1 00:00:03,520 --> 00:00:06,200 Speaker 1: Hey, order and welcome to shared Lunch. My name is 2 00:00:06,240 --> 00:00:09,879 Speaker 1: Susanna Batley and I'm at Channel Infrastructure's head office here 3 00:00:09,920 --> 00:00:13,880 Speaker 1: in Auckland. I'll be joined by Robie Cannon, the CEO. 4 00:00:14,120 --> 00:00:17,840 Speaker 2: More than ever energy security. If fuel security is really 5 00:00:17,840 --> 00:00:19,920 Speaker 2: important to economic prosperity. 6 00:00:20,000 --> 00:00:22,960 Speaker 1: Channel Infrastructure was once an oil refinery and it's going 7 00:00:23,000 --> 00:00:24,120 Speaker 1: through a major transition. 8 00:00:24,360 --> 00:00:27,520 Speaker 2: There was a really significant opportunity to build a real 9 00:00:27,560 --> 00:00:31,040 Speaker 2: future for the company and bring back much more, hopefully 10 00:00:31,120 --> 00:00:33,479 Speaker 2: than what was lost when the refinery was closed. 11 00:00:33,880 --> 00:00:36,400 Speaker 1: It's got a big, bold vision to become an energy 12 00:00:36,440 --> 00:00:40,760 Speaker 1: precinct caring New Zealand's future energy resilience and decarbonization. 13 00:00:40,920 --> 00:00:44,479 Speaker 2: We've got a really awesome opportunity to be transformational for 14 00:00:44,640 --> 00:00:47,080 Speaker 2: Ausland and New Zealand. That could be twenty thousand jobs 15 00:00:47,120 --> 00:00:49,199 Speaker 2: are significant tributor to GDP. 16 00:00:49,440 --> 00:00:52,159 Speaker 1: Before I head upstairs, here's some important information. 17 00:00:52,760 --> 00:00:55,360 Speaker 3: Investing involves the risk you might lose the money you 18 00:00:55,400 --> 00:00:58,680 Speaker 3: start with. We recommend talking to a licensed financial advisor. 19 00:00:59,400 --> 00:01:03,240 Speaker 3: We also command reading product disclosure documents before deciding to invest. 20 00:01:03,480 --> 00:01:05,880 Speaker 3: Everything you're about to see and here is current at 21 00:01:05,880 --> 00:01:06,760 Speaker 3: the time of recording. 22 00:01:06,880 --> 00:01:10,119 Speaker 1: Welcome Rob, Thank you, sus I should probably say things 23 00:01:10,120 --> 00:01:11,560 Speaker 1: for having me here at your premises. 24 00:01:11,680 --> 00:01:14,200 Speaker 2: We're delighted to have you. Thank you very much for 25 00:01:14,240 --> 00:01:15,040 Speaker 2: giving us your time. 26 00:01:15,200 --> 00:01:17,399 Speaker 1: So I'm keen to start by zooming out a bit 27 00:01:17,720 --> 00:01:20,360 Speaker 1: and hearing a bit more about some of the big 28 00:01:20,520 --> 00:01:23,640 Speaker 1: energy changes that are happening in New Zealand, and then 29 00:01:23,800 --> 00:01:28,600 Speaker 1: in particular, what are the challenges and opportunities and how 30 00:01:29,120 --> 00:01:32,640 Speaker 1: Channel might be uniquely positioned to either sold for those 31 00:01:32,720 --> 00:01:35,800 Speaker 1: challenges or take advantage of those opportunities. 32 00:01:35,920 --> 00:01:38,760 Speaker 2: I guess I'll start with a really big picture global context. 33 00:01:38,760 --> 00:01:43,680 Speaker 2: We're finding ourselves in a more contested environment and I 34 00:01:43,720 --> 00:01:47,840 Speaker 2: think more than ever energy security. Fuel security is really 35 00:01:47,920 --> 00:01:53,280 Speaker 2: important to economic prosperity and everybody having a certainty that 36 00:01:53,800 --> 00:01:56,000 Speaker 2: they can get on and invest in what they're doing 37 00:01:56,040 --> 00:02:00,760 Speaker 2: in New Zealand, and so Channels are really able to 38 00:02:00,840 --> 00:02:03,680 Speaker 2: provide or help provide that fuel security piece. It's a 39 00:02:03,720 --> 00:02:06,160 Speaker 2: core part of what we do. We store over three 40 00:02:06,280 --> 00:02:10,240 Speaker 2: hundred million liters of petrol, diesel and jet up at 41 00:02:10,240 --> 00:02:13,240 Speaker 2: Marsden Point, and we're currently in the process of bringing 42 00:02:13,320 --> 00:02:16,639 Speaker 2: in place additional storage. We've got another three hundred and 43 00:02:16,680 --> 00:02:19,240 Speaker 2: fifty million liters of empty tanks up there that we 44 00:02:19,320 --> 00:02:22,880 Speaker 2: can convert, which we've got quite good at and that 45 00:02:22,919 --> 00:02:27,320 Speaker 2: obviously adds to overall New Zealand fuel security. I think 46 00:02:27,320 --> 00:02:29,280 Speaker 2: one of the other challenges as we've gone through the 47 00:02:29,600 --> 00:02:34,200 Speaker 2: energy transition, trying to transition to a renewables electricity system 48 00:02:34,840 --> 00:02:39,359 Speaker 2: has been that firming capacity or generation that can come 49 00:02:39,400 --> 00:02:42,920 Speaker 2: on or off at short notice when the sun's not 50 00:02:42,960 --> 00:02:45,959 Speaker 2: shining or the wind's not blowing and it's not raining, 51 00:02:46,000 --> 00:02:49,959 Speaker 2: which has been doing a lot of lately. And that's 52 00:02:50,000 --> 00:02:52,480 Speaker 2: another area where channel can play a part. So we're 53 00:02:52,560 --> 00:02:56,480 Speaker 2: looking at a diesel peaker at the moment. If all 54 00:02:56,520 --> 00:03:00,359 Speaker 2: of our fuel tanks at Marston Point were full, we'd 55 00:03:00,400 --> 00:03:03,040 Speaker 2: actually have as much stored energy up at Marston Point 56 00:03:03,080 --> 00:03:06,040 Speaker 2: as you would have and like Pookeke in the South Island, 57 00:03:06,120 --> 00:03:09,640 Speaker 2: so huge amount of stored energy and the potential for 58 00:03:09,720 --> 00:03:13,160 Speaker 2: that to just firm that that electricity system will add 59 00:03:13,200 --> 00:03:13,799 Speaker 2: to that firming. 60 00:03:14,840 --> 00:03:18,880 Speaker 1: And in terms of that firming and so the amount 61 00:03:18,919 --> 00:03:21,440 Speaker 1: that might be required to support the sort of largely 62 00:03:21,520 --> 00:03:26,040 Speaker 1: renewables in terms of energy generation in New Zealand, do 63 00:03:26,120 --> 00:03:29,080 Speaker 1: you see that sort of going down as we're bringing 64 00:03:29,080 --> 00:03:32,480 Speaker 1: on more renewables or you know, on the demand side, 65 00:03:32,520 --> 00:03:35,640 Speaker 1: Obviously the demand for electricity is going up. We've got AI, 66 00:03:35,840 --> 00:03:39,120 Speaker 1: we've got data centers that support that, we've got electrification 67 00:03:39,400 --> 00:03:44,640 Speaker 1: of automobiles and other industrial plants. So how do you 68 00:03:44,680 --> 00:03:47,400 Speaker 1: think about that sort of supply versus demand and what 69 00:03:47,440 --> 00:03:49,960 Speaker 1: that firming profile might look like in the future. 