Sephaku Holdings Limited (SEP.JO) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to Sephaku Holdings Limited Full Year 2020 Results Presentation. [Operator Instructions] Please note that this conference is being recorded. I'd now like to hand the conference over to Sakhile Ndlovu. Please go ahead, ma'am.

Thank you, Judith, and good morning, everyone, and thank you very much for participating on this results presentation conference call. Taking us through the presentation this morning is our CEO, Neil Crafford-Lazarus. And soon as he's done with the presentation, we'll go into Q&A in which you'll be joined by Pieter Fourie, our CEO of Sephaku Cement; and Kenneth Capes, our CEO, for Métier Mixed Concrete. Handing over to you now, Neil.

Thank you, Sakhile. Good morning, everybody. I'm just going to take you through the presentation that is available through our website. I'm going to quickly move through the first 4 slides with the opening slide. Today, we're going to look at the financial review, then the COVID-19 impacts, operational review and outlook to end of year. So this is our disclaimer, which ended fine. We will go on from the financial review on -- or Slide #4. Sorry, someone has got a mic on and quite a lot of paper movement in the background, please. Thank you. Group results, net loss after in quarter tax was ZAR 17.4 million compared to the ZAR 44 million profit that we showed last year. I think we've been communicating the decline in demand as a major challenge throughout the year. And that was basically a repeat of what we saw in the first 6 months where we had a loss of half the size with regards to the earnings per share doubled through for the full year. So ZAR 17.4 million loss, operating loss of ZAR 4.6 million and a basic loss per share of ZAR 0.0812 compared to the ZAR 0.212 that we achieved last year as a profit. Headline loss, ZAR 0.0797. And then Sephaku Cement contribution to our equity accounted earnings was ZAR 500,000 compared to the ZAR 46.3 million of the previous year, that we will look at the impact -- up to that in the last column. Just first Métier Mixed Concrete in the middle column. Sales revenue, that was down ZAR 108 million to ZAR 727 million. And correspondingly, the EBITDA also went down to ZAR 34 million from ZAR 52 million in the previous year. EBIT of ZAR 12.1 million or 1.7%. Turnover and a net loss for the year of ZAR 0.6 million. The difference between -- not that it make that a bigger difference, but the impact of going from a profit to negative was purely -- was mainly driven by the implementation of IFRS 16, of course, wherein earlier, we have a bigger depreciation interest that we charge then the actual lease payment of ZAR 12 million that we added back. The repayment of the loan, we repaid ZAR 39 million of the term loan, which started out the year at ZAR 41 million and ended at ZAR 2 million, but there was a movement on the RCA. On the other hand, we and ZAR 82 million loan became ZAR 90 million at the end of the year. So a net payment really of closer to ZAR 50 million than the ZAR 39 million that is stated or that is shown on the movement for the term loan. And moving on to Sephaku Cement. Again, there, a reduction of ZAR 100 million in turnover from ZAR 2.3 billion to ZAR 2.2 billion and a reduction as well of ZAR 100 million on the EBITDA line at ZAR 360 million as opposed to the ZAR 460 million a year ago and an EBITDA margin of 16.4%, mainly as a result of the fall in demand, and we'll look at those numbers in the following slide. EBIT margin of 8.2%, ZAR 180 million and net profit after tax of ZAR 1.3 million of which Sephaku Holdings a share of [ 36 ] is the ZAR 0.5 million that we show. Projects and payment of the loans of cement, ZAR 453 million was paid during the year, which ZAR 275 million was capital. And we closed the year on a loan balance of ZAR 1.37 billion, which is just more than ZAR 1 billion down from the ZAR 2.4 billion that we started off when we started to recommence production. Moving on to Slide 5, net loss of ZAR 17.4 million, Métier revenue down 13% year-on-year, a decrease of 14% in sales volumes and a 1.2% decline in pricing, 13$, of course, being a result of the mix. Year-on-year volume decrease of 14% was due to low demand. It was specifically a bigger decrease in the KZN area, specifically significant projects like in UMhlanga -- the Oceans project in UMhlanga and the Clairwood Logistic Park. They were closed halfway through the previous year already, and we were expecting a restart throughout the year, but that didn't happen and are still at this stage postponed, as we speak. Decrease in operating margin from 4.7% to 1.7% due to the inflationary increase in expenses. We have -- due to the deterioration of results on Métier, specifically in the second half of the year approached Kenneth Capes, our founding member, previous MD of Métier, to join the group again on an executive capacity as from the 1st of April. And Kenneth has affected a number of changes, cutting costs and streamlining operations. So that is in process and something that we will get back to later in the slide, and so which Kenneth will probably