Grindrod Limited (GND) Earnings Call Transcript & Summary

Welcome. We're going to just start off with a quick video. When we did the video last year, everyone was very excited by it, so we thought we'd do another one. It's a quick glimpse into a whole lot of things that have happened during the year. [Presentation]

Thank you. And now welcome -- are we up on video, and thank you, thank you. Coordinating now in this world with 3 different methods of getting through the video, but very nice to see people. It's been very scary looking at a screen for the last couple of years, but it's really good to have people in front of us, and welcome back. I'm sure for many the first time back at the Metzler, so welcome back to the Metzler. And indeed, a big welcome to Cheryl. Thank you, Cheryl. Cheryl has been with us for a number of months now going through the business, going to the meetings, understanding the business, meeting some of our partners, and we look forward to a great future under her stewardship. Having said that, Mike Hankinson after 12 years, retires in May. So great innings on the mark. We'll talk a little bit about the strategy and how we can see that coming through, so a big thank you to Mike as he leaves in May, and welcome to Cheryl. And indeed, as you saw, Deepak coming on to the Board as well, mining experience in Zambia has laterally been with Arise, so knows all the countries in Africa. So we're looking to -- for a lot of good input from Deepak as well. We're fortunate to have Grant, Grant Gelink on our Board as well. He's at the back and a number of service providers and partners, I see them in the audience. Thank you very much for all your support. And it's great for us to be able to present here in person to you. And of course, 1 of the old supporters who's now at Cap, good to have here in the room as well. So today, up front here, it's myself, Andrew Waller; I've got the Finance Director, Fathima Ally; I've got the Chief Executive of Freight Services, Xolani Mbambo; and David Polkinghorne, Chief Executive of the Bank. And we look forward to presenting our results to you today. Okay, thank you. Questions. There's a bit of a trick with the online questions. I'll come through on the screen. So I'll pick up on those at the end. But as always, any questions, e-mail or phone call, and we're happy to answer. This is a picture of one of the ships you saw in the video clip. We have 3 of these that run around our coast, taking product from Durban through to Voltas, for example, we've been as high as Dar es Salaam, actually even Port Louis and up the West Coast depending on where the customer need is. This particular one is moving reefer containers into Cape Town for the citrus season, something we do quite a lot of. And as you can see that a lot of Maersk boxes, particularly on that ship. These are the numbers we pulled out for the highlights, and I know a number of you have already studied the document that came out on SENS this morning. We're particularly proud that we started to get some traction now. And I'd say that is because for a long time, we've held to the strategy. You will recall that the unbundled shipping, and we listed them on NASDAQ. And certainly, I hope that all of you are still shareholders of shipping because you'd be very happy today that share price is running nicely in the current markets. Certainly a lot of us up here are still shareholders, so we're very pleased with that. So that was well done at the time by the Board. And then we said we're going to focus on freight and bank. And I think that's what we're going to see today when we present this. You're going to see that the focus on freight with Xolani's leadership on the volumes is coming through nicely, and the focus on bank and making sure we've got a strong bank that's focused on banking and the platform that will come through quite strongly today. We're particularly proud of the ZAR 1 billion in cash because we always know you can't cheat the cash, right? I've even given up on the IFRS at the moment. The cash is there. So some good results. And yes, a dividend as well. So that's nice. The Board agreed on that yesterday, and we'll put that forward now to the shareholders. So good results and will impact us as we go. We cannot look at the environment because as much as we do a whole lot of good work with our customers and working on solutions, absolutely the environment played a key role. And I think we in South Africa and Southern Africa are well placed and are very grateful to have had what we have our way of minerals and the agri cycle that we've just been -- that we're currently in and I expect will last a little bit longer still because we at South Africa have benefited from this. I know there's been a lot of noise about not being able to get all our coal out of the country and maybe those companies are actually quite grateful they didn't get it out now because they can get double for it, but certainly, we have been endowed with lots of good resources and good climate, and that certainly has helped us as a country. And where we, as Grindrod has been able to play and to help our customers with the solutions to get the product to us. And we had a slide at the end that talks about the environment going forward. Obviously, that's changed a lot with what we see in Ukraine and Russia, but we'll talk a little bit about that at the end. So strong performance from ports and terminals and logistics, strong performance from bank and some of them being up fully happening at the back, which I'll talk to you as well at the end. What I'd like to do now is hand over to Fathima to talk through the financial numbers for us.

