Good day, ladies and gentlemen, and welcome to the Barloworld pre-close trading update. All participants will be in listen-only mode. There will be an opportunity to ask questions later during the conference. If you should need assistance during the call, please signal an operator by pressing star then zero. Please note that this call is being recorded. I would now like to hand the conference over to Dominic Sewela. Please go ahead, sir. Thank you very much. Good afternoon, everybody on the line. I hope wherever you are, you are safe. Joining me on this call on my side, I've got Chris Wierenga, the CEO of the consumer business, as well as, you know, welcome, Quinton. You know, Quinton is here physically with us, you know, this time around. We also have Ramasela on the line, who is the CEO of, you know, Avis. We also have, you know, Andronicca, Chief Operating Officer of Equipment. I've got with me Nopasika, who's the FD, and Nobuhle, you know, investor relations, et cetera. I guess most of you had the opportunity to look at the voluntary trading update for the five months to the 8th of February 2022. I would like to say, you know, it's been a great five months up until the 24 of February when we had, you know, challenges, you know, coming out of, you know, Ukraine and Russia. Notwithstanding that, I think, you know, the business overall has done very well, you know, over this last five months. I think, you know, more importantly, the Equipment in Southern Africa, we've seen, you know, a turnaround, particularly in the GRC. You know, the order books, you know, is almost at an all-time high, in Equipment Southern Africa. I will give Andronicca, you know, a bit of time to, you know, to highlight, you know, some areas. When it comes to Equipment Eurasia, I think, Quinton, by all accounts, this could have been, you know, one of the greatest year, you know, if you look at, you know, the five months, you know. I guess given the challenges of sanctions, you know, things will evolve and, you know, we over time will see that it might be a challenging, you know, six months from here on. I guess, you know, having said so, it's still good to see that the order book, you know, it's solid in Eurasia as well. You'll talk probably more on Mongolia as well. I think on Chris's side as well, we've seen good volume pick up, Chris, on your side. I think you know overall you know the business has done well. The biggest turnaround has really been in car rental in Avis Fleet. You know, Ramasela and teams have done well there, and they still have an opportunity to also just give us a highlight. Maybe let's kick over to Andronicca. Just key highlights, Andronicca, given the fact that most of the people on the call have already seen the statement. Thanks, Dominic, and good afternoon, everyone. Just a quick highlight from Equipment Southern Africa. We have seen in the trading update that one of the highlights is you know the recovery of rest of Africa. In the past, we have noted that you know we were operating in a split of about 70/30, 70 being SA operations. Where we are now, rest of Africa is moving towards the 60/40 split that we have enjoyed in the past. From a South Africa perspective, we had a bit of a slow start, mainly influenced by supply chain constraints, but also as a result of, you know, the type of market that we're serving, quite a number of contractors and some of the finalization of the contract miners with the mining houses we've launched, but we are starting to pick up and deliver on those. Operating profit was up. We are committed to delivering the operating margin that we have always shared with you in terms of what it looks like. I know for the five months we are slightly below the 10%, but we are seeing activity picking up in the second quarter of our year as the supply chain constraints ease up, and we expect the margins to move closer to 10% by the time we will report. On the positive side, as Dominic alluded, GRC is doing well. The turnaround plan is delivering results. Since the beginning of the financial year, GRC has been reporting positive results. Thanks, Dom. Thank you, Andro. Now, Quinton, maybe let me hand over to you. Thank you, Dominic. Good afternoon to everyone. I think from a Eurasia perspective, up until February, it's fair to say that in the Russian environment, it was a record result for the first five months, both at the revenue side, as well as at the operating level. We managed to grow our firm order book from already a good solid $24 million through to end of February to $314 million in a very well-balanced, diversified firm order book with all commodities represented. Gold, coal, diamonds, copper, nickel, and then also a very strong construction and power firm order book. I think also fair to highlight that even from a cash perspective, up until February, results were exceptionally well, and we had a very clean book in Russia. I think Mongolia on the other side, the trading has been not as expected, but largely due to China with China closing its borders, firstly due to the Winter Olympics. China's got a no COVID policy, so they are very strict on the border. Those border closures has hit us quite severe in the first five months. Irrespective of that, the business still generated a very solid, good quality operating margin. I think maybe it's fair to say that during February, the conflict arose between Russia and Ukraine and there was quite a number of sanctions that were implemented. You know, the business is now focused on, you know, firstly understanding, interpreting, and then complying. I think Dominic has alluded to it. I think the next few months will be challenging, but I'm sure we will work through it. We've been through this before and we'll focus on what we can control for now. I think, Dom. Yes. Thanks for the summary. Chris? Thank