contributed an additional ZAR 828 million which we will expand on the next slide. Looking at the equity income, the increase in equity income from [indiscernible] to ZAR 2.6 billion was mainly driven by higher iron ore prices combined with the impact of the rand-dollar exchange rate. Mafube, our 50% joint venture with Thungela, recorded a lower equity accounted profit of ZAR 276 million as a result of lower coal prices and sales volumes due to the TFR performance and production challenges relating to equipment availability, which Kgabi highlighted. As a result, headline earnings decreased by 6% to ZAR 5.9 billion. The cash generated from our operations was ZAR 6.3 billion, resulting in a net cash balance of ZAR 7.2 billion as at the end of June. If we look at the EBITDA waterfall graph, firstly, the price bar, our exports at the lower benchmark API4 price resulted in average price realized of $127 per tonne, a 47% decrease compared to the second half of last year, and only a 2% discount to the benchmark API4 price due to the quality of the product and sales mix. This was partially offset by higher prices we realized in the domestic market. If we look at volumes, export volumes decreased 224,000 tonnes as a result of the ongoing logistical challenges. As Kgabi pointed out, we also experienced lower offtake from Eskom due to the equipment downtime and unplanned maintenance, mainly at Matimba power station. Inflation, we experienced inflationary pressure with electricity cost increasing 9%, labor cost 1.4%, and the rest of our cost at PPI of 9.7%. However, there was some relief as our diesel cost decreased by 20%. The buy-ins from the Mafube JV also decreased by 443,000 tonnes at the lower price of ZAR 1,365 a ton. Looking at the other costs, the royalties expense decreased in line with lower revenue, resulting in a positive variance of ZAR 910 million. Selling and distribution costs decreased ZAR 452 million, in line with the lower export volumes, although it was partially offset by higher costs incurred at Grootegeluk as we used the road transport to mitigate the ongoing logistical challenges. The ZAR 346 million positive variance on rehabilitation is an adjustment of ZAR 163 million in the second half of 2022, not occurring again in this half relating to post-closure water treatment costs, combined with the positive impact of using a higher discount rate to calculate our liability in the first half of this year. Bonus payments and employee costs were also lower, in line with the lower profitability and performance targets not being met. The net positive ForEx variance is due to the impact of the weaker rand-dollar exchange rate on a realized and unrealized ForEx differences on foreign debtors and cash balances. Included under other are the following. That is on our insurance program due to the nature of new insurance products we entered into from an accounting perspective, the treatment change from a premium expense to a financial asset in the balance sheet going forward. We also had positive fair value adjustments on forward exchange contracts of ZAR 278 million and on funds in the environmental trust fund of ZAR 40 million. On the following slide, we split out the revenue and EBITDA of the coal business between Waterberg and Mpumalanga. So despite the EBITDA decreasing at Mpumalanga, our Waterberg operations continue to be robust, demonstrating the benefits of our good cost control and the stable revenue from the Eskom sales contracts. The increase in EBITDA at Waterberg of ZAR 345 million is mainly as a result of the following. Although we had a decrease in revenue as a result of lower export prices realized on higher export volumes of ZAR 1.1 billion, this was offset by higher prices achieved in the domestic markets, although the lowest volumes were lower of ZAR 770 million. There was also a corresponding decrease in royalties of ZAR 714 million. But we incurred higher distribution costs as we used the road transport to evacuate coal via route to Richards Bay of ZAR 116 million. The Mpumalanga decrease in EBITDA of ZAR 2.1 billion is attributed to lower revenue of ZAR 4.5 billion, mainly due to lower export prices of ZAR 1.4 billion and at lower prices of ZAR 2.5 billion. And there