Sembcorp Industries Ltd (U96) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to Sembcorp Industries Full Year 2020 Results Presentation Webcast. I'm Lay San from Group Strategic Communications and Sustainability. The members of the panel for today's presentation are Group President and CEO, Wong Kim Yin; and Group CFO, Graham Cockroft. Without further delay, I will now hand over the time to come to Kim Yin to begin the results presentation. Kim Yin, please.

Good morning, and thank you for logging on to Sembcorp Industries' full year 2020 results briefing. In September 2020, we completed the demerger of Sembcorp Marine. As such, the performance of our existing business is presented as continuing operations, while the performance of the Marine segment will be classified as discontinued operations. So let me start by briefly outlining the key performance for the full year 2020 under continuing operations. Turnover was SGD 5.4 billion, down 19% from the previous year. Net profit before exceptional items was SGD 301 million. And this is compared to 2019, 34% less. After exceptional items of negative SGD 144 million, net profit was $157 million, down 49%. Earnings per share, $0.078, down 48%. ROE, returns on equity, was 3%. ROE before exceptional items was 5.9%. For the discontinued Marine operation, we recorded a loss of $1.154 billion. This included a noncash, nonrecurring fair value loss of $970 million on the distribution in specie of the capital of Sembcorp Marine. While 2020 was a very challenging year, the underlying performance of our Energy and Urban businesses remain resilient. In view of this, the Board proposes a final and total dividend of $0.04 per ordinary shares for FY 2020. And this is subject to shareholders' approval. Let me elaborate a little bit about the group performance highlights. 2020 marked a new chapter in Sembcorp's history. We completed the demerger between Sembcorp Industries and Sembcorp Marine. And this allows us to now sharpen our focus on sustainable solutions. The demerger and the deconsolidation of Sembcorp Marine's debt also strengthened our balance sheet. Group borrowings reduced from SGD 10.8 billion to SGD 7.7 billion. Value was also unlocked with our share price increasing 78% in 2020, following the completion of the demerger. Apart from the demerger, we continued streamlining our portfolio since 2018. Together with the divestments completed in 2020, we have unlocked cash proceeds of $735 million from 17 divestment transactions. And in a very difficult COVID year, the global Sembcorp team responded with exceptional commitment and character to deliver reliable, essential services, which continued with no interruption. With the continued challenges of the pandemic, our priorities continue to be the health and safety of our people, to support the communities we operate in and building resilience for the future. The unprecedented impact of the pandemic on the global economic outlook and the low energy prices has led to the impairment of certain investments and assets, which Graham will bring you through in his section of the presentation. Now let me go through the key highlights of the Urban and Energy businesses. Under Energy, the Energy business remained profitable amidst the challenging environment. Net profit was $160 million compared to $195 million in 2019. Net profit before exceptional items was $297 million compared to $360 million last year and the exceptional items of negative $144 million. In 2020, we continued to gain momentum in strengthening our renewables portfolio. In Singapore, our 60-megawatt peak floating solar project is on track for completion in the second half of this year. When completed, the project will be one of the world's largest inland floating solar PV systems. In India, we secured an additional 400-megawatt solar project in the latest Solar Energy Corporation of India auction, or SECI. We also fully commissioned SECI 2 and 3 projects and become the first to commission fully projects awarded in the SECI 1, 2 and 3 wind project tenders. In Vietnam, we started building our capacity with 17 megawatt of rooftop solar installation completed in December 2020, and I believe we will gain momentum in this area. Our global renewables portfolio in operation and under development has now grown to over 3,200 megawatts. We continue to develop innovative, sustainable solutions. In 2020, we launched Singapore's first renewable energy certificate, or REC, aggregator platform. We are also exploring integrated energy solutions to power data centers. Moving on to Urban. The Urban business turned in a creditable performance in 2020. This was driven by strong performance from Sino-Singapore Nanjing Eco Hi-tech Island project in China and Kendal Industrial Park project in Indonesia. Net profit was $92 million compared to $117 million in 2019. The profit in 2019 included significant contribution from the sale of the Riverside Grandeur residential development in China. Net profit before exceptional items was $60 million in 2020. In 2020, we held a groundbreaking ceremony of a new 1,000-hectare VSIP development in Binh Dinh Province, Vietnam. So despite the COVID-19 pandemic, land sales and order book remained healthy. The Urban business has a significant land bank of integrated urban developments in Vietnam, China and Indonesia, and that will underpin its future performance. With that, let me now hand over to Graham to take you through the group financial review. Thank you.

