Orica Stock

Hello. Good morning, everyone, and thank you for joining us for Orica's First Half 2026 Results Presentation. My name is Natalie Worley. And joining me here today in Melbourne are Sanjeev Gandhi, Managing Director and CEO; and Jamie Crough, CFO. Both Sanjeev and Jamie will be presenting shortly before we move to Q&A.

Before we start the presentation, I kindly ask you take a moment to read the disclaimer on Slide 2. And with that, I'll pass over to Sanjeev. Thank you.

Thank you, Natalie, and welcome all. Thank you all for joining the call.

Let me start with our #1 priority, safety. We are, at Orica, deeply saddened by the fatal vehicle-related incident involving one of our colleagues in North America in late November 2025. Our thoughts and deepest condolences continue to be with their family, friends and colleagues. We have now completed a full investigation and are implementing critical learnings across our organization that such events do not happen again.

Our people are the foundation of our company. We remain absolutely committed to the prevention of harm and to supporting the physical and psychosocial well-being of our people and our stakeholders. While our serious injury case rate remains on target, we are focused on preventing high-risk events, particularly through our major hazard management and next-gen safety leadership programs.

On sustainability, we achieved our 2026 emission reduction targets of 30% decrease in net scope 1 and 2 emissions, and we continue to progress towards our longer-term ambition of Net Zero by 2050.

Turning now to Slide 5 and our key first half highlights. We have delivered a record first half financial performance. Earnings momentum continued from the last financial year with EBIT and NPAT pre significant items up 5% and 8%, respectively, versus the PCP. This reflects ongoing strategic execution, business resilience, the strength of our global manufacturing and supply network and the outstanding delivery by our people. This has translated into higher shareholder returns with the Board declaring an interim increased dividend of $0.285 per share, which is well within our 40% to 70% payout range and the completion of the $500 million on-market share buyback program. Return on net assets improved to 14.7%, which is a 13-year high, reflecting our disciplined approach to capital management and efficient asset utilization.

Our balance sheet remains strong and provides us with resilience in capacity to support further investments in our strategic priorities. Leverage at 1.53x is near the lower end of our target range. Importantly, we progressed several strategic priorities to strengthen Orica's platform for sustainable growth in this half. The Nelson Brothers and Danafloat acquisitions align with our strategy and reflect our commitment to disciplined growth and building high-quality earnings over time across our 3 business segments. We continue to see strong demand for our high-margin premium products and technology solutions, underpinned by solid fundamentals across our core gold and copper markets and critical commodities.

While these conditions remain supportive, we are not complacent. During the half, Orica commenced a cost reduction program, targeting at least $100 million of annualized savings over the next 3 years. This program is focused on structurally lowering costs and improving how efficiently we operate while continuing to prioritize safety and support future growth.

We also made progress towards securing long-term diversified ammonium nitrate supply in North America, while removing ongoing uncertainty and settling the U.S. litigation. This shift will strengthen Orica's resilience and support security of supply for our customers.

Moving on, I'll briefly touch on the key highlights of each region. Australia Pacific and Asia delivered EBIT of $332 million, demonstrating strong resilience despite external impacts, including a temporary reduction in coal production quotas in Indonesia and unfavorable foreign exchange movement. In Blasting Solutions, earnings grew 4% when you exclude the $15 million of one-off carbon credit sales in the prior period, driven by sustained demand for higher-margin premium products, advanced technologies, a very successful contract renewal cycle and strong commercial discipline. In Digital Solutions, exploration activity remains very high with listed exploration companies raising record new funding in Q4 2025, supporting strong demand for access mining technology, while the Geosolutions business benefited from cross-selling across the portfolio. In Specialty Mining Chemicals, Yarwun continued to perform strongly with new reliability and production benchmarks, and we are seeing positive early sales momentum in the OptiOre mining chemicals range, supporting our strategy to grow beyond sodium cyanide.

Turning to North America. EBIT of $113 million increased by 18% year-on-year, reinforcing the region as a key growth market for Orica. In Blasting Solutions, demand for premium products continued with strong adoption of WebGen wireless blasting, supported by disciplined cost management. However, this was partly offset by the appreciation of the Australian dollar. Earlier today, we successfully closed the acquisition of the Nelson Brothers Mining Services business. I'll speak a bit more on that later. In Digital Solutions, earnings growth was driven by strong uptake of blast measurement products like FRAGTrack, increased cross-selling and growing demand for geotechnical sensors and heap leach monitoring services in copper and gold. In Specialty Mining Chemicals, we completed the planned safety upgrades at Winnemucca site with all production lines now running reliably and at capacity.

Turning now to Europe, Middle East and Africa. Across our business, we are not experiencing any material constraints related to the conflict in the Middle East so far, but we continue to monitor the situation very closely. EMEA delivered EBIT of $51 million, up 3% on the prior period. Blasting Solutions delivered a strong underlying earnings performance, supported by increased mining activity in key regions, including Africa and Central Asia and a continued focus on cost management. In Digital Solutions, we saw increased adoption of blast measurement products and radar sales and momentum in key regions such as Africa and Turkey. In Specialty Mining Chemicals, we continue to expand our footprint into jurisdictions with major gold basins. And with the acquisition of Danafloat, we have broadened exposure to copper and zinc going forward.

Latin America EBIT was $47 million, up 1% on the prior year. In Blasting Solutions, earnings were supported by continued demand for high-margin premium products, emerging new growth opportunities and disciplined cost management. In Digital Solutions, we are building on Opera's strong performance in gold, seeking increased uptake with copper customers and have partnered with a large driller in the region, creating further growth potential for access products. In Specialty Mining Chemicals, we expanded into new high-growth mining regions in Latin America, supported by strong gold fundamentals.

Turning now to Slide 7. I will talk about the 3 reporting segments. Starting with Blasting Solutions. The underlying blasting business performed exceptionally well, with earnings up nearly 4% across all regions, except for Indonesia, which was down due to the temporary reduction in coal production quotas mandated by the Indonesian government. We continue to see strong momentum in the adoption of premium products and advanced blasting technology. Notably, increased use of our wireless WebGen systems and 4D tailored explosives. Quality of earnings continue to improve, reflecting a successful contract renewal cycle and strong commercial discipline and cost management. Manufacturing performance across our continuous plants remained consistent with the major cost line turnaround underway and progressing to plan. As previously disclosed, we recently settled the U.S. litigation removing uncertainty and allowing Orica to establish a new customized diversified supply chain in North America.

Moving now to Slide 8, I will provide further details on our strategic actions in North America. North America is a critical growth market for Orica, and we have taken decisive actions to strengthen our position significantly. Firstly, the acquisition of Nelson Bros. explosives business significantly expands our exposure to the U.S. quarries and construction sector and provides Orica direct channels to market and a platform for further cross-selling opportunities across the 3 segments. Nelson Brothers explosives business includes a suite of high-quality assets that are strategically located near key end markets. The transaction is expected to be EPS accretive in the first full year of ownership and provides an annual earnings before interest and tax contribution of approximately $35 million once fully integrated. I'm very excited to welcome the 400-plus people from Nelson Brothers into the Orica family and to work even closer together to serve our U.S. customers. We have already made progress towards securing long-term diversified ammonium nitrate supply in North America. This process will run for the next few months with a view to have new supply contracts in place during the second half. We are very encouraged by the interest to date, and this remains a top priority for the North American business. Collectively, these actions strengthen resilience, security of supply and customer outcomes in the North American region.

Turning now to Digital Solutions on Slide 9. The Digital Solutions segment continued to scale rapidly, underpinned by growing contracted recurring revenues and strong customer retention in line with high-growth, high-margin mining technology benchmarks. Digital Solutions EBIT was $51 million, up 25% on the prior period, reflecting sustained customer adoption and operating leverage as the business scales up. Performance was broad-based across the portfolio, highlighting the depth, diversification and synergies of the Digital Solutions products. In Orebody Intelligence, elevated exploration activity and our improved driller and geology integrated workflow increased the installed base of Axis gyros. While Axis Connect is now at 190 projects already within 18 months of launch, positioning us for further adoption across the exploration workflow. In blast design and execution, growth was driven by strong gold and copper fundamentals and continued adoption of OREPro grade control and FRAGTrack measurement solutions. Geosolutions performed very well on ongoing demand for slope stability monitoring. The new Series 5 GroundProbe radars extend our technology leadership in safety critical monitoring and Terra Insights continues to outperform the original investment case, demonstrating the scalability and channel synergies of our geotechnical offerings. This year, we have provided additional information to illustrate the quality and sustainability of Digital Solutions earnings.

Turning now to Slide 10. Recurring revenue is now over 60% of digital solutions revenue, improving earnings stability and cash flow predictability. Hardware sales and leasing at 67% create a physical and data embedded footprint at customer sites and delivers differentiated mission-critical insights. This is complemented by software at 23%, enabling improved decision-making and services at 10% and supporting sustained value delivery, altogether driving margin expansion and deeper long-term relationships. Cross-selling into our core blasting customer base remained a key growth driver. During the half, cross-selling increased by a further 3% with significant opportunity to expand share of wallet as customers adopt multiple digital solutions over time. Ongoing investment in next generation of technologies will continue to expand our addressable market, extend contract duration and support long-term earnings growth also driven by new technologies like AI.

Moving now to Specialty Mining Chemicals on Slide 11. The Specialty Mining Chemicals delivered EBIT of $57 million, up 20% on the prior period, above our medium-term forecast despite the unfavorable foreign exchange impacts. Sodium cyanide sales were strong, reflecting robust demand and our focus on reliable production and operational execution across our 3 continuous manufacturing plants in the U.S. and Australia. We also continue to unlock customer synergies across the blasting and the sodium cyanide business. During the half, we successfully completed planned safety upgrades at the Winnemucca solids plant, and the plant is now operating reliably and at capacity. We continue to see new mine developments, which are supportive of potential future capacity expansions, both at Winnemucca and the Yarwun sites in the midterm.

In April, we announced the acquisition of the Danafloat product range, a suite of high-performance collectors with an established mining industry customer base across EMEA and Lat Am. This expands Orica's portfolio beyond our leading position in sodium cyanide for gold into sulfide ore processing, including copper and other future-facing commodities. It aligns with structural demand for copper and future-facing commodities driven by electrification, the energy transition and AI-related infrastructure buildout. Danafloat is highly complementary to our proprietary OptiOre range, together, offering a differentiated suite of solutions tailored to specific ore mineralogy and circuit conditions. This diversified specialty mining chemicals beyond sodium cyanide into copper, zinc and other future-facing commodities.

I will now hand over to Jamie to talk about our financial performance in detail.

Thank you, Sanjeev. Good morning, everyone, and thank you again for joining us on the call today. I'll move to the key financial metrics shown on Slide #14. Consistent with our first half business update provided in March, continued strong business performance throughout the first half is reflected in our key financial metrics. While top line sales revenue was marginally lower than the first half of 2025, our earnings before interest and tax has risen to $512 million, an increase of 5% compared to the prior corresponding period. I'll provide more details on this in the coming slides.

Net profit after tax pre individually significant items increased by 8% to $283 million. As previously announced in March, significant items totaling $284 million have been recognized during the half, primarily relating to litigation costs and settlement expense of the CF Industries litigation, incremental supply costs following the 5th of November incident at the CF Industries Yazoo City facility and restructuring costs associated with the organization-wide cost-reduction program. This has resulted in a statutory net loss after tax of $1 million.

Net operating cash flow was again strong during the half, finishing at $231 million. Continued strong cash generation across the business was partly offset by movements in foreign exchange and U.S. litigation costs that have now been resolved and temporary higher sourcing costs in North America. Return on net assets improved to 14.7%, an increase from 13.1% in the prior corresponding period. And approximately 1% of the increase is a result of increased earnings with the balance a result of changes in rolling net operating assets.

Our strong first half results have enabled us to deliver continued improvement in EPS, pre significant items, to $0.607 per share, an increase of $0.067 per share or 12% versus the prior half.

Turning now to Slide #15. We shared our refreshed capital management framework in March of last year, and this half is a good demonstration of the framework in action. We've delivered resilient operating performance despite ongoing geopolitical and market volatility with this half earnings the highest in over 20 years. Continued operating efficiency and capital productivity is evidenced in our improved return on net assets. Our business delivered another strong operating cash and trade working capital result supported by consistent, disciplined allocation of capital expenditure. Our balance sheet remains strong, and importantly, we continue to increase returns to shareholders. This half's interim ordinary dividend is the highest paid since the target payout ratio was introduced in 2016. In March, we successfully completed the $500 million on-market share buyback, the first to be fully completed in over 10 years.

In terms of capital and portfolio management, during the half, we've progressed the sale of surplus land at our Deer Park site in Victoria and also entered agreements to acquire the Nelson Brothers Explosives and Danafloat Chemicals businesses, as Sanjeev detailed earlier, with both acquisitions expected to deliver returns well above risk-adjusted weighted average cost of capital.

Turning now briefly to Slide #16. Pleasingly, the strong alignment between improved earnings, strong cash generation and application of our framework has translated into increased returns to shareholders with underlying growth in earnings per share and ordinary dividends during the half, outpacing growth in earnings. This demonstrates sustained positive momentum from the prior year and also continued successful execution of our strategy and the financial resilience that we continue to build across the business.

Turning now to the EBIT bridge on Slide #17, where you can see underlying earnings growth this half has continued across all segments.

Starting with the Blasting Solutions segment, volume, mix and margin increased by $24 million, normalizing for $15 million of proceeds from the sale of carbon credits recognized in the prior half and movements in foreign exchange. This was driven by continued demand for our higher-margin premium products, advanced blasting technologies, a successful recontracting cycle and continued strong commercial discipline. Margin growth from our blasting solutions technology product range increased by 16% versus the prior period, with continued strong demand for the safety, efficiency, environmental and cost benefits delivered to customers through our WebGen wireless blasting, 4D and Fortis specialty emulsion ranges.

In the Digital Solutions segment, earnings increased by 25% to $51 million versus the prior period. The segment continues to scale rapidly, underpinned by contracted and growing recurring revenue and strong customer retention. And pleasingly, growth in the half was ahead of plan, driven by significant customer demand for our FRAGTrack, OREPro and OREPro 3D digital platforms, together with the rapid scale-up of our Axis mining technology business, supported by an acceleration in global exploration activity, particularly in the gold and copper segments.

Within the Geosolutions business, early customer demand for the recently launched Series 5 radar has been strong. The segment continues to realize cross-selling benefits, leveraging our core blasting customer base as a key growth driver.

In the Specialty Mining Chemicals segment, again, growth in the first half was ahead of plan. Earnings increased by 20% to $57 million versus the prior half. Volume mix and margin increased by $5 million as strong gold fundamentals persist and continue to drive robust demand for sodium cyanide. The Yarwun and Winnemucca solids plants are fully utilized as sales opportunities are outrunning production availability with earnings increasing by $5 million as a result of improved manufacturing performance during the half. And we've commenced very early engineering works to explore debottlenecking opportunities at Yarwun and Winnemucca with the business currently securing third-party tonnes to support new sales opportunities across the global network. And multiyear supply agreements are also being made at improved pricing as strong demand growth continues. Global support costs decreased by $3 million versus the prior half, reflecting ongoing disciplined cost management, including savings generating from the recently announced organizational-wide cost reduction program.

In summary, this is a very pleasing half year result. We've continued to deliver earnings growth despite a number of challenging external market factors. These results demonstrate the resilience of our business and our focus on broad-based earnings growth that is sustainable through the cycle.

Turning now to trade working capital on Slide 18. Encouragingly, the improvements that we focused on over the past 2 years have continued into the first half of 2026. Total trade working capital cycle days on a 12-month rolling basis have reduced by 2 days from September 2025 and are in line with the prior half. Days sales outstanding improved to 45 days, reflecting our sustained commercial discipline and important to note, this was achieved in an environment of continued higher product pricing. Pleasingly, days payable outstanding improved to 52 days despite shorter product payment terms in some regions. Days inventory held remained consistent with September and increased 2 days relative to the prior half, in part due to critical pre-stocking ahead of the April and May Carseland turnaround and also seen as a prudent measure given current geopolitical and energy market uncertainty and the continued premium placed on security of supply.

Absolute trade working capital finished at $677 million, a decrease of $6 million from the prior corresponding period. Foreign exchange had a favorable impact of $31 million partly offset by $25 million underlying increase as at 31 March. This result reflects our continued strong focus on working capital efficiency, and this remains a key focus area for the organization.

Turning now to Slide #19. Total capital expenditure for the first half was $165 million, broadly in line with the prior corresponding period. Of this, $105 million was allocated to sustenance capital expenditure, and this included successful completion of 3 turnaround events within the Specialty Mining Chemicals business at our Winnemucca, [ Alvin ] and Yarwun sites. We also continue to prioritize investment in our downstream businesses, including 4D technology enhancements to our global mobile delivery fleet. $60 million was also directed towards growth capital expenditure, in line with strategy, with this supporting continued strong growth in the Digital Solutions earnings, manufacturing efficiency improvements at our Yarwun and Lurin sites and further investment to expand our advanced blasting technology product range.

During the half, we also made a further investment in our strategic partnership with Alpha HBA, directing growth capital expenditure towards the build-out of supporting infrastructure at the adjacent Yarwun facility. As outlined in our business update in March, we anticipate existing business capital expenditure will be more heavily weighted towards the second half with total spend for the 2026 financial year to be broadly in line with 2025.

Turning now to Slide #20 on the balance sheet and liquidity. During the first half, we successfully refinanced or extended $359 million of existing committed bank debt facilities for an average period of 5 years. We also established a new senior unsecured syndicated loan facility of $500 million in the Asian term loan market, a new loan market for Orica, comprising a $225 million 5-year revolving credit facility and a $275 million 7-year term loan facility. The average tenor of our total committed debt facilities at 31 March was 4.7 years.

Net debt increased by $237 million from September to approximately $2.2 billion. This increase was driven by cash outflows of $312 million, partially offset by a favorable foreign exchange impact on net debt of $75 million.

Consistent with our capital management framework, our leverage ratio at 31 March is 1.53x EBITDA within the lower half of our target range of 1.25 to 2x. Our liquidity position remains robust with cash of $769 million, supported by undrawn committed bank debt facilities of $1.6 billion at 31 March. In December 2025, Standard & Poor's reaffirmed Orica's BBB stable investment-grade credit rating.

As previewed in our announcement on the 15th of March, a one-off cash payment was made on the 30th of April of USD 169.5 million in full settlement of the CF Industries litigation. This matter is now resolved, and it's anticipated that our leverage ratio will finish the 2026 financial year at a similar point to that of 31 March, as I outlined earlier.

In summary, our balance sheet is strong. It positions us well to manage external market volatility, execute on Oracle's strategic priorities and long-term growth plans and importantly, continue to deliver increasing returns to shareholders.

Turning now to Slide #21. During the half, we've commenced an organization-wide program to deliver an enduring step change in the cost base of the business to best position the company for the next phase of sustained profitable growth. This program will deliver at least $100 million of annualized cost savings over the next 3 years relative to our September 2025 cost base. Through the program, we've concentrated on the most efficient ways in which we go to market across all of our operating segments, benchmarked best practice cost to serve and supply chain costs, together with lean functional structures to support this. Cost savings delivered from the program are expected to be realized progressively from the second half of this financial year with the majority of savings expected to be realized throughout 2027 and beyond.

Turning now to the dividend slide on Page #22. Under our capital management framework, we have maintained our target dividend payout range of 40% to 70% of underlying earnings. The Orica Board of Directors today have declared an interim ordinary dividend for the 2026 half year of $0.285 per share, unfranked, representing a dividend payout ratio of 46.6%. This represents a $0.035 per share or 14% increase on the prior year interim dividend. Pleasingly, our consistent and improving financial performance and strong balance sheet continues to translate into meaningful increases in total shareholder returns. And with that, I'll now hand back to Sanjeev.

Thank you, Jamie. Now turning to Slide 24, progress on our strategy. Our strategy is supporting sustained momentum and market leadership through delivering innovative solutions that create real long-term value as we always strive to be our customers' preferred partners. Through disciplined execution, successful acquisitions and continued deployment of advanced technology, we continue to deliver consistent performance improvement. Orica, today, is an innovative company with a resilient business model and continues to deliver shareholder value going forward.

Turning now to Slide #25, our key growth drivers and priorities. We are increasing exposure to resilient commodities such as gold and copper while reducing reliance on thermal coal, aligning the portfolio with long-term trends, including urbanization, electrification and artificial intelligence. Our strategic priorities remain fully aligned with the growth drivers I've discussed. We continue to grow our core blasting business. We drive adoption of digital solutions and grow recurring revenue, and we expand our specialty mining chemicals offering and grow beyond sodium cyanide.

We are continuing to progress our strategic targets. Safety is our top priority, and we remain absolutely focused on preventing fatalities. Following the fatality in North America, we have taken the critical learnings and are implementing these across the organization.

On sustainability, we have successfully achieved our 2026 emission reduction target ahead of schedule with further reductions planned by 2030 and 2035, supporting our long-term ambition of Net Zero by 2050.

Turning to our financial targets. Our 3-year average RONA is tracking within the target range of 13.5% to 15.5%.

Turning now to the outlook for the remainder of 2026 on Slide 28. We have entered the second half of this financial year with good momentum. Looking ahead, while we remain vigilant to geopolitical and market volatility, demand remains robust. We continue to see opportunities to grow earnings through supply security, adoption of premium products, technology and continued disciplined execution of our strategy. The full year 2026 underlying EBIT is expected to increase across all segments and all regions versus the prior period, subject to no new unforeseen factors impacting the business given the very volatile external environment we are experiencing today.

As stated earlier, we are not directly experiencing any immediate material constraints related to the conflict in the Middle East. And our products are generally not transported to the Strait of Hormuz. We will continue to closely monitor any potential external impacts such as those related to future geopolitical and market volatility and any future movements in foreign exchange. Balance sheet strength will remain a key focus, and we expect leverage to operate comfortably within the target range.

The existing business capital expenditure is expected to be broadly in line with 2025. Net operating cash flow is expected to be lower than 2025, and that's primarily driven by FX movements and the impact of significant items that we have previously flagged. Depreciation and amortization should come in at the lower end of our range of $520 million to $540 million guidance. Net finance costs will be slightly higher year-on-year, and noncontrolling interests are expected to track broadly in line with last year. Our effective tax rate should sit slightly below 2025, reflecting the regional earnings mix.

Looking beyond 2026, we see continued positive momentum and growth for Orica. Our medium-term outlook remains unchanged, and our focus stays firmly on maximizing total shareholder returns over time.

Turning now to the last slide, 30. Let me close with 5 takeaways from today's results. First, we delivered a record first half performance and entered the second half with solid momentum. The quality of our earnings and margin improvement reflects strong commercial discipline across the business, and the overall resilience of our business. Second, we are making meaningful progress in portfolio diversification, increasing significantly our exposure to the U.S. quarries, construction and civil market and expanding into copper processing chemistry, markets with attractive long-term growth potential. Thirdly, we maintained a positive outlook underpinned by our global manufacturing and supply network. This strong foundation ensures we are very well positioned to support our customers and deliver ongoing continuity of supply across all markets globally. Fourth, we have launched an organization-wide cost-reduction program targeting at least $100 million in annualized savings to support sustainable future growth. And finally, our balance sheet remains strong with a clear capital allocation framework. We are returning value to shareholders through a strong interim dividend and the completion of our $500 million on-market share buyback.

