PPC Ltd (PPC) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the PPC Investor and Analyst Update. [Operator Instructions] Please note that this call is being recorded. I would now like to turn the conference over to Roland [ van ] Wijnen. Please go ahead, sir.

Thank you very much, Claudia. Good morning, everybody on the call. It is a pleasure to update you on 2 important elements in our business. Firstly, the capital restructure; and secondly, an operational update on the trading environment in the countries. I am joined by my colleagues of the exco, Mokate from International, Njombo for South Africa. And we have both our incoming CFO, as per today, officially, our CFO; Brenda Berlin; as well as our outgoing CFO, Ronel van Dijk, with me on the call. If you will allow me, I would like to make this call as interactive as possible. So I will keep my speaking time very short, and we'll then hand back to the operator to help us with the Q&A session. Just a few highlights on the 2 topics that we have at hand. Firstly, the restructuring. In the restructuring, there's a number of elements. The most important one being the resolution of our exposure to the business in the DRC, where, as you know, PPC Ltd had a sponsor obligation coming out of the project financing. And that project financing was not reaching completion due to the fact that the market conditions do not allow us to operate the plant at full capacity. That led to the fact that PPC for a number of years from South Africa has given financial support in the form of deficiency funding to the DRC and also if the international lenders to the DRC would have decided to accelerate their rights, there would be an exposure of $175 million to the group in South Africa. With the settlement agreement that we concluded yesterday, that has been removed. So we have no longer a deficiency funding obligation, nor is there a possibility for the international lenders to accelerate with recourse to the group in South Africa. That settlement agreement is binding upon us as soon as we have made the transfer of $16.5 million, which is the last and final deficiency settlement, which will happen early April 2021. After that, we will restructure the business based on the binding term sheet that we have agreed with all parties involved. And basically, the restructure should lead to a situation whereby the international lenders reinstate a portion of the debt into the business, which is a sustainable part. And the other part of the debt will go in a special purpose vehicle on a pay-as-you-can base where preference shares will make sure that any of the economic benefits out of the business will flow to the international lenders. PPC expects, therefore, that we will deconsolidate the PPC Barnet business upon completion of the restructure at the end of September. However, we will continue to manage the business on behalf of the Barnet lenders under a management agreement that has an initial term of 5 years and can be extended or not thereafter. With that settlement agreement in place, we have basically derisked PPC from any future economic downside to the DRC operations. And we believe that therewith, we have achieved a major milestone in decoupling the balance sheet of South Africa from the balance sheet of the international operations. And effectively, each of the countries within the PPC group now has a direct responsibility for its own balance sheet, which is a major step forward in what we've always said we wanted to achieve. Second important part is on the South African side, where you will recall that we had made an undertaking for a rights issue to deleverage and de-gear our balance sheet in the amount of ZAR 750 million to take place at the end of March 2021, subject to a resolution in the DRC. The resolution in the DRC is in place, as I just explained. And thanks to the strong trading environment since the lockdown in South Africa and the subsequent de-gearing of the business, we have agreed with the South African lenders that we defer the timing of the capital raise by 6 months to the end of September 2021. And at the same time, the South African lenders have agreed that they will review the need for such capital raise in the light of a approximately 2x recurring EBITDA as a sustainable debt level. It also is related to the sales process of PPC Line. That process, we have reinitiated late last year, calendar year, and we're making good progress and expecting to receive a full set of binding offers early April. We will then assess these offers in the context of shareholder value creation and debt reductions, and expect that if we were to move ahead with a final agreement, to have that in place in May 2021. With these 2 important [ settlements with ] our lenders on the international side and in South Africa, we have placed our business on a much more sustainable footing, and we look forward to the conclusion of the restructuring in the DRC and continued de-gearing in South Africa on the back of a strong trading environment and the potential divestment of PPC Line. On the operational side, our group overall revenue has performed very well. In the full year, until the end of February, we had a revenue increase of 7% despite the various lockdowns that we were confronted with during the financial year. And for the 5 months ending February 2021, it was a 14% increase, which was primarily on the back of very strong demand for cement in South Africa. Our South African cement sales have seen double-digit growth since July 2020, and that has continued until the end of February, and we expect continued strong momentum in the future months as well. Having said that, we remain cautious about any impact that COVID-19 may have on any of our businesses. We have, for example, seen a further lockdown in January and February, which damped the demand for cement in Rwanda, as an example. We would like to highlight that cement imports remain to continue -- will remain a threat to the industry. They have rebounded very strongly, and we actually have seen that the imports over the full year are in line with last year, and we continue to urge the South African government to take decisive action to place the South African industry at the same footing as the local industry. Overall, we believe that we have been trading strongly since we came out of the lockdown. All cost mitigation measures as well as price increases and cash preservation is clearly showing in our results, and you will be pleased when we will be able to share with you the full year results that our cash generation and subsequent de-gearing is taking place. Going forward, we will continue to have a strong focus on revenue, cost, net working capital and CapEx to make sure that we continue to de-gear. I would like to take this moment to thank all my colleagues in the executive team and also Anthony Ball, who stepped in as an executive in June last year and has been instrumental to get us where we currently are with our lenders. And beyond that, it is all the teams that we have throughout South Africa, Botswana and Zimbabwe, DRC, Rwanda and Ethiopia, that have all done a tremendous job to bring us where we are today. With that, I would like to pause and hand back to you, Claudia, to open the questions and get this session interactive. Thank you very much.