was also a saving in distribution cost in line with the lower export volumes of ZAR 394 million. We bought in lower volumes from Mafube at lower prices, resulting in an overall ZAR 1.6 billion benefit. So this translated into a healthy 38% EBITDA margin for the coal business, up from the 37% we reported in the second half of last year. On synergy, we've seen an improvement in the wind conditions in 2023, and for the first half of this year, Cennergi's wind operations generated 335 gigawatt hour of electricity despite a 15 gigawatt hour generation loss at 1 facility due to an Eskom distribution line fault that occurred earlier in the year. As demonstrated in the graph, the wind patterns are seasonal, and we expect higher generation in the second half of the year. Cennergi's operational EBITDA margin was very stable at 80%, underpinned by the long-term nature of the offtake agreements. The Cennergi project financing amounted to ZAR 4.5 billion and will be settled by 2031. It does no recourse to the Exxaro balance sheet and is hedged through interest rate swaps at an effective rate of 12.7%. Hedge accounting is applied and, therefore, it has very limited volatility on the income statement. We then come to capital allocation and cash generation. So in applying our capital allocation framework, we always aim for a net debt-to-EBITDA ratio excluding project financing of below 1.5x. Cash flows in the first half of this year totaled ZAR 6.8 billion, comprising ZAR 5 billion from our own operations, and dividends received of ZAR 1.8 billion, mainly from [indiscernible]. In terms of the capital allocation framework, we then use this to sustain our own operations and functions with capital of ZAR 800 million, and we paid dividends of ZAR 4 billion, consisting of a pass-through of the SIOC dividend of ZAR 1.4 billion and ZAR 2.6 billion from our own operations. Included in the other bucket of ZAR 475 million are shares acquired to settle vested share-based schemes of ZAR 622 million, offset by the translation of foreign cash balances of ZAR 111 million. So excluding the Cennergi net debt of ZAR 4.4 billion, this resulted in a closing net cash position as at the end of June of ZAR 11.6 billion, which positions us well for growth. We shared the value generated with our stakeholders as depicted on the left as follows: ZAR 3.4 billion with employees, and we contribute ZAR 2.7 billion through taxes and royalties to the state's coffers. We paid ZAR 3.7 billion to shareholders as dividend, and shared ZAR 42 million with our communities. As Nombasa already pointed out, we're pleased to announce that the Board has resolved to pay an interim dividend of ZAR 11.43 at an overall group cover ratio of 2.1. This is a pass-through of the SIOC dividend and the cover of 2.5x on Exxaro adjusted group earnings. As you will see from the graph on the left, we are now reaping the benefits of the ZAR 16 billion we have spent on our coal expansion projects, with ZAR 2.025 million of our dividend from our own managed operations now exceeding the ZAR 1.96 million dividend from SIOC. We have now also considered the level of our cash retention in the business which could be dilutive to our return on equity. To balance the level of cash retention with our growth strategy and taking into account the possible size of future acquisitions, plausible downside scenarios and to retain balance sheet flexibility. We aim to retain net cash of between ZAR 12 billion to ZAR 15 billion, excluding the project financing associated with our energy business for our growth strategy. And to reference this, as at the end of June, this net cash balance was sitting at ZAR 11.6 billion, as illustrated on the previous slide. Importantly, this level of cash retention will continuously be reviewed, taking into account the economic outlook and the pace of the implementation of our growth strategy. So with that, in conclusion, I'm going to hand over to Nombasa. I'd also like to thank all the people at Exxaro for your perseverance and contribution to these results wherever you are situated at the operation or at one of our functions. And then also a special word to the finance team for all the hard work and all the late evenings. Thank you very much.

