Thank you for standing by, and welcome to the Adbri Full Year 2022 Results Conference Call. All participants are on a listen-only mode. There will be a presentation followed by a question and answer session. If you'd like to ask a question, you may press the star key followed by the number one on your telephone keypad. I'd now like to hand over the conference to Mr. Mark Irwin, Adbri's CEO. Please go ahead. Morning, everyone. Firstly, I'd like to take the opportunity to introduce myself. I joined Adbri in October last year as CEO. I've spent the last few months getting to know the business, and we'll talk a bit about that today. Today, I'm here to run through our full year results for 2022. Joining me on this call is our Interim CFO, Peter Barker, who joined the team in November last year, and he'll be taking us through the financial section of the presentation. Also with Peter and I is Sarah McNally, who looks after investor relations. I'd like to start also by acknowledging Aboriginal and Torres Strait Islander peoples as the traditional owners of the lands and waters of Australia. We recognize their continuing custodianship of country and culture and pay respect to their elders, past, present, and emerging. In terms of the agenda itself, we'll take you through our results for the period ending 31 December 2022, and we're gonna focus on four sections: safety and sustainability as well, market conditions, our actual results themselves, and our priorities and outlook for 2023. We'll finish with Q&A. In terms of the headlines themselves, revenue increased to AUD 1.7 billion, up 8.4% on the prior year. It was a combination in terms of being driven by price increases and in certain cases, volume growth across product lines. Statutory NPAT, which is attributable clearly to the equity holders of the company of AUD 102 million, down from AUD 116 million from the previous year. That was actually driven by higher operating costs, which we'll go into some detail on, but primarily due to inflation and some weather-related events. Our underlying NPAT decreased to AUD 118 million. If you exclude the profits from property sales, our underlying NPAT was AUD 77.7 million, which was within the range of the guidance provided in October 2022. Net debt of AUD 576 million. That increase from 2021 reflects the cost associated with the Zanows acquisition and the Kwinana upgrade project, which was actually also partially offset by surplus land sales. Our bank debt facilities increased by AUD 50 million to AUD 940 million, with an average maturity profile of 4.3 years. Our key credit metrics remain well within our banking covenant thresholds. Considering the capital required for the completion of the Kwinana upgrade project, the Board has decided not to declare a final dividend. As you would expect, the Board continually reviews the company's capacity to return funds to shareholders. In terms of operating and strategic headlines, there are a number of them which are pleasing. The first one is an acceleration of our internal business transformation. The completion in 2022 of the Zanows acquisition in Southern Queensland, which extends our vertically integrated footprint and network in that region. The launch of our Net Zero Emissions Roadmap, including new medium 2030 targets. Our Birkenhead-type General Purpose Cement being verified as the lowest embodied carbon of any currently known GP-type cement in Australia, which is important as we think about Safeguard Mechanism reform legislation. Our headlines also include cash sale proceeds of property, plant, and equipment, totaling AUD 96.8 million. Pleasingly, an extension of our quicklime supply agreement with Alcoa, which was extended until October 2024, announced towards the end of the year. If I can turn for a moment now, please, to safety and sustainability. As an opening comment, as you would hope, the safety of our people, and that's employees and contractors, our customers, and the community is of paramount importance to Adbri, so our commitment to providing a safe workplace is unwavering. As you can see from the safety slide itself, our total recordable injury rate at 31 December was 7.9, which is disappointingly up on 2021. While a disappointing result, we actually have developed a plan on how to improve in 2023. Whilst that's disappointing, pleasingly, we did see a 15% reduction in our high potential incident frequency rate from 2021. We encourage a strong high potential incident reporting culture across all of our assets to ensure that we get good learnings for sharing across the business for future incident prevention. Just breaking the 7.9 down a little bit further. Our employee TRIFR in 2022 was 6.5. That is a decrease from the prior year. Disappointingly, our contractor TRIFR was 9.5, which is an increase year-on-year from 2021, and that's one of our primary areas of focus for this year, clearly. I talk about responding to climate change. In 2022, we reported for the first time on our Net Zero Emissions Roadmap, in particular, our medium-term FY 2030 targets. Today, we also issued our 2022 Sustainability Report, which you can access online via the company website. Some of the highlights on the report are outlined on this particular slide. In FY 2022, Adbri's total operational Scope 1 and Scope 2 emissions reduced by 8% against our prior year's performance. This equates to a 12% absolute reduction, pleasingly has exceeded our short-term targets. This is due to a number of factors, including operational improvements, including the use or the increased use of our RDF, as well as state grid decarbonization, particularly in South Australia, and some mild production decreases. We acknowledge that we're on the journey and have still, like others, a long way to go, but our progress is pleasing relative to our starting point of a few years ago. One of the things that's really important for us, clearly, is a reduction in lime Scope 1 emissions. And this goal will assist us or will be further assisted in West Australia as we have moved away from coal to gas for fueling the kiln. Again, we can talk about that further in the Q&A. If I turn now please to market conditions. In terms of the operating environment, what I like about this