70 00:03:50,080 --> 00:03:51,880 Speaker 2: Well, there's no question in my mind that demand for 71 00:03:51,920 --> 00:03:55,400 Speaker 2: electricity will continue to grow. And I like data centers 72 00:03:55,440 --> 00:03:58,080 Speaker 2: as a classic example. They use a lot of electricity 73 00:03:58,120 --> 00:04:00,360 Speaker 2: and they use it twenty four to seven. And so 74 00:04:00,440 --> 00:04:02,760 Speaker 2: the challenge for us in New Zealand is matching up 75 00:04:02,880 --> 00:04:05,880 Speaker 2: that twenty four to seven usage of data centers or 76 00:04:05,960 --> 00:04:09,360 Speaker 2: manufacturing that just needs to be able to turn on 77 00:04:09,800 --> 00:04:13,280 Speaker 2: and have the power available to use at a cost 78 00:04:13,320 --> 00:04:19,760 Speaker 2: effective price. Is that our system is actually quite renewable, 79 00:04:20,640 --> 00:04:23,200 Speaker 2: and we've got and it's fairly well known. I think 80 00:04:23,240 --> 00:04:26,000 Speaker 2: most people know that gues is declining in New Zealand, 81 00:04:26,040 --> 00:04:28,640 Speaker 2: and so that used to be the fuel that plugged 82 00:04:28,680 --> 00:04:34,840 Speaker 2: the gap, and now we're relying on whole and there's 83 00:04:34,839 --> 00:04:37,280 Speaker 2: only so much call FID capacity in New Zealand as well. 84 00:04:37,400 --> 00:04:43,760 Speaker 2: So that's where we see diesel picking or maybe other 85 00:04:43,800 --> 00:04:48,520 Speaker 2: forms of gas peaking as being an opportunity to switch on, 86 00:04:48,880 --> 00:04:51,200 Speaker 2: make sure that the power is there when folks need it. 87 00:04:51,240 --> 00:04:55,880 Speaker 2: But ultimately, hopefully over time the New Zealand electricity system 88 00:04:55,960 --> 00:05:00,279 Speaker 2: fully renewabilizers and the need for that firming thes great. 89 00:05:00,480 --> 00:05:03,680 Speaker 1: If that is the case, what happens to your role 90 00:05:04,120 --> 00:05:06,080 Speaker 1: as part of that well. 91 00:05:06,120 --> 00:05:08,520 Speaker 2: I think at the moment, the way we're thinking about 92 00:05:08,560 --> 00:05:13,640 Speaker 2: the diesel picker option for our site is that it's 93 00:05:13,680 --> 00:05:16,880 Speaker 2: there for when as long as it's needed, and we'll 94 00:05:16,880 --> 00:05:19,040 Speaker 2: see how long that is. One of the options we're 95 00:05:19,040 --> 00:05:21,800 Speaker 2: looking at is containerized units so that they can just 96 00:05:21,839 --> 00:05:25,359 Speaker 2: be broad in across the wharf, across the road, planted down, 97 00:05:26,200 --> 00:05:30,479 Speaker 2: probably turned on for very short duration during them during 98 00:05:30,520 --> 00:05:32,600 Speaker 2: a year, and then if we do get to a 99 00:05:32,640 --> 00:05:35,159 Speaker 2: point in our system where it's no longer required, then 100 00:05:35,720 --> 00:05:38,200 Speaker 2: you know, those units can go back offshore and we 101 00:05:38,240 --> 00:05:40,880 Speaker 2: can get value for them. I think, from Channel's perspective, 102 00:05:40,920 --> 00:05:44,680 Speaker 2: the way we interact with our customers, one of our 103 00:05:44,720 --> 00:05:48,400 Speaker 2: key requirements is that we have long term contracts and 104 00:05:48,560 --> 00:05:53,920 Speaker 2: we're not an electricity participant. We have no electricity trading capacity, 105 00:05:54,040 --> 00:05:56,719 Speaker 2: so you know that project would only get developed and 106 00:05:56,720 --> 00:05:59,320 Speaker 2: built if there are other parties in the electricity sector 107 00:05:59,400 --> 00:06:02,240 Speaker 2: that would basically take that capacity off their hands. 108 00:06:02,520 --> 00:06:05,839 Speaker 1: Yeah, their risk it correct. Yeah. So in terms of 109 00:06:05,839 --> 00:06:07,920 Speaker 1: customers then that you mentioned who. 110 00:06:07,880 --> 00:06:11,640 Speaker 2: Are they at the moment, our three key customers are 111 00:06:11,720 --> 00:06:16,159 Speaker 2: bp X on Mobile and Ample and you'll have seen 112 00:06:16,240 --> 00:06:19,760 Speaker 2: also that we will soon be welcoming Higgins to our 113 00:06:19,839 --> 00:06:22,280 Speaker 2: site is one of our newest customers of the new 114 00:06:22,320 --> 00:06:23,600 Speaker 2: e bitumen import terminal. 115 00:06:23,640 --> 00:06:26,640 Speaker 1: As well, you're clearly needing to balance a lot of stakeholders. 116 00:06:26,800 --> 00:06:29,400 Speaker 1: I'm sure there's you know, quite a lot of path 117 00:06:29,400 --> 00:06:32,880 Speaker 1: and safety things to think about with your employees. So 118 00:06:32,920 --> 00:06:35,960 Speaker 1: how do you your shareholders obviously as a listed company, 119 00:06:36,120 --> 00:06:39,320 Speaker 1: so how do you think about balancing those different stakeholder 120 00:06:39,360 --> 00:06:43,000 Speaker 1: interests and how you're making sure that you're generating a 121 00:06:43,040 --> 00:06:46,480 Speaker 1: good sheld of return while also making sure that from 122 00:06:46,560 --> 00:06:48,720 Speaker 1: a U yelling in point of view, that you're also 123 00:06:48,720 --> 00:06:50,320 Speaker 1: fulfilling that role as well. 124 00:06:50,920 --> 00:06:52,280 Speaker 2: You know, the way I look at it is that 125 00:06:52,279 --> 00:06:56,360 Speaker 2: they're all very important. He mentioned health and safety. It's 126 00:06:56,440 --> 00:07:00,559 Speaker 2: absolutely core to what we do and you know, getting 127 00:07:00,600 --> 00:07:04,240 Speaker 2: everybody home safely every day is a core value for Channel. 