My name is Nicola Gosatti, and I'm co-founder of Investor Relations Consultancy Corporate Storytime. OM Holdings is a vertically integrated, low-cost manganese ore and ferroalloys producer, and I'm delighted to have OM Holdings Managing Director, Adrian Low, with me again today to run through an investor presentation following the release of OM's June 2023 quarterly production and market update. The presentation will be then followed by a Q&A session. If you would like to submit a question during the 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. Adrian, over to you. Thanks, Nicola. Good morning, everyone. Thanks for dialing in again to our quarterly webinar. I think everything has been very quiet since the last time we spoke, I think three months ago. I'm just gonna dive into the details and, you know, answer any burning questions you might have. Okay. I think three months ago, you know, you would have seen the same slide that you're seeing on screen, and, you know, you will notice that we have updated the numbers that you see on the chart. Just at a very high level, I think, you know, given where markets are today, we are in the sort of destocking phase of the commodity cycle, this is true, you know, not just for ferroalloys, but sort of across the board for, for, you know, many, many commodities. This is sort of the aftereffects of what we're experiencing post-COVID stimulus. I think, you know, given this, this sort of environment, really for, for, for most companies, what we can do is control costs, ensure that things are running as smoothly as we can run them. On that note, we've actually, you know, tried to increase production, lower overheads. I think this, this sort of goes back to some of the comments that were made maybe 3 months ago about capacity utilization. You know, we're very pleased to share today that, you know, we have revised those updates. You will see that on the manganese alloy side, that is, you know, substantially higher than... On, on, on the high end, substantially higher than what it used to be, and marginally high on the ferrosilicon side. How, you know, this, this... How we've been able to sort of tweak these production numbers is on the ferrosilicon side, you know, investors and shareholders, what we call that, we have temporarily suspended sorry, silicon metal production at our silicon metal furnaces. We have halted that commissioning process. In turn, as, as I've said, you know, many years ago, these furnaces are dual use, and we have converted them for the temporary production of ferrosilicon. You know, we have started this for the first furnace at the end of June. I think you would have seen that in the announcement, and we will look to convert... Well, not convert, but produce ferrosilicon at the second silicon metal furnace as well. With that, you know, I think we're looking at overall, you know, full year figure between 120,000 to 140,000 for ferrosilicon. That will bring output sort of heavier in the second half of this year. For the manganese alloy furnaces, I think, you know, when we introduced production guidance, the first time this year, we always said that, you know, what we put out was a base case capacity utilization of about 75%, more or less the same as what we did last year. What we've done for the manganese alloy furnaces is try to ramp them up quickly as soon as workers become available, and so that's exactly what you see in the guidance figures here. You know, I think the sort of top 3 key highlights for the last quarter would be these changes, first of all, on the ferrosilicon front, on the manganese alloy front. Certainly, I think we have now looked through, you know, sort of what went wrong with the silicon metal furnace, and looked to, as, as a sort of base case target, you know, look to resume production, silicon metal in early 2024. This will most likely be January, pending any further changes to the sort of restart program. Last of all, we repaid just above $9 million to project lenders, and this was always, you know, given the current sort of high interest rate environment, you know, this was the wise thing to do and was always, sort of part of the plan. That's it at a very high level in terms of production updates. It's not very exciting. Nothing much has happened in the world. I think that's too different from the last 3 months, sorry, from the last update 3 months ago. I will just share on the screen the sort of full year plan, just so you can see it in the context of what happened last year. These numbers have been revised. We have revised the furnace numbers as well as the sort of total output of Sarawak. You know, on a combined basis, we're looking at between 340,000-400,000 tons for this year. That's, that's, you know, a meaningful bump up from last year. You know, the future plan remains the same. We are looking to commission the Titan silicon furnaces next year, with that, you know, we'll sort of complete the first three roads, hopefully have all 16 furnaces up and running next year. This year, most likely, we'll achieve, say, 15 furnaces, 15/16, towards the end of the year, you know, hence fulfill what we said three months ago, which was that once workers became available, we would try to ramp up production to, to approach full capacity utilization. I'm just gonna spend the next two slides, talking briefly about markets, because I think, you know, investors and shareholders, will notice that we have been publishing, sort of weekly market numbers, and I think it's important to, you know, when you see those numbers falling, I think it's sort of important to sort of frame everything, in, in, in the right context. I think, you know, if you look at the chart on screen, here