Good day, thank you for standing by. Welcome to Orica 2023 half year results conference call. At this time, all participants are in the listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the call over to your first speaker today, Ms. Delphine Cassidy. Thank you. Please go ahead. Good morning, everyone, thank you for joining us today. Sorry for the slight delay. Just a couple of technical issues, we're here. Welcome to Orica's 2023 half year results presentation. In the room with me today, we have Sanjeev Gandhi, our Managing Director and CEO, and Kim Kerr, our CFO. Both Sanjeev and Kim will be presenting shortly. We also have Angus Melbourne, our Chief Technology Officer, in the room, given that we are presenting for the first time our new Digital Solutions segment. We'll have plenty of time for questions after the presentation, feel free to queue up, we'll get to those questions in a timely manner. Before we get into the presentation, can I just ask you to have a quick read of the disclaimer on slide two. Thank you. Over to you, Sanjeev. Thank you, Delphine. Welcome all. Let's start with our number 1 priority, which is safety. I'm very pleased to report we've achieved our key safety and environmental targets for the half, including serious injury case rate, loss of containment, and potable water intensity. The investigations into the two tragic fatalities we reported last year have been completed, and subsequent actions and learnings have been implemented across our global operations. We continue to prioritize and are making good progress on our sustainability and climate change goals, and our ambition to achieve net zero emissions by 2050. During the half, we achieved some very key milestones in our tangible emissions reductions projects. Most notably, at Kooragang Island, we successfully commissioned tertiary catalyst abatement technology for the nitric acid plant one, with the nitric acid plants two and three being commissioned by the end of this year. This project is designed to eliminate at least 500,000 tons of CO2 equivalents per year from the site's operations and 11% of Australia's total chemical industry process emissions. It is very, very material. The tertiary catalyst abatement technology being installed at the facility is an Australian first and is expected to reduce the site's total emissions by 48%. The Safeguard reforms which were passed in the Australian Parliament in March this year have brought renewed policy confidence and investment certainty for Orica on our decarbonization plans. We have now completed the final investment decision to deploy similar tertiary catalyst abatement technology at the Yarwun manufacturing facility in Gladstone, Queensland. We are planning to do this at the next suitable maintenance shutdown. On our approach to people and community. Orica is privileged to work in many communities across the world. Following formal endorsement from Reconciliation Australia, we are proud to launch our first Reflect Reconciliation Action Plan in Australia. Our RAP is a formal statement of Orica's commitment to reconciliation and the development of inclusive and sustainable relationships with the Aboriginal and Torres Strait Islander peoples and communities in which we work. We consider this as only the beginning of our reconciliation journey with First Nations peoples. We continue to work collaboratively with our customers and the communities in which we operate to protect cultural heritage in Australia and also around the world. At Orica, our people are our number one asset. Retaining our talent and diverse workforce and attracting new talent remains a priority. We continue to implement employee engagement activities to support greater learning and development, increase recognition of performance, enhance diversity, equity, and inclusion, and provide flexibility and clarity of roles for our people all around the world. Turning now to the financial results for the first half of 2023. As we continue to successfully execute the strategy we launched 18 months ago, I'm very pleased with another set of strong results that the team has delivered despite the continued volatility in the external environment and extreme weather conditions in some parts of the world. The 32% increase in underlying earnings reflect the embedded commercial discipline across our business and the focus on quality of earnings. As highlighted in the 2022 full year results, our regional teams worked hard to bring forward recontracting in the second half of last financial year. The benefits of this have flowed through into these first half results and will continue to flow through in future. Our return on net assets have improved from 11.4% in the 2022 financial year to 12.4% at the half, which is well within our target range of 10.5%-13%. This was driven by our improved earnings performance as a result of executing our strategy, strong customer demand Improve plant utilization and increase earnings from our technology suite. We also successfully refinanced our US private placement notes during the period. Kim will talk about more about this in the financial performance update. Our gearing remains below the target range of 30%-40% at 26%. Our prudent balance sheet positions as well to manage the volatile external environment, supporting further business growth and delivering improved shareholder returns. The board has declared an interim unfranked dividend of AUD 0.18 per ordinary share within the target payout ratio at 50%. Turning now to the regional performance on slide six. I'm pleased to report that all regions have delivered improved performance versus the prior corresponding period, resulting from continued commercial discipline, strong customer demand, higher utilization of our manufacturing assets, and increased adoption of our technology offerings. Beginning with Australia, Pacific, and Asia. Strong market conditions for the region continue. Commodity prices remain high and mining activity remains robust, even with the impact of sustained wet weather in parts of Australia. Demand for coal and copper has been strong. Mining activity has been mixed in Australia. Gold activity continued to increase while copper softened slightly as volumes were impacted severely by wet weather. We expect this to partly recover in the second half as the weather improves and commodity