Qube Holdings Limited (QUB) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to this Annual General Meeting of the Shareholders of Qube Holdings Limited. My name is Allan Davies and I'm the Chairman of the Board of Directors of Qube Holdings Limited. As you know, this year's AGM is being held via Lumi online virtual meeting platform. This is due to meeting restrictions imposed and the government health regulations in response to the COVID-19 pandemic. This virtual format allows shareholders, proxy holders and guests to attend the meeting in a safe manner. In addition, the shareholders and proxy holders have the ability to ask written questions and submit votes online in real time. It's hope that this format will allow participation quite a larger and more diverse group of shareholders and guests. A recording of this live webcast will be made available on Qube's website after the meeting. I'm advised by the company secretary that a quorum of shareholders is present, and so I declare this annual general meeting open. The notice of meeting was made available to all shareholders electronically as permitted under the temporary changes to the Corporations Act as a result of the pandemic. The notice of meeting, together with an AGM access notice Lumi online meeting guide and answers to FAQs were lodged on the ASX, but are also available on Computershare's investment vote page, on Qube's AGM and our the annual meeting's page of Qube website. I'll take that notice of the meeting as related. I'd like to begin by introducing the other directors, company secretary and Qube's auditor. Given pandemic-related travel restrictions, directors are participating today from different locations. Joining me at the boardroom of Qube's Head Office in Sydney and observing essential distancing rules are: Maurice James, Managing Director and member of the Safety, Health and Sustainability Committee; Peter Dexter, Chairman of the Nomination and Remuneration Committee and a member of the Safety, Health and Sustainability Committee; Director Steve Mann, member of the Safety, Health and Sustainability Committee; and Director Jackie McArthur; Sam Kaplan, Deputy Chairman and Chair of the Audit and Risk Management Committee is calling in from Sydney; and Director Sue Palmer, member of the Audit and Risk Management Committee; and Director Nicole Hollows is joining from Brisbane; while Ross Burney, member of the Nomination and Remuneration Committee is joining from Melbourne; and Alan Miles, who was Chairman of the Safety, Health and Sustainability Committee and member of the Audit and Risk Management Committee is joining from Perth. Jackie and Nicole have recently been appointed as directors, and I welcome them to their first Qube AGM. Peter and Sue will retire by rotation at the end of this year's meeting in accordance with the Corporations Act and Qube's constitution. They advised the Board that they do not wish to stand for reelection. I'll have more to say about their contribution to Qube in my formal address, which I'll give shortly. As a result of these Board changes, the following Committee membership changes come into effect from tomorrow: firstly, Alan Miles will resign as a member of the Audit and Risk Management Committee; Steve Mann and Nicole Hollows will become members Audit and Risk Management Committee; Jackie McArthur will become a member of the Nomination and Remuneration Committee and Safety, Health and Sustainability Committee; and I will become the Interim Chair of Nomination and Remuneration Committee until a permanent appointment is made. I look forward to working with all directors in their various roles. Also joining me in the boardroom, is Paul White, Director of Corporate Affairs; the Company Secretary and General Counsel, William Hara; Junior Company Secretary, Adam Jacobs; and joining remotely is Jane Reilly, lead audit partner for Qube's auditor in PwC Australia; and also Paul Lewis, who is the Chief Financial Officer; and Paul Digney, the Chief Operating Officer. Before we move to the formalities, there are several housekeeping matters I'd like to mention in regard to the virtual meeting format. The first is in relation to the asking of questions. Written questions can be submitted at any time during the meeting. To ask a question, please press on the speech bubble icon at the top of your screen as shown on the slide. This will open a new screen at the bottom, which there will be a selection for you to type in your question. Please note the item of business to which your question pertains. Please also include your name, location and affiliation with any organization. Once you have finished typing, hit the arrows to be able to submit your question. As noted in the notice of meeting, this year, we'll be having only 1 Q&A session. Towards the end of the meeting, to answer questions all meeting items. This includes questions on the Managing Director's presentation, the FY 2020 annual report and resolutions to be voted on. And we will do our best to answer questions in the order of items of business of this meeting. Question time will take place after all the voting resolutions are shown and prior to the closing of the poll. Lengthy questions may be summarized, a number of the same topic maybe collated or amalgamated and presented as a single question. Questions will be read out by Paul White, Director of Corporate Affairs, acting as moderator. And I'll be turning to the appropriate person to answer them. Finally, if due to time constraints we are not able to answer all of the questions at the meeting, answers to all questions as moderated will be posted on Qube's website after the meeting. Shareholders have the option to vote directly or appoint a proxy prior to the AGM by previously provided voting forms or through the Investor vote page for Qube's AGM on the Computershare website. If you're eligible to vote at this meeting, you can go through the Lumi platform during the AGM, even if you had previously cast your vote or appointed a proxy. Doing so will cancel your previously cast vote or proxy appointment. Voting will be conducted by way of a poll on each item of the business. In order to provide shareholders and proxy holders with enough time to vote, I will shortly direct the opening of the voting system for voting on all resolutions. Once I open a polling vote on, it looks like a bar graph that will appear as shown in the slide. Selecting this icon will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of the options. There's no need to hit to submit or enter button as the vote is automatically recorded. You have the ability to change your vote up until the time we declare voting closed, which will be at the end of the meeting. I'll give you a warning before the poll is closed. I