you, Dominic. Good afternoon, everyone. I think just, you know, touching on the consumer industries first of all, and specifically Ingrain. We've had a very good performance of the business, bearing in mind that from now we're looking at five months included in our actual results versus four months in the, I mean, the prior years. So you'll see an uplift because of the additional months trading in the business. Despite that, we're seeing very strong volume and price improvements, you know, across most of the businesses with all sectors performing very well. We've seen a strong recovery in the alcoholic beverages sector. I think, you know, that's boded well because of the lockdowns and restrictions on sales of alcohol in the prior reporting periods. Obviously, the contribution from that sector is slightly lower than what we see overall in the business, so the mixing volumes has reduced contribution margins in the business. The Ingrain EBITDA between the two reporting periods is up quite strongly. More pleasingly for the business though is we've had you know, higher plant availability on the back of the rollout of BDS across the business. We've seen a much better peak coming into sort of October, November, December this year with plants performing ahead of the prior year and an improving maize grind as well. Within the business at the moment, we are seeing rising maize prices, and these are being dealt with in line with our hedging strategy. You know, we are investing in supporting the margin on the Safex account when necessary. That will obviously unwind as those you know, customer contracts are priced going forward. More importantly in the business in the short term, we have secured maize until mid-2023, and obviously continuously monitoring maize prices and availability in the current situation. We're sitting with good you know, crops that are being harvested. We're expecting a good harvest coming through despite some of the crop damage that we see, that we're anticipating. Our experts on the ground are telling us that we should see a crop in excess of 15,000 tons this year. I think, you know, if I look at as well in the business over the period, we've continued to invest in the maintenance CapEx that we've seen pre-acquisition, and obviously also investing in the critical skills required to maintain the plant availability and improve maintenance practices in the business. I think overall in the period under review, you know, things are going well. We're obviously monitoring the different external environment very, very closely. Domestic volumes are strong. Pricing is coming through nicely. We're seeing opportunities going forward in the organic growth of the business as well. Thanks, Chris. Ramasela? Thank you very much, Dominic. Good afternoon, everyone. I think it is safe to say that we have learned over the period to weather the COVID storm. If you just think back that the last couple of months for us, the five months was when Omicron just started. We've traded ourselves very well out of that Omicron phase. Looking at just our operating profit from a current health point of view, you know, one of the key things was when you look at the volume of 2019, we're still operating at 65% of 2019. Mainly because, as we know, inbound was not yet back. I mean, we're trading still on average between 11% and 12% of the 2019. Our operating profit, which is what we've highlighted when we really get into the deep dive of COVID to say, "How are we going to just work our way out of this?" Looking at our strategy of moving, you know, from the airport, looking at the subscription model, we still get surprised every day with the amount of subscription that we get out of the market, how the market is moving. You know, taking up the subscription model. The replacement business, I think in South Africa, when you see rain, you can already factor some good business for car rentals, and we had a couple of good rains in a couple of months. Our efficiencies are key, as everybody knows about the constraint of the fleet in the market. Our efficiencies really are showing off when you start looking at the fleet utilization. I mean, you get to a point where there's this average throughout Southern Africa in all our operations, but you get to a point where Gauteng we're running at an average of 83%, in Cape Town at 81% of the time. It's all about the turnaround, the time that the fleet available for utilization. We've improved that, we've mastered that process, and it's something that we will continue working to improve on it. I keep on referring to this utilization that you will find difficult to compare anything close to 35% in the standard. That's something that we're really working hard to keep. The used car market remain buoyant. I mean, with the shortage of fleet, the margins no doubt has really become even stronger than it has been in the previous years. We'll continue making sure that, you know, we sell at the right time based on kilometers and the time that we have the fleet, so that we balance our business very well. We are happy to start seeing domestic market picking up. December was one good period where we saw a lot of domestic travel. Looking at the leasing business, you know, we're seeing corporate coming on board in a strong way. One of the things that corporate are starting to do with refunding through the financing lease, that book of ours is growing. The challenge is just delivering them on time, purely because of the delay in the supply. But other than that, a very good solid business for both leasing and car rental, with very strong EBITDA levels. I mean, when you compare ourselves with 2019 now, we've already, when you look at the operating profit, we've already surpassed the February 2019 level. That's something. If you think about it, in South