Thank you, Andrew. Good morning to everybody. It's good to be able to meet the people that we've been interacting with the last couple of months virtually, and of course, it's even more special for me because it's my first time on the live presentation with the Grindrod team. Andrew certainly pointed out the highlights. We certainly won short in terms of trying to scratch around looking for highlights this year. But what I'd like to do in the next few minutes is really give you an overview of our segmental financial results and our financial position. And what that really means is that if our number is inclusive of all of the joint venture businesses that we're involved in. From an income statement perspective, certainly, core operations revenue, as well as trading profit up 9% and 32%. Really, the metric has been in volumes this year. The story is volumes, volumes and more volumes. And what's also been nice is that we've had certain milestones that we've achieved in the business operational use here, which Xolani will tell us briefly in a few minutes. Our ports and terminals as well as the coastal shipping and the container depot facilities have really outperformed in 2021. And what was also good is that those who follow us understand that we have quite a lot of U.S. dollar-based revenue in our ports and terminals and logistics business. And despite the exchange rate strengthening year-on-year, we've managed to produce the results that we've gotten to. So a lot of hard work by the teams on the ground. The bank has also come to the party this year. The teams have done well, the management of the loan book, and we're seeing the credit losses at 1/3 of the levels that we came to the market with in 2020. Really, the only exceptional item that we've got in our core numbers this year is the fair value gains on the investments that we hold in Grindrod Shipping, close to about ZAR 230 million of those have been recorded, but those were offset almost entirely by the losses in the private equity portfolio. Nontrading items are still a significant number for us, but a large portion of that is what we would have reported to you already at the half year, linked to us disposing our road transportation businesses, as well as some private equity subsidiary as well. The only new item really in non-trading items in the second half has been the impairment of our rail logistics investment. So we've recorded close to about ZAR 48 million in the numbers. And really, we just haven't seen the volumes materialize this year on the South Corridor. We operate the concession between Beitbridge and Bulawayo and the sulphur just hasn't been coming down on rail. Overall, our earnings of ZAR 176 million, of which core earnings comprises ZAR 540 million. What we've attempted to do on this slide is to walk through from the earnings to the headline earnings from our core businesses. So we're sitting at ZAR 886 million, which is 166% improvement from the year before. The adjustments that we've made, again, no surprises. We recorded provisioning at the half year linked to us seizing our oil and gas activities in Northern Mozambique. And then of course, I've talked to the impact of the Grindrod Shipping shares. So on a normalized basis, we're looking at headline earnings for our core businesses at ZAR 707 million, which is a 70% uplift again on 2020. From a balance sheet perspective, the key themes that I'd like to highlight, property, plant and equipment, as well as our intangible assets have reduced from the year before, again, linked to the disposal of our fleet as well as the goodwill that we derecognized linked to the carrier businesses. Right-of-use assets have increased, again linked to SA copper leases or effectively Transnet head leases that we've acquired this year for our container depot facility businesses as well as Beaconvale, again, another container facility and then certainly other leases that we would have acquired this year from a yellow equipment and just operating as a perspective within the businesses. Big decline in our investments. Our investment in the Port of Maputo sits in the ZAR 2 billion, and that's just sitting at about ZAR 1.1 billion this year. But the big decline really comes in from the private equity portfolio. We set with the portfolio of ZAR 1.5 billion in 2020 and it's really sitting at just over ZAR 600 million this year. Within other assets, the noncurrent assets held for sale, as well as about ZAR 127 million of what's in current assets are receivables. We're still holding on balance sheet uncollected with respect to the disposals that we've made. Our disposal in the U.K. real estate business was on a deferred payment arrangement. Subsequent to year-end, out of the ZAR 437 odd million that was uncollected at year-end, we've actually collected close to about ZAR 158 million our plans are to collect close to about ZAR 75 million by the end of this year, leading just the final tranches on that sale investment. From a current asset perspective, we are seeing uplift. So we are holding a bit of working capital. You'll see an uplift in current liabilities as well. That's really with respect to our marine fuel businesses based on where the oil prices are -- so the debtors book has increased as well as just our general business is some improved trading. On to the bank, loans and advances, up 5%. You'll see that the real impact of that is really 7%, but that's because the advance that we have on the North Coast properties that we hold at group, we've also increased that by 2% this year on the back of additional securities and volumes that we've registered on the properties. Liquidity for the bank in excess of ZAR 5 billion. From an equity and liabilities perspective, shareholders' equity, we're sitting at a NAV of ZAR 11.76. And essentially, what that facility to support is our decision to continue with our share buybacks. So we've been on the strategic trajectory over the last 2 years and certainly we'll continue still at a fairly sizable discount to our listed share price. The interest-bearing borrowings is really linked to the right-of-use assets and the additional leases. We've taken up bank deposit book up 20%, and David will give more insight into the retail book that sits in that number and effectively the current liabilities, like our citrus because of the step-up in trading. In terms of our group net debt position, we started off this financial year at ZAR 683 million of net debt. We're closing with ZAR 451 million net cash. You'll see the big ZAR 1 billion that we've generated from operations. We've effectively applied it to our interest, dividends and taxation and then a fair chunk of that into investments and capital expenditure. The cash portion of that ZAR 768 million was really about ZAR 460 million and the noncash is the context of the leases of about ZAR 308 million in that number. ZAR 996 million generated on the back of the disposals that we've made, and again ZAR 1 billion predominantly from Fe private equity and the Grindrod Shipping shares, the number is slightly lower because the impact of the share buybacks that we've executed close to about ZAR 30 million is included in that, as well as the ZAR 25 million that we paid to buy from minorities in the bank. So the bank is now 100% owned by the group. If we exclude the bank from our net debt and look at our net debt analysis excluding, we're sitting at ZAR 3.2 billion worth of debt. Effectively, we've reduced our debt by close to 20%. And you can see the huge declines are coming through in the number as well as the preferred share funding into the private equity business. So we made a conscious decision to reduce the debt in the private equity business so that we gain the headroom and get the gearing right as we make CapEx and we build the fleet businesses and we get the debt sitting in the income-generating businesses or in the projects that have the right IRRs. Our treasury project in the final lapses of effectively closing that out, and essentially, what we're doing there is we're trying to get the balance right between our short-term and long-term facilities, and reducing that overdraft has been a step that we needed to conclude on to getting to that. We're certainly in discussions with the banks at the moment, and we're hoping to wrap that process up in the next couple of weeks. Overall, the headroom that we gained has allowed us to resume the dividend position within the group. And I think we're sitting fairly comfortably now as we go into the next cycle of interest changes, as well as the fact that, as Andrew alluded to, we do still have a little bit of cleanup lift to do in the noncore businesses. We thought we just put a slide together for you, actually showing you specifically how the ZAR 1 billion in disposal monies were extended. I think the really big one is just to have the appreciation that within that private equity, we have no returns. A big portion of that spend close to 60% goes to debt servicing, and that's why it was really important for us to reduce that debt. From a returns perspective, we're seeing good uplift on 2020. So facing the group of 17% and then total core operations at 14%. If we exclude the impact of the Grindrod Shipping gains that we've got this year, we're sitting comfortably at 13% freight improved and then at 12% on core operations. You'll see in the wheel or the breakdown of our NAV, our noncore operations constitute about 253 of that 1,156. I think that's it from my side.

Thank you Fathima. Can we just hold the questions to the end, and we'll come back. Cool.