particular slide actually is it shows that we actually don't operate just in the one market, we operate in multiple markets. I think that's a, that's a really positive point and in some ways a point of differentiation. Anyway, what I can say is you can see that there's strong demand across infrastructure, industrial, and mining sectors. It's further anticipated to be the case in 2023. When we talk about the outlook for gold as an example, you can see there that there's a positive outlook there as it continues to be for products such as, or commodities such as nickel, copper, and other essential minerals for the transition to the low-carbon economy. As we had previously identified, the home builder stimulus and state-based government incentives did drive a record number of house starts in 2021. It's actually converted to a strong demand in the first half of last year. Macromonitor's data from December 2022 does predict a decline in new dwellings into 2023, driven by factors such as higher interest rates and still low levels of overseas migration. They do, however, as you can see from the residential approvals slide, they do, however, predict an upturn in both new houses and multi-residential dwellings as we return to pre-pandemic immigration levels. We continue to expect, my apologies, a strong period of economic growth in Australia. Turning to planned infrastructure, that spending as part of the stimulus measures did result in an increase in the tender pipeline. Material and labor shortages have impacted the speed at which those projects are coming to market. Demand for construction materials from the infrastructure sector is, however, expected to grow, and this is also a market where our market share has growth potential. While we close out the mining sector, I'd like to also focus on the alumina sector, which is a critical sector for us in terms of our lime production. The projection here is continued strong demand for alumina output from Australia. When you look at all the sectors today, and again, that's something we'll talk about in terms of our outlook, that we do think that there will continue to be strong demand for our particular products. I can turn for a moment please to the next slide, which are your, our cost drivers. Those particular factors that have driven costs in our sector. From a cost perspective, just as a general comment, clearly like others, we actively try to manage rising costs through our cycle, price increases, which we'll talk a little bit of it more about later, which by their nature, however, can or do lag cost impacts. During the first half of last year, the Eastern Seaboard received significant rainfall. People can say unprecedented rainfall, but significant rainfall, which impacted on our downstream operations in New South Wales and in Queensland. In the second half of the year, or towards the back end of the second half, we had significant rain events in regional Victoria, which impacted on our Mawson, particularly on our Mawson JV operations. Rainfall itself did have an impact upon the construction sector across all sectors of particularly East Coast of Australia. Despite strong order books across East Coast of Australia, there was a supply issue for a period of time. What that meant was it had a flow on effect to the demand of aggregates, sand, and cementitious materials. Having said that, the more important factor that we experienced from the middle of the year onwards was the onset of broader inflationary pressures, and in particular, a surge in fuel and power prices, which impacted on us and the sector more broadly. If I turn now to the FY 2022 results, what I'm going to do is actually hand over to Peter Barker. Thank you, Peter. Great. Thanks very much, Mark. We're on Slide 12. Before I begin, let me just thank the Adbri finance team for an amazing heavy lift on this, many of them who are listening now. I'll do my best to work through this promptly, so they can all get back to work. If we look at FY 2022 high headlines, as Mark has said, revenue increased to AUD 1.7 billion, which is up 8.4% on the prior year, mainly driven by price increases and some sales volumes across the range. However, EBIT was lower. If you look at our underlying NPAT, it's AUD 77.7 million. This indicates it's down year-on-year, indicating cost inflation outstripping the benefits of price increases and sales volume increases, hence the margin compression. Underlying return on funds was down 9.5%, which, s orry, at least with that, was 9.5% down on 2021. This is due to the ongoing investment in CapEx, primarily associated with the Kwinana upgrade, and Mark will talk to that a little later. Finally, as Mark, again, as Mark said earlier, our interim dividend was AUD 0.05 per share, and considering the capital required for the completion of the Kwinana project upgrade project and current market upgrade project, the Board declined to pay as declared a final length in the administrator's no dividend. Moving now on to Slide 13, the underlying profit drivers. Now, this is a waterfall from our underlying EBIT on the left-hand side for 2021 of, excluding property of AUD 170.7 through to our underlying EBIT on the right-hand side for 2022. Now, we've endeavored to provide as much information as possible here so that individual investors can plug the various components into their model as they deem fit. Now, the key points I'd like to bring to everybody's attention is that when we're talking underlying, Mark and I are generally talking to the guidance which was underlying excluding property. It's what's actually going on in the business. Now, if you look at the bars, the key points I'd like to draw out, the EBIT impact of volume was a mild positive. The real traction of, the real headline number I would like to talk about here is the price traction that we were able to generate, generating a nearly AUD 89 million good guy, if you will, across the business. The next six bars to the right are showing you the cash costs in terms of the price inflation and cost inflation that Mark referred to earlier. Depreciation and amortization associated with incremental CapEx, obviously that's non-cash, but nonetheless, that reflects the increased investment in CapEx. That