Nampak Limited (NPK) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Nampak pre-close period conference call. [Operator Instructions] Please also note that this event is being recorded. I would now like to turn the conference over to the Chief Executive Officer, Mr. Erik Smuts. Please go ahead, sir.

Thank you very much. Yes, good afternoon, ladies and gentlemen. Again, welcome to the Nampak pre-close call and our trading update. I'm sure you would have seen the trading update we put out at about lunch today. So what I will do, it's not a long update, I'm going to talk you through just the main sort of items included in the update. And then, of course, afterwards, we will allow some opportunity for questions and feel free then to ask whatever you need some further clarity on. So I think, first of all, I'm going to start with the financial results. I think it's fair to say that it's resilient results despite the impact of COVID-19. I want to point out that the current 6 months under review, and in fact, only 5 months that we've got under review here, it's, of course, been impacted by COVID-19, while the comparative numbers were not. So I think if you keep that in mind, I think you'll agree that it's actually quite a strong recovery from where I think we were during the earlier days of the pandemic. So overall, group revenue increased by 1%. That's been on the back of a very strong performance in Nigeria, where we mentioned we had double-digit volume growth. But it's fair to say it's been softer-than-normal seasonal demand in South Africa, and that's been impacted by the alcohol ban in mostly January this year. And we've seen some delayed impact from that alcohol ban. As expected, it was not as bad as the previous alcohol bans. But nevertheless, there was some softer demand in February and March following the ban. From an operating profit point of view, I think we've reported that operating profit increased significantly. But keeping in mind that's as a result of a lot of cost-saving initiatives, and I'll talk a little bit about that later on, but it also included lower devaluation of monetary items in Angola and Nigeria as well as the loss of disposal for the Cartons Nigeria business that was included for the prior year. If we look at our strategy, I think we're quite satisfied that good progress has been made. We have quite a reduction in our exposure to U.S. dollar debt. You will see that we mentioned that we now are down to 49% at a gross debt level, and that's down from 65% at the end of September last year. I think, in fact, just watch the current rand-dollar, the last time I looked, it was trading at about ZAR 14.77. We'll see where we close today, but maybe just a reminder that we were at ZAR 16.24 at the close of our financial year last year. So quite an improvement, almost 10% improvement on the rand-dollar rate itself. I think it's fair to say that the restructuring initiatives in DivFood and our Rigid businesses are progressing really well. We've already seen quite a bit of savings coming through, and that certainly boosted the trading results. Cash transfers out of Angola, Nigeria were adequate, but Nigeria is certainly getting tighter, and it's something that we are watching very closely. From an operational performance point of view, I'm going to start with the Metals division. So as I mentioned, local demand for Bevcan is normalizing, but it is still below where it used to be. And if you consider the normal seasonal volume for this time of the year, it is still a little bit softer. And the reason for that is the fact that we do not have big events yet. It's interesting to hear that the President has announced that, I think in 15 days' time, they will really look at the amount of people that can attend big events and so on. So we are waiting eagerly to see if there's going to be relaxation on that front. But yes, so local demand is still a bit soft. Luckily, we've got the export contracts. That starts a bit slower than we were hoping, but it's now gaining traction, and it should be full steam ahead for the remainder of the year. You'll see we mentioned that we managed to extend one of our major supply contracts for one of our big customers, and we're happy to say that, that was with no loss of allocation. So same allocation what we used to have, therefore, no loss of market share in one of our biggest contracts. Secondly, we also secured a new contract for the exportation of around 500 million ends also to North America. You might recall that the previous contract that we had to AB InBev, that was for the supply of canned bodies. So this is to a different customer. That's only for the supply of the ends. So very welcome, and that supply has already commenced during March this year. Then Nigeria, I mentioned, very good performance as the beverage market is recovering there after the -- sort of most of the restrictions related to COVID-19 has been lifted. We've seen very good growth there. If anything, the biggest constraint there at the moment is more raw material, to get it through the ports. But overall, we're very happy with the performance there and all doing well in Nigeria. Angola remains very tough. Consumers are still under pressure. The borders are still locked. And as a result, volumes has remained very low. But I'm very happy to say that despite lower volumes, profitability is actually up, and that's a result of some very effective cost-saving initiatives that's been implemented. So overall, the results in Angola actually not bad at all despite the lower volumes. Then the food, much better operational performance. We've seen an increase in revenue. Profitability is looking much better, and that was a result of the cost-saving initiatives, some of the strategic restructuring initiatives that we've implemented. The -- anything disappointing on the food side mainly was the fish catch, say, in other words, for some of the cans we supply to the fisheries have been quite far below expectation. The reason for that is to date, they have not received many or -- many containers of fish that's mainly imported from places like Morocco and so on. We do know that the fish did start arriving at the end of March. So we are looking forward to a much improved second half of the year. So yes, we're hoping to play some catch-up in H2 for that food. As far as the Plastics businesses are concerned, I think it's fair to say that plastic -- our Plastic business has performed in line with expectations. We do have pressure on raw material prices and there's some shortages in the market. And overall, that puts some pressure on margin. Hence, the recovery of the profitability of that business has been a little bit slower than we were hoping for. Nevertheless, they have made very good progress. In our liquid packaging business in South Africa, this is a Paper business, although it is classified under Plastics in South Africa. They performed very well during the first quarter, but they were impacted by the alcohol ban due to the nature of their products, specifically the cartons that they sell for sorghum beer, traditional beer. And as a result, they have been impacted by the alcohol ban. As far as our Plastics business in Zimbabwe, pretty much performed in line with expectation, and therefore, nothing specific to report on that front. As far as the Paper business is concerned in the rest of Africa, that is, first of all, in Zimbabwe, I think we had a very strong performance. But it's fair to say that we had a weaker performance in the rest of Africa, also mainly due to COVID-19 restrictions and similar issues to what we had in South Africa for our cartons business, alcohol bans, et cetera, certainly had an impact on demand. And then the last item that we're covering is around our debt covenants and the asset disposal process. So I think, first of all, we've already reported that we've complied to all our covenants and milestones during the first quarter. We will report on the compliance of our covenants for the second quarter roughly at the end of May, when we release our results for the first half of the year. Then we have certainly received binding offers for several assets, but based on our improved trading results, our lenders have agreed to potentially reduce the requirement to raise a full ZAR 1 billion. Basically, they first want to see if we can maintain our current improved trading results before making a decision on this requirement. So I think that's everything we've included in the trading update. So yes, I think this is the point we will allow for questions related to this trading update.