Good morning, everyone. It really privileged to be here. I have set 2 years of virtual meeting. And it also feels good to be able to talking to the positive results that we've achieved this year as freight services. But before I turn into the highlights slide and take you through and the journey of freight services in terms of how it is achieved. I'd really like to quickly recap on what freight services strategy is. So freight services strategy is about customer solutions, and that's what we live by. We know that we've got strategic assets in the form of export facilities in Mozambique, and that helps us a great deal to then go to customers and design solutions. But for us to be able to deliver on that, firstly, we need to understand the customer's business as if it is our own, through our debt understanding what is able to design a solution that is relevant for the customer and the relevant solution talk to effectiveness of the solution, efficiency, as well as cost effectiveness in terms of its cargo flow. As you know, like what are your cargo, we follow the path of this resistance and that is defined by efficiency in the channel as well as cost effectiveness. So customer is key in that conversation. But second to that is our people and our communities. Without our people, we can design a right solution for the customers and without the support of the communities and the intrusiveness of the communities we know how it happens. And thirdly, we've got strategic assets, as I've highlighted earlier, and that enables us to really sell the right solutions. But what you're saying as freight services is that even if we can't be able to use that infrastructure, we are open to -- open up our new channel altogether, where we don't participate because the important passenger is the customer and is the right solution for the customer. Now the most important aspect of the strategic pillar is all of our operational excellence. Now if you have got a right solution designed in paper, the best way to end credibility from our customer is to be able to deliver, and deliver top to operational excellence. And the key thing there is about simplicity because there is a sophistication in simplicity. And also simplifying our operations, automating and getting our price to buy. The last 2 pillars really talked to revenue growth. And revenue growth really comes from brownfield expansion projects, which I will talk to later. I also talk about acquisition where you're bringing in revenue growth through organic acquisitions. And we also talked about driving efficiencies to get to the right revenue level. The last one, but not the least is shareholder value creation. At the end of Q4, these 5 strategic pillars should talked to creating value for the shareholders. And I'm quite pleased that we are now starting to see the clean shoots in our numbers. And the key for us as management is really to sustain that and hopefully, to grow it. I haven't given that context on our strategy, what has been our highlights as freight services this year. So if you look at our scorecard or before we move on to the scorecard, this machine is what you call a reefer container, a massive piece of equipment, very critical to our mechanized operation in Matola. It has the capacity to load 5,000 tonnes per hour. And if you add another one, you get to 10,000 tonnes per hour, which means in a day, we can load the Panamax vessel. And if you can load the Panamax vessel a day, you can do the numbers in terms of what we can do. Of course, then you need to the customer retail feed into the port in terms of your rail as well as the tracking. I thought I should just say a bit of that because this time I go to Matola whose equipment excites me together with the shiploader. Thank you. So if you look at our highlights, in our scorecards, we've shown a significant improvement all around in 2021. But first and foremost, we operated without a fatality. So it means every employee in 2021 that came to work in Grindrod went back home safely. We update that and we're pleased with that. Secondly, our injury frequency rates, which really measures the intensity of the injuries we care at work dropped. If you look at terminals, we came in at 0.37, we used 0.5 as our benchmark. You can also see that the logistics is trending positively on their statistics. So we're really pleased with that. We do recognize that some we get is done on the logistics. So we remain steadfast in our quest for a safe working environment. On the financial forecast, if you look at the lower part of the table, we grew our revenue by 31% in our terminals business. That is highly commendable. The logistics revenue remains at ZAR 3.2 billion. And the reason for that is that we exited our road transportation, which was a loss-making revenue. And you'll see that translating to ZAR 244 million headline earnings in the Logistics segment, headline stands at ZAR 121 million last year. So this is a pleasing outcome. If you go to our EBITDA margins for both segments of the business, those are broadly in line with 2020 levels. We recall that at the interim that in our Terminals business, we had a challenge in the first half of the year, where our margins were relatively low, even though the volume was increasing. That was largely because of the road transportation into our terminal, which is commanding a lower margins. We have since discontinued the tracking. Return on equity improved terminals were 17% return on equity. We're losing nearly 15% as a benchmark for ourselves. So we're quite pleased with that. I'm also pleased that the logistics business more than doubled its return on equity from 6% to 13% this year. I'm challenging my team to get to over 15% on that one. And that logistics ROE performance was underpinned by good performance in RTL and foreign business as well as the good performance in our coastal shipping and container business. I'm not going to tell a little picture on sure you've seen it, but this is NPDC breadth as you know, we've gone through the rehabilitation of those at our port. At interim last year, I shared with you in terms of what you needed to do in H2 in order to improve our H1 position, which was not where we wanted it to be. I'm not going to go through all the points, but I'm sure you're seeing more greens and probably enriched color than the red. So for instance, we committed to work on our margins improvement, which I've just highlighted that we did and we switched off the margins and profitable operations into Matola. I said when we look at our rail allocation into our terminals and port. And I said, we will look at our best utilizations. Now we get out to the team and to address those issues. And I'm pleased to say that I trust them successfully and is showing in our results. Threats came in towards the back end of last year when we reflectively went through a crippling fire incident on the conveyor belt that links our HSP facility with the port. This was a first bid for us, but our team with the help of Transnet we're able to put together an interim solution within weeks of an incident. That is highly commendable. And I'm really, really pleased with Transnet having common Board and work with us to make sure that you continue operations even under the force majeure situation. Going forward, we are exploring various options with Transnet to install an alternative belting whilst we are working on the main rehabilitation. So if you can get an outcome for -- a positive outcome, we should be back on the belts in no time. That is important because with the current solution, it creates the congestion at the port and you can imagine the unsafe working conditions and the risk that it also creates. It also doesn't help much with the current congestion at the port. So we really need to find the right solution within ourselves and Transnet. If you look at our operational performance, I'm quite pleased that we've performed well against our operational KPIs. So we have key operations to explain that in the potential. So if you look at the chart, port volumes are up 20% on an annual basis against last year. We achieved 22.3 million tonnes, and that's a record for the port ever. And I'm hoping that project to continue. If you look at our Matola drybulk terminal. According to drybulk terminal because it is more than 1 commodity, we have 8.3 million tonnes another record, up 50% on 2020. In both cases the operations delivered a fantastic recovery in the first half with the Matola recording 68% growth compared to the first half. So this was really a year of different halves. And I really commend the team to have put in extra effort in the second half to make sure that we recover our position. As we communicated, we loaded the biggest parcel in the second half. Performance by our teams is commendable in this regard. Also, we broke our monthly volume record twice in the second half of last year. First, we