we're talking about ferrosilicon prices. You will notice the blue line has been, you know, continuously falling since around Q1. This is matched by a continuous decline in Chinese ferrosilicon production as well. That's, again, that's the gray shaded area, behind. I think, you know, it's, it's, it's not really surprising given the macro environment, but for the first, you know, couple months of 2023 and, and, and definitely in the, sort of, last quarter of 2022, ferrosilicon prices have sort of flatlined between $1,600 to $1,700 for the longest time. And I think that was due to two reasons: one, the macro environment wasn't as bad, and two, I think costs remaining relatively elevated, especially when you look at the price of coal coke, reductions. Two things have changed. Well, both of these things have changed since then. I think the market demand, especially in China, has taken a turn for worse, and the price of these raw materials have been falling. obviously, on, on a return basis, you know, although sort of ferrosilicon prices have been falling continuously for better part of this year, I think costs have come down as well. I think the steep stocking cycle, you know, if you look at the gray area, will just. You know, you'll have to let it run its course. I think something that's interesting to note is that in Asia, besides China, you know, Russia is often cited as the second largest exporter, and I think in their case, some of the local producers have switched the production of ferrosilicon to other ferroalloys. I think they have switched, you know, into the chrome, manganese, and other alloys that might be better consumed domestically in Russia. You know, that will have an effect eventually, at some point, on the net volumes being brought into the market. That's it on the ferrosilicon front. I'm just gonna talk through manganese very quickly. You know, I think if you look at just, you know, ignore what's happened in the past, but just look at 2023, the story has been largely similar to what sort of played out in ferrosilicon. In this case, the main exporters of manganese alloys have been Indian producers. They have completely stepped up their volumes and replaced all the volume that, you know, the world has lost through Ukraine. I think, again, it's, it's similar in the sense that, number one, we're facing just very, very challenging macro environments, and, and in the case of, in the case of, manganese alloys, it's, it's, you know, it's not China, because, they can't really export manganese alloys, but rather sort of global demand and especially, demand in Europe. It's also similar to ferrosilicon in the sense that costs have been coming down, and in this case, that would be the cost. Sorry, that would be the price of manganese ore. You can see that, that red line has been trending down, you know, rather sharply as well, this year. You know, again, the sort of brief spike in January, February 2023 was due to, you know, sort of, accidents and disruptions to global miners, to sort of, the largest miners of manganese ore. Since then, you know, lacking any fundamentals, prices have trended down. Again, you know, I think for manganese ore and ferrosilicon, these are very sort of China-driven commodities, unlike manganese alloy, which is a pure sort of, you know, ex-China market. You know, I hope that has given you a sense of what's happened in the last 3 months. You know, fortunately, I think it's been more or less quiet. I would just like to, you know, end this webinar with a short note on, on sort of the long-term growth prospects of the company. Again, you know, I think, a lot of people we chat with and talk to, are sort of warming up to the idea that, you know, ferroalloys is, is not a sort of 6-month outlook market. You know, the market cycles can last between 2 years, all the way, if you look at 2016, and, and sort of that credit cycle, can last between 2 to 6 years. You know, it's, it's really about sort of staying your course, and planning, with the long-term view in mind. On that note, you know, I will again remind investors and shareholders that why we're doing what we're doing is marrying our know-how of the ferroalloy markets with renewable, sustainable hydropower out of Sarawak. I think this is sort of core thesis that will not change. I think it has demonstrated that, sort of, stood the test of time. I think, you know, the sort of benefits from sustainable hydropower will only increase here on out. You know, there are a lot of plans, sort of, for the next 2 to 5 years, including, sort of the final, expansion project, as well as, you know, projects around, what we're gonna do with our carbon footprint, heat recycling, and that sort of things. You know, we look forward to presenting that to investors and shareholders, at the appropriate time. I'm just gonna stop sharing my screen, and, we can take questions, at this point. Thank you, Adrian, for that update. We have received quite a number of questions, so we'll jump straight into it. Our first question is: Which furnaces are the most profitable at the current alloy prices? Is it ferrosilicon furnaces at $1,330 per tonne, or manganese alloys at $880 per tonne? Please answer in terms-... profit per furnace, not profit per ton? Right. Okay. Sorry, I, you know, lost you there for, for a split second, but I think I get it just as a question. Just, you know, before I answer the question, you know, I think it's, it's, it's very interesting to note, you know, we are at the end of July, and the prices that have just been read, you know, sort of if, if you contrast that with the prices at the end of June, things have really sort of slid considerably in just the span of 20 days. I think, you know, I