[Operator Instructions] Our first question is from James Twyman of Prescient Securities.

I've got 2 questions. The first one is on the can exports, could you just give us an idea of the timing of those exports, whether we're talking about the South African exports, Angola exports and the ends exports in terms of how long they will last for into next year? And secondly, whether there's any more development on any potential more exports in addition to the 900 million of can bodies that you've so far mentioned to us? And the second one is, if we assume that the second half is normal compared to the first half, is it seasonally much stronger than the first half? Or -- and whether there's any divisional differences there? So that was it for me.

Okay. Thanks, James. So I think on the first one, so let me handle the 3 different contracts on the exports. So we've got 2 different contracts for the exportation of can bodies. The first one is from South Africa to North America. There was a smaller one to Mexico before, but that's been completed already in October. So we started supplying in terms of the contract in North America from about November onwards. We had a small hiccup on issues with some of the wooden pallets that's being used for the exportation and that put the process on hold for a short period of time. That's been resolved, and we're now sort of back to full supply level. So that first contract is up to December this year. So it's not a very fixed period, but it's essentially meant for up to December. And if there's any further demand, it might be extended, but I think it's a little bit early maybe to speculate about further volume. The second contract is the one for Angola. That's meant to start during the last quarter of our current financial year. In other words, that's only meant to start from about July onwards, and that is dependent on us completing the conversion of the aluminum line in Angola. So I think at the moment, everything is still on track. So that's -- we don't anticipate any major delays in the start of that contract. And that contract is for about 0.5 billion cans, and that's likely to run sort of into the sort of the first half at least of next year or even a little bit more. So that's the second contract. And then the last one for the supply of around 500 million ends, potentially even more, that's around 500 million. That's only for during the current calendar year. So that's also meant to be completed by about December this year. So that was your first question. James, just remind me the second question.

