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Edited Transcript of HUO.AX earnings conference call or presentation 28-Aug-19 11:30pm GMT

Full Year 2019 Huon Aquaculture Group Ltd Earnings Call

Dover, Tasmania Sep 20, 2019 (Thomson StreetEvents) -- Edited Transcript of Huon Aquaculture Group Ltd earnings conference call or presentation Wednesday, August 28, 2019 at 11:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Peter Bender

Huon Aquaculture Group Limited - MD, CEO & Executive Director

* Philip Wiese

Huon Aquaculture Group Limited - Deputy CEO

* Thomas Haselgrove

Huon Aquaculture Group Limited - CFO & Company Secretary

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Conference Call Participants

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* Michael Peet

Goldman Sachs Group Inc., Research Division - Executive Director

* Paul Buys

Crédit Suisse AG, Research Division - Head of Research and Director

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Presentation

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Peter Bender, Huon Aquaculture Group Limited - MD, CEO & Executive Director [1]

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Thank you and good morning, everyone. I also have with me on the call today Philip Wiese, who is Deputy CEO; and Tom Haselgrove, our CFO, who will be taking you through the financial details of our results.

The overall presentation should take around 20 minutes, and we'll cover an analysis of the financials, a review of operations and some commentary on market conditions and the outlook. Then the three of us will be happy to spend the rest of the time taking questions.

The 2019 financial year was a particularly difficult year, almost on par with the 2016. In failing, sometimes you just get dealt a bad hand and this was one of those years. As you know, we started the year knowing that the harvest will be down due to the decision to bring the harvest forward in financial year '18 to address the shortfall of the supply that year. What we couldn't have predicted was the moon jellyfish bloom in late November, which was confined to our pens in the Huon estuary and the D’Entrecasteaux Channel. While there were costs associated with managing the actual event during November and December, what was difficult to quantify was the ongoing secondary impacts from that on fish health and mortalities that have extended right through April. It will be fair to say that the impact on our revenue and profitability over the second half of the year is much greater than we anticipated.

The jellyfish event and the warmer summer temperatures through the extended summer brought on an outbreak of the gill necrosis, which has directly affected fish health and growth. As a result, the average harvest weight fell from 4.78 kilos in financial year '18 to 4.4 kilos. The overall tonnage for the year fell 18% on the previous year to just below the 19,000 tonnes we had indicated in May, while revenue fell 11% helped by continued firm pricing particularly in the wholesale market.

Although the jellyfish bloom is an infrequent event, any future outbreaks should have less impact for Huon as it is planned to have much less fish stock at the higher-risk sites at that time of the year. Now we have a Yellow Bluff site operational in Storm Bay.

This is not the sort of result we planned for, but I think it is important to keep a sense of perspective. In farming, bad years come and go. We learn from them, make changes where necessary and then get on with the process of restocking for the next 2 years and planning the next harvest. And during the first half of the year, that is what we were doing, but on a much larger scale than previous years. To do this, we drew on cash flow from operations apart from the $34 million investment in our future production capacity.

We're also very busy investing capital into building new infrastructure to support the future growth of the business. This year, we finished construction of our salmon nursery at Whale Point, bringing it into operation in the new year. And the first of Huon's new-generation 600-tonne feed barges was moored in Storm Bay where 2 of the 4 leases are now in full production.

Before Tom takes you through the details behind our results, let me quickly summarize some of the headline numbers. Volumes harvested in the half fell 18% from the previous year, impacted, as I said earlier, by the fact that we started to use substantially less fish in the water and then had to deal with ongoing effects from the jellyfish event. Sales revenue declined by 11% as the strong pricing environment was not sufficient to offset the fall in volumes. Operating EBITDA fell 34% to $47.3 million, and operating NPAT declined to $15.9 million. Both were affected by the increase in production cost per kilo, reflecting the impact of lower volumes on a fixed cost base. Finally, statutory profit declined 64% to $9.5 million, influenced by a $9.1 million decline in the fair value adjustment as a result of the tighter margins from the higher per kilo cost of production.

I won't spend too much time on the next slide, but the impacts of events in the second half of the year on our financials was fairly clear. What is also clear is the impact of the investments in rebuilding and growing the biomass that began in the first half. Our plan with this is to return Huon to production levels in financial year 2020, that is where it would have been without the setbacks of the past 18 months.