[Operator Instructions] The first question comes from Charles [ Dividius ] from [ Sandlam ].

Roland. Just a quick one on your comment around the potential of the international rights issue going forward. Can we read into that, that, that will only be required if the Habesha restructuring goes away, that you get -- you need to get to a majority stake and you need to recapitalize that business? Or what conditions will be required for us to see that international right issue be extended?

Charles, thanks for the question. Originally, we launched the international capital raise in the light of an overall restructure that we had included in the DRC. Our DRC lenders prefer the solution that we have currently agreed, and therewith the immediate need for the capital raise in PPC International have come down in priority. We do have some parties interested and we will see whether we push that process forward or whether we pause it. Ultimately, Charles, our view is that our growth in the international part of the operation will require capital. And it's a growth environment, which means that there will be various projects that we have on the horizon. We will have to judge carefully whether we do that through a new shareholder in international, as we believe that we would like to decouple the South African side from the international side. So at the moment, as we have announced, we most likely see this deferred and definitely no longer required as part of the implementation of a sustainable capital structure. I hope that answered your question, Charles.

The next question comes from Rowan Goeller from Chronux Research.

Just a question around that. You say you're going to deconsolidate the DRC going forward. What [Technical Difficulty ] [ would happen to ] your equity then.? Do you still hold equity in that business? I know it's not -- it's quite far down the line in terms of seniority or getting anything out of that. But can you just explain the dynamics of your equity investment or remaining equity in DRC, please?

Thanks, Rowan. Good morning. Brenda, can I hand that to you, please?

Yes, of course, Roland. Look, as part of the -- we're aiming to -- we expect to be consolidated when the restructuring is done, as Roland said. And as part of that restructuring is also downscaling our equity from 69 to a minority position. So yes, we will continue to hold 49%. And as you explained, it's got some far dated value. But by virtue of that and the way the business will be managed, we expect to deconsolidate. If that helps you.

Yes.

The next question comes from Russell [ Buzac ], who is a private investor.

Just very briefly. My only question really is aside from the cost management, that does sound very encouraging, from a volatile currency risk perspective in the territories that you operate and exchange rate risk and the ever shifting regulatory landscape from an Africa banking perspective, what [ is the view then ]?

Thanks a lot, Russell. Brenda, over to you as well.

Thank you, Roland. Look, I mean, I'm not sure I quite understand your question. Are you asking about how we deal with the currency risks in the various international operations?

