PT Bumi Resources Tbk (BUMI) Earnings Call Transcript & Summary

Good evening or good evening -- morning, depending on where you're calling from. Welcome to JPMorgan Credit Call. My name is Soo Chong Lim, Head of Asia Credit Research. Today, we have the presence of Bumi Resources to give us an update on their first quarter number. We have the 2 usual speaker, Andrew Beckham, CFO from Bumi Resources; and also Dileep Srivastava, Director and Company Secretary. And also with us today, we have Nalinkant Rathod, Deputy CEO; and we also have Thomas Kearney, Commissioner for Bumi Resources; and we have Ashok Mitra, Director from Kaltim Prima Coal. I think we are going to start with a short presentation by Pak Andrew, and then we're going to follow by Q&A. Without further delay, let me hand over to Pak Andrew. Pak?

Thank you, Soo Chong. Guys, I've been asked to keep this brief, so I'll keep it as quick as I can and open up to Q&A. If we can move on to Slide 3, please, Page 3. This one, yes. Quarter 1 review, production. Saw a reduction in production from the same time last year due to the heavy rain we had in especially January, February, March. We're seeing production start to recover in Q2, and we expect to see -- be back to full production levels in Q3 and Q4. I'll come on to prices a bit later in the next slide. The CCoW status -- I'm sorry, I didn't mean next slide, but the CCoW status is still in progress with discussions on KPC progressing. We expect to receive good news on that new license by quarter 4. With regards to guidance, we're maintaining our 85 million to 89 million tonnes despite a bit of -- we're a bit down at the moment, but we believe we'll catch that up. Prices though, the $53, $56 is probably conservative at the moment if you look at where the prices are, but we're just making sure. We'll update probably in Q3 if we see these prices maintained, and we could revise them up. Costs. On average, $31 to $34 is reasonable. There is upward pressure on -- because of oil prices, of course. Demurrage costs because of the freight rates are high now. So those are having negative impacts on costs, but we're currently maintaining our guidance on that. The next slide, please. As you can see here, the prices have been increasing all in -- most of -- since about the drop down and then has been increasing in 2021. And as each month goes on, our prices will keep increasing if prices continue to increase. As I remind you, we're 3 months behind the curve. We tend to have our indexes based off the previous 3 months or the previous quarter. So we'll gradually get better and better on realized prices, if you assume that the CV of the coal sales are the same. Next slide, please. These are the forward curves. They're in backwardation, of course, because of the high prices. I mean this -- as of 2nd July, it was 139. I understand it's about 145 for Newcastle now. But the forward curve is coming in around -- for calendar '23 around 88, 85, which is probably not a bad -- 85 to 88 is a possible longer-term price curve or what we think might happen in the future. But naturally, we try to remind everyone, prices in April last year were around $45, $47. So there's been a massive, almost $100, increase since then, and they can go back down as well. Slide 7. Next slide, please. Jan/Feb, as I said, saw most of the rainfall as we can see from the overburden numbers for KPC and Arutmin. Prices have steadily risen in KPC as the index sales followed the last quarter or the last 3 months' prices. Arutmin sales have been mainly of the low-grade coal sales, and a large percentage have gone to the PLN under the domestic market obligation. So if you understand with our Arutmin coal sales, it's about [ 4,200 ] coal, but a lot is going into PLN. And that's based -- the domestic market obligation means that you have a price cap to PLN of $70 on an index-linked -- index price. So for 6,322 GAR, you're getting $70. Similarly for KPC, that's why we won't get all the benefit so quick of the international prices because we have to sell at least 25% to the domestic market and mainly to PLN. And naturally, no one wants to sell to PLN because they can sell abroad for -- on a $140 benchmark. So we're being pushed to try and supply more because we can and we're big enough. So bear that in mind, when you see our prices, it will come up, but maybe not as quick as you had hoped. Inventories are low now. And we're really at minimum inventory levels now. So we are really selling what we can produce at the moment. Hopefully, with the dryer weather coming in, we hope to see some improvements and get production above sales. We move on, I think, quickly now. Next slide, please. Yes, this is the overburden coal mined. We've talked about that. I'll go on. Next slide. Same with coal sales, stripping ratios are down because the Arutmin low-grade coal, you'll see that gradually increase in the Q3 and Q4 as the high-grade coal production increases. Carry on, please. Next slide. Production costs, I'll come on. I have a better