I'll be going into small detail on our operational performance and outlook shortly, but before I do that, I'll hand over to Tom to take you through an analysis of the financials.

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Thomas Haselgrove, Huon Aquaculture Group Limited - CFO & Company Secretary [2]

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Thanks, Peter. And good morning, everyone.

Many of the things I'm going to say in commenting on the performance for the year or the second half, unfortunately, are going to be very similar to what I said at the half year. I say unfortunately because in February, we did believe that the second half would be much stronger than it's eventually turned out to be. And while we've provided an update in May as water temperatures were falling below 15 degrees on what we consider the impact of the jellyfish event would be on our full year numbers, the flow and effects in terms of lower growth and therefore volumes and higher per kilo production costs continued to impact the business.

So if we look at the key profit drivers for the year, by far, the most important factor was the falling tonnages because of so many of our performance metrics are driven by the leverage from scale and fish weight. Once you spent the money on growing the fish, it becomes a fixed cost.

The first half, even allowing for an improvement in growing and operating conditions, was held back from the fact that the '17 year class fish started underweight due to adverse growing conditions in the 2018 summer.

In the second half, with most of the '17 year class harvested, the jellyfish event, combined with gill necrosis, started to take its toll on some of the '18 year class fish either through increased mortalities or later, slower growth.

The average HOG weight the second half was only 4.1 kilos and this is the lowest since it's been in FY '16 when we were dealing with particularly hot summer and other growing issues.

Positively, the average price per HOG kilo remained firm throughout the year at just below $15, an increase of 8% on the previous year.

Looking more at pricing. On the bright spots in the year, the average domestic prices continued firm for the past 2 years, particularly in the wholesale market where we sold just under 2/3 of our harvest in both the first and the second half with the average price just over $15.60.

The shortfall in supply, which started to bite in the second half of FY '18, persisted through the year and we believe it will continue to provide stable pricing conditions for at least the next 6 to 12 months.

Sales through our domestic retail channel, which is typically slower to be impacted by price due to the contracted nature of sales, also recorded a 5% price rise over prior year to now to average of $14.25 a kilo.

Because our overall product -- reduction in tonnage, we prioritized supply into the domestic market. Hard-won contracts to supply new retail international channel were unable to be filled due to the supply shortage. Exports only averaged 6% of sales across the year, but at an average price of just under $12.50 per kilo.

Another positive in our financials is the 23% increase in the value of our biological assets to $209 million. Two factors influencing that, our price and the increased biomass in the water at 30 June, which is forming the basis for our return to the previous year-on-year growth in harvest tonnages.

Pricing remained firm -- pricing remains firm in both the domestic and international markets.

The fair value adjustment, so the profit impact on biological assets, recorded a decline of $9.1 million.

Following an increase in the first half of $25 million to $34 million decline in the second half reflects the seasonally adjusted lower biomass compared to December due to the '19 year class being put to sea and decrease in the fair value as tighter margins had reduced the uplift driven by the higher per kilo production costs. There's also a reduction in biomass compared to what we were expecting due to increased mortality and poor growth.

Turning to cash flow. Our cash flow from operations fell from $57.9 million in FY '18 to $14.5 million for the year. At the half year, I talked about reduced harvest volumes and the significant funds required for rebuilding and increasing our biomass having a short-term impact on adjusted cash flow from operations. The situation improved, as expected, in the second half although recovery was held back by the lower sales and squeezed margins due to our increased production costs.

Our interest payments in the second half doubled to $5.6 million compared to the first half as a consequence of the increase in debt required to fund the final stage of our $150 million 2-year CapEx program and recognizing the full impact of interest rate swaps as cash rates have fallen in the second half of the financial year.

The tax refund, as mentioned at the half year, was received in the second half relating to research and development. And the tax installments made through the financial year will also generate a refund of around $1.6 million in FY '20 as a result of the poor underlying results for FY '19.

The impact of all of this was a fall in our EBITDA conversion ratio to 63% for the 6 months to 30 June compared with 99% in the previous corresponding half.

I'll finish up with a summary of where the balance sheet stands as a result of all this activity. Net assets rose 1% over the year as a consequence of the increased investment in our biological assets and fixed assets being funded by the $57 million increase in our debt.

Our net debt position at the end of the financial year increased 71% on the prior period compared to the prior period of $138.8 million, pushing gearing up to 44% but supported by our new debt facilities.