I am. I am, indeed. I assume that because you're domiciled here, obviously, then your annual results, et cetera, and in the way that we view the growth prospects, how you manage central banking provisions, getting the cash back up, withholding tax implications, whether any of that is also actively being managed to make sure that you [ get suit there ]…

Yes. I think I have been cut off my call. It's the PPC call?

No, you are still very audible.

You are very audible.

Can you hear me, Russell?

Yes, we can hear you.

Okay. Russell, so I think in each country, I mean, they are largely self-contained. So they get their revenues in their own currency, then they spend their costs in the currencies. Obviously, we have exchange rate movements when we consolidate, and there's nothing we can do about that. But in terms of each and every country, they're very much self-contained with a single currency for revenues and expenditures. When we try and extract dollars out of whatever currency from a dividend perspective, that's when we will actually realize currency exchanges. That's when we bring it back to South Africa.

The next question comes from Chris Logan from Opportune.

I wonder if I can ask what was in it for PPC Barnet's lenders to terminate their rights of recourse to PPC? I mean superficially, it almost seems too good to be true. Obviously, one would think you would have to make up for getting out of [ the try ] to recourse elsewhere. Or am I misreading it?

No, no, Chris. There is $16.5 million in it for them. That's not a small amount. It was also very clear to them that PPC South Africa was just not generating the cash. And funnily enough, the good performance was starting to work against us in part of the discussions, as you can understand, right? But I think it became very apparent to the DRC lenders that the situation was unsustainable, and that PPC would not continue to pay those deficiency funds forever going forward. And I think it's also fair to say that as strong as the position of the lenders might have looked, and we obviously also found a number of elements in the agreements that we brought to the table, where we said, "listen, everybody has made decisions on the basis of the project and project financing on parameters that have never been established, including the fact that after the implementation of the project, there were 2 competitors coming into the market, partially funded by the same lenders, which caused us the problems that we have." So there's a whole lot of very complex and some heated debates that led to this result.

Okay, thanks, well done, and thank you for giving some clarity to that. Very well done.

[Operator Instructions] Our next question comes from [ Shwayib Voyej ] from Athena Capital.

Roland. Just a question regarding the management fee structure. I mean, can you talk to the value of that management fee, if there is a fee attached to it? And to what extent that would offset the settlements?

Yes. Thanks, [ Shwaib ]. So the management fee, we will negotiate over the next couple of months, but it basically is a cost coverage fee. You can imagine that we continue to support the DRC, including IT solutions, and we just want to have a cost coverage for that. But there is no recovery of the 16.5 to be thought of in that sense.

The next question comes from David Fraser from Peregrine Capital.

My congratulations, Roland and the team. I think it is a fantastic result. I've got 3 questions. I'll just rattle them off quickly. Can you just clarify when you talked about double-digit growth in SA, you're talking about volume growth and not necessarily revenue growth? And my next question is just about pricing. What sort of price increases have you looked to implement in the current market, particularly in South Africa? And then one for Brenda. First of all, welcome, Brenda. You talked about SA debt moving from 1.9 billion in March down to 1.64 billion in February. Perhaps you can just clarify [ further ], when was the peak debt? I presume in sort of April, May, June post lockdown, you got to a peak debt level and just would help me in trying to understand the debt repayment trajectory from the high during the year, that would be of assistance.

Thanks, David. Let's first talk a bit about the volume and the pricing environment in South Africa. I'll hand over to Njombo.

Thanks, Roland. I hope I'm audible. I think I had 2 questions. One was in terms of the volumes, yes, then we've had a volume growth. And the double-digit that Roland was talking about was mainly focused on the volume growth. We've had healthy price increases, and it is also dependent on the areas, but we've managed to get between 5% to 7% in some areas in terms of the price growth. I'm not sure if there's any other question that I'm missing.

And then probably, it's fairer to put it Ronel on the spot here when you ask historical questions, David. Ronel, are you with us?

Yes, I'm here. Hi, everyone. The debt peak for the past 12 months was around May, and it was just over ZAR 2 billion in South Africa. That has come down steadily through the trading period.