In summary, earnings momentum strategic progress, a resilient supply chain, structural cost environment improvement and increased shareholder returns. Orica is executing well and is well positioned for the future. With that, I'm now open to Q&A.

Thank you. [Operator Instructions] First question comes from Niraj Shah from Goldman Sachs.

Just coming back to the earnings bridge, you called out the $24 million volume mix margin benefit within blasting solutions. I'm just keen to understand what the volume drag may have been within that to assess, I guess, momentum on premiumization and cost efficiencies, please?

Yes. Thanks for the question, Niraj. In terms of volume, if you look at our results over recent years, you'd see that total and sales volume have been tracking down, but margin earnings has been increasing. That is a consistent trend in these results. At the headline, broadly, total volumes in the first half were around 3% to 4% down, and most of that was coming from the permitting reductions in Indonesia and some wet weather in Australia.

Appreciate the color. And just one more. How should we be thinking about, I guess, the CF supply disruption cost below the line in the second half? And if you have any color on conversations you've had with potential suppliers over CF, that would be helpful, too.

Thanks, Niraj. I'll take that. So just keep in mind that we had the supply interruption in -- I think it was November when we received the force majeure notice and then we had to go spot into the market to ensure continuity. So we purchased more than what we would normally need because we had to build up inventory for the Carseland shut, which started 1st of April and will continue for the whole of May, and then we will start up Carseland sometime in June. It also depends on what our partner there -- with their ammonia asset and their timing. So we have to align all of that. So this means that we had to build up inventory and procure product in the spot market, and we have to procure more than normal because we had to build up for the lack of Carseland supply. And you know Carseland is more than 500,000 tonnes capacity. It's a big plant. Now once the Carseland plant starts up in June, we should then get a bit of relief in terms of the supply tightness that we've had.

Meanwhile, what we have been doing is we've been obviously talking to every potential supplier, and we've been testing spot volumes and checking the supply chains. The way I look at it is we are in a unique position because we have got this one-off opportunity of redesigning a supply chain in the United States, which is fit to purpose. So the contract that we've had so far is more than a decade old. At the point that when it was conceived, it was obviously very relevant to our needs, but the market changed. Our business changed meanwhile. And today, we have a very, very different business to what we had 12 years back. So we now have the opportunity of leveraging our own manufacturing network, the existing contracts we have outside of the U.S. in terms of sourcing as well as setting up a new supply chain within the United States.

And not to forget, we've acquired 4 immersion assets with Nelson Brothers, and they are very, very strategically located, and they need to be fed. So we are now in the process of basically [ white ] boarding the entire U.S. demand and supply situation. And we've been testing supply chain with multiple sources to see what is the most cost optimized way of doing this. Once we land on a solution, and hopefully, that's the ideal solution Plan A, Plan B, Plan C, we then intend to start finalizing longer-term supply agreements. So at the moment, it's -- you can call it a trial phase where we are testing the resiliency of -- the resilience of a new supply chain. This will also incorporate by the way, swaps and supply from Carseland and from our existing supply network outside of the U.S. So it will take a few more days, weeks, months, and then hopefully, within this half of the financial year, we would have landed at something.

But once Carseland starts up, our purchase needs will reduce because we'll already start to leverage the internal supply network we have. So we were not able to do that in March and April and May, unfortunately, since the plant was shut. I hope that answers, Niraj, the question.

Got it, yes.

[Operator Instructions] Next, we have John Purtell of Macquarie.

Look, just the first one, just building on Niraj's question there. So obviously, around North America. So I suppose just a broader question is, obviously, a couple of months ago, you sort of highlighted your confidence in being able to find a long-term supply solution in North America. Obviously, we've had the Middle East wars sort of in between that or starting up at the same time. We hope it ends soon. But the essential question is, is there any change to your confidence in being able to find that long-term solution notwithstanding the conflict?

Yes. Thanks, John. Obviously, the conflict is an issue, right, because it's causing uncertainty, it's causing short-term volatility and all of the other things. Keep in mind that in the United States, we are a very large procurer of nitrogen outside of the ag industry. And the big benefit of Orica is that our demand is consolidated. We know where the outlets are, including now the new network of consuming sites we've got from Nelson Brothers. We pay on time, and our demand is not seasonal. So it goes around and it's very stable. So obviously, we have quite an attractive customer to the nitrogen market in the United States, and we were not accessible to third-party suppliers over the last 12 years.

We are now back in the market. Our initial conversations, which have been started since November, obviously, when we entered the market to buy spot tons after the force majeure announcement, have been very, very positive. And we are in the process of now looking into what are the alternatives, what are the opportunities and how can we best, as I said earlier, how can we best design a supply chain that is resilient for the next 10 years. So the confidence has even improved. The sourcing is working as we speak. So even though Carseland is down, we've had a continuity of supply. And if the situation gets better as soon as Carseland starts up because we can supplement with the internal network.

So yes, we feel pretty good about it. But we are taking our time because as I said, in a mature market to redesign a supply chain as a unique opportunity doesn't come every day, and we don't -- we want to get it right. So we'll take our time, and we are engaging with multiple sources at the moment, and it looks very positive.

And just a second question in relation to APA. Obviously, with the tightness in the market, logically IPP prices are moving higher. What does the contracting cycle look like for you this year? And you're seeing any improvement in Indonesia as well, given some of the dynamics in coal and energy markets?

That's absolutely correct, John. The coal is at 52-week highs [indiscernible] or Australian thermal coal, and that's a direct impact coming out of the energy crisis because of the Middle East issues we are having there. Now the Indonesian government did announce that they are relaxing the [indiscernible]. So it was a 20% cut on coal output, and that is directly reflected in our volumes being down, and that's significant. We are the biggest player in Indonesia. We've got Bontang manufacturing and we've got the network of continuous and discrete manufacturing sites across the country. But the first information inputs coming in from customers is, yes, they're all reviewing now their plans. They all would like to ramp up production. There is still this shadow of royalty. So most of our coal customers are still having those conversations with the relevant departments and the ministries in Indonesia, but they are all preparing to ramp up. So my expectation -- and when you ramp down, you cannot just ramp up overnight, you have to mobilize people, resources, supply all of the other things. So that's work in progress. So my expectation is, yes, we'll see a pickup in demand in this half, hopefully starting sooner rather than later. And then this should continue because I don't think energy prices are going to correct downwards even if the ceasefire holds in the Middle East. So I expect a stronger outlook from Indonesia for the next year, obviously, the second half of the next year.

In Australia, demand is holding up. Obviously, coal pricing is -- all commodity pricing is pretty healthy. We had unfortunate interruptions. So [indiscernible] was down for 10 days. That was a trip that led to a bit of a power outage, and we are still under supply constraints because of the Western Australian force majeure. So we've sourced the volumes, obviously, at higher costs. Expectation is that the Burrup facility for ammonia will start up in the latter half of this month, and then we should go back to normal in terms of supply. The last time we spoke of IPP, I mentioned $900 to $1,000, give or take. At the moment, it is significantly above $1,000 level given the tightness in the market overall.

[Operator Instructions] Next question comes from the line of Daniel Kang from CLSA.

Just looking at Slide 32 and the pipeline of scheduled maintenance and turnaround works in the next 18 months. Just thinking how should we think about the earnings impact of these planned works? And will the cost savings program be able to offset this impact?

Yes. Thanks, Dan. Sorry, there was a bit of -- okay. I hope you can all hear us. So there are 2 major events. At the moment, we are in the middle of the 2-month Carseland shutdown, and I said that we expect the plant to start up in June. So that work is done. It's running well. No issues, no concerns, no safety problem seems to be on time, on schedule, on cost.

We've obviously built up the inventory. So the supply continues. The next big event is October, November. It's a 2-month shut of Kooragang Island. And as you know, Dan, it's an important site for us. So we've got now 3 or 4 months to build up inventory to ensure continuity of supply. Now the big advantage here in Australia is because of the network with Burrup and with Island, we have been able to move product around. And then Bontang can always step in and support us if we need additional volume. So all of that has been prepared and planned. So I don't expect too much. Yes, the cost of the turnaround, the cost of the fact that the plant is not operating for 2 months and some additional supply chain costs, sourcing costs will come through. But we don't think that is quite -- that is material.

The intention of the cost-out program of $100-plus million was different. You know that over the 5 -- last 5- to 6-year tenure, we have been building -- we are on a journey of building our portfolio. We've got now the 3 segments. We have done M&A across the 3 segments. And we've grown the organization. We've grown revenue. We've grown bottom line, and we've added resources. After Nelson Brothers, we'll be close to 15,000 people globally. In a growing organization, it's obviously something you need to drive growth. That's all positive. But I think time has come now to start looking at our structures. Meanwhile, we have built up infrastructure. We've got now an off-shoring center in Philippines, where we have more than 800 employees. 6 years back, we had less than 60. So we have significantly scaled that up. We are in the process of deploying AI across the board to automate a lot of those tasks, and we are looking at delayering and to see where the efficiencies are. And that's the reason why we've also changed the approach into the regional organizations, where now they are the platform to sell products across all the 3 segments.

So we don't have dedicated teams for blasting and specialty mining chemicals and digital solutions. We are now selling across the platform and the portfolio. All of that gives us the opportunity to structurally look at our costs and see whether we can go above and beyond managing inflation, which we have done quite well over the last 5, 6 years.

So that's got nothing to do with the turnarounds. The turnarounds happen every year. Last year, we had our turnaround cycle. This year, we've had the turnaround cycle. We'll have another one next year. It's just the unplanned ones that can impact us because obviously, we have not prepared for this, and we've not planned for this. Also, when suppliers announced force majeure, that's not very helpful. So the turnarounds were not the major driver for this program. It was just the right time to do it. And with the available technology and the opportunities we have, we feel pretty comfortable with that.

And maybe one for Jamie, just in terms of seasonality of profits. Typically, [indiscernible] profits is skewed to the second half. Can you help us with how we should think about the second half SKU for this year?

Yes. Thanks, Daniel. So obviously, it's been a very strong first half result. We expect the business to continue to perform well through the second half. I can't really provide guidance now, but the split won't be too dissimilar to prior years. It might be a little bit closer to even if you look at first half, second half.

As Sanjeev said, just to remember, we do have the Carseland turnaround that's happening through April and May. We are hearing noise around increased permitting in Indonesia, but a number of those mines are on reduced rates. So it's a question of how long it will take for them to ramp up. And we are working through the Burrup outage, which is expected to restart this month.

And also important to remember is foreign exchange, right? So we had a -- if you follow foreign exchange, it sort of started a spike around December into January. So we've had only a few months in the first half. Looking today, it's at 72-plus cents. There will be a full 6-month impact in the second half. So that's roughly how you can think around first half, second half split.

Next, we have Lee Power from JPMorgan.

Just on the Indonesian piece, Sanjeev, can you -- I know it's hard, but can you give us some sort of color on how much of a drag that would have been for APAC? And then am I right in your -- in reading your comments and what Jamie just said in response to John's question that the guidance includes some recovery in Indonesian volumes, so you're assuming the quota does go your way? -- obviously were flat for the region half-on-half.

Thanks, Lee. So when you look at the APAC business, it's Australia, a little bit of Pacific and then it's Asia. So we've given some direction there. We'll be saying in the first half, the Asian business outside of Indonesia grew earnings. Australia was very strong in terms of earnings growth. And Indonesia was down. Now the quota cut -- the production quota cut was 20% of coal volumes. That's significant volumes. And we are the largest service provider in the Indonesian market. So we had a direct impact on volumes going into our coal mining customers.

Now we obviously did not have any impact on Bontang because Bontang ran full throughout the period of low demand because we just put the product into the network and used it everywhere. And obviously, our own manufactured product always gets priority over purchase product because of the better margins. But Indonesian earnings did get impacted.

Now with the energy crisis, with the spike in coal, obviously, the Indonesian government had second thoughts, and now they have said that they want to be more relaxed and allow more production. But as I said earlier in my comments, there is still a discussion amongst at least some of our customers on sharing the royalty benefits, the benefits of more production with the Indonesian government. So that's not landed fully. Some of them have already started to ramp up. Some others will. But also, as Jamie mentioned, it takes time to mobilize because people are expecting this to be maybe a 6-, 9-month program of reduced production. So they were starting to demobilize to save costs and now to get the people back and most are remote mine sites in the islands in Indonesia. So it's not easy.

So it's going to take time. I do expect some positives in this half, but I do expect a much stronger Indonesia in the next financial year. So that's going to be a nice upside to look forward to because we were also planning for a reduced demand in the country, but things have changed clearly.

Okay. That's good color. And then just on Danafloat business, like how -- can you give us an idea of the scale and maybe how that's been tracking versus the high single-digit medium-term targets you have for your own equivalent business?

Yes. So we have always said that we keep looking for chemistry to support the copper processing industry because Orica has the manufacturing capability, but not the IP. And the other challenge in that industry is that the customer approvals take a very long time. So it's a very sticky business, which is great. We like sticky business. Our blasting business is very sticky. So it's a digital business, but it takes a long time for a new entrant to come in.

So the opportunity came. Danafloat belongs to FMC, which is a big chemical company headquartered out of the United States, and they have operations in the Nordics where they make these highly specialized IP-protected formulations that go into copper ore recovery. And obviously, it was not strategic for them. It's clearly strategic for us because we are the largest service provider to the copper industry globally in the blasting and the digital space. So we've been having conversations with them and with several others who own the chemistries, but don't have the market access. And then FMC decided that they were happy to sell the business to us. We have not acquired any assets. We have not acquired any people. So it's obviously capital light. We've acquired the IP and most importantly, we've acquired the customer approvals. And it's a running business with customer base, existing customer base in Europe, Middle East, Africa and LatAm. And the idea is that -- and obviously, we have supply agreements, interim supply agreements with them, they'll support us so that the business doesn't get interrupted. But the idea is to take that IP and the manufacturing know-how, bring it into the Orica manufacturing network. So all our continuous manufacturing sites handle chemistry and then start production in-house. And then as soon as we've got our own product, obviously, we take the business and scale it globally as we do with everything else we acquire.

So it's a very, very exciting business. It's a niche proprietary high-value, very low volume, high-margin business, which is exactly the space we want to work in, and it's low capital, and we're very, very excited about it. It's our first foray into copper chemistry. We are #1 in gold chemistry. It's our first foray. We want to duplicate the gold model into copper, and we will continue to look for these kind of bolt-ons. The idea is to grow the business quickly, scale it up quickly and make it global, and then obviously leverage our access to more than 500 mine sites globally and see where we can scale the business up.

Next, we have Ramoun Lazar from Jefferies.

Just a couple of questions for me. Maybe one just on the supply impacts. And if you could help us sort of get an understanding of what those costs could be to the second half, particularly in the below line items. I expect you're going to take those below the line Jamie, in the second half. So any guidance there? And then also, how should we think about the treatment around the Burrup outage as well?

Yes. Thanks, Ramoun. I'll take Burrup and then Jamie can take the U.S. sourcing cost impacts. So the Burrup was unfortunate. Again, it was caused by a power trip, which led to the ammonia plant tripping and then they were not able to restart this. Expectation is in the second half of this month, the plant starts up. We've already sourced the volumes. They are sitting in our tanks, either as ammonia or as ammonium nitrate, so that there's no supply interruption. There is obviously additional costs because these were material tonnes that we brought in. But we feel comfortable that the AusPac business has got enough headroom that we will not have any impacts on margins, and we'll find a way to mitigate that.

So there's no material impact on earnings in Australia because of that -- of the impact. And the expectation is that the plant starts up and we are back to normal. So yes, it's unfortunate, but these things happen. Kooragang Island also tripped for 10 days because of a power outage, and we just had to live through it. All of these add cost to us. But again, we are handling multiple manufacturing assets globally, and we know how to manage that.

A quick comment on the U.S. sourcing costs before I hand over to Jamie. As I said earlier, we had to source more than we normally would because of the Carseland shut because we had to build up inventory and the force majeure came at the wrong time, unfortunately, in November. So second half, once Carseland starts up, we'll get the supply. That's a world-scale plant. It's 500,000 tonnes plus, and we have some capacity there. So that's going to help us to mitigate a lot of those sourcing costs that we had in the first half. Obviously, some of that will be passed through to customers, and there might be a few remnant remaining there, but I'll let Jamie handle answer that.

Yes. Thanks, Ramoun. Look, consistent and you need to think about net costs, right? So they're difficult to sort of estimate. It depends on the level of pass- through to customers. So to date, the team in the U.S. have done an outstanding job working their way through that. And as Sanjeev said, in the second half, we will have more internal network tonnes coming out of Carseland post the turnaround.

In terms of the accounting treatment, I mean, at the moment, we're focused on the RFP, so that's open, and obviously, the near-term supply of the customers. So the RFP is progressing well. We expect that process to complete towards the end of this month, and we'll have a better idea on supply opportunities probably early June. And really, the accounting treatment will follow that. So that's something that we're working through in the second half, but we'll be in a better position to provide an update on that later in the half.

Okay. Got it. That's helpful. All right. And then just noting some of the comments around the cyanide business and debottlenecking opportunities. It sounds like you sold out at both those plants now. Is that right? And then also, just if you could shed some color on what that potential debottlenecking could look like in terms of freeing up additional times?

Thanks, Ramoun. So demand -- and that's not a surprise to anybody is very, very strong. Our challenge with the 2 assets we had -- obviously, Yarwun -- and I called it out in the AusPac update. Yarwun has run at record rates, and we've got fantastic output. The plant is running beautifully. So absolutely no concerns there.

The challenge with both Winnemucca and Alvin was private equity owned. So we had to catch up with maintenance, we had to catch up with [indiscernible]. So the priority was, and I said that earlier, when we did the acquisition in multiple times. First priority was safety. So we spent a lot of time and effort to bring both Alvin and Winnemucca to Yarwun standards, Orica standards, safety standards. That took some time.

The second step was reliability because the plants were operating equipment to end of life, which is a terrible way to operate a chemical plant. So there was no preventive anticipated maintenance happening. So we've changed that approach. We have trained the operator so that we do not run plants to end of life, which means that the plants were operating for, say, maybe 2 weeks, 3 weeks and then shutting down, and then equipment had to be changed or fixed or repaired and then they were starting up. So we were losing a lot of capacity out of that. And we wanted the plan to run 365 days continuously unless it's a planned shut. So we focused on reliability, instrumentation, upgrading, and we've done that for both the plants. Now the plants are operating at the capacity at which they were designed for. And it has taken us nearly 2 years to get there.

The third step, which I've also called out is, as we always do with our chemical plants, we've done this with the AN plants, with the nitric acid plants with the ammonia plants and with the Yarwun sodium cyanide plant, we are looking at debottlenecking. So this is not a high capital. This is low capital, very smart, clever, either capacity freeing up or improving reliability, so we get more output from the same assets. And this potential is huge. As an example, as a reference, when the Yarwun plant was designed, it was built 25 years back with 30,000 tonnes capacity. Today, we can make more than 100,000 tonnes out of that plant. So we are now going back with all that expertise we have of managing and running continuous plants to look at Yarwun and to look at Winnemucca to see how much more can we squeeze out at the lowest capital cost. And some of those projects can take weeks because the operators know where the bottlenecks are. It's a matter of giving them capital and allowance to do the work. Some might take longer. If you've got long lead items and you want to change out a compressor or add a column or build a new tank to improve capacity and throughput.

So we have a plan. The plan is being worked on as we speak. We know when we'll get there. And to prepare for that future capacity debottlenecking, we are already buying third-party tonnes to -- you can call it premarketing, but it's already an existing market from players in Asia so that we -- whenever the capacities are available, the additional capacity, we'll then move immediately to own manufactured product. So that's something we do very well all the time, and that's exactly what we'll do with the sodium cyanide assets we have acquired.

[Operator Instructions] Next, we have Jacob Cakarnis from Jaden Australia.

Jamie, hopefully, you can hear me clearly. It's been a mixed line for all of us, I'm sure. Just the first one, Sanjeev, on the U.S. supply dynamic and RFPs that are out. Just 2 questions there. Is the idea that you'd be at a net neutral margin outcome for the business just making sure that there's good availability for customers? And then I guess the second part of that first question, are you precluded from working with CF Industries again? And in the RFPs, are there considerations for international supply as well, please?

Thanks, Jacob. No, we're not precluded. We work with every supplier. And as I said earlier, we are an attractive customer for the nitrogen industry in the U.S. So the cost basis of the U.S. nitrogen industry is all back to Henry Hub. So based on Henry Hub gas, you either make ammonia and the ammonia market or you buy ammonia, which is produced off Henry Hub, there's very limited trade going into the U.S. for nitrogen. There's some coming in from Russia and other sources. And we will now obviously bring in some product from Carseland, which we were not allowed to do because of exclusivity, but there's very limited trade. So it's all based on the same cost base.

The big challenge in the U.S., it's a big country, expensive logistics. It's all railcars and long distances is the cost of supply chain. So the idea now is to not be dependent on a single supplier to have a diversified network of suppliers. You have to remember that our business model has changed from catering to a handful of big customers in the coal industry to the Q&C and the civil market, which is basically in multiple states across the United States. So sourcing from a single supplier and taking product long distances gets very, very expensive. Every kilometer you go further away from your source, you add logistics cost, leasing costs for rail cars, handling costs, all the other stuff. So the idea now is to come up with a theoretically perfect supply chain where you source close to where your demand is. And now we've got the 4 emulsion plants from Nelson Brothers, and our second joint venture also has a couple of emulsion plans. So that's the network we have to feed. That's where the product goes.

So we are now working with different suppliers in the nitrogen industry to say which is the most competitive and the least lead time supply chain that takes us and gets us the best landed cost and that makes us more efficient. So that's basically the target. If we are cost neutral, great. My hope and ambition is we should be even better in terms of supply chain costs with a diversified supply chain. But that's a challenge for our U.S. team. And you can imagine there's a dedicated team of experts working on this and dealing with them. So we'll keep all of you posted where it lands and that should happen in the near future.

I suppose the concern of the market was that there'd be those added costs, but that's good color. Just a simple one for Jamie, please. Could you just give us a sense of the FX sensitivities just on translation, either at the revenue line or the EBIT line?

Yes. I'll just hand over to Jamie, Jacob. Just to remember this, and we have this everywhere. These were traded tonnes. The U.S. tonnes were not own manufactured tonnes. This was not Carseland or Kooragang Island or Yarwun or Bontang. These were traded tonnes. Like we have traded tonnes in EMEA, like we have traded tonnes in LatAm. So the margins were traded margins. So it's an important raw material, nitrogen in the U.S. for us. But you have to all remember this, that these are traded tonnes. So these were not owned manufactured products with the margins we enjoy when we produce back to gas or ammonia. Jamie, over to you.

Thanks. Yes. Thanks for the question. So my rule of thumb is plus or minus $0.01 in the AUD to the USD is around AUD 4 million to AUD 5 million in terms of EBIT. So we have somewhat of a natural hedge in [indiscernible] 4. So as raw material pricing or other costs move, they'll move through the revenue line.