128 00:07:05,440 --> 00:07:08,520 Speaker 2: And if I zoom out on health and safety and 129 00:07:08,560 --> 00:07:11,680 Speaker 2: safety in general, the role that we provide, and that 130 00:07:11,720 --> 00:07:14,000 Speaker 2: field security piece means that we need to have a 131 00:07:14,040 --> 00:07:19,600 Speaker 2: safe and resilient operation as well. You know, obviously, our 132 00:07:19,640 --> 00:07:22,640 Speaker 2: customers are a key stakeholder and we spend a lot 133 00:07:22,680 --> 00:07:25,160 Speaker 2: of time with them making sure that we can service 134 00:07:25,240 --> 00:07:28,400 Speaker 2: their needs. And the government's obviously very interested in what 135 00:07:28,440 --> 00:07:33,280 Speaker 2: we do, and shareholders obviously as well, So a very 136 00:07:33,320 --> 00:07:36,080 Speaker 2: broad set of stakeholders, and I think as a company 137 00:07:36,080 --> 00:07:39,240 Speaker 2: we're really privileged to be able to interact and serve 138 00:07:39,280 --> 00:07:39,760 Speaker 2: all of them. 139 00:07:39,880 --> 00:07:42,760 Speaker 1: In terms of those current customers and then future ones 140 00:07:42,920 --> 00:07:45,840 Speaker 1: like Higgins as part of factures coming on board. You 141 00:07:45,920 --> 00:07:48,840 Speaker 1: have talked about this transition and this new vision of 142 00:07:48,880 --> 00:07:52,800 Speaker 1: an energy precinct. Can you talk a bit more about 143 00:07:52,880 --> 00:07:56,400 Speaker 1: that and particularly why now, why is now the right 144 00:07:56,440 --> 00:07:57,560 Speaker 1: time for that transition. 145 00:07:58,160 --> 00:08:01,640 Speaker 2: On first of April twenty two two, we close the 146 00:08:01,680 --> 00:08:06,000 Speaker 2: refinery and we converted to an import terminal and upon 147 00:08:06,080 --> 00:08:09,000 Speaker 2: that closure, you know, the key assets that earn the 148 00:08:09,320 --> 00:08:11,280 Speaker 2: I think last year we earned ninety five point one 149 00:08:11,320 --> 00:08:13,880 Speaker 2: million dollars of EBITDA. The key assets that earned that 150 00:08:14,200 --> 00:08:18,720 Speaker 2: were effectively the tank farm, are the port that we 151 00:08:18,800 --> 00:08:22,560 Speaker 2: operate and the pipeline to Auckland. Now those assets cover 152 00:08:22,640 --> 00:08:25,720 Speaker 2: are only thirty or thirty five percent of our one 153 00:08:25,800 --> 00:08:28,080 Speaker 2: hundred and eighty hectares of land that we've got up 154 00:08:28,080 --> 00:08:31,360 Speaker 2: at Marsden Point. So it's part of that transition and 155 00:08:31,440 --> 00:08:36,000 Speaker 2: reinvention of our company into a new business. We thought 156 00:08:36,040 --> 00:08:39,280 Speaker 2: long and hard about what the alternative and highest and 157 00:08:39,320 --> 00:08:41,439 Speaker 2: best use for that land is. And if you look 158 00:08:41,440 --> 00:08:45,160 Speaker 2: at the characteristics of the land, so we're adjacent to 159 00:08:45,840 --> 00:08:49,560 Speaker 2: a port or our Gety which is actually currently only 160 00:08:49,600 --> 00:08:53,160 Speaker 2: really thirty thirty five percent utilized a significant amount of capacity, 161 00:08:53,200 --> 00:08:56,280 Speaker 2: and our Gety, the land itself is only around thirty 162 00:08:56,280 --> 00:08:58,400 Speaker 2: thirty five percent utized. We've got a significant amount of 163 00:08:58,480 --> 00:09:00,520 Speaker 2: land and we've got a pipe line all the way 164 00:09:00,520 --> 00:09:02,280 Speaker 2: to Auckland, So if you make a product and we 165 00:09:02,360 --> 00:09:04,160 Speaker 2: can get it into that pipeline, we can get it 166 00:09:04,440 --> 00:09:07,640 Speaker 2: all the way down into the heart of industrial New Zealand. 167 00:09:08,040 --> 00:09:12,120 Speaker 2: In addition to that, we have a very attractive resource 168 00:09:12,160 --> 00:09:17,839 Speaker 2: consents for fuels manufacture which persists for thirty five years 169 00:09:17,840 --> 00:09:19,880 Speaker 2: from twenty twenty two when they were re issued or 170 00:09:19,880 --> 00:09:25,240 Speaker 2: twenty twenty one. And we've got a very attractive zoning package. 171 00:09:25,320 --> 00:09:28,160 Speaker 2: So the zone that we sit in is actually literally 172 00:09:28,240 --> 00:09:32,040 Speaker 2: called called the Marsden Point Energy Precinct, and so we 173 00:09:32,120 --> 00:09:34,640 Speaker 2: looked at all those features. We realized that there was 174 00:09:35,559 --> 00:09:37,719 Speaker 2: it went very many places in New Zealand that you 175 00:09:37,800 --> 00:09:42,079 Speaker 2: could build, for example, butcham an import terminal or a 176 00:09:42,160 --> 00:09:48,520 Speaker 2: renewable fuels manufacturing site or additional fuel storage, and that 177 00:09:48,800 --> 00:09:52,400 Speaker 2: there was a really significant opportunity to build a real 178 00:09:52,520 --> 00:09:56,160 Speaker 2: future for the company and bring back perhaps much more 179 00:09:56,559 --> 00:09:59,839 Speaker 2: hopefully than what was lost when the refinery was closed. 180 00:10:00,120 --> 00:10:03,160 Speaker 1: In terms of that that capacity that you've got both 181 00:10:03,200 --> 00:10:07,000 Speaker 1: in the land and in the in the in the pipeline. 182 00:10:07,760 --> 00:10:11,200 Speaker 1: What does an ideal customer look like like? Presumably you're 183 00:10:11,280 --> 00:10:14,400 Speaker 1: talking to other potential customers, you know, like l like Higgins, 184 00:10:15,080 --> 00:10:18,240 Speaker 1: what what makes an ideal tenant or customer of the site? 185 00:10:18,480 --> 00:10:20,480 Speaker 2: You know, the first comment to be would be, well, 186 00:10:20,480 --> 00:10:22,959 Speaker 2: we've got a lot of empty tank crew tank still, 187 00:10:23,080 --> 00:10:26,240 Speaker 2: so you know, we would love customers for those for 188 00:10:26,800 --> 00:10:31,240 Speaker 2: our core fuel storage business, and obviously we've got existing 189 00:10:31,280 --> 00:10:34,839 Speaker 2: customers that might have interested in those. I think, you know, 190 00:10:34,920 --> 00:10:37,959 Speaker 2: the thing I'd speak to and we've spoken about publicly 191 00:10:38,280 --> 00:10:44,080 Speaker 2: is the bio Refinery project with the consortium of Sedra Quantas, 192 00:10:44,280 --> 00:10:47,280 Speaker 2: who will be well known Renova, who are Japanese real 193 00:10:47,440 --> 00:10:52,640 