The next question comes from Dave Murray from Investec.

Roland. And let me concur with the well done. Just a quick comment would be useful around whether you're seeing any developing trends in terms of government infrastructure initiatives. So in terms of your growth experience over the last 6 or 12 months, has there been any discernible change in a push from government [ infra ]?

Thanks, Dave. And I'm assuming primarily South Africa is what you're interested in, right?

Indeed, indeed, South Africa.

Njombo, over to you, please?

Thanks for the question. I think in terms of going forward, yes, there is some green shoots on the infrastructure growth. Be it (sic) [ albeit ] that it is mainly focused on the rural areas. And I think it's mostly on the water systems. A couple of dams that are being built and reticulation of water supply to communities. We also saw quite a bit of work coming through from SANRAL in terms of the roads that they are doing. However, based on what the government's intention was and what is coming, it's very slow to take off. However, in -- within the Gauteng and [ kazatin ] area, there is quite a bit of the government and public partnership projects that are taking off. And that is really picking up in terms of what the government has had to do. The most growth [Technical Difficulty]

Hello, Njombo?

It seems we lost Njombo at the most exciting moment of his answer, where the most growth is coming from. And if I fill in his words, the most growth has come out of the retail sector, which we expected to normalize towards February, it has normalized a little bit, but it has continued to be very, very strong, hence, the double-digit numbers. I hope that answered your question, Dave.

The next question comes from Jovan Jackson from Laurium Capital.

Well done on this agreement. Can I just ask, you said that you entered into a binding term sheet. I just -- when you -- while this thing is still not going to be deconsolidated, are we still -- what are the interest rate terms? Have you managed to change that as well? Not sure I read that in the announcement. And then it's obviously going to be consolidated up until that point, so should we still then see -- are you still paying the interest? Or does your -- when you ring-fence the debt, is it purely the DRC? I just wanted to be super clear on that as possible.

Thanks, Jovan. So yes, it is completely ring-fenced. You will still see it in our year-end results because we will not be consolidated at the end of March, but there is no more recourse back to the group. Once we deconsolidate, you will see it completely disappear out of our books. In terms of the interest rates, the interest rates have been renegotiated, they have come down slightly. However, as we said before, our future minority position will not have any economic benefits in the foreseeable future.

But no economic losses either then?

That's correct.

The next question comes from Nick [ Kellar ] from [ Signal AM ].

First of all, I don't know if Anthony Ball is on the call, but for anyone who's been involved in the [ South Sea ] restructure, there's been one missed deadline after the next. And I've really got to congratulate you for: number one, always keeping us in the loop; and number two, for doing such a fantastic job. So well done to you guys. It's very impressive. So I've got 2 questions on the competitive environment. First of all, imports, we know that shipping costs are up significantly. Maybe you can just walk us through the economics of Senegal's trying to import cement and what that has done to the pricing environment in South Africa? And secondly, some of your competitors, those [Technical Difficulty ] we're seeing at the moment, some of their plants have been shut down. And I'm wondering how much PPC are benefiting as a result of that? And what you see that situation looking like going forward.

Thanks, Nick. And definitely, Anthony is somewhere on the call. So he will have heard your words of appreciation, which I only can echo. To your questions, Njombo, are you back? Can you take them?

Yes. Yes, I'm back. So in terms of the imports. Imports did subside during the lockdown period but actually did pick up again. Now with the shipping rates going up, we have seen imports basically going up in terms of pricing. In a lot of jurisdictions we've seen increases of up to ZAR 10 per bag, which obviously brings them closer in terms of our pricing, quite a very welcome change in the pricing. But in terms of the volumes of imports, there has been an upstream [ slow ] We estimate that the imports are basically just about 1% down year-on-year in comparison. With regards to all the other internal producers, yes, we do have a footprint advantage. And also in terms of how we started ourselves, looking at the downturn on the economic situation in South Africa going into this new year. We have looked at our plants and said we can actually soft-mothball, which meant we could start up our plants within a week of the upstream in the market. And when it came, we certainly did take advantage of that. And we were able to bring in about 2 units online. And from a competitive environment point of view, most of the producers are able to get their operations running. And yes, there are some units that are being mothballed in terms of structuring capacity to meet the demand. But yes, we do have the advantage of being able to bring in a bit more into the market on demand.