address in the Q&A section. On the cement side, the equity earnings of ZAR 0.5 million, as I stated. Decline in sales volume of 9.4% for us during the year. The industry volumes decreased by approximately 7%. You will recall that we still had a very good first quarter last year. But after that, there was -- the previous year. And therefore, our decline throughout this current year was a little bit higher than the industry average. Sephaku Holdings, we've completed the cost reduction exercise and just intends to maintain those levels going forward. There was a 28% decrease year-on-year, something that you'll recall we announced in the 2018 year half way through that year. So we saw the first 2019, you had first effect in 2019 and then the final saving coming through the current year moving effectively from ZAR 25 million cost in 2018 to a 16-point-some change for 2020. Moving on to Slide 6, which is always one that questions asked about to make an assessment of what aspects will be by inflation or what is outside inflation like power. And normally, coal and electricity staying at 8% and 9% of cost of production. But that -- so that -- this shows again the transport so being the major portion of turnover and sales on the cement side. Moving on to Page 7 or Slide 7. Cash flow analysis of the group. Started the year with a negative cash balance just under ZAR 2 million. Cash generated by Métier, this is purely Métier as cement is an equity accounted line item, ZAR 34.6 million generated. Net finance cost interest, we met just under ZAR 10 million. CapEx is under ZAR 10 million. Proceeds from the rights issued, which we conducted in February was just under ZAR 35 million. And the debt and lease payments, ZAR 42 million for the year, ending the year just below ZAR 5 million. Moving on to Slide 8 on the Sephaku Cement side. They started 2019 calendar year with ZAR 508 million. The bank generated ZAR 454 million. Finance costs of ZAR 152 million. Net cash from financing activities, ZAR 293 million has closed with ZAR 500 million in the bank. I've mentioned the head office at Slide 9 now. The head office savings that was completed, moving down from ZAR 25 million to ZAR 16 million. Cash portion moving down from ZAR 20 million to ZAR 14.4 million. On to Page 10, the Métier bank debt, there's probably only 2 items for discussion at the moment. That is the handling of the debt and how we negotiated it and what debt payments are looking forward and of course, then the recovery post COVID that we will also address. Métier repaid ZAR 39 million on the regional loan. As I mentioned, you'll see on the slide, the 2 components, the term loan that was paid off during the current year, up to ZAR 2 million and then the RCF that was payable in April and that we refinanced for the period going forward. Again, there's a 3-year term for the ZAR 92 million or the ZAR 90 million part as it was at the end of the year. We will be paying ZAR 15 million from the proceeds of the sale of the Midrand property towards that loan just to get the net debt-to-EBITDA ratio at acceptable levels. And then that ZAR 75 million will be paid as from the 1st of January of next year over a 3-year period, down to ZAR 45 million, which is the bullet for that on the 31st of March 2023. We would only be paying interest on the ZAR 90 million from the 1st of April until the end of August and then also only interest on the ZAR 75 million for the balance of the year. On the cement side, as I mentioned, the billion being paid of the ZAR 2.4, now below ZAR 1.4 billion, ZAR 275 million of capital during the year and ZAR 75 million interest made up ZAR 453 million that was paid. The DCP loan is sitting at ZAR 521 million at the moment, and that is purely an accumulation of interest that moved between the 2019 figure and the 2020 figure, at the same interest as the bank loans. When I show the cash position of cement starting the year with ZAR 500 million and ending the year with ZAR 500 million, they were in a position, and we would have communicated that with the market as well that we were negotiating, making a ZAR 200 million payment towards the loan account that would reduce the next 8 payments by ZAR 25 million each. Although cement had a healthy cash balance, we -- debt cover ratio was under fleet. That covenant was under fleet continuously going forward with the ZAR 1.3 million being required. And the results in the current downturn of the construction cycle, just not resulting in that number with mix. So there was the proposal that we would make a ZAR 200 million payment and that it would reduce the next 8 payments by ZAR 25 million each, which would have eased that ratio. Unfortunately, just before that payment was made, we had the announcement of the lockdown COVID-19, and those funds were basically utilized to cover overhead costs and the payments, the 2 payment that was due in the first period of first half of this year. So we made a February payment and we also made a May payment. The May payment came out of the debt service reserve account, and there was a requirement to top-up that service reserve account, which we will get back to on a later slide