WEBVTT - Channel Infrastructure is refining their strategy 0:00:03.520 --> 0:00:06.200 Hey, order and welcome to shared Lunch. My name is 0:00:06.240 --> 0:00:09.879 Susanna Batley and I'm at Channel Infrastructure's head office here 0:00:09.920 --> 0:00:13.880 in Auckland. I'll be joined by Robie Cannon, the CEO. 0:00:14.120 --> 0:00:17.840 More than ever energy security. If fuel security is really 0:00:17.840 --> 0:00:19.920 important to economic prosperity. 0:00:20.000 --> 0:00:22.960 Channel Infrastructure was once an oil refinery and it's going 0:00:23.000 --> 0:00:24.120 through a major transition. 0:00:24.360 --> 0:00:27.520 There was a really significant opportunity to build a real 0:00:27.560 --> 0:00:31.040 future for the company and bring back much more, hopefully 0:00:31.120 --> 0:00:33.479 than what was lost when the refinery was closed. 0:00:33.880 --> 0:00:36.400 It's got a big, bold vision to become an energy 0:00:36.440 --> 0:00:40.760 precinct caring New Zealand's future energy resilience and decarbonization. 0:00:40.920 --> 0:00:44.479 We've got a really awesome opportunity to be transformational for 0:00:44.640 --> 0:00:47.080 Ausland and New Zealand. That could be twenty thousand jobs 0:00:47.120 --> 0:00:49.199 are significant tributor to GDP. 0:00:49.440 --> 0:00:52.159 Before I head upstairs, here's some important information. 0:00:52.760 --> 0:00:55.360 Investing involves the risk you might lose the money you 0:00:55.400 --> 0:00:58.680 start with. We recommend talking to a licensed financial advisor. 0:00:59.400 --> 0:01:03.240 We also command reading product disclosure documents before deciding to invest. 0:01:03.480 --> 0:01:05.880 Everything you're about to see and here is current at 0:01:05.880 --> 0:01:06.760 the time of recording. 0:01:06.880 --> 0:01:10.119 Welcome Rob, Thank you, sus I should probably say things 0:01:10.120 --> 0:01:11.560 for having me here at your premises. 0:01:11.680 --> 0:01:14.200 We're delighted to have you. Thank you very much for 0:01:14.240 --> 0:01:15.040 giving us your time. 0:01:15.200 --> 0:01:17.399 So I'm keen to start by zooming out a bit 0:01:17.720 --> 0:01:20.360 and hearing a bit more about some of the big 0:01:20.520 --> 0:01:23.640 energy changes that are happening in New Zealand, and then 0:01:23.800 --> 0:01:28.600 in particular, what are the challenges and opportunities and how 0:01:29.120 --> 0:01:32.640 Channel might be uniquely positioned to either sold for those 0:01:32.720 --> 0:01:35.800 challenges or take advantage of those opportunities. 0:01:35.920 --> 0:01:38.760 I guess I'll start with a really big picture global context. 0:01:38.760 --> 0:01:43.680 We're finding ourselves in a more contested environment and I 0:01:43.720 --> 0:01:47.840 think more than ever energy security. Fuel security is really 0:01:47.920 --> 0:01:53.280 important to economic prosperity and everybody having a certainty that 0:01:53.800 --> 0:01:56.000 they can get on and invest in what they're doing 0:01:56.040 --> 0:02:00.760 in New Zealand, and so Channels are really able to 0:02:00.840 --> 0:02:03.680 provide or help provide that fuel security piece. It's a 0:02:03.720 --> 0:02:06.160 core part of what we do. We store over three 0:02:06.280 --> 0:02:10.240 hundred million liters of petrol, diesel and jet up at 0:02:10.240 --> 0:02:13.240 Marsden Point, and we're currently in the process of bringing 0:02:13.320 --> 0:02:16.639 in place additional storage. We've got another three hundred and 0:02:16.680 --> 0:02:19.240 fifty million liters of empty tanks up there that we 0:02:19.320 --> 0:02:22.880 can convert, which we've got quite good at and that 0:02:22.919 --> 0:02:27.320 obviously adds to overall New Zealand fuel security. I think 0:02:27.320 --> 0:02:29.280 one of the other challenges as we've gone through the 0:02:29.600 --> 0:02:34.200 energy transition, trying to transition to a renewables electricity system 0:02:34.840 --> 0:02:39.359 has been that firming capacity or generation that can come 0:02:39.400 --> 0:02:42.920 on or off at short notice when the sun's not 