Africa, COVID only hit us for real in March. That five months was once inconceivable pre-COVID in South Africa, and we've managed to surpass it. We are well geared, I think, at where we're sitting, to continuously grow based on our strategy and our cost containment that we've done over the period. Bearing in mind that the used car market as we know, it doesn't look like it's slowing down anytime. That's one thing that we will always manage and monitor when we look at our total fleet from both the leasing and the car rental operation. Thank you very much. Thanks, Ramasela. Yeah, I think, you know, you gotta get a sense from all the trading activities that, you know, overall, you know, notwithstanding the challenges we're still operating under, you know, we still have COVID in this country and, you know, but the business, all the businesses are doing well. On the logistics front, in terms of, you know, our activity out of auto and logistics, we've seen progress. You know, we've basically finalized the out of the transport business, the Manline Energy, Manline Freight and timber, which was concluded end of February. You know, the money's in the bank. In terms of the transaction, we've sold, you know, the 51% of Aspen Logistics. You know, I think that was around in November last year. Currently we're in the throes of concluding the supply chain business. Obviously, you know, by the end of this month, you know, basically, you know, we should be, you know, to sign the SPA regarding that transaction. I think overall, you know, other aspects I just wanted to update, you know, is around, you know, the de-risking of the pension fund. You know, to that extent, we have, you know, invested some capital to de-risk that. That will give us the flexibility and ability to move the money in between the U.K. and South Africa. We are currently looking at insurance companies that, you know, could actually buy that liability from us. I think, you know, by the time we release the results in May, we'll give you further update on that front. I guess, you know, all of you have received your dividend, you know, in January. The reason why I'm highlighting these two events is that, you know, when you look at the cash generation, we had to, we utilized cash, you know, over this period. Largely because of the order book that, you know, you're seeing in both Russia and South Africa, as well as, you know, the fleet sales in Avis. Therefore, you know, this will unwind, you know, in the second half. I will pause there and see if there are questions that we can, you know, take time. Thank you. Ladies and gentlemen, if anyone would like to ask a question, you're welcome to press star and then one on your touch-tone phone or on the keypad on your screen. If you, however, wish to withdraw the question, you may press star and then two to remove yourself from the question queue. We have a question from Paul Steegers of Bank of America. Please go ahead. Yeah. Hello, everyone. Can you hear me? Yes, we can hear you very well, Paul. Thank you. Hi, Dominic and there's a question for Quinton and maybe Dominic. On Eurasia, on Russia, you know, the next few months are gonna be obviously difficult. We get that. Just wondering, you know, with Caterpillar, I believe suspending operations, they haven't fully pulled out yet. Is that correct? That's the first part of the question. You know, how are you gonna manage this business? Will it potentially become loss-making or will you look to sort of wind it down and potentially sell it? I'm just wondering what the outlook is there for the Russian services business in light of what Caterpillar is doing and what you're seeing on the ground going forward. Thank you. Thanks, Paul, for the question. I think you know just so that we outline you know the areas where we operate in. I've said previously that as Barloworld our focus is in emerging you know markets and these areas are you know in a specific way you look at as Mongolia you know the DRC you know as well as Angola and now Russia. You know these are very challenging environments that we operate in. I think as Barloworld you know we've operated in those environments and making sure that we stick to the laws of the countries where we operate in and also you know not playing politics and then making sure that our business is to look after our customers. With respect to Caterpillar, you know, as announcements, they spoke about the suspension of their Tosno manufacturing. To that extent, you know, that's what they're speaking about. If you remember, Caterpillar only manufactures in Russia in those. I think it's Tosno, where else? You know, Novokuznetsk as well. You know, it's those suspensions that they've spoken about. You know, you have several dealers in one. We are one of the dealers. You know, so Caterpillar around the world, they distribute their equipment through the dealer network. I guess what's constraining us, Paul, is that you know, some of these sanctions. You know, we have to comply with basically sanctions, not just only from the U.S., but the U.K., E.U., as well as Russian counter-sanctions. You know, that creates a lot of challenge. I think, you know, Quinton and the team, you know, are on the ground making sure that, you know, we comply with the sanctions. That makes it difficult. You know, our view at this point is that, you know, we're gonna hunker down and continue to support our customers in Russia, and hopefully, you know, the conflict gets resolved earlier. My view is that, you know, given the past experience, this is worse than we anticipated. We are likely to be in this situation for a long haul. The mandate, you know, to Quinton and the team is to do their level best, you know, to service our customers where they can. You know, I can't tell you today, you know, how what things are gonna be