Thank you very much, Koppes and also to you, Kgabi. We are positive and quite confident in our ability to create value as we navigate the logistics challenges, softening thermal coal and iron ore pricing environment and dynamic commodity trade flows. With the current constraints we are having to navigate, it is important to remember that the coal business has been designed to run optimally at a production level of 50 million tonnes, and with an export volume of 8 million to 12 million tonnes by rail to RBCT. Very important information to be kept in mind because there is a threshold to these volumes, belong which even the most stringent of cost containment measures will be rendered ineffective especially if the reduction of our export volumes due to rate disruptions continues unabated, which means that there would come a point where our operations stop being optimal at these levels of rigor, which then asks for different measures from us as leadership in the organization. Just thought let's put that on the table. We've done well. The team has really looked at how to respond to the current challenges we experienced in operations, because volumes still makes sense at the price levels at which we act. However, if these dynamics change and our export lever is not helping us, then volumes as a cost abatement as well or management lever just won't work for us. We thought we must make that point. We believe that though the new business partnership with government under Business Unity South Africa, and a big custodian of the private sector CEOs, will have the impetus necessary to address the socioeconomic challenges which are facing our country. With the combined and focused intention, resources and capacity, we believe we can turn these challenges around. We are steadfast in our commitment to journey towards being a business that positively contribute to the global energy transition and future energy growth. Through this evolution, we will grow your business and diversify the portfolio responsibly. This will enable us to decarbonize the business and ultimately safeguard its future relevance. As with all growth, decisions must be aligned to our previously communicated investment criteria. For us, this means acquiring access to grow your business while creating a diversified mining and renewable energy company. In addition to acquisitive growth, organic growth will be a key lever for the renewable energy business, even at this early stage of our growth path. We know what it takes to grow the business. Success for us lies in how we acquire these assets, ensuring that executed transactions, they look accretive. For us to achieve this, we have exercised patience, restraint and deep discipline. It's not been easy, but we have to be disciplined. We have to scrutinize each and every transaction that is put in front of us. And we continue to evaluate opportunities as we reported and guided in March. And we also continue to evaluate our ambitions. The bottom line remains, however, that we won't buy assets for the sake of acquisition. The core business will fuel our future growth. And as such, we will continue to optimize it to ensure that maximum value creation comes out of this business. Taking into account our cash generation, we have also considered the level of cash retention that Koppes is talking about balancing shareholder returns with our growth aspirations. Following up on what we have guided before, I am happy to report that we have reached financial close of the 68 megawatts Lephalale solar project at GG in June of this year. Construction is expected to start in this half, with the mine, which is Grootegeluk generating its first green electrons in 2025. As I've said earlier, we have observed slower mining M&A activity due to rising interest rates, risk aversion and uncertain economic environment. We believe that the mining M&A outlook remains positive, as minus pivot from cash returns for growth and pay attention focused on increasing their exposure to energy transition metals. In pursuing opportunities, we have gained much experience and insights. And as we continue to execute our strategy, this experience stands us on solid fatal ground. We understand the markets for the 3 selected metals: manganese, copper and bauxite. We continue to invest in our market intelligence capabilities and strong network to ensure that our project pipeline and deal flow is robust. In this slide, it is my pleasure to introduce you to our new Chief Growth Officer, Mr. [ Richard Lalicker ]. Richard, will you please stand up once I tell the room who you are? Richard brings intensive experience as an investment banker and dealmaker. He has led execution of many M&A deals across the continent. We are very pleased to welcome Richard to our executive and look forward to his leadership and contribution in making the minerals and energy growth strategy a reality. Let's give Richard a round of applause. You are welcome. Ladies and gents, I now conclude to this slide. Logistics remain our biggest concern in this current business. And as a result, we encourage any interaction between the private sector and government to resolve this matter. We are encouraged by legislation developments such as the white paper for National Rail, which they call National Rail Policy White Paper. That could enable the private sector participation in rail. It's very clear stated the role of all players in that legislation. And it is our request when we interact with government to please fast-track the implementation of this legislation. We realize that when solving for the current logistic challenges, which faced the coal business, there's also an opportunity to take a holistic view to the solutions that we can derive from this to also address those logistic challenges on the manganese line. So looking ahead to our growth aspirations, we look forward to engaging further with you, the market, to facilitate and support understanding of our strategy. Through engagement, we aim to further the market's understanding of our approach to capital allocation between the 2 growth focus areas, those being energy and minerals. And as Koppes has mentioned, we believe the optimum amount of net cash to be retained is between ZAR 12 billion and ZAR 15 billion, to enable and set the execution of our strategy up for success. We do not intend to build our cash reserves beyond this range. We do not intend to build our cash reserves forever. As mentioned earlier, this range will be continuously reviewed and considered looking at the economic outlook and the pace of implementation of our growth strategy, as Koppes has said. We have been executing our guns of our strategy for the last 1.5 years. And as such, we have great appreciation of the constraints, which are introduced to our growth aspiration by just looking at 3 minerals. After a robust discussion with our Board on this matter, bearing in mind the competitive minerals landscape, the Board has supported a view to look beyond the initial 3 minerals. We believe that in order to meet our long-term targets, diversifying the minerals base from which to identify opportunities will secure the achievement of our strategy, on condition that once again, we remain within our investment criteria, which we shared with the market. We also realize how critical the right resources are in the execution of the strategy. And that is why you will see us continuously adding the right capabilities as we go along to our team. So skills will enable execution, so will partnerships to solve the different outcomes, with key focus being on partnering to limit risk and bolstering our balance sheet. All being said, our strength lies on the women and men who year in and year out work tirelessly to contribute to the value of your business. I would like to thank each and everyone of them for their continued dedication and resilience. And wherever they are, they know that we are #cruisingnicely. Thank you very much, ladies and gents. I give over Mzila.