prices and demand remain strong. Across the region, thermal coal activity increased due to the high coal prices and energy demand, particularly in Australia, Indonesia, and India. In our Australian business, volumes increased due to higher customer demand despite the sustained wet weather on the East Coast. Asia continues to grow with strength, particularly in Indonesia. Commercial discipline has improved earnings as well as average contract tenures. We are making very good progress on our strategy for growth in India and China, which has been aided by the reopening of China and infrastructure investments in India. A notable milestone during the half was the production of the first Electronic Blasting Systems for alpha trials in China. Turning to North America. While the market fundamentals for most commodities in the region remain strong, activity in the U.S. and Canada was impacted by extreme winter weather during the half, together with a hurricane in Eastern Canada in late December. The weather severely constrained logistics networks across the U.S. and Canada, and continues to do so today. Despite these external challenges, the North American region delivered a resilient earnings performance driven by the ramp-up of new contracts within the metals and future-facing commodity segment, which increased ammonium nitrate and EBS volumes. Some of this growth was offset by higher logistics costs and alternative sourcing requirements during an extended industrial action at a major supplier in Mexico. A highlight for the region has been continued growth in blasting technologies with increased sales in WebGen 200 and strong demand for our Nitrate Risk Reduction explosives offering, which helps support our customers' ESG challenges. For our Latin American region, overall mining activity in the region was stable. Social unrest and flooding in Peru caused logistics interruptions and impacts to some mine operations and again highlights the importance of security of supply to customers in the region. Orica's earnings improved versus the first half of last year, driven by commercial discipline, improved product mix, and new technology penetration. Our teams continue to leverage Orica's global manufacturing and supply network to ensure supply continuity to customers, particularly during the unrest in Peru. Blasting technology adoption and demand for premium products continues to grow within Latin America. There have been increased trials and commercial adoption of WebGen 200 and a migration of customers to premium Fortis bulk explosive systems. Our global manufacturing optimization plans continue in the region, including commissioning increased EBS manufacturing capacity in the region. Turning now to the EMEA region. Robust commodity prices supported strong gold and copper mining activity across Africa. The mining market remains stable in Europe. However, the weak economic outlook in Western Europe continued to impact quarry and construction activity. The team has continued to execute the segment recovery strategy after the exit of our Russia business last year. Progress to date has been very positive, with growth in Africa improving our earnings, as well as increasing our exposure to gold, copper, and other future-facing commodities. We also continue to leverage our global supply chain strength and ability to source ammonium nitrate, which benefited earnings in the half. Our supply chain flexibility will help the region manage the risks associated with the recent volatility in ammonia caused by European gas price reductions, which are lowering the production cost of ammonia. I will now turn to slide seven. As flagged previously, following the completion of the Axis acquisition in October and the continuing growth in our existing digital technologies and solutions, we are reporting Digital Solutions as a new reporting segment starting from this half. The segment consists of Orebody Intelligence, which includes Axis, Blast Design and Execution, and GroundProbe. As ore bodies are increasingly becoming harder to find and exploit against the background of high commodity prices and as ESG responsibilities and commitments increase globally, demand for software, sensors, and data science is increasing exponentially. The unique value propositions of our Digital Solutions is that it seamlessly connects our customers' physical blasting operations and digital worlds so that they can readily understand and optimize their operations at every step of the value chain, from exploration to processing. The Digital Solutions business has been identified as one of Orica's key growth verticals as we continue to build and invest in the next generation of digital technologies and solutions beyond our blasting core. The improvement in EBIT from AUD 11 million in the first half of 2022 to AUD 27 million this half was driven by 30% growth in adoptions and introductions of new technology solutions, high rates of customer retention, and greater stickiness of contracts, as well as the acquisition of Axis. 65% of the segment revenue is from recurring contracts across a range of diverse geographies and commodities. This supports the resilience of earnings. Integration of the recently acquired Axis business is progressing to plan, with Orica's ownership opening up new international markets for the business, both in North America and in Brazil. Benefits from new contract wins with major drillers are expected to flow from the second half of 2023 onwards. Integration costs will, however, continue to impact the business in the second half of this financial year. Turning now to slide eight. Orica's unmatched global manufacturing and supply network remains one of our key competitive advantages. We have made significant progress on simplifying our operations and optimizing our manufacturing centers, which is increasing the utilization of our plants, improving flexibility in the network to manage the volatile external environment, and above all, maintaining continuity of our supply to our customers at the highest quality. Essential to Orica's ongoing success is the maintenance of our existing assets. I'm very pleased to report we safely completed turnarounds at three of our continuous manufacturing plants during the half: Kooragang Island and Yarwun on Australia's East Coast and Bontang in Indonesia. In addition, we continue