now declare the voting open on all items of business, and the polling icon should soon appear on your screen if you are a shareholder or a proxy holder who registered as such on the platform for this meeting. Finally, it should be noted that technical difficulties can occur with a virtual meeting. If any such difficulties arise during the course of the AGM, as Chairman, I have the discretion as to whether and how the meeting should proceed, including whether it should be adjourned, and if so, for how long. In circumstances -- in such circumstances, sorry, and in exercising my discretion, I will consider a number of factors, including the number of shareholders affected and the extent to which participation in the meeting has been restricted. In such circumstances I may, in turn, that the meeting should continue and transact business, including proceeding with voting on resolutions. If you personally experience technical difficulties during the AGM, please refer to the Lumi online meeting guide had on Computershare's investor vote page for Qube's AGM or Qube's website. You can also contact Computershare by telephone 1(300)-555159 in Australia or if calling you're from overseas, +613-9415-4062. Before proceeding to the formal items of the business on notice meeting, I would like to say a few words as Chairman. A copy of my remarks have been lodged with the ASX and posted on Qube's website. Despite the unprecedented challenges we faced in FY '20, the company was able to deliver a sound financial performance. Qube weathered the tumultuous summer months affected by bushfires and flood events and was on track to deliver growth for shareholders when COVID-19 reached Australia in late February. Our first priority, as always, was the health and safety of our employees. The Board and management moved quickly to protect our people and implemented company-wide safety protocols which responded flexibly to the evolving crisis. In anticipation of a prolonged and severe impact on economic activity and the impact on Qube's operations, management initiated a proactive and focused plan in early March to mitigate the impact on Qube's earnings and minimize the need for employee stand-downs or job losses. This work has been successful in minimizing the damage to our people and our operations and as COVID restrictions ease in various states our operations are returning to what we are all coming to know as a COVID normal state. Of course, the economic downturn caused by the pandemic and other factors negatively affected Qube's full-year earnings however the company achieved a net profit after tax and amortization of more than $121 million. Other highlights for the financial year included underlying revenue growth of more than 9% to $1.9 billion. Underlying earnings before interest, tax and amortization were $160 million for the period. Shareholders received fully franked dividends of $0.052 cents per share. Safety performance. The Board remains closely focused on maintaining and improving Qube's strong track record on safety. We continue to invest significantly in safety initiatives and the promotion of improved health and well-being amongst our workforce. Qube's injury rates improved again, continuing the long-term improvement trend with a Total Recordable Injury Frequency Rate or TRIFR of 8.3, a 7% improvement on the rate of 8.9 reported in FY '19. Tragically, despite Qube's efforts and initiatives, in September 2019 there was a fatality of a Qube employee working at the IGO Nova Mine site in Western Australia. Qube provided immediate assistance to the employee's family at the time of the incident and is continuing to provide substantial ongoing support. Qube has also made a donation to the Heart Foundation in consultation with the employee's family. The learnings of the fatality investigation have been shared across the organization and Qube will continue to improve and enhance its safety systems and performance. The Operating Division. The onset of the COVID-19 started impacting Qube's operations towards the end of February 2020 and continued for the remainder of the financial year. Fortunately, most of Qube's operations were defined as essential services and therefore we're able to continue to operate throughout the period albeit on lower overall volumes. Qube's diversification strategy across Ports, Bulk and Logistics operations significantly ameliorated the impact of COVID across the group. Diversification was particularly important the second half of the period during which Qube's bulk operations continued largely unaffected by COVID-19, in contrast to other markets such as automotive, containers and project cargo which experienced meaningful reductions in volumes. The underlying financial results for the Operating Division were pleasing given the environment with earnings growth over the prior comparable period despite headwinds in a number of its markets which impacted volumes and placed pressure on margins. The result benefited from a contribution from acquisitions and new contracts in the period, as well as Qube's diversification and strong market positions in its target markets. In September 2019, Qube completed the acquisition of the Chalmers business which was highly synergistic with Qube's transport and container park operations in Brisbane and Melbourne. As a result, Qube was able to rapidly integrate the Chalmers business allowing for the sale of freehold land owned by Chalmers for around $65 million, pre-transaction costs which was in excess of the total consideration paid to acquire the whole company. Moorebank Logistics Park. Significant progress was made during the year at Moorebank Logistics Park. In November, last year the first shuttle trains commenced operations between Moorebank and Port Botany and volumes are continuing to increase although at a rate less than expected. A major highlight was the announcement in June that Qube had attracted Woolworths to the Precinct in a development that will transform the New South Wales grocery supply chain, Woolworths will, subject to planning and approval, develop a semi-automated national distribution center and an automated regional distribution center. Qube is continuing with the previously announced Moorebank monetization process and has entered into an exclusive negotiation period with the LOGOS Property Group. The due diligence process is proceeding and the Board expects to be in a position to update the market by Christmas. However, as we have previously announced, any decision to monetize Moorebank will only be made if there are clear and compelling reasons and benefits to Qube shareholders. Patrick. Despite the impact of COVID in the second half of the year, Patrick continued to generate strong cash flow in the period, although