Seeka Limited (SEK) Earnings Call Transcript & Summary

[Foreign Language]

Thank you for the welcome. Do please calm and sit. Plenty seats at the front, John. All right. Welcome, everybody. I'm going to have to stand down here in case of full. So welcome, and thanks for joining us today, and thank you for the time you spend with us today and the interest of our showing at Seeka. One apology from Cecilia Tarrant, one of our directors who -- today. As usual, I'll just introduce you to the agenda or to make some preliminary introductory comments and then Michael will obviously with in his presentation will give you a greater context around some of the comments that I'm going to make. But first of all, we'll deal with a little over half a summary. Now I just got to say as a way of an introduction at this stage, I've been on the Board for a number of years now, and this is the toughest season I've experienced with the company, and it's had consequences that everywhere has caused a lot of people concerned. I'll give you an overview of the group financial performance for the 6 months to June '22. And part of that during that slide on earnings as well, earnings and net earnings per share to be a sense of where the bank -- net bank debt is. Give you an update on the market -- our market guidance that we've previously given. And also wanted to make some introductory remarks about the sustainability journey that we are on and something that I think is obviously very important for us as a corporate company to be demonstrating that we are taking steps to be more sustainable. And Michael will -- following those introductory comments was clearly about safety because it's important to the company. He will bring, as I said, some more context and more fresh to the 6-month highlights and also break that down into the segmental reporting and comment further on some of the automation upgrades that we've been doing as a company in the last 6 months. Obviously here, I'll then give you a strong sense of where we've got to with measuring our carbon and the initiatives that we're taking to reduce the carbon output from the company and to give you a sense of the ambition we have to where we want to get to with our carbon emissions and also comment briefly on the future. And we'll have, as always, time for questions. As I said, it's been a challenging year -- has been a challenging year for everybody. But before commenting further on those challenges, we've had a -- our strategy has been to have a greater regional presence. And in the first half of this year, we harvested a full OPAC season for the first time. We harvested and processed part of it last year, but it's the first time we've integrated as well and the New Zealand Freight. So that's I suppose you could say that's been a busy time, but those opportunities came up for us to meet our growth ambitions and also to diversify our presence right throughout the key fit-growing regions of New Zealand, which we did. And so we've bought those entities in for the first time and they're well and fully integrated now. In Seeka Australia, there's been a performance improvement over there. But at the moment, some of our plants are up to 1.5 meters of water, substantial water everywhere, as you will all be aware of in the news of the -- area and Victoria is clearly suffering significant flooding. Now let me talk about some of the tough conditions. And I want people to remember the lens when they see the numbers, the lens that was happening at the time of the season harvest where we had maturity issues, we had issues with logistics that delayed our planned introduction of capacity at KKP, which was took away a lot of capacity capability at the time. We were short of labor. But not only we were short of labor, where there just wasn't enough people that we needed to run the company at the level of labor that we wanted, but they're also sick. And so if you combine the shortage for the number of people that were sick at any 1 time, were 1,100 people short, 1,100 people out of about 4.5 year. The harvest still got off and got packed, but it may not get packed as quickly as we would have liked, and certainly didn't get packed as quickly as our growers would have liked. I'm just going to go a little bit slower there. We were 1,100 people short out of a complement of 4,500. Now I wouldn't like to be the person that had to do 125% more all the time. And the crop wasn't there either. Hayward was down 21%, SunGold was down 10.5% across the New Zealand industry. So as we all know, there's higher fruit loss and particularly in [indiscernible] region. And the company has been looking at as Bailey's insurance and hence see and as likely -- and we've now made the decision to make a claim under that. It's one thing to make a claim, it's another thing to get it approved. But we think that we should make a claim to going obviously help in terms of any results for those growth in that region. We already commented about the delays from KKP, the disruption to the shipping plants and the severe labor shortages. Now, they all sound like excuses but those are the