Grindrod Limited (GND) Earnings Call Transcript & Summary

Good morning, everybody. Trust that we are live and everyone could see us and the presentation on the screen. Thank you very much for giving us your time to join us this morning. We certainly appreciate you being with us this morning. We do have the Chairman, Mike Hankinson, on the line and a number of the nonexecutive directors. They also extend their welcome to you this morning. Here with me in the boardroom, I have Fathima Ally, the FD of Grindrod; I have David Polkinghorne, the CEO of the Bank; and Xolani Mbambo, CEO of Freight Services; and I'm Andrew Waller. Thank you for taking time to join us, as I said. [Operator Instructions] Those will be collated, and Alison will read us the questions at the end of the presentation. Thank you. If I start with a quick overview before I hand over to Fathima with the numbers. The core business of Grindrod has had a really good year this year. The businesses did really well, recovering in the second half after shutdown for the COVID restrictions. And all of those businesses, Freight Services driving their corridor approach; the Bank making sure they dealt with the customers carefully; and then our big focus on liquidity and cost. Those are very focused efforts by the management team during this year. Of course, we all know the impact that COVID has had on the world, which has interrupted all the supply chains. It's also taught us a lot about how we need to go about our daily business as well. In the Ports and Terminals business, lots of resilience, commendable recovery efforts. You'll notice that borders were closed for some time and, of course, a lot of work being done on making sure that trucking and rail can get through the border post to the terminal in Maputo. The rest of the terminals also did well. They managed to attract some cargoes despite the position that we find in, so good performance from that division. On the containers side, as you know, we spent a lot of time working hard on getting the fruit out the country. We had a bumper season. And a lot of attraction for the minerals out of Africa, so a really good performance from the container business during the year. If we move to Northern Mozambique, we operated throughout the year on-site in Afungi. The team has been working really well on behalf of Total, who run the operation at the top there, and a lot of work being done making sure that we can get the cargoes that Total approving into the site for the development taking place on the top there. As you know, we now operate 7 ships on there. These are ships that can land on the beach at Afungi, and we're using the trucks that you can see. It looks a bit like a Scania advert. You can see the trucks on the right-hand side on one of the ships on their way to Northern Mozambique. In the Rail business, we merged with African Rolling Stock Solutions. They have a very good commercial team with some good contracts, and we're very pleased that we've made -- managed to get that merger done. As I said to you, on the Bank side, very focused on the client relationships, making sure that any lending we do is of high quality and also making sure that those customers that we have are well looked after during this period. We have a very strong capital position at year-end and good liquidity, as you'll see when David speaks to his slides. If I can now hand over to Fathima.

Thank you, Andrew, and good morning, everyone. I think with respect to the financial highlights, what's been commendable for us this year is that we managed to keep our revenue from our core businesses relatively flat in comparison to 2019, which is no small feat considering the challenging economic environment that the teams needed to navigate through. The reference to core is really talking to our Ports and Terminals, our Logistics, our Bank and the activities that we hold at a group level. Trading profit against -- again flat against 2019, but this is after taking into account the impacts of fair value adjustments as well as provisioning levels. Our core earnings up 4% at ZAR 329 million compared to the year before, with solid cash generation at ZAR 874 million (sic) ZAR 871 million. We'll unpack our net debt-to-equity ratio later, but Grindrod's balance sheet sitting at a net asset value of close to ZAR 10.75 at the end of December 2020. With respect to the results, what I will note is our 2019 comparatives have been restated largely due to our Marine Fuels investment, which has been reclassified out of held for sale and back into continuing businesses. Whilst we remain committed to realizing this investment, the lead time to closing this is longer than 12 months, and that drives the accounting and the reclassification back to continuing. From a 2020 perspective, you'll see the revenue from core operations, the 20% decline in noncore, again, relating to the contraction of our Marine Fuels investment, and you'll see that being replicating on the balance sheet with respect to our working capital levels and current assets and current liabilities. Trading profit, we're very pleased to note 10% uplift on the prior year. The business has really kicked up a notch with strong performance in the second half of 2020, and the exchange rate did work in our favor, which leads to the commendable performance at a trading profit level. Our fair value adjustments in the ZAR 222 million that you see on the slide. We did book losses of close to ZAR 82 million relating to our investments in our Grindrod shipping shares. There were gains reported in the previous year, and we have reported close to about ZAR 118 million of provisioning against our loan book. Moving down into core operation performances. That loss is largely driven by the write-downs we've taken both in the context of our private equity and property portfolio of close to ZAR 248 million as well as our North Coast property advances of nearly ZAR 162 million. Non-trading items driven through impairments of goodwill and balance sheet, again relating to Marine Fuels as well as our Agri investment whilst we've executed on the sale. So it remains in held for sale at year-end. What we have done is remeasured the investment value to what we will realize once conditions are completed and the transaction is effective. Taxation line looks like it's a swing from the previous year but largely relating to withholding taxes that we've incurred on repatriation of dividends as well as noting that the prior year number is impacted by credits related to tax dispensations in Mozambique. On our balance sheet, our intangibles and our investments, the movements largely driven by one-off impact in non-trading items. Our current assets, the contraction in the business has been noted with respect to Marine Fuels. The big shift in our Bank balance relates and is linked closely to the move in our deposit book of nearly -- of ZAR 1.8 million, which has accounted somewhat based on advances that we would have made this year of nearly ZAR 800 million. Bank liquidity on balance sheet looking strong between our liquid assets and cash balances in excess of ZAR 3 billion. With respect to our liabilities, the one key point I actually failed to mention, and you would have seen it both in the investments as well as the participatory contributions, is that through restructuring of the Grindrod Investment Trust this year, we have effectively lost control, and we've deconsolidated that structure, which has introduced a debt of nearly ZAR 600 million onto our balance sheet. But we'll unpack that shortly with our net debt analysis. Deep diving into each of the segments. You will see from a Ports and Terminals perspective, EBITDA relatively flat. But again, here, it's through the efforts of the teams counteracting the reduced volumes through improved tariffs negotiated with customers and really pushing on the diversification strategy within those businesses. Our Ports and Terminals businesses, 83% are dollar-based revenues, so you see the favorable impacts coming through in the earnings. From a logistics perspective, 6% up at an EBITDA level. And here, you see our strategy of really working as an integrated logistics service provider through our Seafreight, through our landside container activities, through our clearing and forwarding businesses and our ships agencies. And again, Northern Mozambique activities do exist in those numbers but a fairly balanced logistics business with onshore and offshore activity. From a Bank perspective, what I will note is our capital adequacy and our various ratios relating to the Bank well in excess of the regulatory minimum requirements. And again, even through the provisioning levels that impacted the EBITDA line, a very solid profitable performance coming through from the Bank. A lot of the shifts in the deposit book has reversed, and the balances have come back on book as of the end of February. With respect to our net debt, we started out this year with net debt of ZAR 69 million. Through our cash generation of ZAR 907 million, we then led on to apply our cash in the ZAR 327 million, working capital contributes close to about ZAR 36 million of that. We advanced loans to our joint ventures of close to ZAR 84 million, and then movements in our advances book make up the residual. Our ZAR 202 million really relates to us extinguishing our tax liabilities, servicing interest as well as net dividend receipt positions. On the investment -- from the investments front, in the ZAR 272 million, we've put close to ZAR 225 million back into capital expenditure. That is a net position considering disposals that have also occurred in the current year, and we've invested an additional ZAR 47 million into our private equity business. The ZAR 122 million is where we have bought back Grindrod Limited shares to the tune of ZAR 46 million. And we've also taken up our full interest in our car terminal in Maputo and spent close to about ZAR 74 million on that front. The big shift in our net debt is really coming through the deconsolidation of the GIT structure, which is effectively in our singular investment trust, leaving our closing net debt position at ZAR 683 million. On the bottom right-hand corner of the slide, we've really unpacked our debt to show you what it consists of. In the ZAR 1.5 billion, which we deem as general funds, general borrowings, 80% of that is actually security backed through our properties, through our fleet and through our yellow equipment. And the leases liability is really a function of new leases taken on this year as well as redemptions and payments made. At a Grindrod Limited level, net debt levels or net debt-to-equity levels at 9%. And once you exclude the Bank as well as the IFRS 16 impacts, the 2020 net debt at 26%. With respect to how our net asset value of ZAR 10.75 is broken up, we have ZAR 1.65 effectively locked into what we deem as the noncore businesses, so Marine Fuel, Agri and the private equity and property portfolio. Our core businesses comprise close to about ZAR 9.10 of this. And with respect to the return on equity, once you exclude the impacts of the fair value adjustments and the shipping shares, we've effectively delivered a return of close to 7%. Back to you, Andrew.