to make incremental investments to optimize our global network. This includes advancing the decarbonization of our plants, standardizing the manufacture of AN prill products in our network, which provides flexibility in our supply options, continuing to execute on our discrete manufacturing plans to expand capacity, and optimizing our global supply chain, including upgrading our Lurin and Gomia plants. In March, a safe and controlled shutdown at the Burrup ammonium nitrate plant was executed following an operational incident at an ancillary facility at the site which supplies utilities to the ammonium nitrate plant. Work has commenced on replacing the impacted facility, and at this point of time, there is no impact on customer supply. This is just another example of Orica's strong and flexible global supply network. As well as managing Burrup supply, our supply teams are working hard to manage the current AN price volatility in the global market. To support this, we have created a centralized AN sourcing hub and strategy which allows us to improve the operational and financial performance of global AN sourcing by centralizing governance and commercial arrangements for designated global AN suppliers. It also enables us to optimize our global freight position, resulting in a more resilient and strengthened global ammonium nitrate position for Orica and increased security of supply for our customers at optimized costs. I will now hand over to Kim to give you an update on the financial results for the half. Thanks, Sanjeev. I will move to the key financial metrics shown on slide 10. The strength of last year's performance has continued into the first half of the 2023 financial year. Our commitment to executing Orica's strategy is evident in the financial result you see here today. We are seeing increased customer demand for premium products across the portfolio. We have accomplished structural improvements in our contracts, and we continue to provide security of supply to our customers in a constrained market. The outcomes of our actions can be seen through the improved key financial measures shown on this slide. For the first half of the 2023 financial year, sales revenue from continuing operations of AUD 4 billion was up 31% on the prior corresponding period. Underlying EBITDA from continuing operations of AUD 505 million was up 24%. Underlying EBIT of AUD 323 million increased by 32%, which I will outline in more detail on the following slide. Underlying NPAT of AUD 164 million is 27% above the prior corresponding period. Statutory net profit after tax of AUD 123 million includes the impact of the previously announced significant items of AUD 41 million after tax, relating to the release of the foreign currency translation reserve associated with the sale of the Türkiye business and an accrued earn-out relating to the acquisition of the Axis business. Net operating cash flow of AUD 2 million reflects higher earnings being offset by cash outflows that include borrowing costs and income taxes and increased inventory to support business growth and to ensure reliability and security of supply for our customers. Cash generated from operating activities has increased on the prior corresponding period. We remain focused on driving improvement as we move forward. Our earnings per share before individually significant items was AUD 0.36 this period. We have identified an error in the earnings per share for the prior corresponding period reported on this slide and in our accounts. It should state AUD 0.316 per share, not AUD 0.361 per share. On the corrected number, we have increased our earnings per share this period by AUD 0.044 per share on the prior corresponding period. Turning to the EBIT bridge on Slide 11. Underlying EBIT of AUD 323 million increased by AUD 78 million or 32% against the prior corresponding period. The impact of the movement in the Australian dollar on the translation of our foreign currency denominated earnings has had a positive impact of AUD 12 million in the first half of 2023. Improved volumes had a positive impact on EBIT of AUD 35 million. Ammonium nitrate volumes were slightly higher due to increased mining activity driven by strong commodity prices and Orica's continuing ability to provide security of supply to customers in a tight supply market. Sales volumes of our premium Electronic Blasting Systems increased 6% on the prior corresponding period as new customer contracts ramped up and customers continued to shift away from conventional detonators. The impact of the loss of volumes from our Russia operations is included in the Russia bar. The EBIT benefit in manufacturing was AUD 10 million. Increased volumes at our continuous plants in Australia and Indonesia contributed to this improvement, as well as the non-repeating costs in the comparative period of the alternate sourcing of ammonium nitrate during the Carseland plant turnarounds in North America. The largest contribution to our improved earnings performance was mix and margin, which contributed AUD 37 million to the EBIT increase. Customers have continued to shift to our premium products. We have achieved increased penetration with our blasting technology offerings, and structural improvements in our contracts are ensuring that we are deriving appropriate returns for the premium products and services Orica provides. Digital Solutions, our new reporting segment, contributed an additional EBIT benefit of AUD 16 million compared to the prior corresponding period. Growth and adoption of digital technologies, the introduction of new solutions, and contribution from the newly acquired Axis Mining Technology business grew earnings in the Digital Solutions segment. Global support costs have increased AUD 9 million compared to the prior period, primarily due to inflation and increased employment costs, as well as a provision against a specific doubtful debtor. The final two bars of the EBIT bridge represent two operating businesses that were divested in 2022, being our operations in Russia and the sale of the Minova business, which therefore made no contributions to the 2023 financial year. The net result is that the EBIT for the half of AUD 323 million was an increase of 32% on the prior corresponding period. Turning now to Slide 12, trade working capital. Trade working capital has increased from