Good morning, everyone, and thank you very much for attending today's OM Holdings investor webinar. My name is Nicola Gazotti, and I am co-founder of Investor Relations Consultancy Corporate Storytime. OM Holdings Limited is a vertically integrated and ESG-focused ferroalloy company, and has this week released a market and operations update for the September 2022 quarter. I am delighted to have OM Holdings Managing Director, Adrian Low, with me again today to run through an up-to-date investor presentation, which will then be followed by a Q&A session. If you have any questions which have not been forwarded in advance of this webinar, please use the Q&A function at the bottom of your screen. Without any further ado, I am pleased to hand over to Adrian, who will present his comprehensive update from OM Holdings corporate headquarters in Singapore. Adrian, over to you. Thanks, Nicola. Thanks for introduction. Thanks, everyone, for joining us today, Friday morning. Hope you can see my screen. Okay. Without further ado, I'm just gonna go straight, you know, into the heart of the update for Q3. You know, to be honest, I think there isn't really much in terms of production. Things have been relatively smooth. On the corporate side, I think you know, shareholders and investors would have seen our announcement that we have completed all CPs on fifteenth of September for acquisition of the remaining 25% shares of the Sarawak plant. You know, I think you know, we look forward to guiding shareholders on completion of the transaction. To date, that is, you know, anticipated to be on or before the thirteenth of December, being 60 days after, you know, the date of CP fulfillment. That's on the acquisition front. I think, you know, we might have some questions on this, but we'll take that later in the Q&A. Besides the acquisition, you know, in Q3, we also repaid $6.5 million to our project finance facility. That's, you know, as per the repayment schedule. In terms of production, you know, we were sort of pleased to share that I think we'll most likely be able to achieve current target of 340,000-360,000 tons of ferroalloys from OM Sarawak in FY22. Again, you know, I think if you were here last quarter, you will notice that the production has been front-loaded, so hasn't actually much, you know, sort of much to go in Q4. The numbers are as you can see on screen, and I think everything is progressing relatively stably. Major maintenance is on track. You know, I'm also pleased to announce that the two furnaces that we have commissioned have passed our performance testing in August this year. You know, right now, I think the only thing we are waiting for would be the two silicon metal furnaces. If everything goes according to plan, from latest information, the first furnace should commission in the first half of December. You know, we're all looking forward to that, and we'll you know guide and update investors and shareholders once that happens. Okay. Just moving on to the full plan. You know, I think most investors will be familiar with our full year 2022 development plan and beyond. I think, for you know, just look at the column 2022, I think we have basically achieved everything we set out to do, at the beginning of this year. I think, in due course, we will update you know, the market with a you know, sort of full year 2023 plan, once we sort out you know, sort of the ramp-up schedule or ramp-up profile, for 2023. At this point in time, I think you know, the focus really is on delivering the silicon metal project. A lot of management's effort has been around you know, achieving the right grade and positioning ourselves well, for metallic silicon. Post that, I think the next growth stage would be the two new manganese alloy furnaces. I think, you know, as I've mentioned in the past, this number one, this is conditional on funding. You know, we when we announce this project, we will also at the same time share how we plan to fund it. The idea is to deliver this, you know, in the next two to three years' time. I think, you know, we'll see quite a lot of synergies, you know, obviously growing manganese alloys. Again, you know, once we complete that project, that expansion project, we will be looking at just under 500,000 tons of manganese alloys per annum, which puts us, you know, on a sort of seaborne trade basis at about 15%-20% of the global market. Okay. I think just like to take the opportunity, you know, especially for investors, shareholders who aren't familiar with the ferroalloys market. I would just like to take the opportunity during the webinar, you know, to briefly walk through what happened in the last quarter. We'll start with ferrosilicon. You know, looking at the price chart, you know, just tells you one thing, and that is that prices have fallen, but stabilized. I think, you know, sort of the macro factors are sort of pretty obvious. You know, global demand has fallen with tightening, the Fed, with what's happening in Europe with power prices, and also what's happening in China with a lot of sort of instability with respect to the, you know, real estate market. Now I think politically as well. It's not surprising, I think that prices have sort of come off, driven obviously by destocking. I think what's