If you think about the balance sheet, so we have cash -- foreign cash holdings in other parts of the business across the globe, that currency relative to the U.S., as that moves, that will move through interest. But on the other side of that, you'll have the impact on the balance sheet through working capital. So that sort of nets out. What we don't do is hedge the translation of foreign earnings, for example, U.S. earnings, we don't speculate on that. So we have somewhat of a natural hedge. But if you think translationally, $0.01 is roughly $4 million to $5 million in terms of EBIT.

You saved us all some time tonight, I'm sure.

Next, we have Mark Wilson from RBC.

Just a quick question. Where you are experiencing higher third-party ammonia and AN costs. Are you able to pass that through to your customers across the board? And generally, what is the time lag?

Yes. Thanks, Mark. So if you look at the indices which are published, you've got [ Tampa, ] you've got the European indices and you've got the Asian indices for ammonia. And you'll see that ammonia is now trading anywhere. It depends on whether it's FOB or CIF or delivered -- anywhere between USD 600 to USD 800 per tonne. Go back 5 months before Middle East or 4 months before Middle East happened, they were trading at $200 to $300. So they more than doubled the ammonia indices. And obviously, all of our rise and fall contracts are especially the traded ones, right, because the manufacturer ones, obviously, we've got control -- better control on the input cost, which is gas and ammonia in certain cases.

The traded tonnes were always passed through because this is a service we offer to customers. It's not something that we do to make margins. It's basically a raw material we buy for our emulsions and for our bulk explosives, and then we offer ammonium nitrate traded tonnes to customers as a service. So that goes directly through to our customers.

Time lags on, an average, 3 months. After the last Russia-Ukraine -- I can't say it's over because it's still ongoing. But once the Russia-Ukraine prices started, we went through the entire contract book, especially for traded tonnes, and we tried to compress those cycles to make it even shorter than 3 months. So at best, we might have a 3-month lag before the pass-through comes. But in most cases, we're able to pass through in 1 or 2 months. So it's not any more a big issue. That's why we never call it out for the last 3 or 4 years, the lags we have never called out really because they have not become -- we found a way to manage them.

Okay. That's helpful. And then where there have been the planned outages, CF and Burrup. Where does liability lie? Are you bearing some of the costs? Or does that go back to the manufacturer? How is that all working through?

It depends on the kind of sourcing contracts and supply contracts we have. We do have an obligation for quite a few, and this is industry standard, quite a few customers where we need to keep minimum stock levels, not necessarily ammonium nitrate, but basically detonators and emulsion and whatever else they need on a day-to-day basis.

So -- and something we are really proud of is that we have never shut a mine site down for supply. And that's the strength of Orica because our customers know we've got multiple sources. We've got redundancies. We make and buy nearly 5 million tonnes of nitrogen equivalence in the market. So we are the largest in the market. And we do this on a global basis with more than 20, 25 different suppliers, plus the internal network.

So we have managed the force majeure in the U.S. We have managed the force majeure in Burrup, and we have not let a customer down. But obviously, costs come through. Now some of those costs we can pass through because the timing is unfortunate, but the timing helped because we also saw the indices go up. So that helped us to pass the higher sourcing costs through. In some cases, we are not able to pass through. So we have to find smarter ways of managing those costs so that the margin doesn't get impacted.

In the first half results you've seen, both North American business has grown earnings and the Australia business has grown earnings. So you're not seeing that negative impact. So I think we've now got unfortunately enough experience to manage these kind of outages. And the team does a great job in ensuring that margins stay protected.

Next, we have Sam Seow from Citi.

Just a quick question on cash, particularly around, I guess, significant items. Maybe the easier way to ask the question, like a total second half kind of half flow amount you expect encompassing the settlement, supply issues and assume further restructuring costs -- from your cost out? And then maybe even if a net amount from proceeds from land as well?

Yes. Thanks for the question, Sam. I mean it's a good question. So our cash flow was strong in the first half. And obviously, it was impacted by foreign exchange and significant items. We are normally weighted towards the second half in terms of cash generation. There's a few reasons for that. We do have a bit of regional seasonality in the business. If you think about the Northern Hemisphere and some of the larger blasting businesses are a little bit more second half biased. We do have some large payments that normally go out in the first half, like employee payments and prepayments and insurance costs and whatnot. And we are carrying a little bit more inventory leading into the Carseland turnaround that we spoke about before. I'm very happy with where the leverage ratio is at the moment.

In terms of the second half, obviously, we have the settlement of the U.S. litigation that will go through significant items. Ongoing litigation costs have stopped because that dispute has finished. We'll work through the supply costs into the U.S. as we spoke about before. And then the restructuring costs we'll finish at the end of September. We'll make all the structural changes that we're making. There won't be any further restructuring costs, I don't think, in 2027. If you normalize for that, I think our net cash performance this year will be on a par, if not possibly better than last year. But there is, as you said, there's noise in there with significant items.

Okay. And then just quickly, the result a bit ahead of the update you gave, which was pretty late in the period. Just -- perhaps could you talk us through if there was something that went a little bit better than expectations, I guess, towards the end of the half. I just want to check if there's anything there you flag to us, I guess, from an exit rate point of view.

Yes. Sam, we did say when we came out in March to say that it will be slightly better earnings, and that's what we have delivered, slightly better earnings than our original plan for the half. What worked very well was the sourcing efforts the team did for Kooragang Island and Burrup because obviously, that was a bit of a curveball. The team in the U.S. has done an outstanding job in ensuring that we get the most cost optimized tonnes that feed into our manufacturing sites there. So that's been good. The turnarounds are always risky because you could always have incidents issues, cost overruns, delays. Knock on wood, the 3 turnarounds in the first half went well. We always build a little bit of a buffer there because these are big machines, and things can go wrong once you open them up. So we -- the teams have done an outstanding job there.

A bit of tailwind coming obviously from the market tightness. Clearly, there is some concern in the market about supply and reliability, and commodity prices are still very attractive. Copper, 12,000 plus; gold, 8,000-plus; iron ore, about 1,000 -- about 100. Coal prices have come up. So obviously, nobody wants to slow down production. So the concern on supply ability helps.

And then the recontracting cycle that we started, I said we are starting a new recontracting cycle after the last one was successfully completed; has had a great start. We've had some very, very good wins with a nice uptick in margins, and then obviously, the rise and falls comes through. So overall, demand -- underlying demand is strong. Sentiment is positive. Commodities are doing very well. Cost inflation is a real concern. I mean we also consume in, for example, in diesel. We've got a big fleet of MMUs and trucks and vehicles. So we have to find smart ways of managing that. But I think we've got now some expertise doing this over the last 4, 5 years.

Inflation is not new. We've been tackling inflation since the last 6 years now. It's getting worse, unfortunately, but I think we've gotten good at finding ways to ensure that the margins continue to grow.

The key has always been upselling the technology. So we've sold more units of WebGen. We've sold bigger volumes of 4D. We've sold our premium products. You see the digital business is all margin. The SMC business with better cost because our manufacturing sites are working very well. Supply chain has been optimized now across 3 sites rather than just Yarwun. All of that is margin for us because for the customers, it makes no difference, but our costs come down. And finally, the cost out program and our efficiency programs, we have been doing quite successfully. All of that helps, and that's why it's been slightly better than maybe what you might have expected.

Next, we have Harry Sundar from E&P.

Just a follow-on firstly on the impact of sourcing the short-term tonnes in the second half. Is it fair to say you're sort of indicating the impact could be lower on a net basis in the second half? And then just a follow on to that, given you're indicating still getting a second half skew. Would that be with taking this below the line or above the line or either in terms of still seeing a sort of second half SKU? Maybe just for context, I think last year, if you ex out the one-off carbon credit, is it sort of 52% second half SKU?

I think Jamie mentioned that he said it would be a bit more balanced in the first half, second half. For the only reason being that we've got the major Carseland shut in April and May, so that's fully in the second half. And you can imagine a big plant going down for maintenance has an impact. So that's the one thing to watch.

Seasonality-wise, the Northern Hemisphere, with the winters coming out now, demand is strong. Underlying business is looking good. So the SKU will be there, but it will not be that prominent. In terms of the financial treatment of the sourcing cost, it's difficult to say today, we have not taken any decision. So whenever I mention business is strong in the second half outlook, it's all underlying business. right? And then the financial treatment has to go through the normal process with the auditors and the Board.

The problem is we can't quantify that today because my expectation is we need to buy less. But in the end, we have to see where the tonnes are, what the additional costs how can we mitigate that by blending it with our own manufactured product. And remember, we've got sourcing contracts also in North America outside of the U.S. So it's not single source Carseland. We've got multiple contracts already, but they were never in the U.S. because in the U.S., we were exclusive with a single supply.

So we've got a lot of opportunity and we've got a lot of options, and we have to work through all of it. It's complex because logistics in the U.S. is not easy. That's the biggest cost factor. The cost of the product is what it is. It is back to natural gas, Henry Hub, and it's kind of a level playing field. It's the biggest element and the biggest challenge in the United States is getting your logistics right because handling costs of our nitrogen in the U.S. are quite high.

So that's what we are focused on. So at the moment, difficult to say, we'll see where the RFP lands. We'll see where the multiple courts we are expecting land, and then we'll have a better feeling of the magnitude. All I can tell you is my hope and expectation is that we'll buy less third-party tonnes in the second half than we bought in the first half just because we are now able to leverage the internal network.

Great. And maybe just following on from that then. If you're buying less clearly, spot prices are higher at the moment. Just following on what you were saying earlier. So these are traded tonnes. Does that mean you're effectively just passing through whatever the market price is doing? Or is there more nuance than that?

We've always done that wherever we buy tonnes we pass them on. But you have to remember that most of the tonnes we bought were contracted tonnes. Spot turns, you pay a premium, right? So we've been able to pass on quite a bit because the markets are short, right, and customers need supply, but not 100%. And that's why we had -- what was the number, Jamie, $17 million, $13 million in the first half that we took below the line because these are one-off costs.

So yes, whenever we have traded tonnes contracted, the price goes through straight off because as I said, we use most of those traded tonnes for our own needs to make emulsion in bulk, and then whatever we supply to customers is like a service to them. So we don't make much money off them, but we obviously pass the cost through.

Great. Just wondering if you could provide a bit more color on the phasing of the cost out program as well. Just any benefit within this financial year. And then perhaps how much in '27, I noticed the comments, it seemed to be the majority comes in '27 unless I misread that? And maybe how it sort of fits across those 3 buckets?

Yes, happy to, Harry. So look, we've had a very strong focus on discretionary costs and what we call nonbillable costs for some time now. So this program has been in the planning, as Sanjeev mentioned earlier, for some time. We've been focusing on acquisitions, integration, delivering investment cases. Now is the right time to look at our nonbillable cost base. So there was a small amount that was realized in the first half throughout the business, and that there'll be more material throughout the second half.

In terms of where the cost saving is going to be realized, if you look at the slide in the materials, roughly -- and this is very rough, around 40% of the savings will be in structural and overhead reductions; around 30% will be in what we call cost to serve; and 30% roughly in procurement and sourcing savings.

Harry, just to give you a couple of data points. So it's not all about headcount reduction. Obviously, our business is growing, and we need the best people in the industry. So the big focus is on the structure and how we deliver our products and services to our customers. As one example, we are in the process of consolidating manufacturing discrete manufacturer we make the detonators. In Latin America, we got the big -- so we have the hub-and-spoke model, in our discrete manufacturing where we've got one big site, and then we got the satellite sites where they do the final assembly and take the product to the customer.

So Lurin is a big hub in Peru, and then we've got sites in Brazil and Argentina and Colombia and everywhere else, Chile. We are in the process of consolidating 1 or 2 of those smaller sites and shutting them down to get scale in the existing site, which is going to take significant cost out because every sites need safety, security, maintenance, people, and it adds cost. So we're just consolidating that footprint and getting a more optimized supply chain, and that's going to help us to remove significant costs out.

Another example in Asia, we are operating in something like 11 countries. We don't have to be everywhere at the same time directly. So in one of those countries, we are going to shut down our direct operations. We had a manufacturing site there, we are going to stop that, and we are going to hand the business over to a distributor who will then distribute Orica products, but we'll take significant cost out. So these are just smart clever ways. And the other one is obviously leveraging our lower-cost manufacturing sites. We've got big manufacturing in India. We've got major manufacturing in China. Obviously, the labor costs are much lower there. So our unit costs go down when we source from those sites. The market price stays the same, but our margin goes up. So we are using all of these very smart things because we can. We have a global network, and we are able then to optimize cost base on the lowest landed cost delivered to customers. And they don't feel this in pricing, but we feel this immediately in terms of margin benefit.

So that's the rationale behind this program. So it's going to be structural. It's going to be quite consequential, and it's going to have a significant reset of our cost base over the next couple of years.

That's really helpful. Just one more follow-on. So on that, presumably, this is gross cost out. So any sort of inflationary impact to be aware of. And also just wondering, Danafloat acquisition, what's the expected contribution here? Or is it relatively immaterial at this until you sort of grow out the opportunity there?

Yes. So these are pre inflation. We have inflation obviously, every year, like everyone does on our cost base. This is pre-inflation. We've said the program will be at least $100 million in terms of what we realize. And the intention is to at least offset inflation and more than that, obviously.

In terms of Danafloat and I think your question is around the acquisition price and earnings. Probably a key to take from that is, you'd noticed in our financial statements, we didn't disclose this. And if you think of -- as a subsequent event, and if you think about materiality, that will give you a bit of a guide around the acquisition price. The -- probably the first, the first 1.5 years or 2 years of benefits will be offset by integration costs. As Sanjeev mentioned earlier, we'll move the manufacturing equipment to Deer Park to pick up the synergies of the manufacturing savings there. And then the opportunity is to scale up across the customer list to cross-sell, importantly, leverage our current copper and gold position. In terms of earnings, roughly, just think about sort of mid- to high single-digit EBITDA once we get through integration.

Okay. Got it. And just to be clear, when you said pre-inflation $100 million intention to at least offset, you're saying is in to preserve the $100 million uplift, presumably, you're not talking about offsetting a whole $100 million with inflation?

No, as I said, we have inflation every year. That comes at a certain cost. The intention with the program is to, at least, offset inflation or deliver more cost above that. And if things change externally and our external environment, then we'll push harder if we need to.

Next, we have Brook Campbell-Crawford from Barrenjoey.

Maybe just 2 quick ones. Firstly, you talked about recontracting in Australia going well lately. Just how much of your East Coast AN book is up for renewal over the next 12 months? That's the first question.

And the follow-up just around copper processing in general. Do you have an idea of the total size of that opportunity over time in the segments that you're looking to participate to sort of the total addressable market number? That will be super helpful.

Thanks, Brook. So the recontracting globally has been quite successful for us. So Australia, obviously has been -- we've renewed some big contracts. Brook, I don't talk about wins and losses. For us, that's business as usual. We normally don't highlight that. But we've had a couple of very big renewals, a couple of big wins globally in all parts of the world. So it's been very successful.

Now obviously, the environment is helping us got a bit of leverage at the moment. So that supports this. Are normal, and I've said this before, on average global order book renews between 25% to 30% every year. In Australia, we had the big renewals already. You know this in Western Australia, a year back. We've had another major one that will be renewed next year. So this year is more average. So it's not a lot of big renewals here in Australia. So I would say 20% to 30% or even a bit lower than that book.

In terms of Danafloat and the copper market, obviously, we understand the market very well. We've been looking at it now for the last 5 years. The market potential is huge. A lot of this is relatively new chemistry. It's black box chemistry. It's patented chemistry. Every processing plant is different. It's not off the shelf. So you basically go into a processing plant and then you optimize the recipe, make to order, and then you get contracts long term. So the business is very, very sticky. Nobody wants to change. It's very risky.

So -- and with Danafloat, we've acquired customer approval. So that's the exciting part. We just have to get the manufacturing and supply chain in place, scale it up, and take it to all other copper sites. The total addressable market is in, I would say, very rough anywhere up to USD 5 billion globally. So it's a pretty big market. And the market will grow based on the requirements for copper and obviously, the quality of the grid that is being processed. So it's a very, very -- that's why I keep talking about copper chemistry, and we want to get in there. It's a very attractive market for us.

The big challenge for the existing chemical companies there is they don't have access to the mining industry. So the supply chain for them is a big challenge. The remote mines, they don't understand how that works. We do because we are operating those sites. So for us, the supply chain part, the difficult part is already tackled. It's just getting that IP scaling, the production up and taking it to customers, and then the business should start to show good returns there.

Next, we have Scott Ryall from Rimor Equity Research.

Sanjeev, I just want to pick you up on your comments around no immediate material constraints regarding the Middle East. And I think you mentioned that your assumption there is the ceasefire holds or there's not a worst cost scenario of fighting resuming, you would obviously contemplate a worst-case scenario, though. So I was wondering if you could just give us a sense of what the key inputs or components that you're monitoring the most closely only as an obvious one. But specifically, can you also comment on sulfuric acid please, would you contemplate to go into the Danafloat acquisition in any case? And what your exposure is to the sulfuric acid please?

Scott, sulfuric acid is mission-critical, but Orica is not exposed to sulfuric acid. [ Orica is one ] of the largest global producers of nitric acid, which is, again, back to ammonia and gas but sulfuric acid is mission-critical for copper, clearly. And the Middle East and China are big sources of sulfuric acid. And so our concern is indirect. If our copper customers are restricted in processing, then obviously, they might have to slow down mining. I don't foresee that happening because, obviously, you can inventory the ore until the sulfuric acid supply chain normalizes, but that is a bottleneck for the copper industry. It's a concern for the copper industry. So it's an indirect issue that we've been monitoring very, very closely.

And now that with Danafloat, we've got a bit of more insight onto the use of sulfuric acid in copper processing, we are also learning here about the intricacies of that supply chain. But the direct impact of sulfuric acid on Orica is none because we don't handle the product. Our focus is mainly on nitric acid. So we don't do sulfuric acid.

Other risks, there is one. We have a manufacturing site in [indiscernible] which is now working at half the capacity for safety and security reasons, obviously, sensitive product. So the Ministry of Defense there has asked us to reduce capacity and demobilize people. So that we have done for the last -- since the Iran issue started, we have done that. That clearly has an impact, but it's not material. The site is dedicated to the -- predominantly for the construction business there. So that is a direct impact.

Everything else is fall-on effects of gas, oil that comes through the environment. As another example, a secondary effect, we buy a lot of plastics for our detonators. And people know the plastics are made out of the cracker ethylene, ethylene feedstock comes from the Middle East. Ethylene prices have gone up, NAFTA has gone up. So plastic prices are going up, availability is constrained. So we are scrambling to source enough of the resins to make our detonators, which creates a bottleneck in supply and increases cost. That's just one effect.

So there are multiple secondary and tertiary effects. But there is no direct effect. The only direct effect I can call out is shipping costs have gone up globally, container cost, freight rates, charter vessels, shipping insurance. So logistics costs have gone up significantly, but it goes up for everyone, and we just have to pass it on to our customers.

Last question comes from Nathan Reilly from UBS.

Quick ones around Deer Park Stage 2. Can you give us a guide on how much cash you're expecting to release from that transaction, please?

Nathan, so we're working through that now. So we are getting close to working through to the preferred purchaser. There will be cash flowing in the last quarter of this year. So I think there will be a deposit that comes through. And then the balance of the proceeds will come into the 2027 financial year at this stage. In terms of the total value of the sale, this is a smaller side, which I think I've said before, it's about 15% smaller than the land size for Phase 1. So it will be somewhere around $200 million gross proceeds when the transaction closes.

Thank you all for the questions. This concludes today's Q&A session and the conference call. Thank you for participating. You may now disconnect.

Good morning, and welcome to the Orica Annual General Meeting 2025. On behalf of the Board, thank you for joining us, and thank you for your support and ongoing engagement to shareholders. Your commitment is central to our continued success. My name is Malcolm Broomhead, and I am your Chairman. As today's meeting is held in a hybrid format, which means half remotely, half here, I'd also like to extend a warm welcome to those shareholders who have chosen to join us online or phone today.

We do have a quorum present, so I declare the meeting open. And with your permission, I propose to take the Notice of Meeting as read.

I begin by acknowledging the traditional owners of -- and custodians of the land on which this meeting is being held, as well as those who've come to Australia in more recent times, Australian ore. I also acknowledge the traditional custodians of the lands and waters on which Orica operates throughout the world.

For your safety, I'd like to draw your attention to the emergency procedure -- and should an emergency arise, which hopefully won't. And it requires evacuation from the floor, a whooping evacuation sound will be sounded. I never heard one, but I presume well. And if that happens, then the evacuation will be directed by the RACV City Club Fire Wardens. So please follow their instructions. They'll direct you through the doors, which you came in, and you have to go down via the stairs in the lift lobby -- to the lift lobby, where you entered the floor or to the lift lobby to the rear of the stage. And note that the lifts may not be used.

If you do have a mobile phone, please make sure it's turned off to silent for the duration of the meeting.

I'd now like to highlight that the meeting is being recorded and will be made available on the Orica website.

And I'd like to introduce my fellow Directors and your Company Secretary. Seated on my immediate right is Sanjeev Gandhi, your Managing Director and Chief Executive Officer; who will be presenting to you later today during this meeting. And next to Sanjeev is Vik Bansal, who I'm pleased to welcome as our new Nonexecutive Director Elect, who will be standing for election today, and he's also our chair elect. Next to Vik is Karen Moses, and Gordon Naylor, and both of those will be seeking reelection as your directors today. On my far left is John Beevers, and next to John is Vanessa Guthrie, next to her, Mark Gard. On my immediate left is Krista Stewart, our Group General Counsel and Company Secretary.

Members of the executive committee are sitting here in the front row, and they will be available at the end of the meeting to take any of your questions that you'd like to ask them.

Our auditor, KPMG, is also in attendance, and they are represented by Mr. Gordon Sangster and Marica Aranda.

Before I begin my address, I'd just like to confirm that as indicated in the Notice of Meeting, each resolution will be put to shareholders at today's meeting and will be declared on a poll. I'd allow everyone attending the meeting ample time to cast their votes. I now open the polls in respect of all resolutions that shareholders will vote on today. And if you are attending the meeting online, please submit your vote at any time during the meeting by clicking a voting card, 'Get a Voting Card' button, and written questions can also be submitted at any time.

So to help with the efficient running of the meeting, I encourage you to get on and do this as soon as it's convenient for you.

Please click the Ask a Question button to follow the instruction if you have questions. And if you wish to submit a question or comment, please ensure that they're relevant to the matters before the shareholders today and to shareholders as a whole.

So thank you for this opportunity to address you as your Chairman. I'd now like to cover some of the topics that are important to Orica and to you, our valued shareholders.

Starting with safety, which is our most important priority in Orica. It's with extreme sadness that we report that late in November, 1 of our employees, Mr. Lee Pratt, was involved in a vehicle-related accident at a customer site in Canada and unfortunately, was killed. No other injuries were sustained during that event. Look, a thorough investigation is underway, and we're cooperating obviously with the regulatory authorities. We already given assistance to the family of Lee and we'll do all we can to help them through this very difficult time as well as the whole team who worked with him for many years and have been affected by this.

