Orica Limited (ORI) Earnings Call Transcript & Summary

Good morning, and welcome to our 2025 half year results. I'm Delphine Cassidy, Chief Communications Officer, and I'm delighted to have you with us today. In the room with me is Sanjeev Gandhi, our Managing Director and CEO; and James Crough, our CFO. Both Jamie and Sanjeev will be presenting shortly. We value your participation and will ensure that there's ample time for questions after the 2 presentations. So please feel free to queue up, and we'll address your questions as soon as possible. Before we start, can I ask you to have a look at the disclaimer on Slide 2? Thank you. And with that, I hand it over to Sanjeev.

Thank you, Delphine. Morning, and welcome all. Let me start with an update on our #1 priority: safety. We are committed to keeping our people safe, and our serious injury case rate is a key metric for us. We are very pleased to report that our SICR has reduced by more than half from 0.21 in FY 2021 to under 0.09 at the end of March. This achievement is best-in-class in industry and represents Orica's best performance ever since we started reporting on this metric. While we are very pleased by this continued improvement, we remain focused on preventing fatalities and harm. This year, we are particularly focused on reducing collision-related events as the majority of our site-based workforce drive Orica vehicles, trucks or mobile equipment. By focusing on reducing collision-related events, we enhance safety, prevent fatalities and improve overall operational efficiency. In terms of sustainability aspirations, we have made very good progress on our climate change commitments. We have completed the first phase of our decarbonization strategy ahead of schedule, significantly reducing our Scope 1 and Scope 2 emissions. Following the deployment of tertiary abatement technology on 3 nitric acid plants at our Kooragang Island manufacturing facility, we recently reached a milestone of eliminating 1 million tonnes of greenhouse gas emissions from this site alone. This technology has also been installed at our manufacturing plants at Yarwun in Queensland and Carseland in Canada. Turning now to Slide 5 and our financial results for the half. The strong earnings momentum from last year has continued with the EBIT for this half being the highest in more than a decade for Orica. Furthermore, the key financial metrics, EBIT, NPAT before significant items, EPS and DPS have improved by at least 30% year-on-year, demonstrating value delivered to our shareholders. This very strong growth was driven by robust customer demand for our premium products and innovative technology solutions across every segment and every region, highlighting the strength and resilience of our business. Additionally, the successful ongoing integration of Terra Insights and Cyanco has bolstered overall earnings. Together, this has translated into a significant uplift in operating cash flow, setting us up very well for future growth. Jamie will go through this in more detail shortly. Earnings per share before significant items increased by $0.127 to $0.515, which has enabled us to increase the dividend this half to $0.25 from $0.19 in first half 2024, underlying our solid financial performance. The on-market share buyback program will recommence from tomorrow, the 9th of May, which is the first trading day after our results. Overall, it's been an outstanding half, and we are very excited about the opportunities ahead. Turning now to Slide 6. Let me provide a quick update for every region, starting with Australia, Pacific and Asia. Regional earnings increased by 40% driven primarily by a shift towards the higher value-added product mix and strong customer adoption of our advanced technologies. This includes not only our industry-leading core blasting solutions but also our comprehensive suite of digital solution products. For those of you that attended our recent Investor Day in May in Sydney, you saw firsthand the tangible value these technologies are delivering to our customers, empowering them to better understand, predict and control their blasting outcomes. A notable example is the completion of blasting on the Central Kowloon tunnel project, a dual 3-lane highway in Hong Kong, stretching more than 3 kilometers, threading to one of the city's oldest and most densely populated areas. Since 2019, we successfully executed more than 2,500 blasts in the project using eDev advanced electronic blasting systems specifically designed for underground and tunnel blasting with no impact to surrounding areas. We are committed to providing our customers with integrated solutions that go way beyond products to deliver real, measurable value. This confidence in the quality and benefits of our offering enable us to maintain strong commercial discipline, and we are already seeing positive results through the ongoing recontracting cycle. In Specialty Mining Chemicals, we achieved greater market penetration with Orica's differentiated solutions, while our Yarwun facility delivered strong performance supported by record volumes resulting from better gas supply. In North America, we have experienced strong underlying demand for our premium products, which has offset the impacts of lower thermal coal demand, the major Carseland turnaround that was completed in the first quarter and impacts from the global TNT shortage. The Canadian infrastructure market is particularly robust with investment at an all-time high and supporting increased demand for our monitoring products. This underscores the growing diversity of our business and highlights the value of expanding our expertise beyond the mining sector. Our overall performance in the region was further strengthened by the successful ongoing integration of the Cyanco acquisition, and we anticipate greater contributions once safety upgrades at Winnemucca are completed. These results reflect the resilience and adaptability of our business as well as our ability to capture new opportunities in growth markets. In Latin America, earnings grew 7% despite lower volumes, driven mainly by the adoption of WebGen and 4D along with continued commercial discipline. In Digital Solutions, we saw strong growth in GroundProbe radar sales and services. In Specialty Mining Chemicals, the team successfully entered new markets with Orica's differentiated chemical offerings. Finally, in Europe, Middle East and Africa, strong earnings growth was attributable to increased uptake of our premium products and advanced technologies. In Digital Solutions, we achieved a major milestone by successfully completing our first-ever blast that combined our 4D bulk emulsion system with WebGen wireless technology. This innovative integration offers significant benefits, including enhanced safety, improved ore recovery and the ability to precisely tailor energy distribution, demonstrating a compelling value proposition for our customers. We also saw continued growth in demand for GroundProbe products and services, reflecting our leadership in real-time geotechnical monitoring solutions. In Specialty Mining Chemicals, we maintained strong commercial discipline, ensuring that every contract delivers value both to our customers and to our business. These achievements highlight the strength of our diversified portfolio and our ongoing commitment to deliver innovative, value-adding solutions across and beyond the mining sector. Turning to Slide 10, where I'll provide an update across each of the 3 reporting segments, starting with Blasting Solutions. I'm pleased to report a substantial EBIT lift of 29%, increasing from $338 million in the first half of 2024 to $435 million today. This exceptional earnings growth has been fueled by a strong customer adoption of our premium products, disciplined commercial strategies and the continued success of our cutting-edge blasting technologies. We've been proud to showcase our innovative solutions such as the WebGen and 4D. We have now completed more than 10,000 WebGen blasts globally. This achievement highlights the significant value our customers are experiencing from these transformative and innovative technologies. Looking ahead, we are confident that this positive momentum will continue. By leveraging our unrivaled global manufacturing and supply network, our scale alongside our differentiated technology portfolio, we are further strengthening our competitive edge in blasting and beyond. These advancements empower us to solve our customers' most complex challenges, reinforcing our leadership and setting new benchmarks for excellence in the industry. Turning now to Slide 18 for Orica Digital Solutions. Orica Digital Solutions has firmly established itself as one of our key growth engines as we continue to invest in and develop the next generation of digital technologies both within our core blasting operations and in exciting new markets and applications. This year, we are pleased to report that EBIT from the Orica Digital Solutions segment increased by more than 30% compared to prior year, reflecting robust performance across all 3 product categories: Orebody Intelligence, Blast Design and Execution and Geosolutions. In Orebody Intelligence, we are seeing encouraging signs of improvement in exploration activity, which not only supports our current business but also sets the stage for new product launches tailored to the production market. Our advanced Orebody Intelligence technologies are enabling customers to gain deeper insights and make more informed decisions, optimizing operations from the outset. Blast Design and Execution complements our core blasting offering, continuing to deliver strong results driven by growing customer adoption and recurring revenue streams. We completed, as said earlier, our first-ever blast integrating both WebGen and 4D, a further step towards the fully integrated digital mine-to-mill solution and a clear demonstration of the unique value we bring by bringing together our core mining competencies with cutting-edge digital technology and insights. Our monitoring business, Geosolutions, which includes GroundProbe and Terra Insights, continues to perform well. GroundProbe increased its recurring service revenue and maintained strong radar sales, while Terra Insights delivered EBIT in line and slightly ahead of our investment case, further strengthening our leadership in geotechnical and structural monitoring. These achievements underscore the growing demand for our digital solutions, now used at more than 400 sites globally, and highlights the strength of our strategy to deliver smarter integrated solutions that address our customers' most complex challenges. We are excited about the future and remain committed to driving innovation, expanding our digital portfolio and unlocking new opportunities for growth in this dynamic segment. Contributions from our Specialty Mining Chemicals segment increased by 72% on the prior year. The increase reflects the contribution and value captured from operating Cyanco and Yarwun as a globally integrated network of 3 assets. Following our Cyanco acquisition, Orica Specialty Mining Chemicals now has around 240,000 tonnes of sodium cyanide production capacity annually across our manufacturing sites in Yarwun, Winnemucca and Alvin. Orica is now the world's largest mining-focused producer of sodium cyanide, positioning us exceptionally well amid record gold prices and strong market demand. This scale allows us to reliably support gold mining operations worldwide, leveraging our integrated global manufacturing and distribution network. While maintenance activities and essential safety upgrades have temporarily reduced production at our Winnemucca site, our unwavering commitment to safety remains our top priority. We are making excellent progress and anticipate that the plant will be available for high production rates in 2026. Our robust world-class sourcing and supply chain capabilities have enabled us to maintain uninterrupted supply to all our customers, further demonstrating the strength and resilience of our operations. We look forward to building on this momentum and continuing to deliver value both for our customers and our stakeholders. I will now hand over to Jamie to talk through the financials.