Well, yes, the second one was just the seasonality. Is there any significant seasonality in your divisions?

Yes, there is. So especially in our beverage businesses, as you can imagine, in summer, generally, it's quite seasonal. So we'll have much stronger results during the summer season. However, in the current year -- or on the -- when we compare it to last year, I think you'll probably find the other way around -- in fact, sorry, not the other way around, we obviously had an extremely weak second half last year. So although we are currently comparing sort of COVID-impacted results to last year's first half that did not have COVID, when we now move into the second half of the year, I think that's where you have a much -- we expect a much improved performance this year versus an extremely slow performance last year during the half lockdown and so on. So yes, there is definitely seasonality, but I think last year, of course, it was in sort of at extreme level.

So the second half of this year in Metals, is it seasonally likely to be better or worse than the first half of this year? So ignore last year, just this year, you would expect it to be, in general, slightly weaker without the export benefit.

Yes, it's always slightly weaker. But at the same time, we are still busy recovering in COVID. So if only they start allowing major events and sports at schools, et cetera, again, that will boost it because that's what we lapped left during the first half of the current financial year. But winter generally would be slower than summer volumes. Maybe, sorry, if I can, just want to make one call, James. So last year, you might recall that we mentioned that we -- for the full year last year, we lost about 1/3 of our normal annual volume and most of that happened in the second half of the year. So -- and if you consider that normally, we sell less than 50% of our cans in the second half of the year, and last year, we basically lost more than 30% of our annual volume only in the second half of the year, you can imagine how low the volumes were overall. And hence, now that we're getting closer back to normal, you can expect quite a decent recovery during this upcoming 6 months.

The next question is from Mark Narramore of Excelsia Capital.

Just a question around this operating profit number. You said it is up dramatically on last year, but obviously, pretty in a post-abnormal items number you guys disclosed. Can you give the pre-abnormal number if it was up on last year's number this time? That would be useful. That's my first question.

Mark, I'm going to ask Glenn to respond to that. Just before he does, we -- you would have seen in our December update, we mentioned the trading income was up 18%. And we -- the reason why we said the operating income was up significantly, it was actually a loss last year, if you all remember. And of course, this time around, it's going to be a nice positive number. And hence a percentage, therefore, would have been a meaningless number. But I'm going to ask Glenn to respond to the specifics of your question.

As I mentioned, we previously indicated that the number would be up around 17%. It is significantly further up than that based on the year-to-date February. Erik, I'm not sure whether we can disclose that separate percentage unless we go after in the percentage of that specific number...

Yes. No, we can't.

Because it's significantly higher. Yes.

Yes.

In the future, can you disclose it because it is quite useful just because, obviously, there are -- there's always a bit of noise below that. So just helpful.

Yes. Maybe -- remember from our March results, we will disclose it. But at this place to disclose it where we are at the end of February, we were worried that it might be misleading. Hence, the reason we did not do so. But in the March update, you will get that full disclosure.

Okay. Then just my second question around DivFood. You guys are at a point where you're breakeven or better. And maybe just give us more color, I mean, you said there's some fish catch, but if you maybe exclude that in these results, are you at a point where that business isn't -- is it at a breakeven level or better?

No, it's better. It's better.

Better. Okay. So you're starting to make a small margin in Divfood after the restructuring?