Thank you, Kim Yin, and good morning, everyone. Thank you for joining us this morning. I shall now take you through the group's financial review. Starting on Page 8 with the Group P&L. As mentioned by Kim Yin earlier, with the demerger of Sembcorp Marine, our existing business is presented as continuing operations, while the performance of the Marine segment is presented as a discontinued operation. For continuing operations, the group recorded a turnover of $5.4 billion in 2020, 19% lower than in 2019. The lower turnover across all business segments was mainly due to weaker demand as a result of COVID-19 and the decline in energy prices. Group EBITDA before exceptional items was $1.1 billion in 2020, 19% lower than 2019. Performance from our operations in India, Singapore and Myanmar was lower, partially offset by better performance from the Middle East. 2019 EBITDA included a contribution of $104 million from the Urban business, mainly from the sale of residential units in Riverside Grandeur in Nanjing, China. Including exceptional items, 2020 EBITDA of $1.2 billion was 17% lower than the $1.4 billion reported in 2019. We'll look at the details of the exceptional items in the next couple of slides. The share of results from associates and joint ventures was $233 million compared to $186 million in FY '19. The better result was mainly attributable to Urban's operation in China and Indonesia and better results from Energy operations in the Middle East. Net finance costs of $464 million were 5% higher compared to 2019. The increase is mainly due to higher fair value charges -- changes, sorry, of interest rate swaps and the amortization of capitalized transaction costs. The group recorded a profit before tax of $211 million, a decrease of 53% compared to 2019. The group's effective tax rate for 2020 was approximately 26%. You can see noncontrolling interests of $22 million were 21% or $6 million lower than FY '19 of $28 million. Net profit from continuing operations of $157 million was 49% lower than FY '19. The group recorded exceptional items of negative $144 million in FY '20. Net profit before EI for FY '20 was $301 million, a decrease of 34% compared to 2019. Earnings per share for FY '20 was $0.078, and earnings per share before exceptional items was $0.159. Turning to Slide 9, which looks at discontinued operations. You can see there that the total loss from discontinued operation in FY '20 was $1.14 billion (sic) [ $1.154 billion ]. This total comes from 2 parts: first, the loss from discontinued operations of $184 million as our share of Marine's losses from operations for the period until the demerger; second, a noncash, nonrecurring fair value loss of $970 million was incurred upon the distribution of Marine shares, representing the difference between the market value of the distributed shares and SCI Group's carrying value of those shares at the time of the demerger. Including the Marine business and exceptional items, the group recorded a net loss of $997 million for the full year of 2020 compared to a profit of $247 million in FY '19. Turning now to the exceptional items on Slide 10. This slide shows the breakdown of exceptional items in our Energy business. Exceptional items, which include impairments of investments and assets amounted to negative $137 million impact to net profit. All of these, except for Bangladesh in the final row there, were disclosed during the year. Turning to Slide 11. These are the exceptional items in the Urban and Other businesses. Urban recorded an exceptional gain of $32 million. This arose from a $9 million gain from the share -- the sale of some shares in the Sino-Singapore Innovation Park Development in China and a $23 million gain from the finalization of the Singapore-Sichuan Hi-tech Innovation Park project. Other businesses recorded a negative exceptional of $39 million, mainly from the impairment on investment in the Shenzhen Chiwan Sembawang Engineering Co. We completed the sale of this business earlier this year. Turning to Slide 12 and group turnover. The group's turnover of $5.4 billion in FY '20 was $1.3 billion lower than FY '19. The Energy business recorded a turnover of $5.3 billion, 14% lower than FY '19. The lower turnover was mainly due to the impact of COVID-19 on energy demand and lower energy prices. Turnover was also affected by the absence of contribution from divested businesses. The Urban business comprises mainly associates and joint ventures, which are accounted for under the equity method. Turnover was lower than FY '19 as FY '19 included a recognition from the sale of Riverside Grandeur in Nanjing, China. That's a residential development wholly owned by Sembcorp. The lower turnover of Other Businesses was mainly due to lockdowns affecting the operations of the construction business and the absence of contribution from the commercial construction business post-divestment. Turning to Slide 13 and group net profit. The group's net profit before exceptional items for FY '20 of $301 million was $155 million or 30% lower than FY '19. The Energy business net profit before exceptional items decreased 18% to $297 million compared to the prior year's profit of $360 million. We have more detail on the Energy performance -- Energy segment's performance in the next few slides. For Urban, the net profit before exceptional items in FY '20 were $60 million, 49% lower than last year. Land sales in Vietnam were lower in FY '20 than the prior year. In FY '19, we also recognized profits from the sale of the residential units at Nanjing Riverside Grandeur. The decline in Other Businesses was mainly due to delays in the construction business' projects as a result of COVID-19 and the absence of earnings -- absence of an earnings contribution from the divested commercial construction business. Group corporate costs of $33 million were $8 million higher than the corresponding period, mainly due to higher professional fees for various corporate initiatives. The group's net profit after exceptional items was $157 million, a decrease of $148 million or 49% compared to FY '19. On Slide 14, we've presented a waterfall, which shows the movement in the group's profitability between 2019 and 2020 by segment. Most of the downward movement is due to nonrecurring income in the Energy and Urban businesses in 2019, as explained on the slide. Within the Energy Others, there was also the absence of contribution from divested assets in Singapore and lower triad income in the U.K. Under Other Businesses, COVID-19-related restrictions slowed progress on projects for the specialized