telling is that number one, Chinese production, if you just look at the chart, sort of shaded gray area behind, from quarter two to quarter three, Chinese production has fallen by 21%, and that's sort of around the $1,600 ferrosilicon price level. I think you know, we should all note that today RMB is at, you know, it's past, way past 7 RMB to the dollar. You know, I think historically, we've always been looking at you know, 6.5. Even you know, in spite of that sort of massive depreciation currency you know, the US dollar prices actually have stabilized at about $1,500. That tells us something about the level of pain producers are in. I think, you know, we're well in the sort of destocking phase of the commodity cycle for ferrosilicon. Okay. Moving on to the manganese side of things. You know, this year, obviously we have very minimal exposure to manganese ore with Bootu having shut in December 2021. You know, we've basically just been shipping out material that was, you know, being railed to the port in January and February. That's, you know, completely over now. Without exposure to manganese ore, which is the red line you can see on the screen. What we're most concerned with these days is the blue line, which is the price of silicomanganese. I think you know sort of the broad macro factors driving manganese alloys have been very similar to ferrosilicon. It's not so much of a sort of supply side issue moving prices in the last three, months. I think it's more demand side. Prices have come down again, sort of stabilized a bit. What's interesting is that manganese ore prices you know after a brief surge in Q1 of this year briefly touching $8, I think it reached like $8.05 per DMTU, has come down again very rapidly so. You know, it's still doing sort of reestablishing this healthy spread between the price of manganese ore and manganese alloys. I think you know, this sort of goes back to what we said that the price of alloy and ore you know, has to be it's you know, it's almost a law 80%-90% correlated. You know, over time, you know, over sort of longer horizons it pays to be sort of earning this conversion spread between the ores and the alloys. I think, you know, look, on sort of the manganese alloy side, we're also looking at developments in Ukraine because, obviously, Ukraine is home to the world's, you know, single largest manganese alloy smelter. You know, post the Russia-Ukraine war, we'll look to see what the supply looks like. I think at this point in time, you know, needless to say, a lot of producers are destocking as well. While we don't really have a hard number that we can sort of point to, anecdotally, I think a lot of producers in Europe, in India, have either sort of idle furnaces or moved on to produce, you know, other products with healthier margins. On that note, I'm just gonna skip to the takeaway slide that, you know, we always keep repeating, and, you know, leave more time for Q&A. Again, you know, OM Holdings today, I think, is a much simpler story. You know, forget about the trading business. Forget about, you know, the mines exploration. You know, just look at OM Sarawak alone. Look at the volumes. Look at the prices. Sorry, look at the margins and, you know, where we stand sort of relative to the rest of the world, you know. You know, what are some of these key factors? Number one, we run on hydropower. It's a 20-year take-or-pay fixed price agreement. Number two, you know, where we are in this part of the world, Southeast Asia, where a lot of economies are still growing, and steel consumption is still rising. You know, our proximity to our markets and our raw material sources. You know, just the fact that we've been doing ferroalloys, I think,for over 25 years now. Those are sort of our key strengths and, you know, just multiply by volume. I think we do get questions on you know what you know where we are in terms of the price cycle, and I think you know that's well and fine from a day-to-day perspective, but that shouldn't distract us from you know longer term valuations, which is you know what does the 10-year average sort of margin look like for smelting? And you know that's something I hope shareholders can take away. Okay. With that, I'm going to end the presentation and leave time for Q&A. Thank you for that update, Adrian. We'll now move on to the Q&A session for today. Our first question is, would you please provide an update on the continuation of tax ruling limiting taxable object at the Sarawak operations? Right. I think he's probably asking about the tax holiday. Look, the first five years of the tax holiday have ended, and this year, 2022, what we've done is submit our application for the second five years. The second five years function a bit differently from the first five years. You know, 70% of our income will be tax-exempt, and 30% of that will be taxed, you know, at the Malaysian corporate tax rate. I think that gives you an effective rate of about 7%-8% for the next five years. Okay. What is still unclear at this point is when the five years will start, right? I think, you know, if you look at our numbers, we have provided the tax in FY22. you know, there's a chance that authorities will come back and say, "Look, your second five years will start in 