reflecting the uncertain environment and lower volumes. Patrick only distributed $20 million to Qube in the period through a combination of interest, repayment of shareholder loans and return of capital. Equity Raising and Shareholders. In May 2020, the Board and management raised $500 million through an entitlement offer open to all Qube shareholders. On behalf of the board, I would like to thank shareholders for their support in that successful raising. The board notes there has been criticism of certain aspects of the remuneration report from some shareholders. I will be happy to take questions on the issues raised and further explain the rationale for our decisions. I would like to make it clear that at all times the Board has placed the interests of shareholders at the forefront of our thinking. However we acknowledge the critical comments received and will take on board the issues raised for consideration in this year's remuneration report and into the future. Board renewal. As shareholders would be aware, Qube is continuing a process of board renewal with retirements and new appointments this year. Firstly, I'd like to acknowledge the service of retiring director Peter Dexter who has been on the Board since Qube was listed in September 2011. Peter has been a tireless contributor to the Board and has served at various times as Chairman on the Nomination and Remuneration Committee and also as a member of the Safety Health and Sustainability Committee and the Audit and Risk Management Committee. Also retiring at this meeting is Sue Palmer after three years on the board. Sue has been a strong contributor to both board deliberations and the work of the Audit and Risk Management Committee. I'm sure shareholders would join me in wishing both Peter and Sue all the best for the future. And finally, the outlook. The impact of COVID-19 and geopolitical developments continue to be closely monitored and there is still limited visibility regarding future operational impact on volumes and activities across the divisions. However Qube has been trading ahead of internal expectations in the first quarter of FY '21 reflecting generally solid volumes across the business including containers, vehicles, and bulk commodities. Although the first half underlying results are expected to be below the comparable FY '20 first half results, Qube expects to generate reasonable growth in full year underlying NPATA compared to FY '20 mainly reflecting higher contributions from the Operating Division and Patrick, as well as lower net interest costs. This of course assumes no material deterioration in the current economic conditions or volumes across Qube's key markets. It also assumes no material acquisitions or divestments and therefore doesn't reflect any potential outcome from the Moorebank monetization process. We remain confident that Qube's scale, diversification and track record of innovation and accretive investments provide a solid foundation for sustainable, long term growth. And in conclusion, I would like to thank directors, management and all employees for their efforts during what has been a very testing period in the last year. I'd now like to hand over to Maurice James for a presentation on the performance of the Qube group. A copy of Maurice's presentation has also been lodged with the ASX and posted on Qube's website. Maurice?

Thanks very much, Allan, and good morning, everybody. It is a different environment today doing this the way we are. But as you all know, and historically, what I'd like to do is talk a little bit more about the business rather than the specifics and there is a little bit of overlap between Allan's statement and what's in the presentation pack. So where there [ is a litho ] to focus really on the business. We'd like to highlight and talk about what's happening within the business at this point for shareholders. I think the first place I'd start really is there's been no change to our strategy. Our Qube's strategy is to focus on [ imported ] towards supply chains across Australia and New Zealand and with some opportunistic low-risk approaches to selected markets as we've done in Southeast Asia. That strategy is about maintaining or obtaining sustainable competitive advantage through our ownership and control of strategic assets, imports [ new ] rail. It's to grow our business organically and through investment, as Allan just touched on, in technology, equipment, property and through acquisitions to meet our financial hurdles. So the diversification we have talked about is really important to Qube, [ and I'll let ] diversification. I'll talk a little bit more about in regard to customers, geography, products and services. Finally, I'd just like to touch on the strong organizational culture that exists within Qube that encompasses a real focus on our customers, on innovation, on safety. And very importantly, a single organizational focus to our delivery not the creation of [ satellites ] within our business. Just turning to the next slide, I think you've all seen this. It's just an update from our August results presentation some 135, in excess of 135 sites were now operating on across Australia, New Zealand and Southeast Asia, in excess of 6,500 employees and leading market positions in quite a lot of the markets in which we're operating. We're clearly the #1 operator in those markets. The diversification by product and by service is outlined on the following slide. You've all seen that before in various presentations. Just reinforcing that diversification by service or by product. But also, as I said earlier, just flows into diversification by customer, to ensure we're not dependent on any single major customer to ensure there's a direct balance between the imports and exports in our mix of products that we're handling. And that clearly gives us a competitive advantage in regard to the [indiscernible] natural hedge for [ local to the ] Australian dollar. So moving ahead, just ask the operator to jump a couple of slides. On the next slide. And really, this page outlined some of the initiatives of management in relation to COVID. Allan summarized them. I would just add, and over the top of that, that our response started from our operational management. Our Chief Operating Officer, Paul Digney, initiated very, very quickly, which I set on a Committee, an Executive Committee to address all of the aspects that COVID, the impacts on our business, COVID risk plans, business continuity plans, circulars, regular circulars from myself and Paul to our teams, our people, but also our customers in terms of impacts on customers. And as you can imagine, we have a significant customer base. There was issues in various customers, facilities around the country. More specifically in Melbourne