And so how do you see that going forward? Do you think that competitors will come back, or do you think the current situation will persist?

At this stage, what we see is if this demand environment remains the way it is, it's quite difficult for some of our competitors, and there is quite a few of them that can't be able to bring in capacity, let alone new capacity. I don't think there's anyone talking new capacity in South Africa at this stage. The mothballed capacity we've seen at the time when we had the spike in demand around July, August, that we were the only ones that could actually cover that increased spike. Just purely on the cost of returning some of the units back into operation. So going forward, obviously I did mention that we are cautiously optimistic about the demand going forward. And it's all based on a reduced amount in our head, Roland finishing the answer that I was giving in terms of where the biggest spike came from, which was mostly on the retail. Which means it's your [ DI Wise ] and the small contractors that are doing -- are buying product via retail and the retail has been in the upstream. Now you can see that as people start losing jobs and losing money from a situation where there's retrenchment and all of that. We are seeing that it will come to a point where retail start decreasing, and that's when infrastructure should be coming in and boost that space. And if that happens slowly or not at all, it will have an impact, but we're cautiously optimistic.

The next question comes from [ Myron Rajimira from Mitva ].

I just wanted to firstly congratulate you as well. Amazing outcome. Secondly, I had a question on the import prices. And I think it's been answered. I mean it also was a quote by one of your peers yesterday, about ZAR 10 a bag or so. The third -- the real question, I suppose, is slightly complicated one. But traditionally, you've had a certain -- it's about your costs in South Africa. [ So originally ] you've had a certain mix of fixed and variable in the last, let's say, 5 years ago. But since then, you've had a lot of restructure, you've mothballed a few plants and you've actually brought a few back now with that increased demand. So maybe can you give us some color as to how that mix might have changed? I don't know if Njombo or Roland, both of you can add some color to that? Well done.

Myron. Do you want to go with it first then, Njombo?

Yes. I think we won't be mentioning figures, but I think one of the things that is quite significant in terms of our structure of business. Since from about 2 years ago, we were talking about the 3 mega plant strategy. And if you look from the fixed cost point of view, we're starting to reap the benefits of everything that we put through in terms of the restructuring and our network optimization, especially in a situation like this where one operation can double its production to meet the demand without actually increasing on the fixed cost. It's everything that we gain is just straight to the bottom line. So yes, there is a bit of a change. That is basically the risk that we still have on the input cost is mostly on the energy, both on electrical energy, and thermal energy from the fluctuations with the coal cost. And obviously it's from price that sometimes it's much higher. So those are the 2 ways. Obviously, the control basically might upset what we have done in terms of our variable costs.

Thank you, Njombo. Let me just add to it, Myron. I think Njombo and his team have done a remarkable job over the last year to bring the cost back in line. As you know, we also compare ourselves with our competitors to the extent possible. We always benefited from our operation in the Western Cape as being relatively high-margin compared to our inland operation. And currently, we actually see that our inland operation has pulled up its margin significantly on the back of the cost reductions, the price recovery and also keeping the strong volumes. So in that sense, you will hear more about it when we unpack the annual results in June, Myron.

I think I must also congratulate the operational guys. Seems like it's a great improvement happening. Well done there.

The next question comes from Lonwabo Maqubela from Perpetual (sic) [ Perpetua ].

Yes, quick question. It was just relating to the debt. I noted that you said the SA debt at the end of March was 1.9 billion in last year, and then 1.6 now. So what I wanted to clarify what was the gross on-net and then what is the -- if it's gross, what's the net debt [ there ]?

Unless you correct me, Brenda or Ronel, it is always net debt that we report, correct?

That is correct.

