Thank you for standing by, welcome to the AGL Energy 2023 half-year results briefing conference call. All participants will be in listen-only mode. There will be a presentation followed by a question-and-answer session. I would now like to hand over the conference to Managing Director and Chief Executive Officer, Mr. Damien Nicks. Please go ahead. Good morning, everyone. Damien Nicks speaking. Thank you for joining us for the webcast of AGL's first half result for the financial year 2023. I'd like to begin by acknowledging the traditional custodians of this land of where I'm presenting from today and pay my respects to their elders past, present, and emerging. I'd also like to acknowledge the traditional owners of the various lands from which you are all joining from and any people of Aboriginal and Torres Strait Islander origin on the webcast. Today, I'm joined by Gary Brown, Chief Financial Officer. Before we commence, I'd like to say that I'm truly honored to have been appointed as the Managing Director and CEO of this incredible organization, which has a vast history spanning over 185 years. This is certainly an exciting time to lead AGL as we strive to deliver upon our refreshed strategy and accelerate the decarbonization of our customer and generation portfolios, supported by a highly experienced board and management team now in place. I'd also like to congratulate Gary on his confirmation as CFO. Today's results reflect a challenged first half performance, driven by the impact of plant outages during unprecedented energy market conditions in July, when our resulting short position was exposed to high pool prices together with prolonged outage of Loy Yang Unit 2, which was caused by a generator rotor defect. Earnings were also impacted by the closure of Liddell Unit 3 in April 2022, reducing generation volumes, as we indicated in our FY 2023 financial guidance update in late September. The first half also saw another disruptive period for the energy markets through the implementation of domestic commodity price caps and a Mandatory Gas Code of Conduct for gas producers. I'll speak to the impact for energy markets and our business later in the presentation. Overall, our half-year underlying profit after tax was AUD 87 million, down 55% on the prior year. An interim ordinary dividend of AUD 0.08 per share has been declared, unfranked, with the DRP reinstated. Despite a challenged start to the half in terms of fleet performance, I'm pleased to say we've had much stronger performance across the portfolio for the remainder of the period. I'll speak to the measures that have been undertaken to improve our thermal fleet reliability, setting us up for a stronger second half and beyond. We've also seen positive updates and momentum across the business. Customer Markets recorded strong organic growth across both energy and telecommunications amidst a period of heightened market volatility, up by 61,000 customers, with our strategic NPS reaching a new record high of +12. Additionally, decentralized assets under orchestration grew to 199 MW. In late September, we also announced a refreshed strategy and one of the most significant decarbonization initiatives in Australia. The accelerated closure of Loy Yang A, together with our ambition to supply up to 12 GW of new generation and firming capacity by the end of 2035, will reshape AGL's generation portfolio and represents a major step forward in Australia's decarbonization journey, ultimately connecting our customers to a sustainable future. Pleasingly, our inaugural climate transition action plan was endorsed by shareholders at the 2022 Annual General Meeting in November. Good progress was also made in advancing our 3.2-GW development pipeline and the transformation of our thermal sites to low-carbon industrial energy hubs. Both the Torrens Island and Broken Hill batteries are on track to commence operations mid-2023, and I'm pleased to say that the Liddell battery will be backed by ARENA, with funding negotiations underway for the first 250 MW phase. A feasibility study is also well underway with Idemitsu for the Muswellbrook Pumped Hydro Project. In terms of guidance and outlook, we have narrowed FY 2023 financial guidance, and I'll discuss this further at the end of the presentation. Although forward wholesale electricity pricing has lowered from historically high levels over the past six months, these prices remain elevated compared to FY 2020 and FY 2021 levels, which we expect to see reflected in strong earnings growth for FY 2024. Moving now to safety and customer metrics, which both remain very strong. Our total injury frequency rate continues to trend lower, reflecting a disciplined and sustained focus on safety culture and performance over three years in a row. As mentioned before, we achieved a record strategic NPS score of +12, an excellent result given the sheer volatility in Australian energy retailing of recent months. Turning now to a more detailed discussion on Customer Markets performance, which was underscored by strong growth and improved customer experience. Total services to customers increased 61,000 to 4.3 million, delivered through both energy and telecommunications services growth. Pleasingly, disciplined margin management and scaling of growth business areas delivered an AUD 11 million improvement to gross margin. Looking forward, we will continue to responsibly grow our customer base while prudently managing margin. We also delivered improved retention with our churn spread improving to almost 6 percentage points, an excellent result reflecting both our improved service quality as well as heightened market activity as selected retailers withdrew or lowered discounting to regulated pricing. AGL continues to have the least consumer electricity complaints of any Tier 1 retailer. Ombudsman complaints have also reduced by 15%. Encouragingly, net operating costs per service have continued to trend lower. Driven by digitization, reduction in net bad debt expense, and labor savings. We do expect an increase in the second half, driven by net bad debt seasonality, as well as higher technology spend and growth investment as we scale our energy solutions businesses to drive distributed energy under orchestration. Significant progress has also been made in Customer Markets key priority areas. We continue to have the highest brand awareness in energy and now have over 50% of customers interacting solely through digital channels. Pleasingly, Consumer EBIT per service also continues to grow, increasing 9% compared to the first half of FY 2022. Good momentum is also being achieved in accessing future value pools. Customer Markets green revenue now accounts for over 20% of total