0:02:42.960 --> 0:02:45.959 shining or the wind's not blowing and it's not raining, 0:02:46.000 --> 0:02:49.959 which has been doing a lot of lately. And that's 0:02:50.000 --> 0:02:52.480 another area where channel can play a part. So we're 0:02:52.560 --> 0:02:56.480 looking at a diesel peaker at the moment. If all 0:02:56.520 --> 0:03:00.359 of our fuel tanks at Marston Point were full, we'd 0:03:00.400 --> 0:03:03.040 actually have as much stored energy up at Marston Point 0:03:03.080 --> 0:03:06.040 as you would have and like Pookeke in the South Island, 0:03:06.120 --> 0:03:09.640 so huge amount of stored energy and the potential for 0:03:09.720 --> 0:03:13.160 that to just firm that that electricity system will add 0:03:13.200 --> 0:03:13.799 to that firming. 0:03:14.840 --> 0:03:18.880 And in terms of that firming and so the amount 0:03:18.919 --> 0:03:21.440 that might be required to support the sort of largely 0:03:21.520 --> 0:03:26.040 renewables in terms of energy generation in New Zealand, do 0:03:26.120 --> 0:03:29.080 you see that sort of going down as we're bringing 0:03:29.080 --> 0:03:32.480 on more renewables or you know, on the demand side, 0:03:32.520 --> 0:03:35.640 Obviously the demand for electricity is going up. We've got AI, 0:03:35.840 --> 0:03:39.120 we've got data centers that support that, we've got electrification 0:03:39.400 --> 0:03:44.640 of automobiles and other industrial plants. So how do you 0:03:44.680 --> 0:03:47.400 think about that sort of supply versus demand and what 0:03:47.440 --> 0:03:49.960 that firming profile might look like in the future. 0:03:50.080 --> 0:03:51.880 Well, there's no question in my mind that demand for 0:03:51.920 --> 0:03:55.400 electricity will continue to grow. And I like data centers 0:03:55.440 --> 0:03:58.080 as a classic example. They use a lot of electricity 0:03:58.120 --> 0:04:00.360 and they use it twenty four to seven. And so 0:04:00.440 --> 0:04:02.760 the challenge for us in New Zealand is matching up 0:04:02.880 --> 0:04:05.880 that twenty four to seven usage of data centers or 0:04:05.960 --> 0:04:09.360 manufacturing that just needs to be able to turn on 0:04:09.800 --> 0:04:13.280 and have the power available to use at a cost 0:04:13.320 --> 0:04:19.760 effective price. Is that our system is actually quite renewable, 0:04:20.640 --> 0:04:23.200 and we've got and it's fairly well known. I think 0:04:23.240 --> 0:04:26.000 most people know that gues is declining in New Zealand, 0:04:26.040 --> 0:04:28.640 and so that used to be the fuel that plugged 0:04:28.680 --> 0:04:34.840 the gap, and now we're relying on whole and there's 0:04:34.839 --> 0:04:37.280 only so much call FID capacity in New Zealand as well. 0:04:37.400 --> 0:04:43.760 So that's where we see diesel picking or maybe other 0:04:43.800 --> 0:04:48.520 forms of gas peaking as being an opportunity to switch on, 0:04:48.880 --> 0:04:51.200 make sure that the power is there when folks need it. 0:04:51.240 --> 0:04:55.880 But ultimately, hopefully over time the New Zealand electricity system 0:04:55.960 --> 0:05:00.279 fully renewabilizers and the need for that firming thes great. 0:05:00.480 --> 0:05:03.680 If that is the case, what happens to your role 0:05:04.120 --> 0:05:06.080 as part of that well. 0:05:06.120 --> 0:05:08.520 I think at the moment, the way we're thinking about 0:05:08.560 --> 0:05:13.640 the diesel picker option for our site is that it's 0:05:13.680 --> 0:05:16.880 there for when as long as it's needed, and we'll 0:05:16.880 --> 0:05:19.040 see how long that is. One of the options we're 0:05:19.040 --> 0:05:21.800 looking at is containerized units so that they can just 0:05:21.839 --> 0:05:25.359 be broad in across the wharf, across the road, planted down, 0:05:26.200 --> 0:05:30.479 probably turned on for very short duration during them during 0:05:30.520 --> 0:05:32.600 a year, and then if we do get to a 0:05:32.640 --> 0:05:35.159 point in our system where it's no longer required, then 0:05:35.720 --> 0:05:38.200 you know, those units can go back offshore and we 0:05:38.240 --> 0:05:40.880 can get value for them. I think, from Channel's perspective, 0:05:40.920 --> 0:05:44.680 the way we interact with our customers, one of our 0:05:44.720 --> 0:05:48.400 key requirements is that we have long term contracts and 0:05:48.560 --> 0:05:53.920 we're not an electricity participant. We have no electricity trading capacity, 0:05:54.040 --> 0:05:56.719 so you know that project would only get developed and 0:05:56.720 --> 0:05:59.320 built if there are other parties in the electricity sector 0:05:59.400 --> 0:06:02.240 that would basically take that capacity off their hands. 