Did it answer your question, Lonwabo?

Yes, it does.

The next question comes from Charles Boles from Titanium Capital.

I'll join the chorus of congratulations, Roland and your team. Two quick questions. One, on the international operations, DRC has become economically remote in terms of likelihood of economic benefit. It would appear you seem iffy about as to whether you would want to participate, which really just leaves Rwanda, which is a relatively small operation. In summary, is the picture that PPC is [Technical Difficulty] [ essentially ] is becoming a South African [Technical Difficulty] [ Botswana ] and the international expansion you've drawn a curtain on? Question one. And the second is just clarification on the materials business. It says that the demand for aggregates increased due to construction demand. Ready-mix was reduced due to lagged recovery in commercial construction activity. I'm surprised that aggregates increased due to construction demand. If you could maybe just talk a little bit about that.

Thanks, Charles. On the International side, we have not let our plans go, to grow our international business. But what we have done is to say, listen, we're not just going to jump on any opportunity. We really have to apply our minds as to where, when, how and with whom. And that leads me to Ethiopia, where we don't have a strong local partner. And we definitely did not want to close out the DRC and at the same time announce that we would embark with a major investment in Ethiopia, only to have a similar discussion repeat itself in a couple of years down the line. So I think it's fair to say that we are more considered, more careful. You didn't mention Zimbabwe as part of the international portfolio. That for us does remain a strong player, doing a very good job operationally. We started to be able to expect some dividends back out of it. And also, if we were to continue an expansion internationally that would require an equity, we need to understand very well where that equity is coming from and what appetite our domestic shareholders would have in supporting an international expansion. So that's why I would rather say we apply our minds very carefully, and you will not see us jumping around the continent. If it doesn't fit in the portfolio, the small portfolio, but the portfolio that we already have. Does that answer your question on international, Charles?

Yes, it does.

Okay. On materials, I'll let Njombo correct me. Our aggregates has benefited from a commercial strategy change. We moved a lot more to the so-called [ bakery ] sales in the townships, only to find out that these people are not coming with [ bakerys, they're coming with ] truck loads. So that gave a bit of a boost in our sales. Also, aggregates is more used into road construction, whereas the concrete would be more used into building larger infrastructure, which hasn't really happened yet. That is why you see the disparity between the 2 segments. Am I correct, Njombo?

You are. In line with the retail that has pushed that demand, I mean, with the retail and then for our sector, you still consume quite a bit of aggregates and also that the cost structures business model that we change going in today that has boosted the aggregates. When our ready mix looks at infrastructure, so the less of the infrastructure build and major infrastructure build, the less will the ready mix come in. The other thing is that with the ready mix, if you recall, the large construction was quite delayed coming back after the lockdown. So that has had a significant impact on the ready mix business.

The next question comes from [ Myrick Barker ] from Kagiso Asset Management.

Just a quick one. Can you confirm that the IFC, the put option is completely fallen away in the back of this transaction?

Thanks, [ Myrick ]. No, it hasn't. However, that Put option will expire in August and will be part of the restructuring discussions that we will have over the coming 6 months.

The next question comes from Mark Narramore from Excelsia Capital.

Congrats on the results, guys. A quick one on the SA Cement business. You've spoken about this increase in volumes and some price increases. But on the cost side, you've kind of illustrated that there might be some -- or there might be some increases just based on electricity costs and maybe transport costs, whatever that may be. But can you maybe give us the kind of targeted EBITDA margin over the next, what is it, 18 to 24 months, just based on the current run rates, if you can. Just a range, I mean, not an exact number, but this is something that would be quite useful, if you can say.

We're working hard to have an overall reference number of 20% plus. Whether that will happen in the next 12 months or a little bit longer down the line, but that is what we're in.

Okay. So that's an internal target. Then just the second question, on the retail trend you guys have seen, it's been quite strong. Have you seen any slowdown in that in March or Feb? Or is that trend continuing?