revenue, and our virtual power plant has grown 44% to 199 MW of decentralized assets under orchestration, underpinned by the NEO platform. Strong commercial behind-the-meter revenue growth has been recorded, as well as significant increase in commercial solar assets under monitoring and management. We're also excited to have secured new strategic partnerships, which will make the transition to electric vehicles simpler and easier for our customers. Finally, our partnership with OVO Energy Australia and Kaluza continues to grow, with over 40% of customers now migrated to the Kaluza platform, a strong increase on the 30% migrated at the end of the period. Moving now to fleet performance and operations. Commercial availability of the coal fleet was weighed down by a particularly challenging period in July, with high levels of forced outages at Liddell and Loy Yang Unit 2 coinciding with a planned outage at Bayswater. On a positive note, we've completed testing to lower minimum generation levels at both Loy Yang A and Bayswater. We are now able to ramp down Bayswater Unit 4 to 200 MW and are awaiting AEMO's approval for the remaining units. Additional work is underway to further lower these to between 130 MW and 150 MW. The ability to flex our coal-fired plant is increasingly important as new renewable generation enters the system. Volatility captured through trading was also lower. Whilst we saw significant market disruption with severe weather events driving forced outages in the NEM, the trading team was able to manage this using a combination of financial and firming assets, particular the Kiewa Hydroelectric Scheme in Victoria, which provided greater flexibility during this period. Lower generation volumes overall were primarily driven by the closure of Liddell Unit 3 and the unplanned outages, marginally offset by stronger renewable generation volumes, which are 13% higher than the prior corresponding period. Despite a challenged start to the half, we've seen a strong uptick in availability from November, illustrated by the dark blue line. Overall, whilst we had lower unplanned outages compared to the second half of FY 2022, the confluence of the Liddell and the prolonged Loy Yang Unit 2 outages, combined with the planned outage of Bayswater Unit 4, as well as summer readiness activities, resulted in an overall outage factor higher than we were targeting. Looking forward, we have less days of planned unit outages in the second half, giving us a higher availability base to work from and reduce the overall impact of any unplanned outages that may arise. We will also continue to run Liddell at its sweet spot to manage operations and reduce derates and outages through to its end of its life in April. This slide shows the key areas we've been focusing on to improve thermal fleet availability and reliability as we responsibly transition to a low-carbon portfolio. Our main priority is minimizing equipment failures that may result in future unplanned outages and derates. This includes additional preventative maintenance on mills, precipitators, and chemical cleans of boilers to reduce known failure modes such as tube leaks. We are also bolstering preventative maintenance through stronger inventory management to ensure that, where appropriate, critical spares are held on-site or accessed with a reasonable timeframe. Repairing Loy Yang A Unit Two spare rotor and stator is an example that provide a shorter return to service time if such an incident were to reoccur. As mentioned, sizable CapEx investments have also been made to increase the reliability and efficiency of our fleet with upgrades to the turbine and generators of the Bayswater units, as well as further investment in digital control systems, which enable us to flex each Bayswater unit by nearly 500 MW. A quick update on our decarbonization pathway, growth pipeline, and energy hubs. The planned closure of Liddell Power Station is on track for April 2023 and will be the first key milestone of our accelerated decarbonization pathway, reducing AGL's annual greenhouse gas emissions by approximately 8 million tons per annum. Importantly, by closing and transitioning the Liddell Power Station and site to a clean energy hub, we are undertaking one of the largest decarbonization initiatives in Australia in 2023. We look forward to both expected commencement of operations of both the Torrens Island and Broken Hill batteries in mid-2023. Numerous feasibility studies are also underway to bring strong opportunities to commercialization, and we're progressing initiatives to rationalize our upstream and midstream gas portfolios. Now a quick recap and update on our strategy before I hand over to Gary. I'm very proud to say that AGL is leading Australia's energy transition, backed by a bold and accelerated plan to connect our customers to a sustainable future and transition our energy portfolio. We'll drive this transition by ensuring a strong foundation across our business, placing ESG at the forefront of everything we do, continuing to inspire and empower our dedicated workforce, and importantly, leveraging technology, digitization, and artificial intelligence to enhance customer experience, as well as strengthen our trading, operation, and risk management capabilities. Our focus on both leading and emerging technologies will underpin the future energy relationship with customers, unlocking the value of electrification and decentralized energy. We have a defined strategy to deliver an accelerated low carbon future. This slide, which you may be familiar with from our announcement in late September, provides a good summary of the key targets along our 12-year decarbonization roadmap. We will deliver this strategy while maintaining a relentless focus on our valued customer base, and importantly, work closely with our people to explore opportunities for career transition as we progress towards a low carbon energy portfolio. Our ongoing priority is to strengthen and drive value from our core business, providing a strong platform for growth in the medium to longer term to realize opportunities through the energy transition, which you can see on the right-hand side. As mentioned, one of our core priorities will focus on how we help customers decarbonize the way they live, work, and move. We'll drive electrification through propositions we offer and propel growth in e-mobility, starting with in-home charging. We'll continue to accelerate growth in decentralized assets, helping our customers electrify and decarbonize, and positioning AGL as leading in energy solutions. Our market-leading position in commercial solar is evidence of the strong progress achieved in this area. Our retail transformation