Yes. Yes and we're very comfortable with the results at the moment. Of course, we would always hope it to be better. But you might recall, it made quite a sizable loss last year. At the moment, they are definitely positive.

[Operator Instructions] The next question is from Brent Madel of Renaissance Capital.

I just want to just get some clarity just with regards to the issues around you needing to raise ZAR 1 billion as was required by the debt funders. So I just want to get some clarity just regarding your comments, which implies that your debt funders are looking at your trading operations. I mean, obviously, they've given you an extension on the date. I just want to get clarity, does this mean that if your debt funders are happy with the performance in the second half of the year that they may do away with your requirement to raise ZAR 1 billion? I just want to know whether that ZAR 1 billion is or is not fully a requirement or whether there is the potential that, that requirement could be done away with.

Brent, let me give some clarification. So first of all, obviously, with the reduced profitability last year and the impact of COVID-19, we need to get back to our original covenant of 3x on the EBITDA side. So when we put forward that to our lenders last year, they were nervous that given the high levels of uncertainty, whether we will achieve that through normal trading. And hence, the requirement was agreed upon that we need to raise ZAR 1 billion of capital through either assets disposal or capital raise. So now we've got almost 6 months, we've got 5 months of actual results under our belt, and it's looking a lot better. So we are saying to our lenders, "Well, based on this set of results, where we think we're going to get to the end of the year, do you really think that we still need to raise at least ZAR 1 billion?" So I can't give you more detail than that other than saying, at the moment, the results are looking much better. And if it keeps on looking like it is at the moment or if we can get you what we have put forward as a forecast to our lenders, they might reduce that amount, but there is no commitment from them to do so yet. They said, "You know what, let's give you a bit more time. Let's not force you to sell assets at this point in time. At the thing -- at the moment, things are looking better, but there's still a lot of uncertainty. Let's give it a couple more months, and then we will review it." But in other words, it's not a gun to our head where it used to be essentially in September. I think what they're now saying, "Well, hang on, we can now see what's happening. Let's see if these improved results can be maintained, and then we might sort of revise that requirement." At the same time, they will also look at the actual binding offers that we get in. And then we can jointly look and say, "Well, is -- are these offers good enough?" In other words, if you look at a specific business, how much profit it is generating at the moment. They might look at it and say, "Well, you know what, we see you do have a binding offer, but given a certain offer, we do not think you need to sell it. Based on your trading results we might say, no, we will allow you not to sell it." But we cannot say at all what their decision will be at this point in time. That's entirely up to our lenders. But at this point in time, I think it is fair to say that based on the improved position, there's a high level of confidence that we can get to our covenants through normal trading without the ZAR 1 billion requirement. But let's see how the rest of the year is going to go, and then we'll update the market accordingly.

So if I can just confirm here. So what you're saying is that the lenders have given you an indication that they are willing to review the requirements to raise ZAR 1 billion. At this point, they're willing to review it during the course of the year?

Correct. But they haven't given a commitment either way, all they're saying at the moment, "Yes, we are happy to relook at it".

All right. And if I can just ask you a second question. So I've got my question on Divfood. I just wanted to know, are you positive at the moment in Angola?

Yes. Remember we said even last year, we were positive. And at this stage, we are ahead of where we were last year in Angola.

The next question is from Rajay Ambekar of Excelsia Capital.

I just -- 1 or 2 questions. Firstly, you talked about the revenue being up 1%, but obviously being -- the prior period being impacted by COVID. But have you tried to sort of, in a way, strip out the impact of COVID? Do you kind of look at what sort of that like-for-like number is running at? That's the first question. And then the second question, you talk about sort of the ZAR 1 billion of sales, but dependent on how trading goes and how the banks are watching that. But correct me if I'm wrong, but I mean, with these new contracts kicking in the second half, I mean, surely, sort of your numbers in H2 kind of will be better than sort of what you think for kind of the first half? Or am I missing something there? Can you maybe -- just those 2 points.

