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: David Pobucky - Macquarie Research - Analyst
: Robert, Ian and Luke, congrats on another very strong result in the other items, including that strategy update and the cycle upgrade. If I could,
and I appreciate you'll speak more about the oilseed crush capacity plans in coming months. But can you give us any more color at the moment
around how much capital you potentially expect to deploy? How do you think about returns?
Question: David Pobucky - Macquarie Research - Analyst
: And just following up on that. In terms of capital management, how do you think about special dividends going forward in the context of that very
strong balance sheet and core cash position as well as the potential growth opportunities. And then at the same time, with the seasonality coming
off peak conditions as well.
Question: David Pobucky - Macquarie Research - Analyst
: And maybe just one last one, if I could, for Ian. Net interest of $33 million in the half. Looking at that, that was lower than our forecast and consensus
as well. Is there anything in there in terms of the second half whereby you wouldn't assume a similar amount for the second half?
Question: Owen Birrell - RBC Capital Markets, Research Division - Analyst
: I guess my question is a bit of a follow-up on that last question. Just with regards to that working capital buildup. You effectively got a doubling
in your net working capital buildup over the last 2.5 years. If we do things -- or what is your normalized from here. That was the first question.
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MAY 11, 2023 / 12:00AM, GNC.AX - Half Year 2023 Graincorp Ltd Earnings Call
Question: Owen Birrell - RBC Capital Markets, Research Division - Analyst
: I guess the second question then is, you've got $200 million of core cash. Let's say this unwinds in the couple of years, there's probably another
couple of hundred million coming out from working capital. And then you've got UMG, let's say that gets taken out. There's other $120-odd million
of cash coming in the door there. $600 million -- Call it, say, $500 million, $600 million of cash on the balance sheet. At what point do you say the
balance sheet has got way too much cash on it?
Question: Owen Birrell - RBC Capital Markets, Research Division - Analyst
: And I just -- I guess one last question for me is on this -- the interest uplift. Now I understand the metrics where you obviously charge the interest
and you're passing that back through into price, which boosts up your EBITDA. Can I just understand that the funding facilities that you have, are
they at spot prices. So they're not fixed rate facilities. And therefore, I see you've upgraded your through-the-cycle EBITDA by roughly $20-odd
million, which is effectively what you've achieved in this period. Is there any further upside to that if interest rates continue to run higher from here?
Question: Owen Birrell - RBC Capital Markets, Research Division - Analyst
: To get this right, you're basically taking a through-the-cycle inventory level on the interest cost based on a forward curve rate. And so -- and that's
for the through-the-cycle EBITDA estimate. But for the current FY '23 EBITDA estimate. Are you factoring any further uplift into the second half?
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