program, which Jo spoke to at our full year result in August, not only simplifies our core, but extends to new energy technology, which will enhance capability to remotely manage distributed energy resources in a flexible and digital-led way. This slide provides a good summary on how we're tracking today in terms of delivering our strategy as well as our near-term focus areas. I've already spoken to many of these points for our customer portfolio, including our desire to accelerate decentralized assets under orchestration, drive growth in e-mobility, and expand our commercial and industrial energy solutions portfolio. Our energy portfolio will focus on progressing the feasibility studies mentioned on the bottom left-hand side, accelerating the development of the Liddell battery, importantly, advancing and accelerating our project pipeline to meet our 5- GW target of renewable generation and firming in place by the end of 2030. Importantly, we look forward to sharing details on our business strategies at an investor day targeted for mid-2023. I'll now hand you over to Gary to take you through the financial result in more detail. Thank you, Damien, and good morning, everyone. It's my pleasure to address you in my first result as Chief Financial Officer. This slide shows an overall summary of our financial result, which I'll cover in more detail on the following slides. Let me first take you through our group underlying profit in more detail. The stronger Customer Markets performance was largely driven by growth in our commercial and industrial business, a reduction in net bad debt expense, as well as labor savings and efficiencies being realized through ongoing digitization. Turning now to Integrated Energy, where there were some material movements. As indicated previously, July was a particularly challenging month for AGL, with the confluence of planned and forced outages across our coal-fired fleet, resulting in a short generation position. Compounding this short position, AGL experienced significantly higher pool prices, which were driven by heightened winter energy demand, as well as elevated fuel input costs due to the spike in global commodity prices. The AUD 73 million movement primarily related to lost generation earnings caused by the prolonged Loy Yang Unit 2 outage, as well as the closure of Liddell Unit 3 in April 2022. This was partially offset by the positive impact as higher forward electricity prices started to reset through our customer book, hedging and trading gains, as well as stronger hydro generation. Higher global commodity pricing has also increased both the revenue and costs for our gas portfolio. Pleasingly, however, AGL's competitively priced gas portfolio, coupled with prudent trading performance, drove the strong margin contribution you can see in the trading and operations gas bar. Please note that AGL's gas portfolio is well-positioned to meet customer demand, having taken appropriate measures to support future supply, including a short extension of our Camden gas field and the filling of Newcastle Gas Storage Facility to cover upcoming winter demand. Finally, the higher depreciation and amortization charges primarily related to the accelerated closure of the Bayswater and Loy Yang A power stations, whilst lower income tax paid reflected the reduction in earnings. Let's take a quick look at the reconciliation between underlying profit and statutory profit, which we've included due to three material movements. Items on the left were largely driven by external and market factors, whereas those on the right represent structural or operational decisions made by AGL. Starting from the left, the onerous contracts gain was driven by an increase in the price of large-scale generation certificates, partly offset by lower forward electricity pricing in relation to AGL's long-term renewable power purchase agreements, as well as an updated discount rates used to value the liability. The negative movement in the fair value of financial instruments primarily reflects the impact of a drop in forward prices for electricity on a net bought position. Noting that we had an increase in this number in the prior period when forward prices were much higher. Finally, the impairment charges relating to the carrying value of our generation fleet cash generating unit. This is a result of our accelerated decarbonization plan and decision to bring forward the targeted closure of AGL's thermal generation assets by the end of FY 2035, as we announced in September 2022. In August, we did indicate a step-up in forecasted operating costs for FY 2023 to be roughly in line with CPI. Pleasingly, during a period of significant inflationary pressure, operating costs continue to be well-managed across the business, consistent with CPI increases once adjusted for the non-recurring items identified at the full year result. A portion of this increase is a small yet prudent uplift in cybersecurity spend to further bolster protection of our operations and customers. Turning now to cash and debt. Net cash from operating activities of AUD 37 million was 94% lower compared to the first half of FY 2022 due to lower underlying EBITDA and large working capital outflows, particularly payables and margin calls, driven by significant market price movements during the period. The payables cash outflow of AUD 429 million was largely due to the high payable position at the full year, driven by high prices, and then the significant reduction in electricity pool prices across the period and the resultant cash outflows. Notably, the impact of government intervention contributed to a sharp decline in forward electricity prices, resulting in AUD 119 million of variation margin outflows at the end of the half. As you can see, whilst these working capital outflows did result in a reduction in AGL's credit metrics, we forecast this reduction will be temporary as cash conversion rates recover to historical levels in line with the stabilizing wholesale pricing environment and improved generation performance. Encouragingly, Moody's have retained their Baa2 rating and upgraded their outlook to stable. The process to finance maturing debt is also well underway. Now briefly touching on CapEx. As noted last August, growth CapEx for this year will focus on the completion of the Torrens and Broken Hill batteries. You will also note a marginal uptick in thermal sustaining CapEx compared to the forecast we provided last August. This is primarily due to additional spend to strengthen the reliability of our thermal fleet as they transition to closure, which Damien discussed earlier. Before I hand back to Damien, I'd like to take a few moments to discuss how we intend to fund