All the learnings will be shared around the group. The vehicles has many of you will know, a particularly challenging issue for us because of all the miles we drive in remote areas. But on behalf of the Orica Board, I'd like to extend our deepest condolences to the family and friends of those affected by this tragedy.

Our people are the foundation of our business. Without people, nothing happens in this company. So we remain committed to keeping them safe, and supporting their physical and psychosocial well-being wherever we can.

Moving now to performance. Orica in 2025 achieved its highest earnings before interest and tax in over 13 years, at $992 million, and that represents a 23% increase in the result from prior year. So it's a remarkable result, and the whole team can be proud of what they've done, Sanjeev and the Executive Committee and everyone within Orica. It reflects the dedication and the expertise and the consistent performance of our people across every region. And it is our continued focus on delivering value to you, our shareholders.

Orica has evolved into a world-leading provider of solutions across mining and infrastructure. And through the disciplined execution of our strategic priorities and a strong focus on commercial excellence and innovation. We continue to meet rising global demand for our advanced technologies in which we are well and true the industry leader. And across our 3 business segments of blasting Solutions, which is the traditional business, digital solutions, which here is going very, very well and specialty mining chemicals.

This year, we also introduced a refreshed capital management program and framework to clarify how we deploy capital across the business in order to maximize the total shareholders' returns over time. Our balance sheet remains resilient and strong, and we continued our measured approach to investment funding growth priorities and returning cash to shareholders either through dividends or buybacks of some sort. The ordinary dividend of $0.32 per ordinary share unfranked, delivers a total dividend payout of 50% on full year's earnings. And of course, remember there was a share buyback as well, which hopefully all shareholders benefit from in terms of earnings per share growth and share price appreciation.

In addition to our strong financial performance, we've recorded another year of significant sustainability target progress. And as we enter the next phase of our decarbonization strategy, our gross Scope 1 and Scope 2 emissions of 51% below 2019 levels. And we're firmly on track to achieve a 45% reduction by 2030. And advance towards our long-term ambition of being net 0 by 2050. Sustainability is a strategic imperative for us in the sort of business that we're in and for the environment generally. And it's an opportunity also for us to innovate with our customers and our partners.

The Board continues to oversee climate-related risks and opportunities, ensuring that the capital is allocated to the right initiatives to improve efficiency and strengthen our competitiveness. And Sanjeev will talk more about business and sustainability performance shortly.

Moving now to Board renewal and succession planning and which is critical, obviously, to developing and supporting the business and enables us to discharge our strategy and our responsibilities and support management in terms of delivering long-term sustainable shareholder value. I stepped down from my role as Chairman at the conclusion of this meeting, and we welcome Vik the Orica to the Orica Board and as an independent Nonexecutive Director and our Chair elect, are subject to your vote today. And he will be appointed Chair at the end of this meeting.

With over 30 years of experience leading complex global industrial organizations. Vik has a strong track record in driving growth, innovation and operational excellence and performance improvements, and his strategic expertise in engineering, global supply chain, sustainability and technology bring valued insights to the Orica Board and to our growth strategy and manufacturing operations. I'm confident that fixed experience will complement the Board's skills and capabilities and contribute significantly to shaping Orica's next chapter of growth and innovation. And you'll hear a little bit more from Vik shortly.

Before I close, I'd just like to take a moment to share some broader more personal reflections with you. Australia is a truly fortunate country. We've been blessed with abundant natural resources, a highly educated population and a long-standing history piece. Australia has the potential to be the next leading democracy in the world stage if we have a collective will to do so. Yes. Sort of from time to time, it seems as though we want to undermine our own success. And I'm wondering whether we feel some kind of undeserving feeling about all of our great achievements as a nation. Look, a recent example is the senseless attack in Bondi the weekend. And that just demonstrates the erosion of our multicultural harmony and the outbreak sort of occurred recently of racism, antisimetism and violence.

And our thoughts are with the family and loved ones of those who are innocently killed in this violent attack, it's just so unusual for our country. And I just urge our government to demonstrate leadership and put an end such behavior. If this is not contained, we run the risk of other communities suffering racial hatred, and in fact, we already see that. And that is something which really affects the very fabric of our country. The world is vastly different to what it was a few years ago.

Some of our decisions and Sanjeev makes quite a bit about this is rather plexing none more so than our energy policy, where the world's largest energy reserves, which we have and our huge exports. With all of those benefits, we still pay the -- some of the highest energy costs in the world. And that just damages our manufacturing and paces enormous strain on the cost of living. So for example, gas prices here are at least 5x what we pay in the United States, that's 5x. So where are you going to put your dollars. Fortunately, your company Orica, is well positioned because we have global diversification. We operate in over 100 countries, and we're able to offset some of these impediments. The other thing is that the -- well, I'm having a wins the responsibilities of management and board, which have only grown more complex over time.

Much of our focus is now so consumed in navigating bureaucratic processes that address important social and governance issues, by the way, but sometimes nostalgic for the times when businesses roll with the creation of wealth, and it was the role of governments to take that wealth and distribute it through the community as they saw fit -- on defense, infrastructure, health and welfare. But our standard of living, of course, depends on that wealth generation, and we can disregard that at our own risk Finally, looking ahead, we're entering a post truth world. And I think in due course, that's going to be a big challenge for rational companies like us almost in the same levels cyber security is now.

So dealing with reality as we see it compared with what's perceived is important. And this enables dynamic -- this dynamic rather allows bad actors who can be organized for the intent to cause us harm to sway public opinion. And public -- we're a company, our business depends on support from the public. So that will be something of a challenge, I think, going forward. This is my last day in corporate life, and I began my journey with Orica as CEO in 2001, and return in 2015 becoming Chairman in 2016. One of the hallmarks of Orica is the culture and depth of our talent and throughout the world, wherever you go, and the sense of pride and ownership among our people is -- enables us to outperform the market. Our financial resilience and our ability to navigate macroeconomic and geopolitical challenges reflect the strength and the caliber of our people. It's been a privilege to work alongside Sanjeev and all of our executive team.

And on behalf of the Board, I thank you, our shareholders, our customers and above all, our extraordinary people for the way in which you have an unwavering commitment to safety, performance and innovation. On a personal note, thank you our shareholders, our owners for the great privilege of guiding this your wonderful company. It's in good hands, and I wish you and all the employees of Orica are successful and prosperous future. I now invite our Managing Director and Chief Executive Officer, Sanjeev Gandhi, to address the meeting. Sanjeev?

Thank you, Chair, and thank you to all our shareholders for joining us today. Let me also start by expressing my condolences for the very sad and tragic events that happened in Sydney on the weekend. Safety in Orica because we are in a dangerous business is very close to our heart. And we've had this unfortunate tragedy where we have lost made on the workbench. And my thoughts and sympathies go out to the Laven and friends and family and colleagues of our mat that we've lost. No other individuals were injured as a result of the incident. A full investigation is underway, and we are fully committed to learn from this strategic event so that it doesn't ever occur again. It's unfortunate accident. We're doing all we can to support our North American team and the wider Orica community during this very difficult time.

Safety, as I said, is our highest priority and the well-being of our people comes before everything else. Our people are, as Malcolm said, central to Orica's success. We have a global team of more than 14,000 which represents over 95 nationalities and comprises engineers, scientists, technologists, business specialists, and those in the frontline operation and offices. We work across time zones and geographies, but we all remain connected by the Orica Charter and aligned in our purpose, vision strategy and values.

This year, we continue to implement our people strategy, focusing on building capability, driving efficiency, supporting career growth, and strengthening our safe, inclusive workplace culture. We continue to empower our teams, helping our people thrive and continue delivering leading performance on a global scale.

Let's move now quickly to our performance. In 2025, we delivered our highest earnings in 13 years, reflecting disciplined execution of our strategy and strong demand for our advanced technologies, premium products across blasting solutions, digital solutions and specialty mining chemicals. We continue to develop and invest in innovative technologies and solutions for our customers to help them with their most critical challenges from ore body intelligence and blast optimization, to downstream processing and emission reduction at the mine site. These advancements and the successful integration of the 2 major acquisitions we did last year, Terra Insights and Sino reinforce Orica's position as a global leader in each of our business segments and has strengthened our end-to-end offering as we transform and optimize operations to reduce emissions, minimize waste and accelerate the global transition to a low-carbon future.

We have expanded our commodities and customer portfolios as we continue to increase our global footprint and geographical reach, diversify our business and revenue streams and capture new opportunities amongst new and existing customers and industries. We continue to optimize our global manufacturing and supply network to ensure reliable customer support. This is the most comprehensive manufacturing and supply network in the world in our industry.

Major planned maintenance and safety upgrades were completed safely and successfully at our Vinamarka site in the United States and the Kurgan Island site here in Australia, reinforcing asset integrity, and security of supply for our customers. As a result, this year, we achieved earnings of $992 million, a 23% increase on the prior year. Net profit after tax reached $162 million, which included significant items of $379 million, relating primarily to impairment and restructuring costs in Latin America and litigation costs incurred by -- incurred for intellectual property and commercial disputes. Earnings per share before significant items of EUR 1.118 is up $0.254 on the prior year. Our blasting Solutions business delivered earnings of $869 million, up 15%, reflecting our global leadership and underpinned by commercial discipline, advanced technologies and our robust global supply chain driving sustainable growth. Earnings in our Digital Solutions business had a significant uplift this year, contributing $92 million of earnings, supported by improved exploration activity, higher customer adoption rates and recurring revenue.

The very robust gold market fundamentals and service excellence supported record sodium cyanide sales in our specialty Mining Chemicals business, contributing $101 million of earnings. Our Specialty Mining Chemicals business now represents the largest mining dedicated producer of sodium slide in the world.

In 2025, we refreshed our capital management framework to provide greater clarity around how we allocate capital. For the first time in 10 years, Orica successfully launched and substantially completed a $400 million on-market share buyback program. And this program has been increased by up to an additional $100 million, demonstrating our ongoing commitment to delivering value for you, our shareholders. We delivered strong net operating cash flow of $949 million, reflecting our continued focus on cash generation and trade working capital management.

We also adopted a new key balance sheet target this financial year with leverage, excluding lease liabilities, at 1.39x at the lower end of our target range of 1.25 to 2x. The return on net operating assets of 13.8% reflects consistent asset performance disciplined year-on-year capital management and improved earnings, underscoring our commitment to continuous improvement.

Our disciplined approach to capital management and prudent balance sheet are structured to Wittan external volatility. We continue to deliver on our strategy in a very dynamic operating environment. We're shifting market conditions and evolving societal expectations create new opportunities for innovation, adaptation and global growth, strengthening Orica's position and supporting long-term value creation for our customers and our shareholders.

Moving now to sustainability. As we begin the next phase of our decarbonization strategy, our gross operational Scope 1 and Scope 2 emissions are 51% below our 2019 levels. This is very material. We remain on track to achieve our net emissions target of 45% reduction by 2030, and continue to advance towards the long-term ambition of net 0 emissions by 2050 --'s we are exploring emerging technologies such as renewable hydrogen and other low carbon feedstocks, carbon capture and utilization through our partnership with MCI Carbon and renewable energy procurement to drive decarbonization and future business opportunities. Renewable electricity procurement in Australia and Canada is supporting our global -- our goal of achieving 100% renewable electricity by 2040 with a 60% target by 2030. Renewable hydrogen is a potentially significant enabler of industrial decarbonization and the transition to a low-carbon economy and we continue to evaluate a commercial scale renewable hydrogen supply chain, the Hunter Valley hydrogen hub in the industrial and port zone of Newcastle, New South Wales in Australia.

Moving now to the outlook for 2026 and beyond. Building on the strong performance of 2025, we have started the 2026 financial year with strong momentum. Safety continues to be our #1 priority, underpinning every aspect of our operations and decision-making. Demand for blasting technology, specialty mining chemicals and digital solutions remain very strong, and our disciplined approach to execution and capital allocation positions us to navigate inflationary pressures, energy costs and geopolitical uncertainty. Looking forward, Orica is well positioned to continue to deliver profitable growth across all 3 business segments globally and create enduring value for our customers and our shareholders.

Now on a personal note, I would like to extend my heartfelt thanks to Malcolm for his exceptional leadership and unwavering commitment as Chairman. It is because of you Malcolm that I came to Australia 5 years back and he convinced me to come and take over this amazing company. And I can tell you, we've been having a real blast.

Malcolm's guidance and strategic insight have been instrumental in shaping Orica's journey,; particularly as we achieved significant milestones in sustainability, innovation and growth. Under Malcolm Stewardship, Orica has achieved key decarbonization targets built strong partnerships and maintained a constant focus on safety and value creation for all stakeholders. Malcolm's dedication leaves a lasting legacy, and we wish him all the very best for the future.

I'd also like to thank Lillian for allowing us Malcolm's time and letting him continue to work and support myself and the team in Orica. Thank you, Lilian. Thank you for being here. I would now very warmly welcome Vik as our incoming chair. Vik, as you know, brings extensive experience and a very visionary approach and together with the Board, -- we will continue to successfully deliver Orica's growth strategy, navigate an evolving business landscape and deliver enduring innovation and value for all of our stakeholders.

On behalf of our Board and the Executive Committee, we thank the entire Orica team for their ongoing commitment to excellence, their dedication to delivering on our purpose and on our strategy. We thank all of you, dear shareholders, our customers and our industry partners for your ongoing trust. And we look forward to continuing our collaborative partnership with you and remain in a very strong position to continue our momentum and deliver on our strategy for growth and for profitable returns.

I now invite the chair to begin the formal items of business.

Thank you, Sanjeev, and thanks for your very kind words. Let's not kid ourselves. You and your team do all the work. We just take the glory. So -- but it's been wonderful working with you and with all of Executive Committee. Before commencing the formal part of the meeting, I want to cover some important procedural and technical matters. This is a shareholders' meeting, and therefore, only shareholders and their proxies, attorneys and authorized corporate representatives may participate in the voting and so on in this meeting. And if you wish to submit a question or comment, please ensure they're relevant to the matters before the meeting and for shareholders as a whole.

If a shareholder has a detailed question about the operations of the company or a question which appears to be more relevant to the shareholders' own circumstances, please feel free to ask the management who will be available here afterwards following the meeting. In terms of how questions will be managed today, I'll introduce each item of business and then invite questions on all items of business together after all the items been introduced.

I'll invite questions from the floor, followed by written questions, which will be related to me by Delphine Cassidy, Orica's Chief Communications Officer. And for those in the room here today, there are 2 fixed microphones on either side of the auditorium. -- when I've invited questions later in the meeting, please make your way to those microphones and give your name to the microphone attendant. If you're attending the meeting online, written questions may be submitted at any time, and I encourage you to do so as soon as possible.

Please click the Ask a Question button and follow the instructions. Questions submitted online may be moderated or summarized if there are many questions on the same topic, but we will make sure that we answer all of the questions during the Q&A.

Any question or comments submitted that we can serve a defamatory or contains offensive language will not be read out as we responded to. If your question is on behalf of a particular group or organization, we just asked make that known and include that in your question. For shareholders joining us online please follow the online meeting guide, which is available based on the Orica website and includes all of the information you'll need to participate in today's meeting. If you have any trouble using the online platform, please refer to the guide or call a telephone number, which should be shown on the screen for systems.

Thank you for hearing procedures in advance. And finally, in the event that we experience any logic or technical difficulties during the meeting, we might need to take a short break. We never had to do that yet, but this is always the first time. And if any online attendees encounter technical difficulties, the webcast will be available on our website after the meeting. As indicated in the notice of meeting, each resolution will be decided on a poll, and a number of our shareholders not able to join our meeting have already taken the time.

I send us a votes in advance of the meeting and to ensure that all shareholders who have lodged who have voted directly or lodged proxy votes in advance of the meeting have their views known, the number of direct and proxy votes received will be shown on the screen as I present each item of business. So you can see how institutions and others that aren't here have voted already.

In relation to open proxies received for the Chairman, they've all been voted in favor of all of the resolutions. And I appoint Chris Healey of MUFG corporate markets, Australia Limited. The company's share register, who have examined and prepared summaries of the direct and proxy votes received to act as returning officer for the poll. Please also note that if you're a proxy holder or an attorney or nominee and your appointor has directed how you should vote and you clearly must follow their instructions. If you're attending in person, you should have registered your attendance as you came in today. And if any shareholder or proxy holders not registered and would like to do so, you can do that at the door now.

So I'll now move to the formal business of the meeting. The first item is to receive and consider the financial report, directors' report and auditor's reports for the year ended September 2025. And as noted earlier, I'll defer the discussion on that until we've got through all of the resolutions.

The second of which is the reelection of directors under Resolution 2A, in the notice of meeting, which seeks also the election of the panel as Director. Vic was appointed an independent and nonexecutive Director and Chair Elect in August this year and subject to election by shareholders at today's meeting. He'll be appointed as chair replacing me at the conclusion of this meeting.

In accordance with the company constitution Vik and being eligible offers himself for election. I now invite Vic to say a few words in support of his election.

Thank you, Malcolm. Sanjeev, fellow directors and valued shareholders. Thank you for the opportunity to address you today as I stand for election to the Orica Board. It is both an honor and a responsibility to seek your support to serve this iconic Australian company, a company with a proud history and a very compelling future. Since joining Orica in August, I've been genuinely impressed by the company's unwavering commitment to safety, innovation and sustainable growth. Orica's role in enabling responsible mining and resources extraction is critical, not only to our customers and communities, but the broader global transition to a more sustainable future.

My professional part spanning 3 decades across Asia, Australia and the U.S., has taken me through diverse leadership roles across industrials, manufacturing and global logistics. I also currently serve as a Nonexecutive Director of Brambles Limited and Washington Soul Parison, and I'm a Chair of LGI Limited. These experiences have shaped my belief that enduring value is built on operational discipline, strategic foresight and a culture of accountability.

I appreciate that some shareholders have asked questions regarding my existing workload. I fully understand the significant responsibility is required to be a successful chair at Orica and have assured the Board and shareholders of my capacity to meet all duties and provide the leadership and commitment expected by our shareholders.

My planned retirement from CEO at Bottle in early 2026 is already in public domain. I'm committed to lighten some other aspects of our portfolio in the new year to ensure my ongoing commitments to Orica. If elected, I will bring an industrial operators mindset, a global outlook and a deep commitment to culture, good governance and sustainability.

Orica's trends are clear, a global footprint, deep technical expertise and a strong reputation for reliability and partnership. Its recent financial results confirm the solid platform on which the organization stands today. But what also excites me is what lies ahead of Orica -- ahead for Orica. In spite of its impressive footprint and recent financial performance, Orica is not short of growth and improvement opportunities. While I remain highly sensitive on alert to Orica's 150 years of strong and which legacy also ambitious for Orica. Orica must remain a global leader by adapting innovating and continue to deliver for all its stakeholders, its shareholders, customers, employees and communities. Thank you.

Thank you, Vik. The Board with abstaining, supports his election and results of direct proxy votes received in respect of Resolution 2a are now displayed on the screen.

Resolution 2b in the Notice of Meeting, the reelection of Karen Moses as a director. And Karen was appointed an independent nonexecutive director in July 2016, and is a member of the People and Remuneration Committee, the Noms Committee and the Board and Board Audit and Risk Committee, And in accordance with the constitution, Karen retires and being eligible offers herself for reelection. So I would like to hear some words now, and I invite Karen to say some words on behalf of the reelection.

Thank you, Malcolm, and good morning, everybody. I'm very pleased to be with you today, and thank you so much for joining us. I also give my warm thanks to Malcolm for his contribution to Orica and to the business community and wish him all the best for the future. It's been a real honor to serve with you on the Orica Board outcome -- thank you. And I'd also like to recognize and thank Sanjeev and the executive team and all of the staff of Orica for their commitment and their insight.

I've served as a Director at Smart for 9 years, including most recently and audit and people and RAM, which are a real focus for me. As a director, it's important to do what we can to support creating an environment where everybody goes home safely, where everyone has the opportunity to be their best and where we learn and grow and the space is created for the best decisions to be made. The continuing progress that Orica has made in reducing our carbon footprint is a real credit to the people at Orica, deliver a meaningful change in establishing the path to meet our sustainability commitments, and aspirations and working actively with our suppliers and our customers.

I currently serve as a director across the Industrial Energy Education and art sectors, and have served unlisted boards, government boards and not-for-profit boards for over 20 years. I've got a breadth of experience as a senior executive with over 30 years' operational experience in the energy sector. expanding kind of all of the operational aspects, major development projects and finance corporate functions as a COO and CFO. I believe that my operational management experience and my board experience allow me to contribute to across a wide range of important issues and complement the skills and deep experience of the other directors, and look forward to supporting Vikas the new chair in the transition.

So I'm asking and hoping today for your support to be reelected as a director. Thank you.

Thank you, Karen. The Board with Karen abstaining, supports her reelection. And the votes received by direct and proxy votes in respect of resolution to be shown also on the screen.

Resolution 2c in the notice of meeting concerns the reelection of Gordon Naylor as a Director. Gordon was appointed a Nonexecutive Director of your company in April 2022, and he's Chair of the Board and Audit Committee and the Nominations Committee, and is on the Nominations Committee as well as the Sustainability Committee. In accordance with the constitutional company, Gordon retires and being eligible, offers himself for reelection. I now invite Gordon to speak in support of his election.

Thank you, Malcolm, and good morning, everyone. As you've heard, I wish to formally offer myself for reelection as a director to the Orica Board. In the last 3 years, I've continued to be impressed by the depth of the company. The technical substance, which goes well beyond what I expected and with a genuine commitment to company values. I've been especially pleased with progress in bringing that value to shareholders through a refreshed capital management framework. The strategic planning system of the company is now stronger and progress towards sustainability goals, positive and real.

Noting Malcolm's retirement from the board, I would also like to offer him my personal thanks for his leadership. I've learned a great deal from Malcolm and respect him enormously. I'm also very much looking forward to working with Vik as the company moves to its next growth phase. Most of my working life was with starting in Australia and then working in numerous international assignments as CSL grew rapidly to a global leader in biological pharmaceuticals. I've had numerous functional responsibilities ranging from engineering, supply chain, IT, M&A and finance for the business leadership.

I'm now returning to CSL as a director as well as Chair elective Seqirus see ourselves influenza vaccine business. I've resigned from 2 other Boards to allow me to focus on these and Orica. As a business leader, I've executed several transformations of international businesses into global leadership. I'm very familiar with the challenges of running an innovative global Australian-based listed company to produce profitable growth whilst managing the risks appropriately. I'm also an active angel investor and help run my families Philosophic trust. I believe I can continue to make a difference to Orica and offer myself for reelection. Thank you.

Thank you, Gordon. The Board with Gordon abstaining, supports his reelection and results of direct and proxy votes received in respect of Resolution 2c are now displayed on the screen.

Resolution 3 in the notice of meeting is to adopt the remuneration report for the year ended 30th of September 2025. And -- and as you will be aware, this vote is advisory only and does not bind the company or the directors to -- who remain responsible for the policy of the group. However, the Board does take into account feedback from shareholders, including discussion and vote on this resolution when considering future remuneration strategy.