slide on that one, and we'll talk about that. We go on to the next slide, keep it quick. Receivables. Our focus is, of course, still on over 90 days, and of course, the PLN and keeping those under control. The coal company receivables were high in March, a bit lower. We're seeing increase in receivables over the Q2, naturally because of higher prices in the export side. Over 90 days has remained pretty stable. Carry on, next slide. Selling prices, as I said, have gradually increased over the period. You see back in 2018, we were $69. So we're up at $60. We should begin further up or go even more in Q2. We're probably looking at around over $60 for KPC and $37 for Arutmin in the second quarter at the moment. I haven't seen the June prices and the reconciliation of that yet. Next slide, please. Production cost, again, is up [indiscernible] now with fuel costs rising, oil rising. As I remind you, a $10 increase in the barrel of oil is probably at least a $1 increase on our costs. So please bear that in mind. It's rising quite a lot at the moment. Also, freight rates are up. That wouldn't -- we don't get exposed to freight in terms of delivery using freight. We always back-to-back with the contract. But the demurrage -- because we're trying to sell as much coal as possible, we're packing the ships and so there's some delays. And so you get a demurrage cost, and that's quite high at the moment because of the freight rates. So bear in mind, there is upward pressure, but KPC especially and Arutmin are doing a lot of work to look at efficiencies and reductions. We've automated artificial intelligence and automating a lot of processes to try and keep the costs under control. Next slide, please. This is the overburden prices. This is -- I don't really go into much detail here. Go on to the next slide. Fuel prices, as I said, are up, $0.64, $0.65, $0.67. You'll see those go above $0.70 in the second quarter. And they -- I think they'll continue with the demand that we are seeing in the world at the moment. Next slide, please. Let me turn to stand-alone results. Published our financials on June 30 in line with the COVID rules, where allowed. The net loss has reduced from Q1 2020 to Q1 2021 from $35 million loss to $11 million. The owners -- the reduced revenues were offset due to the lower cost as our margin per coal sales per tonne increased from 6.7% to 14%. So if we can get ourselves up, we'll see a big increase. And we probably expect to see profit return in the second quarter. If we go on to the next slide, please. This is on the consolidated and gives a clearer picture with KPC included. So remember, KPC is just, at the moment, equity accounted under the IFRS and PSAK Indonesian accounting standards. With KPC included, it gives a much clearer picture of the revenues and costs but also the operating income, which has doubled from last year because of KPC. If we go on to the next slide. This simply shows you the consolidated movements from Q4 2020 to Q1 2021. And then if we go on to the fourth -- the next slide, Slide 19, where we compare Q1 under reporting standards to consolidated numbers. KPC's impact can be substantial on the revenues, on the operating income. And then if you also look at the balance sheet, the current asset, the current ratio is -- the current ratio, current assets to current liabilities, looks a lot healthier when you look -- include KPC in those numbers. And that's quite important to look at. Of course, equity also increases substantially. We go on to the next slide. This is just a summary of the numbers. I won't bore anyone at the moment to go over them again. Carry on. Equity slightly fell because of the loss, but the last 12 months adjusted consolidated EBITDA increased. And we expect, as I said, Bumi to return to profit probably in Q2. And hopefully, we'll see the EBITDA rise even further. Next slide, please. This is just the breakdown of the EBITDA. Remember, for those who are new there, we have a PSAK 73 which changed the -- how the rental of infrastructure assets and leases of our infrastructure assets are treated, and they're now on amortization. So they get adjusted out of the EBITDA when we calculate it. And so the adjustment there is shown. Anyone needs historical numbers, please e-mail me. Similarly, on all the financials, if there is detailed questions, feel free to give me an e-mail, and we can give you all the backup you need. Next slide, please. Cash balance. This is the -- just the Bumi stand-alone as of March. I'll move on because there's a better slide in a minute. Right. On the cash balance, there's some -- Soo Chong has been asking a lot of times, so we're trying to break it down. If you look at KPC and Arutmin at Bumi, where our cash is moving, you can see our cash is improving. March, there was a drop because we're paying tax and getting all the -- our prices were still following last quarter's prices. As you can see in June, those have increased. As you know, there's the mine closure deposit. This is showing restricted cash