0:06:02.520 --> 0:06:05.839 Yeah, their risk it correct. Yeah. So in terms of 0:06:05.839 --> 0:06:07.920 customers then that you mentioned who. 0:06:07.880 --> 0:06:11.640 Are they at the moment, our three key customers are 0:06:11.720 --> 0:06:16.159 bp X on Mobile and Ample and you'll have seen 0:06:16.240 --> 0:06:19.760 also that we will soon be welcoming Higgins to our 0:06:19.839 --> 0:06:22.280 site is one of our newest customers of the new 0:06:22.320 --> 0:06:23.600 e bitumen import terminal. 0:06:23.640 --> 0:06:26.640 As well, you're clearly needing to balance a lot of stakeholders. 0:06:26.800 --> 0:06:29.400 I'm sure there's you know, quite a lot of path 0:06:29.400 --> 0:06:32.880 and safety things to think about with your employees. So 0:06:32.920 --> 0:06:35.960 how do you your shareholders obviously as a listed company, 0:06:36.120 --> 0:06:39.320 so how do you think about balancing those different stakeholder 0:06:39.360 --> 0:06:43.000 interests and how you're making sure that you're generating a 0:06:43.040 --> 0:06:46.480 good sheld of return while also making sure that from 0:06:46.560 --> 0:06:48.720 a U yelling in point of view, that you're also 0:06:48.720 --> 0:06:50.320 fulfilling that role as well. 0:06:50.920 --> 0:06:52.280 You know, the way I look at it is that 0:06:52.279 --> 0:06:56.360 they're all very important. He mentioned health and safety. It's 0:06:56.440 --> 0:07:00.559 absolutely core to what we do and you know, getting 0:07:00.600 --> 0:07:04.240 everybody home safely every day is a core value for Channel. 0:07:05.440 --> 0:07:08.520 And if I zoom out on health and safety and 0:07:08.560 --> 0:07:11.680 safety in general, the role that we provide, and that 0:07:11.720 --> 0:07:14.000 field security piece means that we need to have a 0:07:14.040 --> 0:07:19.600 safe and resilient operation as well. You know, obviously, our 0:07:19.640 --> 0:07:22.640 customers are a key stakeholder and we spend a lot 0:07:22.680 --> 0:07:25.160 of time with them making sure that we can service 0:07:25.240 --> 0:07:28.400 their needs. And the government's obviously very interested in what 0:07:28.440 --> 0:07:33.280 we do, and shareholders obviously as well, So a very 0:07:33.320 --> 0:07:36.080 broad set of stakeholders, and I think as a company 0:07:36.080 --> 0:07:39.240 we're really privileged to be able to interact and serve 0:07:39.280 --> 0:07:39.760 all of them. 0:07:39.880 --> 0:07:42.760 In terms of those current customers and then future ones 0:07:42.920 --> 0:07:45.840 like Higgins as part of factures coming on board. You 0:07:45.920 --> 0:07:48.840 have talked about this transition and this new vision of 0:07:48.880 --> 0:07:52.800 an energy precinct. Can you talk a bit more about 0:07:52.880 --> 0:07:56.400 that and particularly why now, why is now the right 0:07:56.440 --> 0:07:57.560 time for that transition. 