and deliver our future target portfolio. This slide shows the indicative ranges for the primary channels AGL will leverage to deliver its 12- GW ambition, as announced in late September. Damien has already spoken to decentralized assets and orchestration, which is a growth area for AGL and key component of our targeted energy portfolio. Assets developed on AGL's balance sheet will comprise the largest component and will focus on firming assets, building upon AGL's existing development pipeline of grid-scale batteries and pumped hydro projects. These assets will be funded through a mix of operating cash flow, capital recycling via the potential sell-down of developed and operating assets, as well as project and corporate-level funding. Importantly, we have an excellent track record of raising capital for clean energy projects, having raised over AUD 3.5 billion of equity and debt funding into renewable assets since 2008, and are confident in our ability to access a growing pool of global capital dedicated to fund the energy transition. Partnerships will be the second-largest component and includes the 3.5-GW development pipeline via Tilt Renewables. We will partner with renowned renewable asset developers, which will deliver additional capital and expertise and help accelerate our development options. The main focus of partnerships will be in renewables such as wind. The balance is expected to be delivered via offtakes, we intend to leverage the scale and diversity of AGL's customer base to achieve the most favorable supply mix and terms. Importantly, our strategic asset base and extensive renewable development capabilities position us well to generate excess returns from the transition of our generation portfolio. As an integrated player, AGL will seek to maximize investment returns through additional development, management, trading, and ongoing services that typically would not all be available to a pure-play energy company. The returns and range shown are for observable comparative companies and projects and are provided as an indication of the types of returns that we would expect to see. Now handing back to you, Damien. Thanks, Gary. As mentioned, I'd like a moment to discuss the impacts of recent federal government interventions in energy markets. Whilst we do support certain measures, namely the customer bill rebates, as well as the role of a Safeguard Mechanism, we're concerned that the commodity price intervention has created regulatory uncertainty for coal and gas suppliers, undermining their business and investment confidence. I must emphasize that policy certainty and clarity is key to encourage new investment in clean energy generation and supply to ensure the pace of Australia's energy transition. Importantly, our core business fundamentals remain strong despite market interventions. Our robust risk management has ensured retail strength and stability amid significant volatility in Australian energy markets. Additionally, our coal-fired generation portfolio is well supported by a combination of wholly owned and production cost-linked fuel supply, minimizing exposure to rising global commodity prices and the impacts of the commodity price caps. Taking a closer look at market conditions, you can clearly see the reduction in spot and forward pricing from historically high levels, partly driven by the introduction of the commodity price caps, milder weather, and additional plant availability. The shaded area on the right-hand side shows the downward pressure on FY 2024 forward pricing, illustrated by the difference between the dotted and solid lines, which represent FY 2024 forward pricing snapshots taken in September 2022 and January 2023, respectively. Encouragingly, as we've indicated via the data point call-outs on the graph, FY 2024 forward pricing still remains elevated compared to FY 2020 and FY 2021 levels, which we expect to see reflected in strong earnings growth in FY 2024. I'll now conclude by talking to FY 2023 guidance and our outlook. As I mentioned earlier, we've narrowed our underlying earnings guidance range for FY 2023. Our full-year guidance reflects the improved second half as expected, largely driven by an anticipated increase in generation, with improved plant availability and a reduction in outages partly offset by lower forward electricity prices. Customer margin is expected to improve due to growth in customer services. Operating costs are forecast to increase half-on-half due to the seasonal net bad debt expense and inflation. Encouragingly, the outlook beyond FY 2023 remains positive. Wholesale electricity pricing remains elevated compared to the prior periods, with AGL expected to benefit as historical contract positions reset in FY 2024 and FY 2025. Additionally, sustained periods of higher wholesale electricity prices are expected to flow through to resale pricing outcomes, and the Torrens Island and Broken Hill batteries are also anticipated to commence operations in mid-2023. This will be partly offset by lower earnings due to the closure of the remaining three units of the Liddell Power Station. Thank you for your time, and we'll now open to questions. We will now open for questions. In the room, in addition to Damien and Gary, we have our Chief Customer Officer, Jo Egan, and Chief Operating Officer, Markus Brokhof. If you've been watching the webcast and would now like to ask a question, please refresh the page and you'll see a link to register for the conference call. To ask a question, press the star key followed by the number one. Can I please ask you to mute any other devices before asking questions over the conference line? We will take one question at a time, and if time permits, we will circle back for any further questions. The first question comes from Dale Koenders from Barrenjoey. Morning, guys. Thank you very much. There's just a lot going on in the market in terms of government intervention and cost inflation. Just wondering if you could provide some comments as to how you're thinking about what's going on in retail competition at this point in time, the outlook for bad debts and churn? I know we've obviously got the data for the half just passed, but sort of more on a going forward basis. The labor cost pressures when you combine it all together, is cost plus CPI sustainable going forward? Thanks, Dale. Good morning all. I'll take that one. Let me first start. I'll start on net bad debt expense. We're really pleased with the result for the half. It came in lower than the previous half. That sort of represents, you know, some of the strength of the work we're doing around collections and so forth. You know, we anticipated it probably higher than it otherwise would have come