as well as free cash. It's not all free cash. It's not all available to KPC. There's a restricted mine closure deposit with the government. We have to have that. The royalty also is available for the 2020, the final payment on 2020 when the government finishes their whole check and audit. The balance -- if you look at KPC though, one of the key things and why some people have asked a lot about why price -- the prepayment was less or is planned to be less in July, is because we've shut off -- we cut off on the 26th of June based on the rules of the CAMA. After that date, about $114 million has been received in the CAMA in receivables or collections in KPC CDA. So it's a bit of a timing working capital issue, which should resolve itself in the next -- this third quarter and fourth quarter, subject to production, prices all remaining the same. I'm not allowing for any other adjustments, but otherwise, it should just bleed out into the third and fourth quarters. So slightly down on what we would hope to have paid, but that's just the timing at the moment. If we go on the next slide. This is our -- Bumi's debt. We're currently at $406 million of April. That will come down to about $390 million with the payment in July of about $16 million. We still believe that we'll be quite comfortable. We should be -- if prices stay where they are and royalty rates are the same, we don't see any reason why we don't clear Tranche A by next year towards -- by the end of next year, which is the one on maturity. As you can see, though, it's vital we get the restructuring done as quick as possible because even with paying about $16 million, $17 million on A, Tranche B capitalized interest goes up by about $17 million. So the overall debt doesn't change. So we have to get them -- it's vital we want to get -- stop that capitalization of Tranche B and C, which is just costing us. We're borrowing too much money to -- we're not moving anywhere. So we hope to get that moving. Of course, COVID has restricted us to getting the discussions and even just -- I mean at the moment, the whole of our office is shut down. So we are all in remote locations at the moment. Carry on. I don't think -- on the MCBs, let me just get the right one. Should I get -- there's been a lot of questions from the MCB holders and people. So I just wanted to give you a bit more clarity on where we are. Of the principal conversions, there's been principal conversions of $199 million. $30 million of -- or part of that is $30 million. A part of that -- on top of that is interest. So a total of $229 million. $63 million has been settled, and the remaining balance of $136 million plus the $30 million of interest is still being processed as I've reported to a number of people or to the trustee and the account bank. This is going through the OJK approvals. Now what OJK, which is like the SEC of Indonesia, is saying is that we cannot issue further B Series shares at a nominal value of IDR 100 for conversions of IDR 73. Therefore, we need to issue shares at a nominal value below this price, probably at about IDR 50. Now the issue with this is in the trust document of the MCBs, it says we can't issue shares at a nominal value lower than IDR 100. So we have to first go back to the MCB holders. This is the lawyers telling me, that we have to go back to the MCB holders and get a vote so that we're going to be approved to issue shares at IDR 50. It doesn't change anything of the rights and the terms, but it's just the nominal value given to those shares has to be changed. And we can't do that without first the MCB holders approving. Then we get the shareholders to approve. So unfortunately, we're going to have to do a circular -- a circulation and get a vote. We need a quorum and we need everyone to say yes as quick as possible. So we'll get that out in the next -- we'll get the notice out. We'll give everyone an update on this in the next day or so, and then we'll get the forms out as quick as possible. And we need -- we'll give this like 2 or 3 weeks for people to vote. And as long as we get enough people come back and vote, I think we have to be -- the 75% quorum type numbers. Then we can get the vote done. Then we can move on. So apologies, it's taking longer, but this is now what the lawyers are saying. If you go and issue shares at IDR 50, you're defaulting on the MCB document. So very -- frustration, straining at the moment, but I apologize for those waiting on conversions, and I apologize for the MCB holders as it is. Next slide, please. This is ESG data. Just be aware, it's there. We publish this every quarter, but it's available monthly. Our CSR -- ESG annual report will be out this month. And we'll update everyone with those reports. They're available if anyone needs them. We're happily -- we have a committee formed for all of this sort of stuff. And if anyone needs to talk to that committee, we're happy to do that. And I don't think -- with that, Soo Chong, I think that's really a very quick presentation. I think that's it.