Speaker 2: electricity and fuels manufacturer, a n Z Bank and Kent 194 00:10:53,720 --> 00:10:57,240 Speaker 2: who are working to repurpose some of the old refining 195 00:10:57,320 --> 00:11:02,280 Speaker 2: equipment into a biofuel's menu facturing facility. And if you 196 00:11:02,280 --> 00:11:06,040 Speaker 2: think about you know, it's a few things, a few 197 00:11:06,080 --> 00:11:10,439 Speaker 2: reasons why that would be really epic for both our 198 00:11:10,440 --> 00:11:14,640 Speaker 2: region and New Zealand. Firstly, buyo fuels and manufactured from 199 00:11:14,679 --> 00:11:19,199 Speaker 2: feedstocks which tend to be local. So whether you import 200 00:11:19,200 --> 00:11:22,320 Speaker 2: crude into New Zealand or you ship crude into Asia 201 00:11:22,360 --> 00:11:24,040 Speaker 2: and refine it and bring it down in a boat, 202 00:11:24,400 --> 00:11:27,199 Speaker 2: you've still got a feedstock that's got a transit international 203 00:11:27,240 --> 00:11:31,040 Speaker 2: waters which carries risk. You know, the great thing about 204 00:11:31,080 --> 00:11:33,920 Speaker 2: buio fuels is you can manufacture them from domestic feedstocks. 205 00:11:33,920 --> 00:11:35,320 Speaker 2: So all of a sudden you've actually got your own 206 00:11:35,360 --> 00:11:39,840 Speaker 2: self sufficient fuel industry, which is fantastic for fuel security. Obviously, 207 00:11:39,880 --> 00:11:42,280 Speaker 2: there's a hell of a lot of jobs and economic 208 00:11:42,320 --> 00:11:45,920 Speaker 2: growth and investment associated with that facility should it go ahead, 209 00:11:47,440 --> 00:11:51,400 Speaker 2: it would be incredibly large. Channels expertise today is in 210 00:11:51,440 --> 00:11:56,800 Speaker 2: the management of a high hazard facility and fuels infrastructure, 211 00:11:57,640 --> 00:12:00,559 Speaker 2: and our shareholders invest in us for the regular dividends 212 00:12:00,559 --> 00:12:04,200 Speaker 2: and the long term contracted returns we're able to provide them, 213 00:12:04,480 --> 00:12:07,520 Speaker 2: and so our role in this project is really is 214 00:12:07,760 --> 00:12:10,960 Speaker 2: if you like enabler. So you know, we've got a 215 00:12:10,960 --> 00:12:13,319 Speaker 2: big piece of land and some ex refining equipment that 216 00:12:14,040 --> 00:12:18,600 Speaker 2: we can provide them and steady rental income on. You know, 217 00:12:18,600 --> 00:12:21,360 Speaker 2: we've got some empty tanks which I think they'd like 218 00:12:21,400 --> 00:12:24,760 Speaker 2: to use for their project, which you know we can 219 00:12:24,800 --> 00:12:27,440 Speaker 2: earn revenue from, and we've got a jetty in a 220 00:12:27,480 --> 00:12:30,040 Speaker 2: pipeline in terms of getting that product in and out. 221 00:12:30,200 --> 00:12:33,400 Speaker 2: So I think from our perspective, we're being quite careful 222 00:12:33,440 --> 00:12:36,240 Speaker 2: about where we play in these new projects. We're not 223 00:12:36,320 --> 00:12:41,720 Speaker 2: here to expose shareholders to a significant amount of development risk. 224 00:12:42,040 --> 00:12:44,440 Speaker 2: We know they like investing in us because of those 225 00:12:44,960 --> 00:12:48,640 Speaker 2: long term, stable returns, and that's the position we've crafted 226 00:12:48,679 --> 00:12:49,359 Speaker 2: for ourselves. 227 00:12:49,559 --> 00:12:52,199 Speaker 1: Is that helpful now with I guess some of these 228 00:12:52,240 --> 00:12:57,400 Speaker 1: bigger opportunities that probably do require a significant capital expenditure. 229 00:12:57,880 --> 00:13:00,320 Speaker 1: You did go back to the market's last year and 230 00:13:00,440 --> 00:13:03,480 Speaker 1: raise fifty million, but some of the quantums on some 231 00:13:03,520 --> 00:13:06,760 Speaker 1: of the projects are a lot more than that. How 232 00:13:06,800 --> 00:13:11,360 Speaker 1: are you thinking about funding those versus you know, a 233 00:13:11,400 --> 00:13:15,439 Speaker 1: regular dividend that maybe shareholders expect now and is that, 234 00:13:16,280 --> 00:13:18,640 Speaker 1: you know, is that the right capital structure that sets 235 00:13:18,640 --> 00:13:21,080 Speaker 1: you up for success for this growth. 236 00:13:21,200 --> 00:13:24,760 Speaker 2: So at our annual shareholders meeting, we talked about actually 237 00:13:24,880 --> 00:13:28,000 Speaker 2: increasing our dividend payout ratio. So you know, we're very 238 00:13:28,040 --> 00:13:32,120 Speaker 2: committed to those dividends. And I think the capital rays 239 00:13:32,200 --> 00:13:35,240 Speaker 2: we did last year was extraordinarily successful. In fact, I 240 00:13:35,280 --> 00:13:38,760 Speaker 2: think I'll get the stats wrong, but it had one 241 00:13:38,760 --> 00:13:42,640 Speaker 2: of the highest take ups for a rights issue structured 242 00:13:42,679 --> 00:13:45,679 Speaker 2: in that way ever in New Zealand. And you know, 243 00:13:45,720 --> 00:13:49,560 Speaker 2: fundamentally the reason that people I think backed us for 244 00:13:49,640 --> 00:13:52,480 Speaker 2: that is, you know, the projects that we brought forward 245 00:13:53,120 --> 00:13:55,440 Speaker 2: and if I take the jet tank or I take 246 00:13:55,600 --> 00:14:00,280 Speaker 2: the bitumen terminal facility, you know, largely the fee that 247 00:14:00,320 --> 00:14:02,920 Speaker 2: we earn on those are capacity based. So we're not 248 00:14:03,040 --> 00:14:06,080 Speaker 2: taking a significant newspect about development risk before we're not 249 00:14:06,080 --> 00:14:10,440 Speaker 2: taking a significant amount of operating risk associated with those assets. 