through and something we'll continue to watch closely. That's another reason why we continue to support the government customer bill relief. We think that's important in this sort of environment. From an inflationary perspective, we are, like others, seeing inflationary impacts through the organization, but we continue to manage that very strongly. You see, we've put a forecast out there for the full year to manage within, CPI, and we'll continue to do that through sort of digitization of much of what we do, but also continue to drive efficiency through our generation units as well. Dale, anything further? That was my 1 question. Yeah. Thank you. I can jump back in the queue. Thank you. Thanks, Dale. Next up, we've got Anthony Moulder from Jefferies. Managing inflation. Sorry, Anthony, you cut out there. Can you repeat the question? I appreciate you're managing your inflation costs well, or your costs well, and there could be some high bad debts in the second half. Just interested as to what were the key changes to your view on guidance, given that's been lowered at EBITDA as well as NPAT, please. What you've seen is a tightening of the range and narrowing of the range. The rationale behind that is what we saw. Obviously, we run a long position, you know, let's call it 2 TW-3 TW of energy. Because that curve came off around December, January, you're just seeing some of that length we'd ordinarily sell, we're selling that at, obviously, lower prices into the market. That length we have typically relates to, you know, those firming assets and renewable type assets in the marketplace. That's the key driver there. Thank you. Thanks, Anthony. Next question comes from Max Vickerson at Morgans. Good morning. Can I just ask a question about your forecast rates of return on those two types of assets? Just on the renewables, 6% to 8.5%, I have to admit, if that's an ungeared return, sounds a little bit high. Can you just clarify, you know, does that suggest a change in gearing or, you know, is that an actual arm's length wholesale electricity market return, or is there some customer margin potentially captured in that benchmark? Oh, hi, it's Gary Brown here. Look, just to sort of answer that question. We've obviously provided this as sort of some indicative ranges to try and give some clarity to the market. I guess from an AGL perspective, we do see ourselves as being able to extract additional returns from the traditional pure players. You're looking at things like, you know, the ability to be able to participate in things like development and orchestration and those sorts of things. You know, we do see ourselves as again, being able to, I guess, move up in that in terms of the, where the returns are. Again, these are observable returns that we're seeing in the market as well. Excellent. If I can just ask 1 quick follow on then, each. Given the higher returns you see in the firming assets, is there a limit to how quickly you can deploy those? You kind of hinted that that's where you wanna have your on balance sheet assets. How quickly can you deploy those just from a market perspective? You know, how much, how big is the market for storage? Do the returns degrade if you know, pump too much capital in there too quickly? Yeah. Thanks, Max. I think look what you're seeing today, you know, we've obviously got the Torrens Island battery coming on mid this year. That really demonstrates, you know, the strength of our infrastructure and our assets, if you like. We took FID on that battery only 18 months ago. You know, the ability to deploy the right batteries in the right locations and using our infrastructure is incredibly valuable. We obviously got the Torrens Island battery, but also Liddell, we're continuing to work with ARENA on funding in that phase, and we'll continue to drive that as quickly as we can. You can imagine those sites have the capability and capacity for us to go very, very quickly when we see the market there available for us. That will be a big part of what we put on our balance sheet, because we can do it quickly, we can also do it, you know, when the market needs it, and we have the infrastructure and grid connection. Thank you very much. Thanks, Max. Next up, we have Ian Myles from Macquarie. Good morning, guys. Maybe you can give us a little color on how your strategy's changed as a result of the coal caps and the gas caps, and whether that's gonna have an impact on the profitability of those businesses? Morning, Ian. Look, I might even just hand over to Markus as well, just from a, you know, broader hedging and risk management perspective. You know, we are from a coal perspective, you're aware we obviously own all our own coal down in Loy Yang and contract out for the Hunter for Macquarie. We're not part of that cap, if you like. We're well underneath that cap, and that provides us sort of the breadth to manage, you know, risk management and profitability in that space. What you're seeing, however, is obviously, you know, that's having an impact of bringing down the curve. From a gas perspective, and I'll get Markus to talk on where some of those conversations are at the moment, what we've seen since that intervention come in is a lot of those conversations and negotiations have dried up. We're wanting to see them come live again so we can bring more gas into the market and help our C&I customer base. Maybe, Markus, do you just wanna comment on maybe first gas and then back to coal? On the gas side, I think, our book is very much covered until FY 2025, end of FY 2025. We are still in negotiation with one of the large, with a few large producers here in the local market. For sure, there is at the moment a resistance to enter into contract with us, because due to the fact that there's quite some uncertainty about pricing, but particular, I think the tenor of market intervention, and that is applying also for the coal side. At the moment, I would say there's no change in our strategy overall when it comes to contracting our gas and our coal. The big question mark, how long is the governmental intervention taking place? I think there are a lot of discussion. Is it only for one year or will it continue to be? This will somehow influence any strategic decision about a change in our strategy. I know this sounds very un-PC, but could we expect to see the coal-fired plants actually all turn up as a result of this, AUD 125 a ton cap? They'll all be profitable running much harder now than ever before. That's true. Maybe some people which have not done proper risk management are running now much more harder. That's most probably true. I think we will most probably still study the terms and condition very carefully because I think