where the challenges that Victoria had and I'm extremely proud of the effort management in dealing with COVID. Not only was the immediate reactions to COVID but there's also a focus on ensuring our systems were in strong positions. So potential cyberattacks and the like and the focus that was put on to that, really, really important in our [ Qube ] business continuity planning. Not only do our operational teams really respond to this challenge but also our corporate team and our finance team under Paul Lewis and I'll touch on the equity raising. And again, we appreciate the support of shareholders in them. We also focused very much on costs within our business and how do we reduce our costs to ensure cash flow was protected. Cash is king for us and a lot of the initiatives out of the operating division drove to lower cost structures where we could. And that included -- and I probably will mention a little later, a management initiative to take salary cuts, take salary cuts that came from the shop floor management, if you like, given the challenges that they thought they were going to face in the early stages of COVID in February and March. And so I won't go on any further on that. Allan has mentioned some of the key points. Obviously, very important to us in terms of our people and the well-being of our people. The next slide, I really just wanted to just spend a little bit of time talking about sustainable value creation for Qube and Qube's shareholders. There's a number of pillars that sit underneath this initiative, an important initiative with the business and in no specific order, I'd just like to go through, through some of those. Obviously, the key is safety and health. And Allan has touched on that. So I won't spend any more time. This slide really covers some of the key KPIs that Allan talked about, but also our continued commitment to focus on being Zero Harm culture through our web course. It starts from the top and the Board has been very active in that including our Safety, Health and Sustainability Committee during site walks and site inspections on safety around the country, wherever they happen to be. So a real focus, continued focus on proactive initiatives in this field of health and safety. The next slide, another pillar, if you like, a secondary pillar around our people and the culture of our organization is very, very important. And this slide doesn't encapsulate all of the initiatives within the group and some of the key initiatives around diversity and inclusion. Our diversity and inclusion strategy sets out a range of measurable projectives to drive diversity within our business. We've continued to support the well-being of indigenous communities and the families that work for us around regional Australia. We support the Clontarf Foundation in programmatic work opportunities for indigenous and also young adults or school-aged students. We're also very supportive of the Wayfinder program. We're a founding member of that Wayfinder program on diversity through Deakin University as the initiator and a number of parties and different companies within our industry are supporting them. We're focused on how do we transition women into supply chain and logistics starting at the educational level. It has been a blocker in some aspects of our service provision for women, challenging for women, and we're really focused on an industry-wide solution through Wayfinder to break down some of those barriers. And in some cases, educate more school-aged children around supply chain and logistics that they don't understand. They understand what a doctor is, but not necessarily what logistics is. But it's also important, there's a range of initiatives here to recruit and retain the women that we have within the business. The second area of focus is around health and well-being, and you've heard Allan talked about that already. A range of initiatives within Qube, say, as the highest point with our QubeCare program. As a QubeCare program, that's been implemented, implemented in every site, every location that we operate has a QubeCare program. It's about the health and well-being of our employees. It's a connection to our Qube employee and to [ use letters ] to information and to increase employee engagement with management and company. We have continued that QubeCare program during the year. We were a founding supporter of Healthy Heads in trucks and sheds. It's an initiative that started with Woolworths. We have a supply chain at Woolworths. And this has been an amazing initiative as a whole of the logistics industry has joined together to support the health and well-being of employees in road transport, in rail transport and in warehousing. And I encourage shareholders to have a look at Healthy Heads on the website. And it's early days, but a lot of positive initiatives around the mental health and well-being of our employees and employees in the industry generally. There's been several other initiatives. We talked a little bit about in the past like the Step Up Challenges, the R U OK? [indiscernible] and various other campaigns that we've been party to and initiated within the group. The third pillar on the next slide, I'd just like to talk about is sustainability and focus of management shareholders and generally, the new community around sustainability, improve sustainability outcomes. We're in the process of learning a lot more about that. We've developed the first, as you know, sustainability report, which is about the one on our website. We have been putting in place risk management strategies around that understanding, the key issues around climate change and the like. And as I said before, this year, the basis across some of the other initiatives like gender diversity in the workplace, like modern slavery and the obligations that modern slavery, that we are working on and building -- and I think sustainability, very important in terms of our strategy, across all about our assets and our infrastructure requires and it was very pleasing during the year that our Moorebank project received with an Excellent in infrastructure sustainability award for the design of the infrastructure that came from in Infrastructure Sustainability Council of Australia. It recognized the first-in-the-world innovative strategy around automated technology in automated vehicles, moving products and containers from terminals and [ alternatives ] to a warehouse and the level of automation that will be in that in the future. The next pillar, if you like, on the following slide is really around our commitment to innovation and technology. Again, our Chief Operating Officer leads is Executive Committee. It's the focus of our operating division very much around how do we adopt innovation within our