tomorrow, you know. As long as we are able to trade, we'll trade, you know. If we can't trade, you know, it's a different story. I think that's why we are saying basically there's a likelihood that, you know, we'll have to look at impairment, you know, in this situation. Because the longer the process, you know, lasts, you know, in terms of the conflict, you know, and the sanctions stay, it makes it even more difficult for us to trade. You know, therefore, it's difficult to predict what the next six months in terms of what's gonna be like. I guess we're saying at the time of finalizing the results in May, we'll know, you know, the impact, saying, you know, what type of impairment, you know, might we be taking in a sense. I don't know, Quinton, if you wanna add to that. Yeah. No, I think, Dom, you summarized it. Paul, just to add, I think, you know, our mantra with the team is just to focus on what we can control, focus on our customers, and focus on assisting and supporting one another, you know, in Russia. I think that's all that we can do at this point in time. Obviously, as Thomas alluded, compliance is a very, very important part of our business. Things will get slower as the time passes until, you know, there's a full grasp exactly, you know, what you can do and what you can't do. I think the other thing that's also impacting us is that things keep on changing. You know, what's allowed today might not be relevant tomorrow. For us, it's managing the business day to day and focusing on what we can control and our customers. I think, yeah, I think that's all I wanted to add. Thanks, Paul. I appreciate that sentiment, but I guess, sorry, I'm just coming back to the question. Do you think that in the next six months that business, you know, there's a big fixed cost base here. You know, things are gonna slow, and it's obviously nobody's fault. Do you think that business will be loss-making in the next six-month period? 'Cause ironically, you've had record results. You know, it's really frustrating for you obviously, but I'm just wondering now going forward, what you can control and the costs that you have there, you know, how quickly does this business move down in terms of profitability, and will it become loss-making? I guess that's the question. Thank you. I guess it's a very difficult call. You know, currently, particularly if you look at the trading for the last five months, and there is still trading taking place, you know, in territory. If you look at the business overall in terms of the cost structure, it's one of our leanest, you know, business. Having said that, though, I think, you know, the challenge you have, because things are fluid, you know, but currently, you know, customers are also anticipating the challenges they're ordering. You know, the issue is gonna be to what extent, you know, from a supply chain point of view, would we be able to get parts into the territory, you know, once we comply with the sanctions that are in place? That's gonna be something that determines whether or not, you know, are we gonna be profitable or not? Key for us, 'cause we've gotta take a long-term view here, is that, you know, 50% of the stuff there is aftermarket, you know. It's people who are looking after service, you know. It's, you know, to make sure that we don't lose this skill because, you know and my view is that, come the 20th of March, you know, or after the period of March when we release the results, we'll be able to give you better insights there, Paul. I know it's frustrating for all of us, you know, in terms of wanting to get certainty, but unfortunately that's what it is in terms of, you know, a challenge that we have. You know, but at the moment we haven't taken a view that, you know, are we gonna be loss-making. We do believe that, you know, if we don't have clear visibility, you know, come the time we put out the numbers, we'll have to take the impairment. Thank you. I appreciate the insight. While I have the mic, one last question from me. Apologies. Just you've mentioned the looking to unbundle or sell Avis, both fleet and car rental. We can all make our view on how much those businesses are worth. The question is, you know, how much debt is in those businesses, broadly speaking? Then secondly, if you manage to unbundle, sell it, whatever happens by the end of the year, what would you do with any proceeds from that sale? Thank you very much. Yeah. Thanks. You know, as I've said, you know, the commitment is in terms of, you know, the capital allocation strategy, is that whenever we sell and we get the proceeds, you know, first and foremost, we say, you know, is there an opportunity to buy back. At this level, clearly there's a huge opportunity for us to buy back. If alternatively, we'll, you know, like we've done, you know, we'll repatriate the capital back to the shareholders. If there's an opportunity to further, you know, strengthen the Consumer Industries or Equipment industry in Africa, we'll look at that, you know, in that order, you know. As I said, you know, that's what we'll do with the capital. Our next question is from James Twyman of Prescient Securities. Please go ahead. Yes. Thank you very much. I've got two questions. The first one is, as far as Russia's concerned, can you actually say whether you are still getting supplies from Caterpillar into Russia? Or has the train of product basically stopped, and therefore you're already in the process of running down your inventory? Just to get an idea of the timing of that. Secondly, how is Mongolia affected by this? Are they still able to continue on? I know you said business is slow, but are they still able to get product from Caterpillar, presumably via China? That's it for me. Yeah, thanks. Okay. I think, James, maybe just first deal with the Mongolian question. I think from a