again. The COVID-19 impact, I think it's probably the same across the board, something that you've seen a number of times. Métier experienced cancellation orders from the day that the lockdown was announced. So whilst lockdown only came to effect on the 27th, you're probably looking at 3 trading days for the last 3 trading days of the year. We did see a lot of immediate adjustments as from the 23rd, drivers that needed to get trucks back to home before they could go home, and all those type of things rolled over. So a 2.5% loss in revenue on the Métier side. Our property Midland property that was we sell transaction was ready and for submission, the closed, and that eventually took place at the end of July. So on the Sephaku Cement side, of course, the whole of the COVID-19 impact is post year-end for them as they report on a calendar year. But we have seen that Level 5. Of course, there was no production during that period. Level 4 was a 50% production and back to operations and then on level 3 side. We've also seen, of course, with regards to both companies being exposed to debt that we've seen a welcome increasing blending borrowing costs throughout the year, and that will specifically have an impact on the cement amount or that is still in excess of ZAR 1 billion, with 3% reduction in the refill rate they will assist for that one going forward. COVID-19 mitigation on Slide 14. Have extensive protocols are in place to mitigate exposure to limit infection, monitoring developments and regulations and best practice to ensure the critical purpose response to the pandemic. Employees are screened daily before accessing the workplace, and we're still working on a rotation basis. Whoever can work from home do work from home. The IT capabilities are available to enable that. And of course, employees who contact the virus are required to quarantine. Métier also works on a declaration schedule for employees to access the workplace to promote social distancing, cement design response task team, including external expert. We designated response task team, including external experts to address that on an ongoing basis. The wellness support through external service providers for employees experiencing anxiety and general distress. Moving on to Slide 15. The business continuity and the second most important priority. I think we've -- in all spheres, we did take a very hard look at all costs and reducing costs throughout. Métier, as I've mentioned, Kenneth started there on the 1st of April and immediately implemented a range of cost savings, reducing compensation cost by 6%, reducing transport costs by 5%, by increasing utilization and reducing the fleet. CapEx was canceled for 2020 and limited for 2021. Our fixed cost reduction is a key focus area that is currently still underway. Executive management and employees reduced their salaries, 5% to 50% from April to June. And also we're looking at freezing increases for the current year bonuses for the current year, which is the same that cement is doing. There's cement revised CapEx plan by canceling and postponing certain projects, optimize operational processes such as power consumption, revised overhead expenditure and also applied the principle of no work, no pay. There was a qualification there that did soften the blow. And specifically in the second month, when it was 50%. We on Level 4, we've only allowed 50% of the employees that was on a rotational basis so that everybody did work 50% of the month, and the rest was subject to claim. Also reduced bonuses and other benefits and salary increases frozen for cement for the year going forward. We then have a quick look at the operational review. Again, the focus area was to reduce debt with the decline in market that we've seen over the last 17 months and still to continue to evaluate potential supply opportunities. We have commissioned during the year the plant at Centurion and one at Roseland, both making a contribution, which would have reduced the numbers of turnover and sales if they weren't there, but to be balanced with, of course, the additional overheads resulting from operating such a plant. So these are always under review and taking a hard look at making each plant viable and each plant making contribution. On Slide 18. Métier's response to a constrained trading environment, low pricing inflationary cost increases is the challenge that we're facing. Continuous cost management initiatives focused on competitive price inputs and ongoing focus on optimal routine and in an efficient seat per truck. I think that has been a main focus area recently. And then we are already seeing results coming through, but expecting even better contributions in August. Declining volumes, again, that's something that we need to get back that the service that we provide is the one that attracts the volumes and gets us the supply orders. The challenge of credit risk for customers is inherent in what it is. Current insurance is also getting prohibitively expensive, but we've always had a very robust debt management profile, and we will continue to regularly revise creditors' limits and review their ability to pay. Focus remains for the