takes, and then, a JV contribution and a slight increase in corporate costs. Remembering the corporate for admin is the vast bulk of the accounting team, the vast bulk of the HR team. That's just the way the business recognizes this. A modest salary increase obviously drives that number there. Moving forward then onto the half-on-half trend. As you can see, we have had margin compression in the second half of FY 2022, and this is clearly one of the key focus areas for the management team. Now the costs are both volume, so controlling the costs in absolute terms, and then obviously price inflation, managing price inflation. Again, Mark's to talk to that in future parts of the presentation. With that, Mark, I'll pass that back to you for the next five slides. Thank you. Thanks, Peter. I think what we're gonna also try and do is go through the rest of the slides pretty quickly, so we've got as much time as possible for Q&A. Thank you very much, Peter. In terms of, you know, cementitious materials, just a couple of probably high points here, so I'm not actually reading word for word. What was pleasing really is that mining continues to drive demand in South Australia, Northern Territory, and Western Australia. Across the markets, we saw strong demand, which is really positive. You know, wet weather did have an impact in New South Wales, but it's not the same level of scale for cement and lime as it is for the CAM division. This is where it's about product mix, but the average selling price for our GP or General Purpose Cement increased by 9%, excluding our arrangement with ICL. You can see that revenue's up by 8%. As I say, that's a product mix by the time you include external sales of products such as clinker and slag and other related cement products. It's not often you see the word surging, but it was a surge in electricity prices together with near record gas prices increased our manufacturing costs across a number of operations. Pleasantly, towards the end of last year, we did extend our cement distribution contract with ICL for 12 months. That's something we'll be in the midst or commencing clearly negotiations on in the course of this year. We'll talk more about it. The Kwinana upgrade project review is largely complete. We started that not long after I joined the business last year. It actually has confirmed the robust project economics, primarily due to strong operational cost savings. Our plan continues to assume that that project will be and the project itself will be commissioned and operational in 2024. What we're also saying is that while the review is largely complete, there are capital cost pressures which we think are likely to push the final budget, which we're still working through, above our most recent cost estimate of AUD 290 million. Just to recap for a moment that while construction does continue, the remaining packages of work still to be awarded are predominantly on-site construction related. These awards that are outstanding are expected to be higher than originally budgeted, will be awarded in the coming weeks. Again, once, for those of you who may not be familiar, once commissioned and operational, the benefits from ceasing cement operations at Munster and operating solely at Kwinana are estimated to deliver higher operating cost savings than was originally projected. Turning to the next slide of lime. The average selling price did increase by 13.6%, while South Australia remained stable from West Australian perspective. Those pricing outcomes were achieved as new contracts were secured and were more reflective of price import or price import parity. Pleasantly, we extended our Alcoa quicklime supply contract. We did actually also see a year-on-year [av] revenue decrease. That reflects the reduction in the historical Alcoa supply volumes, as we say, partly offset by new customers. Disappointingly for us, cost increases due to higher gas prices in Western Australia occurred as a result of us reducing our reliance upon coal, as well as some additional maintenance at Munster Kiln 5. If I can turn on to turn your attention please to concrete and aggregates. The revenue increased 13%. That was driven by a number of factors: strong demand, a number of out-of-cycle price increases, which have continued into this year, and contribution from the Zanows acquisition, which completed in April. In terms of concrete itself, the volumes are comparable for the last year, despite some of the weather events. We did, however, see concrete an increase in our average selling price. We had reduced margins, that was on account of, as Peter put up earlier, raw material price increases primarily. In terms of aggregates, sales volumes were up, that was due to exposure to our projects, to a number of projects in Australia. The aggregate price increases were applied in the second half of the year. However, the working through of some higher volumes of lower grade materials did result in the average selling price remaining stable. The Batesford contribution is particularly called out here for people's benefit. If we can move on to masonry. One thing I probably would comment, 'cause we did flag it earlier, is that we are starting to see the Zanows acquisition contribute to earnings as anticipated. However, it did have a series of, the acquisition assumptions had assumed slightly lower costs around maintenance and other, and a number of other related areas, which I think we now understand more clearly and we're much more comfortable with as we look forward. In terms of masonry, revenue was largely in line, but sales volumes were down. We did have a price increase, as did the market, just more broadly. However, the cost increases, particularly in fuel, products and raw materials, more than offset those price increases. Just a final point, the contracting part of the business continues its strong growth through the year, with revenue increasing significantly or 55% on the prior year. If we turn now to joint ventures, that's historically been a very significant part of our earnings, but revenue on the prior year was up due to the inclusion of B&A Sands and full year earnings contribution was AUD 24 million, down from AUD 33 million. If I break that out into a number of