2022 and not 2023." That's still dependent, you know, on them. I think we'll provide an update once that's available. Okay. Thanks, Adrian. Our next question. What are the future expansion plans for the company? Right. I think, look, the immediate plans are obviously silicon metal and, you know, post that, we will be looking at delivering the, you know, two larger furnaces at Sarawak. And, you know, beyond that, let's say, you know, call it a five-year horizon, I think beyond that's sort of what we're thinking about, and not necessarily committing ourselves to, would be sort of in three categories. The first category of sort of, you know, growth plans would be, do we like silicon metal? And how do returns look, now that we're in it? Do we want to convert more ferrosilicon furnaces to silicon metal? You know, sort of what the geopolitics are around that commodity because it's so essential for the solar industry, and you know, it's essentially monopolized by China. That's, you know, called category one. You know, category two would be, I think, you know, we get questions now and then on power, and do we have enough power to sort of fund or fuel all the growth projects that we have. The answer is, you know, some years ago, I think we talked about heat recovery. Basically, what that means is that, you know, we've got 16 furnaces with super hot gases leaving the exhaust. I think the technology today is sufficiently mature to take that energy, you know, drive some turbines and generate power. That would be sort of on the green side. How do we sort of recover all of the waste energy that we're generating? That's two. I think you know sort of the third basket of growth would be looking at silicon and looking at manganese and their sort of green and renewable applications, which should we chase and how can we position ourselves in Sarawak to take advantage of that, right? I think from the silicon side, that's sort of going down solar path and then sort of going down that value chain. You know, basically, from silicon metal, you end up with polysilicon, and then that goes all the way down into solar panels. Then, on the other hand, we have manganese, where you can produce either EMN or manganese sulfate, which would then be used in battery cathodes. You know, eventually, sort of that falls into the EV story, which is obviously very popular today. I think you know that would be sort of the third basket. We're obviously in very early days, and you know, to reach a sort of bankable feasibility study. I would say, you know, these are some of the things we'll think about in you know, the next five years. Thanks, Adrian, for that comprehensive answer. Our next question is. What is the company's dividend policy? The short answer to that is we do not have a dividend policy. I think this actually ties into another question that shareholders might ask. Look, we've done quite a bit of engagement with institutional shareholders who've been sort of sitting on the sidelines this year, especially in Malaysia. The overwhelming comment from them has been that, you know, it's well and fine to have, you know, stock that's not necessarily too liquid. It's important to have a clear dividend policy in place. I think that is what we're working on right now. I think historically, if you look at what we've paid out, you know, in, say, the last three-four, years, that number has been between 20%-25% of net profit after tax. That is a starting point that, you know, we would like to formalize, and I think that can be done as early as this year. It's actually now in sort of the drafting stage and, you know, before going to the board. Look, you know, that's something we'll update the market again in due course. It is something we're mindful of, and that's something we're working on. Thanks, Adrian. Our next question: Does the current low trading volume reflect a lack of fund manager engagement by OM Holdings? Taking into consideration the net profit performance, the low volumes does seem strange. What is the company's plan to improve institutional ownership? Yeah. That's a big question. Look, I think what we've been doing. Let's sort of step back a few years. You know, I think we listed on Bursa Malaysia in 2021 because of the institutional interest then. We got ourselves listed in June. We were at some point looking to do a placement to sort of provide that initial liquidity, without which, you know, it's essentially sort of getting shares being moved into Malaysia. Past that, you know, we didn't do the placement obviously because we thought the price was not appropriate. I think we then managed to get ourselves cleared and became Shariah compliant, which then opened up, you know, the investable fund space, where a lot of public funds, public institutions, saw us as attractive. This, you know, this all happened, I think, you know, over the last six months or so. Here we are today in sort of a situation where the interest has been climbing. Obviously the market has been, let's just say, you know, the timing has been wrong. I think what we're trying to do today, sort of going back to what I said earlier about the dividend policy, that's probably the next logical step, is do a lot of organic engagement. You know, bring potential shareholders, you