Okay. I think we are now going to the Q&A. [Operator Instructions] I think since we're waiting for people to raise their hand, I'm just going to read out 3 questions that I have received from the investor just before the -- even the call start. One is from [ Amy Hui ] from Deutsche Bank. "Please discuss the pricing Bumi has been able to realize for both KPC and Arutmin since the May update. The 2021 revenue guidance has not changed for a while despite benchmark thermal prices continue to rise. For instance, we are seeing average prices is $105 for June and $115 for July in the Bloomberg. What is the realized pricing you are seeing in June and expecting to see in July and next couple of months given the pricing lag? How long will that pricing last to -- at minimum? Can you also guide what product quality CV coal you're raising these prices for? Can you guide what cash balances are at each entity?"

Nalin, do you want to do the first bit on realized? You're on mute. You're on mute. I think he's having a problem.

Can you hear me?

Yes, yes. Nalin, we can hear you.

Yes. No, basically, on growth from bottom up, Andrew had put up a slide wherein we have and the amount of restricted cash and certainly the amount of free cash that has come after the cutoff date. That cash is basically the receivables. So that was relating to the period July that we have received. So they are partly -- that will be utilized during the course of -- during September for the working capital plus ultimately whatever the left is for distribution. On the selling prices, our -- subject to correction by Ashok, our CV is hovering between 150 -- 5,050 to 5,100. Yes, Ashok?

Yes, it's [ 5,100 ] average quality now...

Yes. But 5,100 is basically the average quality. It's dropping, but other characteristics we are maintaining. So whatever realized is, we are showing for 5,100 CV. Now coming back to the current prices to the realization, we can definitely send to the investors month-wise realization that we have and the period at which we had contracted those sales so that you know when the contracts took place that the prices was right. In fact, currently, we are selling coal at a much -- what we should have as per the premium index. We are selling the coal at a premium. But then what we need to take into account is the historical sales that are coming now and the current sales that will be coming up in the second quarter. Andy, what we might like to do is we might like to give the month-wise realization and the contracts that were done during that period, when were those contracts entered into so that the lenders will know why the realization is what we have. I don't think our realization is low. It is decent realization. But we'll give them adequate comfort that realization is what we are getting is the right realization. Do you want to add anything, Andy?

Yes. Look, I mean, prices were, what, up at $65, $66 in KPC in May. As I said, that will probably increase if CVs continue the same. That will probably increase in June. And if prices keep on going up, we'll keep on going up. We're just -- we lag a bit behind if prices drop. And bear that in mind, if prices do drop, we'll lag behind that as well. So we'll get better prices in the spot market for at least the first next 3 months. So we have to look at that. I mean now that China is out of its community -- sorry, the Communist Party celebrations, we expect to see some movements from them. I've also seen -- if you can see the amount of COVID cases happening in Asia, especially in Indonesia, and that -- you can argue that Asia is a part of this world demand at the moment. It's all still struggling. So does that mean that we're going to have an increased demand, even more demand when it comes back on? Or is it going to suck everyone back down? And that's -- I've seen a number of commentators talk both ways. So we hope that, of course, the demand continues and demand increases. But we have to be careful with that. But at the moment, I think prices have moved and prices will continue. Yes. Sorry, Nalin?

Okay. Ashok, you want to add anything, Ashok?