At the beginning of FY '19, we negotiated a new 5-year debt facility on improved terms and with more flexible covenants.

We expect our gearing ratio to remain at this level in the short term but are budgeting for progressive reduction in debt back to the average gearing levels between 20% and 25%.

The strong recovery in cash flow generation to support repayment of debt will kick in when the '19 year class is harvested predominantly in the summer of 2021.

The 21% increase in our working capital to $206 million is consistent with the increased funds required to rebuild and grow the biomass that I talked about earlier.

I'll now hand back to Peter for some more comments on operational performance and outlook.

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Peter Bender, Huon Aquaculture Group Limited - MD, CEO & Executive Director [3]

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Thanks, Tom. The slide, I think, provides a good guidance. Let's have a look at one of the key financial metrics underlying our business, per HOG kilo production cost. It's important to differentiate between our cost per kilo, which in a business with high fixed overheads, are very influenced by the volumes we produce. In financial year '19, our overall cost of production actually fell compared to the previous corresponding period by around 3% and were higher in the second half compared to the first half. However, when we look at costs on per kilo basis because their volumes fell by 18%, this pushed up our per kilo operating costs compared to the previous year by 18%. There are only so many levers we can pull when faced with this sort of -- with the sort of weather conditions experienced over the past 2 summers and outlier events like the jellyfish bloom in November and December last year. What we can do, however, is build a business that enables us to manage and efficiently recover quickly and move on without that disruption having a lasting impact on the business.

However, there are 2 main points that I want to draw your attention to on this slide. The first is that our average cost of production for second half fell, as anticipated, to $12.19 per HOG kilo although the year-on-year, the overall per kilo cost of production rose 16% to $12.45, peaking at $12.72 in the first half. We expect average production cost per kilo to continue to fall in financial year 2020. However, the reduction will be modest due to the ongoing impact in the first half of the increased operational and biological costs on the 2018 year class.

The second point is that domestic pricing during the year remained strong, particularly in the wholesale market, which averaged $15.63 per HOG kilo. 64% of sales went into that market with a record 28% of sales going through the domestic retail channel.

The most disappointing aspect of the year was our inability to fulfill a number of new contracts to sales into the Asian retail market as we struggled to meet demand in the domestic market, which ended up taking 92% of our sales for the year. Meeting domestic demand always remains our first priority and that will continue to be the case.

I want to spend a few minutes updating you on the progress that has been made over the past year in automating our business. Innovation and investment in infrastructure will drive efficiency and lower our cost of production and has been behind everything we have done over the past 5 years.

The construction of the Whale Point Salmon Nursery was completed and commissioned during the year. This facility is the first in the Southern Hemisphere and a game changer in a number of ways in how we manage our operations. Smolt will be put to sea at more advanced stages of growth, reducing mortality risk and allowing us to grow fish from the same size in less time in the sea.

In December, we launched our new unmanned and fully automated 600-tonne feed barge, the Huon Hogan. The second barge is currently under construction, the delivery scheduled for late 2020.

The Hogan is currently moored out at Storm Bay and is supplied by the Huon Supply, 1,000-tonne feed delivery boat, which also became operational during the year. This significantly reduces the number of trips required to fill the feed barges.

Huon developed feeding technology, enabled automated feeding using a spreading system monitored by video sensors that stops feeding when fish are not eating. This has the dual benefit of reducing feed conversion rates and maximizing growth as well as limiting any waste dropping to the seafloor.

Our move to a fully automated shore-based feeding system also provides significant efficiencies to the business as we are no longer dependent on sending crews out daily to feed the fish, taking hits and generally monitor how they are performing. There is significant IP attached to this technology as it can be used with a variety of feed equipment, not just the current Huon feed barge design.

Of course, the other reason for our significant investment in the business, particularly over the past 2 years, has been to provide the platform needed for growth. We currently have fish in production that will support a 30,000-tonne harvest in financial year 2021 and the capacity to increase beyond 30,000 tonnes as the Whale Point Salmon Nursery moves to full production capacity.

At Storm Bay, we were granted an environmental license for new lease at the East of Yellow Bluff. This will allow for expansion in capacity at Storm Bay up to 11,500 tonnes, increasing total lease capacity in the Storm Bay region to 20,000 tonnes.

We now have 2 of our 4 leases at Storm Bay in operation, each of which is capable of producing around 6,500 tonnes.