Yes. Okay. So let me maybe first clarify. Like I say, the business is seasonal. So when we just compare a second half to a first half, our second half normally is weaker than the first half. But -- so if we look at the -- this year coming up, of course, there will be a lot more exports into that second half that will certainly boost the noncore local seasonal demand. But yes, I think overall, last year's results were really low, and we are expecting a very positive recovery this time around. Hence the -- and of course, all of that is fully disclosed to our lenders. They have all that information, and they will use that to do the assessment whether they want to revise that requirement or not.

Erik, if I could just make a point. I'm not sure whether I heard correctly the question. But I think the point we're trying to make is that the first half of last year was not affected by COVID, whereas the first half of this year is affected by COVID. And despite that, we are 1% up on the revenue line. In the second half of this year, we will be less affected by COVID compared to a very badly affected second half of the previous year.

Correct.

Okay. Great. And maybe just the last question. I think when we last met at the results, you were pretty confident that you'd be within covenants and would not require asset sales to meet covenants. Are you still confident on that?

That term, I don't want to give you a forecast on that, but that certainly was the view. And it is on that basis that we are talking to our lenders to say, "Well, hang on, this is where we are in terms of the trading. And therefore, do we really need to sell all these assets?" Now keep in mind there's some of these assets that we might want to sell anyway. So that's a separate issue. But where there's an asset that we believe is closer to our core business and -- or we don't believe the offer is decent, we would rather keep it and make sure we generate cash than maybe look at disposing of it. Even if it's something that we want to dispose of later, we might want to do so. But of course, if trading suddenly start dipping a little bit more than what's in our current forecast, I think then the lenders might get a bit more nervous and not agree to a postponement or a reduction in that requirement.

So -- and 1 last question, just on working capital. Can you maybe just give us some color on how things have gone about from a working capital perspective so far and kind of the expectations into the full year?

Glenn, do you want to respond or you want me to respond?

Yes, I can respond. If I can give you some color on that, year-to-date, last year, it was quite -- year-to-date February, there was quite a significant outflow of working capital. We have managed to curtail that quite substantially. We did have a relatively contracted September 2020 working capital position because we had pulled back our working capital for -- to accommodate the reduced demand to September. So one would expect in the current period here to be -- and for the half year this time to be an outflow of working capital as we restock the businesses to meet increased demand. But year-to-date February, there's a significant improvement on the previous year, and we will be obviously optimizing that position as much as we can. But bearing in mind that the net working capital position at the end of September had been quite significantly contracted to accommodate reduced demand in the heightened COVID period of September last year.

That's absolutely correct. And I think one thing to add to that, these export orders come with quite lengthy sort of payment terms. And hence, initially, they will be quite an outflow in terms of the accounts receivable on that. But then, of course, that will stabilize. And once these contracts are over, there will -- there should be quite a significant inflow again at the end of it.

[Operator Instructions] The next question is from James Twyman, which is a follow-up from previous.

I've got a couple of follow-ups. The first one is going back to this first half, second half thing. So the second half is seasonally weaker in beverage cans in South Africa compared with the first half. But presumably -- not presumably, but with the export volumes that you've got that will plug -- will that plug all of the seasonal hole or some of the seasonal hole? My assumption was that it would plug probably all of it so that the second half shouldn't be any worse than the first half in South African cans, which is your most seasonal business. And then I had a second question, which was if you do generate significant cash flow in the second half, especially with the low CapEx, should we expect the dollar debt, which you've announced now, to fall further by year-end, let's say?

Okay. James, the first one, I must be honest, off the top of my head, I can't give you that exact analysis on the seasonality. I think it is fair to say that the export should plug quite a bit of that normal dip that you've seen during winter. So I think that is a fair expectation. In terms of the reduction of debt, any money or any capital raise through the disposal process would be paid back pro rata to all the different lenders. So we don't have an ability to only pay that dollar debt or anything. Any of the disposal proceeds would be applied on a pro rata basis to all the different lenders, irrespective of the currency.