construction business. Turning to Slide 15. This is the Energy net profit breakdown by geography. I'll highlight a few of the main drivers of the variance for each of the markets. For Singapore, the decline in net profit was mainly due to lower power demand and the absence of contribution from multi-utility facilities divested in October 2019. This was offset by a higher contribution from our gas business where we had increased our ownership from 70% to 100% in November 2019. For the rest of Southeast Asia, the decline in net profit was primarily due to the $16 million of one-off compensation recognized in FY '19 from Myingyan, as highlighted on the previous slide. For China, net profit declined slightly, largely due to the lower wind resource experienced in FY '20. India's performance was affected by the lower availability of Project 1, lower energy demand and prices for Project 2 and lower wind resources in the Renewables business. The actual results for Project 1 were a PLF of 78% and a net profit of $75 million; for Project 2, a PLF of 75% and a net loss of $52 million. For Renewables, SGI had a PLF of 23.9% and a net profit of $27 million. In the U.K., the performance of UKPR was affected by lower triad income, as I mentioned, and that's in line with the regulated rate set by the U.K. regulator, Ofgem. The Rest of the World reported an improved net profit mainly due to higher tariffs and lower interest costs. Net profit in Salalah also included an insurance receipt due to the disruption from Cyclone Mekunu in May 2018. Under Corporate, we had lower interest costs due to lower debt balances and lower interest rates in the Energy segment. We also had a write-back of some prior year provisions and income recorded -- or captured under the job support scheme. Turning to group return on equity. The slide shows return on equity for continuing operations by segment. The group ROE before exceptional items was 5.9%. The group ROE includes the return on equity also of Other Businesses and Group Corporate. Energy ROE before exceptional items for FY '20 was 8.5%. Urban ROE before exceptional items was 5.5% lower than FY '19. As explained earlier, the FY '19 net profit for Urban was higher as it included the recognition from the sale of residential units in Riverside Grandeur in Nanjing. Turning to group CapEx and equity investment. You can see that CapEx and equity -- sorry, in the Energy segment was substantially lower than FY '19. The spend in FY '20 was mainly for wind development in India and solar capacity in Singapore. Equity investment in FY '20 was $2 million related to joint ventures in Vietnam and Indonesia. Turning to Slide 18 on group free cash flow. For cash flow, the overall group position includes Marine's operations up to the 11th of September 2020. The group's FY '20 cash flow from operating activities was $491 million compared to $977 million in FY '19. The higher level of working capital was mainly due to increased receivables in India. The group net cash flow from investing activities was positive $28 million as cash flows from divestments, dividends and interest income exceeded net investments in CapEx. This excludes the effect of the deconsolidation of Sembcorp Marine's cash of $1.3 billion upon the distribution specie of ordinary shares and the capital of SCM to SCI shareholders in September 2020. Excluding expansionary CapEx, the group free cash flow for FY '20 was $719 million. Turning to Slide 19 on group borrowings. At the end of 2020, the group's net debt was $6.7 billion, substantially less than the $9 billion at the end of 2019. For FY '20, interest cover was 2.4x, while gross debt and net debt-to-capitalization ratios were 0.69 and 0.60, respectively. With the deconsolidation of Sembcorp Marine, the level of gross debt and net debt has fallen dramatically. Although the interest cover and debt-to-capitalization ratios are worse than a year ago, that underlying business is now less exposed to oil price volatility and can manage better -- and can better manage these ratios. The debt maturity profile has also improved post-demerger. That's captured on the next slide here, Slide 20. These tables show the maturity profile of the debt at the end of 2020 and the end of 2019. With the demerger, you can see we have substantially reduced the amount of short-term debt and now have a better profile over the years. In late FY '20, after the demerger, we redeemed the $1.5 billion of bonds due in 2024 that we had issued to fund the subordinated loan to Sembcorp Marine. The redemption was financed with a mix of drawdowns under credit facilities and existing cash balances. This refinancing is expected to achieve annual interest cost savings of between $25 million and $35 million per year. On group liquidity on Slide 21. At the end of 2020, the group's cash and cash equivalents were $1.0 billion, and our unutilized committed facilities were $847 million. So in total, the group had around $1.9 billion of cash, cash equivalents and undrawn committed facilities at the end of 2020. Turning to the outlook for 2021. It's clear that significant challenges remain for economies around the world. There continued to be uncertainties with regard to the strength of the recovery from the COVID-19 pandemic. For Sembcorp, we expect to have another 202 megawatts of renewable capacity commencing operations in 2021. We also expect the full year contribution from Sembcorp and Veolia services, which we acquired in June 2020. In India, SECI 2 and SECI 3 wind projects, amounting to 550 megawatts which were commissioned in 2020, will also contribute their first full year of operations. However, underlying performance of the group will be impacted by the potential exit of a major manufacturing customer on Jurong Island and a customer's facilities in the U.K. that are undergoing a 1-year overhaul. In 2020, these customers contributed approximately $30 million of net profit. There will also be the loss of income from divested assets in Panama and Chile. We also expect earnings in Singapore and Vietnam to be impacted as the natural gas contracts in Singapore approach expiry in 2028 and as the Phu My 3 power plant in Vietnam faces reducing tariffs as its power purchase agreement approaches expiry in 2024. With this, I end my presentation. This will be my last results briefing with Sembcorp as I head back to New Zealand next month. And I'd just like to say thank you to all of our investors and analysts for their support in my time at Sembcorp and to wish you well for the years ahead. We can now take any questions that you may have. Thank you.