September 2022. We are holding higher inventory, which is supporting the growth of our business and is ensuring reliability and security of supply, which remains important to all our customers. Ammonia price changes, such as the drop we have seen recently, take time to flow through to inventory valuations due to long lead times in some locations. We expect the value of inventory to reduce by the end of 2023 should the current lower ammonia prices persist. Pleasingly, our efficiency ratios demonstrate the effectiveness of our management of trade working capital. Our teams have achieved a further reduction in days inventory held, meaning on average we are moving inventory faster. Our days payables outstanding ratio has reduced, however. This is due to commercial decisions which have led to a change in vendor mix with shorter payment terms in order to secure supply in the tight market conditions. We will continue our focus on optimizing trade working capital, including ensuring appropriate inventory volume is maintained that is fit for operating conditions. Turning to capital and investing expenditure on Slide 13. We prioritize capital allocation for safety, environmental, and asset maintenance, followed by growth capital reprioritized by return. Total capital expenditure for the first half was AUD 154 million. We expect the full year spend to be within our guided range of AUD 400 million-AUD 420 million. During the first half, we invested AUD 89 million in sustenance capital expenditure. This reflects spend on major plant turnarounds at Bontang and Kooragang Island, as well as on customer-facing assets. We remain committed to decarbonization and supporting sustainability initiatives. In the first half, we invested a further AUD 13 million on sustainability projects, predominantly relating to the tertiary catalyst abatement technology being installed at our Kooragang Island plant, as well as a prill tower scrubber at Kooragang Island to reduce particulate emissions. We invested AUD 52 million in growth capital expenditure to support customer growth opportunities, particularly in Australia and Africa, to further develop our digital technologies and to continue work optimizing our discrete manufacturing network. We also completed the Axis acquisition in October 2022 for an upfront cash consideration of AUD 256 million. I will now talk to Slide 14, balance sheet and liquidity. In March 2023, we successfully completed the issuance of $350 million USD equivalent of unsecured notes in the US private placement market. We were delighted to receive strong interest from investors in a key capital market for Orica. The proceeds we used to prepay $350 million of notes originally due to mature in September 2023. This proactive management of our debt further strengthens our balance sheet and extended our drawn debt maturity profile as at 31st of March 2023 to over six years. We have no further refinancing requirements until May 2024. Our net finance costs of $82 million are higher than the prior period and reflect further increases in external interest rates environment. We expect our net finance costs in the second half to be in line with the first half. In relation to our drawn debt, we are currently holding about 60% in fixed rates and about 40% is floating. Our net debt as at March 2023 was AUD 1.4 billion. Noting that the September 2022 balance included the cash proceeds from the equity placement last year that we used to fund the Axis acquisition in this financial year. Our gearing ratio was 26.2% at the end of the period. Gearing remains below our stated range of 30%-40%. We consider this prudent in the current operating environment. In January 2023, S&P Global Ratings completed their annual review of our credit rating, affirming it at BBB stable. Turning now to the dividend slide. Orica's dividend policy is designed to ensure that shareholder returns reflect the company's position and market conditions throughout the cycle. Under this policy, we have consistently paid dividends within our target payout ratio of 40%-70% of underlying earnings. The board has declared an interim ordinary dividend of AUD 0.18 per share, unfranked, for the half year, an increase of AUD 0.05 per share on the prior interim dividend. The dividend payout ratio has increased from 41% in the first half of 2022 to 50% this half. Wrapping up now. Our financial position is prudent and positions Orica well to manage the volatile external environment, to support further business growth and to deliver improved shareholder returns. We will continue to apply our capital management framework to guide our investment decisions, and we remain focused on improving our operating cash generation and optimizing our trade working capital. With that, I'll now hand back to Sanjeev. Thank you, Kim. We launched our refresh strategy 18 months ago, and we remain very strongly focused on execution. Our strategy focuses on driving profitable growth by optimizing our operations, delivering smarter solutions, and partnering for progress across our four business verticals of mining, Quarry and Construction, Digital Solutions, and Mining Chemicals. Turning now to slide 18, which summarizes our performance against our strategic target in this half. We are making good progress across our financial and non-financial targets. Having met all our financial targets, we have been able to deliver improved shareholder returns this half. I'm also very pleased with our improved performance on safety, with zero fatalities during the half, and our serious injury case rate is now tracking below the target of 0.149. However, there's always more to do in this area. We continue to make significant progress towards a simpler, more efficient, and more sustainable organization, which will help deliver future value for our shareholders and broader stakeholders in a resilient manner. Turning now to our full year 2023 and outlook on slide 19. The momentum of Orica's performance in the first half is expected to continue in the second half of the financial year. The seasonality of earnings will be less skewed to the second half compared with FY 2022. The previous expectations of EBIT improvement drivers remain: anticipated growth in global commodities demand, continued commercial discipline, increased adoption of advanced technology offerings, and contributions from