Okay. But most of the debt is in dollars. So presumably, that would help.

Well, at the moment, we're set at a gross level, 49% at the moment is in dollars. So therefore, if we pay back everything evenly, it shouldn't make a difference to that. The net position, we'll see how different that is.

Okay. And just one more, if I may. Just -- so you were supposed to have ZAR 1 billion of binding offers by the end of March. Where did you end up getting to? Can you say that or not?

No, no, we can't. And well, first of all, we're not at the end of March yet. So any offer, in theory, can still come in by the end of the day. But -- yes, so -- but we have received binding offers. We're not going to update the market at this point in time where we are. But obviously, that's something that our lenders has got full access to. So you're obviously referring to the time line of getting these binding offers by the end of this month. So that is a process that we are discussing at the moment with our lenders. They are fully up to speed as to where we are, and we'll update the market, of course, when we have our results presentation at the end of May.

The next question is a follow-up from Brent Madel.

Sorry, I just want to get a little bit of clarity just with regards to the position of the lenders. As you said, it's a fluid situation. And obviously, they will take a call at which ever time they feel is prudent. I'm just -- even if you achieve the net debt-to-EBITDA debt covenant by the end of the current financial year, I guess the inherent risk is that the export contracts don't need to get out into FY '22. So it would seem to me illogical that the debtors -- or the funders in this case would really have to wait until either the first half of FY '22 -- sorry, FY '23 probably before they can finally make a call. I'm just trying to get a clarity as to how the funders can ultimately make a call if there is the potential of a significant swing in your earnings if the export orders don't recur. And surely, they will remain conservative as opposed to reducing your requirement at such an early stage when there's a potential if dip if export contracts don't duplicate.

Yes. Brent, I don't want to speak on behalf of our lenders, but we can give them as much information as possible so that they can make a call. Keep in mind that if they reduce the requirement for ZAR 1 billion, it might be just a time line that they move out. So they might decide to say, "Well, we still require ZAR 1 billion, but we'll give you another year or another 3 months or another whatever." Or they can look at it and say, "Well, hang on, we can now see what your trading is going to be." And even without the disposals, they can calculate where we might end up, but I think that's speculating at this point in time. So I think all we can say at this point in time is that based on the improved trading results, they are happy to relook at it. I think that's what it comes down to.

The next question is from Alistair Anderson of Business Day.

Can you hear me?

Yes. Go ahead, Alistair.

I just wanted to ask you, in terms of the export contracts, particularly perhaps to North America, maybe Europe, I mean, in the next 2 years, how much more of that is Nampak is looking to do, how much to export out of Africa? Does it become a much bigger part of your business given risks around Africa?

Alistair, no. These contracts are short term. So I don't think we should sort of assume that, that will be there into the medium term. And it's based on a capacity shortage at the moment in North America. So although the big can makers in North America are busy installing more capacity, building more factories. And once those factories come onstream, that demand will be satisfied from local capacity. The on-cost of importing can from abroad is massive. As you can imagine, we are exporting NTA. So there's quite a bit on cost. And it's really just because of the shortage over the next 12 to 24 months that is -- we've got this opportunity. There is a potential that if growth continues, that capacity might still be inadequate. In such a case, these contracts might be extended for another couple of months or a year or whatever, but there's no certainty around that at the moment. So hence, at the moment, those contracts are only going to, the first one, December of this year and the Angolan one sort of early into next year.

The next question is a follow-up from Mark Narramore.

Just a question around competition in the bevcan market and particularly in South Africa. I know the last meeting you guys had with us, you kind of mentioned one of the competitors was quite a financially difficult position in the SA bevcan space. Maybe if you can elaborate on those dynamics now. And also with the booze ban that's happened in the last year, I've heard consoles been having quite a tough time. Have you guys had any kind of -- stolen any market share from the glass market in the beer space? It would be interesting to hear.