facts. But despite -- despite those comments, this all sounds a bit negative, I mean you actually look at the numbers and remember the lens that I've just been talked about, we should be too upset by the numbers. Not as good as we would like them to be, clearly, but they're not as bad as they might have been or could have been. So our revenue at $247.3 million is up 10% on the previous corresponding period. And just remember how much the yields were down. EBITDA at $49.4 million is up 5% on the previous period. Net profit after taxes -- before tax, sorry, is down at $30.1 million, that's down 2%. And our EBITDA, I've already talked about, no, I missed skipped over EBITDA. An EBITDA of 49.4% is 5% up on the previous period. Now we've already previously forecast to the market that we expect our full year net profit before tax to be between $9 million and $11 million. And if you look at the numbers there at 30th of June, we've already got a net profit of $21.5 million. Now that's just an indication of the nature of the seasonal business that Seeka has and obviously through the last period of the months of the year, we're running at losses because of the nature of our business. But there's an unchanged from the forecast that we've made earlier in the year. I have a little look at the trends over the last 5 years. So those biographs, you can see how tough '22 was relative to the other 4 black bars, but there are an 80% cumulative annual growth since June '18. And we have a deliberate strategy to improve operating earnings. And you can see in '21, we managed to push it up to $46.9 million at 49.4% and 22% is flattened off, and I'll just explain some of the reasons for that. But already within that background, we've spent $20 million in the 6 months in terms of investing in new technology. Now the key reason for that is we've got to become more, more efficient than the packhouse, but the lack of labors is driving the need for automation. And most of those items listed there are in respect of improving automation, improving productivity with less people. And Michael is going to spend a bit more time on those. Let's turn to the next page. Now this slide is our earnings per share and our net tangible assets at 30th of June. $0.52 earnings per share, net tangible assets at that time was $6.07, which was up 12% on the previous equivalent period. Total net assets of $254.8 million. Now in the normal dividend timing, we've given the uncertainties of future crop. The weather, as we understand it, could be wet again this season with a third year of [indiscernible] And the -- the drop off in the earnings relative to where we expected them to be at the end of June, we've proposed [indiscernible] we didn't declare a dividend in a normal comp, but it's still something that we will consider on a regular basis to see if the company can afford to that. Doesn't help to have a frost event, though in terms of dividends going forward. And from all the information that we're getting, there's been a lot bad break season as well. So you've got only low [indiscernible]. You've also got a frost event, a significant frost event, who would have thought the frost event would run from right from the west, right through to the east of this region. Just to give you a sense of our net bank debt, which is specifically borrowings less cash on hand. This year, we have been gone to a banking syndicate. You can see the partners to that syndicate there being Westpac, ASP, BNC Rabo Bank. And we've got 200 -- a line of $211 million, which has helped us with headroom. And you can see where -- what we've invested on in this period. Obviously, those automation matters that we referred to and also our growth investments in Orangewood and Fruitometry and New Zealand fruits. We do have some assets left for sale, and we're still actively trying to market those, which not as big as they were a couple of years ago in terms of landed orchards that we have for sale, a small amount there that will reduce some of our debt in due course, hopefully. [indiscernible] something to be more sustainable in today's environment, they use an expression about a social right to operate and met and been responsible about use of minimizing waste, reducing carbon, supporting our communities is all part of their license that corporates should have to their social license to operate. So we've released for the first time at the end of June, our sustainability report, which starts to tell the story of our journey of becoming more sustainable. It does -- it sets our targets and our ambitions. It explains where our carbon footprint comes from. It details the initiatives that we are working on to reduce carbon. Talks about the social programs that we run as a company and what we're involved with, and the governance aspect of the reporting that's not new. That's been a requirement for some time, and it's been in our annual report previously as the government structures that we follow in terms of governing the company. So with those introductory remarks, I'll ask Michael to comment, put a greater flavor to those early comments. Thank you.