areas, ICL's contribution decreased largely due to increased product cartage and finance costs. Sunstate's contribution decreased materially, and this was actually primarily due to inflationary cost inflationary pressures. As mentioned earlier, Mawsons' contribution decreased quite significantly, driven by higher fuel costs, repairs, maintenance, and wet weather. If I turn now to the income statement and hand back to Peter. Thank you. Thanks very much, Mark. We'll move through the income statement onto the balance sheet on page 21. Just two points to draw out here. Firstly, you'll see a slight increase on receivables and inventories. That reflects the volume. We're quite comfortable with the management of these. It reflects a slight price increase, and you also see a slight rise in payables associated with that. Otherwise, the balance sheet is, the only other point is CapEx slightly. Sorry, property, plant and equipment slightly up, reflecting ongoing CapEx and the Zanows acquisition. Moving through to capital expenditure on page 22. We've talked about that already. That's the numbers flowing through. We do split into stay in business versus developmental CapEx, the light blue versus the dark blue. Moving on to operating cash flow on Slide 23. Operating cash flow generated AUD 166.4 million in the middle of the page, and then you can see the uses of it, both CapEx, and we've talked to where we're investing that. A great outcome from some sort of what we're calling asset recycling, but non-core asset sales, AUD 96.8 million net, so great outcome there. Then obviously the AUD 56.8 million for the Zanows acquisition. Last slide in terms of the finances is 24, which is capital management. Now, firstly, in terms of our debt facilities, which is the top right-hand graph there, you can see we've got plenty of tenor. The first debt line that comes due is AUD 50 million in late 2025. That's quite some time away. You can see the undrawn components there of all of our debt lines. In terms of the top left, which is our leverage ratio, that's not a covenant, but what we're pointing out there is that our current leverage is at the upper end of our preferred range of 1x- 2x. In the bottom left, that is a covenant, and you can see we've got ample headroom in terms of covenants. We are currently sitting just below 15x EBITDA interest cover or 11.5x without property sales included. In a really good position there. With that, Mark, I'll pass it back to you for the outlook. Okay. This next slide, Safeguard Mechanism. It's. I will spend a couple of minutes on this and then very briefly talk about the outlook. I think the first thing we'd like to say here is we do recognize the importance of decarbonizing. Ostensibly as a result, we are supporters of the proposed Safeguard Mechanism reforms. With the view, however, to submissions with the government that we think that there is an opportunity to make those reforms more effective, and we'll come back to that later. Both cement and lime are critical. The production, particularly the domestic production of cement and lime are really important sovereign capabilities. Particularly as they play a very important role to critical minerals for the economy as we transition to a low-carbon future. Cement clearly goes into foundations such as wind turbines, hydro dams, electricity transmission, distribution substations. It's also used as a key component in the mining process for products, particularly underground mines where you're mining products such as copper and nickel, which are essential. Lime's essential is an essential component or input into critical mineral processing, water treatment and production of aluminum products. As a result, we are directly engaged with the government and through the industry on the proposed reforms. We believe that in order to protect sovereign capability and to support the transition to a lower carbon future, we think the reforms should be amended to recognize the following. One, that companies such as Adbri's ability to opt in to an industry average baseline as to a site-specific metric from the 1st of July, 2023. The second point, which is just as important, is a level playing field for domestic manufacturers compared to importers. Importers, potentially under the existing legislation, can avoid the reforms. What we're talking about there is asking for some type of import parity to avoid the offshoring of emissions, let alone before thinking about the sovereign capability implications. I think finally, and just more generally, funding support for the development of alternative emission reduction technologies. I'm sure this will be covered a little bit in Q&A. In terms of priorities and outlook, FY 2023, if we can turn to Slide 27. We put in here, prioritization appointment of a permanent CEO. You'll see that from this morning, that Adbri's appointed myself in the role until October next year. The appointment of a permanent CFO is well progressed. In terms of our leadership team and what we're focused on, we have had to focus on an accelerated transformation program and improving our resilience as a business in the context of fairly difficult macroeconomic circumstances. Those things include improving our operating efficiency, continuing to accelerate our business simplification, focusing on our workforce plan training, but also increasing our level of diversification in our workforce. Acceleration of our strategy of divesting surplus assets such as land to realize value and recycle capital, and implementation of our roadmap. Finally, in terms of our outlook, this is very important. We anticipate a strong demand for our products. And, you know, again, this is reiterating what I've spoken about previously, so I won't comment any more other than to say we do anticipate cost headwinds to persist in 2023. However, we think the strong demand for our products and the benefit of the price increases that have been in place over a more recently and heading back into some parts of 2022 should rebuild resilience and margin. I think with that in mind, I think we're done, and I'll hand over for Q&A. Thank you. If you'd like to ask a question, please press star one on your telephone and wait for your name to be announced. If