The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Peter Steyn - Macquarie Research - Analyst
: Just, Sorry, ASP has been beaten to death, but just very keen to get a bit of a sense of how you're thinking about average selling prices in the
business. Given a very strong first half painted sales, one would assume that, that will continue to be well supported, and coated will probably do
reasonably well in the context of all the value-added products you guys are pushing, as you mentioned, Mark. Is there a fairly significant underlying
benefit that you're seeing in terms of sales mix rolling into the second half?
Question: Peter Steyn - Macquarie Research - Analyst
: Okay. Perfect. And then I was interested to just explore the bookends of scenarios around North Star and the COVID-19 impact on the expansion.
Presumably, this should be a relatively temporary effect and -- to be able to solve for it. But could you give us a sense of how much of the content
is China-orientated or exposed to COVID-19 disruption and then sort of what the high-road and low-road scenarios could be?
Question: Lyndon Fagan - JP Morgan Chase & Co, Research Division - Analyst
: First question's just on the guidance. Looks like you're using AUD 0.69, and I just wanted to make sure I'm interpreting the sensitivities correctly.
So if I look at Slide 68, it looks like every cents adds around $20 million to your EBIT. And at today's AUD 0.66, your EBIT would be $60 million or so
higher than your guidance at that currency. So i.e., EBIT would be up 20% at spot currency. Is that interpretation correct?
Question: Lyndon Fagan - JP Morgan Chase & Co, Research Division - Analyst
: Okay. So just to be clear, the -- where it says the currency is on an un-lagged basis, there's an implicit sort of locked-in nature to the lag steel prices
and the Aussie dollar pricing of those.
Question: Lyndon Fagan - JP Morgan Chase & Co, Research Division - Analyst
: Okay. So sorry to keep banging on about it. So if spot was to stay at AUD 0.66 for the rest of the period, instead of being a $60 million uplift versus
your guidance, what would it be, roughly, in terms of an uplift? If it's not $60 million, it's...
Question: Lyndon Fagan - JP Morgan Chase & Co, Research Division - Analyst
: Okay. No worries. Yes, look, perhaps I'll take that off-line and move to the next question, which is just on the North Star capital spend. Obviously,
a lot to deploy still. Just wondering if you could give us a bit of a profile for the next few halves in how that comes out?
Question: Lyndon Fagan - JP Morgan Chase & Co, Research Division - Analyst
: Great. And just a final one. I guess just trying to square away the $100 million buyback in the context of negative free cash flow in the period. I
guess how do I think about -- was there an excess return metric on something else? Or just wondering how that comes about.
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