Thank you, Sanjeev, and good morning, everyone, and thank you again for joining us today. I'll move to the key financial metrics shown on Slide #11. Consistent with the market update provided at our Investor Day in March, continued strong business performance throughout the first half is reflected in our key financial metrics. Whilst top line sales revenue grew by 8% versus the first half of 2024, our earnings before interest and tax has risen to $472 million, an increase of 34% compared to the prior corresponding period. As Sanjeev mentioned, this is our strongest first half earnings result in more than a decade. I'll provide more details on this in the next slide. Net profit after tax pre-individually significant items increased by 40% to $251 million. Also announced in March, significant items totaling $340 million have been recognized during the half in relation to the carrying value of our Latin America business in addition to associated restructuring expenses in Latin America and also EMEA. This has resulted in a statutory net loss after tax of $89 million. Of the total significant items, $235 million are noncash. As I mentioned at the release of our full year results last November, cash generation from our core business and its relationship to EBIT remains an area of strong discipline across the group. Importantly, net operating cash flow for the half finished at $245 million, a 29% increase versus the prior corresponding period. Return on net assets is broadly in line with the prior period as expected given the recent major acquisitions. Our strong first half results have enabled us to deliver continued improvement in EPS pre-significant items to $0.515 earnings per share, a $0.127 per share or 33% increase versus the prior corresponding period. Pleasingly, a key highlight of these half year results is the strong alignment between improved earnings, stronger cash generation and importantly increased returns to shareholders. Turning now to the EBIT bridge on Slide #12, where you can see that we have delivered improved earnings across all operating segments, demonstrating Orica's strategic effectiveness. Starting with the Blasting Solutions segment, mix and margin increased by an encouraging $73 million versus the prior year. Now important to note, within this result are $15 million of proceeds from the sale of carbon credits, and normalizing for this, the improvement period-on-period is $58 million, very consistent in terms of run rate with the $101 million improvement delivered last financial year. Demand for Orica's premium products and innovative technology solutions continues to grow strongly. Margin from our blasting solutions technology product range grew by 64% versus the prior half with continued strong demand for the safety, efficiency, environmental and cost benefits delivered to customers through our WebGen wireless blasting, 4D and Fortis specialty emulsion ranges. Encouragingly, this growth in blasting technology margin exceeded the 55% increase delivered last financial year. Earnings continued to expand within the segment, supported by a positive recontracting cycle, strong growth in sales of electronic blasting systems, both continuous and discrete manufacturing plants running at high levels of uptime and ongoing benefits of strong commercial discipline embedded across the business. In the Digital Solutions segment, demand remains strong for our suite of digital offerings and value-added services, with earnings growing by $11 million versus the prior period. The Geosolutions business is successfully integrating the Terra Insights acquisition, delivering earnings that meet our investment case, together with GroundProbe benefiting from increased recurring revenue and radar sales. Earnings growth in Blast Design and Execution was driven by new contract wins in North and Latin America and a global increase in the adoption of our core products for blast management, grade control and fragmentation monitoring. As Sanjeev mentioned, a significant milestone was achieved in this half with the first-ever blast utilizing our 4D variable energy bulk system and WebGen wireless initiating systems. Within the Orebody Intelligence business, exploration activity is showing signs of improvement. Our Axis Mining Technology business is well positioned to support customers with the recent launch of 2 new innovative products. The Champ Navigator 2 gyro enhances measurement flexibility, improves rig productivity and reduces standby costs, while the new Axis rig aligner enhances operator safety, reduces setup times and offers field-to-cloud connectivity, capturing critical data workflows. In the Specialty Mining Chemicals segment, mix and margin grew by $15 million. This was primarily due to the first half contribution from the Cyanco business, noting that this is net of the cost of lower production associated with the process safety upgrade works carried out at the Winnemucca P1 plant. As previously disclosed, associated lost production together with partially constrained gas supply in Yarwun during the first quarter will result in an EBIT contribution that is lower than expected by up to $20 million for the full year. Across our manufacturing assets, we delivered improved performance during the first half, with the increase in earnings of $32 million primarily attributable to the non-repeated costs incurred during the major Kooragang Island 6-yearly plant turnaround completed in the first half of 2024. Importantly, whilst maintenance activities and essential safety upgrades were being undertaken at the Winnemucca production facility, our Yarwun plant performed strongly with high levels of uptime during the second quarter, with production in March being the highest monthly performance in the plant's 35-year history. This reinforces Orica's position as the world leader with production expertise in the mining-focused production of sodium cyanide. And finally, these improvements were partially offset by currency impacts on the translation of foreign earnings and higher global support costs versus the prior period associated with ongoing litigation that has been previously disclosed. Turning now to trade working capital on Slide #13. Pleasingly, the improvements we delivered last financial year have continued into the first half of 2025. Total cycle days on a 12-month rolling basis have improved by 5 days versus the prior period, moving us closer to top quartile trade working capital performance relative to industry benchmarks. The marginal increase in absolute trade working capital versus the prior period takes into account the Cyanco acquisition and also increased inventory holdings seen as a prudent measure given the current geopolitical volatility. This strong working capital result supported the increase in net operating cash flow for the half. And as presented at our Investor Day in March, maintaining strong operating discipline in this area is a key element of our refreshed capital management framework. Turning now to Slide #14. Our capital management framework is designed to provide clarity and transparency in how we think about deploying capital within the business. Over the coming slides, I'll highlight key areas where we have successfully applied the framework beyond improved trade working capital and net operating cash flow, including effective management of capital expenditure, ensuring we at all times maintain a strong balance sheet and most importantly increased returns to shareholders. As previously communicated, we announced an on-market share buyback of up to $400 million commencing on the 28th of March. In the 2 trading days prior to entering the first half blackout, we purchased 760,000 shares on market for a consideration of $13 million that settled in April. The buyback will recommence from tomorrow following the release of our half year accounts. Completing the on-market share buyback in full within a 12-month period is a key priority for the organization. Turning now to Slide #15. Total capital expenditure for the half was $167 million. Of this, $106 million was allocated to sustenance capital expenditure. This included successful completion of turnaround events at our Carseland, Kooragang Island and Winnemucca sites, in addition to further investment in our downstream business, including enhancements to our mobile delivery systems fleet. Spend was at a lower level than the first half of 2024, reflecting the lighter major turnaround schedule. Investment in growth capital expenditure was lower in the first half versus the prior period, with $60 million allocated across the Digital Solutions segment, ongoing investment in our discrete network optimization program and continued investment in our blasting technology portfolio, supporting the year-on-year increase in margin I mentioned earlier. Sustainability capital investment also reduced following the completion of key investments in our continuous manufacturing facilities, such as the tertiary catalyst abatement technology. Further sustainability capital expenditure will be assessed and prioritized consistent with all capital investment through our capital management framework. As outlined in our update in March, we anticipate capital expenditure will be more heavily weighted towards the second half, with total spend for the 2025 financial year to be broadly in line with 2024, including a slightly higher allocation towards growth capital expenditure. Turning now to Slide 16, on the balance sheet and liquidity. During the half, we successfully refinanced an extension of existing committed bank debt facilities totaling $460 million for an average period of 5 years. The average tenor of our total committed debt facilities at 31 March was 4 years. Net debt increased by $247 million from September to approximately $1.9 billion. As expected, net financing costs have increased from the prior corresponding period, reflecting the drawn debt required to fund the recent major acquisitions. In line with our transition to a leverage target policy range under our capital management framework, leverage at 31 March was 1.45x, within the lower half of our target policy range of 1.25 to 2x. Our liquidity position remains robust with cash of $720 million supported by undrawn committed bank debt facilities of $1.2 billion at 31 March. In summary, our balance sheet is strong, and it's well positioned to support Orica's strategic priorities and growth plans and ultimately increasing returns to shareholders. Turning now to the dividend slide on Page 17. Under our refreshed capital management framework, we have maintained our target dividend payout range of 40% to 70% of underlying earnings. The Orica Board of Directors have declared an interim ordinary dividend for the 2025 half year of $0.25 per share, unfranked, representing a dividend payout ratio of 48.6%. This represents a $0.06 per share or 32% increase on the prior year interim dividend. This increase in dividends reflects our commitment to delivering sustainable and disciplined returns to shareholders, aligned to our capital management framework. Our consistent and improving financial performance and strong balance sheet provide a solid foundation to support the company as it continues to grow profitably, deliver on our strategy and ultimately improve returns to our shareholders. And with that, I'll now hand back to Sanjeev.