between the lines you can read that there are some obligations that's not a free lunch, the 125, because there are some obligations, that you can be directed and there's a must-run, and we are not happy about this. We will most probably anyhow not participate in this scheme. I think, Ian, just the other thing to call out is, you know, through the work that we've done on this plant over the last number of years, I mean, Macquarie now we're able to turn down to 200 MW from 685, you know, and Loy Yang, you know, well below, you know, that 40% as well. That flexibility is gonna be incredibly important in this market going forward, you know, particularly in the middle of the day. You know, we'll continue to see how far we can drive that down, so we've got the flexibility we need. That's great. Just as a side of that, does that create a CapEx impulse because these machines aren't really originally designed to turn up and down with the thermal heat going through the metals? We've spent, you know, over the last number of years when we've done a number of the upgrades, a lot of that spend has been incurred. I mean, what we're obviously then just trying to manage carefully is any additional ongoing maintenance of the fleet as a result. We're not seeing any of it today, but things such around the mills and so forth, that's where the work takes place. The value in doing that would far exceed some of that cost. I don't know, Markus, do you wanna comment? No, I think that's all. Okay. Okay. That's great. Thanks, guys. Thanks, Ian. Next up, we have Mark Samter from MST Marquee. Yeah. Morning, guys. Just my question's around the balance sheet. This wasn't an enormous amount of talk about it in the presentation. Just keen to get a feel for, first obviously net debt's back up to almost AUD 3 billion, whilst I know the working capital drag will normalize, I'm just keen to, A, get a feel for how much headroom you think you have organically over the next couple of years, also maybe just give us an update on how refinancing's going, your ability to raise debt at the moment. I'm just cognizant that it's a moot document now, if we go back to the- The merger documents, certainly you guys felt that it was gonna be much easier for the businesses to raise debt as separate entities than together. Can you give us a feel for how those conversations are going with lenders? Particularly, can we also get a feel for what you think you have in headroom over the next couple of years for investment? Hi. Firstly, as we've sort of said in the slides, we've sort of talked through the amount of headroom that we had in terms of liquidity at the end of the half, which was about AUD 485 million. As we've talked about, we saw a significant reduction in working capital as a result of the reduction in prices. We're very confident that those cash conversion rates will return to historical levels throughout the second half, particularly as we see more normalization of those working capital levels. In addition to that, you know, we've obviously spoken to having, you know, a strong expectation of a strong 2024 and 2025 as well. I think that'll certainly assist the balance sheet. We've also sort of had a number of discussions with financiers, and we're very confident about our ability to refinance the company and certainly set ourselves up for growth in the future. As we all know, there's a lot of demand for renewable projects to deploy capital into those areas as well. We're very confident going forward. Mark, just to add to that. The other thing I would- Is there much of a change in the... Sorry, Damien, I didn't mean to interrupt you there. Keep going. It's all right, mate. Alex, are you seeing much different in the, obviously rates are rising, but the premiums you're paying for debt? Yeah. Look, I think it depends on which market you tap. I mean, certainly 'cause the risk-free rate's gone up, that obviously has an impact, as you move through. You know, again, you know, we're pretty confident with the ability to be able to source competitively priced debt going forward. Mark, just the other thing I'd say, I think, you know, having a clearly endorsed strategy now going forward, having a board in place, management team in place, you know, the banks now look at, you know, our transition plan and strongly support that transition plan, you know. That's a key part of us getting access to that capital. You know, the whole team's involved in plenty of these discussions with the banks just to talk about this transition plan and our delivery of it. You know, we are, we are confident to be able to deliver on that refinance. Okay. Thanks, Alex. Thanks, Mark. Next up, we have Peter Wilson from Credit Suisse. Thanks. Morning. Damien, I just see in your comment, looking out to 2020, 2024, 2025, that you said the increased earnings from the Torrens Island and Broken Hill batteries will be partly offset by the closure of Liddell. That would imply The word partly would imply that Torrens and Broken Hill is greater than the earnings lost from Liddell. Could you just please unpack that a little bit, what the uplift you're expecting from the batteries is, what the earnings of Liddell is, and also include what your expectation is around the change in operation of Bayswater once you bring Liddell out? Cheers. Thank you. Let me try and unpack that one a little bit. What the intention of that statement is obviously when Liddell comes out of the market, you know, clearly we will have lower generation and lower earnings as a result. It will partly offset it. It won't fully offset it. That was the notion of the words we're trying to use there. Clearly different revenue streams from a battery than there will be from a generation perspective. What we do see is, particularly in the SA market, that battery playing an important role, you know, in those periods of peak demand and so forth. The intention wasn't. I think you might. The way you've read it's probably the other way around. We don't intend that to, you know, obviously offset Liddell. It will provide some additional revenues and margin into the business going forward, and we anticipate that coming on, you know, halfway through the year. Markus? Yeah. Maybe still to keep in mind, the results of Liddell are overstated. If you would continue to run Liddell, there's no reason to believe that this would, the margin or the gross margin, which we are generating, would stay like this because it needed heavy investment. From the, from Bayswater, if you look then after the Liddell closure, what happens in this Bayswater, most probably, Bayswater will then run a bit harder in order to make sure that we have the energy in the portfolio. From an energy point of