Just to remind the people that the pricing which we got in quarter 1 was based on quarter 4 because all these sales were booked in quarter 4 and the price was low. Then in quarter 2, which we booked again based on quarter 1, so that Pak Nalin said that we have to provide to the investors how the price were booked and contracted and when was it. Also, we have to remember we have some long-term contracts entered into last year on a fixed price to some customers, and that price still were being realized in the month of May. So hopefully, in the month of June, we have -- in KPC, we have realized around $67, as Andy said. And we hope that in quarter 3, the price realization will be much higher than what we have seen now.

I think -- let me add a few more points here. Number one -- we have 4 types of sales. Number one, the domestic sale where the HBA has been fixed at [ $70 ]. All the sales to PLN are realized at a lower price. Then we have a second set of sales where we had in the past sold at a fixed price, and we continue to keep up our commitment. The third one is on a month-to-month basis, we fix the pricing at a certain volume and that we realized during the course of that quarter. And the last one, of course, is our sales which are on an index basis. And there, we realize index first quarter premium we have negotiated. We realize those prices. If the investors want a breakup on this, we can also provide that.

So since we are on the -- we are talking about this cash thing, right, I think I understand all this lagging effect of the coal prices and how that's going to hit your cash flow, yes. But the reality -- I mean, let's face the reality, right? Coal prices, average prices in the first quarter is still about $87 for Newcastle benchmark, yes. And the company announced only going to be able to pay $16 million of EBITDA. So first thing first, $87 of per metric ton of coal price for Newcastle. I think we are going to be so lucky it's going to hold around there. So my question is that if $87 per metric ton of Newcastle prices, the company is only paying $16 million. And you're now talking about KPC keeping $100 million plus of cash. But how long? And the company is still saying that you're going to repay the full Tranche A by end of next year, assuming no restructuring whatsoever. So you only have 5 more quarters to pay. So are you suggesting that you're going to be able to pay $16 million to $17 million of principal per quarter starting in October?

Soo Chong, let me answer that question. I think Andy can chip in. First, as I said, the sales in the first quarter, majority -- a significant portion of it is the sales committed in the previous quarter, which is quarter 4 of 2020. And second thing is, assuming that everything is average, a flat CV adjusted price on $87 should be around $70, and we have realized $66. That is when you give a 5,100 CV coal, there is a discount to the flat CV adjusted price. Taking a cue from what you said, $87, adjusted to the CV, I think $66 that we have realized is a very good price.

So I think, Nalin, I think you missed my point, okay? I'm not asking -- I'm not saying that you're selling $87, which I understand because your coal -- your current coal is not 6,300 or whatever it is, right? I know you are not benchmarked. The question is more like if Newcastle benchmark is $87 and then you're selling at $67 and you only managed to pay $16 million of principal in July, so we are not talking about first quarter, right? July payment is based on second quarter. It's based on cash flow generated in the second quarter. And second quarter cash flow should be based on first quarter average selling price, as what you suggested, that there's a 3-month lagging effect. So we are not talking about first quarter cash flow. We're talking about second quarter cash flow, which should be tagged to $87 or $67 you're talking about. But $16 million, how do we [ draw ] -- this is really the pattern I don't understand -- yes.

Soo Chong, look, what I said, when we got the collections in, we show up on June 26. That's how it's done. So all the rest of the receivables that are there, and they will show as cash in June, some cash balances for KPC won't be available -- can't be touched by KPC until, I think, July 6 or 7. It can be touched when the allocation comes out. So it's stuck there, and that's a working -- really simply a working capital based on the CAMA thing. So by the next quarter, there should be a position where we have this additional cash available, assuming prices stay where they are, production hits its targets, okay? But -- so yes, I am quite comfortable with over the next -- the course of the next 4 to 5 quarters, we'll be hitting enough to be paying back the As on time.

