Barloworld Limited

Good morning, ladies and gentlemen, and welcome to our interim results presentation for the six months ended 31 March 2025. My name is and it gives me a great pleasure to welcome our executive team to take you through our results. First, led by Mr. Dominic Suela, Group CEO. He'll take us through our group highlights. Ms. Nopasikalila, our Group Financial Director, will, as usual, provide the financial summary. Andronika Masemula, the CEO of Equipment Southern Africa, will take us through, obviously, Equipment Southern Africa's results, which fall under industrial equipment pillar, and she will be followed by Mr. Emilie Eka. Emil will proceed to industrial services, and he'll take us through the results for our business VT, and Chris will conclude the divisional results by providing an update for ingrain, which falls under the consumer industries pillar. To close off, Dominic will give us a strategy update, provide an outlook, and as usual, we'll take time to address whatever questions you may have. Please feel free to post them online, and we will address those at the end. Without much further ado, ladies and gentlemen, I'd like to welcome our group CEO, Mr. Dominic Suela.

Thank you, KG. Ladies and gentlemen, Welcome to our interim results for 2025. It's always a pleasure and an honor to present our financial results alongside my executive team. 2025, certainly this year has been very interesting in all its hallmark when you look at the volatility, uncertainty, complexity and ambiguity. The world is changing faster than ever in terms of economic shifts, tech breakthroughs, global politics and climate changes are reshaping our daily living. In such a dynamic environment, businesses such as ourselves, especially those in cyclical industries, need to look beyond short-term gains and prepare for long-term resilient strategies. Investing in ESG is a smart strategy for building resilience in the face of economic cycles, regulation, and evolving expectation. On the environmental front, we have revisited our long-term climate strategy to focus on absolute reduction in scope one and scope two, carbon emission, instead of efficiency-based targets. We continue to invest in environmental infrastructure. In May this year, we proudly celebrated the launch of the upgraded maritime water effluent plant. Our solar installation in Cliff River is in progress, and hopefully before the end of this year, we will be able to launch that project. Investing in our employees and establishing a culture of zero harm is fundamental to our strategy. We are pleased to report that there were no work-related fatalities during this period. However, we did observe an increase in our lost time injuries and resultant frequency rates. Each incident has been thoroughly investigated and appropriate corrective actions have been implemented to prevent the recurrence. We are committed to cultivating a diverse and inclusive workforce where every individual feels a genuine sense of belonging. Equally, we adopt a comprehensive approach to employee well-being, ensuring not only that our employees return home safely each day, but their overall health, dignity, and fulfillment upheld throughout their professional journey at Baloworld. On the training and development, this remains one of our focus area. Over the last six months, we provided about 248 apprentices and interns with the work opportunities in the group. Since its launch, we have 84 Baloworld leaders graduate from the SEED program, equipping them with the skills and knowledge to drive our company forward. Our independent board serve as a custodian of our governance and strategy and continue to exercise independent oversight over the business. As I indicated in November last year, we were disappointed to learn of the potential export control breach in our division in VT. We filed a notification of self-disclosure to BIS on a voluntary basis. The investigation is ongoing as announced this morning that BIS has granted a further extension from the 2nd of June to about the 2nd of September, and we'll keep you updated as we progress with that investigation. If we just change tack a little bit to look at some of the highlights, the year of 2025 commenced with a guided sense of optimism characterized by lower global headline inflation and prospects for pockets of global economic growth. When you look at the trading conditions within the period which we operate in, we have entered a lower cycle where commodity prices have subdued. As some African mining clients remain cautious about capital investment. They're preferring to rent equipment from us than to buy. On the construction sector side, there is still a recovery in progress in that area. But when you look at Zambia, particularly the copper mines in that area, they've been spared by favorable copper prices. And when you look at our business in Mongolia, the sector continued to grow, albeit at a slower pace. You're all well aware of our activity in VT that has been significantly reduced by sanctions and prolonged geopolitical environment, and largely because the addressable market has shrunk in that area. At the current rate, we expect our operations in VT to trade toward break-even levels and to remain self-sufficient. During this period, we focus on levels That we can control. Because some of the issues that I've spoken about, geopolitical issues, are way beyond our control. We primarily focus on reducing overall operating and financing costs through our fiscal discipline and agile treasury management. Including VTE, group revenue declined marginally by 2.2% to $16.8 billion. EBITDA margin expansion of about 0.6% when compared to prior period. Similarly, operating margin expanded by about 0.3% to 8.8%. Group headline earnings per share declined by about 20.5% to 423 cents per share. Normalized headline earnings per share, which exclude VT, amounted to about 356 cents per share. I'm pleased that the board agreed has declared a digital dividend of about 120 cents per share, which is in line with our dividend policy. Our balance sheet remains robust. In light of the uncertain times ahead, I'm confident that it is resilient enough to absorb future volatility. I'm going to hand over to Nopa Sika just to give us a financial overview.