Thank you, Jamie. You all have seen our strategy on a page before. The strategy drives growth and market leadership by delivering innovative solutions that create real value for our customers. By integrating advanced technologies and expanding into new markets, we diversify revenue streams and meet the evolving needs of the mining and infrastructure industries. As evident in our results, this approach ensures strong performance across our segments, supporting greater safety, efficiency and sustainability for our customers while capturing new opportunities and delivering long-term value for our shareholders. Turning now to Slide 20, our key growth drivers and priorities for 2026 and beyond. Our blasting business is the cornerstone of our operations, providing a strong foundation to build new businesses. By leveraging our global position and the trust and relationships we have with our customers, we can address increasingly complex and diverse challenges. We will continue to invest in and grow our core blasting business supported by industry-leading technology and our sophisticated manufacturing and supply networks. In Digital Solutions, we will drive uptake and grow recurring revenue while further developing our cutting-edge technology. Additionally, our privileged global sodium cyanide network allows us to fully unlock the advantages of our assets, deepening our customer reach. I will quickly touch on our progress against our strategic targets for FY 2025. We are well on track with execution of our strategy. Looking ahead, we remain focused on several strategic targets that will set us up for future growth. These include pursuing organic growth, accelerating the adoption of innovative blasting technologies, as evidenced by our recent performance. Additionally, we continue to optimize our global manufacturing and supply chain network, expand in high-growth mining chemical markets and diversify our portfolio. We believe that these strategic initiatives will drive continued progress and position Orica for sustained success. Now turning to the outlook for the remainder of 2025 and beyond. As I mentioned at the start of today's presentation, I'm very pleased with our strong financial results, and I'm confident that this positive momentum will continue through the remainder of this year. As previously announced, we anticipate EBIT for 2025 will increase driven by robust growth across all segments and regions versus the prior period. Importantly, all other guidance for 2025 remains unchanged, reflecting our commitment to delivering on expectations and executing our strategy with great discipline. Looking ahead, I remain optimistic about our outlook as we continue to build on our strategic foundations. Let me highlight some of the key drivers for the year ahead. In Blasting Solutions, we are expecting continued strong demand for our premium products and advanced blasting technologies. Our Carseland plant will undergo a major turnaround in the second half of 2026. While this will obviously impact production, our global supply network will ensure that we are able to continue to seamlessly supply our customers. Adoption of our digital solutions technology remains robust, with increasing cross-selling opportunities further strengthening our digital offering and expanding our reach. With safety and maintenance work undertaken in 2025, we expect production in Winnemucca to increase. And with the outlook for gold remaining strong, we are very well-placed to capture further growth in this segment. We will continue to assess and prepare for different scenarios as bilateral negotiations evolve around tariffs within the -- between countries while leveraging our unique global supply and manufacturing network to mitigate any potential risks. We do not foresee any material impacts to our business in the short term. We are maintaining a very strong focus on cost management, which continues to be a key risk mitigant amid ongoing geopolitical volatility. Now to the final slide. In summary, we are very confident in our strategic direction and the initiatives we have in place to drive further profitable growth. Our focus on innovation, operational excellence and disciplined execution will ensure we continue to deliver value for our customers, shareholders and all stakeholders. Thank you. And with that, we will open for questions.