business. It's part of our Qube DNA, if you like. It starts from early days [indiscernible] in automation and the like of Patrick, many, many years ago and what's there today in Patrick's. For us, innovation and technology is really about delivering the outcomes for our customers, that produces or delivers a safer environment for our workforce. And obviously, with that drives efficiency and productivity and ultimately, financial -- improve the financial performance for Qube. We do have a strong track record in leveraging technology, and we'll continue to do that to deliver long-term growth for Qube. The company has -- there's huge photographs there. Probably won't mean a lot to a lot of people but just trying to give inception of the various areas of technology. We would have in excess of 30 projects that Paul Digney and his team are looking at various stages of development from innovation, his ideas [ to very close ] or just being deliver into operations. And they cut across a whole range of areas, robotics technology, digital imaging, artificial intelligence, machine learning. We have the virtual reality and simulation [ modeling ] and training our employees, in motor vehicle handling and also in relation to skills development. Some of those slides there are those programs, the robotic scaling of logs on trucks in New Zealand was developed by Qube. Prior to that, it was employees manually measuring on the back of a truck, the diameter of logs. And you can imagine that the safety issues associated with that automated scanning now, automatically measured the diameter of the logs. That's important for all the exporter to understand the volume exporting. Similarly in the hold of ships, remote control of diggers and excavators and levelers in the hold of ship that can be controlled from the deck of the ship, not the hold of the ship. In New Zealand, creating and building and designing a log grapple which sounds interesting, but these are equipment attached to the mobile cranes that picks up bundle of logs without employees on the ground. Prior to that, employees needed to be on the ground, connect swings and do the long the similar activities to enable a crane to loosen the bundle of logs to dock. We separated our employees from the equipment. And there's all sorts of examples of the technology we're looking at. We're also looking at hydrogen fuel technology in line with our trucks and our fleet, particularly in our pulp fleet, where we can get advantages and obviously operates in a more sustainable operation at our fleet. So that probably summarizes just some of the pillars that we're looking at in terms of sustainable value creation. I'd just like to quickly run the first short video. As you know, I like to run videos as it often may help a lot more than what I can express in words. So is the first video. I'll got a second one to come a little bit in a few moments. And this is really about that community and community involvement as an example, of what's happening round the country. Thanks very much. [Presentation]

Just turning to the next slide. And Allan has already talked a little bit about FY '21 at the start and the positive start to FY '21 for us. I'd just like to spend a little bit more time on that and just break it up and go through various aspects of our business, as you're completely aware [ we are going through to part Operating Division ] and Property Division and Patrick's investment policy. In our operating division, we have seen in the logistics activities, volumes being above expectations. As you can see container volumes here, activities across the business have been positive despite some additional costs that have been incurred, particularly in Victoria, where our responses to COVID-19 were significant. The ports business, if you like, has experienced stronger volumes in motor vehicles in the quarter coming into this country. We're seeing strength also in construction materials. And those have been particularly important business in terms of our [ employees ]. In New Zealand, we've seen forestry products above our expectations and our general expectations. And some of those positive aspects that offsets some of the negatives across our core business. Our bulk activities, as Allan talked about earlier, we've seen above expectations. In terms of volumes, very strong commodities such as nickel concentrates iron ore, mineral sands and lithiums, particularly in Western Australia. AAT, this year as most of you are aware has moved out of the Property Division and to the Operating Division [indiscernible] of the volumes through AAT, particularly in imported motor vehicles have been strong in the last few months. And also RoRo cargo, general cargo project cargo, some of that project are cargo related to windfarms. And finally, Quattro has been positive and above expectations, they are as we reported in August. That has been some import -- import volumes coming through our Quattro facility at Port Kembla. And later in the year, we're expecting [ measurable ] volumes from a very strong crop [ our piles ] to go through those contracts. So overall, the operating position, as Allan touched on, about the internal expectations. In terms of volume activities across most of the businesses. The Property Division, first of all, as you would know, compared to prior year, the sale of the Minto property occurred in September. So it was a contribution from rent, if you like, on Minto that would go toward sale occurred in September. We have generally been pivoting from increased revenues as the warehouses have been less and developed and operations that have commenced. So there's some improvement in leasing revenues in FY '20 or leases that were secured in late '20 that flow through into FY '21. Some of those income streams are obviously offset by, as Allan talked about, lower-than-expected volumes through our IMEX terminals, some of the dynamics around road rail in the short term and the impacts of COVID, the impact of those volumes through the IMEX terminal. We believe that's just a short-term issue and doesn't change the long-term view of the potential data on external. In terms of capital investment, a few more milestones during the first quarter. We've seen some additional structure works happening at Moorebank that has the Woolworths development. One is finished, the other we finished by Christmas, ahead of schedule for Woolworths. We've seen the warehouse [ buyers are calling Qube for ] logistics and we'll move into occupation of that in the first quarter of next year. And we've been continuing the investment into the establishment of the equipment at Moorebank for the IMEX terminal. Just turning quickly to Patrick's, again, stronger-than-anticipated volumes through the Patrick