Thank you, Dominic, and thank you all for joining us this morning. Our results in this interim period demonstrates that our business is agile and can withstand turbulent times. As Dominic has already mentioned, performance in VT has declined following the prolonged geopolitical environment. So in order to understand our group's performance, it is important to isolate VT for a moment. The income statement excluding VT yielded impressive results considering the challenging trading environment. Revenue achieved was $16.8 billion from $17.2 billion in the prior year. EBITDA and operating profit increased by 3% and 1.3% respectively. The EBITDA margin rose to 12.5%. and the operating profit margin improved to 8.8%, benefiting from prior year's restructuring and cost containment measures. Impairment in the current period relates mostly to our SMD business, which was successfully disposed in April this year. Our share of profits from joint ventures and associates declined due to our ongoing challenges in the DRC and reduced trading activities in bar track. Andronica will elaborate on this a little later. NMI's operating profit remained flat year on year. And you may recall that in the previous year, their results included profit from sale of property of 14 million rand. Moving on now to the performance of VT, as expected, ongoing geopolitical situation continue to impact their results. The business, however, is still on track to break even and remains self-sufficient as we had previously guided. Transitioning to the group's view, including VT, as anticipated, resulted in reduction in revenue, EBITDA, and operating profit. Net finance costs improved by 24%, benefiting from lower interest rates and the reduction in floor plans, which we replaced with less expensive debt. We estimate an ETR of 31.1% for the full year, which is in line with what we had reported in September at 33%. Group HEPs declined by 20.5% from 5.32 cents per share to 4.23 cents per share. On the segmental front, Equipment Southern Africa's revenue declined by 6%, mainly due to the reduction in aftermarket revenue. Machine sales remained flat, and rental revenue performed exceptionally well, increasing by 17.8% year-on-year. Mongolia continued its upward trajectory with strong revenue increase of 23%, benefiting from growth, both prime product and aftermarket activity. In-grains revenue remained flat, with volumes decreasing by 3%, while the average price increase was 2.8%. The divisional CEs will expand on the divisional performance a little later. As previously mentioned, the group's operating profit, excluding VT, improved by 0.3% to 8.8%. Mongolia's operating margin remained flat above 0%. beg your pardon, it remained above the 20% mark. A slight reduction in equipment Southern Africa margin, mainly as a result of the change in sales mix. And with ingrains margin improving by 1%. Our balance sheet remains strong, with assets exceeding liabilities by 17.5 billion. This represents a 5.2% increase compared to the September results. Total assets rose by 4.2% to 42.9 billion, two key contributors to the increase. in the total assets are the rise in foreign currency translation reserves, driven by the strong U.S. dollar against the rand, and the increase in working capital. And here, in particular, the accounts receivable. Accounts payable, including floor plans, decreased to 13.1 billion compared to September 2024. Free cash outflow of $2.8 billion in this first half is in line with the working capital, and this is expected to reverse in the second half. We continue to invest in capital expenditure across the division, positioning the group for growth. The group remains compliant with all its debt covenants. ROIC and ROE are below our target rates of 14% and 15%, noting that we are still halfway through the year. And contributing to the current shortfall is the increase in invested capital and reduced profitability during the reporting period. In declaring the dividend, the board took into account levels of debt, required investment, as well as the macroeconomic outlook. I'm delighted to share that the board declared an interim dividend of 120 cents per share. Now with that, I'd like to hand over to Andronika Masimula.