0:07:58.160 --> 0:08:01.640 On first of April twenty two two, we close the 0:08:01.680 --> 0:08:06.000 refinery and we converted to an import terminal and upon 0:08:06.080 --> 0:08:09.000 that closure, you know, the key assets that earn the 0:08:09.320 --> 0:08:11.280 I think last year we earned ninety five point one 0:08:11.320 --> 0:08:13.880 million dollars of EBITDA. The key assets that earned that 0:08:14.200 --> 0:08:18.720 were effectively the tank farm, are the port that we 0:08:18.800 --> 0:08:22.560 operate and the pipeline to Auckland. Now those assets cover 0:08:22.640 --> 0:08:25.720 are only thirty or thirty five percent of our one 0:08:25.800 --> 0:08:28.080 hundred and eighty hectares of land that we've got up 0:08:28.080 --> 0:08:31.360 at Marsden Point. So it's part of that transition and 0:08:31.440 --> 0:08:36.000 reinvention of our company into a new business. We thought 0:08:36.040 --> 0:08:39.280 long and hard about what the alternative and highest and 0:08:39.320 --> 0:08:41.439 best use for that land is. And if you look 0:08:41.440 --> 0:08:45.160 at the characteristics of the land, so we're adjacent to 0:08:45.840 --> 0:08:49.560 a port or our Gety which is actually currently only 0:08:49.600 --> 0:08:53.160 really thirty thirty five percent utilized a significant amount of capacity, 0:08:53.200 --> 0:08:56.280 and our Gety, the land itself is only around thirty 0:08:56.280 --> 0:08:58.400 thirty five percent utized. We've got a significant amount of 0:08:58.480 --> 0:09:00.520 land and we've got a pipe line all the way 0:09:00.520 --> 0:09:02.280 to Auckland, So if you make a product and we 0:09:02.360 --> 0:09:04.160 can get it into that pipeline, we can get it 0:09:04.440 --> 0:09:07.640 all the way down into the heart of industrial New Zealand. 0:09:08.040 --> 0:09:12.120 In addition to that, we have a very attractive resource 0:09:12.160 --> 0:09:17.839 consents for fuels manufacture which persists for thirty five years 0:09:17.840 --> 0:09:19.880 from twenty twenty two when they were re issued or 0:09:19.880 --> 0:09:25.240 twenty twenty one. And we've got a very attractive zoning package. 0:09:25.320 --> 0:09:28.160 So the zone that we sit in is actually literally 0:09:28.240 --> 0:09:32.040 called called the Marsden Point Energy Precinct, and so we 0:09:32.120 --> 0:09:34.640 looked at all those features. We realized that there was 0:09:35.559 --> 0:09:37.719 it went very many places in New Zealand that you 0:09:37.800 --> 0:09:42.079 could build, for example, butcham an import terminal or a 0:09:42.160 --> 0:09:48.520 renewable fuels manufacturing site or additional fuel storage, and that 0:09:48.800 --> 0:09:52.400 there was a really significant opportunity to build a real 0:09:52.520 --> 0:09:56.160 future for the company and bring back perhaps much more 0:09:56.559 --> 0:09:59.839 hopefully than what was lost when the refinery was closed. 0:10:00.120 --> 0:10:03.160 In terms of that that capacity that you've got both 0:10:03.200 --> 0:10:07.000 in the land and in the in the in the pipeline. 0:10:07.760 --> 0:10:11.200 What does an ideal customer look like like? Presumably you're 0:10:11.280 --> 0:10:14.400 talking to other potential customers, you know, like l like Higgins, 0:10:15.080 --> 0:10:18.240 what what makes an ideal tenant or customer of the site? 0:10:18.480 --> 0:10:20.480 You know, the first comment to be would be, well, 0:10:20.480 --> 0:10:22.959 we've got a lot of empty tank crew tank still, 0:10:23.080 --> 0:10:26.240 so you know, we would love customers for those for 0:10:26.800 --> 0:10:31.240 our core fuel storage business, and obviously we've got existing 0:10:31.280 --> 0:10:34.839 customers that might have interested in those. I think, you know, 0:10:34.920 --> 0:10:37.959 the thing I'd speak to and we've spoken about publicly 0:10:38.280 --> 0:10:44.080 is the bio Refinery project with the consortium of Sedra Quantas, 0:10:44.280 --> 0:10:47.280 who will be well known Renova, who are Japanese real 0:10:47.440 --> 0:10:52.640 electricity and fuels manufacturer, a n Z Bank and Kent 0:10:53.720 --> 0:10:57.240 who are working to repurpose some of the old refining 0:10:57.320 --> 0:11:02.280 equipment into a biofuel's menu facturing facility. And if you 0:11:02.280 --> 0:11:06.040 think about you know, it's a few things, a few 0:11:06.080 --> 0:11:10.439 reasons why that would be really epic for both our 0:11:10.440 --> 0:11:14.640 region and New Zealand. Firstly, buyo fuels and manufactured from 0:11:14.679 --> 0:11:19.199 feedstocks which tend to be local. So whether you import 0:11:19.200 --> 0:11:22.320 crude into New Zealand or you ship crude into Asia 0:11:22.360 --> 0:11:24.040 and refine it and bring it down in a boat, 0:11:24.400 --> 0:11:27.199 you've still got a feedstock that's got a transit international 0:11:27.240 --> 0:11:31.040 waters which carries risk. You know, the great thing about 0:11:31.080 --> 0:11:33.920 buio fuels is you can manufacture them from domestic feedstocks. 