[Operator Instructions] Our first question comes from Ramoun Lazar from Jefferies.

Just a couple of questions for me, if I may. Just one, Sanjeev, maybe if you can comment on the seasonality this year between the first half and second half and how that -- how we should think about the full year given the historic 45%-55% split.

Yes. Thanks, Ramoun. 45-55 is not really a historic split. We've had fluctuations every year. This year in the first half, I'll just enumerate what we went through. We went through significant weather disruptions. So we had severe weather events in Western Australia. On the East Coast in Queensland and New South Wales, we had significant rain events. We had a lot of mine flooding and operations getting interrupted in this part of the world. Despite that, we've delivered strong results. We went through some major turnarounds both in the blasting space but also in the chemical space, as mentioned earlier. Kooragang Island went through a major turnaround, and then the Winnemucca efforts are ongoing. Now despite all of that, we've delivered a strong result. But just as a reminder for everyone, the numbers for the first half do include $15 million of credits from decarbonization. That will not repeat in the second half. Now once you take that out and try and normalize that, our second half is normally a better half, a stronger half. So we do expect to see the momentum continue into the second half of the year. But keep in mind that we are in an environment where there's a lot of unpredictability, so I can't really tell you what a split is. My expectation is we will have a stronger second half as we normally do. But finally, we will see what the split is when we end up in November. So I can't give you a number, Ramoun, unfortunately. But again, we have had a strong first half, and we do expect -- despite the turnaround at -- in mining chemicals and all the other external challenges, we do expect that the momentum continues into half 2.

Okay. Great. And just one more for me. Just on the premiumization and the rollout of some of these blasting solutions like WebGen and 4D, I guess where are you with that in terms of the rollout broadly across the geographical footprint, how to think about, I guess, the benefits from things like WebGen and 4D coming through over the next few periods?

Yes. Look, we've rolled the products out and the solutions out across the globe now to -- most of our customers are willing to trial with us and then obviously pay for these premium solutions because they bring real value. So the trialing is done. Value propositions and business cases have been created successfully. You see that -- our mix and margin now for the last couple of years. Now it's all about scaling it up because our traditional business where we sell millions and millions of -- hundreds and millions of tonnes of detonators, if we can get WebGen even to 1/10 of that, it will significantly move the needle. The same, we sell hundreds of thousands of tonnes of emulsion. And the more of 4D we sell, obviously, it's a premium product with a better offering, the better margin. So now it's all about scaling. The trialing is done. We don't have to convince customers to buy them. It's all about identifying a value proposition for a specific bench, a specific blast, a specific rock property or grid and then coming up with a commercial solution for that. So that goes customer-by-customer, bench-by-bench, site-by-site. And I did say that we've had more than 10,000 WebGen blasts since we've launched the product, but in a year, we do more than 100 million blasts. So there's a lot of runway for us to go as we scale these new products and technologies up, Ramon.

Our next question comes from Jakob Cakarnis from Jarden Australia.

Jamie, just wanted to focus a little bit on the first question, maybe just teasing that out a little bit more. Can you just explain to us the impacts of the Winnemucca efforts there? Are the first half and second half impacts equal to that? And I guess as we look into FY '26, as you catch up the total $20 million that you've called out, that's in combination with Yarwun, are we expecting that that comes back and a little bit more as the network is up and running in '26, please?

Thanks, Jakob. Happy to do that. Yes, we did call out up to $20 million of impact because of loss of production and higher costs as we had to do the safety upgrades. Now the way Winnemucca is structured is there are 3 different assets there. There are 2 production lines. We call them P1 and P2, and then there are the utilities which support both the lines. So the first half was more work done, and we have now finished with that, and the line is up and running, is on the P1 line. In the second half, we are now in the process of addressing line P2 and also the utilities. So the split is roughly half and half, but it is more skewed to half 2. So we will see a bit more spend coming in half 2 of the up to $20 million that we have guided you to. Now once we are finished with all of that, then we will be at nameplate for 2026. And then the first is to check the integrity of the plant because these plants are -- this asset has never been run at max loads. So we'll then try and run the plant at max loads to see where the bottlenecks are. And then during 2026 and then in 2027, we'll start to look at debottlenecking. So it's a step-by-step approach. It's a highly hazardous chemistry. The asset is not brand-new, so it's more than 20 years old, and it's been owned by private equity. So that needs a lot of tender love and caring, which we are giving, and we need to first reach stable operations, which we aim to do by end of this financial year. And next year, we'll test for capacity and then look for debottlenecking and plant expansions because the potential is there. The demand is strong. Gold is doing very well. And then with the revival of mining now in the United States, I expect that domestic demand in the U.S. is going to be extremely strong, and we need to gear up. So the timing is perfect. So I'm quite optimistic that 2026 onwards, we'll see the full benefits of the acquisition coming through.