Infrastructure at the East of Yellow Bluff lease is in the process of being installed and we began stocking this lease from late July this year.

As I mentioned previously, the facility at Whale Point was commissioned in late December with the first singlings transferred into tanks on the 21st of February. These fish were put to sea in July this year and will be ready for harvest in 9 to 10 months. This saves up to 5 months from the time the fish at sea, which effectively boosts capacity without needing to find extra leases and helps even out the harvest profile of the whole year.

At Macquarie Harbour, we continue to farm at the same levels, maintaining our production for this region at around 10% of our total capacity.

We continue to progress our investigations into the suitability of sites in New South Wales and West Australia for the production of Yellowtail Kingfish. In October last year, we announced that Huon had secured a lease to operate in a new aquaculture zone 60 kilometers to the west of Geraldton in West Australia. We have begun a process of environmental monitoring, which we expect to continue through to the end of 2020 before committing any capital.

On the East Coast following the conclusion of the trial of Port Stephens, we've been working with the New South Wales state government to find suitable lease sites that will support the commercial operation. The medium-term objective is to set out farming sites on both the East and West Coast of Australia in order to supply locally grown Yellowtail Kingfish to the domestic and lucrative Asian markets.

We spend a lot of time talking about the farming aspects of Huon's operations in these briefings, but we also do a lot of work marketing our product and developing our brand both here and overseas. There's no point growing 30,000 tonnes of salmon if there are no buyers. So there is a strong focus within the business of driving domestic per capita consumption, which is 2.1 kilos that's well below other developed countries.

In April this year, we opened a new processing facility in Ingleburn in Sydney, which will enable us to capitalize on our market reputation for freshness by supplying fresh salmon to markets up and down the Eastern seaboard, but particularly into the large Sydney market. Last year, the domestic retail consumer bought just over 5,500 tonnes of Huon salmon or 29% of our total production. As the market continues to grow at around 10% per annum, we're targeting an increase in our market share over coming years. Campaigns like Harvested by Night, Fresher by Day and the promotion of Huon as the first and only salmon company in Australia to be able to deliver RSPCA-approved salmon to the market represents some of the important initiatives that will help us meet that goal.

We now have over 600 people working at Huon, and aside from being very vigilant of us keeping them all safe as the safety steps testify, we also run a number of staff development programs as part of our People & Capability strategy. Last year, this includes the Huon Leaders Program, an establishment of a framework for ensuring we are on public succession planning at the operational level, sponsoring employees to complete VET sector training courses, the equivalent of TAFE, an ongoing support in general literacy and numeracy. We are one of the bigger employers in Tasmania and we take investing in the capabilities of our people very seriously.

During the year, we spent $64.3 million in CapEx for financial year '19, much of which went towards completing Whale Point and our expansion in Storm Bay. We have now invested $150 million over the past 2 years on building the core infrastructure necessary to power our expansion in production over the next 3 years. Beyond this year, we anticipate our annual CapEx spend will settle at around $40 million unless, of course, market opportunities dictate otherwise.

The final dividends -- dividend of $0.03 per share has been declared, franked to 50%, resulting in a full year dividend of $0.06 per share, which is consistent with our dividend policy to maintain an annual payout ratio of up to 35% of net operating profit after tax.

I'd like to now share our views of how we see the market developing and what this will mean for Huon's performance not only for financial year 2020 but also into the medium term. In Australia, domestic demand is expected to continue growing at around 10% per annum with growth in domestic salmon production expected to struggle to keep up in the medium to long term. At the same time, global demand for salmon is growing at around 6% to 8% per annum and expect it to continue at that rate given the low per capita consumption of salmon in most markets outside of Scandinavia.

Forecast for growth in global supply over 2020 to 2021 continue to show it falling shorter demand due to supply constraints in Norway and Chile and the shortage of lease space globally. As a result, international salmon prices are expected to remain high for the foreseeable future with Rabobank forecasting NOK 62 to NOK 63 over the next 2.5 years compared to an average NOK 60 in 2017 and 2018.

So what is the outlook for Huon for 2020 and the next couple of years? First of all, we are confident that we will meet our guidance for production volumes this year of at least 25,000 tonnes. The season has started with record biomass in the water with the '18 year class below optimal weight. And as we have already flagged, production costs are expected to be only modestly below those of financial year '19, at above $11.50 a kilo due to the higher costs carried through from the difficult 2019 summer.