Thanks, Fathima. Xolani?

Thank you. Good morning, everyone. Thanks, Fathima, for the numbers. I just thought I'll give a bit of context and backdrop of 2020, which informed how the businesses operated this year. If you go back, we ramped down our stockpiles in our facilities, particularly at the port in MPDC as well as at the Matola Terminal. The Durban port was almost on a standstill, handling only around essential cargo, if you all remember. Mines closed and some were partly opened, which impacted our volume that we've needed to have moved. Within our operations in Maputo and Matola, only 1/3 of the staff during the lockdown period. So on that basis, we commend our employees who continued to ensure delivery to the extent possible, and we are fortunate that China continues to take -- to accept our vessels into their ports. So given this context, I thought I'd then share with you the performance around the port and what gets us excited about this investment or this asset. It achieved earnings growth and is a major contributor to earnings of Grindrod. 18% growth was achieved through various measures. One was the cost-saving drive, which meant that some of the operations had to -- in fact, that operation had to go through some of the sacrifices, review the various contracts and ensure that it will run in a cost-effective manner. In addition to that, the costs, as Fathima highlighted, this operation is rand-hedged. It benefited from a weaker rand, which assisted us in offsetting the volume underperformance of 13%. Volume was achieved this year, which is good for us, and you'll see when I talk about capacity. We are substantially complete with our project, which included Berth habilitation and chrome slab expansion. What's also worked for us is that it is not just at the border that we had the challenges around the bottlenecks, which meant that the cargo flow into the port was limited. As a result of that and through engagement with CFM, Transnet as well as the management, we were able to uplift the rail capacity from 1.2 million tonnes to -- from 1.1 -- from 2.1 million to 4.2 million, doubling our rail capacity. Now that is assisting us to introduce a meaningful alternative cargo flow to road. As a result of that, the railing as a ratio of total cargo flowing to the port improved from 18% pre-lockdown to 25%. Now going forward, I wanted to expect an uplift because if the cargo flow through road improves, we're still going to retain or increase the rail. So you can see on the key focus areas for 2021, we're looking to optimize the offloading area for rail so that we're in a position to accept more rail cargo. We also do acknowledge that, that rail activity does introduce some multiple handling as the cargo flow into the receiving area has to be trucked into various slabs. So the team are working hard to ensure that, that operation is optimized and is run effectively. But overall, it's encouraging that with that marginal -- loss of margins, we still, on a scale, able to drive more volumes. The other thing that we're doing well, which has started, is the automation of our operations because that also serves efficiency. So the receiving of the trucks into the port as well as the trucks leaving is fully automated, which means less headcount. And also, it means we're controlling the cargo and giving the customer confidence that the cargo losses are well-managed and the customer upfront understands what has been received at the port is exactly what they dispatched from the mine. The other key activity that we're looking to achieve is to roll out the Port Master Plan, which we've started working on last year, and the document is finalized, and we're going to start rolling it out this year. The cost optimization becomes -- continues to be key for us. So that's the story around our port operations. You can see if you visit us there, we've turned this into a world-class facility. And hopefully, sometime this year, we're going to have an offering of some sort. Moving on to the volume. I thought I should share a bit of volume just to give you a context of what I've just covered. You see the chrome volumes there at 5.3 million against 6.4 million last year, down 17%. So what is encouraging here is that the slabs facility or capacity ranges between 8 million and 9 million tonnes. So there's a big potential upside for us to grow into this operation. Key for us is to unblock the bottlenecks at the border and also continue to drive our rail as an alternative to road haulage and hopefully can get it to 8 million tonnes. And if you optimize the cargo dwelling period at the port, you can actually push that to around 9 million tonnes. You can see the trucks that's there. Last year or in 2019, we averaged 458. This year, in 2020, we averaged 335. That's the full impact of what 2020 was in terms of the difficult trading conditions. The good side of it, which I have explained earlier, is the offset for the -- part of that, it came from railings. So we received about 11 trains per week into the port as versus 8 railings in 2019, an increase of 38%. If you look at our Terminals' operations. Really, our flagship operation there is Matola, and it did very well for us. Although the volume were down, they were able -- I'll share the slides and the next slide, we'll talk more on the volume there. So the volumes were down. What really helped us in terms of maintaining EBITDA lever was improved tariffs, as Fathima indicated earlier, and also the mix of the cargo between the magnetite and coal. As you know, we're driving more of the magnetite and less of coal, and that bodes well for us. But also what is that similar to the port, this is a rand-hedged asset, which on the times of weakness of the rand, we benefit from the revenue side. Also what the team has done very well is focusing on costs. The fixed cost base for that facility dropped by 12%. Of course, half of that drop came from a weaker metical because most of the costs in that facility are metical-based. We converted all our dollar costs over the years into metical, and we're getting revenue in dollar terms, which works well -- very well for us. We touched on our Maputo car terminal. We're looking to use that terminal more as a, going-forward, as a multipurpose terminal, at least a portion of that, so that we're able to attract other cargoes, including the project cargo into that facility. What is also pleasing which you'll -- I'll show you it to you was the volume into -- in our core terminal in Richards Bay. Within the numbers that are shown in the next slide, an 18% increase in volume growth now in our Richards Bay complex or in our Richards Bay core terminal, which is quite pleasing. And we know the driver of the volume increase and the price is because the China is not buying from Australia. It's buying from elsewhere, including ourselves. I guess, the key for us is then to try and lock our customers as much as we can. The focus area for us is introducing the road haulage really to take advantage of the current strong iron ore market that is encouraging, and we're seeing some of the contracts coming through for us, which will -- which should put our operations in Matola. We're looking to continue that diversification of the cargo into Richards Bay. We also are looking to work with Transnet. Some of you may have seen the strategy has been proposed of reviewing the ports across the country, particularly Durban, [ POA ] and Richards Bay, where possibly Richards Bay maybe a hub for all the mineral volume. We are well positioned. We've got infrastructure there. So for us is to really work with Transnet to see how we can optimize that corridor and make sure that Richards Bay becomes a prominent facility for exports. And also, to see to what extent we can participate with Transnet working together in the Durban Port. This is a slide on volume, which you've seen additional info slides. One thing I really wanted to highlight here is the improvement or ramp-up in H2, which is evident on the numbers of around 4.4 million up to 5 million tonnes. The Richards Bay, I touched on. Outside other facilities, as I said earlier, the Navitrade or the core terminal improved by 18% on the volume, so 1.7 million tonnes. Just to highlight, we would need a bit more because the breakeven point for Richards Bay is around 2.8 million tonnes at NPAT level. So currently, what is pleasing is that it generates enough cash. On Matola, we're looking at the breakeven volume of about 3.8 million tonnes. Anything above that goes to the bottom line. So we're striving hard to make sure that at minimum, we get to 2019 tonnage or even better. Moving on to Logistics. Our Seafreight and Intermodal businesses, the business has done really, really well. It has become a major contributor to Freight Services' earnings. You will recall that we integrated our Intermodal business with Seafreight business because those businesses complement each other very well. The increase in shipping activities, improvement in mineral volumes and good citrus season, as Andrew indicated earlier, has driven this -- the performance for this business. We've increased our footprint as the demand increases, and I'm pleased to say that the utilization for our facilities is sitting at around 75%. We appreciate that this is a good utilization given that -- given the seasonality of citrus as well as grape season. Teams continue to look at how they can optimize the use of those facilities off-season by handling the empties into -- attracting the empties into those facilities when the seasons are off. Now clearing and forwarding business, I'm really pleased with the performance of this business. Its earnings shut the light out in 2020. And what it did very well is they were able to improve their yields on a volatile market because this business was on disbursement, and any incremental improvement in the yields will go straight to the bottom line. So very encouraging that given the difficult trading conditions, they're still able to do that. You'll recall that the Logistics contract -- contracting was a challenge over the years. The teams have worked tirelessly to turn this performance around. As we sit now, the utilization of the facilities is sitting at around 85%. And what is also encouraging is that the customer mix is broad so that you don't have an exposure on one customer. So as an example in Joburg only, the biggest customer is sitting around 50% utilization of that facility, which is really quite encouraging. So as a result of that, we've had to add 6,000 pallets at our Meadowview facility in Johannesburg. If you look at the focus areas, in the Seafreight and Intermodal businesses, we're going to continue to expand our footprint in line with the demand. And that's what we've been doing over the years, and it's why if you go to Maydon Wharf, you'll see our footprint there has grown very well. We -- our multipurpose terminal in Durban has received between 1.5 million and 1.6 million tonnes from 0 in the prior year. Now this is very encouraging for us, and we're going to continue to grow that business. And then our clearing and forwarding business, the challenge -- last year was a challenge in this business in that the airfreight component of our clearing and forwarding was struggling as a result of low traffic on air and securing a booking or booking slots was a challenge. We're hoping that as the airline market comes back, we'll be able to drive this part of the business again. Our product data in Northern Mozambique remains very exciting to us as management. What has worked very well for us and is winning the heart of the customer up north is our compliance with SHERQ. Last year, we ended with 500,000 hours of free injury. Now this is very commendable and is essentially giving us the license to operate in that area and is giving us a competitive advantage to be a preferred logistics sales provider in that area. We continue to embed our sustainable relationships and partnerships with our customers, and it seems to work very well for us. If you look at where the focus is in this area, which is quite critical for us is we committed to build the Palma logistics hub. We halted that last year given the current -- the insurgent activity that was surging last year. We've since decided to continue with the construction. So we expect that by the end of the first half of this year that, that site should be up and running. It will cover the container depot, ensure depot for our customers. And we also want to increase some engineering activities through our Hesper Engineering business in SGM. The key thing that we're getting the team to really focus on is now that we're in the northern part of Mozambique, we now want to entrench ourselves throughout the East Africa corridor so that to unlock Nacala, Malawi and Zambia corridor, really talking to our strategy of unlocking trade corridors. The other key activities that's coming up, you would have seen the announcement of the return of the graphite, the reopening of the Balama mine. Back end of H2, we should be able to resume that operation and ramp-up the logistics services actually currently conduct. On Rail, and we touched on the Rail merger, which really is about ensuring that we secure the cargo, and securing that cargo will then allow us to deploy our existing vessels -- our existing locomotives, which are currently at low cost base. Just to share numbers, we're currently sitting at the deployment rate of 31%. We need to be above 33% to get to profitable level. So I'm encouraged that the team embeds and drive these contracts, we should start seeing the uplift in our deployment rates. I'm excited that we secured a 6-year extension of our existing grain wagon hire contract between Malawi and Mozambique. So those are going to continue to generate earnings for us. Where the focused area is, is about the extending our Northern Line concession with the railway of Zimbabwe and also ramping up deployment I shared -- I touched on earlier. What is key for us is to ensure that we continue to work with various partners, including Zambia rail, in Zimbabwe as well as in South Africa to make sure that the North-South corridor continues to work. We're also to pursue opportunistic locomotives disposal as they arise. Thank you.