0:11:33.920 --> 0:11:35.320 So all of a sudden you've actually got your own 0:11:35.360 --> 0:11:39.840 self sufficient fuel industry, which is fantastic for fuel security. Obviously, 0:11:39.880 --> 0:11:42.280 there's a hell of a lot of jobs and economic 0:11:42.320 --> 0:11:45.920 growth and investment associated with that facility should it go ahead, 0:11:47.440 --> 0:11:51.400 it would be incredibly large. Channels expertise today is in 0:11:51.440 --> 0:11:56.800 the management of a high hazard facility and fuels infrastructure, 0:11:57.640 --> 0:12:00.559 and our shareholders invest in us for the regular dividends 0:12:00.559 --> 0:12:04.200 and the long term contracted returns we're able to provide them, 0:12:04.480 --> 0:12:07.520 and so our role in this project is really is 0:12:07.760 --> 0:12:10.960 if you like enabler. So you know, we've got a 0:12:10.960 --> 0:12:13.319 big piece of land and some ex refining equipment that 0:12:14.040 --> 0:12:18.600 we can provide them and steady rental income on. You know, 0:12:18.600 --> 0:12:21.360 we've got some empty tanks which I think they'd like 0:12:21.400 --> 0:12:24.760 to use for their project, which you know we can 0:12:24.800 --> 0:12:27.440 earn revenue from, and we've got a jetty in a 0:12:27.480 --> 0:12:30.040 pipeline in terms of getting that product in and out. 0:12:30.200 --> 0:12:33.400 So I think from our perspective, we're being quite careful 0:12:33.440 --> 0:12:36.240 about where we play in these new projects. We're not 0:12:36.320 --> 0:12:41.720 here to expose shareholders to a significant amount of development risk. 0:12:42.040 --> 0:12:44.440 We know they like investing in us because of those 0:12:44.960 --> 0:12:48.640 long term, stable returns, and that's the position we've crafted 0:12:48.679 --> 0:12:49.359 for ourselves. 0:12:49.559 --> 0:12:52.199 Is that helpful now with I guess some of these 0:12:52.240 --> 0:12:57.400 bigger opportunities that probably do require a significant capital expenditure. 0:12:57.880 --> 0:13:00.320 You did go back to the market's last year and 0:13:00.440 --> 0:13:03.480 raise fifty million, but some of the quantums on some 0:13:03.520 --> 0:13:06.760 of the projects are a lot more than that. How 0:13:06.800 --> 0:13:11.360 are you thinking about funding those versus you know, a 0:13:11.400 --> 0:13:15.439 regular dividend that maybe shareholders expect now and is that, 0:13:16.280 --> 0:13:18.640 you know, is that the right capital structure that sets 0:13:18.640 --> 0:13:21.080 you up for success for this growth. 0:13:21.200 --> 0:13:24.760 So at our annual shareholders meeting, we talked about actually 0:13:24.880 --> 0:13:28.000 increasing our dividend payout ratio. So you know, we're very 0:13:28.040 --> 0:13:32.120 committed to those dividends. And I think the capital rays 0:13:32.200 --> 0:13:35.240 we did last year was extraordinarily successful. In fact, I 0:13:35.280 --> 0:13:38.760 think I'll get the stats wrong, but it had one 0:13:38.760 --> 0:13:42.640 of the highest take ups for a rights issue structured 0:13:42.679 --> 0:13:45.679 in that way ever in New Zealand. And you know, 0:13:45.720 --> 0:13:49.560 fundamentally the reason that people I think backed us for 0:13:49.640 --> 0:13:52.480 that is, you know, the projects that we brought forward 0:13:53.120 --> 0:13:55.440 and if I take the jet tank or I take 0:13:55.600 --> 0:14:00.280 the bitumen terminal facility, you know, largely the fee that 0:14:00.320 --> 0:14:02.920 we earn on those are capacity based. So we're not 0:14:03.040 --> 0:14:06.080 taking a significant newspect about development risk before we're not 0:14:06.080 --> 0:14:10.440 taking a significant amount of operating risk associated with those assets. 