the recently acquired Axis Mining Technology business. We continue to remain cautious of external challenges from geopolitics, inflationary pressures, higher energy costs, and supply chain dislocations, and we will continue the ongoing cost efficiency initiatives to reduce the impact of these external pressures. Capital expenditure is expected to be within the AUD 400 million-AUD 420 million range, higher than PCP due to the sustainability and systems projects. Depreciation and amortization are forecast to be in line with PCP. Focus on the balance sheet and cash flow optimization remains, with gearing anticipated to stay below the stated range of 30%-40%. The inventory value is expected to reduce by the end of FY 2023 should the current lower ammonia prices persist. Net finance costs are expected to increase on FY 2022 due to higher interest rates. The second half is anticipated to be in line with the first half of FY2023. The effective tax rate is expected to be at the lower end of the guided range of 30%-32%. Let me now conclude by saying we are deeply committed to the continued execution of our strategy and expect strong business performance to continue as a result. Demand for critical minerals remains strong, driven by the global energy transition. External challenges are expected to persist, and our teams will continue working very hard to mitigate the impact of these on our business. We expect increased customer activity to continue, as well as increased demands for our products and services and our breakthrough technology solutions. We remain committed to accelerating our sustainability agenda and helping our customers achieve their targets while remaining competitive in a lower carbon future and delivering value for our shareholders and our stakeholders. Thank you. With that, we will open up for questions. Thank you. As a reminder to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. One moment for the first question. First question comes from the line of Niraj Shah from Goldman Sachs. Please proceed. Hi, good morning. I have a couple of questions. I'll start with my usual. Just curious to where you're seeing East Coast IPP at the moment and whether, I guess global supply chains for AN into Australia are normalizing at all? Hi, Niraj. It's, it was very difficult to hear the question, I'm assuming you're asking about IPP on the East Coast of Australia. Yeah, that's right. All right. Yeah. Well, look, if I talk overall globally about supply and demand, and then I'll come to the IPP in on the East Coast of Australia. Demand in this half has been impacted, as I've mentioned, by weather, seasonality, disruptions, social unrest and everything else that we have faced. Demand has been slow, seasonally slow, and then you have the weather impacts. Supply on the other side has not really changed. There is no new capacity in the market. There is some consolidation going on, but that's not brought any new additional capacity of nitrogen equivalents into the market. The Russian product is still significantly disrupted and hard to find. It's been a constant challenge sourcing because we source globally. You know, supply demand is still, I would say, in a nicely balanced matter, in a balanced manner. Obviously, the raw material input costs in some parts of the world have come down. This has resulted in the ammonia prices coming down. That's mainly natural gas. We've seen a significant decline. For example, the US gas price is around $2 per million BTU, and that obviously reflects in the cost of manufacturing ammonia. If you look at trying to source product and bringing the product into Australia, and we've tried to do that, due to the Burrup interruptions to supplement supply from our Australian assets, it's quite challenging. It's not easy to get the molecule, and then it's also not very easy to bring it into the destined markets. The last I've seen, and there's obviously a kind of a lag, I have seen IPP still about AUD 1,200 at the port here in Australia, and then you have to add the local distribution cost. I've not seen any other movements in IPP, but obviously there's a few months of lag till we get the latest data. Thanks. That's helpful. My second question was just around Burrup. I was just wondering if you could remind us on when those contracts reset, and if you could give us any color on the profitability of those tons right now. Look, I mean, Burrup has a slate of contracts, and they come up periodically for resetting, and we have reset a few already in the second half of last year and earlier this year. There is one major contract, which was a base load contract for the asset, for roughly 50% of the capacity, and that will come up for renewal end of 2024 with the first impacts in 2025. Great. Thank you. For the question. One moment for the next question. Next question comes from the line of Brook Campbell-Crawford from Barrenjoey. Please go ahead. Yeah, thanks for taking my question. Can you just talk a bit, please, about the contract book in Australia more broadly? How much of it has been reset over the last sort of year and a half, I guess FY22 and first half 2023? You gave some comments on Burrup, broadly across Australia, including the East Coast, how much has been reset over the last three halves? Sure, Brooke. I'm happy to do that. Look, I've always said that on a global basis, we renew around 25%-30% of our contract book every year. I've also said earlier that we wanted to pull forward some of those negotiations because there was concern about supply ability and reliability of supply, and I also had to plan my gas purchases for the future. We've very successfully managed to pull forward significant contract renewals of FY 2023 already into the second half of FY 2022. What's left for this year is minor, so most of the heavy lifting for the year is already completed. Next year, obviously we'll go back to the normal 20%-30% contract renewals over the global book, including in Australia. That's great. Thanks. The impact in the second half from, I think it's three turnarounds. Can you just talk about perhaps what the EBIT impact from that will be and how that compares to the second half FY 2022? Yeah, sure. I mean, we have a bit of a heavier turnaround schedule in this half of the year. We have Kooragang Island going down twice for plant turnarounds. We will also