Mongolian perspective, Mongolia was never reliant on Russia. In fact, no product, except the product that was manufactured in Russia, you know, came from Russia to Mongolia. The events in Russia, Ukraine doesn't impact Mongolia directly. What impacts Mongolia is China. Anything that happens in China impacts Mongolia automatically. I think, so for us, we've also got to look at China. When China shuts down for COVID outbreak or whatever the case might be, that impacts the supply chain through to Mongolia because it means the Chinese ports or border are closed. That's something that we're managing separately. I think the question on Russia. What was the question on Russia again? No, whether you're able to trade. Oh. Yeah, yeah. Yeah. Caterpillar. Caterpillar, like all suppliers in the world, is busy interpreting and understanding, you know, what is the sanctions, what are you allowed to do and what you're not allowed to do. It sounds, that's relatively easy to interpret, but it's not. I mean, from a product perspective, that's easy. We've got clear guidance, what and how product can flow. However, the customs in all the various countries, product flows through customs, and customs first needs to understand exactly is this allowed to go through to Russia or not. Caterpillar is still in that process, working through the process in terms of to see what's being sanctioned, what types of products is allowed. Because there is certain products like dual-use parts or whatever the case might be, that's not allowed to be sold to Russia. That process is quite complicated. It's comprehensive. It's not just Caterpillar that's in this net. Customs needs to make sure that they cover all suppliers in the world. That's where the hold up is. Caterpillar hasn't stopped shipping to Russia. They haven't withdrawn. They need to work through the process, and customs needs to work through the process in terms of what's allowed through customs to Russia. That process, because it's so big, will take time. You know, I'm pretty sure that over the next month or two, you know, there will be a lot more clarity in terms of exactly, and customs will know that when they allow the shipment to pass, that it's actually in terms of complying with all legislation. James, are you good? If I could ask one more quick question, if I may. Just on the unbundling. Well, it was gonna be a sale of the Avis business, and now you've mentioned unbundling. Does that mean that we should be a little concerned that you're not so confident on pricing? Or does it more likely mean unbundling is an additional option to speed the process up? I think you have it half, you know, is to speed the process up because we've received, you know, answers that said, you know, bids, you know, from potential buyers. I guess a lot of people tend to want to take advantage thinking that, you know, because of COVID, you know, then, you know, we you know we are you know we'll take any price. I think the business, you know, has done, you know, phenomenally well. To that extent, you know, we're running this process, you know, dual processes, you know, to say we look at, you know, sale if it's warranted. You know, remember when we sell the business, we'll actually have to get approval from ADRs, you know, and unbundling, you know, similarly, you know, we have to get clearance. I think we got to get to a point where, you know, we say, "What's the best, what's in the best interest of the shareholders in terms of these two processes to get the right value? Okay, thank you. Thanks. Thanks, James. Thank you. Our next question is from Marc ter Mors of SBG Securities. Please go ahead. Good afternoon, and thank you for the presentation. More of a philosophical question relating to ESG and the ESG assessment of possibly remaining in Russia. Since the invasion of Russia into a democratic country, Ukraine, we've seen several global companies exiting Russia completely. I'd just like to know how management looks at the ESG considerations relating to possibly remaining in Russia. You know, thanks, Marc, for this question. I mean, it's a very difficult, you know, scenario, you know, which you find yourself. The point I was trying to make in terms of saying, once you've chosen a strategy to invest in certain emerging markets, you know, these countries are politically challenging, you know, because there could be political instability. There could be all sorts of other challenges. I mean, you know, and hence, if you look at currently as we speak, you know, there's a war in Mozambique, you know, and in the DRC, we've lived in the type of an environment. I guess what's regrettable in any war, Marc, is the loss of life, you know, on either side. Because you know, for us, you know, we are business people, you know, one of the key issues is to make sure that, you know, we operate in an environment where there is peaceful and you know, diplomacy should reign. I mean, wherever there's gonna be conflict, you know, it's very important for the leaders, you know, to engage in you know in trying to find resolutions of problems. You know, it's not for us as business people to do that. I guess, you know, it depends from one company to the other, you know, what they choose to do. I mean, you know, our view is that, you know, we get into these countries long term, and we understand, you know, the institutions of the political challenges that, you know, come with investing in these countries. Therefore, our view is that, you know, we are likely to stay as long as it makes, you know, sense in terms of the safety of our employees, you know, and then also what we hope is that, you know, various leaders are able to actually enter into discussions and resolve problems accordingly. I can't speak for them because I'm not a politician, you know. From a point of view of, you know, the