terminals. I haven't seen the full year of volumes for October, but yesterday, I saw the Port of Melbourne numbers, which were very encouraging, 4.2% growth, 4.5% growth year-on-year for October and a 7.2% growth we view for the Port of Melbourne numbers. So things have been much more positive than we expected a few months in terms of volume share of ports. Now some of that volume, I think, has been related to volume in [ Sydney and Melbourne ]. And so we do -- I do caution that a little bit until we say the new sale [ dials ]. The other aspects of Patrick really related to its specific volumes, as we've talked about in the presentations. Q1 was stronger than anticipated, 9% lower than last year and a market share of around 4 point -- 43%. Allan touched on a dividend of $20 million of distribution, and there was another $10 million distribution October. And importantly and finally, in Melbourne, we can report that Patrick signed the new lease at East Swanson Dock through 2066. Including the adjoining land for the Coode Road land, which is the site for the development of the container delivery rail terminal on the dock on the Port of Melbourne. That rail terminal on Patrick has entered into a Development Deed with the Port of Melbourne. We were able to be funding the majority of that development of that size and that Patrick will be making a contribution to it. But the majority will be funded by Port of Melbourne. So I think on that note, I'll just move to the second video quickly and just looking at the regional Australia. So thanks very much. [Presentation]

Just maybe on now to Moorebank and the monetization update. And Allan gave you a few key points earlier. I'd just like to reinforce that, that we did move into the exclusivity arrangement with LOGOS following receipt of a number of nonbinding indicative offers. The detailed due diligence with LOGOS commenced in early October and is progressing and continuing to progress. The market, I would like to highlight that the monetization process still is in the status of a nonbinding indicative proposal and remains subject to a number of conditions, including completion of this due diligence, documentation and various third-party approvals. Qube, as Allan said, only proceed with the transaction if it is able to realize appropriate value for the shareholders while supporting huge strategic objectives and strategic initiatives. The process, as it stands today, has moved to the possible monetization of 100% interest in the warehousing property or as we call it warehouse trust components of the Moorebank project, while Qube would return 100% of the interest in the rail terminals or on logistics activities at Moorebank. Clearly, that arrangement would be subject to considerable contractual arrangements that need to be put in place between the parties. And there's a positive approach towards aligning the long-term interest of the respective parties between the property assets and property development and; the logistics activities going forward. At present, we expect to have determined by business, whether or not we will proceed -- whether we will or not proceed with the transaction and expect that documentation of all the arrangements will flow into Q1 next year. Finally, I just like to just touch on our performance and output more than more specifically our outlook and Allan has summarized that pretty well in his presentation. And certainly, our outlook has improved since our August results on the back of generally stronger volumes that we've been talking about already today. Those expectations in Q1, we're in a period, if you like, where there was great uncertainty around COVID, and as I touched on, and Allan touched on, volumes have exceeded that. As Allan also touched on, first half underlying results, we still expect to be below the comparable FY '20 results. If you recall last year, it was a story of 2 halves, a very strong half, first half and then a second half impacted by COVID. Overall, for the full financial year, as Allan articulated, we expect to generate reasonable growth in full year underlying NPATA compared to FY '20. And this obviously, is a reflection of the higher volumes and higher contributions from our Operating Division, from Patrick's and a lower interest cost as a result of the equity raising and the sale of Minto. So overall, this is, as we normally qualified, subject to no material deterioration in economic activities or volumes across our key markets. It does assume that there's no material acquisitions or divestments and does not, as Allan said, to share any outcome from the monetization process for Moorebank. We obviously continue to monitor very, very closely impacts to COVID-19 and the geopolitical developments particularly about U.S.-China relationships and impact that, that will have on not only us as a company, but Australia. So in conclusion, in regard to that, I think we embarked on the large-scale diversification strategy. We got a track record to deliver on innovation and investments. And from a management perspective, that's a very strong position for long-term growth for Qube. So finally, just in conclusion, I do want to publicly acknowledge the incredible commitment of Qube's management team to Qube and with shareholders. Your efforts since the roll of COVID in February '20. There's no question in my mind I think is the most difficult year that Qube has faced since its inception in 2007. We volunteered to take fixed salary pay cuts, some up to 40% in the ports division in advance of potentially significant stand downs of hundreds of employees in regional areas where we were concern major volumes and impacts on our volumes to our regional operations. Qube did that because we want to lead by example, to save costs and avoid the need to make potentially hundreds of employees return due to significant reductions in those volumes or anticipated reductions in those volumes. After these actions, the government announced the job cut program and management at Qube are making sure the government approved and the government approved job programs in order to save those hundreds of jobs within Qube to keep the experience and the skills of those employees and the folks at Qube and to help our regional communities in which they live. And finally, to maintain a strong commitment to the Qube culture across our workforce. Your extraordinary efforts and skills are unparalleled in this industry. And I have unreservedly relieved this was the right conservation for management on behalf of Qube, its employee, its shareholders and the communities in which we operate. In my view, you've done an incredible job to protect the health and well-being of our employees. So again, I thank the management team at Qube. Thanks, Allan.