you'd like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. We ask that you limit your questions to two per person. Your first question comes from Daniel Kang from CLSA. Please go ahead. Good morning, Mark, and Peter. Thanks for the briefing, and congratulations, Mark, on your appointment. My question firstly, just with regards to your outlook statement. You comment there that, I guess that demand and price increases should rebuild margins. I mean, can you provide some sort of color as to what sort of level of margin recovery you're expecting? Yeah, no, great question. The balance is, you know, providing some color, but without. Yeah. Without being too granular. The price increases did occur at different times in 2022. Some were able to catch up with the lag of costs and some weren't. We accelerated those price adjustments towards the back half of the year, and there are a number that were put in place last year that are effective from this year. We are rebuilding margin. I'm not gonna clearly be able to quantify that for you, but directionally, you know, we like the way we're starting the year from a margin. From a resilience perspective, the demand is strong across the products. Probably doesn't add much more to your question, unfortunately, Daniel. Mark, just, I guess, just to clarify that, I mean, historically, EBITDA margins, if we look at Slide 14, were around the, you know, 17%-18% sort of level. I mean, is that the sort of medium-term sort of target that you'd be restoring to? What year did you say? From, when you look at the, look at Slide 14 generally. Slide 14. The product mix is a big factor. You know, as you know, if you go back a number of years, lime, you know, was a much bigger proportion of our revenue, and that hasn't come off. It, you know, product mix has changed a lot. Yeah, I know I can't, I can't guide you, and you're asking the right question. No, no problems. No problems. Yeah, thank you. Thank you. Your next question comes from [Lisa Quinn] from JPMorgan. Please go ahead. Hi. Morning, all. I just had a question on the Kwinana cost, you know, being revised above the AUD 290 million estimate. I guess when should we get an outcome of this review? Can you just talk us through in a bit more detail how the investment case still holds, given, you know, costs are at least a third higher? Yeah. Yeah. Certainly the end of March, that's something that we've agreed to internally, is when we'll have finished and have the certainty we need, we think, to have completed to form a view on what our CapEx estimate is. Then we actually have to make a decision, and I'm not an expert in this area. Is that something that we update the market on or not? I just don't know the answer to that one, Lisa, but certainly the review work will be done, you know, within the next number of weeks. Ostensibly, we have three-plus significant packages of work to close out and complete negotiations with. That's why we just need a little bit more time on that. That's the first thing. That's the timeline. The second one is, you know, how do the economics hold up? What's interesting is there's a capital, capital lift, as you say, from AUD 200 million to AUD 290 million+. The original case was AUD 200 million. What we also see is if you had not done Kwinana and actually said, "Hey, we're just gonna keep operating Munster," as an example, and Kwinana just more generally before the upgrade, there would have been and there will be significant CapEx costs to maintain those plants in the next few years. There's a delta between the capital we're spending now and the future capital we have to apply, should we want to keep Munster open. That's one point. That gap is actually widening, because it's actually really expensive to do greenfield extension projects or brownfield stay in business CapEx. The second thing, however, is we've found that the operating cost benefits from operating a new plant are slightly higher on an annualized basis than what we thought when we prepared the business case. That's why it still retains an attractive NPV, to answer your question. Okay, sure. That's helpful. Thanks. I guess just my second question, just given the high levels of absolute debt, I mean, how should we be thinking about the sustainability of the dividend going forward as we go through this peak CapEx for Kwinana as well? Lisa, Peter here. As we point out on the balance sheet slides, we have, whilst the debt level is above our preferred zone, it is still comfortably within our covenants, and we have facilities, appropriate facilities. Clearly, our Board's an active board, and they'll be reviewing this through the halves ahead. Okay, sure. Thanks. Thank you. Your next question comes from Lee Power from UBS. Please go ahead. Hi, Mark. Hi, Peter. Just kind of following on from Dan's question. Can you give us an idea when you talk to cost headwinds in 2023, the level of cost increase that you expect to come through your business? I take your point about expanding margins, but can you give us an idea of what level of price increase, price realization you actually need to get just to cover those cost headwinds? Let me, if we look at it, when I was, you know, doing this work, I've been doing this work for some time, thinking about, you know, the business and the budgeting process. I can be fairly clear on the answer. I think people have seen a reduction in diesel price, so that's a, that's a positive. The second thing is, you know, the price of coal, which is relevant for some raw material inputs, that Newcastle export or Newcastle port price is. That's the second thing. It does appear that what the federal government's attempted to do in terms of the, a cap on gas pricing, if that's the right probably crude term. It looks like there appears to be some greater stability in gas pricing as you look out, look outwards. They're all much more, i t just feels a lot more stable than even six months ago. Where do we worry a little bit? It's actually probably as we think about, you know, labor availability, labor pricing as in, you know, how that's all sort of working. You still do see worker shortages in different parts of Australia. That's just something that we're working through as are others. That