Thanks, Xolani. David?

Good morning, all, and again, thank you for joining us this morning. I think as you've probably seen throughout the industry, and it's a common theme, so I'm not going to go on about it too much, but for us, 2020 was really about 3 stories. We started the year off with lots of energy, very well positioned to take advantage of what we saw as coming in the year, only to find that we were forced to reconsider a lot of that, has much hit us. So where did we focus our attention during 2020? Firstly was about balance sheet, and that was to protect the net asset value. The second issue for us was to make sure that we maintained earnings and ensure that we generated earnings and importantly, cash flow. And then the third impact for us was certainly about the management of our social impact, and I'll talk a little bit to that. So from the perspective of balance sheet, we didn't disappear into our shells. We continued to grow. We continued to look for good opportunities, and they were there throughout the year. So we did increase advantages -- advances. However, we had a deliberate plan to reduce what, for us, has been a drag on our earnings over the years. I've been accused many times, and those of you on the call will know what I'm talking about, about having an lazy balance sheet. So we did look at that. We've had negative carry impacting our earnings. So we did deliberately reduce our core funding base, focusing on getting -- or not renewing expense of fixed interest deposits and also not rolling our bond towards the latter half of the year when that matured, ZAR 240 million of our bond. So that was a deliberate strategy. However, clearly, banks are about securing funding and making sure that we're liquid, so one can't get complacent on that front. And as Fathima alluded to, we have recovered all of the reduction in deposits that we saw at the end of the year by the end of February, but that's into more efficient and more cost-effective deposits. On the advances side, clearly, a huge amount of caution on credits, advancing of credits and, as you see in the numbers, provisioning. So impairments from both a forward-looking view, obviously, impact of ECL modeling, all of that comes through. So hopefully, in time to come, we'll see a reverse of that. But it's too early to tell whether one's being overly cautious or realistic in the current environment. Very important for us is liquidity, and we've stated that over the years. And at year-end, we had over ZAR 3 billion in surplus liquidity. So actually still -- notwithstanding what I said earlier about a lazy balance sheet, still having a huge amount of liquidity to manage that risk. From an earnings perspective, as I said, continuing to write business, managing expenses. Some of it was self-fulfilling. Things like travel obviously disappeared from our expense base, but it did force us and gave us the opportunity to really look at our expense base across the board and be very efficient in managing that. Also very important for us was to look at margin and preserving margin and through looking at our advances book, repricing loans where we were able to do so and writing new loans at the appropriate margin. So margin protection, a very important process for us. Then the management of social impact and clearly staff welfare at the top of that list. We were very quick to -- notwithstanding that we're an essential service and we were able to come into the office or be present in our office, we were working remotely. 95% of our staff was remote from day 1, and in fact, we still have 80% of our staff working remotely. So we found that we can do that. We can be responsible and not expose our staff to unnecessary risk. As a result, we were fortunate that we haven't had any fatalities from a staff perspective in terms of COVID and very few positive cases. From a client perspective, clearly, we've had to engage extensively with our client base. Through the early COVID stages, we were offering and engaging on loan concessions to borrowers who needed to have some relief. Interesting stat on that, we offered or we're engaged with clients, about 170 clients early on in terms of potential relief. We ended up with around 145 of those clients actually taking advantage of some relief for the first few months. By year-end, that 145 was down to 4. So I think it demonstrates the responsibility of our client base, the positive engagement that we had with those clients that they have reverted back to the original repayment conditions by year-end. But it was very much about engagement, understanding the needs of our clients and them understanding our requirements. So it was very much a 2-way discussion. And then the final point on social impact is clearly about industry involvement and industry engagement because this is a countrywide issue, not particular to us. So what was very relevant and prevalent early on was a huge amount of engagement with the banking association, with the regulators and a very proactive and positive engagement and involvement from particularly those 2 bodies, our regulator and banking association. So I do commend them on how they have approached the industry and the requirements in our economy. So that, I think, covers largely the operational points that I've set out on the left. A little bit about 2021 and what we're focused on. You'll probably -- if you compare what we said in 2020, a lot of that is the same, and the reason for it being the same is that we were forced to either defer or delay some of the initiatives we were looking at. None of it has changed. We still are a resolution that our strategy is correct. We're not going to change our caution in terms of lending focus. We see ourselves as a relationship banker, and those relationships are important. And for us to grow, particularly in the SME space, which is what we have as a stated intention, will require additional capital. So that's -- the 2 go hand-in-hand. And clearly, strategic partner introduction and the introduction of new capital will enable us to really ramp up on that front. So that would continue once we're ready to do so. And the other pillar that we're looking at is obviously the platform banking and digitization initiatives, and those are ongoing, and we're still very excited about the opportunities in that respect. So for us, 2021, I think, is about emerging from 2020. We, as I said, have the same very strong balance sheet, and we'll take advantage of the opportunities as they arise. And we see 2021 as hopefully a significant improvement on 2020. And this time around, if we don't have the impairments, that kicks straight back into profits. Hopefully, that is what happens in 2021.