Thanks, Fred. I've taken my jacket off as I feel the heat to stand up here and talk to you all. Welcome to our stakeholder update. Perhaps a little difficult period in the company's history, I think, and probably the most difficult period I've been through here, particularly in the last sort of 6 to 8 weeks. And we've been through a few crises previously. So it has been a little bit difficult. Then we tell you a bit more about what's been going on in your company or in our company, so you understand the dynamic and understand the reasons and where we're going to and what's going on from here. Firstly, let me pay tribute to those people who work in and around the company that worked in with us for the last couple of years: contractors, people in the business, our suppliers are key, our growers because we've been through pandemic. We went down through a period where people's safety was that people were worried fundamentally about whether they could go to work, where they can spend time away from their families to get the job done, to get the fruit and to get it through, there was anxiety. And the company took all steps that we could to make sure that we limited the impact of the pandemic. Now that we've got 2020 hindsight now, but at the time, it was just fundamentally uncertain. We had a COVID Response Committee running that operated to ensure maximum safety for all the stakeholders and around our business. And as people did to come, it is true, we were 1,100 people short across 4,500, but it wasn't like that, because it came in waves, and went to sites. We've got people who work, not just 1.25 jobs or 2 or 3 jobs to get the job done in the season. Some of the results that we've got now, we're not happy with and I'll explain to you what bingo and why. We have had one serious Harmon during the company this year. It was quite remarkable when you take into account the hours and the effort. That was a person on repack and Orangewood the new site, we'd done some maintenance on the [Transpack] side. So a lot where the fruit comes out, but where the empty trays go in under the machine, and the person has taken off a cover off his pocket. No more operating practices that you can't start the machine is nearly a hold on the machine. But in this case, the machine was started. The person didn't pick up the safety risk. Even though he stands a long way from the machine at the end of the feeding the conveyor pushes the boxes on, he actually walked up to the machine to talk to his partner on the other side of the machine, lend on the machine, put his hand down onto the Sprocket, got his own in [indiscernible] Court in the sprocket and. So that is our lost -- that is our serious harm injury that we've had this year. We've had a number of near misses, but that is the one. And we know reasonably -- I think we're disappointed with having any of them, but we're disappointed to have that one in particular. Our total recordable injury frequency rate, how many injuries do we have per 200,000 hours worked, actually remarkably good, 2.94, well down in our target of 4.95%. We had the one serious harm injury in Orangewood. We had the review done by Work Safe, we've worked with them. We've gone through the [indiscernible] review. There's no follow-up. We've gone through all sorts of retraining back in the business. We've changed our practices with any of you to speak we would do. We have one, the lead indicator, which is our inspirational people is what we call it. It's about people attending and going to safety meetings site-by-site, crew by crew by crew to make sure that we've got attendance. And so that's 93% attendance and meetings being held across the business. And so, I mean, I would have referred not to report a serious harm injury, but we've got away with it so far. We're quite remarkable when you can see what's been going on. 800 permanent employees in the company now, 250,000 seasonal. Last year, we had 920 RSEs. The year before, we had 440. Next year, we've got 1,500. You would have seen some commentary in the media about RSEs and accommodation. Let me put you all right about that. That is on response to official information request from the union, asking for information about any complaints that Seeka has had at a combination facility. We've had some over in [indiscernible] Through the pandemic when we were really short, I went to Wellington and had a check integration in New Zealand and say, Oh, you couldn't host subs and RSE where they started arriving. I mean on a Friday, you were to get a phone quarter say good news, 90 people coming on Sunday. Well, we don't have accommodation for 90 people sitting around on a Sunday. So we ended up having to compromise, we put people over into route room. We can't put people in any RSE accommodation facility that is not approved by the labor inspector that is pre-inspected. The facility in Rotor is actually very good. It's not a bad facility. It's actually an excellent facility. It has catered, not self catered. So when you've got 2 or 3 or 4 countries of origin countries staying there. We can't get the dietary conditions right for everyone. So we had some issues there. Getting bank accounts opened quickly for people when they're arriving that number isn't easy either, banks and people open Tuesdays and Thursdays 2 [indiscernible] 2. And it takes 20 minutes or so to get someone on board. And you've got 90 people to enough, and that's just on 1 arrival where it's 3 weeks. We had 450 people arrive in 3 weeks. So we have all sorts of problems. Then, of course, we had the incidence of the fatality. We had a person who tragically had a heart attack when driving down Remer rate having delivered wider to the night shift at a heart-attack unfortunately passed away. People will be rift. They consolidated their [indiscernible] back at. Guess what? And when of course, the next morning, old labor inspector