hit 900,000 tonnes. And secondly, we hit 1 million tonnes. So the challenge is on the team I can see clearly there to actually get 1.2 million tonnes, we'll see. Every month, of course. If you look at this chart, really at this table, really putting a context in terms of the market outlook as we enter 2022. Overall, we remain buoyant on the market outlook on the commodities that we handle to our port and terminals. And you would have seen the coal price that you had over 200,000 a tonne but the short-term view on coal is a positive one, probably to the medium term, some -- but we think that in the long term, structurally record our fundamentals would be weak, as the green initiatives continue. So our in-house view is that this will call it be weak. We're fully aware of the short-term volatility and cyclicality which comes with these commodities. That's why we're here to manage that risk. Some adjustments are saying that volatility do understand the chance to work wise in your earnings. So all the growth opportunities for our business, particularly Port and Terminals. We know that the port has completed substantially all it's rehabilitation and its chrome slab, which is really your stockyard. So their capacity at the moment to deliver chrome and ferrochrome sitting at around 9.3 million tonnes. And the volumes they achieved last year were around 8 million tonnes. So there is a scope to increase those volumes to 9.3 million tonnes. We probably can stretch them to get to 10 million tonnes with the current capacity that they have. So there's a core opportunity we see on the expansion. Secondly, we will grow Matola drybulk terminal. You would have seen the announcement that you made to expect. We will grow from an annual capacity of 7.3 million tonnes to 12 million tonnes. That's an additional of about 4.7 million tonnes or rounded up to 5 million tonnes. Now that requires us to spend ZAR 1.8 billion of capital expenditure in the next 3 to 5 years. We'll do that responsibly because we have a single bid operation in Matola and therefore, we need to ensure that there's an implemented project, which do not impact on the customers' cargo flow. So that requires us to work sensibly on that project. So I'm quite pleased with that potential of growth in the terminal. And we run high level numbers, and the investment heavy rates will be achieved. I'm pleased that we completed the expansion of our Maputo drybulk which we normally refer to it as GML in our numbers. And there was work being done behind the scenes to expanded operation on the back of alternative cargo. So what core markets have done has enabled us to actually accelerate that program. And so as of today, we now at 4.5 million tonne capacity on the GML and on Maputo drybulk. This allows us to actually attract or provide access to our potential in joint ventures. And as a terminal operator and the Port Master Plan, it is our obligation to as much as we can provide access to those who want to export commodities. Of course, in the current demand that we see, it's going to be virtually impossible to fulfill access to everyone that's coming to the port. And you certainly work to meet NPDC, to make sure that we can accommodate as much as we can of our customers. The set of disposal done just to interesting a bit is, we've created a new channel because of the commodity port congestion, where you can track and record into Matola through Switzerland and then rail them on to our channel. Also our port is currently not congested during the revenue on the trends through that facility at the moment. And customers are excited by it. And it's 1 way that we've actually designed a solution that works for the customer under the current market conditions. So this -- if we now move on to Logistics. How many before logistics, the key point I also wanted to make is that there was an opportunity on the PSP in Richards Bay. The quantum of that investment at this stage is unknown. And I guess when the PSP comes out in the market will be able to evaluate. And at that point in time, depending on whether will be in operating in that we'll announce our investment commitment that will come with a PSP. We also continue to work on executing on our manganese strategy. This is an exciting area for us, as I've highlighted before, but it does require some patience. I can see some few faces who are meant to deliver on our first meaningful parcel. Just to remind audience, we're already moving 0.3 million tonnes of manganese as it stands now to our Maydon Wharf facility in Durban. And we're looking to establish a facility in a short term in PE or others. And that will use that to an export through our PE. So those are the growth opportunities really under the potential we have. There is a PSP that came out. Unfortunately, the way it's structured. It's now an EPCM, a PSP, which limits our meaningful participation in it, but working behind the things in terms of what we can do. Our PSP is a private sector participation where Transnet are looking at how they can bring in private sector with investments to come to improve efficiencies, invest in the infrastructure in our infrastructure whether Israel or Peter. So that's what PSPs about. And we are aware of the tenders that have come out in the market. Now if we look at our Logistics business. In 2021, again, at interim, we highlighted our focus pillar, in terms of getting our Page 2 right. Again, we executed most of hygiene points as you can see, as we committed last year, and that really paid off. These exception points include our joint venture deal, which we announced last year. We're working on comp con approval. And hopefully, we'll have that sit in few mines to come. However, what remains steady -- sorry, we remain ready to resume swiftly on our LNG projects in Mozambique. Its resumption date remains uncertain. And as a result of that, we haven't built it into our forecast at all. So if it does come through, it would be an upside. And also wanted to note is that we've engaged our LCT, lending costs that we used last year to move the project cargo. We engage with the owners of LCTs, so that when the project comes back, we're able to switch on added capability, which really gives us -- gave us a competitive advantage. And then if you look at the market outlook on our experience. I think the fundamentals are right, as mentioned. In fact across all of these years where we operate our logistics business, both short and long term. The tightness of container availability due to constraints worldwide at the ports continues to sustain high rates. I mean in the money are sharing, we do see that container, reefer container for food, you can get a rate of $12,000, that's massive. In fact, if you also look at the vessel, you can look in the vessel up to 80,000 tonnes a day depending on the size of the vessel. So it's incredible what's going on in the market. And you see that in the medium term that will remain in place given the current climate that's currently ongoing. So the shipping rates do remain stable in the half. So why are the opportunities of growth in our logistics business. We remain optimistic in our container depot joint venture, as I've indicated earlier, and that will come with an increased business activity for us, even though we're taking a reduction in the shareholding. And the cash to utilize our shareholders in terms of contribution will be utilized to grow our existing businesses, whether we deploy it in TCM or any other revenue generating activities. I've highlighted the fact that there's a pipeline in our container -- in the container terminal in Durban and in Doha. That PSP is positioned for international players, unfortunately. And for obvious reasons that none of the logistics companies in SA have got that capability because that sits with Transnet. Now for us to find some more of partnering with those international players in order to participate in that space, it seems a bit of a hard work to get run over the line. Although we are positive on the announcement of the possible open access to the country's rail network, we remain unclear on the shape it will take. And therefore, we're taking a conservative view on road and rail. But having said that, we are seeing a massive increase in the inquiries that you get for our locomotives. We own about 55 locomotives of that. Last year, 47 locomotives was deployed. We think the rate will go up to over 80% in the coming years. And second is the opportunity comes on the rail network in South Africa. We will participate to the extent that we've got the locomotives available and not messed up by the other opportunities, which you see both inside and outside the country. So we also have accelerated our subsea maintenance program on the internal commodities that you currently have in our container facility in order to position ourselves for participation. On that note, I'd like to thank you.