probably involves less topics to be concerned about in terms of not knowing where they're going or direction in which way they're going than some time ago. Okay. Sorry. Based on those comments, are you assuming costs are up, though, based on the labor piece? Well, I think time will tell. Time will tell. We're hoping. You know, we have internal initiatives around efficiency and cost management. Our goal is to continue to reduce variable costs as much as we can. Or controllable costs. That might be a better definition. Okay, thanks. A second one, just on the ICL contract. I think when you announced the rolling of that, you said it was at pricing reflective of current market conditions. Can you elaborate on that? I mean, do we use the 9% GP Cement, price increase as a guide? How do we think about the fact that you're potentially looking at costs increasing and a, and a contract that seems to be locked in for a year? Thank you. Yeah, no, it's a great question. I don't know if we've given a lot of visibility on that contract in the past. Let me, let me say this. One of the things that occurred, the last agreement was for close to a decade, I think. I think the pricing formula was more static. You know, I think what we've tried to introduce for both parties' benefit is some more flexibility and some more reflection of current market pricing. That's actually the, probably the best and only thing I can really say at the moment is, you know. And t hat's why getting the principles around how that's gonna ebb and flow, that was an important consideration, and that's why it took a little bit longer to negotiate it. It's a, it's somewhat of a new principle, and it's more of a win-win basis when you think about it that way, as opposed to saying, "Here's a price. Here's a point in time, and that's the price point for the next 10 years." That just doesn't feel equitable. Okay. Just to clarify, the pricing, is the pricing fixed on a, on a one-year basis, or is there some sort of floating price within the, the existing contract? All contracts have a formula. I'm certainly not gonna say any more than that. I don't think we have in the past. I don't think this is the point for me to deviate from past practices. Thank you. Your next question comes from Peter Steyn from Macquarie. Please go ahead. Hi, Mike and Peter. Thanks very much. Just wanted to extend that the question around energy inputs, particularly just a wee bit. Could you give us a sense of how you're thinking about contract structures? You know, obviously high price is not the right time, but how are you thinking about trying to give yourself better visibility in a relatively uncertain medium to longer term energy outlook? Yeah. Depends which different. Thank you very much, Peter, for the question. If you are in, as a general comment with our contracting methodology in terms of our customers, what we try to do is not take a fixed position for ourselves as a general principle on key inputs like energy costs. We try to variableize that. That's one mitigant. Second thing, back to your point around, let's call it energy consumption, whether it's electricity, gas, coal, or even diesel. That's actually a piece of work that we are reviewing in some parts at the moment about how we think we can do that and how we think we can do it differently or better. But what has happened is in West Australia, the absence of coal and the conversion to gas, we're lucky we can convert to gas, but it's been a shock for many large players in WA. What it's done is it's accelerated our thinking about non-coal, just generally in WA. As it relates to South Australia, yeah, we're reviewing how we think about that at the moment as you do. Yeah. And then just, my second question around, the demand outlook and particularly your thoughts on the resi pipeline, that extending and then the, I suppose the degree of confidence you have that, the pipeline kind of recovers in the second half and that you actually do see that inflection point? You know, how confident are you that resi remains in support of your revenue outlook? Well, I think, for us, your outlook, clearly, we wouldn't, I don't think anyone would wanna give an annual outlook. I think you actually have to break it in your own mind into sub-markets. I think that's all I really would prefer to say. I understand the merits of the question, but that's probably the best answer I can give you, Peter. Thank you. Your next question comes from Keith Chau from MST Marquee. Please go ahead. Good morning, gents. Two explicit questions from me. The first one, a follow-up on the ICL contract. To your point, Mark, historically, it's been a multi-year contract. The last one was for a decade. As I understand it, and has been discussed by prime management before, there was a mechanism in there to recover costs, albeit on a lagged basis for Adbri. I just wanna be really clear that the cost impulse that Adbri had to absorb last year and the lack of price increase to ICL, that will actually be recovered in FY 2023. With the additional cost increases coming through this year, that will also be recovered by Adbri as well. Thank you. Yeah. I think, just tend to understand why it's an important question because it's such a big customer, but also those terms are confidential. I think, as I say, everything that we did last year, particularly towards the end of last year, was the view to making sure that we have less price risk ourselves and can't pass prices on. What we've tried to do is to say to the extent that prices pass on and they are a pass-through, if there's an adjustment upwards or downwards, we would like the customer to work with us on the up and down. I think that probably does give you a directional guide on that question. I guess if you're saying to the market that it's on similar commercial terms, I mean, surely you can confirm that if the terms are indeed similar, you will be getting the same recovery mechanism as you've had in the past. I mean, the risk for investors is that. Yeah. Ultimately, you end up in a situation where that price resets, and then. Yeah. You recover from FY 2023 onwards and not for FY 2022. No, I understand the question. I'll be more precise then. Our ability to recover those price