Thank you. If I can now spend a little bit of time talking about the noncore, and we've given you a bit of detail here. You would have seen from Fathima's slides that she referred to the noncore, the net asset base is ZAR 1.65 per share, and you would have seen also that we booked ZAR 1.10 in impairments or valuation adjustments in this area. Senwes, as you know, is now sold to Agribel. We expect that to conclude with money flowing at the end of March on that amount. And the difference between our carrying value and the ZAR 367 million was booked in last year's accounts. Marine Fuels, we've taken a bit longer to get that over the line. And as Fathima has said, that has meant -- according to IFRS, we had to put it back into continuing. And of course, that might ease the accounting of it, but we're still very focused on that. We've got a number of people that we are engaging with, who are potentially interested in acquiring this business. That business made $4 million, our share in the current year. And of course, we took the conservative view of looking at the impairment of the goodwill in order to impair any goodwill that we had on our side and within the business to offset some of that profit that came through on the accounting. On the private equity and the loans to the KZN North Coast loan, unfortunately, and many of you would have seen the [ court ] ruling was favorable. Unfortunately, that deal has fallen through. So we have had to dust off all our workings done this time last year and go back to the market on selling the private equity businesses and coming to terms with how we need to address the North Coast property. The -- there have been a number of smaller sales out of the private equity. If you see there, we've talked about 8 of the 33 have been sold, one transaction in process at the moment. And it's important to remember that all of these businesses have current shareholders. So each one of them requires us to engage with those shareholders and make sure that we find a good fit for them, which is the process that we are underway with at the moment. On the North Coast property, because our collateral was a little bit short, we were forced to book that impairment that you see there to reduce the carrying value down to ZAR 1 billion. So lots of work for me to do specifically now that Xolani has taken over as CEO of Freight. Together with Andrew Blades, I'm making sure that we realize cash from these 2 assets and, in fact, from Senwes, and make sure that money comes through from Senwes as well. If we then look to the outlook for Grindrod. Within Freight Services, we believe we've got the right business model. Our focus on trade corridors is correct. You'll see there the 4 streams that we're working in. The ports and terminals, increasing -- with Xolani, increasing utilization, making sure we expand our current facilities, diversify products and also then expand the terminal footprint as we go. And there's various streams of work being done on all of those. On the container businesses, growing the depot footprint again and expanding our relationship with the shipping lines. After all, it's the shipping lines that are driving the movement of these containers. Both those businesses -- or within each of those areas, ports and terminals, containers, a number of businesses are now working together much more than they have in the past to get the service offering as it sets a full corridor solution. Northern Mozambique, Xolani has talked quite a lot about, we still want to push that Nacala corridor all the way through to Chipata and Zambia to make sure that we can operate that corridor effectively. There are many corridors similar in Africa that are working really well, and the Nacala corridor doesn't need to lift up. The graphite will come back this year. So that's also exciting. And of course, all the work that we can do for Total and for the other people that want to establish themselves in Northern Mozambique, in that oil and gas area, we're very happy to provide them with solutions. On the rail corridors, commercial development is obviously key. And that's the focus for us there, to make sure that we get a deployment of all those locomotives that we do have on our balance sheet. And you can see at the bottom there, the different product types that each of these businesses are dealing with. So the right business model in Freight Services is important to us. If we then look at the next slide, it's very clear that health and safety globally is being tested this year. We have learned how to operate. Unfortunately, not all of our businesses can operate from home. We've learned to operate under these conditions quite well. And I think we're going to see a little bit more of that going into the future. So that was really important to get our -- there were a couple of months in this year where we got very anxious. Xolani was spending a lot of time making sure we have banking facilities available. The business executives were very hard at work, making sure we still got product through our terminals and our depots to ensure we had the right cash flows. So we managed to overcome that quite nicely. The next slide. Obviously, on the business model, we've discussed the growth strategy. As we embed further ourselves in that area of the oil and gas, we will continue to push further East -- further into East Africa. We have sold 4 locomotives into Uganda. We do have a little office in Uganda. We're working on that corridor, the Lake Victoria project. We're busy looking at ship build. So more and more as we move up the corridor -- up the coast, we will expand our footprint, but working from the base that we've set there in the Northern Mozambique. The same in the bank. As you've heard David talk about, we will be driving into that platform banking. We're quite a long way down the line with that exercise and looking at self-funded growth within that bank. From a balance sheet perspective, as you saw Fathima saying that we do have good cash generation, we need to make sure that we apply that cash in a disciplined manner. And I know that, that 1 slide that Fathima puts up on returns is a key focus for all of you as it is for all of us on the management team. Our management team, certainly, in the Freight Services division, is extremely focused on the corridor approach and making sure they work together to drive customer solutions far more so than in the past. And you've heard from David that the bank itself has got a very tight team actively working on the core objectives of the banking platform and relationship lending. We do have to address in South Africa, in the freight businesses, the B-BBEE ownership or participation, which Xolani has got quite a long way down the track on, and we need to work out how best to put that in place. We all know that, and we've said it before, the way that we get confidence in the share price, it's not languishing at ZAR 5, that it's closer to the ZAR 10 is that we consistently perform. I think our Freight Services team has demonstrated that in this year that they managed to pull quite a reasonable profit in a year where at least 2, maybe 3 of the months were completely washed out. And the same on the bank side. We managed to manage the relationships with our clients that has meant that there hasn't been a big disaster on the impairment side within the bank. We do have to execute on these disposals. We're all very focused on the assets that we have in there. It has been a difficult period when we thought we had a deal in place and also, during COVID, not easy to sell businesses during that time. So a lot of focus on making sure we can extract cash out of those businesses to either pay down debt or then return to shareholders. So from an outlook perspective for Grindrod, as we see the economic recovery, I mean it was a very strong recovery in South Africa on the mining side that you've all seen. And of course, you've seen what's happened to the containers as well. Those rates have lifted hugely as our -- as shipping rates all over the world. So a lot of demand for our logistics services. And all the narratives that we see is also pointing to post-pandemic recovery. All the governments are talking about infrastructure. All the governments are talking about climate change-type infrastructure build as well. So a lot of opportunity for us as a logistics business and as a bank lending business as those stimulus packages come through for us to execute on them. So very positive for us going forward. I think it's important for us to recognize that, globally, we've had a one man's year. It's not over yet. We had one of our colleagues lose someone in his family last weekend. So it's not over yet. We need to be focused. This COVID hasn't gone away for us in South Africa. We had a number of deaths during the year. And obviously, we are -- heartfelt condolences have been to those families and the friends of those people. We'd also like to thank all of our staff for what -- the effort that they've put in this year. It hasn't been easy. And they put their shoulders to the wheel and made sure we've come through, which is very pleasing indeed. Our customers have had the same challenges as us, and we've managed -- as have the suppliers, we've managed to work with both of those during this time. We had huge support from the funders during June, July, and we're very appreciative of that -- their support. So to all of you, thanks again for dialing in. We are very proud of what our team has managed to achieve this year, and we're looking forward to the next year. It has its challenges. And hopefully, there won't be a bigger curve ball than the one we had this year. But we're up for it. And I think we're well placed at both the bank and the Freight Services business to address what comes our way. A lot of the questions I guess have gone through to Alison. You can also e-mail Fathima, and we can get back to you that way. But if I could ask Alison now to please, if you could pose the questions to us so that we could try to give answers to many of them as we can.

Yes. Andrew, we have got a few questions.

Thank you.

And the first one is, what initiatives are being considered to improve the divisional's ROEs? 8% on freight and 3% on the bank means Grindrod will continue trading at a big discount to core NAV.