Well, again, if I can add my welcome and thanks to all of you for being here. Do you feel I come back with family, particularly right here, who has been with us for many years. So love to see those familiar faces. It's also interesting when you see how a business can transform when you put people under their passion, I don't know whether you picked up, Xolani was always focused on numbers older. And now you're talking about machines and people and things that coal and things that excite them, and you can see that vibrant is. So it's great to have that energy and it's feeding through into the whole team. So I've got to keep up with us now as things go. And banking has been quite tough in the last few years. But as you can see, it's starting to reemerge. And certainly, that energy in my team and the bank is coming back after 2 tough years. So I'm delighted with that. The balance sheet, as Fathima said again, we've kept it simple. And I'm going to address the issue before anyone texts me again. But we've got surplus liquidity as Fathima said, over ZAR 5 billion. Just to give a quick recon of that so I can help you out with it. Simplistically, we talk about our loans and advances versus our deposit base is about ZAR 2 billion, as you can see from there. But in those deposits, we exclude -- because we talk about core deposits, we exclude any of the retail deposits and that's close to ZAR 1 billion. So you can add those into debt liquidity that we had. Why do we exclude it? Because historically, it was related to the SASSA contract that we were managing and it was very volatile. So we never counted it as money we could ever use. With that having then gone now back to being able to look at that as core deposits, and this number will change. We'll stop using a core deposit differential going forward. There's probably at least ZAR 300 million to ZAR 400 million of core deposits on top of that now that we can talk to. And on top of that, we've got the lipid bond in the press, close to ZAR 1 billion, and our capital, obviously, of ZAR 1.3, ZAR 1.35. So all of that gets you over the ZAR 5 billion number if you added that. So yes, strong and liquid balance sheet. The surplus cash, fortunately, is not costing us. If we were carrying over ZAR 5 billion there was negative carry on it, that would be a problem. So it's not a problem in that respect. It's just how we can effectively use it. Now I'm going to -- again, throw this away from me and not make it my problem anymore, because what we need is really some additional capital, and we've got in the room today, our latest executive appointments is Nkululeko Sowazi and she didn't know I was going to mention this, I would say second down the job. But her task is to grow our SME business, take control of it, we're in the process of getting new capital Tier 1, Tier 2 capital, which we can really channel into this initiative. And I'm very excited about having Sowazi on Board and again, new energy and concentration and focus on that area of our business. So welcome, Sowazi, officially. On the income statement, strong recovery in earnings, not difficult to offer a number that was there, but it's good to see. So over 150% growth in earnings. And that's despite still carrying the coverage provisions that we put in place. We also managed to add a right provision overlay as we had the July rights unrest. So that was something we thought we should just consider and put that in place as well, plus provisioning for some additional costs that we took in 2021. So all in all, I'm very comfortable with the number that we've got to from an earnings perspective. But even more importantly, I'm very excited about where that number can get to going forward. So 2022, I think we can put all the previous reasoning always excuses COVID, right, low economy, worse kind of issues. We've got to move past that now and look at -- what is the current state of the business that we're in. How do we deal with that and how do we grow it within that economy. So I see a huge opportunity to revert back to the numbers that you would have seen back 2018 from the bank as opposed to the last few years. The pick up in the net asset value in case anyone again is looking at that number, that includes ZAR 285 million of preference share capital, which is Tier 1 capital for us. So depending on which NAV number you look at, it's either ZAR 1.35, which is ordinary share capital with the ZAR 1.6 of Tier 1 capital. I've spoken to most of these points. I'm not going to repeat them. But certainly, I will say, we had a good year despite, as I said, treading water in many respects. So we've seen ourselves position the balance sheet again for growth going forward. Again, exciting for us is the platform banking strategy that we've adopted. We've got over 1 million Easy Pay Everywhere accounts still, which is the old carryover from platform banking relationships. Those are our permanent accounts active. So that generates significant revenue in that business. And then obviously, which was announced at the latter half of the year, the platform banking relationship and the arrangement with Shoprite Checkers. We see significant opportunity in that. We'll take a while, obviously, it's about volume. It's about account numbers. So that is a joint initiative for us to grow those, and that's the challenge. And then obviously, increase the offering because obviously, the more you expand the offering of those accounts, the more you really need that to generate. So certainly, something that's significant for us and a significant focus area as we go forward. New capital I've talked to. That is an ongoing initiative of ours. So focus from my perspective to get that in place during the course of this year. And then, yes, as final point, I suppose, for us going forward, focus now on regenerating the earnings. Costs are always an issue in the banking industry. The regulatory environment, compliance, we can't ignore that. Scale is important as a result. So we have to be very conscious of what is required from a governance perspective, critical for us in managing our business appropriately, making sure that we carry that forward into our platform banking relationships because that's effectively what is what we need to bring in to those relationships. So we can't ignore that, we can't scrimp on that. So costs, we can't ignore. So obviously, scale on the income side is the balancing factor. And I think we're well placed in 2022 to start rebuilding that strongly. I think if we go back to the beginning, I said a lot of work being done on the strategy. And a lot of focus on freight services getting back to basics and banking getting back to basics. And that's been well done by the management teams. I think the timing of the shipping unbundling was off a tune. Certainly, if we had 5 years of what they had in their markets, we probably would have done some in drastic to our shipping division. So having them on their own is opportune, and it has worked out. So with that focus on freight and bank, now at all that remains is for me to complete the work that we want to do on making sure that we are only freight and bank and that we don't have a Marine Fuels business. We need to find a new owner for that business. We're working with our partner and with the management team there to make sure that we can exit that. That's important to us. We still have 2 of the -- what we refer to as the private equity investments, 2 major ones. There are a couple of little ones, but the 2 major ones -- and again, we're working with our co-partners in those businesses to work out how they want to grow their businesses going forward. It's not nice for an entrepreneur with a bank that's been alongside them, now the bank says they want to be out. It's not a great place for them to be in. So we need to nurture that business and make sure they end up in the right space to build their businesses going forward. So the work being done on both those. And then, of course, we have this exposure, the loans that we have to the various owners of this large tract of land between [indiscernible] and Glasgow is 15 kilometers of beach frontage and up to the highway. It's a huge tract of land where we initially helped the partner Vitol to get away mills and land. So we've got loans to these different shareholders. And we need to make sure that we have -- we work with these guys -- the team to sell off pieces or develop pieces. There's a whole lot of work being done on Seton, which I'm sure you've probably seen in the press, a lot of work being done on various hotel groups and some industry with quite a fuse municipalities. So there's lots of work being done in this area. So that's -- those are the 3 areas that we still have in the back of our head that we need to address in order that we can now say we've done and now we can go forward. And that's when the shareholders say to me, have you -- when are you going to buy back shares? Have you bought enough shares back? And yes, we probably haven't bought enough shares and maybe not return enough money, but these are the 3 things that still keep us awake. But when I come to work, I have to say, Xolani will still have these things. So that's the only part, but it's holding us a little bit back.