0:14:11.080 --> 0:14:13.680 The risk follows the parties that are best able to 0:14:13.720 --> 0:14:16.920 manage that risk, which is generally our customers. And so 0:14:17.080 --> 0:14:19.600 from our perspective, we're playing to our strengths, which is 0:14:19.680 --> 0:14:23.160 management of a high hazard facility and long term infrastructure 0:14:23.760 --> 0:14:26.480 and we're letting our customers and partners play to their strengths, 0:14:26.520 --> 0:14:29.320 which is management of the product that they ultimately want 0:14:29.320 --> 0:14:32.560 to get into New Zealand store and distribute to where 0:14:32.560 --> 0:14:36.200 it needs to go. So I think from my perspective, 0:14:36.480 --> 0:14:38.520 you know, I think shareholders are attracted to that type 0:14:38.520 --> 0:14:40.280 of model, and I think as long as we stick 0:14:40.320 --> 0:14:42.960 to that type of model, you know, I'm really confident 0:14:43.000 --> 0:14:44.840 that we can raise the capital that we need to 0:14:45.840 --> 0:14:47.320 fund these projects and. 0:14:47.240 --> 0:14:51.800 On those contracted revenues and contracts that you enter into 0:14:51.840 --> 0:14:56.359 with the customers. With the move of shutting down the refinery, 0:14:57.280 --> 0:15:01.840 you know, revenues less dependent on fuel volley, But what 0:15:01.880 --> 0:15:04.880 does that do to the potential for upside? So it's 0:15:04.880 --> 0:15:08.920 greater protecting the downside risk, but where is the upside 0:15:08.960 --> 0:15:10.960 for equity returns? 0:15:11.320 --> 0:15:13.480 Yeah, So I think I think the way I look 0:15:13.480 --> 0:15:17.040 at the business is we've got this core, defensive infrastructure 0:15:17.080 --> 0:15:21.120 business with long term contracts with our customers, and that's 0:15:21.160 --> 0:15:23.680 in a place where I think we're up to you know, 0:15:23.800 --> 0:15:26.680 roughly fifty percent of our revenue last year or this 0:15:26.800 --> 0:15:31.480 year is fixed, so not dependent on volume threeput, And 0:15:31.800 --> 0:15:33.560 I think investors take a lot of comfort from that. 0:15:34.120 --> 0:15:36.920 I think the upside comes from our ability to deliver 0:15:37.000 --> 0:15:40.480 the growth projects, and so last year we committed to 0:15:40.680 --> 0:15:43.800 fifty five to I think sixty five or sixty two 0:15:43.840 --> 0:15:48.120 million of new growth projects that we're at attractive returns, 0:15:48.160 --> 0:15:50.440 and that is the Bitchumen terminal and the tank that 0:15:50.440 --> 0:15:54.840 we're talking about, and we've spoken this year about and 0:15:54.880 --> 0:15:57.200 in this conversation about some of the other projects that 0:15:57.240 --> 0:16:00.160 we've got growth projects that we're working on, like the 0:16:00.160 --> 0:16:04.280 the capacity based diesel peak, like the Buyer refinery project, 0:16:05.800 --> 0:16:08.840 where you know, we're able to in a really smart 0:16:08.840 --> 0:16:12.720 way use our existing assets, use our existing land to 0:16:13.000 --> 0:16:17.560 provide additional revenue and returns to shareholders. But the returns 0:16:17.560 --> 0:16:21.680 and revenue associated with those deals are likely to be 0:16:21.760 --> 0:16:26.760 the same contracted, capacity based type deals that you've seen 0:16:26.800 --> 0:16:28.720 from us in the past, because we know that shareholders 0:16:28.800 --> 0:16:31.120 like them. So that's that's one part of the upside. 0:16:31.160 --> 0:16:33.560 I think the other for us is over the course 0:16:33.800 --> 0:16:37.400 of the past eighteen months, you know, three of our 0:16:37.480 --> 0:16:41.000 major shareholders sell down the three customers actually that we have, 0:16:41.200 --> 0:16:44.040 which is a legacy they holding their head when we 0:16:44.040 --> 0:16:47.800 were a refinery, and that to me speaks to their 0:16:47.840 --> 0:16:51.440 discipline about recycling capital, and we see an opportunity for 0:16:51.560 --> 0:16:54.520 us to help them recycle capital and other terminal assets 0:16:54.600 --> 0:16:57.120 they might own in this part of the world as well. 