turns up and says, Oh, you actually got overgrounding going on here, not bothering to understand the circumstance, will not bothering to go [indiscernible] Kevin. So we've got beaten up a little bit. We look after our RSEs. We've got dedicated people. W do it everywhere that they stay that is checked by the labor inspector. If there are any issues, we will deal with them quickly, we have met all of the Counsel at Generals in New Zealand for all Pacific oiling countries. And I can assure you, we look after those people and hold them in the highest regard. We, of course, have to deal with the regular pattern of Mr. [indiscernible] that seem to come through with a Regal monotony. So just to go a bit further in the 6 months of the June 30, we packed in a pandemic. Our contingency planning was stretched. W expected to have KKP running on the sixth of April, and it turned up and was running 4 days before the end of the season. So we had to move things around. We had to open shifts up early. We had to take some of our RSEs out of picking and put them into the packhouses to run it harder. We operated 3 new sites in the season, OPAC, Orangewood and Brisbane. So it's 11 sites in total that we operated across all of New Zealand's major Q3 growing regions, but we had operating issues at [indiscernible]. It's probable that we've damaged the fruit as we put it across the greater. There is an insurance claims and pay now for that under [indiscernible] and under Seeka's Bailey's insurance, if we have damaged that fruit and it is our fault then insurance we cover us, just to impose that. Fruit loss for [indiscernible] fruit, SunGold and [indiscernible] is 30%. Normal would be 10% to 12% to [indiscernible] fruit only. So it's 3x what we would expect. And Hayward, it's 18%, and we would expect it to be 6% to 7%. So we have statistically an outlier there. It's not easy if you are a grow to hear that. But what should comfort grows is actually we're acting responsibly. We've got an insurance cover and [indiscernible], and we've got it activated. And so we're talking to the brokers and insurers right now. Outside of that, we've actually had a poor quality year across the industry. We had a lot of packing damage. We had a lot [indiscernible]. We had a lot of cuts and rough handling. And unfortunately, our quality systems haven't held those problems within New Zealand. It's not confined to Seeka. It's across the industry. Zespri has had huge problems in the market and dealing with out of spec fruit. The industries have done a great job in actually containing that problem and cleansing it and getting the best fruit through to the market, but it's been a big problem nonetheless. And of course, as Zespri have tightened up, the quality specs back here in New Zealand, and we're effective repacking every single piece of fruit since week 27 through week 23. So it comes at a huge cost. There are a lot of [indiscernible] underway at the moment to actually fix that for next year. Primarily, it's about slowing down. I make sure answering questions that people have seen through me as I speaking, slowing the packing down, better auditing, that grows to do a good job. They're growing that crop year long. It's not -- do not want to and they're not reckless, but we had too much packing damage over this year. And so we've actually got to slow everything down, treat that fruit with more due care and respect and attention and deliver our market are a bit of fruit. We've got long-term resources still in development. They're coming through, which you see that fruit standing to come through really in some volume from 2025, but '23 and '24, it will start arriving. And look, our Australian business has done really well. Even though we've got some water in the Hayward water at the moment, some 1.5 meters deep. They've been trying to pump it out because it's sort of -- it's come from higher ground, it's hard to get rid of it. Orchard in operations. This is led by Barry Penellum. This business grows kiwifruit, Avocados and Kiwiberry. Our revenue at $45.7 million is down 15%, our EBITDA of $5.1 million is down 10% from the previous corresponding period. We've got increased Kiwifruit volumes, but our yields are down. Our per hectare yields than Haywood were down 21% this [indiscernible] per hectare, and we're down in SunGold by 10.5%. Actually a highlight for us is Kiwiberry, very small category. The returns per hectare is exceptional. But you can see we're actually still a very big growth at 7.5 million, 17.1 million trails grown this year. We've got 142 hectares of Kiwifruit in development, 46 hectares of SunGold, 91 of Haywood and [indiscernible] Where couple of hectares is a Kiwiberry in 16 hectares of Avocado on the line coming up. In terms of our postharvest business, our revenue of $178.5 million, it's up 23% on the previous corresponding period, understanding, of course, that we've got the new acquisitions on. $52.9 million in EBITDA is up 8%. And we've had to continue with a lot of things. I don't know if you know, but Guzman was a full 2 weeks late. Normally, 85% of their fruit is cleared in the very first part of the season, which we call first pass the post. This year, 15%. And if you're not familiar with that region, I'll remind you that rained and it just rained and rained and rained. And so it compressed capacity for us. We had to scramble even more than we were. We had delaying the KKP machine, which winner didn't turn up is actually looked that looks absolutely fantastic. We've got inflationary pressure. So the wage rates moved from $22 to $24, and we're 1,100 people short at peak periods. We had high fruit loss. Big component of that is from the fruit that we've handled in [indiscernible]. And we've got an insurance claim, 2 of them underway for our OPAC fruit. To the SeekaFresh, we were connecting the fruit that we don't supply through disease ready where