Thank you very much, Nombasa, for that lovely ending. And thanks to the team for a great set of results and presentation. And I can share with you compliments from the markets for a good set of results. And maybe I can start with the first question, maybe just to set the record straight -- okay, before I carry on, I'd like to invite Leon. He's going to take my seat, and I will be walking around as I facilitate the Q&A. Leon is our MD for energy. And while he walks to take from his seat, Riaan, the first question to you is, yes, great results. How should we think about the net cash guidance that you've given and the dividend policy? Do we still get a dividend if net cash falls below ZAR 12 billion due to acquisitions or downturn in prices? I think this is a question that the pensioners would also be quite interested in.

Yes. So the dividend policy, there is no intention to change the dividend policy. But as Nombasa pointed out, the maximum cash accumulation that we foresee at this point in time is within that ZAR 12 billion to ZAR 15 billion range. We're not going to accumulate more cash or cash indefinitely. And then obviously, this will be reviewed on an ongoing basis. If you tomorrow do an acquisition, then you want to retain that amount of cash. But that is taking into account the size of acquisitions, also in the current landscape, looking at possible downside scenarios. This is the modeling that we've done that we think the optimum size is.

Okay. And then I'll go to a high-level question, which I think has partly been covered in the presentation regarding just our outlook. To what -- to the extent that some of these challenges continue and to what extent could they materially hit on volumes, particularly in terms of breakeven? You spoke, Nombasa, about Transnet performance. There's a reference to Eskom. But also if coal prices continue to come down, what's the likely impact on the business that we see going forward?

So look, as we said earlier, that there is a level in volumes at a certain price that our operations would be suboptimal, which then would force us to look at operations that are sensitive to price bursts, and see how we can adjust. And indeed, we will do so. We are comfortable where we are at the moment. There is no indication that we are closer to that price range. But it is possible, Mzila. It will be done.

Then a couple of questions on the coal business. Firstly, congratulations on that 98% record price realization. And the question is, for your forecast of 95% in the second half, are you being conservative? Sakkie will take that question.

He doesn't like the added questions.

Thank you. Nombasa know me, I'm not conservative at all. So no, the 98%, I think, is important to see in context the drivers of that. So we continue to benefit hugely from our market to resource optimization strategy, that really assist in upgrading our production mix to a sales mix of much higher value. That process will continue, and we expect to continue to get very good results from that. The mix of which we sell obviously play a big role in that number. And as we said, for the second half, we expect that number to increase the percentage of RB1, but looking out to 2025, the number that you referred to, there are some uncertainties about that period, and we've just been realistic. What we also have currently that's hugely helping us is the impact of fixed price sales that we still have in our sales book that is helping us in this period of lower pricing. So I would say the current number is a very bullish number, and we think the 95% is definitely doable, but not overly conservative.

And then on Leeuwpan, how should we think about the longer-term future of Leeuwpan and as coal prices continue to normalize?

So I think we've made it quite clear that indeed Leeuwpan is quite sensitive to the export volatility. And our strategy has always been to settle Eskom within the domestic market, which we've been successful in the last year, and we'll continue to look into those opportunities. And there will come a time where we make an announcement should we see that risk. But for now, we think that we could settle them within this good market well for Eskom of lower product.