year as a gain on the reduction of debt, just probably the third time that I'm mentioning it that ZAR 1 billion has been paid. That cost control exercise and improve our efficiencies has been a main focus area, and substantial savings has been affected in the current year. Because of the reduction of the sales volumes, the results in the bottom line would probably not be reflected this year, but will only probably be seeing positive results from that in the year to come. The social and labor plan, the payment of that was also a focus area for the year. But again, with a leadership that [indiscernible] that is something that remains outstanding. We have completed a multistage plan on the introduction of alternative fuels, but it's also something that, under the current scenario, is something that needs to be looked at with regards to the capital expenditure required in going ahead with that. Cement pricing. If you start the graph in 2018, we've seen -- we see a good recovery curve on the bulk side. Bulk prices has increased as was required over this period, specifically, as we've seen a reduction during the 2015, '16 years. So it's only recovering now. The bulk prices, not that much an increase. We did see a good increase between 2018 and 2019. And then from the second of 2019, a bit of a reduction there, and that was mainly a mix issue because that's post the introduction of our Falcon brand to counter imports in the [indiscernible] area. Imports, also something that is still with us, with the increase in the -- of the weakening of the rand, something that we're expecting to see less of. But we will still import during the first quarter, and if we need -- and did continue this talk of shipping being in the harbor at the moment and -- but I think it is something that is less of a threat with the weaker rand and also the iTech application is continuing. We've not had a conclusion on that, but it is something that has been ongoing and information is continuously supplied to iTech. Cement first half performance of the current year, which, of course, was impacted by COVID from the last week in March, where we saw an immediate ceasure of August or cancellation of orders that was placed. Year-on-year, cement volumes was 8.5% lower for the first 6 months, a general decrease in demand in Q1 in March 2020 and then the impact of COVID-19 in April, specifically. We saw solid sales recovery in May and June with double digit average monthly increases compared to 2019. Our revenue decreased to ZAR 894 million for the 6 months from the ZAR 997 million for the previous year due to this level of volumes. The outlook, we have seen a lot of announcements, and we have been party to a lot of the strategic meetings with regards to Presidential Infrastructure Coordinating Commission Council that consented the 18 strategic integrated projects and of the 50 projects that was related for implementation to the value of ZAR 340 billion. This covers a wide variety, and I'm sure most of you have seen the rolls and presentations on that, human settlements, ZAR 138 billion; transport, ZAR 47 billion; energy, ZAR 38 billion; waters and sanitation, ZAR 106 billion; agriculture, ZAR 7 billion; and digital infrastructure, ZAR 4 billion. Those are all structures that would require cement, and we are looking forward to be participating in those projects at once they are left it to. So building materials has been simply -- sorry, I'm on Slide 25. Building materials have been impacted by the economic downturn. GDP growth forecast are revised downwards, supplying a tough operating environment. Our focus will still be to reduce the debt and to be vigilant on the cost control. Just a final comment on the debt we have in both instances now settled debt going forward. The Métier revolver, as I've mentioned, that one is now to be paid over a 3-year period and interest-only until the end of the year. And then capital and interest on the ZAR 75 million over the 3-year period down to a bullet of 45 in March 23. And in the cement side, the debt services over account that was an acquired to pay the May payment for cement, we then approach the lenders for an interest-only dispensation for the last 6 months for the year of capital starting again on the 1st of January of next year or for 2021 for quarterly payments. A prerequisite of their discussions was from the lenders that the debt service reserve account of ZAR 125 million that was utilized for the payment needed to be cropped up first before we could negotiate the nonpayment of capital and any interest for the balance of the year and that amount to be postponed to a bullet at the end. The ZAR 125 million that shareholders needed to contribute was then contributed by Dangote Cement Plc as a shareholder loan. So in effect, the cement loan, the balance just moved from the amount owed to banks to now being owed to shareholder. It's again at the same terms and conditions, but that enabled us to postpone the ZAR 230 million payment of capital and would have been required for the balance of this year to October 2023. And that concludes the presentation, and we'll now go over to a question-and-answer session.