know, institutional investors, analysts on site, onboard more research analysts. You know, I think the fact that a lot of large institutions see us as you know, potentially interesting stock, and the fact that, you know, we're getting more and more analyst coverage is a signal of quality. I think it's absolutely correct to say that, you know, the volumes are not commensurate with the quality of the company. That's something, you know, obviously we're trying to address. You know, two things I would say. Continue the organic engagement. If you follow us on LinkedIn, you will see that that activity has sort of stepped up over the last two months. Get more analyst coverage. You know, Kenanga has recently initiated coverage, so you know, encourage everyone to check that out. I think there will be another analyst releasing research in the coming weeks. You know, again, stay tuned for that. Besides that, I think, you know, we sort of formalize dividend policy and just continue the engagement work. I think there's no, you know, really, sort of silver bullet for this. It's really just pushing on all fronts, and reaching out to people and educating people about the industry. Thanks, Adrian. Our next question is in two parts. It is pleasing to see strong production and sales at OM Sarawak during the September quarter. First part of the question, what grade of silicon metal will be produced once the furnace conversions are complete? And secondly, what is the approximate landed cost at Sarawak for 1 ton of quartz that's used in producing ferrosilicon and silicon? To answer the first question, you know, the entry level grade for silicon metal is 553 grade, so that's 0.5 iron and then aluminum and calcium. I think, you know, we're actually going to start ourselves with raw material that can sort of let's say theoretically reach chemical grade, so 441, 421 and 411, but target 553, so for starters. What that means is, we will be fairly unconstrained in terms of sales strategy, and at the same time, have enough of a sort of ramp up curve, because I do think, as with our experience with ferrosilicon, there will be a sort of acclimatization period and a learning curve before, you know, sort of able to reach those grades. But you know, to begin with end in mind, buy those, you know, high quality raw materials, start off with a lower grade, test out the market and then sort of move on from there. I think the entire process is probably gonna take 6-9 months. You know, by third quarter in 2023 we'll have a good idea of, you know, what the, what sort of the overall picture and overall strategy will look like. Yeah, you know, short answer would be start with 553, hopefully end at 421 and 411 and then, you know, see where we can move from there. The second part of the question. Sorry, Nicola, could you just repeat that again? Okay. Second part of the question was, what is the approximate landed cost at Sarawak for 1 ton of quartz that's used in producing ferrosilicon and silicon metal? Yeah. Look, I think historically that number has been AUD 40-50, you know, probably at the peak of the sort of freight AUD 70 or so. I think that number's gonna, you know, go down. It's definitely going down now, but I think, you know, next year it'll probably go down, go back closer to what it was historically. Okay. Our next question. The September quarterly update reports that the plant design capacity of silicon metal is 21,000-24,500 tons per annum, which is 50% of the ferrosilicon comparable furnace production. Do you expect the silicon metal profit per ton to be double that of ferrosilicon? And does the extra profit justify the capital cost as well as the one year of downtime for the conversions? Yeah, that's a great question. So, backtesting the silicon metal prices at the 553 grade, you know, at the time we decided to do this, the answers are overwhelmingly yes. So sort of simulating the costs, you know, from, I think, must be 2015 to 2020, or something like that. The short answer is that yes, the additional margin fully compensates us for the reduction in productivity. What is interesting about silicon metal is it gives you a lot more optionality in terms of where you place the material, whether that's in the U.S., in Europe, or, you know, in parts of Asia at certain, you know, moments of crisis. The volatility of the price of silicon metal is a lot higher than ferrosilicon. So again, that creates a lot more opportunity for us as well. Yes, you know, it does justify you know, the shutdown time. You know, just like to add that, you know, if you look at the full sort of maintenance and conversion project timeframe, it's not actually a year of the furnaces being shut, right? It's actually only a couple of months of the furnaces that are going to be converted, being shut. The lead time, I think the bulk of the lead time is really getting these parts fabricated and delivered from China into Sarawak. Okay. Our next question, given the global geopolitical instability and potential recessionary impact to the global economy, how do you envisage the company be impacted with respect to growth and profitability in the near and medium term? Do you believe that currently low prices for ferroalloys are already reflecting these economic