Okay. And then maybe just picking up on that, and some of that you've touched on in terms of progress with M&A, anything else you want to add on progress on Exxaro's M&A strategy?

Look, it's been a very interesting 1.5 years of looking at opportunities out there in the market. And we've asked ourselves, we've asked advisers to say, is there an opportunity we may have missed? And the answer has been no, not necessarily. You guys seem to have looked at everything that you set for yourselves, and really feeling that, yes, it is indeed to do a deal. We can do a deal any day. But the most difficult one is to do a good deal. And that's what we're looking for. And we will not allow, and this Board, will not allow deviations for what we said we would do from an investment criteria point of view. We know what we must get on top of work that is on the table, and we keep to that, because we think that will be good for investors.

Great. And then there was a question which somehow has disappeared from my screen here from Mr. Magagula relating to the Energy business. Measured in EBITDA terms, what is the threshold where we feel that it has reached sufficient scale? And my reading of his question is that there's probably a lot more to the question than what reads the question.

That's 80? Was it Leon? Do you want to...

Carry on Leon.

Yes, it could be conceived as a loaded question. So our EBITDA currently is roughly ZAR 1 billion. But from an industry perspective, you look at installed capacity, net installed capacity, now the bigger players are in the range of 500 to 1,500 range. And the really big players exceed that. So I think you can have a linear relationship, obviously, understanding that the equity IRR and the proceeds plays a role. So as things are now, your IRRs are lower, so you probably can't have it directly linear. But probably times 3 or times 4 to make it really sizable.

And then before I move to Chorus Call, I don't know if we have any questions there or online. The last question was, Riaan, on the numbers that you presented. Somebody just wanting for clarification on net stock movements and buy-ins, which we indicated at about ZAR 1 billion. And what is included in the other EBITDA of ZAR 211 million. It used to be a negative ZAR 1 billion annualized.

So stock movement, there was a bit of stock buildup. Mellis, I don't know what the figure is, you can perhaps give detail.

Yes, on the stock, we did have a bit of an increase. We did end up with healthy stocks at the end of June. We've seen subsequently the stocks coming down a little bit in July, but -- so we bought in 175,000 tonnes in the first 6 months and our stocks did increase half year on half year. The other one is around the insurance...

So I can take that. The other, so the ZAR 211 million is mostly, as I pointed out, our insurance program. So in the past, the way that the program was set up was expensed through the income statement. And we've got now a new insurance products which doesn't require us to expense it anymore. It's treated as a financial investment. Because to the extent that you don't have claims, you ultimately get the money back in the future. So that was one of the major issues in that bucket.

Okay. Do you have any questions online, Chorus Call?

Yes. We do. We have a question from Brian Morgan of RMB Morgan Stanley.

Just on the cash balance that you've highlighted, the ZAR 12 billion to ZAR 15 billion, quite a sizable number that you're looking at holding back. Just get a sense to you, are you looking to hold that amount of cash back because you feel that debt market by [indiscernible] to you as a coal company?

So if -- you weren't clear, Brian. So it's about the debt markets.

So no, I think -- so in getting to the cash balance, the cash retention, we're not only looking at cash retention. Part of that overall figure is also debt markets. So it's a combination of cash and debt markets. And as I pointed out, also plausible downside scenarios. .

Any follow-up questions?

I have another one please if I may. Can I just ask on Belfast? On Belfast and Mafube, also had a contract to hand up issue, and in Mafube you had a problem with equipments availability. Could you give us a bit of color there and a bit of context what happened?

Brian you are right with Belfast, in -- last year, we did announce, following the fatality, the challenge with a contractor. We've onboarded a new contractor. So that has an impact in Q1. But now you see Belfast is ahead it managed to really do well in that space. And if I then go to Mafube, Mafube was an impact on Transnet, but on equipment availability to us around our drills at the mine, which are being addressed.

Any other questions online before I come back to the room?

We have no other questions on the conference call.

Okay. Thanks.