social impact that we make, you know, like we make impact in creating jobs, you know, in Siberia, the same thing in Mozambique, you know, and we hope that, you know, whatever challenges we face could be resolved, you know, by the politicians. If it makes business sense for us to stay, we'll continually look at those options. Yeah. Thank you for the well-considered answer. Appreciate it. Thank you. Our next question is from Brent Madel of Absa CIB. Please go ahead. Hi, good afternoon. Thanks for taking my question. I'm sorry to just push on this issue a little bit, and I know that you've indicated. I guess my first question I was gonna ask is just some level of clarity on exactly how, I mean, very simplistically, how the sanctions is impacting the Russian business, and I think you've sort of clarified that to a large extent. Can I ask you, so if there's an order that is due to be delivered to Russia, is that sitting at the port in which it's being exported? In other words, it cannot be delivered to the customer, or are you getting some products into Russia? Two, if you can't get products into Russia, if my understanding is correct, there are quite onerous penalty charges that Caterpillar or yourselves could face if delivery is on time. Do those still apply? Three, if you cannot deliver, is there potential that that order could shift across to manufacturers, let's say, for argument's sake, in China, who could possibly, you know, take that order themselves and deliver on that order? Okay. Chris, you wanna comment? I think maybe to answer on the last or well the first question again. The first. I mean, you know, obviously, you know, there's some ports where, you know, the supply chain is still operational and running. Then if product is manufactured in that region and there was an order, then you're allowed to sell that product, then it's relatively easy. But obviously, Caterpillar manufactures all over the world, and product comes from all over the world in on different supply chains and routes through to Russia. So the first thing that we need to do when you do receive an order or if we've got a contract is to establish, are we allowed to sell that product? Firstly, can we sell the product? Secondly, are we allowed to sell the product to the customer? We go through those processes, and then the next question is, can we deliver? Because the supply chain or the supply route might not be operational at this point in time, as what I've just explained to you before, because the customs also needs to go through this process, and they don't just have to deal with Caterpillar. They've got to deal with every single manufacturer in the world. It is a massive process, and it's human beings that's sitting there that needs to go through this process. What we'll do is we'll go through that process, we will then be in contact with the customer. We will give the customer various options. I mean, obviously, delaying the shipment could be one option. Customer might be happy to delay without penalties. Another option is to cancel. Customer might say, "Well, I'll rather wait," because you know, we are in a mining boom, so many customers are prepared to wait, and says, you know, "Let's take a breather and wait until you know, there's more clarity." Or you know, we decide you know, we cannot deliver, it gets canceled. Then we need to find a different home for that product. Luckily, we are in a mining boom, where this it should not be too problematic for us to reroute or redirect our product. In terms of finding ways to go through different routes, I mean, that's always an option. You've got to look at cost, that's the one thing. The other thing is you've also got to make sure that you don't circumvent the law. To try and make a plan to say, well, we're not going to comply if we do this, then we circumvent that. We're also very careful from that perspective. It is a complicated process. As we said a little bit earlier, that's why things are going to slow down, because there's a lot of things that needs to be taken into account before you make a decision to either continue or whatever the circumstances might be. I hope that answers all the questions. I don't know if I forgot some. Sorry, if I can just- Say that. If I can just clarify one issue. If there's a late delivery and there's a penalty that's applied, or if there's no delivery and there's a penalty that's applied, who pays that to? Is it Barloworld or is it Caterpillar? Well, the first thing is we need to get to the penalty and we negotiate with our customers and obviously it's our customers' choice if they would want to continue. Then you've also got force majeure. When there's force majeure circumstances then those penalties will not apply. It's a whole process. I think Dominic has just alluded to it just now. There's the political side to what's happening, and then there's the business side. All our customers are businessmen, and all they are interested in is trying to also generate and do the best for their stakeholders, employees, et cetera. We haven't seen any customers that were. They all understand the situation. They're not throwing their toys out of the cart and demands things. They're all looking to see how do we work together for them to eventually receive that product. You know, as we sit today or as at the end of February, I would say, you know, there's been no talk even of penalties at that point in time. Just my last question, if I can. Just on the strategy. So if the worst-case scenario plays out where Russia and the Russian business and the Barloworld Russian business unfortunately just cannot survive, would you be rethinking the strategy of selling Car rental and leasing? Or, you know, from a strategic perspective, are you guys happy to go ahead with that process no matter what happens on the Russian