0:16:57.800 --> 0:16:59.760 Because we're not the only terminal in New Zealand. There's 0:16:59.760 --> 0:17:02.520 a bun from others. There is one actually just downstream 0:17:02.520 --> 0:17:07.560 from us. And so from my perspective, you know, we're 0:17:07.560 --> 0:17:10.360 here saying we've got capital to invest. You know, we're 0:17:10.359 --> 0:17:12.760 a good owner and manager of these assets. That's why 0:17:13.119 --> 0:17:18.040 customer relationship piece is so important, and you know, we 0:17:18.080 --> 0:17:20.800 can take a long term, long term view and allow 0:17:20.840 --> 0:17:23.880 our customers to reinvest their capital elsewhere in their supply chain. 0:17:24.560 --> 0:17:27.000 Your background is that you've headed up M and A 0:17:27.119 --> 0:17:29.800 for a large, a recent bank. Outside of maybe those 0:17:29.880 --> 0:17:32.679 terminal assets, is there any other sorts of assets that 0:17:33.359 --> 0:17:38.879 could be quite attractive, particularly because of maybe capabilities, expertise, 0:17:40.080 --> 0:17:42.679 other sort of assets and experience that channel might have 0:17:42.720 --> 0:17:43.560 that they could leverage. 0:17:44.280 --> 0:17:44.480 Yeah. 0:17:44.520 --> 0:17:47.120 One of the lessons that I've learned from doing twenty 0:17:47.240 --> 0:17:49.040 years of M and A is you need to look 0:17:49.119 --> 0:17:51.680 really long and hard at what your own capabilities are 0:17:52.000 --> 0:17:54.840 as a business and ask yourself, you know, can you 0:17:54.920 --> 0:17:58.160 actually manage what you're buying better than the person that's 0:17:58.200 --> 0:18:01.840 selling it to you. And I think in relation to 0:18:02.119 --> 0:18:05.440 terminals sets, you know, I think we've got we managed 0:18:05.480 --> 0:18:08.360 New Zealand's largest terminal by a country mile. We've made 0:18:08.400 --> 0:18:11.359 some really good operational improvements over the last couple of years. 0:18:11.400 --> 0:18:14.480 Really proud of the way the team's delivered that, and 0:18:14.560 --> 0:18:16.920 I think, you know, that's earned us the right to say, well, 0:18:16.960 --> 0:18:20.520 we are really good owners and managers of those assets. 0:18:21.119 --> 0:18:24.320 And so I think we're pretty disciplined about the types 0:18:24.320 --> 0:18:27.400 of sets that we'll look at, actually, and I think 0:18:27.520 --> 0:18:29.879 focused on those where we can add value as a 0:18:29.880 --> 0:18:34.639 management team and as an operator and sticking sticking to 0:18:34.720 --> 0:18:37.439 those now. It might be in the future that we 0:18:37.440 --> 0:18:40.159 build additional capability and we say, hey, we've got a 0:18:40.200 --> 0:18:43.000 capability that we can go and export, or you know, 0:18:43.119 --> 0:18:45.600 there's an asset that comes with the team that has 0:18:45.600 --> 0:18:48.520 a great capability. But I think for the business as 0:18:48.560 --> 0:18:50.640 it stands today, that's really our focus. 0:18:50.760 --> 0:18:52.920 So it's really asking the question, are we the highest 0:18:53.000 --> 0:18:55.639 value owner of this asset? It's right, I'm not just 0:18:55.680 --> 0:18:57.840 trying to get a bargain for a sort of random 0:18:57.840 --> 0:19:00.000 asset that might not be so strategically alone. 0:19:00.280 --> 0:19:01.960 You shouldn't and you can't do M and A for 0:19:02.080 --> 0:19:05.080 M and a's sake. You do it because you see 0:19:05.119 --> 0:19:08.320 it gives you a competitive advantages of business, helped solve 0:19:08.359 --> 0:19:12.720 your customers problems in our case, and that most importantly, 0:19:12.760 --> 0:19:15.119 we can add venue to shareholders and if it doesn't 0:19:15.200 --> 0:19:18.879 tack those boxes, then we shouldn't be doing it. 0:19:19.680 --> 0:19:22.720 So you did mention that twenty years experience doing a 0:19:22.760 --> 0:19:26.040 lot of different M and A deals. Was going into 0:19:26.040 --> 0:19:29.320 an executive position always part of your plan? Or was 0:19:29.320 --> 0:19:31.200 that more sort of an opportunity that came up. 0:19:31.840 --> 0:19:34.240 I think, if you want to be really real about it, 0:19:34.280 --> 0:19:36.480 I don't think becoming an investment banker was ever part 0:19:36.480 --> 0:19:40.760 of my plan. I went to university to study computer science, 0:19:40.800 --> 0:19:44.240 took one finance course, and almost by accident, just kept going. 