The Board sets the remuneration strategy with a view to ensuring our market framework can attract retain and motivate talent that we need and the outcomes for executives which are aligned with shareholder returns. There's 3 elements to the remuneration at Orica. There is a fixed remuneration. There's a bonus for the achievement of short-term objectives and there's a long-term incentive plan. Full details of the Orica's executive remuneration framework and a summary of the company's performance -- for the 2025 financial year can be found in the remuneration report and by casting your vote in favor of the remuneration report. You'll be indicating your support for the remuneration strategy that the Board has adopted for its most senior executives, including the CEO.

I wish to highlight that none of your directors nor any of the senior executives who are named in the remuneration report may vote on their own shares in relation to this resolution. And results of the direct and proxy votes received in respect of Resolution 3 are now displayed on the screen.

We now come to the proposed grant of performance rights to the Managing Director and CEO under the long-term incentive plan as the long-term element of Sanjiv's remuneration for the 2026 financial year. The number of actual rights to be granted will be calculated as set out in the explanatory notes of the -- notice of meeting. And under the Australian Stock Exchange Listing Rule 10.14, the shareholder approval is required for a director to be issued securities under an employee incentive scheme. And any votes cast in favor of this resolution by the CEO or his associates, will be disregarded in accordance with the ASX listing rules. And results of the direct and proxy votes received in respect of Resolution #4 are now displayed on the screens.

Resolution 5 in the notice of meeting relates to the reinstatement of the proportional takeover provisions as required under Rule 86 of the company's constitution and details of the effect of this rule and its advantages and disadvantages are also set out in the notice of meeting. If renew this rule will be operating for another 3 years from the date of this meeting, this is a regular event for us to bring this resolution forward. Results of direct and proxy votes received in respect of Resolution 5 are now displayed on the screen.

As mentioned earlier, I'll now take questions on all items of business, and we'll start by taking questions from each microphone in turn. If you wish to ask a question or second question rather or further question, please take your place at the end of the queue so that everyone can have a go. And everyone will have an equal opportunity to be heard.

I ask that shareholders respect for those attending the meeting and keep your questions to a reasonable length. Are there any questions from the floor?

Chairman, our first question is from Peter Ed from the Australian Shareholders Association.

I note the recent fatality that you've had and that you have, in fact, previously identified transport incidents as a key area for the safety train. My question really was about you report serious injury case rate which is a somewhat different safety measure that is used commonly across the ASX companies, such as total recordable injury frequency rate -- do you benchmark against similar businesses? And when you publish the benchmarks results? And also, would you consider reporting TRIFR?

Peter, thanks for that. It's -- we use a serious injury case rate because we think it's the best indicator of things that can really seriously hurt or in kill people. So it's a very important indicator for us and how we run the business. I do understand what you're saying in relation to being able to compare our safety performance with other companies and the move away from trip and so on is something that we'll probably address and put those numbers out so that you can see so that everyone can compare us across the group. So thanks for that.

Thank you just another one. And I was going to acknowledge your leadership when I first started, but used. So please accept our acknowledgment of your leadership for Orica over the last 10 years. You've had a very successful year quoting the highest EBIT for 13 years. But your statutory reporting is rather spoiled by the significant items, particularly from Latin America. I just wondered there's discussion of goodwill, fair enough, property, plant and equipment at $94 million. But I don't believe you have a plant in this region. So could you clarify these assets how these asset valuations arose? And what becomes the property and equipment that is now being written off Also, what's the prospects for recovery in the Latin American market?

Look, significant items are always difficult. We'd love to have but with no significant items, but we're required to under accounting standards and KPMG, particularly vigilant in making sure stuff doesn't get stuck below the line that shouldn't be there. And we would love to be able to eliminate them. Latin America has been a challenging jurisdiction for us for a while. We need to fix it going forward. We understand that, and the company has -- is looking at various options to do so because it's a great market, 1 that Orica should do well in given it's primarily hardrock underground.

In terms of how the actual treatment of plant and equipment, which has been written off. I'll just ask Sanjeev to add to the comments.

Yes, I'm happy to take that, Peter. We did an acquisition in Peru call Exa in 2019. So we do have goodwill and the asset value of that in the books. And during 2025, in Peru, we lost a major contract to a domestic competitor who has been extremely aggressive with their pricing models, and we decided to walk away from that business because for us, it did not justify continuing to serve the customer based on the price and margin profile of that business. As we did that, obviously, that impacted the headroom we had in terms of the asset value of that acquisition. So we had to do a noncash -- predominantly a noncash write-down. The asset still operates. It's a strategic asset for us. at the Lurin site in Peru.

And it's now become -- when we acquired that business in 2019, it was catering to the domestic market in Peru. Today, it's become a global hub. So we are able to obviously manufacture very, very cost competitive and high-tech products out of Peru, and they are being exported all over the world, not just in Latin America but also in the -- in North America and rest elsewhere. So the asset is still functioning at very high loads and is very valuable to us. It was just the accounting treatment because of the loss of the contract. And obviously, our auditor, KPMG, has been taken on the journey, and they are aligned with the treatment.

Okay. I have a couple of director questions. Would you help me to go through those now.

You might finish off.

Mr. Bansal was appointed to the Board in August, and has been elected to become Chair on your retirement. He's well-qualified candidate for a directorship with Orica, and we have no issue with his appointment and we'll vote for his election. However, given that the time of his appointment, he was a CEO of a major Australian company in Boral, although his retirement from that position in 2026 have been announced. What was the process involved in his appointment? And what commitments did he make regarding the workload prior to his appointment as Chair elect, -- given that he continues in his role as the CEO of Karl, are you confident that he has the capacity to fulfill the roles of Chair in Orica in immediate future?

Yes. We certainly went into listen to some detail before appointing him, he is stepping down very shortly at Boral's been already announced publicly I also rang the Chair of Boral to confirm all that and to make sure that, that transition occurred seamlessly -- and as Vic said, he will be addressing a couple of his other directorships, so that these things don't all occur at once, but he will certainly be very quickly within the -- there's a 5-point rule. I think that proxy advisers use for recommending directors and Vic will Easley make that when he gets into full swing here at Orica. So that's -- that's how the process worked, Clearly, when he was first appointed, he was over that 5-point limit, and that caused a number of questions from people like yourself and others. So we have addressed that.

Yes, thank you. I was going to ask whether Mr. Ben want to make any further comment, but I do acknowledge you may comment in your own presentation. I guess my only follow-up for that is that SGH is going to appoint you as a director when you retire from your CEO role. So what does the medium term look like for your workload and for your directorships?

Yes. So thank you for asking the question. And we've had that discussion before. As Malcolm said, I'm very clear on the 5-point rule, and I think we'll get there. So a couple of things. One, as you would appreciate, these transitions are not binary. They are a glide path in and glide path out. So you have to work through that, as you would appreciate. And also, as you're doing that, you also want to make sure the commitments on all parts are honored. So the -- all my transitions are public. So I finished on SGH early -- at Boral, early 2026. Post that, I'll joined the SG Board, not the bottle board, and I'll adjust the portfolio next week -- next year. So I think we should be fine. By the time this next AGM will be in a pretty good shape.

We hope so last -- my final question was to Ms. Moses, who's seeking reelection after 9 years. Paragon your corporate governance statement states that directors generally not served more than 10 years. Noting the significance of as Moses as board committee commitments, what are our plans for the following do you want to comment on that?

Yes. So we're obviously very conscious of that commitment, and I'm very conscious of the benefit of having a transition when you've got lots of people changing not to have too much are happening at once. So I'm here to serve the board for as long as the board wants me to serve.

Thanks, Peter. Sorry, you've been riding for a fair while.

Chairman, the next question is from Crystal Charles. Mr. Tom, that's all right.

I have 2 questions I'd like to ask on behalf of Market Forces. My question relates to the decarbonization of operations at the Huracan Island ammonia production facility and its recent memorandum of understanding with the gas company, Santos. Orica recently announced it has reduced SP1 Millions of CO2 equivalent emissions from its nitric acid plant at Kurgan Island. It also has plans to invest in the HansolValley origin Hub to create Green origin to displace gas in its production of muni at Kerrigan Orica said, the first phase of this project will reduce gas consumption by 7.5%. Your Vice President also recently remarked that fossil fuel majors have no interest in investing in the transition and that relying on these companies to get us to net 0 will mainly when happen. Now despite all these steps in the right direction, I am confused as to why Oracle signed a memorandum understanding with Santos for the highly controversial Narrabri gas project, which will see central supply in Orica with gas for up to 10 years roaming new gas field. This is completely at odds with both Oracle's rhetoric and positive actions to reduce its gas consumption and transition to renewable space alternatives. I am wondering how Orica justified this MOU in light of its decarbonization efforts. Sanjeev?

Thank you. Thank you for that question. Just as a bit of context and background. Orica is 1 of the largest consumers of natural gas in this country. In the Hunter Valley alone, we consume more than 15 better deals of gas, and then we've got other manufacturing sites. There's 1 big difference between Orica and the rest of the gas consuming industry. We do not use gas to make energy, more than 95% of the gas that we consume is used to make products and services that go into very critical industries in Australia, including the mining industry, civil interstate industry, we do cater to the pharmaceutical industry from those products. We cater to the beverage industry. So there is a big massive ecosystem of consuming industries around the Hunter Valley where we produce and consume natural gas.

Now that's why we have called hard to abate because it's not easy to replace what we call raw material or feedstock which is natural gas overnight. And that's why the word transition is extremely important. The transition will take time. And that's why our ambitions to decarbonize go up to 2050 because at the moment, we do not have the possibility of replacing natural gas with an alternate feedstock to give us the opportunity to investigate and invest into new technologies. We have decided to build the hydrogen hub, which will be 7% of our gas demands, but we still need the balance 93% to come from the gas industry in Australia. So we are a baseload customer for the gas industry. We work with all gas companies.

And when Santos approached us and asked us to sign this nonbinding MOU due to express our interest for future supply of gas, we were happy to do that. Once again, it's nonbinding. It's not yet fully committed. It depends on whether the project gets realized, but we will always appreciate getting gas supply from Australian gas producers so that we can consume and convert that gas into very valuable and critical products for sovereign manufacturing. You do not want the products we make to be imported into the country and have no local domestic manufacturing because that would be a very, very challenging situation. And that's why I've always said that should not be deindustrializing to decarbonize because that hurts manufacturing jobs and it hurt supply security of the resource industry, which is so critical to the Australian economy.

Thank you for that. Just a follow-up question on the -- I understand that Orica has committed $433 million to be handed Valley Halogen Hat project for Renal. And I'm just wondering what specific metric or time line would trigger Oracle to walk away from the Santos deal? Like how sufficient with this high regen hub would need to be, but you got to consider it's sufficient.

So the plan to build the first hydrolyze is 50-megawatt art. This is 7%, 7.5% roughly of our gas needs. This, by the way, once commercialized, would be 1 of the largest green hydrogen facilities, not just in Australia but in the world. So it sounds small, but this is a brave step very innovative step. We are doing this together with the state and the federal government support because Orica would not do it alone. Obviously, it's new technology. There are some risks involved here. But we are an operator. We have been producing hydrogen for several years, decades in the Hunter Valley. So this helps us to start on the journey of decarbonizing hard-to-abate and a very expensive to a bit industry. When will we reach 0 consumption of natural gas not in my lifetime because you need to be competitive because you've got imports. You've got other competitors not doing what we are doing, and we need to stay competitive so that we are able to continue to earn a profit and satisfy our shareholders. So it will be a long journey. And our target, obviously, is 2050 net 0 and it will be a long, long way until we reduce our dependence on gas.

Yes. Got it. Now that -- it's my understanding that Narrabri will take 5 to 7 years to develop as Santos has stated. And I'm wondering why Oracle would need to commit today to be MAU rather than doing it in a couple of years' time when Haroon performance is clearer.

Again, it's a nonbinding commitment. Santos has been a partner for us as has every other gas company and when they requested us to support onshore gas in-country gas for domestic manufacturing, we were happy to do that.

Now my second question relates to the potential reputational damage to Orica from its partnership with Santos. Santong has made a catastrophic decision moving a decade ago to double the size of its export LNG plan at Reston despite not having sufficient gas reserves. That decision has same reclass in LNG and sensors become a net drain on the domestic market. with the ABC recently reporting about since 2017, Santos has pulled about 3 years of gas up from the domestic market to meet its export contract obligations. This has contributed to higher and more volatile prices for domestic users, including Oracle, but are now under pressure from rising gas costs. Is Orica concerned that its MOU with Santos is simply rewarding the company for poor decision-making, which has significantly contributed to scarcities.

I'm not in a position to comment on Santos and their strategy and policy. My view on gas supply is the genuine gas consumers like Orica need support from the domestic gas industry. You know that a lot of our gas is exported overseas. And as a result, we are suffering from higher prices here and not enough supply. So my interest is to ensure that the manufacturing of Orica stays sustainable. We will continue to decarbonize as we have done in the last 5 years, and we'd like to see adequate supply and reasonable pricing of gas in this country.

Can you confirm whether the MRU includes explicit net 0 alignment clauses or climate triggered exit provisions?

No. It's just a very, very holistic nonbinding MOU. It does not go into any of those details at all.

Thank you. Another question, microphone 2.

Chairman, the next question is from Emily.

Okay. First, I want to thank Mr. Brunet for being leader. And welcome Mr. Gandhi -- sorry. If I put my glasses on, I can't read if I look milieu, then I can't read my notes. So I've got a problem. Okay. Now another person I want to think that I know never gets spent or sell them as the secretary and being most important year for a Jane Austin commemoration. I want to say that it is universally acknowledged that we want to do all the hard work.

No question about that.

Okay. So I had a simple question, although a gentleman who spoke before me probably covered it, but I didn't understand most of it. Okay. My question was Mr. Gandhi. You mentioned that Orica technology is in demand. Can I ask which countries demand it? And can you elaborate a little bit more on what the technology innovation actually is because as some company that makes explosives apart from safety, and I don't understand what else is involved.

Thank you. Thank you. That's a question close to my heart. I talk the next 5 hours about our wonderful technology and innovation. We've been on the journey of using technology and digitizing what we call our workflows. So we operate every day on nearly 500 mine sites globally. We are the largest in the world and we operate in more than 100 countries globally. And the mining process can be a very manual process, and this means that people are in the line of fire. And so we have seen opportunities with technology to derisk the mining process to ensure that people are not directly in the line of fire. And over the last 5 to 6 years, we've got this wonderful track record of innovation and launching products and services that customers all over the world are using today. Some examples of these great innovations in the blasting space, which you are familiar with, is blasting without wires.

So if you watch old movies and you see Hollywood movies with people tying is down and then pressing the plunger, that is literally how blasting happened several decades back. Today, we've got blasting without wires. So you drop a detonator and you walk away and then you blast it remotely. There are no people, there are no wires. So the safety, the productivity of these kind of technologies is just amazing. Customers love it. These are premium products. We've invested a lot of capital and R&D resources in building these technologies. We are world first in bringing a wireless detonator into the market. Today, we are selling the product all over the world every major and minor today, consumer today would love to get a hand on these very, very innovative products. So that's in the blasting space.

In the digital technology space, we are using data. And what we're doing is mining data. So we are mining resources for our customers, but we generate a lot of data, more than 150 years of experience. All of that data has been put into the cloud. And then we've got technology and sensors and tools to monetize the data and come with better outcomes for our customers. This could be productivity, this could be cost. This could be safety. And the focus here is on very attractive industries like the gold industry. And you have seen where the gold price is. It's a very attractive industry. Copper is mission-critical for the energy transition. You need copper for electricity transmission. We are also supporting the iron ore industry and then critical minerals and rare reads. So all of these digital technology suites that we have, we are the first ones to integrate digital technology into the blasting space. And we are creating what we call workflows without going into too much technical detail. And these workflows are basically adapted to our customers' need. So we can customize a solution for you and give you the outcome as a customer, and solve a problem that you have, the problem might be safety, license to operate, cost, productivity, efficiency. And these products are just flying off-the-shelf. Customers love this, and you see that translate into the results that we are delivering for our shareholders. So thank you for that question.

Chairman, the next question is from Rex McKenzie.

Mr. Chairman, I have 2 short questions. The first 1 is a bit related to the last question that was answered. The gold price is very high at the moment outrageously high. Some people would say, what would happen if it half or if it went down to 1/4 of that, I am actually coming from Vendian, which used to produce the largest amount of gold in the world. And it strikes me that the factories that produce in would suffer greatly if the price fell. And so would blasting solutions. And anyway, that's the question.

Look, Orica is well positioned in the mining sector because we depend on volume rather than price. Now you make a very good point. If if the gold price went to, let's say, 1/4 of where it is, the high-cost mines would probably shuttle go on care and maintenance. So there would be an impact of some sort, but it's fairly muted -- where we make our money in the gold sector is actually in the technology part. The -- we do make money, obviously, in the blasting particularly in underground mines, both blasting. And so it would have an impact. But if you look at total volumes in Orica's business, the gold sector is important, but it's not crucial to our business. Do you want to add anything to that?

Yes. Gold has a very -- first of all, thank you for the question, Mike. Coal has a very interesting dynamic, which is different to other commodities. The ore that is available today on earth for gold is quite rare. That's why the gold price is so high as a data point, if you break a ton of rock -- and if you get 2 grams of gold out of it from a tonne of rock, that's a good mine, that's a good yield. And that's the reason why there's not enough ore and there's not enough or in nature, which has been discovered and not yet exploited,; and the demand is still good because gold is countercyclical. It's something that most central banks like to keep in inventory to protect against external forces. So we see gold demand continuing to increase. There's not enough supply.

So when gold customers come in approach, Orica for help, they're asking for better productivity and more output, which means they need more blasting services from Orica, and they mean more sodium cyanide. So it's different to every other commodity we operate in because availability of gold is reducing prices going up, they need more of our services, which is a sweet spot for Orica. And that is why we have been very, very proud operators of the -- in the gold industry from the Gold Fields in Bendigo 150 years back. till today, where we are the #1 service provider to the gold industry in the world.

Yes. Very reassuring. The other question, what's the difference between the statutory profit and the stated profit is very large. Could you just enlarge on what are the main contributors to that the difference between statutory profit. We're just -- you got...

Yes. Thank you. So the reported earnings, which we define as EBIT was obviously a number of $992 million, which was a 13-year high. the NPAT after special items was a lower number. And that's where we had basically the impairments that I talked about earlier. This was predominantly in Latin America. -- and that was the reason why the other impact into earnings was the legal fees that we have also called out. This was for ongoing litigation to protect our IP in Australia and globally and also for commercial litigation that we've had in the United States. So those are the 2 reasons why you see that delta between reported earnings and then the statutory numbers.

SP1 And of course, the EBIT is earnings before interest and tax. So when you take interest and tax off to get to the net profit after tax, that's a reduction. And then underneath that is the significant items of Sanjeev.

Thank you. Are there any other questions from the floor?

Chairman, the next question is from Kiran Bala.

Welcome board for all of their efforts within the year. And Malcolm, I wish you all the best in your future time. Sanjay, the results have been remarkable considering the impediments that the group has had to incur. We've had a very high gas price. Input costs are high. We are competing in an environment that's not level. We've got certain restrictions that are put on to Orica that overseas competitors are not subject to -- and yet with all of those, the results have been remarkable to say the least. What steps would we be taking within the next few years to increase the productivity and to be able to compete better with the other companies.

Mark, you want me to take Pathak you for the question, and you've been very kind. We appreciate the feedback. Look, it's been a constant battle, as you very rightly pointed out. I mean, the productivity discussion in Australia is front and center with the labor government and everybody understands that Australia as a place to do business is losing cost competitiveness exactly for all the points that you mentioned, high energy costs, high cost of doing business, IR challenges and everything else that we have going. What organizations like Orica do is, first of all, we hedge our bets.

So we try and diversify our revenues and earnings to different commodities like gold, copper, iron ore, not just focused on 1 commodity, but also different geographical reasons so that if there's downside in some part of the world in terms of a slowdown or a new regulation that hurts our business, we see upside somewhere else so that we are able to become more resilient and that's the key for our strategy.

We'd like to see resilient and consistent earnings growth. We do not like to see the volatility and the fluctuations. And we've managed to do that over the last 5 years and delivered consistent shareholder value. But it's a constant battle. There's a lot of discussions we have -- I have personally with the government. The good news is they are listening. They are happy to take feedback and now we are waiting to take -- waiting to see action.

So gas reforms are due. My expectation is before we close for the year, or early next year, we will see an update from the Ministry on gas policy, so that it's a more equitable area. The other one, which is basically in our control is managing our own costs. how can we become more effective? How can we become more efficient? How can we do things smartly, -- can we use technology to become more productive, to become more efficient because you can't keep complaining to the outside shareholders. It's something that you have to do in terms of self-help or it has been very good at this. And the last factor is that we've got a great team. And they put their heads down. And every day, they're operating on nearly 500 mine sites globally. -- and they are focused on delivery for our customers, for our neighbors, for our partners and for our shareholders. So thank you for the feedback.

Just 1 more question. If you had a wish list of what the government what you'd like the government to do to improve the operations for the company, apart from gas prices, what would those 3 be?

Well, I'll go to model -- you can have a different. Look, as far as gas prices are concerned, the most -- the difference between the United States and Australia is fundamentally who owns the gas, who owns what is below ground level. In the United States, the farmer or the individual land owner owns everything to the center of the earth. Here, the government does. So that's the first difference.

Therefore, in the United States, fracking, for example, is welcomed because landholders can sell the rights or get a royalty by allowing a company to go on to their land and produce and produce gas through fracking. And then they retire to Florida and never see a cow again. But -- so that's the first big difference. And that's not going to change in Australia.

The other big impediment that we have is that all of our energy really, well, all of our resources have for a long time been sold to the market. The market is normally China, Japan and so on. So it's offshore. So they're sold into the export market, which is a much higher price due to competitive reasons than domestic production would be. Again, in the United States, you have to meet all of the domestic demand before anyone can get an export license. So that's a fundamental. The government is addressing that. governments onto it, and they're talking about reservation of gas for domestic use.

So you can't -- well, you could, but be unwise to break existing contracts, but any new developments will have a proportion -- a small proportion probably of that development will be allocated to domestic supply. If that occurs, that will solve a big amount of the problem. That's to -- you can go for...

Just to -- I mean look, to give credit to the state and federal governments. -- wherever we've engaged, we have invested, we have created jobs. We are critical to the domestic economy here. We play a very significant role in big industries as a big consumer of gas and a service provider to the mining industry. And as you know, these are the 2 most critical industries in Australia. People continue to support this economy, job creation, technology innovation. And we believe in working collaboratively with our neighborhoods, with our customers, with our partners, with our suppliers and the governments. So it's a good conversation to have. And it's obviously our right to state where we have the pain points. But I do have to say that the government is listening. They are very open to receiving feedback and now we are waiting for positive action in the due year. So I am optimistic that we have gone through a very difficult time post COVID with the economic slowdown and all the other challenges. We have recovered very strongly. We are a very resilient organization today. That's visible in our earnings, and I'm optimistic about the future. and working collaboratively with our governments here.

Chairman, the next question is from Marcela Brasil.