view, going forward, we are balanced, but, for sure, some capacity is missing overall when Liddell is going out, and this we will. We have secured already because the closure of Liddell is known for the last seven years. We have already secured the capacity in the market via additional contracts, which we have secured via cap contracts and so on. That's under control. Okay, good. Thanks all. Thanks, Pete. Next up, we have Rob Koh from Morgan Stanley. Good morning. Yeah, congratulations to all the team members who've been confirmed in their roles. I guess my first question is just about the slide 18, where you've called out an AUD 82 million increase in gas gross margin in trading and origination. So that's great. I just wanted to get a sense of if that continues for the current half and next year, or should we be looking to include, at the very least, the short-term gas price cap as impacting that number, please? I think there is a few elements to this. On the one hand, we have optimized, and I think I said this to you already in the past, we have helped optimize our haulage and transportation portfolio, have optimized the contracts and renegotiation and so on in order to cope also with the pressure on the gas portfolio, because you are well aware that our legacy contracts over time are running out, and we had to successively fill the gas portfolio with shorter-term contracts. There was some pressure on, and we have managed to get some costs out of this. On the other hand, for sure, with a rise in gas prices, we were able to increase the profitability of our overall gas book. That most probably will then have also some spillover effects in the second semester. Going forward, with the price caps, it will be most probably, and that's something, we will lose some competitive edge, when it goes forward, because everybody could theoretically then secure price at AUD 12 per gigajoule. We believe we have a competitive edge with our portfolio, because at the end of the day, we have quite some flexibility in the portfolio. This will be our USP going forward, our unique selling proposition. I think we are well placed, but for sure, if the price caps will not only stay for 12 and go further on, then it will be a very tough market. Yeah, I see. Thank you, Mr. Brokhof. Hence the comments about the intervention. That's clear. If I can sneak in another question to your Head of Customer, who had a really great half. Maybe just a quick update on number of services per customer. There was a previous target, but that was 1.6, but that was set quite some time ago. Just wondering how we should think about that, please. Thanks, Rob. I'll pass that one straight to Jo. It's been a great, six months for customer. I won't steal any of her thunder. Thanks, Damien, and thanks for the question, Rob. We are incredibly pleased with the result. We've got not only great services growth, but really strong customer experience, which is excellent. Really strong churn reduction continue on customers that have multi-product services. At the end of the year, we updated on that with Energy and Telco, and we're continuing to see that performance go really strongly. Okay, fantastic. Great to hear. Thanks so much. Thanks, Rob. Next up, we have Reinhardt van der Walt from Bank of America. Good morning, folks. Thanks for taking our questions. Excuse me. I just wanna unpack this guidance change a little bit more. Back in September last year, you told us that the extended Loy Yang outage isn't gonna have a material earnings impact. The September guidance probably would have had visibility on the July outage costs. Is this AUD 40 odd million dollar step down in EBITDA, is that predominantly just due to your net long position getting sold in at lower spot prices? Or is there some other incremental change here? Yeah, no, I think, what we made really clear, you know, July was a very challenging month for us because of the outages we had and obviously the incredibly high prices at the time when we were short. The narrowing of the guidance is exactly as you say. You know, we are long energy, let's call it 2 TW-3 TW in that length. You know, when we look to sell into the second half back into the market at lower wholesale prices because of, you know, the forward curves coming off is what's reduced that by, you know, let's call it AUD 20-odd million. There's been no other change from a Loy Yang perspective. We've got our plant running incredibly well at the moment. Availability, you know, the last three or four months has been exactly where we want it. I think hearing from Markus, you know, the last day or so, I think in January we've seen record availability over the January month. Again, we'll continue to drive the reliability of our plant particularly hard, and we have less outages planned in the second half as well, which also helps from a managing availability over that term. Okay. I mean, given that Liddell is gonna come out now in April and you're taking on a bit more load, let's say if you end up with a net short position in an FY 2024, I mean, in theory, would the lower forward prices actually be marginally positive for FY 2024, given that you're gonna have to have some spot purchase costs, but now at a lower level? Yeah, I think that's a story which we tried to convey over the last years. I think the most probably 2023 was the most challenging year. The most of the hedges which we have entered in are rolling off now on the lower price level. That, yeah, you can assume that the prices, the wholesale market prices, which we have seen over the last couple of months and even year, will flow into this. That will contribute very much to a higher hedging revenue going forward. I think that importantly. Yeah. why we're using the words, you know, we see strong revenue growth or earnings growth into 2024, that's the language we're using and quite deliberately. Got it. Thanks a lot. Thanks, Reinhardt. Next up, we have Dan Butcher from CLSA. Yeah. Hi, everyone. Just a quick one, really. Your gas margin was an impressive AUD 4.8 a gigajoule, this period. I'm just wondering whether you can comment- On how sustainable that is given your increase in gas costs likely to come through. Secondly, have you had any pressure with the government about concern they've got that retailers are not bound by the price cap the same way that producers are, and that maybe they'll extend the price cap to you, seeing as you're making some very good money off that gas at the moment? I think most probably you are right. There was this margin is mainly because for sure, gas prices have come up very much, where if you have seen some lengths in the portfolio, we could benefit from this. This is for sure not sustainable