we connect that fruit to the market. $8.5 million in revenue. Avocado returns, I don't need to tell you the market the volumes and the returns have been very low, $0.5 million in EBITDA. They are innovating that. We've got new customers. We're increasing the volumes. We just picked up a new citrus grower [indiscernible] line. We're building our strong relationships we've got with customers, and we are a category supplier to Costco. We supply bananas, pineapple, papaya, Kiwifruit and Avocados. They're the categories that we are the category manager for cost going on. Most of the $23.6 million in segment assets if you're interested, is actually there's money that's owed to us from our dealers. On Australia, this is led by Jon van Popering. You are on the line. $14.4 million in revenue is up 4%. Still just going through the yield, the tail end of COVID over the year, the disruption to labor the late pruning, the effect is head on our yields, but still $2.6 million in EBITDA is excellent given those circumstances, and it's $1.2 million in EBIT after the lease. So the team has done a good job to get going. Some innovations over the year, particularly with new variety peers. They look -- we have nashi and pears coming. It looks absolutely exciting. And we're pushing into Jujube dates. And the Jujube date market is something which you may not be familiar with. It's an Asian dates, a fresh date. It yields very quickly within 14 months. It doesn't require any fertilizer, only use a little bit of water, 1 megaliter versus 10 megaliters for -- per hectare for kiwifruit and it self prints, and so -- and 20 tonne of hectares. So scratching my head there, but it looks pretty good. Hopefully, it's true. Hopefully, it works out there where you've got to keep drawing. We've got a number of automation upgrades underway. Some are on this list and some are I'm going to talk to just by [indiscernible] and so we do have the new MAF Roda machine, KKP is in store. It does work that is fantastic as a high labor reduction machine, so low labor. Half [indiscernible] goes in flat and boxes come out with fruit in it through a fair proportion of the fruit that goes through without any human intervention. So that's a very trick. We are currently now installing a new Spectrum Compac grading facility and precising machine at [indiscernible]. And so that will save labor saves most of the greatest as well as speeds the machine up a little bit. We've got the Gisborne post-packing automation, which is carton handling and staffing, robotic staffing over there in Gisborne, $4.5 million. We're continuing to investigate and trial the latest technologies, and we have today been talking to the Board about our food automation plan, which if we follow it, we'll see upgrades happening progressively across the business. Oaka 1, Oakside 2 and Transpac, OPAC and Main Road as well as a new machine in Northland. So pretty much touching every site over the next 4 or 5 years. While still maintaining our capital expenditure within a reasonable tolerance. I've had many questions about a sustainability report that was published this June. It's been quite a journey that the team has been on with sustainability, and which has culminated in our first formal sustainability report. We have calculated our carbon footprint. We've had that done for the 2019, '20 and '21 and it's been verified by Toitu, which is like an auditor that comes in and check your calculations and you miss to make sure it's sensible. So that in itself is a huge feet. We understand where we are impacting the environment. We understand that refrigerants, energy use, our importation and use of artificial fertilizer, our use of fuels are the primary, electricity are the primary sources of where we're actually damaging the environment. And so we've now got plans in place. We've got the capacity at the moment of 446 kilowatts of solar power systems that are installed in Kerikeri in Australia and here. We actually got our own wooden farms, which has diverted 100 tonnes of waste from being trucked to landfill to our own wooden farm here to go back to the orchards to make it come entirely [indiscernible] so to take away the use of artificial fertilizer. We have invested in the multi economy. And yesterday, the Board and I were lucky enough to go to kerikeri to be hosted up here to look at the developments that have been undertaken up there in conjunction with [indiscernible] Line #3 pre-sizer and provincial growth fund in [indiscernible. We have supported our RSE workers in [indiscernible]. So 781 here in the calendar year last year. And we did support local organizations, charities and Sports Group to the [ $70,000 ] The team working through and on our sustainability project have with the Sustainability Committee of the Board, agreed what our targets are to reduce our carbon footprint. So by 2025, we want a 30% reduction on our base year 2019 as the business was configured in. By 2030, 50% reduction and by 2050 to be net zero carbon. And so there's some debate makes the Board of Directors, I have to tell you some argument about whether we would buy carbon credits to offset. But I don't think so. I think we're going to try and get it without having to do that. And if we do have to do that, there will be a top-up at the end, but I think that's where the conversation might have entered, but I'm not entirely sure to speculate. We're going to -- the way we're going to get there is we're going to increase our investment in solar. It doesn't necessarily mean that we have to invest in it ourselves because there are parties who will invest in solar and sell you the power. So we could put solar on [indiscernible] for example, at our packhouse there and draw the power of at Main ride at Kerikeri, at our Kerikeri resorts, because we're picking avocados through the summer, we're not sunny and we need electricity. We're going