risks? Okay. That's a great question. I think the short answer is yes. I think it's priced in. You know, the first thing that sort of springs to mind is, you know, I've always looked at the sort of plot of sort of the scatter plot of manganese ore versus manganese alloys. You know, given that it's sort of 80%-90% correlated, you know, the R-squared is pretty high. You can sort of track where you are relative to history. We are actually, you know, sort of it's actually priced below where it should be historically. I think that's interesting. That tells you that the market is oversupplied and the price is, you know, clearing that oversupply. That's why prices are, you know, between AUD 1,000-AUD 1,100. That's why the prices of ferrosilicon are between AUD 1,500-AUD 1,600. Although, you know, I think in the last few weeks we have seen signs of potential signs of rebound, although I think it's too early to call that. I think it's fully priced in. I think sort of going back to the first part of the question on sort of where the global macro economy is heading, look, I think it's heading down, right? There's no questions about that. I think if you look at the prices of ferrosilicon and manganese alloys, they're not always driven by the same things. During Q3, I think they were both on sort of crawling, and obviously in 2021, both driven by supply rising. Back earlier in history, there were periods when, you know, in end of 2017 when, you know, essentially doubled, whereas manganese alloys didn't really move much. What that tells us is that this is driven by their own supply and demand dynamics. I think probably faster than the decline in steel production and customs policy. All of this, you know, next, will depend on how quickly producers restock. If, you know, steel production hasn't sort of, you know, overcorrected, because at the end of the day, you know, steel is still needed for basically everything we do. That will change at some point in time. I think we have seen, you know, the history in the last two years has proven to us that a lot of times purchases in steel mills sort of overshoot the forecast more often than not. You know, look, I think we'll look to see what the catalyst will be for the next recovery. I think, you know, we're not overly concerned with the downturn at this point. Okay. Adrian, for today is, in the company's view, what are the major risk factors for the business in calendar year 2023? That's a big one. What are the major risks for the company in calendar year 2023? Look, I think the focus today is really on the three products. You know, ferrosilicon is fairly mature. Manganese alloys will be just earning the conversion spread. You know, silicon metals are sort of a new product for us. I think let's address them one by one. You know, I would say for ferrosilicon, the greatest risk factor for us today is a complete about turn in Chinese policy, meaning sort of abandoning the sort of new growth policies and, you know, returning to sort of industrialization phase, you know, say, so China in the last 15 years kind of stage. I think the risk of that is not high, is low. I don't think, you know, given what's, you know, happened recently in China's Congress, they're not really about to sort of reverse course of economic policy. Obviously, what that means is, you know, sort of China dropping its export tax on ferrosilicon. So that's on the ferrosilicon side. On the manganese alloys side, I think risks are fairly low. I think, you know, there are opportunities and then the nature of the supply is such that it's fairly self-correcting and then tends to correct itself fairly quickly in, you know, sort of three to six months time, as opposed to China. I think, there aren't really risks on that front. Lastly, silicon metal, obviously, the risk would be more around production and then not achieving the grades that we set out to achieve. Finally, obviously, I think, you know, on labor side, that's a question that we get now and then, so might as well address it. The issue with labor from China to Malaysia, I think that risk has gone down a lot, right, in the last 18 months with a lot of programs and initiatives that we've been doing. I think we sort of compressed the requirement for sort of skilled foreign labor to just a couple of positions, you know, say, superintendent, deputy superintendent, some of the metallurgists, you know, per furnace. I think that risk has gone down a lot, but obviously it's still there. In a hard scenario where, say, you know, China stops issuing passports, that would then be an issue. But I think, yeah, besides that, yeah, everything seems to be okay at this point. You know, those would be sort of the four risk factors, or three, you know, if we remove manganese alloys. Well, thank you all for participating in today's webinar. That appears to cover the majority of questions from our audience. If you do have any further questions for Adrian, please feel free to email them to us at info@corporatestorytime.com. We will make a recording of this webinar available via OM Holdings and Corporate Storytime social media accounts in the coming days. That concludes our webinar for today. Once again, thanks to everyone for attending. Thank you, Nicola. Thanks, everyone, for dialing in.