Can I just confirm, nameplate is around that 109,000, 110,000 mark? Is that right?

It's difficult to tell you because I said we have never tested them. In total, we've got 240,000 tonnes. That includes Yarwun, and Yarwun this year was a bit more than 100,000. So yes, the rest is the Winnemucca assets. But we have 2 plants there. But again, these are all numbers that we know of, we have not tested them, and we might be pleasantly surprised with some upside hopefully.

That's helpful. Just while I've got you, Sanjeev, one more. I'm just wondering about the persistent remixing away from thermal coal and whether or not -- as you come back to have a look at maybe how the world's changed or is changing, whether that strategy still makes sense. And I guess where I'm going with that, are you seeing upside either from customer engagement in your own financing costs or anything from continuing down that path even though demand and market dynamics might be more favorable in that market than they have been historically, please?

Jakob, that's a very interesting question. We've always said very publicly that we will never disown thermal coal. We will always supply our thermal coal customers until the last coal mine is operating, whether it's in Australia or in Indonesia. What we have done as a strategy is obviously maintain our position in thermal coal but expand other commodities like copper, gold and iron ore. And you see that in the product mix. If you follow the presentations we make over the last 4 years, 8 results, you will see that progressively grow. And today, copper plus gold is nearly 50% of revenue. And then we've got quarrying and construction, civil and then obviously coal -- met and thermal coal, iron ore, all of that. So no, we don't have a strategy of giving up thermal coal. Now the U.S. is talking about a revival of coal, and we'll see whether that happens. Structurally, we have seen an approximate 10% year-on-year decline post-COVID in thermal coal output in the U.S. So the market is shrinking, and whether there's going to be a recovery and a revival in thermal coal, it depends on gas prices because in the end, the energy market plays the arbitrage between coal-generated power and natural gas-generated power. So if gas prices in the U.S. go above $6, $7 again, as we have seen them go sometimes in the past, then we will see more thermal coal production. If not, we will see a slow and gradual decline. We do not see thermal coal demand falling off the cliff. And if there are new opportunities for us to exploit, then we will look at thermal coal if it makes commercial sense for us. In terms of our shareholders and the banks and the financing since the ratio, our exposure to thermal coal is under 15%, most of our stakeholders are comfortable with that. And my expectation is, as the rest of the commodities in our portfolio continue to grow, the thermal coal will have a natural decline, not because we step away from it but because everything else is growing faster than our exposure to thermal coal.

[Operator Instructions] Next, we have Andrew Scott from Morgan Stanley.

Sanjeev, if I can just follow on from Jakob's first question, you talked about 240,000 tonnes of capacity. When we clear the turnarounds, where do you -- what do you see in terms of excess capacity relative to current demand when we do get that clean year in FY '26?

Andrew, we don't have excess capacity. We are supplementing sales by sourcing third-party tonnes as our plants continue to grow. Remember, we did buy capacity, but we also bought customers and market share in the United States. Before acquiring Cyanco, our market share in the United States was zero. Today, we are the largest supplier of sodium cyanide to the gold industry there. So we are at the moment short on capacity, so we are supplementing and we've always done with Yarwun. Because Yarwun has been sold out now for several years, we have been supplementing capacity by bringing in product from third parties, which is traded tonnes, no margins. So once we start to convert those traded tonnes into own manufactured product, we will get a margin uplift. So no, we are not excess in capacity. We are always balanced or slightly short. And our strategy, like it is with ammonium nitrate, is we make and trade, which means that wherever we see growth opportunities and we don't have enough capacity, until the debottlenecking catches up, we will source third-party tonnes and cater to our customers. Now we are a full-service provider to the gold mining industry. This means we do blasting, we do digital technologies, and we do sodium cyanide. So even if we are doing traded tonnes of cyanide, we still have the blasting margins and we have the digital margin. So it's important that we keep our footprint and the full service offering. And the message -- short message is, no, we are not long on capacity.

Got it. That's helpful. Jamie, just one for you, the $15 million of carbon credits in the period, I just want to understand, what exactly does that represent? And what I mean by that, is it just 1 year of production? Have you done any forward selling? And then can you just give us some thoughts about how you're going to go to market with these credits in the future?

Yes. Thanks, Andrew. So we generate carbon credits under a number of different schemes in different countries. So these were sold in Australia, and we generate credits under different schemes in Australia. So the best way that I can answer it is we manage these at a portfolio level, and we do need to remain below emissions limits within these countries. So we'll surrender credits where we need to, and when we have access, we'll sell them. Now this is obviously a market where these credits are fungible and tradable, so pricing moves. So it's a little bit hard to forecast how much they'll be in the future, but I guess the primary goal is to surrender them where we need to to stay below limits. And when there are opportunities, we'll look to sell them.

Next, we have Owen Birrell from RBC.

Just one question from me on Burrup. Just wondering if you can provide us any sort of color on the new contract duration volumes, hopefully price. I know that it started from the 1st of January, so 3-month contribution. If you can give us a sense of what that contribution was in the half as well, that would be appreciated.

Thanks, Owen. No, we don't break down specific contracts, and I don't talk about wins and losses, so I can't give you more. But what I can tell you is, yes, you're right, there was 1 quarter of benefits in, so we'll get 9 months of benefits. Next year, we get full year benefits. I can also say that this was, I think, one of the largest contracts we have ever signed successfully. So it's a significant scale-up of our Burrup activities. The Burrup asset is running very, very well. It's a full-service contract, so I'm very pleased with that development. And we will see continued margin accretion out of that contract. You'll see that benefit coming through the mix and margin in the waterfall chart. So that's where it is reflected. Now remember, whatever we earn in Burrup is 50% shared with a joint venture partner. So we have to keep that in mind when we consolidate our earnings. Apart from that, it's an excellent win and just a big testimony to the quality of our products, services and technologies that we have an offer for our customers in Australia but all over the world.

Can I ask in terms of just, I guess, how we can think about it, should we assume that it has, I guess, a floating rate-style price to it such that the margin that you're gaining on that contract should be relatively fixed through time? Or should we see the margins fluctuate around because it's more of a fixed-style price?