Thank you, Nopasika. Good morning, ladies and gentlemen. I'm pleased to announce the results for Baloworld Equipment Southern Africa. These results demonstrate the resilience of our business in the prevailing challenging economic conditions, and we're in line with our expectations. Revenue declined by 5.9% compared to prior year at 11 billion. The appreciation of the rent against the dollar contributed to a 2.8% reduction in revenue while the remaining balance was attributable to lower parts sales volumes. Total machine sales were flat compared to prior year boosted by an increase of 19% in new sales, while rental revenue grew by 18%. EBITDA margin remained steady at 11.5%, Free cash flow closed at an outflow of 2.4 billion as a result of an extended working capital cycle. Return on invested capital was above cost of capital at 14.4%. Moving on to new equipment sales by segment, new equipment sales were 2% lower at 3.9 billion. Contribution by segment remained fairly the same compared to prior year, with the exception of energy and transportation. The segment's contribution decreased from 12 to 10% influenced by grid stability in South Africa, which decreased the demand for backup power. Shifting to machine sales by commodity, A diverse commodity mix continues to shield the business from sector-specific dynamics. Following the successful seeding of equipment to zinc projects in the prior year, contribution from zinc decreased to 7%. Copper contribution almost doubled at 13% on the back of key projects in the Zambia Copper Belt. Fleet replacement in the coal sector increased the sales contribution to 51%. Now moving on to operating profit margin evolution and aftermarket contribution. Operating profit margin was firm at 8.5% despite aftermarket contribution diluting to 59% of sales. The impact of the aftermarket reduction was offset by continued cost management resulting in operating expenses staying flat year on year despite inflationary pressures. The delta between operating profit before fair value adjustments and after fair value adjustments, breached the targeted 1% benchmark due to the high volatility of the REN dollar exchange rate. Moving on to BATREC JV, the JV delivered a positive share of profit of 40 million, although lower than the prior year. The business continues to face challenging trading conditions, increased competition and uncertainties in the regulatory environment. Our outlook for the remainder of the year is that trading will remain at the current pace. Our strategic imperatives remain consistent. We are leveraging on BBS to drive efficiencies and lower the cost to serve. As much as we are in a downturn, we are investing in expanding our digital capabilities to preempt aftermarket opportunities while improving equipment uptime for the benefit of our customers. The physical well-being of our brain champions is key, and we have intensified our safety training. We continue to offer a diverse range of solutions to respond to the equipment needs of our customers, be it new, used, or rental equipment and engines. In closing, We are optimistic about the growth prospects in Zambia on the back of increased demand in copper. The geopolitical tensions have created uncertainty and therefore delaying mining recovery in the region. We expect construction to grow, although at a slower pace. The transition to contract mining is reshaping the market landscape, resulting in extended working capital. The order book at $3.6 billion was strong, increasing 25% year-on-year, supported by orders from copper and coal projects as well as construction. Thank you. I will now hand over to Emmanuel Lieta.