Thank you, Maurice. I'd like now to turn to the formal proceedings which involves consideration of the FY '20 financial statements and reports and voting on the resolutions as set out in the notice of meeting. So firstly, the financial statements and reports. The first item of business is to receive and consider the company's financial report, the directors' report and the auditor's report for the financial year ended 30th of July 2020. These are contained in the annual report, which was lodged with the ASX, sent to shareholders in August and September and is available on the Qube's website. As is common practice with most companies, the reports will be tabled but will not be to subject for a resolution as it isn't required by the Corporations Act. Likewise shareholders and proxy holders to ask questions on the management of the company on all annual report. Questions may be asked of the auditor related to the conduct of the audit, the preparation and content of the auditor's report, accounting policies adopted by the company and the auditor's independence in carrying out the audit. All questions should be addressed to me and I'll then request auditor, Jane Reilly, and a member of the management to respond to the question as applicable. As I mentioned, the questions will be answered during the question time towards the end of the meeting. Voting -- ladies and gentlemen, I will now move to the resolutions to be put to the meeting. And as set out at the notice on meeting. Detailed information on each of the resolutions is contained in the explanatory memorandum attached to the notice. Qube's constitution allows the Chairman to demand the poll, which, as I've mentioned, I will demand on each resolution. As advised in the notice, as Chairman of the meeting [ of but all undirected ] available proxies all for each resolution. Rather than stepping through each resolution individually, a list of resolutions and the corresponding ballot direct and proxy votes received for each have now been displayed on the screen. These votes, together with the votes cast at this meeting will be added and the polling result launched with the ASX. I move that each resolution be adopted and we'll speak briefly to each. Firstly, the election of Jackie McArthur. The first resolution is to consider the election of Jackie McArthur as a Director. Jackie was appointed by the directors to fill a casual vacancy on the Board in accordance with the company's constitution, with her appointment taking effect from the 7th of August 2020. In accordance with the Corporations Act of Qube's constitution. Jackie's appointment as a director must be confirmed by way of election at this AGM and being eligible, Jackie offers [ her service for ] election. Information on Jackie's professional experience is contained in the explanatory memorandum in relation to this resolution. The directors other than Jackie given our interest of time, enormously recommend you vote in favor of this resolution. I'll now ask Jackie to speak to the renovation.

Thanks, Allan. It's a privilege to be considered for election to the Board of Qube, whose [indiscernible] are seeing such an important Australian organization who continue to demonstrate operational excellence and provide us all with such a critical link to the global economy. I have more than 2 decades of experience in logistics, supply chains and global, regional, mature and emerging markets, operations, manufacturing, technologies systems, workplace safety, crisis and risk management. I spent time in my executive career living in Asia and I've seen an end-to-end operation of the supply chain across 38 countries in the Asia Pacific, Middle East and Africa. I was also Managing Director of an ANZ supply chain and logistics services provider with warehousing and transport operations [ in every ] state. In these roles, global trade and import and export product movements played a pivotal part in everything I did. So this is an industry I have a deep respect for. As the world moves into a new era of technology and smart systems, and you would have heard Maurice touched on some of the exciting technology advancements in Qube today. There are more opportunities than ever before to drastically improve customer outcomes while keeping employees and people safe. The boards that I'm on today all challenge my thinking on many of these issues. And I must say that although I kept busy by Board work, my capacity overall isn't all challenged. I've yet to meet -- I've yet to miss a meeting in my Board career. I'm always available for ad hoc meetings as required. So thank you for listening, and I hope I have your support to join the Qube's Board. Thanks, Allan.

Thank you, Jackie. Resolution 2 in relation to the election of Nicole Hollows as a [ director ] As it relates to Nicole's appointment as a director to fill the casual vacancy on the Board in accordance with the company's constitution with her appointment taking effect from the 19th of October 2020. Because of the Corporations Act and Qube's constitution, Nicole's appointment as Director must be confirmed by way of election at this AGM and being eligible, Nicole offers herself for election. Information on Nicole's professional experience that also contain the explanatory memorandum in relation to this resolution. The record hold by Nicole, given her interest in our group unanimously recommend to vote in favor of this resolution. I would now like to invite Nicole to speak about the resolution.