No. Look, the nature of the contracts we have in the blasting space is always a cost pass-through, margin-protected, and then there's CPI and all the other moving parts, the famous rise and falls that we have spoken of at length in the past. So this contract is no different. It's an industry standard. We just go with the industry standard. Obviously, what really gives us a big -- and there are several flow-on benefits for us. Obviously, the contract is very different to the previous one that we had because there's services here. Services for Orica are always higher margin, so that's always very positive for us. Secondly, the flow-on impact in terms of diluting our cost base because it helps with throughput at Burrup, it helps with diluting our fixed costs around the area where we serve customers. We are a very labor-intensive, capital-intensive business. So there's a lot of flow-through effects which come in from scale, and we obviously are a major player in Western Australia with our own manufacturing sites, both in discrete and with ammonium nitrate, and we are fully leveraging those benefits there. So it's very similar to any other formula, with any other contract with rise and falls where we have margin protection, where we pass on any inflation or any benefits of cost reduction to our customers, and then the scale effect comes in because it's an increasing-scale contract in terms of volumes. So year-on-year, as output increases, also our services requirement increases, so that will also lead to benefits over the period of the contract.

Are you able to give us a sense of what that period of the contract is, what the duration is?

It's a long-term contract. The last one we did was 5 years.

Yes, but this one, no expiration on it?

We don't really -- Owen, I really don't like to talk about specific contracts and customers.

Our next question comes from John Purtell from Macquarie.

Just had a couple of questions, please. Look, firstly, I'd be interested in what you're seeing from your mining customers at the moment as we move into a slowing global growth period. Is there any change in behavior retake-up of value-added products or any change in activity across your different regions to call out?

Thanks, John. On the contrary, because most of our customers globally are running behind mine plans for various reasons, either weather-related or supply chain disruptions, there is more and more demand for sustainability-based solutions, for productivity solutions and cost mitigation products. So we are doing very well with all 3 of them. We're seeing some interesting upsides. You may have heard of FAST-41. I've been monitoring this very, very closely because we have always been in touch with our U.S. mining base, and they always complained about regulation, permitting, the long lead times. And now with the new initiative from the U.S. government to fast-track approvals, we've seen a surge in nearly 20 new greenfield, brownfield expansions in the United States coming through. And if these get realized, which I guess they will because prices are still high, there's not enough supply across the commodity landscape, that should mean strong demand for our products and services in the United States. We don't see any kind of slowdown in Australia, which is, again, a very important market. We see Asia going very, very strong. We've seen an interesting uptick in Western Europe because there seems to be more interest in investing in infrastructure. It's -- a little bit is defense-driven, but the rest is just old aging infrastructure in the EU. So we're seeing increased interest in the European markets. Africa is doing very, very well, and then obviously, Asia with Indonesia, India, Philippines doing extremely well. The other interesting aspect is infrastructure spend. So we are expecting more interest in aggregates for quarrying and construction and big infrastructure projects like tunnels, hydroelectric power, caverns for gas storage, and we are seeing an uptick in each of these investments. So honestly, I'm not seeing any slowdown anywhere for the simple reason that the resource industry has lagged in capital and CapEx. And there's not enough supply to meet demand. That's why commodity prices are still very attractive. Now we do have an early indicator in our business, John, and that is our Axis exploration business. So we've seen relatively low levels of exploration for the last 2, 2.5 years since we acquired Axis, but I mentioned that in Sydney, the last couple of months, we've seen an uptick starting with gold now moving into copper. So that gives me hope that there will be a strong pipeline of new brownfield, greenfield mines coming on stream. So that's significant upside for us. So no, I don't see any slowdown currently. The one slowdown that might happen is M&A. There's been a lot of M&A activity in the resource industry. And the question is whether this will continue or people will go back to basics in terms of investing in resources and building their own. So time will tell, John.

That's helpful. Appreciate it. And just a second question on Digital Solutions. Just confirming that the result was sort of broadly in line with your expectations. Were there some integration costs taken above the line for Terra? And just as far as the second half outlook goes, are you expecting a stronger second half versus the first?

We are for 2 reasons, first, starting with Orebody Intelligence. The exploration business is seasonal. So we do -- every year now, we've seen this for the last 3 years, we've seen December, Jan, Feb, the lowest part of the year, and then we see an uptick. So I expect OBI, Orebody Intelligence, the upstream exploration business, we will see results Q2, H2. It was quite weak in the first half as it has been for the last couple of years. Blast design and then -- so the BDE part of the business is very closely linked to our core blasting business. Blasting is going strong. I've given you an outlook. Second half will be strong. So I expect that to be very good. Terra and GroundProbe, so that is Geosolutions, have done very well. But yes, you're right, we've had some integration costs in the first half, we'll have more in the second half. This is predominantly bringing the Terra Insights, which is 5 different companies with a lot of people and manufacturing sites, into the IT platform of Orica. So so far, they have been using Terra Insights computers and Terra Insights IT and e-mail addresses. Now we are bringing them all onto Orica to standardize this. This is important for cybersecurity reasons because the weak link is always the user, and we want them on the Orica platform. So that's first step. There will be -- there was some spending first half. There will be more in the second half. And then the big one will be the ERP integration, which I don't expect will happen this year. That's a lot of work, so that may happen in '26 or '27. So yes, a lot of integration activities in digital, but underlying business is very strong and skewed to half 2.

Next, we have Brook Crawford from Barrenjoey.

Just to follow up on your comment, Sanjeev, about very strong digital growth, I guess it was sort of $11 million increase in EBIT year-over-year. If you strip out [ carat ], was the underlying organic growth consistent with the low double-digit target? If you can confirm that, that would be great.

Yes. Thanks, Brook. Look, I mean 31% growth year-on-year is pretty good in my view. I'll take it any day. So as I said earlier, Axis has been weak. It has been weak for the last couple of years because exploration is very, very slow. It's 30% to 40% down. But again, as I have said in Sydney and again earlier today, we do see an uptick coming in exploration. We are also launching new products, Jamie talked about them, into production drilling. So all of that is expected to give us benefits in half 2. So we'll see an improvement there. Blast Design and Execution was very strong in the first half. This is in line with our blasting business. And then Terra Insights had -- and Geosolutions with the GroundProbe had a strong first half, but we had integration costs. So my expectation is that momentum will continue. Second half, we will see hopefully better earnings in Orebody Intelligence upstream, and then the rest of the business will continue to operate very well. But there will be integration costs in Terra in the half 2 also. Do keep that in mind, please.