Let me ask you the next -- the other way around though. You have -- June, you had $263 million of cash at KPC, yes. And I look at it that in March, you are keeping about $66 million. Can I assume the minimum cash balances you need for KPC is about $60 million? So effectively, you have about $200 million of cash that's available for distribution come October, as everything else being equal. I mean I presume that we are not talking about additional -- even a single -- so you are telling me that you are cash burning. You are burning. You are generating negative cash flow for the third quarter. Assuming nothing happened, yes, you have 0 cash generated in the third quarter. Am I assuming that at least we're going to have -- at least KPC will be able to upstream $100 million to Bumi?

No, it wouldn't because you've got to cover your costs and you've got to cover the royalty, as I told you, in the deposit. If you look at the note there, quite clearly, there's $40 million in the government deposit. And then we have to keep -- I think it's $60 million. I haven't got the sheet in front of me. $60 million of royalty for last year when they finalized the number. So that's covered. But there's at least -- I would say if nothing happened, personally, and I won't hold a mash up to this, but I would say that if we went negative cash, don't get me wrong, we want the dividend. But on a pure exercise basis, you'd have $50 million more, right? So you'll be at $66 million this time, okay, instead of -- because you have 51% of the $114 million that should have come in. So you would have another $50 million. Now we don't think that -- assuming everything doesn't go that way, I mean, believe me, if prices drop to $70 again, we'll be reviewing everything, right? We have to. But if prices stay at these $130, $140 level, we can then dividend up with covenants. This is just a timing issue because you've got 4 days. You don't look -- normally, you knock around 28, 29. But under the rules of the CAMA, we cut on 26. So that's just the way it worked out.

So is it -- are we -- why this time around to be slightly earlier than the usual?

I think it's the holidays and the weekends. I think -- I actually didn't check exactly, but I think it's the holiday. If you get certain holidays and also the weekend, it has an effect on it. Looking at June, we'll look and see right now exactly. Yes, look, 25th -- it was actually 25th that had to cut off because 26, 27, I think there was a holiday around there as well. And remember, we've got to take into account China holidays, Indonesian holidays, Singapore holidays and U.S. holidays. So that's just the thing. So that's why June -- and you'll get the financial statements for KPC. They're available to all the lenders. You'll get June's numbers. You can see the KPC balances. And that's the thing. Everyone would say, "Oh, there's so much cash that's being held." But it's not being hoarded. It's just the timing and how we do it. And remember, we have other shareholders as well. So we all have to agree on numbers and what comes out, and it all has to be done and carefully controlled. So we apologize, it's not coming out as quick. We want it -- Bumi wants it as quick as possible, but it's costing me money for sure.

Let me ask you though, how do we -- how is the investor going to estimate? How much cash is always going to be kept at KPC, right? I mean that has become a big issue, right? Because you have $263 million. Yes, you can say it's a timing issue, whatever it is. You have royalty deposit of -- I mean, plus all these deposits, $100 million. But still, we are talking about $263 million, right? So how this bond order going to be comfortable that you could -- just for whatever reason, there's been -- this has not been upstreamed as what it should be. And that's really the bigger question about how do people going to be able to estimate the cash flow that can be thrown on KPC. And the other question is also on Arutmin. How much cash that really Arutmin need for operation? You are talking about $43 million. Is that -- it seems like Arutmin had never paid a single cent for the repayment. When will we see some cash coming up from Arutmin?

On your first question, you've got to bear in mind there's 3 major shareholders, and they all have to agree on this. They're signing. So I can't say to you today, this is a good cash position or that's a good cash position. Yes, Ashok has a minimum cash he wants, right, to manage. But of course, if prices keep on increasing, okay, we're more confident more can come up. But if prices are falling, then we have to review, and that is subject to all the shareholders. For Arutmin, we're getting hopefully to high-grade production, and that's to clear up the backlog on liabilities. That needs to be done. We hope to see something next year from Arutmin. Is that fair, Nalin?

Fair. But let me add up there, Soo Chong. Basically, when we talk about the cash flows from the operating companies, 100% of the distribution of money [indiscernible] available for distribution. What is money available for distribution is operating cost minus royalty plus taxes plus/minus cash. And the last item on that is the working capital adjustment. In this market today, when it's going up, my receivables are also going up in value into the tonnage that we see. So subject to the working capital adjustment, every penny that is available in KPC will be distributed and is being distributed. Now if you ask me whether Ashok is holding any cash, I don't think so. Ashok, can you comment on that?