[indiscernible] to get your shareholders to do that not your shareholder funds from an internal share point.

Thank you, sir. We'll certainly bear your comments in mind. Thank you. So that's essentially the noncore operations that I am completely responsible for and working on day in and day out. If we then move to the market outlook and of course, that's changing over the days and nights, right? So these stats are all stats that we took out of the third quarter of last year. The areas that we operate in and the areas that are strong, as I said right at the outset, we're very fortunate that we're in the mineral economy, and we've got a great agricultural cycle at the moment. The work that we're doing, Xolani doesn't talk a lot about it, but we're doing a lot of work to explore what we can -- how we can operate in East Africa that comes through here. Of course, I've had a number of questions even this morning on Ukraine and Russia. Firstly, what a very, very sad situation we find ourselves and in the world. We're just getting used to working with COVID, and now we have this. So as the container markets, we're about to start coming right, who knows where they're going to be now. Maersk is one of our partners who have been vocal about, they're not calling Russia, so maybe there'll be more ships on hand for us to use. But certainly, you're not going to see those containers to and from Russia and to and from the Ukraine. And of course, Ukraine is responsible for feeding most of North Africa. So we're going to have a number of challenges. Our coal miners have been receiving calls overnight from Europe looking for coal. Of course, we were making good progress on the green revolution to stop eliminating coal that's taken a bit of a backseat while this is going on. So we see for us in South Africa huge opportunity to make sure that we do our part to provide more food and more power. And certainly for us at Grindrod as part of that supply chain we'll be doing all we can to assist that. So I think good -- what we've seen certainly January and February are good months for us. So it looks like we're going into the new year no pressure team. It looks like we're going well into the new year. So we're looking forward to it. Thank you. That is what we have by our formal presentation. And very happy now to take questions. And I think what we'll do is take questions from the floor. Sam has got the mic.

Congratulations on the results and the presentation. I found it particularly informative the way you took us through your various activities. If I may ask, Dave, did I hear you correctly about preference shares being Tier 1 capital? Because you're in very lonely company. First Rand announced yesterday, they repurchasing theirs. That leaves only Standard Bank and EPSA. So good luck.

Yes, just a comment on that. The different kinds of press, obviously, the first rand Standard Bank ones with the listed press, ours are very specific, and they have terms in place, which are tantamount to capital, nobody to convert them towards.

If I may, would you comment, please, on your cost of capital versus your ROE? And where you see your ROE going and what would be your target? And then if I may, do I read correctly now that the bank is core? And finally, would you comment on your Remgro association and relationship.

Thank you. Let me answer this quickly. Remgro, 25% shareholder, very supportive of us. We have a member on the board, Peter, who probably most of you know from this Vodacom days, obviously doing a whole lot more at Grindrod, and he has an associate director alongside him. They attend all our meetings, all our committees and are very supportive in the process. Not as demanding as some of the shareholders in this room, I can tell you, by way of why haven't you bought back shares, why haven't you -- those sort of questions, but very supportive. So we are very fortunate to have them. And of course, alongside them, we still have the family as a 10% shareholder, and we have Walter Grindrod on our Board. So we've got a very firm team of people with skin in the game, but I'm not prepared to take dawdling, which is good. So that's good. Bank has always been core to us. We do understand that when the shareholders buy Grindrod that don't necessarily buy Grindrod because of the bank. We certainly understand that. But the way we've always said is the bank is very important to us, and it was growing from nothing, right, after the sale of the original business to old mutual back in the day. So we're very proud of what David's team has done there. The question on the balance sheet and returns. We think we're starting to get there now. And that's why we -- at request by a lot of you put that little dial, the circle, that side of the circle. We're starting to get to the right sort of numbers. And I think that's also why you see the share price on you tick up a bit. And I think also when we start being brave enough to now say right, the expansion plans are as follows, I think that also helps with restoring our equity. Certainly, and a lot of the shareholders have with a smile our debt from our perspective, is too low. But we still have, as I mentioned on the previous slide, we still have those 3 areas that we need to finish off addressing. And we're not sure where those are going to end up. And until those are really addressed property, we'll be conservative. But we also see the banks spending more and more time on is that EBITDA multiple. And we will -- our EBITDA multiple is fine, and we're well within it. So we think we still have some headroom that we could use. But all of these projects, as we've done in the past, we will tend to put the debt into the project. So as soon as you've got a project that looks like it's got legs, the banks will entertain it, provided you've got the right undertaking from the customers and the producers, et cetera. I think that's where it is. As to what level we're going to sit on debt-to-equity, that's an open question. At the moment, you saw we're down at 25%. As I say, I think that's quite low. But we're not yet at that position where we say we're okay or we want to add more.

You mentioned the cost of capital number.

Cost of capital number? Yes. So on ROE, as part of why we use an ROE of 15%, so we're just below that.

Thank you, Mr. Waller, I have a question from Ms. Ally and also one for Mr. Polkinghorne, please. Ms. Ally against intangibles on the balance sheet. There was a comment about logistics impairments. I'd like to hear a little bit more about that. What is the nature of those impairments? And what is the quantum of those impairments?

Thanks for the questions. From an intangibles perspective, we were holding for the road transportation businesses close to about ZAR 145 million worth of goodwill. We've essentially impaired all of that. And when I say impaired, impaired in the cost of we've disposed those businesses now.

And as the word impairments restrict just to what you've said, it's a plural.

It's a plural because it's multiple businesses. It's our automotive business. It's our fuel carrier business in different jurisdictions, South Africa and Namibia.

Thank you. Mr. Polkinghorne, the difference currently between deposits and loans, in rand terms is ZAR 1.9 million -- ZAR 1.9 billion, forgive me, whereas a year ago, it was ZAR 600 million. So it suggests, therefore, that you are paying interest on ZAR 1.3 billion without getting anything in return. Do I read that correctly?

No. Because that cash we placed in the market. So the surplus liquidity, we then placed back into the market or invest in T-bills or...

So it's not sleeping much.

That's right. It's not costing us anything. Not making any money but it's not costing us anything.

Your numbers are strong and a significant part of the group's earnings is from JVs, joint ventures. It would be very useful to know what percentage in rand terms of that flow, I'm talking about the cash flow, of course, is controlled by specific and rigorous dividend cover and timing as to payment. I'm sure you don't have that number today, but when it comes to annual report, that's the kind of thing that an analyst would like to see because that's not a given that those joint ventures are under your direct.