No, the trend is continuing. It does start to normalize a little bit, right? So especially Feb was not as strong as, for example, October. March looks again quite strong. But if you compare March to March last year, you have to take into account that March last year was already impacted by lockdown in the last couple of days. But overall, it's still double-digit across the whole period.

And one last question, if I may. Just on the regulation side and on the import tariffs, it sounds like you guys have made some good progress, but nothing concrete yet. Have you got any other updates? Or any color you can give us to, additionally what you said in the statement, that would be useful as well.

I could give you the mobile number of the [ ITC ] governor. We have supplied them with everything they need. And it is now really in their hands. And I know I've been saying this as well in December, and it was true in December. It was true at the end of March, and we don't have their word yet. Look, Mark, we see this as important, as necessary for the long-term sustainability. But in the plans that we have made, we have counted with the fact that imports continue to bother us for the foreseeable future.

[Operator Instructions] The next question comes from Lazarus Shigwedha from Ninety One.

Congratulations, again, on the achievement around DRC. I know that Myron and the rest of the people on the call have passed their congratulations already in that regard. My question is around -- just Zimbabwe. If you can just give us an indication of the currency split in terms of sales in Zimbabwe. And you did indicate that you are able to repatriate some money. You've got some dividends out of that. Maybe just give us an idea of how much the balance back in Zimbabwe, and the improvement, if you can give maybe a sense of the number in terms of the improvement of the dividends that you can get out of Zimbabwe, that would be very helpful.

Thanks a lot, Lazarus. Mokate, up to you.

Thanks, Roland. Thanks, Lazarus. Yes, we continue to experience sales growth in Zimbabwe, primarily driven by infrastructure projects. We've seen quite a significant increase in the bulk volumes in the market, coming from 14% to roughly 20% in this current financial year. Costs remain under pressure because with Zimbabwe, slowly getting back to pre-2018 input cost pricing. We're seeing quite a little bit of a squeeze in terms of the cost line. We are continuously, obviously, looking at our pricing to make sure that we maintain our margins as per our guidelines previously provided. We're trading primarily in Zimbabwe in ForEx. Close to 65% of our sales for the year have been in ForEx, and we're trading in multi currencies [Technical Difficulty] [ besides ] rands, pulas, dollars. We take all the foreign currencies at the moment. And our balance in terms of cash is more than 95% in foreign currency. So we settle our income to obligations in [ DCS ] and try to maintain our cash balance [ at mainly in ] foreign currency. And with that in mind, as you have seen in November, we were able to declare dividends, and they were paid out of our cash balances. So that becomes a much easier process from a regulatory controls point of view. And we plan to continue declaring dividends in Zimbabwe and try our luck. Hopefully, the regulatory environment does not change in the process, but we will continue declaring dividends and [ try and repay the ] money to South Africa. I hope that answers your question.

Yes, it does.

The next question is a follow-up question from David Fraser from Peregrine Capital.

Just a question on advisers cost and particularly on the DRC settlement. I know you engaged with a number of advisers to help you through the process. Can you clarify the costs incurred up-to-date by those advisers? Have they been written off into the EBITDA numbers that you've disclosed here? And will you perhaps highlight them at the year-end as, obviously, being sort of once-off? EVen if you don't take them out of EBITDA as long as you just highlight them to us, please.

So on the correction of the [ null ], David. It sits in the EBITDA numbers that we are mentioning here, and it runs this year in double digit numbers, not triple digit.

[ and it will ] separately as the result.

And double digit meaning double digit millions?

That is unfortunately correct.

Okay. A small price to pay.

It costs to get out of trouble, David.

Roland, we have no further questions in the queue. Can I hand back to you for closing comments, sir.

Thank you very much, Claudia. Thank you all for the questions. I hope it was as interactive as you wanted it to be. We've managed to stay within the time. We look forward to keep you informed on the sales process of our Line division, followed by the announcement of our full year results, which we expect in June this year, and we look forward to stay in touch. Thank you very much for your participation, and Happy Easter to everybody on the call. Thank you.

Thank you very much. Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.