It's Tim Clark from SBG Securities. I've got a couple of questions. First of all, just on your coal costs, so your costs, it was really a very good performance. I just wonder if you, beyond fuel, which is obviously sort of an easy tailwind, what actions have you been taking on costs? Where are you -- maybe operation by operation, have you been taking specific actions, closing areas, given the installed capacity is obviously higher than the current operating rate? My second question is just on long-term prices. If you -- when I think back to your mineral strategy, you gave us an idea of what your long-term price outlook was. But some of the transactions that are happening now in the markets are at much higher long-term price rates. So you're not going to execute on transactions if your long-term prices are relatively conservative, which I think those were generally. So I just wondered if you've changed any long-term prices or should we rely on the same old numbers. And then thirdly, just the additional kind of comment on potentially other minerals that you'd look at, are you -- is it sort of a coming out of frustration on execution? Is it like you've kind of felt like everyone is chasing the same opportunity and you're really struggling to get value? Because I think shareholders really appreciate that they want to get value from a transaction. They don't want a transaction to be just desperate. But is that an indication of the fact that opportunity set is perhaps too attractive to the broader market?

Always very interesting questions, Tim. Thank you very much. I really want to use the team whilst they're still here. We're going to be on road shows, I won't be there. So please allow me to use the team. So let's start with cost, Mellis, in terms of what you're doing. So we go to long-term prices psyche, but we also go to the outlook for the 3 commodities between [ Mushwana ] and [ Shibu ]. And then we'll talk about the frustrations. Okay? And then Richard is here also, is going to talk to issues on what's happening on the M&A side, maybe before I sweep. Okay. Over to you, sir.

Yes. Thank you. Thanks, Tim. On the cost side, we're also very proud of our performance on costs. And if you look at specific things that we're doing, you asked if we've stopped any activities. The only 1 that we have stopped is the trucking, which doesn't make economic sense. So you're not going to move those tonnes and make losses on them because of the premium that you're paying on the logistics leg. But overall, we -- so all the other activities we continue. We're obviously monitoring and shaping the businesses based on prices at $100, at $90, at $80, and you're looking at a balance of your portfolio in terms of the blending opportunities that Sakkie also touched on and how you get full value for your product. On the -- if you look at what process do we follow, we really focus on transparency and accountability when we look at our cost. You make sure that everybody understands what the targets are. They sign up against the targets and then we hold people accountable. And you'll see that, on the 2 areas where we had actually big reductions this time around general and as well as on the rehab side. they were up in the previous period. So we look at this as a long-term game. We're not doing things that are irresponsible. On the rehab side, you saw that we increased our rehabilitation area from 17% to 20% in the half year on half year. So that just demonstrates that we're doing things responsibly. And on the contractor side, you got the answer from Kgabi on how why those costs were higher in this reporting period. So some of those things are timing, but really, we look at this over a long-term game. Thanks.

Thank you very much, Mel. Let's then look at the core long term before we get to copper, bauxite and manganese.

Thanks, Nombasa. Kevin is here, we should actually call him in. But if I don't talk Exxaro but talk to the industry analysts, Wood Mackenzie latest information for '24, it's about $99, and looking out to 2025 is $95, which is not too different from our view, is that in that space, $95 to $105 is probably a good area for us to be in the medium to the longer term.

So just to follow-up on that. Does that mean that if we have that $90, $95 range, that's what your business is set up to do at today's Transnet level? Or is that assuming an improvement from Transnet?

Yes. So our current view on our business, Tim, is that we do not expect Transnet to perform at materially different levels over the next year, unless something serious structurally happens. So we are preparing ourselves for a scenario where we may see the current Transnet performance, at least until the end of next year, and that we must deal with that. And that's the context that we gave earlier, is to say, within that context, we then look to continuously optimize our other routes to market so that we can bring the breakeven point of those economies down to a price level where at $100 per tonne, you can make money from it. So that is the continuous effort we have there. But yes, that's the price level we look at. And then we plan our business for -- until the end of next year at a 50 million tonne type TFR to RBCT level.

Thank you, Sak. [ Mushwana ]?