Yes, that's a good question. And I'll certainly look at it. The joint ventures, if I look at TCM or our Matola drybulk, which is a big operation, we have Vitol as our partner. They're a 55% shareholder, but we agreed to run it jointly. We operate it. As you can understand, we're on the ground, Vitol trading oil and presumably very busy in Ukraine and Russia at the moment. So we have a really good relationship with them. We are very comfortable with the expansion plans, they're very comfortable with returning capital to the shareholder. So we don't have any restrictions from them as a joint venture partner. We also don't have restrictions now from the banks that lend into TCM. Now of course, with the expansions that we are allowed to do, that will be an interesting conversation if we are going to want to spend x billion of rands, how much will the RMBs and standard banks and add to the net banks put on us when we pull them into this. So there will presumably be some covenants there. The other joint venture that we have on the clearing and forwarding side is with Röhlig International. They have the international network. They don't have their own people on the ground in South Africa. We are the people on the ground. Yes, we rely on them for that international network, and they do steer the company a lot. But again, we had negotiations now to get our sales up to 50/50 each so that went very well. So I don't think there are any negative control concerns around our shareholder relations. Maybe as I say, on the banking side, if they want to add restrictions, which we would have to agree to, obviously, that would be potentially would come.

Let's go back to that. What we did about 3 or 4 years ago, we ensured that every JV of the associates has got an outstanding dividend policy. So roughly across all those businesses, we do distributions twice a year. The average payout ratio is about 70%. In some instances, because of this alignment that Andrew talked about, we do go over 70%, especially if we see an overperformance from those businesses. And none of those congregations have made their resistance, and we are aligned in terms of getting those cash from those businesses.

I'll just read some numbers to the gentleman's question, we booked legally equity accounted income of close to about ZAR 289 million. Of that, we've pulled back dividends in the form of actual cash flows to about ZAR 245 million. So we've returned back 85%, which talks to Xolani's point about we do challenge where there's excess cash that it actually returns to shareholder. The only JV that hasn't produced dividends per se is our rail JV, but they have talked to some of the challenges that Xolani described. But what we do have in that business are shareholder loans, and we're seeing those getting paid off at a good rate.

Any more questions from the audience in front of us. We do have a question on the machine. Xolani, I'm sure you read it, do you want to read it out and then answer it?

So the question is coming from Guida Miller at M&G Investments. Congratulations on our results as the planned capacity expansion for the Matola Terminal of approximately 5 million tonnes. Is there no concern around commodity markets slowing down, and this capacity potentially coming online when you go into a down cycle? And then she builds on the question to say, what if any measures are in place to make sure that there are volumes contracted for this additional capacity coming online?

Thanks for that question. If I give you a bit of history, we expanded our capacity to 7.3 million tonnes about 3 years back, and we held back. And we worked hard at getting to where we are. The philosophy that we had talked to, we cannot expand is the commercial strong support. So this year, for the first time, we hit our target and the indication of that going forward, is we hit our target. In terms of the coal commodity, the mix at the moment is 20% coal in the terminal and 80% magnetite which has a tendency to move throughout this cycle as opposed to coal, which only moves when the pricing is right. So in terms of fundamentals, we are seeing an increasing demand for the space for the magnetite. And that's good space to be in. Of course, once we've expanded our facility, we are exposed to cycles, as I've indicated earlier, because the nature of the product is cyclical. But even with that, we are able to -- or we have been able to move cargo above our breakeven position, even when the cycles were very low. I'm talking about iron ore prices falling below $80 a tonne. So we're quite comfortable to inject it investment, and they are just back to why we should do this is that, as you know, the concession has got a life span. And if you delay the spend to later you will struggle to recover investment in terms of the payback and actually realize the returns. So now is the right time, and it also plays positively in terms of our commitment on the Port Master Plan and position us well in our commitment to Mozambique. Thank you.

Thank you. And the next question over the line is, can you please comment on the sustainability and potential range of the Ports and Terminals ROE? Please touch on the key moving parts, what is in your control, as well as the impact of planned CapEx. I think that's almost a repeat of that question, Xolani. Important to split the Port and Terminal out. You've got the Port of Maputo, slightly different return metrics to terminal.

And maybe just a bit of color. So in our TCM operation, and in general, across terminal, we targeted 15%. Of course, the impact in terms of delivering that is the underutilization of our facility, which is what we've seen over the years. But once the cycle comes, you in the game for terminal is that the market customers are keen on moving volumes because they also have capital on the ground. And during low prices they want to move cargo at least to keep the engine running. So we do have an exposure and the 15% target will be impacted with the prices fall, but the fundamentals on iron ore, how much better. So we're not heavily reliant on coal with consumer.

Next question, and we probably touched on it a bit throughout the presentation. Great volumes coming through from Maputo Port and Matola. Could you just comment on the commodities contributed the greatest to the volume growth across the business?

Well, in terms of perhaps ranking that market from kind of perspective in terms of shareholding, magnetite and iron ore was the main contributor, followed by chrome and ferrochrome into the main port and then coal. That ratio may slightly change in the short term given the increased demand for the space to move coal. And if the working at that you've seen and at the Port of Richards Bay can be unlocked. We might see a little bit of more flavor towards coal, but overall, we feel that magnetite or iron ore and will continue to be a key commodity.

And the last question is around the rail and the opportunities that we have in rail, which, I guess, is an ongoing question. We, as Grindrod has ownership or a share of ownership in 55 locomotives and 2 vessels, and we have 150 wagons. The total asset value on our books of that investment is ZAR 200 million. We do believe that there is value greater than that in that NAV. However, we need to see the earnings coming from it. First is very clear. And we have taken impairments in the part you can't reverse the impairments until you see the earnings stream coming. Yes, if we decided to sell all the -- like us, you can do the math for self on 55 locos. You're going to get more than ZAR 200 million back. So there is opportunity to sell them more but that's not what we go. We right understanding how they can be used and how we can use our expertise in the rail businesses that we run to help with the mineral and agri, and whatever we see coming out of Transnet in the coming weeks and months on the rail side. Until we know -- until we see the PSP as Xolani says, it has been difficult to guess what it means to us. But we're very pleased to be in a position where we could do so. May we check if there are any questions from the conference call?

Yes, there are. The first question comes from Nick Keher of Signal Asset Managers.

I think my question was related to the rail that you've just spoken about. At the moment, the coal mines seem to be struggling to get coal to the ports and to export them and with coal prices at absolute record highs in the whole coal market being turned upside down by the Ukrainian crisis. I'm just trying to find out from you guys what the opportunities are for Grindrod, both on the rail side and on the port side. Can you maybe get to very optimistic scenario for me and maybe just less optimistic scenario.