Thank you, Alison. Yes. I think you can say that's exactly what we're focused on. The specific strategy within Freight Services is to increase utilization, increase diversification, make sure that we extend our footprint by developing customer corridor solutions. And we know the demand is there for Africa's products, both minerals, agri and liquid assets. And we know the corridors that we want to operate on. And you can see what we put up now in this annexure, that map that we're working on. We do have to be very disciplined about our deployment of capital. I expect one of the questions that Alison has got is on the insurgency in Mozambique. You will know that we are operating 7 ships up there. We have those ships on short-term contracts. So we've got to be very careful about how we deploy our capital. We can't commit Grindrod to extensive costs where we don't see the returns coming. So I think -- I'm not sure if I've answered completely from a Freight Services side, but it is the Freight Services executive team to make sure that return lift is something that's more acceptable to us. And yes, we're very focused on that ZAR 5 share price, which we believe to be way under what we are actually worth, and we need to get that share price up through the sale of the noncore and through continual execution of profits against our businesses, net assets. On the bank side, do you want to...

May I just add on the bank side. Clearly, a huge component of that is just eliminating the impact of impairments. And if we were just to revert back to the mean or what we would see as a normal impairment year, we have a higher ROE immediately and the growth plan would get us back to an acceptable and appropriate ROE going forward.

Yes. I think it's fair to say that the bank also got affected by the interest rate drop.

Yes. Yes.

So I hope we have answered that question. You got any more, Alison?

Yes. Please can you clarify if the ZAR 600 million of preference share funding indicated in the 2020 legal net debt analysis slide relates to the listed Grindrod preference shares or the preference shares issued by the private equity and property company to the Grindrod investment trust structure?

So that is funding in the bank that the bank have used to fund various of its advances. And in the prior year, it was required to be consolidated. So it become internal to Grindrod. And we have now unbundled that share trust and sold it essentially in inverted commas to a third party. And it, therefore, becomes external debt to the group. So it was always there, and it's got nothing to do with the Grindrod Limited bridge. It's funding for the bank.

Okay. The next question -- sorry, is that it? The next question. What was changed in the Grindrod investment trust structure that resulted in Grindrod's business trust structure being deconsolidated for the 2020 financial year?

Okay. Fathima, are you happy to answer?

I will take that. So -- and at the risk of not trying to sound like an accounting lecture, I'm going to try and keep this simple. If we look at the facts, from a consolidation perspective, a lot of it is benchmarked on control. The position in December 2019 was that it was bank representation with respect to the trustees on the trust. The employees of the bank were involved in the management and running of the trust. And to a large extent, the returns that the trust generated would effectively default back to the bank. The position now in December 2020 is that we have no representation on the trust -- on the Board of Trustees. We are not involved in the management of the trust since we're not involved in that role. And from a returns perspective, it would only be to the extent of utilization of facilities that we've advanced, which were effectively undrawn and unutilized at year-end. Those are essentially the main drivers around the deconsolidation.

Thanks, Fathima.

Andrew, you did touch on the security issues in Northern Mozambique. We have had quite a few questions on that. I'll just read this one specifically. Have the operations in Northern Mozambique been impacted by the security concerns in the area? And if so, what steps are being taken to ensure the safety of the staff deployed in the region?

Yes. Okay. No. Very important question, and it's played on us throughout the year. I think we firstly have to accept that this is a very, very deep problem. It's not a problem that's arisen in a year, yet it's come to a hit because Total is now developing and there are people in the area. But I think this is a big social position that Mozambique have to address as a country. And we cannot make class of it. What happened -- what has been happening in Northern Mozambique is not acceptable and needs to be addressed. We operate in Northern Mozambique under the auspices of Total. Total control that area, which they have under their watch. And if they do not want anyone on site, we have to leave. And you'll know over December that they scaled down from 4,000 employees to 1,600 employees on site. Now that's a lot of people. Total has a significant security presence that they are in touch with. There are many governments involved, as you're aware. And the primary concern is to make sure that we protect all of those people. But of course, we would like there to be a solution within Mozambique to this problem. Otherwise, it probably will not go away. We have scaled down a few people over that area as Total didn't have a need for a full confidence. But largely, we are the only means of getting product into that region because you cannot use the trucking transport into the region. So our ships are highly critical just for bringing in food and water, fuel to drive generators, et cetera, as well as the construction material. So very important to us. So far, we haven't been involved at all in any services. We've been -- within the zone, the secure zone, the Total sits at, which is patrolled by various security forces. So we've been very fortunate not to be involved in those. But you're absolutely right. We have to protect our people. And there haven't been any requests from any of them at this point that they're feeling uncomfortable where they're working. And we do rotate people in and out of there on a regular basis to make sure that they have rest time off that zone. Hopefully, that's answered most of those questions.

Thank you, Andrew. Just something more on Northern Mozambique. There's been a lot of speak -- a lot spoken about project cargo in Northern Mozambique. That would likely take a few years to be complete. What next after the infrastructure is complete?

So the -- that's a good question. So the business model currently, as you outlined, is project cargo based into the construction, which -- with Total having to deliver on the commitment in 2023, that will actually slow down. But what then happens because we'd have set up ourselves in Beiras -- Beira in terms of offering continued services, the change will be from -- will be in terms of the cargo form or the form of cargo that now translates into your FMCG, your fuels, et cetera, which we'll continue to provide. And the kicker -- following that would be the kicking off their project, which then puts us back into the project mode. So my expectation is that for the next, say, 5 years, we're going to continue the project mode. And then the annuity in terms of the sustainability of the businesses going forward will then translate into normal cargo like any other town where you import essential products that are required for the community that will be building up there.

Yes. I think -- if I can add to that, Alison. I think it's important that this is one aspect of our Northern Mozambique, so where Xolani earlier referred to about the corridor through to Chipata and Zambia. There's a lot of agri in land of Northern Mozambique as well as in, what I was referring to, right, as we're getting about the push into Tanzania and Uganda to all areas that we are spending time investing. You'll remember that we've been talking about -- and we have employed a person at least from -- at least 10 years ago on this oil and gas project. So we have a number of people that are already working on the next growth for us as we push up the East Coast into East Africa. Next, Alison?

Thank you. Next question. As and when the private equity assets are disposed of, would the related party loan advances be settled? Or would bank continue to have loan exposure to these underlying businesses?