250 00:14:11,080 --> 00:14:13,680 Speaker 2: The risk follows the parties that are best able to 251 00:14:13,720 --> 00:14:16,920 Speaker 2: manage that risk, which is generally our customers. And so 252 00:14:17,080 --> 00:14:19,600 Speaker 2: from our perspective, we're playing to our strengths, which is 253 00:14:19,680 --> 00:14:23,160 Speaker 2: management of a high hazard facility and long term infrastructure 254 00:14:23,760 --> 00:14:26,480 Speaker 2: and we're letting our customers and partners play to their strengths, 255 00:14:26,520 --> 00:14:29,320 Speaker 2: which is management of the product that they ultimately want 256 00:14:29,320 --> 00:14:32,560 Speaker 2: to get into New Zealand store and distribute to where 257 00:14:32,560 --> 00:14:36,200 Speaker 2: it needs to go. So I think from my perspective, 258 00:14:36,480 --> 00:14:38,520 Speaker 2: you know, I think shareholders are attracted to that type 259 00:14:38,520 --> 00:14:40,280 Speaker 2: of model, and I think as long as we stick 260 00:14:40,320 --> 00:14:42,960 Speaker 2: to that type of model, you know, I'm really confident 261 00:14:43,000 --> 00:14:44,840 Speaker 2: that we can raise the capital that we need to 262 00:14:45,840 --> 00:14:47,320 Speaker 2: fund these projects and. 263 00:14:47,240 --> 00:14:51,800 Speaker 1: On those contracted revenues and contracts that you enter into 264 00:14:51,840 --> 00:14:56,359 Speaker 1: with the customers. With the move of shutting down the refinery, 265 00:14:57,280 --> 00:15:01,840 Speaker 1: you know, revenues less dependent on fuel volley, But what 266 00:15:01,880 --> 00:15:04,880 Speaker 1: does that do to the potential for upside? So it's 267 00:15:04,880 --> 00:15:08,920 Speaker 1: greater protecting the downside risk, but where is the upside 268 00:15:08,960 --> 00:15:10,960 Speaker 1: for equity returns? 269 00:15:11,320 --> 00:15:13,480 Speaker 2: Yeah, So I think I think the way I look 270 00:15:13,480 --> 00:15:17,040 Speaker 2: at the business is we've got this core, defensive infrastructure 271 00:15:17,080 --> 00:15:21,120 Speaker 2: business with long term contracts with our customers, and that's 272 00:15:21,160 --> 00:15:23,680 Speaker 2: in a place where I think we're up to you know, 273 00:15:23,800 --> 00:15:26,680 Speaker 2: roughly fifty percent of our revenue last year or this 274 00:15:26,800 --> 00:15:31,480 Speaker 2: year is fixed, so not dependent on volume threeput, And 275 00:15:31,800 --> 00:15:33,560 Speaker 2: I think investors take a lot of comfort from that. 276 00:15:34,120 --> 00:15:36,920 Speaker 2: I think the upside comes from our ability to deliver 277 00:15:37,000 --> 00:15:40,480 Speaker 2: the growth projects, and so last year we committed to 278 00:15:40,680 --> 00:15:43,800 Speaker 2: fifty five to I think sixty five or sixty two 279 00:15:43,840 --> 00:15:48,120 Speaker 2: million of new growth projects that we're at attractive returns, 280 00:15:48,160 --> 00:15:50,440 Speaker 2: and that is the Bitchumen terminal and the tank that 281 00:15:50,440 --> 00:15:54,840 Speaker 2: we're talking about, and we've spoken this year about and 282 00:15:54,880 --> 00:15:57,200 Speaker 2: in this conversation about some of the other projects that 283 00:15:57,240 --> 00:16:00,160 Speaker 2: we've got growth projects that we're working on, like the 284 00:16:00,160 --> 00:16:04,280 Speaker 2: the capacity based diesel peak, like the Buyer refinery project, 285 00:16:05,800 --> 00:16:08,840 Speaker 2: where you know, we're able to in a really smart 286 00:16:08,840 --> 00:16:12,720 Speaker 2: way use our existing assets, use our existing land to 287 00:16:13,000 --> 00:16:17,560 Speaker 2: provide additional revenue and returns to shareholders. But the returns 288 00:16:17,560 --> 00:16:21,680 Speaker 2: and revenue associated with those deals are likely to be 289 00:16:21,760 --> 00:16:26,760 Speaker 2: the same contracted, capacity based type deals that you've seen 290 00:16:26,800 --> 00:16:28,720 Speaker 2: from us in the past, because we know that shareholders 291 00:16:28,800 --> 00:16:31,120 Speaker 2: like them. So that's that's one part of the upside. 292 00:16:31,160 --> 00:16:33,560 Speaker 2: I think the other for us is over the course 293 00:16:33,800 --> 00:16:37,400 Speaker 2: of the past eighteen months, you know, three of our 294 00:16:37,480 --> 00:16:41,000 Speaker 2: major shareholders sell down the three customers actually that we have, 295 00:16:41,200 --> 00:16:44,040 Speaker 2: which is a legacy they holding their head when we 296 00:16:44,040 --> 00:16:47,800 Speaker 2: were a refinery, and that to me speaks to their 297 00:16:47,840 --> 00:16:51,440 Speaker 2: discipline about recycling capital, and we see an opportunity for 298 00:16:51,560 --> 00:16:54,520 Speaker 2: us to help them recycle capital and other terminal assets 299 00:16:54,600 --> 00:16:57,120 Speaker 2: they might own in this part of the world as well. 300 00:16:57,800 --> 00:16:59,760 Speaker 2: Because we're not the only terminal in New Zealand. There's 301 00:16:59,760 --> 00:17:02,520 Speaker 2: a bun from others. There is one actually just downstream 302 00:17:02,520 --> 00:17:07,560 Speaker 2: from us. And so from my perspective, you know, we're 303 00:17:07,560 --> 00:17:10,360 Speaker 2: here saying we've got capital to invest. You know, we're 304 00:17:10,359 --> 00:17:12,760 Speaker 2: a good owner and manager of these assets. That's why 305 00:17:13,119 --> 00:17:18,040 Speaker 2: customer relationship piece is so important, and you know, we 306 00:17:18,080 --> 00:17:20,800 Speaker 2: can take a long term, long term view and allow 307 00:17:20,840 --> 00:17:23,880 Speaker 2: our customers to reinvest their capital elsewhere in their supply chain. 308 00:17:24,560 --> 00:17:27,000 Speaker 1: Your background is that you've headed up M and A 309 00:17:27,119 --> 00:17:29,800 Speaker 1: for a large, a recent bank. Outside of maybe those 310 00:17:29,880 --> 00:17:32,679 Speaker 1: terminal assets, is there any other sorts of assets that 311 00:17:33,359 --> 00:17:38,879 Speaker 1: could be quite attractive, particularly because of maybe capabilities, expertise, 312 00:17:40,080 --> 00:17:42,679 Speaker 1: other sort of assets and experience that channel might have 313 00:17:42,720 --> 00:17:43,560 Speaker 1: that they could leverage. 