then be implementing tertiary abatement at each of the remaining two nitric acid plants there. We have Yarwun going down for plant maintenance, and then the big event is the first-ever major site turnaround for Burrup since the plant was started up, which will happen mid of July. Each of those turnarounds is anywhere between three weeks to six weeks, and then obviously for that period of time, we do not have any production. Now, we clearly try to manage to build up inventory and then use our internal supply network to cater to demand during that time. Because of the unfortunate trip at the utility plant in Burrup, we have basically eaten up all of that buffer inventory. At the moment, we are running hand to mouth. We have used our global network now to supplement supply into Australia, and we'll continue to supply our customers, but we will remain, you know, kind of balanced to tight on our own manufactured product in this country. That is why, you know, when I referred to the skew in my speaking notes, I did say that the skew would be less pronounced in the second half because I'm kind of capacity restricted in the second half of the year because of the planned turnarounds, three of them, and then the unplanned trip that happened at the utility site in Burrup. Thank you. Thank you for the questions. Next question comes from the line of Richard Johnson from Jefferies. Please proceed. Thanks very much. Sanjeev, you mentioned a couple of times, your strategy for optimizing your global manufacturing network. I think what you're doing on the downstream IS side is pretty well understood, but I was wondering if you could just enlarge a little bit about what you're doing on the upstream end of the with the AN plant. The or the investments you're making there to enable you to leverage your manufacturing facilities on a global basis better going forward. No, absolutely Richard. Thanks for that question. I mean, the industry standard is, and I've said that before, that you normally get 2%-3% capacity creep every year in continuous manufacturing assets. That's a standard in chemical industry, and that's something that I brought a bit more focus into within Orica. We have quite successfully managed to get more out of the same assets with very small investments. These investments could be an interim tank, it could be a warehouse, it could be some kind of infrastructure at the port, just to ensure that the plants are running higher for longer. We've been very, very successful with that. That's the first initiative. That's more supply chain connected to get more throughput out of existing assets. The second investment is as we continue to do our planned turnarounds, we always have to change catalysts because catalysts run to end of lifetime. We are working very closely with our catalyst suppliers, these are old friends of mine from chemical industry, we are getting better improved catalyst performance whenever we are changing catalysts. That's giving us more throughput, but also importantly enough, it's also giving us less emissions. It's a double win for us, we have successfully implemented catalyst changes in Bontang. We've got more capacity out. We've got less carbon emissions because we got better conversion, we are now going to roll that technology and those new catalyst, proprietary catalysts also to the other assets. That gives us a bit more of capacity. We all the time are looking at potential low-cost, cheap debottlenecks to do wherever it makes sense for us without doing anything silly. Wherever we are pre-sold and we have customer demand, we will continue to look at our make and buy strategy. I have mentioned that I would prefer to have a better skew towards make, and I think we have successfully managed that, but that's work in progress. We'll continue to work on this. The last comment is we continue to look at efficiency, digitization, automation. Most of our manufacturing assets are quite old, and we have also spent significant capital which comes in sustenance, where we have upgraded the new into new Digital Control Systems or DCS systems as they are called. These are these automatic systems that run those plants, and we have now upgraded them to the newer versions. For two reasons, one is they are better, more efficient, so they are, you know, give us more real-time data. Secondly, they are also better cybersecurity protected. There's a lot of things happening with our manufacturing teams. They're doing an outstanding job. Then the last comment, which I mentioned in my speaking notes, is that we have now the universal prill, and we are now able to shift product easily from one asset to the other because that's the product that moves most easily and then goes into our solutions business and our emulsion business. Richard, a lot of work and very successfully done by the manufacturing team at Orica. That's very helpful. Thanks, Sanjeev. Just a quick one for Kim on the interest expense guidance. I'm just trying to understand, Kim, I apologize for being dumb here. So you're thinking around adjusting the discount provision, presumably that doesn't apply in the second half, or perhaps you can correct me there. Are there any costs in there for the USPP or were those capitalized? If you look at the discounting provision and consider the result that we've got in there for the first half, that's actually reflective of a normal unwinding of our discount provisions across a normal period. That's why when we talk about second half being more reflective of the first half, you'll see that result, that discounting being similar for the second half if the interest rate environment consists. It was actually the prior period that was an unnormal amount in that line item. For the second half, like I said, we will have. We are expecting interest to be in line with the first half. The costs of the USPP activity are capitalized as borrowing costs into our P&L. They will unwind over the period. That's excellent. Got it. Thanks very much. That's it from me. Thanks. Thanks, Richard. Thank you for the questions. One moment for the next questions. Next up we have John Purtell from Macquarie. Please proceed. Good morning, Sanjeev and Kim. How are you? Very well, John. How are you? Not too bad, thanks. Well just had a couple of questions, Sanjeev. Firstly, just in terms of what you're seeing around the