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Thank you, Andronika. Good morning. Mongolia continued to deliver stellar results and pleasing to see that for the last two years there were no LTIs or lost time injuries. Revenue up 28% to $132 million. driven by parts growth of 46% and prime product sales growth of 28%. Operating profit increased 21%, with the operating margin reduced to 21%, and slightly so compared to prior year at 22%. This was mainly impacted by the foreign exchange losses of 1.3 million. EBITDA up. 20% at $30 million, with a margin at 23% versus a prior period at 24.7%. Our returns on invested capital was holding up above our cost of capital at 58%, diluted by increased invested capital. The cash outflow of 69.5% million was due to the impact of growth in the working capital requirements. Now turning to the revenue by segment and commodity mix, the mining sector remains the economic platform. Amid the decline in prime product sales contribution, we saw a very strong aftermarket contribution. Coal and copper are the key industries and account for almost 90% of exports. Coal contribution to our sales mix increased from 67% to 71%, with copper contribution also increasing to 16%. The coal price has declined over the past year, but the copper price remains strong. Now, with the slowdown in coal deliveries into China, New equipment is expected to ease compared to the first half deliveries. Now looking at the mining project in territory, the mining project pipeline remains strong. Now starting with the brownfields proven reserves, there is a high concentration of mainly coal, gold, and silver project. Some of the projects have been delivered, and hence you will not see them in terms of the brownfields project. Looking at the near-term greenfields projects, it is pleasing to see a number of bankable projects all across strategic and critical minerals with significant reserves and resources. The mining companies are continuing with infill drilling to ascertain the proven reserves. Unfortunately, the amendments in mining laws and tax regulations are poised to significantly impact the mining project, particularly strategic mineral deposits. Ladies and gentlemen, our strategy remains the same. With a focus on customer diversification, also on our energy and transportation and construction industries. While we are investing in technology and growth plans, we are mindful of the trough plan through cost discipline and protecting our margins. Similar to the Russian entity, we have implemented additional mitigating measures to ensure compliance around the export control. Profitable growth and social justice are core to our delivery agenda. The government also has announced the 14 mega projects, which some of them are still in the pre-feasibility phase, with a focus on critical minerals, a new city, road and rail infrastructure, dams, and power plants. This will demand external investment and equipment supply. At the center or at the heart of our initiatives, we have successfully deployed the Baluworld business system, which focuses on daily improvements and our respect for our champions. On the outlook, Mongolia Rail GDP growth focus for 2025 is sitting at about 6.2%. With the foreign exchange reserves remaining strong, the Bank of Mongolia raising the policy rate from 8% to 12% this year to control inflation. It will also keep the rate until the inflation falls below 8%. Unemployment is sitting at about 5%, and with a revamp of the taxation in mining and resource sectors has caused investor uncertainty. Given that, with all the headwinds, what is in our control is a focus on working capital and cost discipline. We will continue to deliver on our promises through operational excellence, our growth agenda, and compliance. And looking at the prime product deliveries, activity will moderate against prior. Our framework order is down at 21 million. and predominantly with coal sitting at a mix of about 77%. Now, ladies and gentlemen, I would like to turn over to our business in Siberia. A Russian entity has shown resilience. Revenue down 35% to 69 million. This is due to continuous depletion of limited inventory and reduced addressable market. The EBITDA was down 68% to $7 million, with additional knock-on costs due to restructuring and compliance measures. VT generated cash of $45 million for the period, with the cash in-country of $144 million. Trading activity has subsided. We are currently left with about 50 pieces of small construction machines, unprecedented low parts inventory, which will be depleted in the next coming few months. We are clear, resolute, and hell-bent on how we safeguard battle world investment. With the lower trading activity, it is imperative that we continue to optimize the structure, protecting our asset value and critical skills. Remaining self-sufficient in terms of funding requirement, as said by our group CEO, and we need to win the right way. On the outlook, the economy is slowing down. The GDP growth expected at 2%, down from the 4.3% in prior year due to fiscal tightening. Fiscal consolidation and elevated inflation between 6 and 8% and very volatile. Though it is expected that it will fall to 6.3% by the end of the year. On the labor market, unemployment at historic low of 2.3% causing labor tightness. Investment growth halving compared to 2024 due to the high credit cost and prudence. High interest rates at 21% and weakening domestic demand. But again, what is in our control? VT will be our way to remain at break even levels while maintaining the cost discipline, protecting value and the wellbeing of our champions. I thank you. Now we'll hand over to Chris.