Thank you very much. Thank you, Graham. Thank you, Kim Yin. We will now proceed to the Q&A session. [Operator Instructions] Thank you very much.

Thank you, Lay San. First, we have Mayuko in the queue. Okay, it seems like Mayuko has lowered her hand. So next, we'll have Terence Chua.

Can you all hear me?

Yes, Terence, we can.

Yes. Yes, so I just have 2 questions first. Can you all give an update on Sembcorp Myingyan in Mandalay Myanmar and the Sembcorp Industrial Park in Myanmar whether there's any -- I understand there's probably no disruption, but what's your view on the ongoing situation? My second question is can you comment on how you see energy demand in the key markets for 2021 or maybe how has it performed in the first 2 months of 2021? Yes, that's all.

Okay. Thank you, Terence. You know that we own and operate 225-megawatt Myingyan power station in Myanmar. Last week, we have put out an announcement as well that shares the level of investments that we have, right? With the situation in Myanmar, as it escalates, we were obviously monitoring very closely. Our first priority is the safety of our people, right? So to that end, there are daily communications with our 90 employees. 70 of them are at Myingyan, near to Mandalay. It's still some distance away. I was told it's a 2 hours' drive, and there are 20 of them in Yangon. So we make sure that we communicate with them regularly. And so far, they are safe. The other thing that's important and is an immediate priority is also then to make sure that, with the safe operations of our people, the business continue to hum. Now this plant is one of the lowest-cost power that is available to the people of Myanmar, right? So this business, for us to continue operating this plant, it is important to the well-being of the people in -- or the community that we serve. So that is our other priority: to make sure that the plant continues to operate. And so far, we have been able to keep it operating. So those are the key priorities at the moment, right? And in terms of the industrial park, we have announced the launching of the park. Now having said that, today, there's no actual activities, right? It is a project in development. There is -- we do not have any actual activities or investment going on in the industrial park at the moment. So those are the updates on that. Graham, anything to add to that?