Yes. Great. No, will do. And just one on the explosives business and just, I guess, the outlook beyond the second half. There is concern in the market, and I guess your stock valuation would reflect this, that perhaps the growth profile in the explosives business could slow from FY '26. Do you, I guess, have a line of sight on continued strong growth in blasting in FY '26? Or do you think the market's concerns are fair and you'll see more modest or low growth in blasting next year?

Brook, I'm surprised. I've not heard this. There's no reason why anything to slow down. As we've talked about the macros in the mining industry and in the infrastructure industry, there is need for commodities, there is need for electrification, there's need for data centers. There's strong demand for copper, there's strong demand for gold, there's strong demand for iron ore and met coal and then all the smaller commodities. So I don't see any reason. In fact, I talked about a more optimistic outlook especially in the United States with new mines coming on stream hopefully. So I'm surprised to hear that there is any kind of concerns on slowing demand. I don't see a reason why demand should slow. But our business is different, as I've always tried to say. You have seen our tonnes over the last 5 -- 4, 5 results now not really growing. It's all about mix and margin. It's all about offering better solutions, better technology, doing more with less and producing better outcomes. So our focus is now on solving individual problems and challenges of our customers on the bench, on the mine site. Strategically, mines are going deeper. They are going into more difficult geographies. The easy wins are done, and it's all about productivity, safety, ESG and trying to mine at the more efficient way, which means fragmentation, less waste, less tailings, less milling. And we've got a solution for each and every one of those challenges. So our growth profile is looking very, very healthy. So I don't understand where the concern comes from, honestly, not from me.

[Operator Instructions] Next, we have Nathan Reilly from UBS.

Sanjeev, just focusing in on the North American Blasting Solutions business, volume is a touch soft there in the first half. I'm just curious to get some perspectives on your expectations for demand for that business in the second half, please.

Yes. Thanks, Nathan. So first half, in the first quarter, we had the major Carseland shut. So obviously, I had more purchased tonnes and less own manufactured tonnes plus the turnaround costs. So that reflects there in the lower volumes and the lower margin. Secondly, we had a global shortage on TNT. So all explosives -- civil explosives companies are competing with the ordnance factories to source TNT because the same TNT goes into armaments as it goes into our boosters, so -- and we buy TNT globally from several suppliers. By the way, as just a bit of history, the largest source of TNT was Ukraine, which was obviously not available in the market now for the last 3 years. So it's not a new challenge. It just got escalated because there was more demand for armaments, and we had to compete with governments and defense factories to source TNT. So as a result, we had to announce a force majeure in our initiating systems field for some unfortunate weeks. We did not short our customers, but we were obviously running hand-to-mouth in terms of getting our supply chains running there. So a combination of the winter season, which is always the low season there for the construction in the mining markets with -- in Canada especially but also U.S., and then the shortage of TNT and the Carseland shutdown. Now I'm expecting some of that will obviously come back in the second half because we don't have the shutdown effects. We've got TNT under grips now. So we've got better supply ability, but things can get disrupted. But yes, I do expect that there will be a recovery in half 2 in terms of volumes and earnings in North America.

Our next question comes from Daniel Kang from CLSA.

Sanjeev, just given the strength of gold markets, I'm just interested in your thoughts on the supply-demand and pricing outlook for sodium cyanide. Can you also remind us of the pricing and contract terms for the segment?

Yes. Thanks, Dan. So very positive, strong demand, very high attractive gold pricing. Anybody's guess where gold pricing will go. We started at under $2,000. We are now close to $3,500 per ounce, forecast of $4,000 plus. So we'll see where it goes. Obviously, very attractive business. Nobody wants to leave ore unexplored here, get it out yesterday, take advantage of the high pricing. Now the other second challenge -- obviously, one is not enough supply. The second challenge is that ore grades are very diluted. And this means you need to work harder to extract the high-purity gold that you need. So you blast more to get less, and then you have to use a lot of sodium cyanide to extract out of a very diluted ore grade. Now as you can imagine, both of this fits perfectly into our business model. And the third big benefit we are getting out of this is that one of the big challenges in gold industry is managing leach pads and the environmental impacts. We have come, by the way, now with a new technology where we are integrating our Digital Solutions business, sensors from Terra Insights and created a software monitoring system to manage leach pads so that we can, like we do with tailings dam with GroundProbe, we can then assist our customers to manage environmental concerns better. And then we obviously are continuing to optimize the consumption of sodium cyanide. So there's a lot of offerings we have there. So it looks pretty positive. Our contracting cycle before we acquired Cyanco was 12 months. The Cyanco team was very smart commercially. They did longer contracts, 3 to 5 years. So slowly but surely, as our contracts roll off, we are moving to longer-term contracts wherever customers are willing to play ball with us. Because supply security is a concern, you do not want, of all things, sodium cyanide to shut down your gold extraction today given the attractive pricing we have there. And the big advantage we have is we are reliable, we are just in time, we are next doors to our mining customers in the United States and obviously with the seaborne freight coming out of Yarwun, long lead times, and we've got stock points all over the world. So it's a very, very attractive supply chain, and we are able to deliver when the customer needs the product, which means we don't shut down mines. And if you're dependent on a single source from someone else, from a trader somewhere in the world, you're taking a risk. At these prices, I would advise customers, please don't take a risk.

Just one follow-up, if I can, on Digital Solutions, and there's been a lot of commentary on that already. But I get that there's been integration costs that may have impacted margins, which slipped a touch to 23% from 25% last year. It sounds like from your comments that there should be a pickup in the second half, but can you just comment on the longer-term, I guess, aspirational levels of where margins should be?

If you look at the margin profile of our digital business, and we started from a very small base, we are now scaling that up, you'll see that the profile has been very, very attractive, normally 2 to 3x margins that we earn from our blasting business. Now the one big difference is our legacy digital business was -- there was a lot of service there, so SaaS and recurring revenue, and we did a lot of leasing, which had low capital. So the revenue model was different. What we acquired from Terra Insights is pure sales. They did not have a SaaS model. They did not have a service model. So by definition, their margins were lower than our legacy digital business of GroundProbe. Now the big prize for us is to bring software as a solution into monitoring. We are doing this with GroundProbe. We just have to extend that to the Terra Insights business and then start offering that as a packaged offer, including monitoring of not just the tailing dams from a slippage and a risk point of view but also from hydraulic pressure point of view or from a slippage point of view or from an integrity point of view. We can do that today. So we are building that software, common data platform. And we will be ready hopefully at the end of this financial year, and 2026, we'll start to see the benefits. So yes, the business is skewed to the second half because of seasonality and because we see an uptick coming from the upstream business. But in the downstream monitoring, we see significant upside as we convert that sale model to a sale plus SaaS model. So there's a lot of runway there, Dan.