Thanks for the question, Tim. With regards to your question around the prices, I think let's start with copper. I think your point is fair to say that we are seeing some transaction happening at much higher price ranges. But what we are seeing in the market, Tim, is that even with the numbers that we've given you previously, those long-term prices are competitive, and we are not taking ourselves out of the market. So we're still comfortable with the numbers that we previously provided around copper. In fact, on manganese, the numbers we provided, comments we're getting from some of your colleagues is that perhaps we are a little bit too bullish on those -- our manganese price. So we're still comfortable with the prices. And the feedback we're getting when we are in the market is that, when we're modeling these things, they are competitive. We're not taking ourselves out of the market. So I think that's one side of the question. The other question on the other minerals, so I'll comment to this and I think Nombasa will also say something. When we did announce the minerals strategy in the Capital Markets Day in 2021, we did say that we are starting with the 3 as a starting point. So the fact that we are looking at potentially new minerals, it's not out of desperation. It's what we've always said that we will do. And from where we sit within the 3 minerals, there are opportunities, executable opportunities that we see value that we have in front of us. Thank you.

Thank you very much. Anything to add, Richard? Just also to say, Richard will be starting on the first of October. So we are abusing Richard. Richard has been probably visiting for the second time this building. So he's very fresh. Okay. Go for it.

Not much more to add. Thanks, [ Mushwana ]. Tim, I don't think there's a common theme around challenges in M&A. You have to look at every commodity separately, what are the challenges in copper. It is a crowded space. It always has been and always will be a very popular commodity. Manganese, there are less opportunities out there. Bauxite has its own challenges. And as we move forward, potentially into other commodities, how do we approach those on each with its own strategic approach. So I think, broadly, yes, a lot of opportunities we're looking at, that the team has been very busy. I'm joining a fantastic organization that has a wealth of knowledge. And I've been pleasantly surprised as to how advanced they are in terms of their thinking around these commodities that they're looking at. So it's hitting the ground running. It's not building a team. It's running with a team that has a number of really interesting ideas and opportunities in the pipeline.

No, thank you very, very much. But just to say that you're very right, Tim, that the 1.5 years that we've spent on this market, we've learnt a lot in each one of the areas. And that's why we can tell you upfront that today we don't believe that bauxite will be the first asset that we bring on the table because of the challenges of where it is at the moment and the challenges in those areas, the vertical integration that we see in that space. And yes, we believe that probably these other 2 commodities, there are lots of opportunities that are open. Obviously, one is to consider partnerships very carefully. On some of them to enter, especially if you talk to copper. We've talked about our interest being Tier 2 assets and even Tier 2 assets now, you must look at that ticket today. The size of the ticket is huge. So -- and serious movement in terms of premiums that are really set on these assets. Lots of competition. Yes, we agree. I think that's what Richard is saying as well. And we need to be very realistic to say, if we really want to set the strategy for success, it has to come through the similar conviction we had on the 3 in terms of market fundamentals, and we'll look at market fundamentals of whatever we choose. And we also would like to look at alignment also with our investment criteria. We still want to see investments in minerals that will contribute in the energy transition, renewable energy environment, we still believe that there's going to be opportunities in that space. And we will inform the market in terms of what we see. We are -- we can't say which ones at this point in time. But we can say that we are quite confident that there will be extra opportunities to look at to set the strategy for success.

Any other questions from the floor? Any questions from Chorus Call online?

We have no further questions on the conference call.

All right. Thank you very much. I think it actually has been quite a detailed presentation of the results, where we've tried in preparing to not necessarily foresee the questions, but I think with an understanding of the needs for information from shareholders, we provide that upfront. So with that, what remains is for me to say, thank you very much for your attendance, both here and online. And also for me to express my gratitude to the team that has supported me in the past 10 years. I remember my first presentation when Wim de Klerk said to me, this is your show, and pretty much took it literally. And I've really enjoyed it in the past 10 years, each period that we've held the results where we started at the JSE and now we're in our own building here. And for the team that supported in putting this together, I think you always do a great job. I never have to worry about this anymore. It's something that happens automatically, but with efficiency and great effectiveness. And this is the support that I'm very happy to hand over to Ling-Ling as she takes over the reins. So thank you very much and wish you well. Please join us, we're about to eat.