really do think we are quite a fair bit into the destocking cycle, and hence you see sort of prices moving very, very erratically at this stage. To answer the question, I think at this point in time, if we were to look at the prices of manganese ore that have just been released last week for forward delivery, and if you look at the prices of reductant, coal coke, semi-coke, that sort of stuff, on that sort of replacement cost basis, you know, I think ferrosilicon would be the winner at this point in time, and not just on a per furnace per day basis, but also on a per ton basis. You know, manganese alloy has sort of fallen behind the ferrosilicon curve, and I think, you know, this is part of the reason why we have increased ferrosilicon production as well, although, you know, we do expect both to sort of trend down. On a sort of forward-looking basis, I think, you know, what's, what's happened now is very interesting because for manganese alloys, if you look at the last, you know, six years, I think we are now approaching a point in time where the oil price and the alloy price has become a bit dislocated. We are low, even by historical standards. I think, you know, what this is reflecting is, just this very ferocious destocking of inventory, both by producers, notably India, and also by consumers. And, we are seeing a lot of customers, especially for manganese alloys, booking orders. You know, historically, they would've booked a month, 2 months, before shipment date. Today, we're seeing people book alloys for, you know, shipment within 2 weeks. And so that just reflects, you know, where the inventory has moved, and sort of who's financing the inventory, although the net tons, you know, in the cycle, and the entire system sort of, remains unchanged. Thank you, Adrian. That leads us into our next question. If OM management consider that silicon metal will be the most profitable per furnace, will the company build more silicon metal furnaces rather than manganese alloy furnaces? Will OM Holdings' access to low-cost power give OM Sarawak a strategic advantage as a silicon metal producer? I think the answer is yes to the second question. You know, for silicon metal and ferrosilicon, we have done this sort of cost-benefit analysis and sort of the earning spread between the products historically, and I think I've been asked this at this webinar as well, and you know, I think the answer at the time, which still remains the case, is that looking back historically, back testing those numbers, silicon metal does better. The interesting thing is, both of these are produced out of China, but ferrosilicon has a 25% export tax, and silicon metal does not. You know, even without that export tax, you know, silicon metal is, is, is a better performer, and, and I think that's reflecting the power cost that we have at Sarawak. Going back to the first question, why don't we produce... Sorry, why don't we build more silicon metal furnaces? The answer is that silicon metal is a much more power-intensive product to smelt. It makes more sense to smelt them in smaller furnaces. What we're trying to achieve with the two new furnaces is lower sort of manpower dependency, sort of more efficient output, and that means larger furnaces. It's, it's easier to smelt manganese alloys in sort of 33 MVA furnace. These are, you know, at this point in time now, sort of par for the course, for a lot of larger Chinese smelters, although it's not the case in other parts of the world. What would make more sense, and what the company is considering at this point, is to build the 2 new furnaces for manganese alloys, and see how silicon metal performs, not, not the market, mind you, but how the furnaces perform next year. With that information, we will then be able to decide, should we increase the amount of silicon metal we're gonna produce in the final mix, and if so, it would make more sense to convert existing furnaces, 25.5 MVA furnaces, to produce silicon metal instead of building, building new ones. It's, it's sort of an indirect answer, but I, I, you know, hope that that's sort of given you a sense of why we're not building silicon metal furnaces. Okay. Thank you, Adrian. Our next question: How will each segment of your company's business and earnings unfold over the next few quarters, given the changing global environment for your company's products, rising interest rates, sanctions impact, competition, et cetera? Wow, okay. That's a, that's, that's a big question. I, I've just, you know, picked out a, a couple of keywords. Look, I'll, I'll try to answer, as comprehensively as possible. On, on the sanctions front, I think, you know, unfortunately, nothing much has really changed. You know, the world's still buying products from Russia, especially if you're not a sanctioned company, there's no reason why, anyone, can't buy product, that you're offering. I think in terms of ferrosilicon, we have seen, some marginal reduction in demand, for Russian origin products. You know, I think this doesn't really translate into, sort of price changes, on, on, on a net basis, because, there will be people willing to buy that, you know, it's, it's really just a game of musical chairs. On, you know, sort of the macro environment front, I think it's, it's, it's sort of what I've been saying earlier about, you know, where we are in, sort of the macro cycle and as well as the commodity cycle. On the macro front, I think, you know, with high interest rates, demand's not really there. Obviously, geopolitical events in Europe have prevented sort of demand from coming back as well. You know, the longer this goes on, the more suppressed demand will eventually sort of make its presence felt. That brings us