The reduction in biomass levels across the Tasmanian salmon industry and continued growth in demand should result in average pricing remaining firm throughout the year, albeit easing slightly from last year's average of $14.96 up to -- around $14.50.

This will set us up for a strong lift in revenue and an increase in operating earnings for the year as production costs start to come down.

If I look out to 2021, we have fish already in production that will support a 30,000 tonne harvest in that year, pricing that will continue to be underpinned by a shortfall in supply and strong cash flow driving down our gearing. In that context, it is worthwhile keeping this year's result in perspective. When we look back on financial year 2019 in 2 to 3 years' time, it will be seen as an aberration for all the reasons I have talked about.

That concludes the formal part of the presentation and Phil, Tom and I would now be happy to take questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from Michael Peet with Goldman Sachs.

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Michael Peet, Goldman Sachs Group Inc., Research Division - Executive Director [2]

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First question, just on the -- with the 25,000 tonnes sort of target at least for this year, suggestion where the channel mix that you see going forward? And I'm just interested particularly in the wholesale domestic channel and pricing. Maybe if you can make some comments on how you think that's going to be absorbed and what sort of price do you expect?

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Thomas Haselgrove, Huon Aquaculture Group Limited - CFO & Company Secretary [3]

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We will continue, as Peter pointed out, Michael, to supply the domestic wholesale market as a priority and we end up at around 30% of our 25,000 will go there. And the pricing would be, as mentioned, under $15 at the moment.

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Michael Peet, Goldman Sachs Group Inc., Research Division - Executive Director [4]

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So that's declined a little bit over the past 6 months, the pricing?

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Thomas Haselgrove, Huon Aquaculture Group Limited - CFO & Company Secretary [5]

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Well, yes. What we're doing is when we forecast the sales for the year, we always are a little bit conservative. There has been no price decreases in the market. But we will probably just keep it a little bit tight in our forecast and potentially there might be some upside on that.

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Michael Peet, Goldman Sachs Group Inc., Research Division - Executive Director [6]

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Okay. And just interested in your international retail contracts or the interest. What sort of percentage are you expecting to export this year as you -- I assume you're going to be obligated to supply there?

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Thomas Haselgrove, Huon Aquaculture Group Limited - CFO & Company Secretary [7]

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Yes. We will export probably around 20% for the year. And as Peter pointed out, the international price would be stable, if not increased a bit. But if you look at the fish sizes and if we get the recovery on our fish growth as expected, those prices for the bigger fish is actually quite a bit higher than the average as of NOK 62, NOK 63.

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Peter Bender, Huon Aquaculture Group Limited - MD, CEO & Executive Director [8]

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What's actually happening in countries like Norway is their average size is coming down because of how they now have to treat for sea lice. Because they're now doing mechanical treatments for sea lice, they struggle to get the fish up to a large size. So they tend to sell them before they get too big. So often there's somewhere between $1 and $2 difference between fish that are over 6 kilos compared to, say, fish of 4 to 5 kilos.

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Michael Peet, Goldman Sachs Group Inc., Research Division - Executive Director [9]

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And just on the operating EBITDA per kilo, $2.51 last year, I mean, is it probably a bit too much to expect to keep to $3 this year, looks like it'll be up a little but not that much?

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Thomas Haselgrove, Huon Aquaculture Group Limited - CFO & Company Secretary [10]

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Yes. We'll be up a bit on the $2.50, but we won't quite hit the $3 mark. We'll be somewhere in the middle of those two figures.

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Michael Peet, Goldman Sachs Group Inc., Research Division - Executive Director [11]

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And I'm just interested, all being equal on price, I guess, but with Whale Point, your new leases at Storm Bay, et cetera, the network at sort of 30,000 tonnes, where do you see your sustainable sort of EBITDA per kilo margin once you get all that ramped up?

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Thomas Haselgrove, Huon Aquaculture Group Limited - CFO & Company Secretary [12]

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As we've pointed out multiple times in the past, Michael, our target is definitely to be better than $3 and closer to sort of the mid-$3. And we've got everything in place now. And remember, it's very important to note that there's no more implementation of the growth strategy. Everything is fully implemented. And with the implementation does come certain challenges operationally. And this is the first year now that we can sort of say everything is implemented. And it has now just come to make sure we get all those efficiencies flowing through to hit those numbers.

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Operator [13]

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Your next question comes from Paul Buys with Crédit Suisse.