Thank you, Emi. Good morning, ladies and gentlemen. It's a privilege to be standing here presenting the ingrained results for the six months to the end of March. I must say I'm very pleased with the results that we've been able to achieve in the six months. I think really building on the turnaround initiatives that we implemented last year, I think despite the face of the economy that we're seeing at the moment in the country. I think on the revenue side, we're very happy that we've seen some pricing increases coming through, and that has sort of offset some of the reduced volumes that we've seen in the six-month period. The optimization benefits are yielding the results. We're seeing lower fixed costs in the business and improved operating efficiencies, which have translated to an improvement in EBITDA, and consequently also showing operating profit at 14% in the current six-month period. Very pleased with the strong cash flows we've generated through the half at 85 million rand, and this is a vast improvement on the 173 million that we invested at the same period last year. And this is despite increasing our fixed asset investment into the business to support the business stability and growth. Really, I think the cash generation has been on the back of tightly controlled working capital management in the six-month period. If we just look at the revenue, we've seen stable revenues. It's sort of really a tale about the price increases we've been able to put through, and then lower volumes which we've experienced both domestically and in the export markets. Headwinds that we face there are fairly low international starch and glucose prices, which have increased impeded our ability to export in the current environment, but have also impacted domestic volume slightly as we're seeing imports coming into the country, really impacting some of our smaller customers in terms of product off-take. But the high prices of grains during the period have really supported our co-products or agri-products business during the six-month period. Looking at our operations, I'm very pleased with the progress that we're continuing to make in all areas of the business, really supported by the Bottlewell business system transformation that we're going through. We've seen zero LTIs during the six-month period, and a real credit to where we were last year this time. Our ongoing capital investments, of which we spent $148 million this year, are starting to show improving efficiency gains in the business and also supporting throughput, as well as supporting our license to operate in the business. I think, as Dominic alluded to earlier, we've implemented an effluent treatment plant at Merton and also in the stages of commissioning a solar plant at Clip River. And the one and a half megawatt plant there should support our cost containment drive and some margin expansion as well. We've seen a strong improvement in operating efficiencies across all the plants, and I think our plant availability is starting to show some improvements in the business, and very, very pleasing to note the good progress we're making at Belleville Mill in the Western Cape, where we're seeing good growth in profitability and overall performance in that particular plant. I think as we're focusing in the short term on both the profitability and ensuring longer-term value creation, the focus areas that we're working on as a leadership team, first of all, it's about making sure that we have a safe working environment to ensure overall employee well-being. We're managing cash as can be seen, and we'll continue to focus on that together with the commodity price exposure that this business has. Our efforts to continue growing in the domestic as well as increasing participation in export sales remains a key imperative for the business, and we are certainly seeing the improvements coming through on the supply chain commitments that we've made and that is also upping our plant reliability overall. Again, the focus on sustainable development in line with the group's overall objectives are progressing reasonably well during the six-month period and we'll continue to focus on these and supporting our efforts over the short to medium term. If we turn our attention to the outlook for the business, we do expect to see some volume recoveries coming through in the second half. We are taking some targeted actions to stimulate demand and therefore increase overall contributions out of the domestic business and will opportunistically take advantage of export opportunities as they arise. I think the benefits of the restructure are now starting to come through and we'll continue to sustain these in the medium term as we look to get into our return on capital targets for this business. Maize prices are starting to ease with the recent rains and good harvests that we've seen this year. and we do expect that to offer some reprieve to the margins in the business in the next 12-month period, having secured sufficient grain again for our business operations right up until June next year. We did discuss the environmental impact of the effluent treatment plant at Meryton, but that really gives us the license to increase our participation in the modified starch market for this business, both domestically and in export markets. These are fairly low volume but very high value products, and the plant really allows us to increase capacity substantially out of the Meryton mill, positioning us well into the second half and beyond. And with that, I'd like to hand back to Dominic. Thank you.