to the commodity cycle. What's happening in the commodity cycle is, you know, in spite of that reduction, sorry, notwithstanding that reduction in just global demand, I think the oversupply situation remains severe, especially in manganese alloys. This is a very sort of classic situation where, you know, everyone wants to be the last man standing, because at some point, prices will recover, things will rebound, and you don't want to have stock reduction just before that happens. I think it's just a very, very sort of classic game theory, kind of, well, prisoner's dilemma kind of situation, where everyone's incentives are not aligned, but rather sort of encouraging the production of more and more ferroalloys. Well, ironically, you will also notice that, we have, you know, revised our production guidance upwards this year. So that's sort of playing into the same dynamic. I think, you know, that's, that's why it's very important to highlight, sort of our key strengths, in terms of the power price and sort of, you know, having the sustainable power, from Sarawak Energy. Thank you, Adrian. Our next question is in two parts: What are the expected costs of the silicon metal furnace rectification, and is there any potential claim for damages or compensation against advisors? Are you confident that the technical issues will be resolved to facilitate nameplate production levels from the furnaces in calendar year 2024? Right. We don't have a figure, in terms of, you know, total cost at this point in time. Will there be damages claimed? Will there be some kind of claim? Yes, there will be. You know, there will be some kind of claim for rectification, and that's, that's, you know, the split of that, is what's being discussed and negotiated. Is it major? It's not sizable, in the scheme of things, is what I can share at this point. You know, in terms of achieving the capacity for silicon metal next year, I think, if the first furnace progresses smoothly in Q1, we'll, we will look to commission the second furnace three months after. That will bring us, you know, close to, but not, not actually in reach, the four years nameplate capacity next year. Definitely on a runway basis, we will at least achieve that, hopefully by middle of next year. Thank you, Adrian. Our next question: Are you able to provide guidance regarding movements in inventory, receivables, and payables to provide the audience a feel for profitability for the first half of calendar year 2023? You know, unfortunately, we are not in a position to provide that information at this point. You know, do note that our first half financials will be available in, you know, just around a month's time. Stay tuned, and, you know, we'll talk through that and answer any questions investors might have at that time. Thanks, Adrian. Our next question: For how long will the major maintenance programs referred to in the presentation take furnace production offline? I think a lot of the work has been done. You will notice that, that's actually part of the reason why we were able to increase second half guidance. I think there are a few furnaces where we have delayed major maintenance. You know, I think they should be wrapped up by the end of the year, if not early next year. These are, you know, we're talking about furnace weeks, and that's not really sizable in the scheme of things. Yeah, I would say, as far as Sarawak's output is concerned, major maintenance isn't really a factor at this point. Okay, Adrian, our final question for today: Apart from dividends, does the company consider other capital management strategies, such as share buybacks or prioritizing debt reduction? Yeah, look, that's a great question. I think, it's always a tough thing to balance between debt, debt repayments and, you know, doing things on the equity front. Look, if we had cash, and debt wasn't a pressing issue, i.e., you know, if we had lower levels of debt, interest, interest rates weren't so high, it would be a great time to sort of do buybacks and because that would give you sort of the biggest bang for your buck. Unfortunately, I think it's, it's just a situation where, you know, we're balancing things on multiple fronts. One on, on, on the project finance side, because, you know, just, just to give you a sense of, of, you know, what the factors are. One, there's, there's a repayment schedule, that has been agreed upon. Two, you know, interest rates are high. Three, we are doing a lot of things, with the eventual sort of refinancing, in mind, either at the end of this year, if not early next year, to sort of unlock, the, the remaining value from, from, what's being constrained from project finance. These are some of the constraints that, that the company has. Absent all these things, then, then yes, I think, it would, it would make a lot of sense, to do something, on, on equity side. You know, in, in sort of future scenario where we have completed, you know, all these growth projects, it, it, it would then make sense at that point in time to consider what we're doing with the cash being generated, should that be distributed in terms of dividends, or should we actually be reducing the shares issues. You know, I think those, those are all things that we're thinking about. It, it just, you know, isn't the best time to actually do it at this point. Thank you, Adrian. That does appear to cover the majority of the questions from our audience today. If you do have any further questions, please feel free to forward them to 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. This concludes our webinar, and thanks to everyone for attending. Thank you to the OM Holdings team and Adrian for the update. Thanks, Adrian. Thank you. Thanks, everyone.