How do you do? I am also from Market Forces. I have a question around climate. And I appreciate all the work that Origis doing where you appreciate all the work Origis doing to achieve at 0. In order to meet climate goals for NetCo, we need no more new gas fields -- and if we curved exports, we may not need new gas fields. Santos is continuing to expand its gas extraction and contributing to rapidly rising emissions. I wanted to ask also about the government. What do you hope will be the result of the government's gas review? Would you support attacks on LNG exports -- so we can't reserve existing gas being extracted to supply our manufacturing, which you say is critical to our economy. Thank you.

I understand your position on gas and hydrocarbons generally, really. And there is no doubt that if we're going to be a net 0, you can't have both. However, to get there, you, at the moment, the only emissions-free technology in Australia, at least, because we don't do nuclear is wind and solar. And given situations where the sun is not shining and wind is not blowing. You do need some kind of back up, be it batteries, which aren't yet at a scale to of an industrial scale at least to store that energy. And at the moment, the only sensible interim technology or sources gas, much better than coal, but not perfect. So we support gas for that reason. It's -- we just couldn't operate if there was no gas. But I'm sure in the long term, the goal of the government, at least, is to eliminate it.

May I ask a follow-up question? I agree with you that we need gas for the transition. However, developing new gas fields is something we don't need if we stop our exports, all we curve our exports. And I agree that manufacturing deserves to have decent gas prices and -- so I guess what I'm saying is it's the export industry that's taking out LNG that is causing this problem in the first place. And I understand that you have an MOU with the company that is the cause of all of these problems. So I guess I'm wondering if you have a position in supporting the curbing of exports of Australian gas so that we can have decent gas prices for us and our manufacturing.

So we operate in Australia in 3 states in New South Wales, in Queensland and in Western Australia. And if you compare the 3 states, Western Australia has domestic gas reservation for domestic consumption. So that's the model that we support and encourage the government to think of for Queensland as well as for New South Wales. Now having said that, I also understand the constraints of the gas industry because they are committed to long-term contracts with their customers. And these are sovereign contracts with important trading partners like Japan, Korea, China and Southeast Asia. So our ask is Orica is not that you break those contracts and you put our trading partners into trouble.

Our ask is to find sensible ways of ensuring that there's enough reservation and supply for genuine consumers of gas like ours. We do not consume gas to make electricity. As I said earlier, we use it to make very critical products for the Australian economy, and that should not be put at risk. That's our view.

And it's a complex question in a way because the gas -- nearly all of our gas is consumed by offshore producers of gas, be it Japan, China. They're not cutting back, if anything, they're increasing because they're reducing their reliance on coal. So do we deny them the gas that they want to buy from us. Well, I guess we could, but we do have contracts, your questions about new gas fields. And presumably, they'd get the gas from somewhere else. So the Middle East would be classic spot. So we'd just be transferring currently the gas production to the Middle East or somewhere like -- so that's the philosophical question that really is for governments to grapple with.

Thank you. Do we have any more questions? On it, too. 1 seems to have gone dry. Okay. Delphine, do we have written questions?

Mr. Chairman, yes, we do. I'll start with the questions from Mr. Stephen Mayne -- the first 1 is in regard to directors' fees. -- gas Malcolm Broomhead was paid $546,000 in his final full year's Chair of Orica. How much have we agreed to pay Sydney-based big Bansal to Chair Orica? And what are the arrangements in terms of whether Orica will be funding an office at the Melbourne headquarters or executives support for him to perform the chair role.

Thank you, Stephen. Good to hear from you. Vic will be on the same remuneration as I have been on. And he will take over my office in the Orica building and next to Sanjeev.

The next question is from Mr. Mayne again. Under our constitution, Board nominations must be lodged between 45 and 90 business days before the AGM. With the Rush pre-Christmas AGM, we closed Board nominations a month before revealing the full year results. Given you farmed Aristocrat also have 30 -- 30 September balance states and hold their AGMs in late January or February. Why don't you do the same? Is this something that Vik may look at going forward?

Well, he might do. But we have had February AGMs before. And what happens then is at February and people are voting on things that ended in September last year, they can't even remember what happened, and they're now much more focused on what you're going to earn and what's happening in the current year. So we found not only that, internally, management have to stay back off and over the Christmas break on the January break when most of Australia goes to the beach to prepare for an AGM. So there is that aspect. But the big 1 is just too long. So therefore, to try to get it done and it's rushed, it's not ideal, but that's just the calendar we deal with. So we've chosen to have the meetings now before Christmas -- while it's still fresh in shareholders' minds.

The next question is from Stephen again. We're a long way from AGM best practice. There's no archive available of last year's AGM webcast on our website. We failed to disclose the proxies early to the ASX along with the formal addresses. And we're not following the agenda instead of dealing with debate on all 7 items of business as 1 job loss. You don't ignore the agenda at Board meeting, so please don't do it at the AGM. Will Vik Bansal under tech to fix these issues at next year's AGM?

Well, Vik, when it gets into the chair, we obviously have a look at that. Look, the -- we do follow the ASX rules and guidelines. So that's the first thing I would say. The second thing is that in terms of -- we have done both methods. We've dealt with each question as they come up and ask Q&A. It's just much more efficient and people still get all of their questions in. I don't think anyone's missed out on the question if we do it the way that we have. So that's how we've settled on this method. AGMs are long enough. And so the way to make them more efficient, while still being completely informative to shareholders. has been the way that we have chosen to go.

The next question is from Mr. Kevin Daly. Have there been any developments in the Korian Ireland hydrogen project?

Yes. Very, very positive developments. We continue to work on the pre-feasibility and the feasibility for the project. We have a project team in place. We are looking at engineering, we're looking at sourcing options. My expectation is that we -- if everything works well, -- and we're also, by the way, engaging with the third-party external partners to come in and join us in the project. So my expectation is if we get all the ducks lined up sometime in the first calendar quarter of 2026, we will take this to the Board to get their approval and sign-off. And once that happens, and the project will hopefully move into execution phase. So so far, challenging, a lot of issues to tackle, but I feel optimistic about the project.

Thank you. The last question is from Mr. Kevin Daly again. did the new U.S. tariff regime have any effect on the company's operations?

Not really. It certainly caused a lot of work in the United States early on. But we have -- we get most of our product that comes into the United States from both Mexico and Canada, but we're exempt from under the tariff agreements, from getting those tariffs. So we're very fortunate in that regard.

One more. This is from Mr. Kevin Daly. As your world map doesn't show activities in Guinea, does that mean you're not supplying explosives to the Simandou iron ore mine?

At the moment, we are not because Guinea requires local content and local partners. So we are, at the moment, not in a position to cater to the needs of Guinea. It's something that we will consider in the new year. But for the moment, we do not have operations on the ground in Guinea. The most important market in Africa is gold and to a certain extent, copper, but we'd love to get some iron ore as well.

Mr. Chairman, there is just 1 more question from Stephen Mayne, which we've dealt with already and that's on Vik workload.

Okay. Well, just repeating that we have -- we have discussed this at length with IC and he has given us undertaking that. He will reduce his workload in accordance with the guidelines that you would expect and the proxies advisers expect. So I'm very confident that he will be able to perform his duties as you would wish.

Any more Delphine?

There are no more questions. Thank you.

Shareholders, as there are no more questions -- all that remains is to complete the poll by submitting your votes. And if you haven't already done so, once you've completed your voting card, please place it in the ballot boxes at the exit or hand it to a member of the Orica staff or the returning officer before leaving the room.

Online voting will remain open for a further 5 minutes. And following the close of voting the results of the poll will be announced to the Australian Stock Exchange as soon as they're finalized. But it's clear that from the direct and proxy votes received today that all the motions will be carried.

That concludes today's meeting, and I now formally close the meeting. Thank you for your attendance. And on behalf of the Board and the Executive Committee, I extend our thanks to you, our shareholders, for your support. A light lunch will be served outside in the foyer. And before we leave, I just understand that our new Chair would like to close with a few words. So Vic?

Thank you, Malcolm. I think it'll be remiss on me not to say what I'm about to say. So before we leave, I want to take a moment to recognize and celebrate the outstanding leadership of Malcolm over his decade-long tenure tearing Orica. Malcolm, your dedicated stewardship and strategic guidance has strengthened Orica's position as a global leader in the sector. Under your guidance, Orica navigated industry challenges, leadership changes and expanded its international footprint. Throughout this journey, Orica has continued to deliver for its stakeholders. This is evident in people and other operations around the globe. I've heard about the trees you have planted all over the world. I'm looking forward to seeing them.

Your unwavering commitment to safety, sustainability and innovation has set the standard for the industry and establish the foundation for Orica's ongoing success. On a personal note, I'm deeply, deeply grateful for the smooth transition and the mentorship and the launches you have provided during our anticipated handover. Your guidance has been invaluable in helping me understand the unique attributes to Orica. Thank you, Malcolm. Please be assured that we will continue to build on the strong foundation we have dedicated, I promise you that. Thank you for your dedicated service, to all our valued shareholders, I'm truly honored by the privilege to serve as a Chair and look forward to working together as we shape Orica's next chapter of growth and success. Before we finish, can I ask everybody to give a standing ovation to Malcolm Broomhead.

Thank you. Thanks, everyone. It's been a privilege and a pleasure. So I know that you'll do a great job and take it to a new level. Thank you.

Good morning, everyone, and welcome to Orica's 2025 Full Year Results. I'm Delphine Cassidy, Chief Communications Officer; and I'm delighted to have you with us today. In the room with me is Sanjeev Gandhi, our Managing Director and CEO; and James Crough, known as Jamie, our CFO. Both Jamie and Sanjeev will be presenting shortly.

We thank you for your support and value your participation and interest in Orica. As per normal, there's ample time for questions after both Jamie and Sanjeev present. So feel free to queue up, and we'll address your questions as soon as possible.

I can confirm that the materials that we'll be covering today have been lodged with the ASX and can be found on the ASX and Orica websites.

Before we start, can I ask you to have a look at the disclaimer on Slide 2.

Thank you. And with that, I hand it over to Sanjeev.

Thank you, Delphine. Good morning, everyone, and thank you all for joining the call today. I'll start very quickly with Page 3, which is just a very brief recap of who we are: The world's leading mining and infrastructure solutions company.

Let me start with our #1 priority, safety, on Slide #5. I am extremely pleased to report that this year, we've had 0 fatalities across our operations, and our serious injury case rate has fallen to 0.093, the lowest ever on record for Orica. This outcome reflects our focus on safety leadership wherever we operate. We have empowered our people to speak up and stop work whenever they identify risks. While we celebrate this amazing improvement, we remain absolutely vigilant. Safety is nonnegotiable given the environment that we operate in. We are continuing our targeted safety programs, for example, focusing on preventing vehicle and equipment collisions to ensure every Orica employee and contractor goes home safe.

I'm also pleased to note that we recorded 0 significant environmental incidents in FY 2025, underscoring our commitment to operating responsibly in every community where we work.

Turning now to sustainability on Slide 6. There is a small typo, and I'd like you to correct that, which is under the Scope 3 column in the second last line, the word phase is missing, so it should read as reduction pathways as part of the next phase of decarbonization. I'm sorry about that.

Our commitment to decarbonization is delivering measurable results. We have significantly cut our greenhouse gas emissions and have already eliminated 1 million tonnes of CO2 equivalence at our Kooragang Island site alone through new abatement technology. Overall, our gross Scope 1 and 2 emissions are now 51% below 2019 levels, well ahead of schedule, and we are firmly on track to meet our interim target of a 45% net reduction by 2030. This puts us in a strong position as we work our way towards our ambitions of net zero emissions by 2050.

During the year, we completed the first full year of tertiary abatement at Yarwun and commenced sourcing renewable electricity in Australia and in Canada, lifting our renewable power coverage to 22%. Renewable electricity procurement in Australia and Canada is currently supporting our goal of achieving 100% renewable electricity by 2040. We continue to explore emerging low-carbon technologies from renewable hydrogen to alternative raw materials to carbon capture and utilization. These efforts demonstrate that our focus on sustainability is not only the right thing to do for the planet, but it's also supporting efficiency and innovation in our business.

Turning now to our financial results for FY 2025 on Slide 7. Financial performance in FY '25 has been outstanding. Double-digit profit growth, strong free cash flow and value generation for shareholders, all while strengthening our balance sheet. This gives us a great platform to build on for the future.

Let me walk you through the highlights.

Our EBIT rose 23% to $992 million year-on-year. This is the highest earnings we have achieved in the last 13 years. This reflects the strength of our strategy, the resilience of our business model and the outstanding execution of our global teams. Net profit before significant items increased 32% to $541 million, and earnings per share rose by 29% to $1.118. This represents the value we are delivering to shareholders through disciplined growth and operational excellence.

Notably, we've seen earnings growth across all 3 of our core segments and across all of our regions. Blasting Solutions, digital solutions and specialty mining chemicals have contributed to the strong earnings growth. This demonstrates the strength and resilience of our diversified portfolio and the success of our Beyond Blasting strategy.

Our cash generation remains robust with net operating cash flow up 18% to $949 million. Leverage ratio is now at 1.39x. Return on net assets has improved to 13.8%, reflecting our continued focus on capital efficiency, asset utilization and profitability. The growth in earnings has translated into higher returns for shareholders, enabling the Board to declare an increased final dividend for FY 2025, bringing our full year dividend well within our targeted range of 40% to 70% payout ratio. We are pleased to share our success with investors in this way.

In addition, our on-market buyback of up to $400 million is nearly complete, and the Board has approved an increase of the buyback by a further $100 million to a total of $500 million to be completed by March next year. This capital management initiative, our first ever share buyback in more than a decade, reflects our confidence in Orica's future and our commitment to maximizing shareholder value. Jamie will talk more on the financial performance shortly.

Looking at the earnings across our segments and our regions. Earnings were up across all regions and all business segments.

Starting with Australia, Pacific and Asia. APA delivered EBIT of $658 million, up 23% on the prior year in an environment with significant weather events in Australia and also in Asia. In Blasting Solutions growth was driven by higher demand for value-added products and services, which improved our product mix and margins. We benefited from successful contract renewals and wins and increased manufacturing output due to the nonrepeat of the major turnaround at Kooragang Island in the prior year. These gains more than offset some softness in demand in some areas, for example, lower thermal coal volumes in Indonesia. We also realized a one-off $15 million benefit from selling carbon credits generated by our abatement projects in Australia.

In Digital Solutions, robust fundamentals in gold and copper fueled greater uptake of our Axis mining intelligence products, and we saw significant customer adoption of OREPro and OREPro 3D for blast modeling.

In Mining Chemicals, strong gold demand drove record sodium cyanide sales supported by new customer wins and our ability to reliably supply customers through our global network of assets.

Moving to North America. North America reported EBIT of $212 million, up 15% year-on-year. Our technology leadership and focus on future-facing commodities like copper and gold has provided a strong platform for growth in this region. Demand for our premium blasting products remained strong, and adoption of our patented WebGen wireless blasting system, accelerated, driving growth in the region. These positives helped offset external headwinds, including reduced demand from the U.S. thermal coal sector and a subdued quarry and construction market in the United States. We continue to maintain disciplined cost control in our business.

In Digital Solutions, North America saw an uplift in demand for blast measurement tools like FRAGTrack and for in-situ geotechnical monitoring instruments. In Mining Chemicals, we successfully completed major safety upgrades at the Winnemucca cyanide plant in Nevada, which will support higher production going forward. The integration of the Cyanco acquisition in North America is substantially complete, and we are already unlocking customer synergies between explosives and the cyanide business.

In EMEA, which is Europe, Middle East and Africa, EBIT delivery was $101 million, which is up 18% on prior year. This strong result was underpinned by increased demand for advanced solutions in underground mining as well as a pickup in construction and mining activity in key markets across this region. Leveraging our global experience, we achieved deeper penetration in important emerging markets across Africa and Central Asia. At the same time, we maintained a firm focus on commercial discipline and strategic portfolio optimization, which improved the quality of our earnings.

In Digital Solutions, EMEA's earnings benefited from new contracts in major growth regions, and several new partnerships were executed for environmental monitoring solutions. We also saw a growing uptake of OREPro and OREPro 3D software and continued growth in GroundProbe radar deployments and services across the region. In Mining Chemicals, better customer mix and the use of our multi supply sources boosted cyanide margins, and we expanded our emulsifier products into new emerging markets.

Finally, to LatAm. Latin America's EBIT was $90 million, up 4% on the prior year. This was a good outcome given the challenges in this region. We achieved rapid customer adoption of new blasting technology, notably increased use of WebGen wireless blasts and 4D tailored explosives. While the competitive dynamics remains challenging in this region, good progress has been made on securing new business and new contract wins. The Latin American team have also implemented portfolio adjustments and operational improvements aimed at managing costs and the ongoing supply challenges.

In Digital Solutions, Latin America saw a very strong uptake of our RHINO monitoring technology and continued growth in GroundProbe and Axis product sales. We are leveraging the Terra Insights acquisition synergies to accelerate adoption of our Geosolutions products. In Mining Chemicals, we successfully expanded into new high-growth mining regions in Latin America and benefited from customer synergies between Orica and Cyanco, which are driving higher market penetration for our cyanide and blasting offerings. We also ramped up our Cyantific technical services in the region, providing added value to our gold mining customers.

Moving to a segment view, starting on Slide #9. Starting with Blasting Solutions. Across all our regions, the core explosives and blasting services business performed exceptionally well. EBIT for Blasting Solutions was $868 million, up 15% year-on-year. We achieved margin expansion by shifting further towards higher-value premium products and by deploying more of our patented LP and the non-repeat of last year's ammonia shutdown at Kooragang Island contributed to the earnings uplift.

Moving to Digital Solutions on Slide #10. The Digital Solutions segment is rapidly scaling up and has firmly established itself as a key growth engine for Orica. EBIT from Digital Solutions was $92 million, up 32% versus prior year. This step-up in growth reflects accelerating customer adoption of our digital products and the integration of the recent acquisitions. All parts of the digital portfolio contributed strongly. In Orebody Intelligence, improved exploration activity drove higher demand for our Axis analyzers and sensors, we are also advancing a strong pipeline of new products for release in 2026 focused on gold and copper exploration and production.

In Blast Design and Execution, recurring software and sensor subscriptions are growing steadily, supported by robust gold prices that encourage mining customers to invest in or precision tools like OREPro and OREPro 3D. In Geosolutions, cross-selling is driving growth with many blasting customers also adopting our monitoring systems. GroundProbe's recurring monitoring services revenue continues to increase. Terra Insights, which we acquired last year, delivered earnings ahead of its investment case. Cross-selling opportunities are being realized, for example, by offering monitoring solutions to our blasting customers.

The combination of growing revenue streams and high customer retention demonstrates Orica's delivery of technology-focused growth, reinforcing our position as a leader in digital mining solutions and clear demonstration of growing beyond blasting. Turning now to Slide 11, which demonstrates how Orica is driving growth by expanding not only our addressable market, but also deepening our market penetration in the digital space. We continue to see robust fundamentals in the digital space.

Exploration activity is accelerating, and the mining industry's rapid digitization is driving demand for advanced instrumentation and integrated digital solutions, areas where Orica is setting the pace. Orica's innovation and R&D are not just responding to market needs, they are actively creating new markets. By bringing innovative solutions to the mining sector, we are expanding offerings to our customers, and in turn, growing the total addressable market itself.

Our total addressable market has expanded at a 39% compounded annual growth rate since 2023, driven by both organic innovation and the successful integration of strategic acquisitions, Axis and Terra Insights. Digital Solutions revenue has grown even faster at a 30% compounded average growth rate after adjusting for the timing of the acquisitions. The years following the Axis and Terra Insights acquisition have delivered clear synergy benefits, accelerating both our TAM and the revenue growth. As shown on the previous slide, the high proportion of recurring revenue and low churn demonstrates the value and stickiness of our offerings and the strength of our customer relationships.

Moving on to Specialty Mining Chemicals on Slide #12. EBIT was $101 million, up 47% on the prior year. Robust gold market fundamentals with gold prices and demand hitting all-time highs have driven significant demand for sodium cyanide and our services. We achieved strong sales volume, supported by new customer wins and by leveraging Orica's unrivaled global manufacturing and distribution network to ensure reliable supply. Our integration of Cyanco, which we acquired in 2024, has progressed very well, and we are beginning to realize the synergy benefits across the blasting and the cyanide businesses.

During the year, and as previously disclosed, we completed planned safety upgrades at the liquid cyanide facility at the Winnemucca plant on plan. Similar safety upgrades are being completed on the solid cyanide facility in October. We expect full production at Winnemucca from FY 2027 onwards, and we expect to start up the Winnemucca site with full production from the end of next week.

Our Yarwun and Alvin cyanide plants ran at record rates. And despite undertaking major safety and maintenance upgrades at our Winnemucca plant, our global supply chain allowed us to meet customer needs without any interruptions. We have continued to expand our emulsifier product portfolio, increasing exposure to copper and iron ore markets and entering into new regions and growing our revenue streams.

We've launched the new OptiOre range of mineral processing reagents targeting future-facing commodities like copper and critical minerals. Our scientific technical services offering for gold processing has seen steady uptake, providing extra value to customers beyond the chemical itself.

In summary, our Specialty Mining Chemicals business today is the world's largest mining-focused sodium cyanide producer with an integrated sodium cyanide production network of approximately 240,000 tonnes annually. This, along with the positive outlook and demand for gold, underpins the continued growth forecast in the medium term.

I will now hand over to Jamie to talk about our financial performance in detail.

Thank you, Sanjeev. Good morning, everyone, and thank you again for joining us today. I'll move to the key financial metrics shown on Slide #14. As Sanjeev mentioned earlier, the continued successful execution of our strategy is reflected in our financial performance. Whilst top line sales revenue grew by 6% to $8.1 billion this year, our earnings before interest and tax rose to $992 million, an increase of 23% compared to the prior year. I'll provide more details on this in the next slide.

Net profit after tax, pre individually significant items, increased by 32% to $541 million. As previously disclosed at the half year and our business update in September, significant items totaling $379 million after tax have been recognized this year, primarily relating to impairment and restructuring of our Latin America blasting business, in addition to litigation costs. Of the total significant items, approximately $235 million is noncash in nature, mainly relating to the Latin America impairment. After inclusion of these significant items, statutory net profit after tax finished at $162 million for the year.

Net operating cash flow finished at $949 million, an increase of 18% versus the prior year, reflecting continued strong cash generation across the business in addition to disciplined working capital management. Return on net assets improved to 13.8%, an increase from 12.8% in the prior year. Our strong performance in 2025 has enabled us to deliver continued improvement in EPS, pre-significant items, to $1.118 per share, an increase of $0.254 per share or 29% from last financial year.

A key highlight of our results throughout 2025 is the strong alignment between improved earnings, stronger cash generation and importantly, maximizing total shareholder returns over time in line with our refreshed capital management framework.

Turning now to Slide #15. We shared our refreshed capital management framework in March this year, and the framework is designed to provide clarity and transparency in how we think about deploying capital across the business and through the cycle. We've applied the framework consistently throughout this year and the quality of our earnings demonstrates a number of proof points. These include continued strong operating cash flow, efficient working capital management, disciplined capital expenditure and investment, and importantly, we have safeguarded the strength of our balance sheet and, as a result, delivered increased returns to shareholders.