Thanks, Alison. So the focus for us to sell the private equity assets and the land loans on a measured basis, those will then settle the debts that Grindrod Financial Services or Grindrod Limited has to fund those investments. If those new owners decide to change their banking lines, if some of them have bank lines with Grindrod Bank, that's for Grindrod Bank to deal with separately. That's natural. And I'm sure that the current owners who will still be in those businesses will look forward to still having those facilities available or they'll look to go to elsewhere.

Yes. I mean from the bank's perspective, clearly, we're happy with those loans. They're commercial loans into businesses on, as Andrew said, normal terms. So we certainly wouldn't want to be exiting our quality lending that is into those businesses.

Okay. But as you would know, Grindrod Bank is run entirely independently of Grindrod Limited. The Board of Nonexecutives is entirely independent. We have one representative on the Grindrod Bank Board, besides David as the Chief Executive. So very completely -- all their credit processes, everything is completely separated. And in fact, the reserve bank actually measures the amount of lending that the bank does to us on a monthly basis -- at Grindrod Limited, on a monthly basis. So it's very strictly measured and governed. Thanks, Alison. Any more?

Yes. Will you be resuming the share buyback? And how much are you looking to invest in IT and governance in the bank?

Okay. The buyback first. You would see from that net debt graph that our buyback has pushed us into borrowings, if you look at that little line that goes across the net debt graph. And of course, when the transaction fell through on the private equity sales, we thought that we better be a bit more conservative. As we make progress now with selling these assets, we will look to settle debt and commence buying back shares again as it goes. David?

Yes. In terms of spend on IT and governance, I mean there's no targets, per se, in terms of what is our target to spend on governance. But inevitably, it's about people. So capacity to deal with regulatory compliance. And that's an ongoing cost. So we're not -- it's not a particular project that will have an end. From an IT perspective, we are involving third-party service providers rather than building technology and technological capacity in-house. And again, what previously we had looked at as an in-house spend of close to ZAR 30 million to ZAR 40 million over a couple of years will be replaced by third party and outsourced capacity, and that will be at a reduced level. But it's not a cost that's going away, either of those.

And it's fair to say that the governance cost of a small bank is a big cost. They have a number of committees, et cetera.

Yes. Disproportionate to the capacity, but it is what it is. So we all, as banks, have to ensure that we are profitable, notwithstanding that.

And the IT costs, as you would imagine, in Grindrod Limited is also a significant cost. More and more and more, the ability to have platforms or have transparency in the product, even minerals, open to customers, is coming through as a requirement. And in fact, you would imagine that -- as you would imagine, there are a number of, what we call, bots running various processes within our businesses as Grindrod. Next, Alison?

Okay. Thank you. Your results have been positive overall, which is commendable. What provisions have you made for possible third wave of the pandemic on the group's performance?

Thanks, Alison. Thank you for the comment. We have, in this last 6 months, learned some very tough lessons on how to operate in this environment. We don't have any specific accounting provisions made, but we have now learned the processes and procedures that we have to put in place to make sure that we operate and keep our people safe. That's going to -- been a big learning, and it's not going away. As I said to you, one of our senior people lost a family member over the weekend. This is still very real to us. So we are not allowing our people to get too complacent as an organization. So a very strict regime driven out of the HR Director's office, making sure that we are compliant. He updates us every week, giving us the stats, understanding where areas of higher infection are, et cetera, et cetera. So still very important to us. But as to an accounting provision, the provisions that you saw on the private equity book, on the land, those have obviously got some reference to the fact that COVID was around, that certainly came into the DCF models that our corporate finance people in the bank and the audit of corporate finance people looked at. But no -- outside of that, no specific accounting provision for COVID. David?

I think the question also, though, is relating to have we -- from a business and operating provision, have we -- do we see anything different? And certainly in the bank, we don't because we've continued operating throughout. And I think the same probably goes for the rest of the group. And we had to deal with it, Phase 1 and 2 of the wave. I think if there's a third wave, it would be more of the same.

Yes. I mean the reality is that our protocols have worked. Challenging as the environment was, it has worked. So what kind of tides, wave -- or wave 1, if I can call it wave 1, was a hard lockdown, which meant that we had a standstill on our operations. As I've highlighted earlier in my opening presentation, we ran the stockpiles down. We had to put almost standstill 104 essential cargoes. And throughout that, we managed to come out. And we used that scenario to map out what are the important protocols that we need to put in place, what is it that to require, which current institution we have to approach to make sure that we can unlock some of the things? For instance, we had to approach, in Mozambique, the government to allow us to run at least with 1/3 of the staff. We now know that for those who can work from home should actually continue to work from home. So I think we -- if there is wave 3, God forbid, I think we are well equipped to tackle it, but we can't be too relaxed about it.

Thanks. Next, Alison?

Thank you. Can you provide insights on the ferrochrome market trends of late in the ports? And are the tariff increases in the terminal business sustainable? Please provide some insights.

So maybe to just touch on tariffs. A bit of history, which applies both to chrome and magnetite. About 4, 5 years ago, when we had a crash in the market, we reset our tariffs to encourage volume so that at least our terminals continue to operate, and we generated cash to EBITDA to sustain our operations. So what's happened going forward is that we've improved our efficiencies along the way and on the port side, we've invested a bit more. And as customers gained confidence in our ability to deliver reliably in those ports and in our terminals, we incrementally started introducing the clawback on the rates. And because we've done it systematically and it's coupled with efficiencies and reliability of our operations, we believe that those incremental will continue to remain sustainable. At these current levels of the iron ore price, I'd like to think -- as well as the chrome, I'd like to think that the relativity of the logistics costs compared to the price -- lending price into China is still relatively low. There potentially should be a scope to uplift those. So I'm quite comfortable that because we've done this in a responsible manner and continued to make earnings, it should be sustainable. On the magnetite side, I'm also relatively comfortable. And there, what will drive it more is the mix between magnetite and coal. And as we push more of the magnetite, I truly believe that the pricing continues to be sustainable. Yes, one can benefit from the uptick if the market gets overheated, one should have a potential to get abnormal rate on spot cargoes, but that will only be short-lived.

Next, Alison?

Thank you. Next question. Can you please provide specific targets on cost savings and the focus areas there are? And how have your staffing levels changed over the year for core, noncore, et cetera?

Okay. Maybe a little bit of a detailed question. But within this current year, we've shrunk a little bit of staff complement and we certainly have pulled back the cost base. The business plan that we did for the year -- for this year and the year thereafter was tabled in November, well before we came into the New Year. And that business then looked to keep that level of staffing and cost at the same. So we expected an increase of 4.5% in salaries. But other than that, we're looking to keep that cost base at that level that we started the year. There have been, unfortunately, some staff that we've had to let go during the year. And there will still be a few more repositioning of businesses to make sure that they're set for the new normal. So yes, there will be certainly a cost base that we need to look at within some of those businesses.