Okay. First of all, around the financial position of competitors, that's not something I can comment on. I think everybody in the packaging space finds it tough. And hence, anybody that was already in a weak position, it properly exacerbated that pressure. But I do know that one of our competitors also managed to secure export contracts in North America. So I think that would have assisted. Beyond that, I don't think there's anything I can comment on. In terms of pack share to glass, I don't have the exact numbers. I would say that at one stage, we certainly did gain some market share. And that's basically during the alcohol ban, the returnable glass floats would not have come back at the required rate. And therefore, any beer they still had in their tanks potentially could have gone into cans ahead of glass. But I don't think that should be anything that should have any long-term impact. If there's a move similar to what we've seen in North America and Europe, that due to the lockdown, there's higher levels of home consumption, then it is reasonable to expect that there would be a benefit towards cans, mainly away from the big returnable glass bottles. And I can say that we have seen very healthy demand for our bigger packs. So it's probably a reasonable assumption to make, but I can't say that, that is necessarily categorically the case.

And just to -- I mean, I can kind of figure out the competitor you're talking about, the exporting there, they're kind of the stronger player. But the other, I think, is GCI, how are they -- I know they were kind of in quite a rough place financially, but I mean, do you have any update on their position?

No, we didn't.

And is there -- I mean, their plant is still up for sale, isn't it?

Listen, you're asking me things I think about my competitor that I would not like to comment on in this call.

[Operator Instructions] Our next question is a follow-up from Ray Ambekar.

Erik, just a quick question on -- you touched on sort of the supply-demand dynamics where you're having to export cans from SA. But have you got any update on kind of that situation in terms of are you seeing sort of new capacity coming online? When will it come online? Or just what has happened there? And when you think maybe that domestic supply, if it was the U.S., for example, when that comes online? Any color on that would be helpful.

Yes. Ray, unfortunately, we don't have visibility about these -- the rate at which that capacity is coming online. We only get feedback from the procurement departments that we deal with on some of these customers. And according to them, the pressure is still on. So they're still trying to get as many cans as they can get from us. And even in our existing supply agreement, if we can produce more cans quicker, they are happy to take that. So that doesn't mean that the total volume will necessarily increase, but at the moment, they are, still from our understanding, under severe pressure.

So we have no further questions in the queue. Do you have any closing comments?

Glenn, is there any other comments you would like to add before we close?

No. I think a lot of the questions that have been asked are very relevant and pertinent. I think to say that the teams are working well, I think we can do well with the funders. As Erik has indicated, the second half numbers are, I think, going to be better than the first half, and we're progressing well. So we're in the process of -- obviously, we've been closing out the positions for the half year and the teams will be dealing with all this new reporting requirements for the end of May. So I think all is in order, yes.

So final comment from my side. It's like I said, in our minds, these results are very pleasing. It's been against a tough backdrop. We were certainly hoping that the local economy, the local demand was going to be stronger, but it was probably a little bit weaker than expected, but we didn't expect it to jump straight back to what it was last year. So overall, if I look at our trading results, I think we're very happy with where we are. There are certainly certain things that's not within our control. That includes things like hyperinflation adjustments and those things. And at the moment, we're not seeing any massive adjustments to be required, but that can change very quickly. So if I look at everything that are within our control, I think we are very satisfied with where we are. But of course, there's always risk. There's still uncertainty to around a potential third wave, all these things. And those are the type of things that the lenders want to see a little bit more data on. We don't know when the third wave is going to hit us, if it's going to hit us at all. And hence, I think they probably looking and saying, "This is maybe a little bit early to review the requirements at the moment." But yes, I think it's fair to say we're happy with the results. If it keeps on going the way it's going at the moment, I think then we should be in a very good space by the end of the year. But yes, there's still a lot of water to run into these sea until the end of the year.

Ladies and gentlemen, that then concludes this conference, and you may now disconnect your lines.