Thank you, Neil. I'm going to hand over to Judith to open up the lines for the Q&A.

[Operator Instructions] The first question comes from Charles Boles of Titanium Capital.

A couple of questions. Is the sound coming through?

Yes, I can hear you well. Thanks, Charles.

Perfect. A few questions, if I may. The first one is the local community issues at Aganang, is that an operational interference issue? Or does the risk extend to getting licenses renewed or revoked? Maybe if you could clarify that first?

Yes. Pieter, do you want to take?

Yes. I think if we answer it will be easier. It's not an operational interference at the moment, but we need to manage it so that it doesn't become an operational interference. At this stage and into the future, there's no risk of it interfering with any of the licenses. We are in constant contact with all the regulatory bodies, especially the DMR. We attend a number of meetings with them. In fact, one of the evidence of that is we have got a temporary agreement between DMR local municipality and ourselves as to the social and labor plan. And although that is not strictly according to the law, they have made that concession because they have tried from their side to involve the community in signing off, and they have now taken a position to say the community is partly with our leadership. Therefore, they cannot rely on communities. So they're relying on the municipality structures to take that position on behalf of the community. So we have got a temporary position in place. We have also started with the new initiative where we are investing quite a bit of infrastructure in the community itself, and that's been accepted very well. We are facing honorary use at the moment. The older structures are certainly not the hindrance anymore. We've had a bit of an upheaval this morning, which is against the local authorities, not against us, but some disruption. So we have very few disruptions. As far as vehicles are concerned, we had delivery vehicles from time to time, they want to stand or the trucks. But rest of operations not impacted at all.

Can you just talk a bit about the pricing environment, maybe what's happening with the blenders in the market? You've got a market that volumes in aggregate are -- have declined. It's just hard to see that price increases are going to hold despite more and more participants in the industry becoming more financially strained. But maybe you can just talk about what you're seeing in terms of pricing and activity from blenders.

Okay. So the blenders post lockdown are not as active as they used to be. They're certainly still there, but a lot of the smaller blenders have given up, closed shop, especially those that -- and there are quite a few instances where guys had break yards, and then they started a blending operation as well. Those are now saying it's not poor business. Let's carry on with loss without this. So we're ending up with about 3 stronger blenders. One of the short-term issues that they're struggling with is the availability of slag and ash because of metals reduced production and some of the inefficiencies and their livelihood depends on the ability to get ashes. So they are being limited. And certainly, I believe they're not as active as they were last year this time. I'm not saying that will continue forever. They are still there. But we are seeing some more responsible behavior from them, and I think the larger ones, especially. They are being policed more rigidly from the national [ SAVS ]. We're seeing that qualities improve. And I think with the current environment, we are seeing increases coming through. Again, I can't guarantee how long that will last, but there's also a move towards high, and we're really focusing on that towards high-strength products and promoting high-strength class where they cannot compete. Where we are competing directly, we're competing with a price fighter, but we are achieving increases on the higher-value products for our sale growth.

And pricing from the other cement companies in the industry?

I think something I didn't mention is, I think, first lockdown, all the cement companies, including the blenders, have suffered pain and distress, and they simply have to increase prices. So we've certainly seen increases coming in from end of May. We had increases ourselves in the one region in middle of June and another for the rest of the operating area, middle July. And we're probably looking at another increase in October just to catch up on costs that we've incurred as an industry. And I think everybody is under the same pressure. I think we're all borrowing from the same banks, and the banks were tough, although we've renegotiated those loans now. We need to make sure we get back on track by the end of the year. And that's going to push, and we're seeing increases coming through from all other players.

Charles, just as long as we don't have any further questions in queue at this point. [Operator Instructions] If you've got more questions, you're welcome to go ahead and ask them.

Perfect. I'm a little stuck on Page 11. Maybe you can help me. So the debt for SepCem is ZAR 1.37 billion at the end of December, and we're holding ZAR 500 million in cash. And then we've got the shareholder loan. So if I follow that ZAR 500 million, I'm just trying to track I suppose that -- the waterfall on Page 8, if you will, on the ZAR 500 million rolling forward, if that makes any sense. So if I've got ZAR 500 million, I'm trying to understand why a shareholder funding of ZAR 125 million was required. If you didn't use the ZAR 200 million for a prepayment, did you not have sufficient cash reserves to make the necessary payments cover the overheads and still be sufficiently liquid?

Charles, that is exactly the point. I think, first of all, we did make 2 payments out of that ZAR 500 million. Let's, just for a moment, set aside what was the earnings for or the net result for the first 6 months. But during that 6 -- there was 2 payments needed to be made to the banks, so call it around ZAR 250 million. That's also the -- that will utilize for debt. And then if you look at April being an overage-only, the cash requirement to run an operation with an annual turnover, let's say, a monthly turnover of ZAR 200 million, if you have a ZAR 2.4 billion turnover during the year, so you're looking at ZAR 200 million a month operation that has got no income during that year. And this is the variable cost that, of course, is safe to an extent. So there's quite a drain on cash during the April and even for May when you're only looking at 50% of production. Although we [indiscernible] a net requirement of cash. Now if that drains ZAR 400 million of the ZAR 500 million, and I'm talking a very, very loose number now, you need to have a working capital installed as well. And we could not use those funds to top up the debt service reserve account. And the debt service reserve account typically needs to be topped. So included in the ZAR 500 million was the amount in the debt service reserve accounts, of course, as well.