314 00:17:44,280 --> 00:17:44,480 Speaker 3: Yeah. 315 00:17:44,520 --> 00:17:47,120 Speaker 2: One of the lessons that I've learned from doing twenty 316 00:17:47,240 --> 00:17:49,040 Speaker 2: years of M and A is you need to look 317 00:17:49,119 --> 00:17:51,680 Speaker 2: really long and hard at what your own capabilities are 318 00:17:52,000 --> 00:17:54,840 Speaker 2: as a business and ask yourself, you know, can you 319 00:17:54,920 --> 00:17:58,160 Speaker 2: actually manage what you're buying better than the person that's 320 00:17:58,200 --> 00:18:01,840 Speaker 2: selling it to you. And I think in relation to 321 00:18:02,119 --> 00:18:05,440 Speaker 2: terminals sets, you know, I think we've got we managed 322 00:18:05,480 --> 00:18:08,360 Speaker 2: New Zealand's largest terminal by a country mile. We've made 323 00:18:08,400 --> 00:18:11,359 Speaker 2: some really good operational improvements over the last couple of years. 324 00:18:11,400 --> 00:18:14,480 Speaker 2: Really proud of the way the team's delivered that, and 325 00:18:14,560 --> 00:18:16,920 Speaker 2: I think, you know, that's earned us the right to say, well, 326 00:18:16,960 --> 00:18:20,520 Speaker 2: we are really good owners and managers of those assets. 327 00:18:21,119 --> 00:18:24,320 Speaker 2: And so I think we're pretty disciplined about the types 328 00:18:24,320 --> 00:18:27,400 Speaker 2: of sets that we'll look at, actually, and I think 329 00:18:27,520 --> 00:18:29,879 Speaker 2: focused on those where we can add value as a 330 00:18:29,880 --> 00:18:34,639 Speaker 2: management team and as an operator and sticking sticking to 331 00:18:34,720 --> 00:18:37,439 Speaker 2: those now. It might be in the future that we 332 00:18:37,440 --> 00:18:40,159 Speaker 2: build additional capability and we say, hey, we've got a 333 00:18:40,200 --> 00:18:43,000 Speaker 2: capability that we can go and export, or you know, 334 00:18:43,119 --> 00:18:45,600 Speaker 2: there's an asset that comes with the team that has 335 00:18:45,600 --> 00:18:48,520 Speaker 2: a great capability. But I think for the business as 336 00:18:48,560 --> 00:18:50,640 Speaker 2: it stands today, that's really our focus. 337 00:18:50,760 --> 00:18:52,920 Speaker 1: So it's really asking the question, are we the highest 338 00:18:53,000 --> 00:18:55,639 Speaker 1: value owner of this asset? It's right, I'm not just 339 00:18:55,680 --> 00:18:57,840 Speaker 1: trying to get a bargain for a sort of random 340 00:18:57,840 --> 00:19:00,000 Speaker 1: asset that might not be so strategically alone. 341 00:19:00,280 --> 00:19:01,960 Speaker 2: You shouldn't and you can't do M and A for 342 00:19:02,080 --> 00:19:05,080 Speaker 2: M and a's sake. You do it because you see 343 00:19:05,119 --> 00:19:08,320 Speaker 2: it gives you a competitive advantages of business, helped solve 344 00:19:08,359 --> 00:19:12,720 Speaker 2: your customers problems in our case, and that most importantly, 345 00:19:12,760 --> 00:19:15,119 Speaker 2: we can add venue to shareholders and if it doesn't 346 00:19:15,200 --> 00:19:18,879 Speaker 2: tack those boxes, then we shouldn't be doing it. 347 00:19:19,680 --> 00:19:22,720 Speaker 1: So you did mention that twenty years experience doing a 348 00:19:22,760 --> 00:19:26,040 Speaker 1: lot of different M and A deals. Was going into 349 00:19:26,040 --> 00:19:29,320 Speaker 1: an executive position always part of your plan? Or was 350 00:19:29,320 --> 00:19:31,200 Speaker 1: that more sort of an opportunity that came up. 351 00:19:31,840 --> 00:19:34,240 Speaker 2: I think, if you want to be really real about it, 352 00:19:34,280 --> 00:19:36,480 Speaker 2: I don't think becoming an investment banker was ever part 353 00:19:36,480 --> 00:19:40,760 Speaker 2: of my plan. I went to university to study computer science, 354 00:19:40,800 --> 00:19:44,240 Speaker 2: took one finance course, and almost by accident, just kept going. 355 00:19:45,840 --> 00:19:49,679 Speaker 2: And when I finished university, most of the cool kids 356 00:19:49,680 --> 00:19:53,359 Speaker 2: were trying to get internships at banks and those types 357 00:19:53,359 --> 00:19:55,640 Speaker 2: of things. So I just did what everybody else did it. 358 00:19:57,200 --> 00:20:01,560 Speaker 2: So from my perspective, I found myself twenty years into 359 00:20:01,560 --> 00:20:04,159 Speaker 2: an investment banking career. I think one of the privileges 360 00:20:04,200 --> 00:20:08,120 Speaker 2: of that is that you work with companies in their 361 00:20:08,119 --> 00:20:10,359 Speaker 2: best moments and in the worst moments. You know, I 362 00:20:10,400 --> 00:20:12,760 Speaker 2: saw a lot of really good decisions and I saw 363 00:20:12,800 --> 00:20:15,119 Speaker 2: some not so good decisions, and you learn a lot 364 00:20:15,320 --> 00:20:20,720 Speaker 2: in that. I think personally, I'd achieved a lot in 365 00:20:21,200 --> 00:20:23,199 Speaker 2: that part of my career and I was kind of 366 00:20:23,240 --> 00:20:25,280 Speaker 2: ready to move on to the next thing. And actually, 367 00:20:26,240 --> 00:20:28,680 Speaker 2: you know the role well. The two roles that I've 368 00:20:28,720 --> 00:20:31,200 Speaker 2: had since I transitioned out of banking have both been 369 00:20:31,240 --> 00:20:34,880 Speaker 2: with really good clients. When I was working at Full 370 00:20:34,920 --> 00:20:39,080 Speaker 2: South bar and moved on to Manua, you know, they 371 00:20:39,080 --> 00:20:41,040 Speaker 2: were a client at the time, and I knew that 372 00:20:41,080 --> 00:20:44,280 Speaker 2: business really, really well, So I think that helps with 373 00:20:44,359 --> 00:20:48,680 Speaker 2: that familiarity. But yeah, look, I think I wouldn't say 374 00:20:48,720 --> 00:20:50,800 Speaker 2: it had always been part of the plan, but certainly 375 00:20:50,840 --> 00:20:54,360 Speaker 2: increasingly it was part of the plan. And I'm really 376 00:20:54,400 --> 00:20:55,840 Speaker 2: excited by what I'm doing now. 377 00:20:56,840 --> 00:21:00,040 Speaker 1: You talked about seeing both good decisions and not so 378 00:21:00,119 --> 00:21:04,000 Speaker 1: good decisions. A key part I imagine of being a 379 00:21:04,040 --> 00:21:07,680 Speaker 1: CEO is that you really have to live through the consequences, 380 00:21:07,720 --> 00:21:11,040 Speaker 1: both good and bad, of those decisions. What has been 381 00:21:11,080 --> 00:21:14,200 Speaker 1: some of the biggest learnings you've had as you've made 382 00:21:14,240 --> 00:21:18,280 Speaker 1: that transition from advising to sort of you know, seeing 383 00:21:18,320 --> 00:21:20,440 Speaker 1: the consequences both good