Let me just comment. This -- one of the shareholders has also appointed an audit firm to check our cash balance. Whatever the expenses are being shown in our weekly cash flow, that has been checked by the audit firm before it is signed off by the 3 shareholders on a weekly basis. So if you look at, Soo Chong, this $263 million will not happen every month. It's an aberration that in June, unfortunately, all the collections came on 28, 29, 30 of $114 million. It was also in 25th -- 28th, 29th, 30th. And these were -- came into the Deutsche Bank, which is our account in CBA, which will flow into week 1 collection and after meeting the expenses will be distributed as loan to the shareholders. Nothing is kept in KPC, except a few million dollars for meeting the day-to-day expenditure. That's how it is. So it is subject to audit on a weekly basis. So nothing is kept in KPC. And the CBA is also signed off by the 3 shareholders once approved by the auditor.

Okay. Let me just put it the other way around there. This -- the money that's now $114 million, they got deposited in the CAMA after the cutoff date, right? Can the KPC still come back and say, "Look, I still need another $50 million for my working capital?" Or this is really already in the CAMA and then...

No, no. We cannot touch that because it will flow from Deutsche Bank into our account only on 9th July. So from that $114 million, we net off our expenditure as per CAMA requirements. And then the balance is paid off to the shareholders as well. The expenses includes payments to contractors for the various lease rentals, operating expenditure and tax. And then the balance is paid out to the shareholders.

Okay. Okay. So next question, I think -- sorry, this is another question. Well, I think there's another question from [ Sharma Shah ]. It's the same question. "Why does cash generation remain so limited even though coal prices are at a record level?" So I presume everybody is expecting October have to be a much better payment than what we have reported so far. Next question is from another company called [ Hasbi ] from Trimegah Security. "What is the new normal for coal prices between 1- to 2-year time frame?" I'm not sure, Nalin, you want to have a short...

Yes. Normal prices, I mean, if you look at the industry -- if we look at the industry, it's on -- it's being attacked by many people, okay, being a fossil fuel industry. Fortunately, not only coal, all along oil industry was quietly escaping the wrath of these, what you call, fossil fuel issues. But now even oil industry has got affected by this. Now the net result of this, there is absolutely no new investment in the mining sector. Even when we are talking to Glencore, Glencore really said that they have even cut off $14 million, $15 million in terms of production in Australia and that they are not going to put any more new investment for new capacity. But they will try to still consolidate and they have even recently acquired Cerrejon's BHP Billiton and -- for shareholding. So now they own 100% of that. That is producing about 18 million tonnes. So why I am telling that, there is going to be a consolidation in the industry. The production is not reducing at all because I don't expect the demand to reduce so quickly, at least not in the next 5 to 7 years or even 10 years. If you ask me whether you are going to see stable prices, I do believe we are going to see some stable prices. Now the latest analysis that you might like to see is that in May, the exports from Indonesia were lower than April. And June, I still don't have the number, but it is not likely to be more than previous months. So even though the prices of coal are pretty high, the exports from Indonesia have not gone up at all. That shows either the rain has badly hit the producing areas or the costs are also going up. So even at the higher prices, the economics are not working out for the producers. Now we are doing our own research on why production has not gone up. At least from our side, we know why we have not gone up. We have -- in fact, we could not deliver so we incurred some massive demurrages. I think about $15 million or $17 million we paid in the first quarter because we committed the sales and we could not deliver because of the massive rains. Now Soo Chong, if you ask me my gut feel, I'm always a believer that coal is not all to an end. It is beginning, but I don't see much of an issue for the next 10 years. And next 2 to 3 years, I see some stable coal prices.

I think there's still no -- I don't see any questions from the floor. Were there any question from the floor?

Yes, we have a question from [ Michael Jay ].

Can you hear me?