because gas prices have come down from record levels. If you look at the AUD 40 per gigajoule price range, which we had, we were coming down now. I think also what is very important, and maybe Jo can, complement me, we are trying still to get more competitive gas in the market, and we will give this back to our C&I customer. But maybe Jo. Thank you, Markus. Yeah, absolutely. We're working very closely, particularly with our large commercial and industrial customers, many of which, you know, rolled off longer-term contracts onto default rates post the announcement of the interventions. Where we can, we're giving rebates to those customers, shorter-term contracts while we wait for some more certainty into supply. We're certainly doing everything we can to support customers, 'cause we know it's incredibly challenging for them with this uncertainty. Just to add to that a little bit, just so, in terms of those rebates that are out there, it's where we buy spot gas in the month in question. If it's the month in question, we've been able to buy some spot gas for that customer who's on a default rate, then we'll give some form of rebate back to them as part of that. Until we can start getting that long-term gas back into the book for those customers, we're having to manage it on that basis. Maybe also coming back to. I- Coming back to your questions, I think the margin is not sustainable, to be honest with you. We are still going forward, that will be a tougher market. You are right, we are not bound by the price cap. At the end of the day, if you want then to secure additional C&I customers or if you want to start another marketing campaign with our customers, at the end of the day, we have to find additional gas. Still we are then falling back to the AUD 12 per gigajoule, depending what is then how the flexibility and how haulage and so on, will be priced in then at a later point of time. I think that, as you're well aware, that's still not clear from a regulatory point of view, how this is all put into the overall pricing scheme. All right. Thanks very much, guys. Thanks, Dan. Next up, we have Gordon Ramsay from RBC. Thank you very much. Markus, a question for you again on the gas book. Did I correctly hear you say earlier in the presentation that the book's now covered up to FY 2025? Yes. Hello? Yes, that's true. You know we are covered. I can just repeat, we are covered. At the moment with our current customer portfolio and our current demand, we are covered until financial year 2025. Thereafter, we have a gap. We are, as I said in the beginning, we have for sure not waiting on the price caps and so on. We have started to negotiate already some long-term contracts going forward. At the moment, the producers are waiting understandable on the detailed terms and condition. We are still confident that we can fill then also the gap which is coming up. We have shown this in the previous financial years. There is a gap then opening up to 20 PJ, 30 PJ that we are confident that we cover this gap then going forward post financial year 2025. Okay, well. Yeah. Sorry, my confusion on this is I'm looking at the slide that you presented last year, which shows your gas book, and when you looked at FY 2025, it looked like 50 PJ were basically uncontracted. I'm just trying to understand whether that 50- PJ gap has now been contracted? We have secured some gas, but you know, also the demand has gone down. That's most probably something where there was- Thanks, Dale. I'll take that one. We're aware that the outcome of the DMO has been pushed back a little bit through to the end of May, I think it is. Ultimately, that's gonna be a decision for the AER. We expect that the methodology will be similar, and certainly when we look at our retail pricing decision, which will be for majority of our customers on market contract increases because of the 24-month rolling average that still needs to flow through. Okay. Has hedging been changed at all or hedging practices to account for potential uncertainty in the DMO? No, I think we are still from a risk management point of view, we are still hedging on a 2.5 years rolling average. Is that? And just- Okay. Just maybe to clarify, Dale, for our portfolio, the DMO really only applies to about 10%-15% of our customers, whereas, the majority are market contract pricing. You know, based on AGL's pricing decisions. Yeah. Based on the basis that we don't see any change in methodology on the DMO, and the way we manage our book there, you know, there's no change to the way we think about hedging. Are we factoring any amortization in this or just standard corporate revolver for investment grade? Look, I think that's something we're still to work through as part of refinancing going forward. I think, again, at a broader level, I think, you know, think of it as a corp revolver for the time being in terms of your models. Yeah. That's fine in the short term. Yeah. Okay. Yep. Yep. Yeah. Okay. Thank you. Yep, okay. That's great. Thanks so much. Thanks, Rob. We've got our last question from Pete Wilson from Credit Suisse. Thank you. I just wanted to ask a question on customer. By the sounds of it, you're pretty happy with the first half result, with the EBIT increase. Just wondering what your expectations are into the second half and effectively for the full year, in light of the guidance for an increase in OpEx in the second half. Do you expect an increase in gross margin in the second half to offset that increase in OpEx? Or are you actually expecting like a net margin decrease in the second half? If you could also, in answering that, maybe explain why our consumer electricity gross margin was pressured in the first half. Yeah, sure, Pete. Yeah, look, we're seeing really strong momentum in the customer business, so I expect a strong second half. I think the signaling around OpEx is due to some investment in our growth businesses. Timing on technology spend in our retail transformation program, and also there's a bit of seasonality on net bad debt. As Damien said, like, you know, we're in a really strong position with our debt portfolio, so we'll continue to focus on that. In terms of electricity, it really just was a timing position on the impact of the retail price change. Margin compression has really stabilized, and we're seeing really good results with less customer switching in the portfolio. I think, Pete, broadly on your question, we expect to see a net margin after expenses being positive in the second half and up on the second half is the way to think about it. Excellent. Thanks for that. Thanks, Pete. As there are no further questions, this concludes our Q&A session. Thank you, everyone. Thank you all. Talk later.