Thanks, Chris. Just to give you a sense of the slide that I have committed to present to yourselves, if you look at the implementation of the strategy which was initiated in 2017, we continue to exhibit intended outcomes in terms of navigating the macro environment, given the fact that we operate in a very cyclical environment. And when you looked at the core business, which is mainly equipment and industrial services as well as we've basically gone through the fix and optimize part of the strategy. And this strategy continues to show resilient results. When you look at the current mining cycle exacerbated by the macro factors and uncertainty in global trade affecting mainly our equipment, South Africa delivery of the ROIC. There's a continued focus, particularly around cost containment. The austerity measures that we introduced last year in that business has ensured that the business continues to deliver the ROIC above the WEC, particularly given the fact that we're looking at the six-month period. And I believe that in the second half, the business will demonstrate that it will be above the ROIC. Equipment Mongolia, on the other hand, continues to deliver significant ROIC above the header rate. However, when you look at those numbers, you can expect that there will be a moderation to normalize levels in the near future. At Ingrain, you know, optimization that has taken place in 2024 are delivering the desired results with an improvement in ROIC from the previous period. And as Chris just highlighted, to enhance Ingrain's ROIC beyond a hell rate, you know, Chris and the management team, they are concentrating on maintaining and further increasing profitability through targeted initiatives. Focus on volume growth. I think we spoke about modified starch. Demand planning is one area that I think is important. Price agility is very important, albeit we are market leading in starch and the only business that price agility is very important. And lastly, cost control. These efforts obviously underpin the improvements, will be underpinned by the operational efficiency of the plant. And I believe that we'll be on track in terms of this division to deliver ROIC more closer to 2021. And for the current period, the group ROIC, if you exclude VT, you're looking at about 12.2. With VT, it's about 11.8. I think I don't have to say what has happened to the VT environment. But when you look at the ROE, I think this slide shows that ROE, ROE compared to the period between 2017 and 2021 has shown significant improvement. Even in the first half. This particular outcome highlights the portfolio effect that we've implemented through the strategy, as well as the deployment of BBS, you know, because, you know, and, you know, ensure that there's continuous, you know, elimination of waste and embed, you know, more efficient processes. You know, the current, for the current period, when you look at the group ROE, you know, excluding VT is about 11.2, with VT is about 10.1, you know. And despite the recent drop in the ROE over the past six months, we remain confident that the portfolio will continue to deliver sustainable general return that exceeds its health rate over the planned period. We remain steadfast in pulling on the strategic levers that are within our control. We do this through disciplined execution of our strategy, which is firmly grounded on the principle of valuable business system, The future effects of tariffs on our business remain uncertain. And we are mapping out the medium to long-term ramification of these tariffs. And we are in discussions with Caterpillar to see, because they're closer to some of the discussion in the U.S. In closing, I think you all know that uncertainty is not new to us because we've operated in very volatile, you know, in terms of geopolitics, you know, market, and we've faced, you know, worse challenges in the past. So we have successfully navigated these issues in the past, and we've leveraged on our endowment in terms of the business that we have in our control. And I think Antonika spoke about the geographical diversification, you know, in terms of the markets, commodities that we operate in. And, you know, we've got leading businesses that have got a very strong mode. We drive cultural transformation, as I said earlier on, you know, through BBS. But what underscore BBS is the respect for people. and making sure on a daily basis there's continuous small improvements that over time compound to bigger effects. And Nopasika spoke about the balance sheet. We think it remains resilient and well-poised to deliver our results through a very uncertain 2025. And I think we were hoping that This year, at least, that our Russian business will have some level of uncertainty, but we remain hopeful. But I think in terms of the outlook for equipment business, our view is that in the second half of next year, we're likely to see an upturn in the environment. And I think one of the key issues for us, having learned in the previous downturn, is that we don't want to cut too deep into that muscle Andronica, but make sure that we are well invested, particularly in terms of technical skills, and so that when the tide turns, we are ready. I'm just going to pause here and take questions, you know, if there are any online. KG, I have other questions already, or should we? Yes, yes.

Yes, there are. Thank you, Dom. I think firstly, before we go into questions, we'd appreciate Lichie Diani's expression of congratulations to the EXCO for the results. Let's start with Mark Tomas. He asks, what are the key reasons for substantial increase in working capital in equipment in Southern Africa? And he follows that question with, what is the outlook?