Thank you, Allan. It's a pleasure to be here today as part of the Qube Group that contributes significantly to the Australian economy and to be given the opportunity to tell you a little about my experience. I have over 20 years experience as a Chief Financial Officer and Chief Executive Officer in publicly-listed, private and more recently, the government-owned sector. My executive experience spans operations, safety, infrastructure development, culture, strategy, accounting and finance, mergers and acquisitions, capital and risk management and corporate governance. I'm currently a non-Executive Director of Downer EDI and Chair of Jameson Resources, and will only commit to 1 additional external board role to ensure I have the ability to devote the adequate time to each board. I fully understand the time involved in being a nonexecutive director, and I'm used to and tried on being busy, particularly from just finishing an executive career. My executive background and being a chartered accountant, together with being committed and having a genuine interest in the Qube business, and I'm well positioned and look forward to adding value and contributing as a member of the Board and the Audit Risk Management Committee. Thank you for your support.

Thank you, Nicole. Resolution 3 is in relation to the remuneration report. And the resolution is to adopt the FY '20 remuneration report. The remuneration report is included in the annual report. Information on this resolution is contained in the explanatory memorandum, which also includes a message from the Chair of the Nomination and Remuneration Committee. The Corporations Act requires that listed companies put a nonbinding vote to shareholders to voice their opinion on the remuneration report. Key management personnel, including directors and the closely-related parties are excluded from voting in favor of the remuneration report, unless it's directed proxies for shareholders' ability to vote. The directors encourage all shareholders to cast their vote, and the directors unanimously recommend shareholders to vote in favor this resolution. Resolution 4 is the approval of FY '21 award of SARs under the Qube long-term incentive plan to Maurice James. And this incentive plan has been in place since the 2017 financial year. The summary of the plan is included in remuneration report and the explanatory memorandum in relation to this resolution. The director other than Maurice given his interest in it, unanimously recommend that you vote in favor of this resolution. Resolution 5 under the ASX listing rules, Qube may [ shore ] up of 15% of its share capital in any 12-month period without shareholder approval. An issue of securities under an employee incentive scheme will not be included in that 15% limit if within the 3 years prior, shareholders approved the issue of securities under the scheme. More information on this resolution is contained in the explanatory memorandum and if passed, Resolution 5 will provide flexibility to the Board when considering any further necessary fundraising. The Director other than Maurice given an interest in, unanimously recommend you vote in favor of this resolution. Resolution 6 provides for amendments to be made to Qube's constitution to take into account developments in law and the listing rules corporate governance principles and corporate practice for ASX-listed entities since the constitution was adopted in 2011. Detailed information on this resolution is contained in the explanatory memorandum. In summary, the proposed revision of the constitution includes amendments to facilitate the holding of virtual and hybrid general meetings. Amendments to enable the results of polls to be announced to the ASX rather than in newspapers escapes, amendments to provide additional clarity regarding adjournments and postponements of general meetings, amendments to provide greater flexibility for the passing of circular resolutions by directors and the general administration at board meetings; amendments to allow reasonable fees to be charged for the registration of share transfers where committed to do so by the listing rules; and amendments regarding ASX restricted securities to align with changes to the listing rules that were made December of last year. A copy of Qube's current constitution is available in the Corporate Governance section of Qube's website. A markup version of the proposed amended constitution has been made available on Qube, too, or on meetings page accessible from the homepage of Qube's website. The draft for bonus constitution has been signed by me as Chairman at the meeting for the purpose of identification. This resolution must be passed as a special resolution. This requires at least 75% of the votes cast by shareholders entitled to vote to be in final resolution. If approved, the amendments will take effect from the conclusion of this meeting. This resolution does not encompass or provide an insertion of proportional takeover provision into the constitution, which is the subject of Resolution 7 and requires separate approval independent of the outcome of the resolution. The directors unanimously recommend you vote in favor of this resolution. Resolution 7. The company is seeking shareholder approval in accordance with the Corporations Act to reinsert proportional takeover provisions into Qube's constitution following their previous lapsing in '19. These provisions provide that if offers are made under a proportional takeover bid, the registration of a transfer based on the acceptance of an offer made under that bid is prohibited unless and until a resolution to approve the bid is passed in accordance with the constitution. The wording of the proposed provisions is unchanged from the wording approved by shareholders in previous years. It is set out as reinstated Part 14 in the marked-up version of the proposed amended constitution is available on Qube's website. A detailed explanation of the proportional takeover provisions, their effects and the reasons to reinsert them are set out in the explanatory memorandum. This resolution must also be passed as a special resolution. If approved, these provisions will also come into effect from the end of this meeting. As noted above, this is a stand-alone resolution and not dependent on the passing of Resolution 6 and the directors unanimously recommend you vote in favor of this resolution. So moving on to questions.

I would now like to present the Q&A part of the meeting. As previously mentioned, I'll respond in the first instance and determine who is best placed to answer the question. And I'll invite [ Director ] Paul White, Director of Corporate Affairs to read out the first question.

Thank you, Chairman. The first question is from Mr. Michael Willard and it reads. Since the [ current ] government were voted out of office, Australia's relationship with China has formed a dire situation. China accounts for about 40% of Australia's exports and a large percentage of our imports. Has any member of the Board or senior executives find the present government to moderate their very public criticism of many China's domestic affairs so that the return on my shares is maximized?