Yes. If I can build on what Andrew said, specifically in our Logistics businesses, I think the teams have been quite proactive, probably forced into it a little bit through the pandemic. But in our Intermodal businesses, in our carrier businesses, within our rail businesses, we've restructured and probably close to about 90 people have been retrenched. So we believe that we've rightsized the workforce, which is a big part of how -- of what our cost structure comprises. We believe we've rightsized that, and we're well positioned working into 2021. On the costing side, we had some uplift because with remote working conditions, we have had to invest quite significantly in our IT infrastructure and more specifically on the IT security side. So we've invested quite heavily and rightly so into uplifting on that. And in 2021, the focus will be more around looking at how effective it is exploiting the various penetration mechanisms. We continue to look at costing for the group. It's something that Andrew mentioned we do almost on a daily basis. But we believe from a people perspective and then the other big aspect is around our infrastructure, you'll see also in our carrier businesses into some of the adjustments in our headline earnings, we have been making quite significant disposals this year. And that's come through in the year. So again, we've tried to keep our businesses as sustainable as possible going into 2021.

It is a very focusing point when ports get shut and borders get shut and you've got a big workforce and you've got a whole lot of expenses to meet at the end of the month, that's very -- that really focuses your mind. And Xolani led that charge in June last year, engaging with the banks, which were very supportive. He gave us some headroom. And then engaging with every single business around how to make sure that they had used the cash they had to run their businesses and how they could get some payments early. We had some suppliers, Total was one of them, in the carrier business that paid us early. Maersk was another that paid us early to help us with cash flows, which is a part of that whole exercise that those teams did to make sure they managed liquidity and the cost base. So a lot of focus on cost base in the last year. Next, Alison?

Thank you, Andrew. Next question. Please be more specific on the acceptable levels of return on equity and freight you referred to. Please break this down within the underlying operations in freight. Finally, please speak to specific key milestones put in place.

Okay. This is all about return on equity, Alison?

Yes. That is correct.

Okay. So we have a business plan that each year gets tabled with the Board. That business plan has a very detailed by business look for 3 years ahead. It has a base case and it has other scenarios on it, which inform the Board where we are looking to deploy capital, which businesses are coming through better and which not. The ROE for the Ports and Terminals business in our 21 year is at 12% in that business plan and Logistics at 11%. And I know that they do increase in the next year about 2% each. That is monitored every month as the monthly results come together. The underlying businesses -- I mean there are many, many, many of them. They all have their own targets. And I don't know them offhand. But they're all focused on making sure that they achieve those targets. That is your base case. If the -- if 1 or 2 of the other things that we're working on come off, well, then that improves it, too. So I mean I think I've kind of answered some of it. The bank was always at ROE that was 10% or thereabout, right?

12 plus.

12 plus. So -- and of course, that measurement is slightly different than the bank. But that's the quick view. I'm very happy to take this question in detail if it's important to the person that asked the question. I think there will also be a lot of shakeout now when we finally get to realize the disposals and deploy that capital on debt and buybacks. And I think that will also change the whole picture. Next, Alison?

Thank you. What are your plans for your vehicle delivery logistics business? The market has taken a big downturn and new competition went up. Is this still considered core to the group?

Yes. Good question. That business and the fuel distribution business, both in this year, took a big beating. A very difficult market for them to be in. The car carrier business is lifted. I mean there's quite a lot of car sales coming through at the moment. And the fuel is also lifted. But if you say, are those core to the Grindrod's strategy of corridor solutions? Clearly, it isn't. We operate within Durban, Johannesburg and Cape Town on moving cars for the various OEMs. They are on trucks, and they happen to be on the road. So yes, that's aligned. We do have some trucks in our container business. We have a couple of mineral trucks as well. But the car carrier and even the fuel carrier, it's not strategic corridors in Africa as much as the rest of the business. So if there was a better owner and a better partner for those businesses, we would certainly entertain a discussion around where that business should be. Next, Alison?

Thank you, Andrew. We have one last question. The Seafreight and Intermodal businesses reported really good earnings. We recently saw a significant increases in container rates. How does this impact on Grindrod?

So it's quite positive that the rates are where they are. What it does mean for us is that it creates a demand for MTs into the East because they need those to fill them up and probably send them to Europe or America. So for us, the opportunity it presents is affecting the shipping lines in terms of evacuating those containers and -- yes, and deliver the service to the shipping lines.

Yes. So the ships that the Seafreight businesses use are all on fixed charters from owners, and they're at fixed rates. So they haven't been affected by the increase in charter rates that -- if they were not fixed. Clearly, when those roll over, there will be a negotiation process and that may come through as extra cost at that point. In the clearing and forwarding business, as Xolani have said earlier, when the planes all disappeared, obviously, there was a whole lot of -- how do we get product on the roof, some of those around the world. Some of those planes are back on. And yes, a lot of bookings on ships at the moment. The customers are doing a double take at the size of the cost. And that's clearly because the world was out of sync on containers. The lockdown in various parts of the world means the containers ended up in the wrong places, and the global supply lines got completely interrupted. And it was exactly the same a few years ago when gas first came on the scene as an alternative to oil, and the U.S. became long on gas. And we saw all those supply chains moving in the -- what we then had as the handysize and the tankers all have to change their direction. So I think it will take a while for this to settle down. But there's no doubt that if you look across all the shipping types, that all of those rates are increasing. And that's partly as a result of very low build of these ships over the last 5 to 10 years. So we do expect shipping rates to continue and not just container rates, the actual ships themselves, to continue to become more and more expensive in the near term. Because with fixed, as I say, on our own vessels, that won't have too much cost impact on us. But the impact on global supply lines, obviously, we would have to watch. Thanks, Alison.

Thank you. There are no more questions.

Thanks, Alison, and thank you for all those questions. And if we haven't in any way answered a question property, please make sure that we get them on e-mail. You have that facility. I'll pick up on Alison who the people are that asked those questions. If there are any more detail you want, please do engage with us. We're very happy to give you the answers. And thank you very much once again for your time. We are very keen on our business, and we know where we're going, and we -- the strategy is clear amongst us all, and the team is aligned. And we look forward to restoring shareholder value, which is what our key narrative is at the moment, to ensure that our share price recovers. Thank you for your interest and good day to you.