Our next question comes from Niraj Shah from Goldman Sachs.

Just 2 for me, one on KI. I was just wondering how much capacity you've unlocked at that plant post-turnaround, just noting that I think it was about a $19 million, $20 million drag in manufacturing a year ago, and this period, you've had a $32 million uplift from non-recurrence.

Yes. Thanks, Niraj. So we had our ammonia plant down for nearly 2 months, and then we had the ammonium nitrate unit down because we also then retrofitted the prill tower to eliminate particles. So if -- I now remember off the top of my head, we were missing 100,000 tonnes of ammonia, which we had to then import. So obviously, it was not own manufactured. It was traded tonnes with no margin there and then the corresponding impact that goes down into the ammonium nitrate. So we've recovered a bit of that, but then we did have the nitric acid and ammonium nitrate shut in this half. So not 100% was recovered, but a bit of that was recovered. The second challenge always is that if we don't consume the natural gas for ammonia, we have a take-or-pay, and then we have to then either pay a penalty to the gas supplier or we have to sell the gas on spot markets, and the netback from that depends on what the spot price at that point of time is. So sometimes we benefit if the timing is good, and sometimes spot price is lower than contract prices, and then it's a loss, net loss for us. So it's very difficult to tell you, but the volume we missed in ammonia, in nitrogen equivalents was roughly 100,000 tonnes.

Okay. And secondly, over a couple of years now, I guess, you've sort of described the Australian and supply-demand balances, well, as the market is pretty balanced, if not tight, and everything seemed pretty disciplined. I was just wondering if there are any changes there that you're seeing or if it's pretty consistent.

No, not really. So none of you asked me the famous IPP question, but I'll fall and tell the information because you do that every time. IPP is still pretty attractive, high 3 digits, low 4 digits delivered to ports in Australia, and then you have the inland freight, which can be quite tricky. Supply-demand has not really necessarily changed the big turnarounds either with us or with our competitors as a constant cycle, which takes capacity out of the market. Imports have -- we monitor the trends. We have been an importer ourselves. Nothing major, nothing really has changed in terms of imports coming from overseas. We do get the occasional spot cargo coming in, and then we look at their landed costs and the IPP. So we are still in the same ballpark as we were 6 months back, Niraj, when we spoke at the half. So nothing really has changed. Demand is still looking good. We were impacted by wet weather. It happens every year, but this year was intense. I think we had 2 cyclones and significant flooding extended period of time both in Western Australia but also Queensland and New South Wales, and that has had an impact clearly on our volumes. And you see that in the tonnes at APA, they are down. A lot of that is because of the wet weather, but then we were able to sell the higher-priced products for wet weather that helped us.

Next question comes from Scott Ryall from Rimor Equity Research.

The first question is very quick hopefully. You've talked to the carbon credits of $15 million, I think, was the number. And am I right that that's mostly Safeguard credits, and therefore, it comes into the blasting solutions in APA division, please?

Yes. That's sitting in other income in the APA business.

Perfect. And then the second one may take a little longer. So I'm looking at RONA, and I'm looking at the compendium that you've sent out just in terms of the summary numbers. And the denominator there, the asset number, rolling operating assets, it has gone up by roughly $1.5 billion. And I'm just trying to reconcile that with some of the balance sheet items where working capital virtually unchanged, PP&E is up about $400 million, intangibles up about $600 million. And I'm looking on a 12-month basis. Could you just help me understand why the denominator has gone up so much as well? And I guess the follow-on to that is, can you tell me when that denominator, the asset number actually starts to stabilize and you'll start to see the benefits of increased RONA as well as the very strong EBIT growth that you've been delivering over the last couple of years, please?

Yes. Sure, Scott. The short answer is it's the acquisitions. If you look at the acquisition purchase price for Terra Insights and Cyanco, that's what's driven the increase in net operating assets. Thank you for calling out the fact that working capital hasn't gone up. That's a very strong focus of the business around working capital efficiency. If you go back to the announcements around the acquisitions, we did say that they would be RONA-accretive over the medium term. And obviously, the way the formula works is you take on the net operating assets immediately, and then you start to work through synergies and cost savings and margin improvement, so the RONA increases over time. So the RONA result for this half is as expected per the investment cases.

Could you just help me, though, James, and just in terms of reconciling the denominator, though, so if the rolling operating assets -- sorry, I forget, I know I've got the wrong terminology there, but the rolling operating assets that you put in there are up by $1.5 billion, PP&E and intangibles are only up about $1 billion, I know it's an average number, but where is the extra $500 million coming from? Because I just am struggling to reconcile it with your balance sheet.

Yes, sure. I'll take it off-line with you, Scott. There is also an impact of FX here, but I can take you through the reconciliation in detail off-line.

And that might help just in terms of the comments you've made, as you said, the accretion to RONA. I mean at the end of the day, you've kept RONA flat while you've made those acquisitions. So I'm kind of just wondering when you get the acceleration then of RONA to kind of catch up with the EBIT acceleration. But yes, I'm happy to take that off-line.

Yes. I can address that now. As Jamie said that when you do the acquisitions to build portfolio and build out new segments, you pay upfront and then you get the benefits over a period of time. And obviously, what's held us back there is the Winnemucca asset integrity part of it. Axis has also held us back because we have not seen that uptick in the exploration, which is hopefully coming soon. So we do see these -- the earnings profile from the acquisitions coming in strongly '26, '27, '28. We have a target of 13% to 15% RONA for this year, the range average over 3 years, right? So we are now rolling and we are now -- at the full year, we'll be in that range, I'm hoping. So I'm not really concerned. The acquisitions have been EPS-accretive. They will be RONA-accretive in the midterm. And once we get these assets humming and delivering as we expect on plan, then you'll start to see the benefits from 2026. So we'll keep you posted in November when we come up with our plan for next year, and then hopefully, you'll see the benefits show up there.

Thank you for all the questions. I see no further questions at this time. I would now like to turn the conference back to Sanjeev for closing remarks.

Thank you. I'll take that question -- I'll take the closing. So thank you all for joining us. If there are further questions, please get in touch with me, and we can go through it in more detail. Thank you, and all have a good afternoon.