globe, obviously global growth is slowing at present. I think you called out obviously Western Europe and Q&C there, but any other impacts? I suppose more broadly, how you're sort of feeling about the defensiveness of the Orica business? Look, if I look at the macros, we do see inflation, you know, inflation is real. It's coming through. We see consumer spending starting to slow down in some parts of the world, and customers, you know, trying to go down to more generic, less branded products. That's something we'll see how that flows through. If I look at our own industry and look at the resource industry, and then I'll talk about civils later, but at the resource industry, demand is very strong. There's just not enough supply. John, you know, this industry has underinvested over a long period of time. The investment cycles are large, the risk is huge. There's a lot of consolidation going on in the resource industry that's not adding new capacity. It's bringing efficiency, effectiveness and and speed into the market but not really adding to supply. Demand, on the other hand, is consistently growing, driven by ESG concerns, driven by energy transition, and consumption, and I don't expect that to slow down. The macros for the business are good. Supply will not be enough in my view. You know, we'll see, you know, more attractive commodity prices for longer, in the midterm. All of that is positive for Orica because we help our customers improve productivity, and improve, and manage inflation with better costs, a more efficient blasting, better fragmentation, all the technologies that we have there, and also the ESG proposition. That's all playing to our sweet spot and our strengths and the customer willingness to pay for those new solutions. Premium solutions is very much visible, so very positive. Civils, we have seen the seasonal slowdown that was predominantly Western Europe and the U.S. markets. This was because of the very, very heavy winter in the U.S. and the cold weather. We do see a bounce back in the civils market. Our exposure is mainly tunneling and civil infrastructure sponsored by the government. These are long-term projects. Now, if the governments want to take a break on spending, which would be surprising for me, but if that would happen, then we would see a slowdown. When I talk to our customers in the Q&C segment in the U.S. and Europe, they have no inventories. They were running hand to mouth. There's obviously a need to restock, and there is demand. I do expect this business will bounce back, but we will have to see, given inflation, energy, and all the other challenges in Western Europe, how strongly the bounce back is. Thank you. Just a couple of quick questions for Kim. Kim, can you talk to your sort of cash flow conversion targets for the second half, please? Also any, sort of quantum to the extent that you can provide re: that inventory reduction that you're expecting in the second half at current ammonia prices? Thank you. No, no problems, John. Thanks for the questions. In relation to the reduction that we'll see in the inventory in the second half, look, we don't know where those prices are going to go. To predict a number at the end of the second half period is beyond our ability to see where that market's going. Obviously, as you can see, that price has come down in the last few months. It does take a considerable amount of time for that to flow through to our inventory as we secure that product from the manufacturers, from our third-party manufacturers right through to our customer sites. We do expect to see that come through in the second half, but the actual amount at the end of the period will reflect the prices that we'll see during that second half of this financial year. My apologies, I've forgotten the first question. John? Yeah, just on the cash flow conversion. The cash flow conversion expectations for the second half. Indeed. It is a linked question. The cash flow conversion is linked to the inventory result that we'll see for the second half of the financial year. As we see that inventory valuation come down with those prices coming down, we should expect to see a much stronger cash conversion rate. Again, we'll just need to see where that inventory lands at the end of the year to see what the number comes out at. That will be a key driver of our cash conversion performance in the second half of the year. Got it. Thank you. Further questions. One moment for the next question. Next question comes from Scott Ryall from Rimor Equity Research. Please go ahead. Hi. Thank you very much. Sanjeev, I just wanted to touch on, maybe it's an extension of Richard's question in terms of the operational leverage in the business, which, you know, to me very much seems to be driven by, you know, flat capital invested and actually getting the sales revenue really motoring. If I look at EBITDA growth compared to sales revenue, either divisionally or at an aggregate level, it's slightly lower than EBITDA growth is slightly lower than sales revenue growth, which suggests costs are growing faster than revenue, obviously. I wonder, could you comment on when or if you see an opportunity to reverse that trend and actually grow the EBITDA margin as well as the EBIT margin, please? No, absolutely, Scott. Look, there's a constant effort to also grow EBITDA margins as we continue to develop the portfolio. You do have to remember that we have significant sustenance spend every year. We are spending more than AUD 200 million-AUD 250 million on catalyst replacements, on fixing our assets. We have an older aging asset base, so there's a lot of investment going into sustenance that flows into the depreciation. Yes, we are adopting a capital light strategy, but we are investing significant capital in decarbonization. Each of these tertiary abatement asset needs significant capital. Not all of that is supported by governments. We have to spend a lot of capital there, and that pays back over a period of time through carbon credits and other benefits. Initially, you take the burden of the capital investment and the higher depreciation, then it starts to flow through. It'll take a bit of time, which is typical in heavy capital investment, we are running through that cycle and we have started in 2019. We'll continue with that initiative. There will be some kind of disconnect