to reduce the amount of emissions or leaks that we had from our refrigeration systems, I find it hard to call them fugitive, but we're going to reduce the amount of leaks that we have. We are installing more leak detection systems, as we actually put new cool stores up, we're moving away from harmful refrigeration to synthetics, which have no carbon they're not damaging to the environment. So we believe that we can, over time, reduce that. And of course, we're moving away from using Petrol to using 0 or low emission vehicles as we can get them. We've been slightly frustrated and our attempts to do that because you can't really source them. But I'm reliably informed that 50% of the vehicles coming into New Zealand today for sale have some element of electricity in with the hybrid petrol electric vehicles or pure electric vehicles. And so how we've done in terms of if we look at the 3 intensity-based measures that we've got to benchmark our performance. So $1 million of revenue. You can see we're down to 64.2 tonnes per million of revenue to 100,000 trays packed, of course, if we packed more the usual there, we would have had a problem without KKP, but we had a great looking graph here at 50.7% employee is 29.9%. And so we are tracking how we're going. We are looking and thinking about ways to reduce our impact on the environment, we are reducing our use of artificial fertilizers and pesticides and sprays. And so team has done a good job to guess where we are. In terms of the fruit focus, we do from here, and just we've got a list in a minute. Well, it's all about the operational improvements for 2023. Capacity is all there in set with the Transco Cool store, and we've got projects underway in the business reviewing every part of the harvest. We also have those insurance claims in play for the fruit that was handled through our OPAC shed. We are focused fundamentally on fruit quality right through the supply chain from the time the time has delivered to the customer. And that actually is a little bit of a headache for everybody because at the moment, the way that we measure fruit quality and freight performance is how we deliver it to the vote. Alfred has outturned brilliantly and excellently in the market, even our competitors are telling us that from the recent market and it's cold comfort to our growers because actually, the cost of having poor quality fruit and the market is spread across all grounds, whereas if you got -- if you've actually done a better job to clean your fruit and get it into shape here, it is only spread amongst our growers. And so that is something we need to think about. We're thinking carefully about our fruit loss in performance, inventory management, scheduling every part of our own supply chain. Capacity plan remains front of mind for us. We've made a commitment to our growers that we will have our SunGold harvest completed next year by the 11th of May. That was before the frost. Now it will be even earlier, I expect if things to hold even. Lastly, I think RSE accommodation is important. We are investing $5 million into our Sharp Road facility [Indiscernible] to be ready for 2024. We'll think about how we fund that when we get to it. We have leased the spread master facility just down the road from here to 112 people. We are in negotiation to build another facility close to this to where we are today for 140 people. So we're looking to progress that. But -- we've got 1,500 RSEs coming for next year. We've got looking -- overseas people coming to New Zealand. We are hopeful that the tightness that we've had to date with labor loosens next year because there's certainly too tight list. I think that's a trend for me. So I'll hand you back to the Chairman, and I'll take any questions later through the.

Thanks, Michael. So I hope that's given you a greater sense of the '22 season and the difficulties and the aspects and how the company is thinking in response to some of the matters that Michael's raised particularly around fruit loss. So it's now the time of the meeting where we have questions. And someone's got -- presume you've got questions from online as well. We have they. But here we listed ask are there any questions from the floor and -- and then I'll move to the -- any online questions.

[indiscernible]

[indiscernible] very early stages at this point. But Michael, do you have a sense for the quantum is still a bit of work to be done to do there.

I think sort of [indiscernible] but what I could say is that probably got 4 or 5x fruit loss [indiscernible] early in the season impression still this damage coming through, we must characterize it as a [indiscernible]. But actually, you've got client characterized as a spin sort of on somewhere between 55% and 60% of our fruit loss is in most [indiscernible]. So the works out with the insurance company, the exit behind and for them to exit the time is going to be our somewhere in that region. [indiscernible]

[indiscernible] Sorry the challenging thing about -- sorry, the challenging thing about the particular industry is questions. So there was a question about any particular issue and [indiscernible] it won't happen again. So just [indiscernible] color on it was created by [indiscernible] which has got to be [indiscernible] I'm not trying to dodge it. I'm just trying to say no before the news room here. That damage didn't become apparent. [indiscernible] they been conditions before longer. So it's set around. So we're calling over the machine now in the end software. We're working with the report analysis to find out why well operations we can make. But also we're going to -- next year, every 10 days after and every 10 days, check what we've had -- before so we were running [indiscernible]. rather than having a whole seasonal at the time before we ever got an issue. So if I can assure you that through that process, we won't have that problem.