risks for us has improved. Okay. Understood. Thank you. The second question relates to West Australia and the implications of the capital blowout for Kwinana. Obviously, that project is gonna proceed. I just wanna get an understanding of how you contract your volumes to customers, what proportion of those contracts are for multi-year terms, and how the pricing mechanism works. My key concern really stems from the ability for Adbri to negotiate with its customers when, you know, there's quite a heightened need to fill up the plants as that Kwinana investment completes. Yeah. Ultimately, the returns profile is becoming more precarious, you know, without further details. I'm just keen to understand, you know, whether you end up losing negotiating power in the state because of the nature of that investment at Kwinana. Yeah. The plan is that our contracting strategy with customers in WA won't change as we turn Munster off and turn Kwinana on. Because it's about market forces from a customer perspective. Our goal, and I'm working with the team, is to make sure, hey, you know, we've had a capital cost higher than what was originally approved by the Board. We actually need to make the plant more efficient than what was assumed in the business case so that we can operate in cost saving as opposed to thinking about it more on the revenue line. The good thing about that plant, though, is it does actually have capacity. Kwinana does have the potential to increase production. What we have to find is we have to find a market for that increased production. Thank you. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name for it to be announced. We do ask again that you keep your questions to two per person and please keep them succinct. Your next question comes from Simon Thackray from Jefferies. Please go ahead. Thanks, gentlemen. We're gonna dig into Kwinana. We only get two data points a year on the balance sheet, there's gonna be a blowout in CapEx. I don't know if you can guide us to order of magnitude. Are we talking 5%, 10%, 20%? Secondly, as part of that question, the Australian business CapEx has been stepping up every year for reasons we all understand. Maybe you can give us a total CapEx envelope for fiscal 2023, given it's such a critical part for us with Kwinana coming in, and the impact to the balance sheet. That's the first question. Mark, if you will, I'll take on the first part of it and then pass over to you. Simon, in terms of the cost increases that we're anticipating associated with Kwinana material, w ell, if it was, we would've updated the market. I'll just leave it at that. That gives you a fairly good indication of how we are seeing it at the moment. As Mark said, and this is an important qualification, there are a number of packages that are currently being reviewed. Again, as Mark said, we anticipate having, you know, in the coming weeks, being able to complete that process. That's the internal timeline we're working to. In terms of total CapEx, certainly, it's, as you can see on our graphs, it is elevated at the moment. In terms of a total CapEx window, we haven't actually put a projection out there. You know, you're aware of the timeline for Kwinana. You're aware of the total timeline. Our stay in business CapEx is slightly elevated, and that reflects the impacts of the Zanows acquisition. I think you can mathematically compute an indicative range off that if you so chose. Mark, is there anything you wanted to add to that? No, listen, we were hoping that we had enough clarity to close out and give an updated guidance on Kwinana, but we're not, otherwise we would have. We're just a number of weeks away, so, there's nothing more I can say until then, unfortunately. Yeah. Sorry. And stress. I'm just going back to my point about being able to compute, stay in business CapEx. Are you guiding me to that stay in business capital to depreciation? Is that what you're suggesting, like given it 110% or thereabout? Because that would seem intuitively pretty easy to work out from your perspective and to be at least be able to guide that. We can allow some tolerance for development, but what's the stay in business CapEx number? Well, Simon, look, I appreciate the challenge for you. We're just not providing forward-looking CapEx projection. Thank you. Your next question comes from Brook Campbell-Crawford from Barrenjoey. Please go ahead. Yeah, thanks for taking my question. Just a quick one around concrete price increases. I think you talked about some recent increases going through there. Can you just quantify what the price per cube or percentage increase of the most recent increase was and the timing of it? Also some color on how that varied by state. That'd be very good. Thanks. Yeah, I don't think we've historically. It's Mark here. It's a great question, but we've not historically have guided that way, and it's also market sensitive. For us, I can say we had some price adjustments from the 1st of January. We've also had some, again, depending on which market you're in, on the 1st of February. That's all I can say. We don't do percentages, unfortunately. I understand why. Okay. We can't, we're not gonna deviate from best practice. All right. No, that's fair enough. Then I just guess one on strategy. When do you, I guess, expect to provide an update to the market on strategy? Are you sort of going through a thorough review of the whole group and what your strategy is gonna be? If so, when do you plan to provide an update to the market? Yeah. Our strategy remains the same. You know, we've actually got, you know, there's a reference in there that, you know, Peter talks to about asset recycling. You know, so I think we've still got some landholdings that we've got under consideration. Other than that, I don't think that. That's not a change of strategy, that's just execution. In that respect, it's, you know, continues to be a vertically integrated business as usual business strategy. Thank you. Your next question comes from Anderson Chow from Jarden Australia. Please go ahead. Oh, thanks for taking my question. I just have one on sort of probably the industry level. You talk about reviewing your pricing strategy. I mean, are you seeing a changing behavior