A clear example is our successful on-market share buyback. In March, we announced an on-market buyback of up to $400 million to take place over the following 12 months. I'm pleased to share that this initial program is substantially complete with $399 million of shares repurchased to date, representing 4.1% of issued capital. Given our robust position, the Orica Board has approved an increase of up to an additional $100 million to the existing on-market buyback for a total program of up to $500 million. The buyback is expected to be fully completed by March 2026.

Over the coming slides, I'll talk to you the key aspects of our 2025 results in more detail, which highlight the continued successful application of our capital management framework.

Turning now to the EBIT bridge on Slide #16, where you can see that we've delivered improved earnings across all reporting segments. Starting with Blasting Solutions. Volume mix and margin increased by $81 million from the prior year, inclusive of $15 million of proceeds from the sale of carbon credits recognized in the first half. This was driven by continued strong demand for our higher-margin premium products and technology solutions, a positive recontracting cycle and continued commercial discipline. Growth in volume mix and margin slowed in the second half due to lower sales volumes in Indonesia and the U.S. due to reduced thermal coal demand.

Margin growth from our blasting solutions technology product range increased by 46% in 2025 on top of the 55% increase delivered in 2024 with strong continued demand for the safety, efficiency, environmental and cost benefits delivered to customers through our WebGen wireless blasting, 4D and Fortis specialty emulsion ranges.

In the Digital Solutions segment, earnings increased 32% to $92 million, an increase of $23 million from the prior year. Growth was underpinned by strong customer uptake of our digital platforms and sensor technology and acceleration in global exploration activity, particularly in the gold and copper segments and increasing recurring revenue. We also benefited from the full year contribution of the Terra Insights acquisition, continuing to realize the benefits of cross-selling opportunities across the Geosolutions portfolio with the integration of GroundProbe and Terra essentially complete.

Our FRAGTrack, OREPro and OREPro 3D products continue to attract significant customer demand, together with our Axis Mining Technology business, acquired at the bottom of the cycle, well positioned to support existing business and new contract wins, in line with strong metals exploration activity.

In the Specialty Mining Chemicals segment, earnings increased by $32 million to $101 million, an increase of 47% from the prior year. This growth reflects the full year contribution from the Cyanco acquisition, a critical investment supporting continued strong demand for sodium cyanide amidst sustained high gold prices, together with new contract wins in both the cyanide and emulsifier product ranges.

Pleasingly, our recent acquisitions have created opportunities to further bundle digital monitoring and optimization services with cyanide supply. As Sanjeev mentioned earlier, Cyantific and OptiOre provide opportunities to expand revenue streams and importantly, grow the segment beyond cyanide.

Across our blasting solutions and specialty mining chemicals manufacturing assets, we've also delivered improved performance versus the prior year. Earnings increased by $36 million primarily attributable to the non-repeated costs incurred from the 6-yearly Kooragang Island ammonia plant turnaround conducted in the first half of 2024.

Pleasingly, the strong production performance at our Yarwun cyanide facility continued throughout the second half, which is important as we progress through critical safety upgrades at our Cyanco-Winnemucca production facility. Maintaining uninterrupted supply to our customers and having the flexibility to adapt supply points across our chemical supply chain reinforces Orica's position as the world leader in the mining-focused production of sodium cyanide. And finally, global support costs are lower than the prior year, primarily due to the classification of litigation costs as a significant item in 2025, some small property sales and ongoing disciplined cost management.

In summary, our earnings growth has been broad-based, supported by increased contributions from every segment with a continued focus on execution and commercial discipline. Consistent with our capital management framework, this demonstrates our objective of resilient through-cycle performance and pleasingly, this has continued into the start of the new financial year.

Turning now to trade working capital on Slide #17. Encouragingly, the improvements that we've focused on over the past 18 months have been maintained this financial year. Total trade working capital cycle days on a 12-month rolling basis are in line with the prior year. Days sales outstanding remained consistent at 46 days, reflecting our sustained commercial discipline as sales revenue grew by $482 million or 6% during the year. Days inventory held increased by 2 days, seen as a prudent measure given significant geopolitical uncertainty, particularly in the U.S. and raw material shortages occurring through 2025.

Importantly, we've been able to fully offset this through a 2-day improvement in rolling days payable, closing at 51 days and moving us closer to top quartile total trade working capital performance, relative to industry benchmarks. Absolute trade working capital finished at $620 million. Foreign exchange had a $30 million unfavorable impact, partly offset by $14 million in efficiency improvements with ending trade working capital to sales finishing the financial year at 7.6%, improving from 7.9% at September last year. This disciplined working capital results supported the increase in net operating cash flow and remains a key focus area for the organization.

Turning now to Slide #18. Total capital expenditure for 2025 was $460 million, broadly in line with the prior year. Of this, $286 million was allocated to sustenance capital expenditure. This included successful completion of turnaround events at our Carseland and Kooragang Island sites in the first half and the Winnemucca and Alvin facilities in the second half. We continue to invest in our mining services downstream business, including enhancements to our mobile delivery systems fleet in growing markets to support increased sales of specialist emulsions such as 4D together with investments in our cyanide barge fleet to support increased sales.

Allocation to growth capital expenditure was slightly higher this year with $172 million invested in line with our strategy of supporting growth in the Digital Solutions segment, capacity expansions and efficiency improvements in our continuous manufacturing plants and further development of technology-focused blasting solutions. Growth capital expenditure is closely managed in line with the capital management framework where investment must achieve hurdle rates significantly above our pretax weighted average cost of capital as evidenced in our growing margins this financial year. Sustainability-related capital expenditure was $2 million following completion of key projects such as tertiary catalyst abatement across our nitric acid plants. We expect 2026 capital expenditure to remain broadly in line with the prior year.

Moving now to Slide 19 on the balance sheet and liquidity. We continue to strengthen our balance sheet during the year with a number of key funding initiatives successfully executed. During the year, we refinanced or extended $461 million of existing committed bank debt facilities and added a new $90 million debt facility. In July, we also announced the successful issuance of USD 390 million in the long-term notes in the U.S. private placement market. Now as an indicator of how Orica's balance sheet is viewed externally, investor demand for the notes were strong, with a total order book of circa USD 4 billion, and this resulted in funding at favorable pricing.

As a result, at 30 September, the average tenor of drawn debt was 5.5 years, an increase from 4.7 years at the end of September 2024. Net debt ended at $1.9 billion, excluding lease liabilities, an increase of $304 million from the prior year. This increase was driven by cash outflows, including $630 million of on-market share buybacks and dividends, together with $415 million of strategic capital investment. This was partly offset by our strong operating cash inflows.

Consistent with our capital management framework, our leverage ratio is 1.39x EBITDA and sits comfortably within the lower half of our target range of 1.25 to 2x. We maintained a robust liquidity position. At year-end, we had $747 million in cash and $1.6 billion in undrawn committed facilities. And in December 2024, Standard & Poor's reaffirmed Orica's BBB stable investment-grade credit rating. In summary, our balance sheet is strong. It positions us well to weather external volatility, support continued delivery of our strategy and, ultimately, increased returns to shareholders.

Turning now to the dividend slide on Page 20. Under our capital framework, we have maintained our target dividend payout range of 40% to 70% of underlying earnings. The Orica Board of Directors today have declared a final dividend of $0.32 per share, which brings the full year dividend to $0.57 per share, unfranked, representing a full year payout ratio of 50.2%. This represents a $0.10 per share or 21% increase on the 2024 full year dividend of $0.47 per share. This increase, together with the successful on-market share buyback, demonstrates our commitment to delivering enhanced returns to shareholders in a sustainable and disciplined manner, consistent with our capital management framework.

In closing, Orica's outstanding financial performance and disciplined capital management have positioned us for sustainable and enduring growth and to maximize shareholder returns. Our resilience, strategy, talented global team and commitment to innovation, ensure we are well prepared for future opportunities and to drive continued success for all of our stakeholders.

With that, I'll now hand back to Sanjeev.

Thank you, Jamie. Moving now to Slide 22. Our strategy is driving growth and market leadership by delivering innovative solutions that create value for our customers. This approach has underpinned consistent performance improvement over the past 5 years and notably the strong performance in FY 2025, a 13-year high. The successful integration of acquisitions, the technologies we have deployed and the markets we've entered are all translating into strong results. Orica today is an exciting and innovative company with a resilient business model and continues to deliver shareholder value going forward.

Moving to Slide 20 to Slide 23. We continue to increase our exposure to resilient commodities while reducing reliance on thermal coal. This shift ensures we are aligned with global trends and future-facing commodities, supporting both growth and sustainability. Our strategic priorities remain fully aligned with the growth drivers I've discussed, continue to grow our core blasting business, drive uptake of digital solutions and the recurring revenue they bring and expand our specialized offering in mining chemicals. Underpinning these priorities is an unrelenting focus on commercial discipline and quality of earnings, operational excellence and collaboration with our customers on new technologies.

Turning to Slide 24, I will give you an update on our strategic scorecard. Orica remains firmly on track with our safety, sustainability and financial targets. We are maintaining a strong safety record and have achieved our 2026 net Scope 1 and Scope 2 emission reduction targets ahead of schedule with further reductions planned by 2030 and 2035. We are driving organic growth, accelerating technology adoption and expanding into high-growth markets and future-facing commodities. Our average 3-year RONA is tracking within the target range of 13% to 15%, and this has been increased to 13.5% to 15.5% for FY 2026 to 2028. We maintain a dividend payout ratio, and our annual capital expenditures aligned with strategic priorities.

Turning now to the outlook for FY 2026 on Slide 25. We remain excited about Orica's future. The strong performance in 2025 has given us an excellent momentum entering the new year. Despite external uncertainties, our core markets and business fundamentals remain robust. We expect to continue growing EBIT across all 3 business segments in the year ahead. In Blasting Solutions, demand for premium products and advanced services is expected to stay strong, driven by increased customer penetration and ongoing technology adoption. Earnings growth will be supported by improved product mix, recontracting margin uplift and commercial discipline despite lower thermal coal demand in Indonesia and the U.S. and a planned turnaround at the Carseland plant in Canada.

In Digital Solutions, we see continued strong earnings growth. Mining companies are increasingly embracing digitization, automation and productivity analytics. We plan to further use the adoption of our digital offering across our customer base and use AI to improve productivity outcomes. This, combined with recurring revenue streams and an expected further uptick in exploration activity, will drive earnings higher in this segment.

In Specialty Mining Chemicals, the outlook is very encouraging. Gold prices remain elevated, and industry forecasts point to sustained strength in demand for gold and hence, sodium cyanide. With our integrated sodium cyanide production network, we are well placed to supply this demand and win additional contracts and anticipate further earnings growth from this segment.

Beyond the segment outlook, we expect depreciation and amortization to be $520 million to $540 million, slightly higher, reflecting recent investments. Given the ongoing geopolitical challenges and external market volatility, we will increase our focus on cost management to protect and strengthen our business performance. Net finance cost, effective tax rate and capital expenditures should be broadly in line with FY 2025.

The sale of our Stage 2 surplus land at Deer Park is on track to complete during 2026. We do expect ongoing litigation costs will be around $50 million to $60 million, as previously disclosed. As Jamie mentioned, the increased share buyback of up to $100 million is expected to be completed by March 2026. Following the recent incident at CF Industries Yazoo facility on the 5th of November, we received a notification on 10th of November from CF Industries claiming force majeure that will impact certain of its contractual obligations and indicating that it is presently unable to manufacture industrial ammonium nitrate. We are assessing the notice, and we will leverage our global manufacturing and supply network to minimize any potential impacts.

Looking beyond 2026 on Slide #27. We are confident that Orica will deliver sustained profitable growth and accelerate value creation for shareholders. Some key drivers over the midterm in the next 3 to 5 years. In Blasting Solutions, we expect our core blasting business to deliver GDP plus earnings growth through the mining cycle. We expect to grow faster than the mining industry. This will be driven by increased penetration of our products and services, continued rollout of our advanced blasting technologies and further improvements in our margin mix. The fundamentals of our core market are strong. Commodities like gold, copper and critical minerals are in high demand, and customers are seeking productivity and sustainability improvements that our solutions provide.

In Digital Solutions, we expect further acceleration in earnings growth moving from low double-digit percentages into the mid-teens EBIT growth. The mining industry's digital transformation is just beginning. And Orica, through our BlastIQ, OREPro, GroundProbe and Axis Technologies, is at the forefront of this trend. We have opportunities to grow our digital services in both our existing customer base and in new markets like civil tunneling and infrastructure. High recurring revenue and low churn will underpin this growth, making it a prominent earnings stream.

In Specialty Mining Chemicals, we now expect earnings will grow from mid-single digit to high single-digit EBIT growth over the medium term, reflecting the strong fundamentals in gold and potentially increase demand in base metal processing. We will continue to be laser-focused on translating growth into improved returns. We are targeting to deliver a 3-year average RONA of 13.5% to 15.5% over the next 3 years, an upgrade from the previous 13% to 15% range. This will be driven by higher earnings and disciplined capital use. We will maintain a strong balance sheet with a leverage range of 1.25 to 2x EBITDA and continue our dividend policy of 40% to 70% payout ratio.

In summary, the outlook for Orica is very positive. We have built considerable momentum in FY 2025, and we expect that momentum to continue into this financial year. Our markets, especially in commodities like gold, copper and critical minerals, are favorable. Our technology-led strategy is resonating with customers as demonstrated by the uptake rates. And our financial discipline provides a strong foundation. We are confident in our ability to continue delivering profitable growth across all segments and to create substantial value for our shareholders and customers in the years ahead.

With that, I'll now open to Q&A.

[Operator Instructions] First question comes from the line of William Park of Citi.

Firstly, just with respect to the headwinds that you've called out in Indonesia and the U.S., could you be able to provide some quantitative color around the earnings impact that you've seen in FY '25 for your Blasting Solutions business and your expectation of those headwinds into '26, please?

Yes. So I'll start with the U.S. We've seen -- William, we've seen a 10-year trend of coal extraction in the U.S. declining gradually. That has not changed. Now we do have the new U.S. government talking about bringing out more coal, and that might give us a bit of an uplift, but it's still early days. Now I'm not sure whether this is going to happen, but I can tell you structurally the challenge that the United States has today. There's a lot of investment going into data centers driven by AI. And as you all know, data centers need a lot of energy. Now the U.S. power grid is kind of maxed out at the moment. There's not been significant investments there, and they have shifted from coal-based power to gas-based power obviously because of the cost arbitrage because gas is still very competitive there.

Now if there is the surge, this predicted surge in electricity consumption as these data centers come online, the grid does not have capacity to supply power. The only latent capacity that the U.S. grid has is coal-based power plants because they are not running at full loads today. Now if that comes true, then we will see an uptick in coal consumption. But I'm not -- I can't predict if that will happen and when that will happen, but that's a possibility. So in our forecast for 2026, we have expected and we have anticipated a continuous gradual decline in coal output in the Permian Basin in the United States, and that is reflected basically in our forecasts.

Indonesia is interesting. Indonesia has been a relatively new trend. Since June of this year, we've seen a decline in exports of Indonesian coal into China and into India. And so it's been recent and it's been low -- I would say, around 10% decline in exports of coal from Indonesia overseas. And there are 2 reasons for this. One is obviously the coal pricing has corrected downwards. And the gap and the premium that customers pay power customers for the high-quality coal, so the low ash content, high low sulfur content, high calorific value coal versus the lower quality coal, which Indonesia offers has shrunk. And this means that the higher quality coal, which is mainly Hunter Valley coal, Mongolian coal has stronger demand.

So there's been a bit of a shift from Indonesian coal to the Hunter Valley coal and to the Mongolian coal. Now this obviously benefits us because it's a shift from the Indonesian demand into Australia and Mongolia, where we are active. But that has been the first trend. The second trend is that there's been an increased coal output of Chinese coal. So as a result, we have seen this decline in Indonesian coal exports. And we've seen a similar trend in India. India has been increasing their own coal production where we are active as a mining services provider, but they have slightly reduced imports from Indonesia.

Now whether this is a long-term trend, whether this is going to continue, it's hard to say because China issues, coal quotas once a year. So we'll have to wait till after Chinese New Year to see what the new coal quotas are, which are indicators of how much China will import in 2026, '27 onwards and what would be the impact of Indonesian coal.

So that's all I can tell you at the moment. It's a very recent development. We are watching it closely. But obviously, we do have exposure to thermal coal in Indonesia because we are the largest mining services provider in that country.

That's very clear. And then my second question relates to the force majeure that you've alluded to involving CF Industries. Can you just remind us, so the volume take-up on an annualized basis was around 800,000 tonnes from memory. Presumably, all of this is at risk. And can you just provide some color around some of the options that you have available to effectively replenish these volumes? And maybe some color around, I guess, the contracted price and spot price. Any color around that would be great.

Yes. Thanks, Will. Look, it's a very recent development. It's just -- we received the force majeure letter 2 days back. So we are obviously looking through it and analyzing what it means to us. You're right, the contract has an obligation to offtake up to 800,000 tonnes, but our nominations depend on our market needs. And obviously, given in mind the coal decline and all of that, we have not nominated to the full extent. So the risk is not 800,000 tonnes, if it is a risk at all. So that's the first answer.

The second answer is, obviously, we have our own global network. We've got the big manufacturing in Carseland. We've got all the other alternatives. So at the moment, we are busy mobilizing our global network. You have to remember, this is not the first supply disruption that Orica has faced in the last 5 years. We've gotten, unfortunately, pretty good at managing supply disruption. So the team is busy working and we have lined up supply, and we don't foresee any immediate disruptions of supply to our customers. We need to wait and see what the supplier tells us in terms of duration. So once we know that, we'll have more information and then we'll have more planning.

But again, just to keep in mind, we've got this notice just 2 days back. So it's very early days now. And our focus today is, first, to ensure that our customers don't get disrupted, which we are planning to do with our internal network and obviously through sourcing options.

And just the last one around the trend, I guess, with respect to exploration that you're seeing and I guess the acceleration in momentum, particularly in Axis that you've alluded to. Could you provide some comment around some of the observations that you're having with respect to the exploration levels across the regions that you're operating and how Axis is sort of performing in the first 1.5 months in FY '26.

Thanks, William. I mean, look, you know the exploration market value, you've been following us. We've been telling the market now for the last 18 months that we've seen an uptick in exploration after a nearly 4-year decline in exploration activity. So we've seen some record lows in exploration and with the juniors not investing capital and all the other challenges. On the other hand, demand continues to grow. So we're falling short on supply. So it was inevitable that exploration would pick up.

We first saw this in gold. We've seen this now for the last 18 months, extremely strong pull in exploration activity in gold. We now start to see this in copper. This is obviously going to go forward into critical minerals and rare earths. So we continue to see a strong uptick in the exploration pipeline. We are a global player today. We've scaled up Axis globally. We operate in all parts of the world with the major drillers everywhere in the world. So we are at the front line and seeing what the pipeline is, and it looks very, very promising. That's the first piece of good news.

The second news is when we met in Sydney when we did our digital roadshow there, we did say that we are going to launch into production drilling. So we are on the verge of launching the first Axis products into the production drilling market, which is obviously another exciting entry -- market entry for us. This, by the way, will double the TAM that we have in the exploration market. So just another example of when we bring in new technologies, we acquire new businesses, we grow the TAM very, very strongly, and then we obviously increase our penetration and market share. So it's looking very promising. And obviously, the pricing reflects the need for more exploration and more mining to happen and follow. So let's put it this way, I'm very optimistic about the exploration market.

Next, we have Brook Crawford from Barrenjoey.

Sanjeev, just a quick one on the outlook. Just note that you expect growth in blasting in FY '26. Just want to check if you expect GDP plus type growth levels in FY '26 in blasting, I guess, adjusting for the carbon credit benefit you had in FY '25, which would be similar to the midterm target.

Yes. Thanks, Brook. So yes, that's the guidance that we are giving you that during -- through the mining cycle, over the midterm, we are expecting GDP-plus growth, which means growth faster than the mining industry because of increased penetration. I did call out that for next year, we have a major Carseland shut at the end of the financial year, and you know what this means. This is a big shut. So it's more than a month. And this is basically led by our own maintenance schedules, but also our supplier turning down the ammonia unit for their own maintenance. This -- as you can imagine, as it did in 2024 with Kooragang Island and ammonia has an impact, obviously, on the blasting business and then the non-repeat of the carbon credits.

But despite all of that, we do expect blasting business globally will grow, and we will perform better than in 2025 for a couple of reasons. One is, obviously, we still have recontracting benefits coming through, not just from 2025 but also new contracts that we are winning as we speak. We've got further penetration and scale up of blasting technologies. So wireless 4D, everything else that goes around with it, specialized emulsions and all the other products and services that we have there. So that's another area where we continue to see growth in mix and margin. And then we obviously have also new wins in new regions, in new markets that we have entered now in the last 18 months, and that starts to scale up as we speak. So we'll also see some tailwind coming from that.

So overall, the segment will be growing, the blasting segment, but there will be these 2 impacts. One is the one-off carbon credits that has to be taken out. And then we will have the Carseland shut, which, as you all know, has some impact on our earnings.

That's helpful. And just on the buyback, you have increased to $100 million. It just seem a little bit light. I mean, for context, I think you did more than $100 million in the month of September alone. So just want to check why perhaps it's a conservative increase in that program through to the end of March.

Yes. Thanks, Brook. It's a good question. As you can imagine, we have discussed this intensively with the Board. Look, my view is this is the first buyback we have announced and successfully completed in more than a decade at Orica. It's all about building our credibility and we tell you what we'll do and then we do what we tell you, as I've been saying over the last 5 years.

First of all, I'm very happy that we completed the first tranche. We were expecting to do this over 12 months. We finished it earlier. We purchased below VWAP. So that's all very, very positive. And we still have a few more months to go. So we thought the best thing to do was to just extend the buyback so that we still completed within the 12 months. And we did want to buy 5% of our equity and we ended up with 4.1% because the share price went up. So obviously, we still want to do that 5%.

Now in the new year, once we are finished with all of that, you know we have a Board refresh. We will have a new Chair coming in. We are also thinking about a strategy refresh with the new Board. So we'll put all of that together. And once we finish the March milestone, then everything else is again on the table -- back to the table. I'll hand over to Jamie. He wanted to add a few things there.

Brook, it's Jamie here. So as Sanjeev said, we were targeting around 5% of market capitalization for this buyback. To date, we've bought back about 4.1%. And I think I said at the Investor Day in March that we were targeting this over the 12 months. So we've been quite successful in terms of volume and cost. So the weighted average purchase price has been around $20.15, and you can see we've been trading about 12% above that recently. And given the time frame that we've got until March of next year, another $100 million would get us up to about 5%.

And I quite like the March timing for a few reasons. So we delivered the net operating cash flow to our results in September. We release our results in November. We do our strategic planning cycle in February. So we look at what does the business look like for the next 2, 5, 10 years? What are the growth options that we have in front of us? How do we deploy capital to support that? What delivers the greatest return to shareholders? So I like the March timing. So we'll complete the balance of the $100 million, and then we'll come back next March and talk about what the focus is for the business then.