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Paul Buys, Crédit Suisse AG, Research Division - Head of Research and Director [14]

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First question just on the volume outlook. Obviously, you've given us expectation for at least 25,000 tonnes. Just interested to know how you see that developing over the 2 halves specifically?

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Philip Wiese, Huon Aquaculture Group Limited - Deputy CEO [15]

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Probably more skewed into the first half. It will depend on where we see things happening, particularly in the export market. So taking advantage of where we see the best pricing in the international market over the full 12 months. And taking the supply points where we're not directly competing with a high supply from Norway and Chile. From a domestic point of view, it'll be very similar to prior years.

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Peter Bender, Huon Aquaculture Group Limited - MD, CEO & Executive Director [16]

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And we tend to have bigger fish in this half, particularly through October, November, December. But still we have some of those bigger fish in January and February, but the exports will be more in this half we're in now.

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Paul Buys, Crédit Suisse AG, Research Division - Head of Research and Director [17]

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And then I guess a kind of similar question just on the cost per kilogram. Again, you've given your outlook there and indicated that the first half will be more impacted by some of those carryover issues. So just wanted to get an idea, I guess, on, again, how you see that progressing through the year. So $11.50 is sort of the average, but where you land in the second half '20 will obviously be a better point to what you'd hoped to do in FY '21. So again, just interested to see how the 2 halves construct around that average of $11.50 or a bit above?

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Philip Wiese, Huon Aquaculture Group Limited - Deputy CEO [18]

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The -- it will depend a little bit on our harvest profile. But the '18 year class go right through into the third quarter. So because of that, you end up with a similar profile first and second half, but it definitely comes back in the second half. But you're really only getting the benefit of the '19 year class in the last quarter of the year.

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Paul Buys, Crédit Suisse AG, Research Division - Head of Research and Director [19]

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Okay. That makes sense. And the last one, just a quick one. So you mentioned, obviously, the new bank facilities completed during the half and more flexible covenants, et cetera. It looks like you're -- from what I can see, your covenant is 2.75x and you finished a bit above that at 2.9x. I mean I assume that's not an issue otherwise you would have flagged it. But just kind of looking to get a bit of color there in that regard in terms of sitting above covenants as that balance sheet does?

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Philip Wiese, Huon Aquaculture Group Limited - Deputy CEO [20]

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The covenant up for 30 June was 3x. And at the moment, it drops down to 2.75 beginning with September quarter.

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Operator [21]

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(Operator Instructions) Your next question comes from Michael Peet with Goldman Sachs.

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Michael Peet, Goldman Sachs Group Inc., Research Division - Executive Director [22]

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I just had a couple of follow-ups, if I may. Just on CapEx since you've mentioned averaging $40 million. But just wondered, is it going to be a little bit higher than that this year?

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Thomas Haselgrove, Huon Aquaculture Group Limited - CFO & Company Secretary [23]

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No, Michael, we'll probably, if anything, be a little bit below $40 million.

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Peter Bender, Huon Aquaculture Group Limited - MD, CEO & Executive Director [24]

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It's mainly maintenance CapEx now with most of the projects finished out in one of the feed barges.

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Thomas Haselgrove, Huon Aquaculture Group Limited - CFO & Company Secretary [25]

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Yes. And a bit of a capacity building as well. So that's why I'm saying, if anything, it will be below $40 million.

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Michael Peet, Goldman Sachs Group Inc., Research Division - Executive Director [26]

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Okay. And sorry, I just missed that export percentage on the mix?

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Thomas Haselgrove, Huon Aquaculture Group Limited - CFO & Company Secretary [27]

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Yes. It's somewhere between 20% and 25%, Michael.

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Michael Peet, Goldman Sachs Group Inc., Research Division - Executive Director [28]

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25%. Great.

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Operator [29]

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There are no further questions at this time. I'll now hand back to Mr. Bender for closing remarks.

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Peter Bender, Huon Aquaculture Group Limited - MD, CEO & Executive Director [30]

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Okay. Thank you. One thing I'd encourage everyone to take away from this briefing is growth plans for 2020 are not affected in any way by the results of 2019. The groundwork for what we expect to deliver in 2020 and 2021 was laid more than 2 years ago as part of their investment, the infrastructure and innovation. And that is what will drive a growth in revenue and profitability beyond the current year.

Thank you, everyone, for joining the call.