there, eventually we'll catch up with it as the revenues and the benefits flow out of those investments. My question was more around the OpEx. The capital spend I get and the depreciation amortization. Just on operating costs, is there a prospect of sales growing faster than operating costs? Yes. Obviously, yes. Hopefully over the next couple of years. Scott, it'll depend on where we are with inflation. We see significant inflation coming through. Just as an example, our electricity costs are through the roof. We've seen significant hits there. All of that goes into our operating costs. You know, there are two ways of diluting that. One is to get more throughput out of the plants, and we are doing that quite successfully. We'll continue to benefit as more volumes are sold out of the same assets. We continue to dilute those costs. Obviously, our efficiency measures as we modernize equipment, the maintenance costs also come down and the running costs come down. It's again, it's something that will not happen overnight, but it will happen over a period of time, and we have a lot of focus on that. Okay, great. Thank you. Then I just wanted to ask you a question on RONA, please. In your presentation, you talk about the 12.4% within the target range for this half year. If I go back to the annual report from last year, Malcolm's chairman's letter said the target was 10-12, and your delivery of 11.4% for the year was within that target range. Maybe I've missed it, but has your target range shifted to include 12.4% now? That's correct, Scott. We upgraded that when we gave the guidance for this year to 10.5%-13%. We are now at 12.4%. You were right. Last year, the target range was. Yeah. 10%-12%, for this year, we had upgraded to 10.5%-13% based on the measures that we knew we would be implementing in the year. Okay. Could you just comment on the applicability of that? I mean, is this, in thinking about new capital spend in Orica, where we've seen, as Kim mentioned, there's quite a significant increase in interest costs to which obviously affects the cost of debt and equity. Is the bottom end, particularly of that range, still applicable to investments that you're making at the moment? Look, Kim is running our capital committee. I'll ask Kim to answer that. We do have internal thresholds which are pretty stiff, unless it is for safety. I'll let Kim answer that. Yeah, thanks, Sanjeev. Obviously, our internal hurdle rates are significantly higher than our actual cost of capital. Whilst the interest rates do go up, we are always ensuring that capital spend, capital projects that we approve that are delivering improved returns so that have a much higher growth rate than that. Having said that, we also still do need to invest in capital for reasons such as through safety, environmental, and the like as well. We do have a balance of our capital spend. Some will drive increased profit performance, and some ensure that the existing base load of the result is safe and environmentally secure. That's why we've got that range in there. We've also still got that external environment of uncertainty that we're operating in at the moment. That's why we've got a wider range from that RONA perspective. Certainly, as far as approving any new capital return, capital projects that deliver returns, our hurdle rates are much higher. Okay, great. Thank you. That's all I have. Thanks, Scott. Thank you for the questions. The next question comes from the line of James Wilson from Jarden Australia. Please go ahead. Hi, guys. I think the first question is probably more applicable to Kim. Just on that working capital build-up that you had obviously through inventories preparing for the turnarounds in the second half, are you able to maybe give us some color as to how much of that derives from a greater amount of units of actual AN inventory as opposed to just the value of units increasing with higher AN prices? Yeah. We're focusing on the total value that we've got in that inventory level, James. We do have a mix. We do have increased volumes, which we did state in our return. There's also in our reports and also the increase of the prices that are still flowing into that valuation. The increase in volumes that we have are really around ensuring we've got that security of supply. That's where you're seeing that result coming through in the last half and over the last 12 months in particular. It's providing really good returns to us. We continually monitor the level of our AN holdings as we do for our entire inventory holding and adjust and adapt them to the external environment and conditions. Like I said, we do expect that value to decrease in the second half of the year, given where those ammonia prices have fallen over the last few months. We'll continue to see what that does to our inventory and monitor both the value and the volume over the next six months. Okay, great. Just one for Sanjeev as well. You guys mentioned that, you know, obviously you've got some contracts at Burrup that are coming up, particularly with BHP at the end of 2024. Are you able to tell us whether you've been able to bring forward contract negotiations for repricing to try and lock in sort of currently high prices in APA? Or is the timeline sort of unchanged on how you're negotiating those contracts? No, I mean, we've done quite a bit of that globally, not just here in Australia. We've been very successful. We've got contracts locked in earlier at longer tenures. All of that work has been done predominantly in the second half of 2022 and a little bit in this half. Most of that work is done. Also at Burrup, we have recontracted some contracts, but there is one which had a longer duration because that was a baseload contract for the asset, and that will only come up for renewal end of 2024. Okay, right. You can't give us any sort of color on whether that specific contract has been pulled forward in its negotiations or not? no, I can't. All right. Thanks, guys. Thank you for the question. We have no more questions from the line. I'd like to hand the call back to the management for closing. Thank you all for joining us. Please feel free to come back to me if there's any further questions, and more than happy to answer that. Thank you and have a good afternoon. Thanks, cool. Thank you for your participations. You may now disconnect your line