front? Yeah, Brent, you know, we regard our Caterpillar distribution business as very core to our being. You know, therefore, I'm talking about a worst-case scenario. I mean, you know, because we've had worst-case scenarios in countries like Zimbabwe, where, you know, we were forced to basically, you know, because we held a license, you know, we had to basically sell, you know, portion of our license, you know, to Zimplow. You know, and we're stuck in Zimbabwe for many years. I know the challenge in Zimbabwe, but, you know, eventually we believe that, you know, Zimbabwe will come out, you know. I don't know when, you know. And therefore, in that worst-case scenario, we'll still be able, you know, to stay in holding the license, you know, in Russia. You know, when you look at the strategy, the strategy was informed by the basis of the fact that fundamentally we believe automotive and logistics doesn't fit, you know, in line with our, you know, long-term strategy. You know, so the issue for us, it was the timing of when can we realize good value for, you know, either exiting through a sale or unbundling for ages, you know? Therefore that's, you know, we'll go ahead irrespective. Many thanks. Thanks. Okay. Next. Thanks. Our next question is from Roy Campbell of RMB Morgan Stanley. Please go ahead. Good afternoon. Thanks very much. Just a couple of questions, please. Maybe just, I know we're harping on Russia a little bit, but just your view in terms of Caterpillar suspending manufacturing in Russia. Is that a function of the supply chain and what the things that Quinton has been talking about? Or do you think it's a view that they, you know, for now, don't want to be exposed to Russia? You know, what Mark was talking about in the ESG perspective. In which case, you know, remaining in Russia, is that just a Barloworld management decision, or can that be influenced by Caterpillar and its exposure in Russia? That's the first question. Second is, may... I struggle to hear the South Africa equipment spiel just now. If you can just give us a bit more background to the supply chain challenges that you've had in that business and, you know, is the increase in the order book a function of that? When and how do those supply chain challenges alleviate and do we see that all coming through in the second half? Thank you. Okay. I guess you know on the issue you know in Russia I cannot certainly speak for Caterpillar you know because they are a separate legal entity and so are we. You know I can only quote what they've said you know. You know they're suspending manufacturing you know in those two operations you know in Tosno as well as Novokuznetsk. You know that's as far as I can say on that. We get, you know, to be given license by Caterpillar in terms of the territory where we operate in, you know, and, you know, so if Caterpillar decides tomorrow that they're not gonna manufacture completely, you know, for whatever reason, you know, and we can source products elsewhere, you know, whilst we comply, you know, with sanctions, you know, we'll continue to trade, you know. So that link, you know, is independent, you know, unless we then decide on our own say, "Quite frankly, Caterpillar, thank you very much for the license. You know, we don't want to hold this license in Russia." That's a different story. It's us making the decision. Like we did in Spain. We said to Caterpillar, you know, "We don't think it makes sense for us to remain in Spain. We'd like to actually, you know, sell the business and we exit Spain." We then, you know, pursued, you know, another jurisdiction in Mongolia. You know, that's basically, you know, how that, you know, will pan out in the end. Andronicca, did you hear the question in terms of supply chain? I did, and thanks, Roy. In terms of the supply chain, the impact is twofold. The machine lead times have increased, particularly in the mining space, the lead times are much longer. On average we're looking at lead times of about eight to 12. For some mining machines, we're looking at lead times of close to 40 weeks. On the positive side is that our order book started growing even before, you know, we closed September. Some of these orders we anticipated and we started placing orders with Cat. We are expecting that we will convert those into a sale in the second half of the year. The second part of the constraint has to do with the parts availability. It is taking us much longer to close the jobs where we have to either repair equipment or the trucks that are in for service and require parts. It's taking much longer to close those shops and it is having an impact on our working capital. You would've noted that we have reflected on cash, you know, equipment business is a business that's known to generate cash. But given these challenges that we're dealing with, working capital has to increase to take care of those challenges while we try to make sure that at the right time when supply eases, we are able to convert those goods. Thanks. Thanks. Maybe if I can just have a quick follow-up. Given the lead times going out to 40 weeks, what does that mean for your cash flows in the second half? Does it, are you gonna be investing or building up inventories quite significantly as a result? That's all. Thank you. Thanks for that. We have started already building inventory and in the second half we are expecting to convert that inventory into cash. December, January, it was the worst period in terms of order fulfillment from Cat, but now we're starting to see those bottlenecks easing a little bit and we are anticipating that in the second half, you know, the inventory that we've built up and the leads that's in our books will be converted in the second half. In a nutshell, we expect the second half to be better than the first half, so in cash generations