Indeed, indeed. I think as I flippantly said earlier, the likes of -- are probably very pleased that they haven't exported all of their stockpile because they can get double for it now, right? So obviously, is a big challenge for us as a country and how we can help the world with what's going to be a very luckily as a cold winter has moved on from Europe, but it's going to be a cold time for many people and no power. We'll certainly be engaging with Transnet and the coal customers to see if there's any way we can help. CFM also got a lot to contribute in that area. As Xolani said that we've already got some areas prepared in Maputo Main port, where we can quite quickly take more volume. We do have facilities in Richards Bay and we do have facilities in Durban, all of them would be available to ensure that we can play our part in it. As I said earlier, how Transnet goes about rail is yet for us to see. We do have some locomotives that can help. They're not quite the same as the Transnet locos. So there are quite technical details like the braking systems must be aligned, those sorts of things, which is why Transnet, I think through this quite carefully. But I'm sure that they're a long way down that track on that thinking, and we'll know soon. On the port side, we've seen what they've done -- what Transnet has done on the container terminal, and that's really exciting for us as a country, although it may exclude us as local players, we do believe that bringing in the DP World and the MSCs and the Maersks of the world, they are the people that can run these container terminals and do so all over the world very efficiently. And yes, there will be some work for us to do, I'm sure. So that's very positive to see what Portia and her team are doing on the container side. And we hope that the same will happen on the rail. Lots of discussions I know have been taking place, and let's see how we can help. It certainly doesn't help to put more trucks on the road. The border post at -- into Mozambique was only running at 450 trucks a month or so ago and is now up at 900. And in the previous room, we are running 1,000 trucks into the port. That is for magnetite. So you can do 1,000 trucks, but that's not going to help you. We need sizable volume and we all know the sizable volume means rail. And that's the solution that we need to make sure that we can bring to the market. I hope that answered enough the question.

Is Transnet just a complete black box to you? Are you having no insight into what their plans could look like?

No, it's not a black box at all. We work day in, day out with Transnet and CFM both on the ports and the rail. Rail, huge involvement, because they're running 30, 40, 50 trains to our facilities every single day. And the reason why we can do the volumes that we have through Matola in the second half is absolutely because Transnet. We had a derailment last Friday. By Saturday morning, the Transnet people are on the ground fixing it. And it was in our facility in Mozambique that had the only obligation they had was that they would like their wagons back. So we work hand-in-hand with them and find them very cooperative in every sphere of running our operations. The challenges that they have internally obviously has got to do with the PSMA and the various rules that they have to make sure that they abide by in coming to the RFIs or RFQs or whatever acronym they use for how they allow us to participate as a private sector in this film. So yes, we've seen a lot of -- we've had a lot of discussions about how it could occur but we wait for, obviously, the definitive procedure that we need to follow to ensure that we can help.

I guess that's -- I'll just end off now, but I guess that's my question. Can we increase capacity by 10%, by 20%, what is that scenario that I should kind of think about?

From a Grindrod perspective, I know from a Transnet perspective and RBCT, there's capacity. From a Grindrod perspective, you saw the numbers that Xolani put on his slide. Those is what our opportunities that we see taking into account what we're seeing on the coal. So if you look on that slide on the Port and Terminals and indeed on the logistics, you can see what those numbers are.

Okay. And just a last question. Are you paid when you load coal based on the price of coal or just based on volume?

Sorry, can you just repeat that question?

When you are paid -- are you paid on just volume or you are paid on the coal?

I wish I was paid on the price of coal, indeed, yes. That's always been a challenge for us. I've got a couple of customers in the room, they'll be able to contribute a little bit of their profit share in this room. No, obviously, there's a -- if you want to be short term is, there's an opportunity for us to be -- to stand ground and auction sites of that's not necessarily our style. Will we make a cycling more margin? I'm sure we will, because when the coal mines are making the money that they are, they're not going to fight us as much as we've had in the past rate. So there is a little bit of an opportunity. No, we don't get paid on price. We get paid on the service we provide. Thank you very much. And if you have any more please e-mail, it's always open. 2 more questions, with the growth at Maputo operations and plan to expand what are Grindrod's CapEx commitments as a JV partner. CapEx commitments, I think, Xolani, you've spoken a bit to that. Do you want to...

[indiscernible] 1.6 billion particularly our commitment on Matola.

And then does Grindrod plan to bid for any Transnet RFPs renew private sector opportunities as SA ports such as Durban? So where we are with the 2 container terminals, Durban and Doha is that Transnet has now taken a step to invite the large container operators to come in to assist them with those container terminals. Would there be space for Grindrod to pay alongside those big container terminal operators? Yes, absolutely. Would we like to do it? Yes, absolutely. Is it necessary? The freight container terminals all over the world in far more complicated jurisdictions than here. So I don't expect any of them to come running to say, Andrew, why don't you please provide us with a few people that can help us here, they may. And just to reiterate, I think that is the right move for South Africa. We need these key players that know what they're doing to come and help us lift our game in South Africa. And as Grindrod, you saw those little ships. So we will continue to have lots of opportunity to make our little slice of the action in ensuring the supply chains operate. So yes, we'd love to be, but unlikely, it's more likely to go to one of those big players, which we think it is the right thing to do. All right. Any more questions on the phone line?

No, sir, we have no questions from the line.

There's nothing more here. And any more in the audience? One more.

Just a coal question. So rail coal to Richards Bay is just the cost of -- sorry, trucking coal to Richards Bay. I mean, obviously, $300 coal, that must be a very feasible. What would it cost you in rand per tonne to rail coal from Malanga down to Richards Bay?

So there is a lot of coal at the moment that is trucked from Northern itself. So certainly into our facilities. And of course, there's quite a lot of rail that comes into us and RBCT. Important to remember, RBCT has the big maxiwagons, the new wagons and we saw on the spin, our suppliers operate on the smaller wagons. So we see enough volume using those smaller wagons. But as the pricing you -- Sean, do you want to hazard a number. Road haul from...

That is to ZAR 600 versus rail will cost you about ZAR 250. Another $25, it can generate all day at these rates.

Yes. And I'm sure that's what the plans that the guys are already running through. It's where you're going to put it -- where you're going to drop it and how you then get it on position, whether you can find the ship to take it. So there's a lot of logistics for me to do. Yes. Please stay at home. This is not COVID, but there'll be a few cold tracks on that. Any other questions in the audience? Wonderful. Thank you once again for your time and for coming in to see us. We welcome your participation and thank you all for making the effort. Please join us for the tea outside. And thank you very much, everyone, on the line and on the Zoom. Thank you.