And just really a quick one on the blasting in term growth. I just want to confirm, are you talking nominal or real GDP growth?

Nominal, Brook, just to make things easier for everybody.

Next question comes from Mark Wilson from RBC.

Sanjeev and Jamie. just a couple of quick comments about the CF Industries' force majeure, and I realize it is early days. Just with your contractual arrangements, should this be a prolonged shutdown? And you do have to take on additional freight and sourcing costs. Would you be able to recover those from other customers offering CF Industries or insurance?

Yes. I cannot comment on CF. We've got the legal team looking at this force majeure announcement. So -- and it's an old contract, a complex contract. So we look through all of that. But yes, we will do everything we can to ensure that this does not come back and hurt us in terms of earnings and margins. There will be increased costs if you have to source for a longer period of time, we don't know. So we have -- our supplier has to tell us how long they are out and when will the supply restart, and we have a valid legal contract in play for the next 6 years.

So it's obviously a discussion we'll have with them. Their clear focus right now is to look at the safety of the operations, and then there will be an investigation and all the other stuff that happens around the regulation. So it's still very, very early days. But as I said, we have covered supply. At the moment, we are fine. And the most -- more important data point is how long is the outage so that we can start preparing for all kinds of eventualities, including passing on costs and managing costs and everything else that gets related with this kind of disruption.

Okay. That's great. And then just on the cash flow, good improvement there, particularly on the trade working capital side. Just wondering how much more progress you think you can make. And I did notice there was a reasonable increase in non-trade working capital. Can you just touch upon that?

Yes. Thanks for the question, Mark. We focus very heavily on working capital and have done a number of years now. We've done some benchmarking work on where we sit in the industry. So we've looked at as many companies in the blasting business or the agricultural space or the chemical space to sort of benchmark each part of our working capital. I think on the receivables side, if you look over the last 5 years, the region has done a great job renegotiating terms as contracts have come up for renegotiation, which is the best way to improve DSO. So I think in terms of benchmarking, we're probably in the top half in that space. There's more that we can do there.

On the inventory side, it's interesting. We're quite hard on ourselves in the way that we manage inventory in the business. Comparatively, we're in the top quartile. If you look at our DIH, it's relatively strong, particularly if you look at inventory to sales. In our benchmarking work, we were top 2 in that space. But our issue was really around DPO. And comparatively, we were very much in the bottom 25%. I don't think that we were leveraging our buying power as well as we could have.

So this year, the supply chain team has done a great job. We've renegotiated around $400 million of supply agreements. Around $250 million of those were below 30 days, they're now above 30 days. And around $150 million were between 30 to 60 days, which are now on greater than 60-day terms. So that supported the increase in DPO. But that remains our area where I think there's the most room for improvement. But we are very, very conscious of the conversion of EBITDA to cash, given we are a very working capital-intensive business. And the increase in non-trade working capital was basically due to restructuring costs, which have since been paid.

Next, we have John Purtell from Macquarie.

Just had a couple of questions, please. Just the first one, obviously, you've upped your medium-term EBIT growth targets for mining chems and digital. And I know you've alluded to some of the factors, Sanjeev, here. But obviously, the gold price moves around. So just be interested in what are the factors outside of the gold price that are giving you the confidence to up those targets?

Yes. Thanks, John. So I'll touch briefly on digital, and then I'll go back to chemicals, which is a very special macro that plays out there. Digital, it's just a matter of us getting comfortable with our recent acquisition, Terra Insights. So the acquisition is complete. The business has delivered above acquisition business case. So we just get more comfortable with it. You know it was a new technology. This was the part of the sensing and monitoring piece in the value chains, both in civil and in mining that we were not active in. We were only active in monitoring through GroundProbe. So we have significantly expanded -- doubled basically our offering in that industry. So the first year was all about integrating, taking control of the business and getting comfortable with the technology. Now we feel comfortable. We see the runway. And that is why we've said instead of the low double digit, we'd like to grow this thing, the digital business and earnings in mid-teens.

And this also then goes back to Axis. Axis has been with us a couple of years. We have invested capital. We have scaled the business up. Today, we are a global player with a significant market share, a clear #2 in the exploration space. And then as I said earlier, we are entering into production drilling. That's going to double our TAM, and we are starting from 0 market share. So we're going to go there and increase our growth.

So -- and then obviously, our core blasting technology business, it's all about optimizing blast outcomes, fragmentation and less waste and all of the other stuff that we do there, which is very, very successful and appreciated. So digital business will grow. Earnings will grow harder to mid-teens, as we have said.

Chemicals is interesting because it's not directly connected -- our business is not directly connected with the gold price. It obviously helps -- our gold is at $4,000 an ounce. There is a structural issue in the gold industry. There's not been enough exploration. The ore that exists today, proven ore deposits is very, very dilute. So you're talking 1 gram, 2 grams per tonne of rock blasted. And the demand is there. So what this means is you're -- first of all, you need to explore more, which is what we have seen in the Axis business, so that's coming through.

Secondly, you see marginal gold assets over the on the right of the cost curve. They become more competitive now with the pricing of gold. So they start to come back into production. That means more demand for us. Thirdly, because the ore is so diluted, you have to blast more to get that gold ore out and then you have to use more extraction chemicals to get the purity we want. So even if gold supply doesn't increase, you have to increase servicing of the gold industry to keep with your output. And that's a very interesting macro that plays to our favor because we do the digital part in Axis. We do the blasting for the gold customers and then we do the extraction using sodium cyanide.

So that's the first macro that gives us confidence. The second one is that we are now nearly finished with the Winnemucca safety upgrade. So we had one major turnaround plan. We split it into 2 to straddle the financial year 2025 and this one. Because the demand was so strong, I did not want to shut the site down. So we kept some part of the site running to cater to customers. And we have got 3 lines there. So we shut the first line then the second line for the liquids. We finished with the safety upgrades.

We will finish the solid safety upgrades by next week, then we'll have the plant up and running, and then we're going to test capacity. And we're going to max our production, and that's where the uptick will come. And that's why we said let's increase our earnings forecast from the middle single digits to the higher single digit earnings. And that's what gives us confidence to do that, John.

And just a second question on the profit bridge slide there, the margin mix is obviously up $81 million for EBIT in blasting. I think you mentioned that, that includes the $15 million carbon credit benefit. So you've got a $66 million underlying there. So I think the broader question is, do you think you can maintain that level of improvement in '26? Or is that going to be difficult given some of the thermal coal regional weakness you've called out?

John, our focus has always been mix and margin optimization, right? I've told the market several times, our volumes don't really drive our earnings. So it's all about scaling up our blasting technologies. The WebGen has got a lot of runway to go, right? And we have now gone open cut in WebGen. So we started with underground the first couple of years. We have launched the second version. We are now looking at even the next iteration of WebGen, which is very, very exciting. So this thing has a long, long way to go. And our biggest success has been our new emulsion, the variable density emulsion, where we are able to basically control energy intensity within a hole and to provide the outcomes that the customers need. And now we're bringing it together.

So now we are selling solutions, including WebGen and 4D together. And the upselling potential there because of the value proposition is huge. And this is going to drive continuously our earnings. And we are launching new products. We are launching new emulsions for cold climates. We are now launching new products for the underground sector. We are going hard into the metals industry. And as you know, the macros and mining are -- it's going deeper. It's going underground into more difficult geographies. And we are so strongly placed with our global footprint to cater to new demand coming everywhere in the world. That's why mix and margin will continue to drive this.

And then on top of that, the digital business is all mix and margin right? There is no volume there. It's all about services, recurring revenue, SaaS. So that's continuing to grow. And then the specialty mining chemicals expectation is that volumes will grow and margins will also grow. So yes, pretty confident. The only call out, as I said earlier on the call, is 2026. We've got the Carseland shut down, and you have to pull out the $15 million from the carbon credit that was a one-off.

Next, we have Scott Ryall from Rimor Equity Research.

Sanjeev, I just want to follow up on your carbon credits comments just then, you still get carbon credit issued under the scheme that you've agreed with government, right?

Yes, Scott, that's a good question. Look, we are generating the highest -- one of the highest quality -- I should temper that. One of the highest quality carbon credits in Australia. We've started on this journey even before the safeguard mechanism existed. So we obviously have got a head start over the other 214 heavy emitters in Australia who are under the carbon credit regime.

At the moment, we are banking them, right? And that's why you see the difference. If you look at our sustainability results, you see a difference between gross and net emissions, which is significant. And that difference is basically the carbon credits that we are generating every day at Kooragang Island and Yarwun, but which we are not monetizing or we are not surrendering. So we are banking them at the moment. And we'll continue to do that until 2029 when the safeguard mechanism kicks in, which is basically a 5% reduction year-on-year. And at that point of time, we will be well under any kind of penalties, right?

And then -- but what we are doing is we are banking these carbon credits for future because at a period of time, as our production grows, our emissions will -- we continue to mitigate them. But at some point in time, we are going to be caught by the safeguard mechanism credit, and that's when we are going to start to utilize those carbon credits. So my expectation is in the foreseeable future, we do not expect to pay any kind of penalties under the safeguard mechanism.

Now if you have excess carbon credits and if the market is very strong and if a good customer or a partner comes to us and says, can you help us out, at the right price, we are willing to sell them. But our base strategy is that we would like to bank them because we don't need to sell them today. And we can bank them and keep them in our inventory. And at the right time, we can either monetize or use them to offset our emissions in the future.

Right. Perfect. And then just if I can touch on the CF Industries issues again. You've given color, I guess, that it's all very recent. If I look at the facility in question, just -- it does just shy of 600,000 tonnes of ammonia, which, if that was all channels to ammonium nitrate, would be over 2 million tonnes. And you've said you're up to 800,000, but obviously less than that. Do you have a sense of how this puts the U.S. or the North American market more broadly than just your supply of ammonium nitrate? And I guess what I'm looking at is, you made a good comment that during COVID, you managed your supply chain pretty well as a global player. Do you have regional players who are highly exposed for this incident as well?

So I mean, look, I don't think the numbers you quoted are correct, but you should check up the website to see what the right numbers are because I think these are published numbers. They are a big fertilizer player. They are not really an explosive player. We are the biggest explosives customer. So a lot of the excess capacity that they might have in their system mainly goes to the fertilizers industry. It doesn't really go into the explosives industry.

If you look at the U.S. supply and demand for nitrogen, the U.S. market is long, and it will remain long because, obviously, the ag business is a seasonal business. And because of the coal decline over the last 10 years, we've seen length coming in the U.S. market. So the market was never short or tight. It's been long. And we have to see now what the tenure of the shut is and when can they get these assets up and running. And then we have to decide what -- if at all, there's a longer-term impact. But again, it's really, Scott, early days. I can't really tell you more than that.

Okay. So you're more -- you're more focused on your internal ability to service your own customers' needs as opposed to the competitive advantage that may give you from being a global player?

Absolutely. Because we don't produce in the U.S., so right, we are kind of agnostic to what happens to other people, and especially the fertilizers industry because we don't play in that industry.

Next, we have Nathan Reilly from UBS.

Sanjeev, just with your East Coast gas supply, previously, you've indicated that you've recontracted, I think, out to 2031. Can I just confirm, is that you're fully contracted out to that period now. Can you also maybe sort of talk through the cost impact doesn't feel like it's that material going forward?

You're touching a nerve here, Nathan. No, no. We are fully contracted until 2031 on the East Coast, both at Yarwun and at Kooragang Island. These are not easy negotiations. But we've got leverage because we are big. I think we are one of the largest consumers of natural gas in New South Wales. So we've got some leverage.

I'm not happy because I have to pay more. But as you said very rightly, we have smart ways of managing that and mitigating that through internal efficiency measures and then also through pass-throughs. So I don't expect any kind of material impact on the -- on our margins in the -- on the East Coast of Australia.

But this whole gas discussion is now really coming to a head. I think both gas suppliers and gas consumers like ourselves, we have come to the realization something has to give. The equation has to be more equitable. The government is working. We have submitted our own submissions to them and our own imports and facts and figures, and everything is in black and white.

In this country, gas has quadrupled in the last 12 years, gas price, right? So we used to have average gas prices of $4 today, the market talks about $18, $19. So that's just ridiculous. It's not sustainable. So I'm now hoping and waiting for the government to come up with some kind of reservation policy, first step, on the East Coast because getting more supply in, that ship has sailed, right? It will take 3 to 5 years to get in more supply. So the first thing to do is use the Western Australia model, have reservation for genuine users like Orica. And then the second step to get in more supply, and then also look at the pricing so that everybody has an equitable stake in this industry. So that's where I'm hoping, Nathan, and we'll watch what the government does.

Okay. Very clear. And finally, just on your legal fees. I think you've guided that you're expecting that to be -- will be a significant item, but $50 million to $60 million, I think, in '26, but that's on top of the expenses you incurred in '25. It seems like it's an awfully big number. Can you just give us a breakdown in terms of what's -- obviously, there is CF arbitration issue in there, but just give us an idea of what else is hitting that number?

Yes. So this is ongoing. We've had legal fees since 2020, 2021. We always had legal fees. Given the nature of our business, we are global, there's always some kind of contract issue with the supplier, with the customer, some IP issues. Last year, we spent some money on a significant IP issue in Australia, and we came out winners there. So that was money well spent. We are going to continue to invest in protecting IP and defending our IP also in 2026. There's a bit of that.

There's a few legacy issues about some acquisitions and divestments made in the past, where we are tackling some of these either claims from our side or claims on the other side that we are defending. And then obviously, we've got the ongoing litigation. So it's a mix of everything, but it's in a similar ballpark as to what we had in 2025, and we will have them in '25 -- in this new financial year. Post that, we will see what happens in terms of the ongoing litigations and then we'll have -- we'll take a call.

Next, we have Daniel Kang from CLSA.

Sanjeev and Jamie, just have a few questions, which I might just ask all at once. So firstly, just on your upgraded medium-term EBIT forecast for Digital Solutions and Specialty Mining Chemicals. Can you just help us with your medium-term margin expectations?

Secondly, given the strength of gold markets, just wondering if you can provide some color on sodium cyanide pricing trends. Is there scope to improve pricing terms on your customer contracts?

And just finally, your Digital Solutions slide on Slide 11, I think. Great to see TAM has grown by 39% CAGR, but it seems like revenue has lagged that at 30%. So theoretically, it does imply some share loss. Can you just talk about market share trends?

Thanks, Dan. It's the other way around. The day you acquire a business, the TAM comes into your accessible market and then you grow your market share. So if you look at the timing of the acquisition, we have grown faster than the market. And now the fact that the market has grown faster is because the full TAM is accessible to us with our new products and solutions, which are now integrated. And now we have the potential to increase our penetration by increasing our market share. So it's the other way around, not the way you put it, but it's the other way around because you first get the TAM and then you get the growth and the earnings out of it. So that's an upside that we'll do better.

And then I mentioned in Axis, we were doing only exploration. So the TAM included just the exploration. Now we are launching this year into production. So the TAM has doubled, but our sales are still 0 because the product is being launched now. So as we grow into the production market, you'll see our sales revenue catch up. So that just tells you there's more upside. It's not a loss -- share loss. It's basically us starting into a new market and then bringing in new products and solutions and growing our share in that market.

In terms of margins and pricing in sodium cyanide. Pricing is not that relevant. It's a commodity. It's the margin that we make out of it, and that's what we do here is play our supply network. So we've got 3 manufacturing sites in 2 continents, and we've got 4 distribution centers globally on top of that. So it's all about landing the product at the lowest landed cost to our customers, which basically gives us the best netback. And there's nobody else in the world who can do this because there is nobody else with multiple locations and supply chain facilities that we do -- we have.

So that's where the upside is. So there are situations where sodium cyanide price might come down because the byproducts producer might ship a consignment through a distributor and dump it somewhere, but that does not decide margin. The margin is decided by how you optimize delivery and supply chain and handling of the product, which, as you can imagine, is a very difficult product to manage.

So it's not directly relevant, the pricing mechanism. It's an input. It's a factor of input. So there's natural gas in it. There is a sodium hydroxide in there, and there's a bit of ammonia that goes into conversion. And obviously, the cost of these ingredients is very different in different parts of the world. So it's more a margin game and a netback game in this business. It's not so much a pricing game there.

Next, we have from Ramoun Lazar from Jefferies.

Sanjeev and Jamie, just one for me just around the capital position. Obviously, you've got Deer Park that you're expecting to monetize at some point in '26. I'm just trying to understand how you're thinking about capital deployment. Is there anything in the M&A space or in the portfolio that you think you need to add -- to continue to add to the strategy of growing beyond blasting? Or should we think about those surplus funds coming back to shareholders via buybacks?

Yes. Thanks for the question, Ramoun. Just your question on Deer Park. So we look at all of our land portfolio and whether it's surplus to need. So just in Deer Park, in particular, so the market engagement, so far, has been very positive. I think we're approaching conclusion of discussions with all interested parties. I think we'll know more by around March of next year who the most likely successful party will be.

In terms of funds from that, I think it's going to be Q4 next year. The challenge will be, is it Q4 of our financial year or Q4 of the calendar year. So I'll know more about that in March of next year. We're also looking at the land that we have at Botany. Now first and foremost, our priority here is our environmental and community commitments and remediation. That's the primacy and the thing we focus on there most. As we work through the individual lots through remediation milestones, there may be opportunities to divest parcels as we move through remediation. That probably won't be until 2027. And obviously, if you look at the location of the land, it's in a very favorable spot. So you can imagine that, that would be well valued, but that will be probably 2027.

What do we do with those funds? It really comes back to the capital management framework, right? So if we've got surplus balance sheet capacity, we will look at what options we have to deploy. If it's M&A, it has to be enduring investment consistent with the strategy. It has to deliver the requisite return above pretax WACC to be accretive to shareholders and accretive to EPS. We look at things all the time. We probably look at 50 things a year, most years we do none. Last year, we did 3 or 2. If there's no way to deploy that capital in terms of M&A that's consistent with strategy and EPS accretive and enduring, then we'll look to return it to shareholders. That's exactly the reason why we spent so much time on the capital management framework this year.

Yes, understood. I guess what I was trying to ask is, is there anything in the portfolio that you think is missing that you could look at potentially adding to via M&A or that you can, I guess, develop internally?

Yes. It's a good question. So we're obviously the market leader in terms of the provision of sodium cyanide into the gold industry. If you look at the energy transition, right now, we don't have a chemical offering in the copper space. Now we won't get into sulfuric acid or hydrochloric acid, they're very much commoditized, but some of the specialist chemicals in the purification process, we will potentially have a look at. I don't expect that to be significant M&A. They're probably smaller bolt-on acquisitions at this stage. So we're actively looking at that. We may do something in that space next year, maybe not, but there's no significant M&A that we're looking at as we sit here today in that space. I don't know, Sanjeev, if you want to add to that?

No, Ramoun, I don't think there's anything else missing in our portfolio. So what we are trying to do at the moment with specialty mining chemicals, given the business is so successful and we understand chemistry -- we were a chemical company or we are a chemical company -- is look at offerings beyond gold, so replicate the same model, do digital blasting and extraction in other commodities. So copper is an obvious target. We're also looking at rare earths and critical minerals because there is also a lot of processing that goes into that. And for processing, you need to handle hazardous difficult chemistry, reagents, flocculants, floaters, extractors. And this is specialized chemistry. This is basically, I would say, a black box chemistry where you sell small ingredients at very high margin, very high pricing, and it's all about value delivery in terms of optimizing extraction.

So that's the area that we really would like to grow into because we don't own the chemistry there. The chemistry is available in the market, we know who has it, we have been engaging with quite a few people. But whether we make a deal or not, time will tell. It has to be at the right value for us. And if it is not, then we'll continue with the capital management framework here.

In Digital, we don't need anything else. We are investing in AI, but it's all homegrown AI. We are developing our own agents. We are developing our own AI tools to leverage our sensors, our data, our software and the cloud that we have put into place to monetize more value out of that. So that's more organic growth. I don't expect unless something falls into our lap at the right valuation that we'll buy anything in digital.

Our last question comes from Lee Power from JPMorgan.

Sanjeev, just on Slide 10, where you chat about churn rates that have come down. Is there something specific going on with the type of contracts up for renewal? Or something else going on around how you're approaching pricing or your competitors approaching pricing that might explain the change in churn rate?

Yes. So the churn rate has improved, which is a positive that tells you that -- so the churn rate basically means the percentage of businesses that we are losing, and that's come down, which is great. And this tells you that our offerings are getting better, the business is getting stickier, and customers are seeing value. So they are -- so we are obviously winning new business with new customers. What is really exciting is we win a lot of business in digital at our competitors' blasting sites, which is a lot of fun, as you can imagine. But we are also able to retain business and then expand businesses because digital business is fast moving. We come up with a new offering every, whatever, 6, 8, 9, 10 weeks. And it's all about putting stuff together and then adapting the solution to your particular ore body or your particular mining method or your particular commodity and then coming up with a new solution. So churn rate going down is very, very positive, and this means the business is getting stickier, and customers are loving what we are able to offer.

Yes. I guess I was coming from like the other side, often like churn rate and price go somewhat in opposite direction. So I was trying to work out if there's something else where maybe the rest of the industry has kind of started pushing price as well and that's starting to show through in churn rates.

We use the same philosophy as we do with blasting. We are here price leaders. We are the market leader in the digital space globally. So we are the one who set pricing and benchmarks. We are not a price taker. And we have not yet seen a reason to compete for share on pricing because our products are just superior and better.

That's a good sign. And then sorry, just to go back to Brook's question around Blasting Solutions. Is your point that -- you've obviously got the medium-term targets, you're going to grow, but you -- given the Carseland shut, you might be below that medium-term target you've set. Is that what I should take out of your answer to Brook's question? Or if I'm mistaken, what should I be taking out of that?

I did not hear you very clearly because I lost you for a minute there. Would you repeat that and summarize it, the question?

Yes, sorry. So I was asking just a follow-up on Brook's question around Blasting Solutions and the '26 guide. There's obviously a lot of moving parts. You said there is going to be growth. I'm just trying to work out is, do those moving parts end up that your growth rate will be positive and yet below the GDP plus EBIT growth target you have in the medium term? Or is it going to be at or above that rate?

Look, we'll try and grow earnings as hard as possible. I'm just trying to remind everybody of the one-offs, which is the 15 million carbon credit and the Carseland shut, right? So always keep that in account when you factor in earnings growth in blasting for 2026. Going forward, obviously, because these things will not recur in '27 onwards, then we will go back to a more normal cadence.

Why am I calling out Carseland? Because this is as significant an event as we had Kooragang Island in 2024 where the whole site was down for a very extended period of time. And that's why I'm calling that out specifically. So yes, obviously, that will have more of an impact in 2026, and then it will wash out in 2027. So again, that is just something to keep in mind. Otherwise, we are committed to the forecast we've given you, which is GDP plus.

Thank you for all the questions. That concludes our Q&A session. I will now turn the conference back to Delphine.

Thank you all for joining us today. If there are further questions, please feel free to reach out to me. And we look forward to meeting you over the next couple of weeks. Thank you, and have a good afternoon.