No. No. I can take the energy demand, if you like.

Please.

Sure. Terence, it's Graham. Just to -- it's quite interesting what's been going on with energy demand and energy prices as well, clearly, which are very important. Across the key -- our key markets, Singapore, India and the U.K. where we have a merchant exposure, we've seen year-on-year, so '20 over '19, a fall in demand in all 3 markets. We also saw a fall in prices in the same period of time. But if you sort of break it down a bit more and you look more closely at Q4 over Q3, which perhaps gives a stronger indication of where things might be going in 2021, then you see both growth in demand, Q4 over Q3, and also price increases in the same period. So that's -- while I don't have a crystal ball to tell you what it's going to be in 2021, but in terms of where things have been going over the year and where things are perhaps trending most recently, then we are seeing higher levels of energy demand and prices at the moment.

And if I may add, obviously, part of this is the initial shock to the communities because of COVID, right? And then over time, it has -- we see some recovery. Now having said that, I've been coached to be very careful about this and to say that, look, the scale as well as the speed at which the recovery, in terms of economic activities, remains uncertain, right? So we want to be very cautious about -- thinking about recovery or a very quick uptick in prices or demand. I think we remain very cautious about that.

Next in queue, we have Lin Chen.

I'm Lin from Reuters. I want to ask, is Sembcorp reevaluating its investment in Myanmar? Or is there any, like, long-term plans for the country?

I would like to repeat what I said just now, we are invested in the country. We are operating this very important infrastructure asset, and we believe it is serving the people of Myanmar well. So our immediate priority is to make sure that our people are safe and that our business continues to operate and continues to serve the community that we are in.

Next in queue, we have Siew Khee.

I've got a few questions, and I will just read them all at once. The first one is how big is the Veolia earnings contribution? You can give us historical, if you like. Secondly, are you happy with where you are in terms of your thermal power in India right now? Or are you still looking at -- or are you reviewing the operations? I just wanted to see whether you're happy with the stake right now and what's your plan in India. Thirdly, in doing your impairment exercise and review in second half, have you considered and looked at all things? What other things you may not have actually looked at or may not have actually provided and still reviewing? Fourth question, do you expect any major planned shutdown anywhere in the world this year? And finally, you mentioned that there's a potential exit of a customer in JI. When will you know whether that's confirmed and whether you can just split to the contribution between Singapore and U.K. from this -- sorry, the $30 million of net impact that you mentioned, the exit of JI's customer as well as the 1-year shutdown of a customer, can you just split into countries?

Graham, do you want to deal with that? The first one is about Veolia, the -- how big is the contribution -- historical contribution from Veolia. If I may, maybe we can deal with the questions in reverse order while we look for that number. For the major planned shutdown, this year, we are looking at India. P1 will have a 45-day shutdown, and P2 will have a shorter one. And we will also have a smaller maintenance in Myanmar as well as in Vietnam. So -- but those are all within contractual arrangements, and we believe it would have minimal impact on revenue, right? So that hopefully answers the shutdown question. In terms of the potential exit of the customer, I think, are we...

We haven't -- Siew Khee, we haven't broken down by individual markets. We've said the $30 million for the -- both the impact of the exit of the customer and the U.K. facility shutdown. In terms of when the customer may exit, clearly, that's in their hands and not ours, so we don't have any information at this point to confirm a date.

On that, I believe the customer in Jurong Island has already announced their plans. So I think we can say that it is Eastman. They are ending their manufacturing operations in Singapore, right? And because of that, our services with them will come to an end. And it is -- it will definitely happen this year, I think. That's what is quite clear to us, right? And the U.K. is -- the major customer is taking down their plant to reconfigure their plant. So it will take a little bit of time before they can come back online.

We expect that outage to be about 1 year, I think, at this stage. Siew Khee, on Veolia, we -- our expectation is they will contribute something around $10 million in 2021.

Okay. And India...

In terms of impairments, we always review. If there's a trigger, we will certainly review. But also just as part of preparing the annual accounts, we do a sweep across the entire portfolio to see whether there's anything else that we should be considering. And there's no further reviews planned at this point. It's something that we do regularly, particularly if there's a trigger.