at an industry level in general? I mean, obviously, our competitor is talking about shifting away from fixed price contract, and what do you think the acceptance by customers is for variable cost contract? I think, and I did note those comments, as you say, you know, by the competition there a little while ago, myself and the press. For us, our learning is that is to try and have the ability to pass through those costs that we can't control. That's actually a, that's a strategy of ours, is actually to try and mitigate the cost where possible, but where we can't, pass them through to the customer. What we're also saying on the flip side is that some of those are sort of fairly obvious, you know, non-controllable costs. If those costs go down, our preference would be to, you know, reduce those. They're not intended to profit off them. We're intended to recover our costs, they would head down as well. In terms of margin, if you can manage those costs the right way, I think you can sort of manage your margin as well. I'll probably leave it at that, I think is probably best. Okay. My second question is, I don't know if you could provide a specific on this, but just in terms of our energy usage for LNG, I think, we have about 11 PJ fixed price contract with Senex that covers South Australia. What's our total LNG gas requirement elsewhere? Just trying to figure out our unhedged or variable floating gas price exposure. Yeah. Senex is as you know, I think you may know, that's not all of our gas exposure. Yeah, we do a combination of other things outside of that. I just don't know the answer, I'm afraid. I'm not sure. We'll have to check if we can follow that one up for you, and if we answer that, we'll answer it more broadly for everyone. I'll leave it at that if I can. Thank you. Your next question comes from Sam Seow from Citi. Please go ahead. Good morning, all. Thanks for taking my question. Just quickly, I wanted to understand that sequential decline in line to 404 from 446 in the first half. I mentioned there wasn't that much weather impact, and seasonality shouldn't have been that big. Maybe just a comment there on the second half and the run rate going into calendar year 2023. Yeah. I think the answer in short is that that's the runoff from a loss in some volumes from Alcoa. I don't think there was a weather impact at all of any type of material nature. 404 is the right number from a run rate perspective in calendar year 2023? I don't think we're guiding forward, but I think what we're just saying as a general comment, is we feel that volume for our products is strong. As a general rule, you could say, well, if you're reducing that ostensibly full run rate in 2022 and your products remain strong, you should be able to extrapolate that one, without guiding accordingly. What we will hope is that in some of the aggregates and concrete area where we did have from time to time last year some weather impact, there was some accelerated demand after that, but we're just hoping for, you know, a much more steady state, on an annualized basis. Thank you. Your next question comes from Peter Wilson from Credit Suisse. Please go ahead. Thank you. Morning. Mark, one of the big strategic initiatives of prior management was a push into the infrastructure segment, which we saw manifest as contract wins. When you've reviewed those contracts, are you comfortable with the, you know, the risks and the margins implied by those contracts? Have there been any missteps? Should we expect any issues there? Do you think it's a segment that Adbri can continue to compete in going forward? It's a good question. We made a structural change to move the leadership of it under the CAM division from where it was, and that was because we felt Peter, that there was growth potential there, and it should sit under. It was getting large enough to be under operations versus sort of supported through corporate development. That's the first thing. That's an indication of the support of the thematic. That's the first thing. The second thing is because it's an area that's growing for us and because we've been able to understand market conditions, you know, we don't, we don't look at future business around price exposure and so our view is contracting going forward, you know, we wouldn't take aggressive fixed positions, that, you know, maybe others have done the last couple of years. For us, as I say, it's a newer sector where we've a smaller market share, so we've got the luxury of learning from others. Okay, good. To follow up on the Kwinana project, the operational savings. The last estimate or the original estimate was AUD 19 million in year one OpEx savings. Yeah. What's your current estimate, if you could quantify it, and where have these additional operating savings materialized from? Yeah. There's, there are a couple things. One is, there is a component of a delay, once operational, where the Fremantle Port Authority is taking longer. Our, conveyor system, as opposed to a short distance trucking, that's gonna be delayed a little bit, not through anything that we can control, but through the sort of Fremantle Port Authority approval process, but it's still going to happen. What we've said is that that AUD 19 million, the verification work we've done, has us a couple million dollars above that number. We're not talking about doubling that number, but we're talking about, an improvement upon it that is probably non-material, otherwise we would have guided, but it is, reviewed and updated and above the AUD 19 million. Thank you. Unfortunately, that does conclude our time for questions today. I'll now hand back to Mark for any closing remarks. Well, I'd just like to thank everyone. I think we had sort of 40+ people, dialing in, so I really, really appreciate your interest. For Peter Barker and myself, it's our first presentation, so I'm hoping that, you know, sort of, you know, hope that may have come across a little bit in some ways, but we really appreciate everyone's time. We appreciate the effort of our team to put it together and, you know, we look forward to catching up again. Thank you for your support. That does conclude our conference for today. Thank you for participating. You may now disconnect.