anyway. Thanks, Roy. We have a follow-up question from James Twyman of Prescient Securities. Please go ahead. Yes, thank you. Yes, just one more quick one from me. Would it be possible for you to say how much of your product in Russia comes from Russia? How much comes from the U.S. and how much comes from elsewhere? I would say, I mean, it depends on the cycle and what orders you've received. I mean, the Russian plant manufactures 777s. It assembles some engines and then some excavators. But the 777s is not the only factory in the world. There is other factories in the world that also manufactures 777. A 777 is an important product, but I mean, you would only sell maybe per annum, I would say on average over a five-year cycle, you will sell 15 777s per annum. Then some of the large mining trucks that all gets manufactured in America. The dozers they get manufactured in America, which... I mean, this is our bread and butter, products. The dozers are in America. The graders is in South America. The underground machines are in Thailand. There's some products, the articulated trucks is in the U.K. The backhoe loaders is in India and the U.K. You have manufacturing plants all over the world. It's a very small part that's actually in Russia. Yeah. I mean, that's basically your question. Thanks, James. Thank you very much. Thank you. Our next question is from Kgosi Rahube, Citi. Please go ahead. Thank you very much for this opportunity. I was trying to move away from Russia, but I just have one question. In terms of the competitive landscape, are you seeing any sort of movement, especially around your competitors? Are they pulling out of Russia at this stage? I think so. I think all competitors. Some competitors have suspended. Nobody's pulled out. They suspended certain operations. Some competitors are still, you know, doing business as normal, but within the law. Obviously China has always been very, very big, because if you look at the Russian market, it's a big market, but dominated by Chinese and Russian equipment. The Western equipment, let's call it the premium brands, plays in a very, very small segment anyway, from that perspective, and specifically in, you know, hard rock mining. I think everyone is more or less in a similar boat. Nobody's really said, you know, they withdrawing completely from Russia. They just suspended operations. Some manufacturers still continue to deliver. Okay, thanks. That's clear. Just maybe two last questions for Chris. In terms of Ingrain, I'm trying to get a sense of maize prices. You mentioned that you secured maize until mid-2023. Can you perhaps just talk about pricing and also what you think of, you know, where the prices are today? That's the first question. The second question is around the comment in the announcement that indicates that margins will be lower as a result of normalized sales mix. Can you just perhaps give us a bit more detail around that? Thank you. Kgosi, thanks for the question. Maize prices are sort of fluctuating around ZAR 4,200 to about ZAR 4,400, depending on, let's call it deliveries, up to July. When I say we secured physical maize up until, you know, mid-next year, that means we have contracts with farmers for delivery, and we've obviously taken a corresponding position on Safex to hedge against that exposure. We do have some unpriced maize that, you know, as soon as we're able to price with customers for physical delivery of starch, we price that maize accordingly. Effectively, we don't have any exposure to the maize price. We shift that risk through to our customers, and as soon as we've contracted for pricing with customers in line with that exposure, we lock in the position. I mean, obviously it's important to secure maize supply into the business. But I think at this point in time, we're monitoring the situation very carefully and, you know, it's business as usual on procuring maize and making sure that we stay in close contact with customers on pricing. Customers are obviously quite keen, seeing volatility, to be discussing pricing at this point in time and locking in positions on physical delivery of finished product from us. If I then turn our attention to the mix, I said the contribution percentage will be down slightly because in this period, we'll be selling more product or more at a normalized level into the alcoholic beverages sector, which last year we had, you know, some short supplies into that sector due to lack of demand because of the alcohol curtailment as a result of lockdowns during the festive season. What you're seeing this year is a more normalization of that, but we're still expecting to see very healthy double digits, you know, EBITDA margins coming out of the business, and probably more of a normalization to EBITDA margins that you would have seen pre-acquisition in 2019 under the old Tongaat reported results. I think that's just the guidance that we were providing in that particular space to show that we're seeing a mix change that is the more normal with our standard, domestic customer distribution that we're used to in the business. Okay. Thank you so much. Kgosi, you have the answer. You know, this brings us to you know, sort of to the closure. I think we've taken all the questions and you know, if there are any further questions, you could email those to Nwabisa. You know, most of you have details, and we'll try and you know, reply as quick as we could. We will be getting to a close to it, you know, as the first of April, you know. And yeah, I guess, you know, we will give you a further update, you know, you know, around you know, around May when we release the interim results. Thank you very much, everybody, and you all have a great afternoon. Thanks. Ladies and gentlemen, that concludes this conference. Thank you for joining us. You may now disconnect your lines.