and bad, of any of the 384 00:21:20,480 --> 00:21:21,640 Speaker 1: decisions that are being made. 385 00:21:21,960 --> 00:21:24,920 Speaker 2: Having a really good team around you is everything. And 386 00:21:25,400 --> 00:21:28,600 Speaker 2: having a team that aren't afraid to put their hand 387 00:21:28,680 --> 00:21:32,120 Speaker 2: up when they think you're making a bad decision or 388 00:21:32,800 --> 00:21:35,960 Speaker 2: we're not heading in the right direction. And so, you know, 389 00:21:36,000 --> 00:21:38,800 Speaker 2: what I really value about our team at Channel is 390 00:21:38,960 --> 00:21:42,440 Speaker 2: everybody is upfront and straight up about what they think, 391 00:21:42,480 --> 00:21:45,320 Speaker 2: and we have really good discussions about all the decisions 392 00:21:45,320 --> 00:21:48,359 Speaker 2: that we make. You know, that healthy culture of challenge 393 00:21:48,400 --> 00:21:52,680 Speaker 2: and debate leads you to making really good decisions. And 394 00:21:52,760 --> 00:21:56,600 Speaker 2: so for me, being surrounded by soper smart people who 395 00:21:56,640 --> 00:21:59,800 Speaker 2: are passionate about what we're doing, passionate about the mission, 396 00:22:00,440 --> 00:22:02,960 Speaker 2: want the best for the company, and each bring different 397 00:22:03,000 --> 00:22:09,760 Speaker 2: perspectives to a decision, whether it's operational, financial, strategic, commercial risk, 398 00:22:11,640 --> 00:22:14,639 Speaker 2: and each bring that lens from my perspective. I think 399 00:22:14,720 --> 00:22:16,520 Speaker 2: that's how we make good decisions as a company. 400 00:22:17,320 --> 00:22:20,640 Speaker 1: And as you say, when you do have those diverse opinions, 401 00:22:21,080 --> 00:22:23,639 Speaker 1: it's almost impossible to get consensus straight away. 402 00:22:23,880 --> 00:22:26,520 Speaker 2: I almost worry if everybody agrees with something because it 403 00:22:26,520 --> 00:22:30,120 Speaker 2: makes me wonder, have we really tested this right? And 404 00:22:30,200 --> 00:22:34,080 Speaker 2: so Yeah, that's why really diverse team of talented people 405 00:22:34,240 --> 00:22:37,960 Speaker 2: is such an important part of a high performing business. 406 00:22:38,200 --> 00:22:42,560 Speaker 2: And people that are unafraid to provide their opinions, good 407 00:22:42,600 --> 00:22:47,439 Speaker 2: fact based discussion and you know, ultimately contribute to the 408 00:22:47,480 --> 00:22:49,520 Speaker 2: success success of the company. 409 00:22:50,160 --> 00:22:53,080 Speaker 1: So in terms of that success of Channel Infrastructure, if 410 00:22:53,119 --> 00:22:56,040 Speaker 1: we fast forward five years or maybe even ten years 411 00:22:56,520 --> 00:23:00,440 Speaker 1: and things have turned out really well, what is Channel Infrastructure. 412 00:23:00,600 --> 00:23:04,320 Speaker 2: Well, we've got a really awesome opportunity to be transformational 413 00:23:04,359 --> 00:23:07,240 Speaker 2: for Northland and New Zealand. As I said, so the 414 00:23:07,280 --> 00:23:11,520 Speaker 2: development of the Energy Precinct, you know, I think you've 415 00:23:11,560 --> 00:23:13,960 Speaker 2: seen the numbers. You know, during the build phase that 416 00:23:14,000 --> 00:23:15,240 Speaker 2: could be twenty thousand. 417 00:23:15,040 --> 00:23:17,000 Speaker 1: Jobs, just a massive for fifteen years. 418 00:23:17,480 --> 00:23:20,320 Speaker 2: Over fifteen years, you know, it could be over eleven 419 00:23:20,400 --> 00:23:24,720 Speaker 2: hundred jobs on an ongoing basis, a significant contributed to GDP. 420 00:23:25,600 --> 00:23:28,080 Speaker 2: You know, depending on the projects that we can bring 421 00:23:28,119 --> 00:23:31,560 Speaker 2: to be, you know, we will be really additive to 422 00:23:31,640 --> 00:23:34,840 Speaker 2: New Zealand energy and fuel security because that's what the 423 00:23:34,920 --> 00:23:38,240 Speaker 2: Energy Precinct is designed to do. And you know, I 424 00:23:38,240 --> 00:23:40,680 Speaker 2: think if we did that, you know, for Northland and 425 00:23:40,760 --> 00:23:44,480 Speaker 2: New Zealand, that would be epic, That would be just 426 00:23:44,560 --> 00:23:48,200 Speaker 2: such a such a great outcome and where you know, 427 00:23:48,400 --> 00:23:50,919 Speaker 2: the energy Precinct is a long term plan and there 428 00:23:50,960 --> 00:23:53,760 Speaker 2: will be ups and downs on projects that happen and don't, 429 00:23:53,880 --> 00:23:56,239 Speaker 2: but I think we all see the potential there and 430 00:23:56,280 --> 00:24:01,720 Speaker 2: the awesome economic potential for Northland and the awesome you know, 431 00:24:01,840 --> 00:24:04,440 Speaker 2: opportunity for that energy and fuel security piece. 432 00:24:05,240 --> 00:24:05,439 Speaker 3: You know. 433 00:24:05,480 --> 00:24:08,879 Speaker 2: The other comment I would make is that my hope, 434 00:24:08,920 --> 00:24:11,920 Speaker 2: certainly within fifteen years, is that we aren't just based 435 00:24:11,960 --> 00:24:13,600 Speaker 2: at marson Point or don't just have as sets at 436 00:24:13,640 --> 00:24:17,199 Speaker 2: Marston Point to Auckland. That we're a bigger company than that. 437 00:24:17,240 --> 00:24:18,360 Speaker 2: We've got a bigger footprint. 438 00:24:18,520 --> 00:24:21,639 Speaker 1: Their precinct is a real long term investment. Some of 439 00:24:21,640 --> 00:24:24,440 Speaker 1: the numbers are you know, I've got big scale. I 440 00:24:24,440 --> 00:24:27,760 Speaker 1: think PETWC estimated about two point three billion dollar contribution 441 00:24:27,840 --> 00:24:33,320 Speaker 1: to the to the GDP. That that might make you know, 442 00:24:33,680 --> 00:24:36,640 Speaker 1: things around us are changing all the time, and it 443 00:24:36,640 --> 00:24:39,760 Speaker 1: feels if anything like the rate of change is getting faster, 444 00:24:40,160 --> 00:24:44,400 Speaker 1: not slower. How do you think about building a long 445 00:24:44,480 --> 00:24:48,040 Speaker 1: term strategy, and particularly one where it does require significant 446 00:24:48,119 --> 00:24:52,280 Speaker 1: capex upfront when things change so much? 447 00:24:52,560 --> 00:24:57,280 Speaker 2: Yeah, well, firstly that's why partners are really important. I 448 00:24:57,359 --> 00:24:59,240 Speaker 2: think we need to be really humble in New Zealand, 449 00:24:59,320 --> 00:25:01,760 Speaker 2: that we won't have all the right ideas and the solutions. 