I think on the -- in terms of India as a whole, we obviously are in a very strong position in India today in terms of both thermal as well as renewables. As you know, we got 1,700 megawatts of wind in India, and we have just added into the development 400 megawatts of solar. We intend to continue to plow into it. Having the thermal operations, as today the card is laid out on the table, what it does for us is also then you could generate cash flow that we can use to fund our renewables growth, right? So that's one thing about it. In terms of when -- the question about, in the longer term, how do we think about the India portfolio, I think -- let me talk about it as a group, with India being a key part. In the longer term, we do want to meet our carbon targets, right? And we are moving in the direction of wanting to decarbonize. Now that can be done, as I say, in 2 ways. One is you can reduce your thermal but you can also increase your renewables. And India is a place in which we are pushing the strategic direction of providing sustainable solutions and also, in particular, growing our renewables portfolio. Just to add a little bit on to what Graham was talking about, obviously, you look through all the EIs that we have announced in the past year, quite a fair bit in each of the markets. The one that, obviously, a lot of people are watching is India. We are -- I can tell you that we are watching that very closely. We are reviewing it very, very closely, right? I think when we're ready, we will talk about it in more details. But at the moment, based on the latest that we are aware of, we are not ready to make an impairment. I think that is the position that we have today, yes?

Yes.

I hope that answers your question, Siew Khee.

Yes.

Next, we have Rahul Bhatia.

Yes, I have a couple. My first is that could you talk about medium- to long-term ambition of increasing renewables as part of total portfolio? Any targets you have in terms of capacity? And a related question on this is how you intend to finance for new investments given the current debt situation. My second question is, can I check with you on your view on opportunities that were mentioned in the Singapore budget related to increase in solar capacity and EV charging stations? Is it something you're looking at closely to be part of it?

Thank you, Rahul. In fact, I would need to ask you for a little bit more patience. On your question 1 and 2, the long-term ambitions for renewables, we clearly have got strong ambitions, but I will only be able to give you a little bit more color. We are planning for Investor Day in May, right? And I really hope that you could attend. And then in May, we will give you all these details, long-term ambitions and then how we can finance the growth. So I ask for your patience, and I'm also very excited about the opportunity to come and tell you the story, right? In terms of the Singapore budget, there are several areas. In fact, there's a big push into a greener future, a more sustainable future, right? Among them, if I recall -- and Lay San, you have to help me out here, if I recall correctly, there was, first, $90 billion of bond funding for infrastructure, right, of which green bonds were specifically mentioned. So that is one area in which we think we want to latch on to, to finance the growth of our business, of our ambition. The other thing was, as you already pointed out, EV was a big push. Now what that does for us today, we are not directly invested in EV or EV charging. Now having said that, this is part of a big trend and a big transition into electrification. And it would drive demand for power, right? And we are one of the major producers in Singapore. So that is an area in which it will definitely benefit us. In terms of solar and renewables growth and sustainability in general, allow me just to share how I think about -- how we think about our positioning in sustainability. We're into energy production, we are in water and then we are also into waste collection. In energy, of course, as you're well aware, we are 280 megawatts of solar. We're one of the largest solar players in Singapore. And the landmark project that we mentioned is the 60 megawatts of floating solar, one of the largest in the world when it gets commissioned. So we're very proud of that, and we'll continue to plow into that area. That fits squarely into governments and Singapore's push into more sustainable living in terms of source, right, production of energy. In terms of water, we have a new water plant. We recycle some 280,000 -- is it gallons?

Cubic meters.

Cubic meters.

Cubic meters, sorry, 280,000 cubic meters of water every year, right? And so that's -- we are positioned in helping Singapore use water more sustainably. In terms of waste, of the 1.4 million households in Singapore, we collect and manage the waste of 700,000, half of the Singapore population. We recycle or we generate energy from some 300,000 tonnes of waste that is produced. We use it to generate energy for Singapore. So from a recycling perspective, in water and in waste, I think we're also a big player. So we're happy to see the Singapore budget coming out with a strong drive towards sustainability. And we believe we are very well positioned, certainly, in Singapore. And we are -- if I'm not wrong, we may be the only one who is positioned in all the key dimensions of sustainable living. So hopefully, that will give you some color on it. And again, I'm very eager to talk about 1 and 2, but we'll be ready to share a lot more with you in May. Thanks.

Next in queue, we have Foo Zhiwei.

Can you hear me?

Yes, Zhiwei.

Well, first, I'd just like to wish Graham all the best for his future endeavors.

Thank you very much.