I'm being slow here. When you said the debt service account, maybe just take you back a minute that, that is...

You always have to have the next debt set payment already in a separate account, earmarked for that payment within 7 days after you made the previous payment.

Oh, really? So you made the payment. And 7 days later, the next payment has to be in an account to make the following payment?

Yes. Normally, that account stays -- we don't touch that account. They just sweep from the current account. But always one payment in advance in a debt service reserve account. But we use the debt service reserve accounts to make that payment. [ It's not sweep ]. So it's always cash on hand, but it's a restricted cash because it [indiscernible] the payment of the loan. So in May, it was used towards the payment of the loan, and there was ZAR 150 million in it. So there was ZAR 25 million left after the ZAR 124 million was swept out of it. And as I said, there's a requirement that it needs to be topped up within 7 days. We've asked for an extension of that in order to have a negotiation with regards to non-capital payments and the banks or the lenders agreed that they would negotiate, but they needed the top-up to be made before the end of July. Now again, in recovering from this -- the one -- let's call it, 1.5 months out of production does not facilitate topping that up from operations. So ZAR 105 million was required by the shareholders. And, of course, that was negotiation between shareholders holdings cannot go to market at current prices. But -- and then go to probably -- fortunately, had a big bond raise just before COVID, so they were able to supply around ZAR 125 million as a shareholder loan. So yes, the -- so it's 2 things. So the 1 50 -- 1 3 7 5, of course, has because of the payments for February and May, come down to 1 1 7 0. So it's not 1.3 anymore. It's 1 1 7 0. And now the payment of 1 25 by DCP is not going into the debt service reserve account anymore. We've now abandoned that requirement going forward. But the 1 25 was also paid off against the loan. So there was a further one. So you should be looking at 1 0 5 0 at the moment, which is 300 less than what the current showing as the amount at year-end. But 1 0 5 0 to the banks and now 1 25 additional to DCP because they paid the last -- the difference between 1 1 7 0 and the 1 0 5 0 they've made.

Let me just take a look so I make sure that I've got you. So 1 1 7 0 is the capital after the February and May principal payments?

That's correct.

You're deducting 125 being the payment made from DCP. So that gives you to the banks on the 12th of August, 1 0 5 0, roughly?

Yes, roughly around...

Rough numbers.

Yes, yes, absolutely.

Maybe if I can just comment. Yes, rough numbers, but there was also still ZAR 25 million in the debt service reserve account that also went off. So it's ended up being 1 0 2 5, but...

Yes, exactly. Sorry, yes. Swept 1 25 of the 1 50. We put 1 25 back. So there was 1 50 that was paid down of the 1 7 0. So that went up to 1 1 7 0. We then went to 1 0 2 0, 1 0 2 5, as Pieter said. But the net -- or Sephaku Cement debt is still the 1 1 5 0 now because it's just 1 0 2 5 to the banks and [indiscernible]

So let's say 1 0 2 5 to the banks. To then to Dangote, we had the 5 21 in at the end of the year, plus the 1 25. So we're at nearly 6 40, plus interest, I assume, is accruing on that?

Yes.

And then we have some cash balance that we deduct from that to get the net debt. Or is now -- is it effectively -- so you've got a working cash balance of ZAR 50 million to ZAR 100 million, I'm assuming?

That's more than that. And I think maybe if I can [ mostly to say ], when we started negotiating with the banks, we were just coming out of lockdown. And in fact, we were still in lockdown. And then as we came out, we were extremely conservative. In retrospect, as we sit now, we didn't need as much as we got from Dangote, but the shareholders took a decision, especially Dangote, get the monkey off your back, let's put this money in. And if we go through whatever other debt now, let's not get ourselves in the same situation. So we do have some headroom, especially after the last 3 months. And probably if we've known we were going to be in double-digit growth for the last couple of months, we would have settled for something smaller than that. But I think it's one more of Dangote was saying, get this out of our way. Let's not irritate the banks. Let's get on with business that we still have. And I guess we can't disclose the detail. It's not public knowledge yet. But we do have headroom cash in the bank.

So you [ came ] to what I was trying to get to, which is just because if I figure if it was 50 to 100, your headroom was very tight. But you're saying you've got more headroom than that. And barring anything unforeseen, you've got sufficient to trades sufficiently in SepCem.

Yes.

Correct.