450 00:25:01,760 --> 00:25:03,720 Speaker 2: And there's a whole bunch of really big companies and 451 00:25:03,760 --> 00:25:06,639 Speaker 2: some small companies out there in the world doing some 452 00:25:06,680 --> 00:25:09,199 Speaker 2: really interesting things in this space, and we need to 453 00:25:09,200 --> 00:25:12,520 Speaker 2: bring their expertise in capital as relevant. So, you know, 454 00:25:12,560 --> 00:25:14,439 Speaker 2: I think that's part of how we de risk this 455 00:25:14,920 --> 00:25:21,879 Speaker 2: for Channel and our investors. So from my perspective, partners 456 00:25:21,920 --> 00:25:25,600 Speaker 2: are key to that. I think being willing to be 457 00:25:25,680 --> 00:25:28,720 Speaker 2: patient and pivot as well. So said, this won't be 458 00:25:28,800 --> 00:25:33,000 Speaker 2: a linear journey. And you know, probably two years ago, 459 00:25:33,080 --> 00:25:36,360 Speaker 2: did I think that you know, we would have need 460 00:25:36,720 --> 00:25:39,480 Speaker 2: for a diesel peaker or on the site or that 461 00:25:39,880 --> 00:25:45,080 Speaker 2: might be something that New Zealand would need. And so 462 00:25:46,080 --> 00:25:48,359 Speaker 2: I think you've always got to be scanning on the horizon. 463 00:25:49,240 --> 00:25:52,200 Speaker 2: Where are the opportunities, How can we contribute as a company, 464 00:25:52,280 --> 00:25:55,160 Speaker 2: What is our unique competitive advantage that we can bring 465 00:25:55,200 --> 00:25:59,200 Speaker 2: to something, and who can we partner with to help 466 00:25:59,280 --> 00:26:03,040 Speaker 2: make it happen. And you know, if it happens that great, 467 00:26:03,160 --> 00:26:06,200 Speaker 2: that's great. And if it doesn't, then you know, maybe 468 00:26:06,240 --> 00:26:08,000 Speaker 2: it sits there for five years and it happens in 469 00:26:08,040 --> 00:26:11,480 Speaker 2: five years, or maybe it pivots to something else. I 470 00:26:11,480 --> 00:26:14,800 Speaker 2: mean if you think about, you know, the Buyer refinery project, 471 00:26:15,320 --> 00:26:17,679 Speaker 2: that's the ultimate pivot because we're turning what was some 472 00:26:17,760 --> 00:26:21,720 Speaker 2: old refining kit into something that is new and you 473 00:26:21,880 --> 00:26:25,120 Speaker 2: could make a really significant economic contribution to New Zealand. 474 00:26:25,320 --> 00:26:28,040 Speaker 1: If you were an investor thinking about channel infrastructure as 475 00:26:28,040 --> 00:26:30,760 Speaker 1: an investment, what would be the metrics that you would 476 00:26:30,800 --> 00:26:33,680 Speaker 1: be looking at. We talked about dividend, so divin yield 477 00:26:33,760 --> 00:26:36,000 Speaker 1: is one, but what are some of those other metrics 478 00:26:36,000 --> 00:26:39,879 Speaker 1: that you would think about tracking over time to assess 479 00:26:39,920 --> 00:26:43,760 Speaker 1: whether channel of structure is being well run and doing well. 480 00:26:44,440 --> 00:26:46,080 Speaker 2: So the measure that I would look at so this 481 00:26:46,240 --> 00:26:50,240 Speaker 2: dividend and free cash flow? Right, and the reason that 482 00:26:50,280 --> 00:26:52,439 Speaker 2: free cash flow is so important and actually you look 483 00:26:52,440 --> 00:26:55,040 Speaker 2: at it across any business you invest in, not just channel. 484 00:26:55,240 --> 00:26:59,000 Speaker 2: You know, that is a true measure for the cash 485 00:26:59,080 --> 00:27:02,520 Speaker 2: that the business is reducing. And so you know ebit 486 00:27:02,600 --> 00:27:05,000 Speaker 2: DA can have you know, when people talk about revenue 487 00:27:05,040 --> 00:27:08,080 Speaker 2: and ebit DAR, you know there's pros and cons with 488 00:27:08,200 --> 00:27:12,800 Speaker 2: those measures, but free cash flow is the yearnings less, 489 00:27:12,840 --> 00:27:16,840 Speaker 2: the sustainable capex, less your interest costs, so you know 490 00:27:16,880 --> 00:27:19,040 Speaker 2: it's a true measure of the cash that the business 491 00:27:19,040 --> 00:27:21,280 Speaker 2: is producing, and I think scheerholders should look at that. 492 00:27:23,920 --> 00:27:26,159 Speaker 2: I wouldn't want to give anybody any financial advice, but 493 00:27:26,240 --> 00:27:28,960 Speaker 2: I'd I certainly look at it at any investment that 494 00:27:29,040 --> 00:27:31,840 Speaker 2: I look at, not just not just channel. And that's 495 00:27:31,840 --> 00:27:34,320 Speaker 2: a metric that we are focused on as a company 496 00:27:34,440 --> 00:27:38,159 Speaker 2: because you know, we need to balance you know, the 497 00:27:38,200 --> 00:27:40,879 Speaker 2: long term nature of our business and making sure that 498 00:27:40,920 --> 00:27:44,760 Speaker 2: we make good, disciplined investments in our assets to ensure 499 00:27:44,800 --> 00:27:47,480 Speaker 2: that they're there for a very long period of time, 500 00:27:47,560 --> 00:27:49,560 Speaker 2: so that that's covered in the KPEX part of it. 501 00:27:50,920 --> 00:27:52,720 Speaker 2: And then there's the yearnings part of it, or the 502 00:27:52,760 --> 00:27:55,040 Speaker 2: cash that the business generates as well, which is a 503 00:27:55,080 --> 00:27:59,280 Speaker 2: reflection of the enterprise or the job that we do well. 504 00:27:59,359 --> 00:28:01,720 Speaker 1: I think we're I'm here, but thank you so much 505 00:28:01,800 --> 00:28:04,320 Speaker 1: for what has been a really interesting conversation. 506 00:28:04,600 --> 00:28:06,080 Speaker 2: Thank you, suys, really appreciate it. 507 00:28:06,119 --> 00:28:08,920 Speaker 1: Thanks for tuning in. Everyone. You can get Shared Lunch 508 00:28:08,960 --> 00:28:12,159 Speaker 1: on YouTube or wherever you get your podcasts. Leave us 509 00:28:12,160 --> 00:28:14,199 Speaker 1: a rating and let us know what you'd like to 510 00:28:14,200 --> 00:28:16,320 Speaker 1: hear about next. Have a good wish of your week.