Yeah, thanks, Mark, for the question. I think we highlighted that when you look at some of our customers who had placed orders in the main did delay taking some of those equipment for various reasons because when you're in a certain environment, it creates a bit of a challenge. And I think that's mainly one of the major issues for us. But if you then look at the investment as well in terms of our rental business, I did say some customers are opting for renting equipment as opposed to buying those. And that also led to that working capital increase. And I think it's about $1 billion. I don't know if I'm correct. you know, the increase in working capital in your area. How much? 1.7 billion. Yeah, yeah. Okay. So, and I think that's, you know, the main issue, Mark.

And in terms of outlook?

I think, as I said, I mean, you know, the second half we're likely to begin to deliver on some of that inventory. I mean, you know, but the market remains subdued in terms of the mining cycle. So I said probably you're likely to see things, you know, turn in that mining segment probably the second half, you know, of the calendar year, not the financial year next year.

Okay. Okay. And then we're staying with Mark. He asks, what will ensure break-even in Russia with rapidly reducing sales on equipment and parts?

Yeah, I think we did indicate that from the get-go, Mark, we said our plan was break-even. And I think when you look at this current, the results presented here, they're pretty close to break-even. And all the initiatives that IMI is embarking on are really trying to make sure that we don't lose are people, but by the same time, you basically are selling parts which are not impacted by export control. Therefore, the discipline there is making sure that you can be able to sell that. But the other issue, obviously, is difficult to sell labor in a smaller addressable market. Therefore, for me, I'm not saying we will always remain profitable, and hence we're giving guidance that as soon as we dip below that level, we will actually be, unfortunately, having to force to take out people. As we said, the business is self-sufficient in terms of funding, and there's more cash in that business, more than I would like us to have, given the fact that you can't take the cash out. Thank you.

Thank you. And this is the last question we've got online. It comes from Khosi Rahube from Standard Bank. And the question is rather on ENT. So he says, you mentioned that ENT's contribution decreased from 12% to 10% in the first half of 2025. How do you anticipate this will change once the grid expansion project in South Africa is underway? And also, are there any notable updates regarding grid expansion in South Africa? Thanks, Hossein.

Thanks, Kosi. So with the grid stabilization, what you are likely to see is the decrease in the demand for backup power. However, there are still opportunities in the large power solution space where the demand is around integrated power solutions, and that's our main focus area right now. Now, in terms of the update on the transmission project, we have started seeing inquiries from some of the contractors. So what ESCOM is working on right now to expand the transmission network is likely going to benefit our construction business. because those transmission lines have to be put in the middle of nowhere. And we are starting now to see contractors to ESCOM coming to us for inquiries on construction equipment. Thanks.

Thanks, Sandra.

Okay. I'll close with this question, Dominique. It's from Roy Campbell from RMB Morgan Stanley. He says, please could you give some update to why an extension in the voluntary announcement was required. And that will be the final question for today. Thank you.

Yeah, I've got Sandile, our head of legal in the room. You know, Sandile, would you just want to give a high level?

Thank you, Dominic, and good morning, Roy. I think in summary, the extension is purely a function of the complexity of the investigation. I think you will recall in our initial announcement that the investigation is being conducted by an independent forensic firm who are working under the guidance of U.S. legal counsel, and it is them that requested the company to apply for the further extension on the basis of where we are in the progress of the investigation. I think the other point I must just make is, Roy, you must appreciate that the U.S. authorities are not likely to have agreed to this further extension unless they were satisfied that the company was taking all the correct steps in the investigation. Thank you, Don.

Thanks, Sandeep. Ladies and gentlemen, thanks for your time, and please remain safe wherever you are. For those who are traveling, please do so safely. We hopefully will see some of the analysts in the next hour or so.

In the next few days, yeah. Okay. So, yeah, the analysts this afternoon and some investors tonight.

Okay. Thank you very much, everybody. Thanks for your attendance. Appreciate it.