0:19:45.840 --> 0:19:49.679 And when I finished university, most of the cool kids 0:19:49.680 --> 0:19:53.359 were trying to get internships at banks and those types 0:19:53.359 --> 0:19:55.640 of things. So I just did what everybody else did it. 0:19:57.200 --> 0:20:01.560 So from my perspective, I found myself twenty years into 0:20:01.560 --> 0:20:04.159 an investment banking career. I think one of the privileges 0:20:04.200 --> 0:20:08.120 of that is that you work with companies in their 0:20:08.119 --> 0:20:10.359 best moments and in the worst moments. You know, I 0:20:10.400 --> 0:20:12.760 saw a lot of really good decisions and I saw 0:20:12.800 --> 0:20:15.119 some not so good decisions, and you learn a lot 0:20:15.320 --> 0:20:20.720 in that. I think personally, I'd achieved a lot in 0:20:21.200 --> 0:20:23.199 that part of my career and I was kind of 0:20:23.240 --> 0:20:25.280 ready to move on to the next thing. And actually, 0:20:26.240 --> 0:20:28.680 you know the role well. The two roles that I've 0:20:28.720 --> 0:20:31.200 had since I transitioned out of banking have both been 0:20:31.240 --> 0:20:34.880 with really good clients. When I was working at Full 0:20:34.920 --> 0:20:39.080 South bar and moved on to Manua, you know, they 0:20:39.080 --> 0:20:41.040 were a client at the time, and I knew that 0:20:41.080 --> 0:20:44.280 business really, really well, So I think that helps with 0:20:44.359 --> 0:20:48.680 that familiarity. But yeah, look, I think I wouldn't say 0:20:48.720 --> 0:20:50.800 it had always been part of the plan, but certainly 0:20:50.840 --> 0:20:54.360 increasingly it was part of the plan. And I'm really 0:20:54.400 --> 0:20:55.840 excited by what I'm doing now. 0:20:56.840 --> 0:21:00.040 You talked about seeing both good decisions and not so 0:21:00.119 --> 0:21:04.000 good decisions. A key part I imagine of being a 0:21:04.040 --> 0:21:07.680 CEO is that you really have to live through the consequences, 0:21:07.720 --> 0:21:11.040 both good and bad, of those decisions. What has been 0:21:11.080 --> 0:21:14.200 some of the biggest learnings you've had as you've made 0:21:14.240 --> 0:21:18.280 that transition from advising to sort of you know, seeing 0:21:18.320 --> 0:21:20.440 the consequences both good and bad, of any of the 0:21:20.480 --> 0:21:21.640 decisions that are being made. 0:21:21.960 --> 0:21:24.920 Having a really good team around you is everything. And 0:21:25.400 --> 0:21:28.600 having a team that aren't afraid to put their hand 0:21:28.680 --> 0:21:32.120 up when they think you're making a bad decision or 0:21:32.800 --> 0:21:35.960 we're not heading in the right direction. And so, you know, 0:21:36.000 --> 0:21:38.800 what I really value about our team at Channel is 0:21:38.960 --> 0:21:42.440 everybody is upfront and straight up about what they think, 0:21:42.480 --> 0:21:45.320 and we have really good discussions about all the decisions 0:21:45.320 --> 0:21:48.359 that we make. You know, that healthy culture of challenge 0:21:48.400 --> 0:21:52.680 and debate leads you to making really good decisions. And 0:21:52.760 --> 0:21:56.600 so for me, being surrounded by soper smart people who 0:21:56.640 --> 0:21:59.800 are passionate about what we're doing, passionate about the mission, 0:22:00.440 --> 0:22:02.960 want the best for the company, and each bring different 0:22:03.000 --> 0:22:09.760 perspectives to a decision, whether it's operational, financial, strategic, commercial risk, 0:22:11.640 --> 0:22:14.639 and each bring that lens from my perspective. I think 0:22:14.720 --> 0:22:16.520 that's how we make good decisions as a company. 0:22:17.320 --> 0:22:20.640 And as you say, when you do have those diverse opinions, 0:22:21.080 --> 0:22:23.639