STL Operational Update to QCGO Board & Policy Council

Mark Gray - Chairman

David Quinn - Chief Executive Officer

19 July 2022

Topics of Discussion

  • Introduction to STL
  • Operational Update & 2022 Crush
  • Storage & Handling Agreement Update
  • Infrastructure Investment
  • Focus for the Future

Introduction to STL

  • Role: receival, storage and outloading of raw sugar on behalf of customers
  • Listed NSX entity, owned 2/3 by growers, 1/3 by millers
  • 7 member Board (includes 3 independents including the Chair)
  • Current share price: $1.03
  • Market capitalisation: $370M
  • Share price growth since NSX listing (2004): +329%
  • Share price growth since change to new operating model (2017): +20%
  • Average returns to shareholders (last 5 years): +12.3% (15.8% when allowing for franking credits)
  • Written-downvalue of assets: $331 million
  • Replacement value of assets: $2.2 billion

Operational Update and 2022 Crush

  • All BSTs open for receival & outloading with first sugar received late May 2022
  • Overall storage volumes in BST's just prior to 2022 Crush were at ~ 20% (lower than normal)
  • Reflection of strong sugar demand and pricing
  • Discrete Covid outbreaks at sites being managed without disruption to receival or outloading
  • As at end June circa 8% (~300K) of the nominated 2022 crush has been received
  • Nominated volumes are up ~7% as compared to 2021 crush actuals
  • Almost all Sugar Mills now operating
  • Strong shipping schedule planned for July & August 2022

Storage & Handling Agreement (SHA) Update - Process

  • One SHA single document applies to all 6 STL customers
  • Previous SHA commenced 1 July 2018 and expired on 30 June 2022
  • Option to extend previous agreement not exercised by 2 parties, necessitating negotiations with all parties on terms of a new agreement
  • Due to competition principles, STL required by law to negotiate individually with all customers and ultimately eventual outcome must then be applied uniformly across all 6 customers
  • Discussions commenced with each customer in October 2021 and a series of 'negotiating principles' adopted. Clear and transparent timetable established and maintained by STL
  • 5 separate drafts of the new SHA produced over 5 months along with detailed supporting information and concessions made by all parties (including STL) on multiple fronts to reach agreed terms
  • STL clear from outset that receiving and outloading of sugar from the 2022 Crush would continue, irrespective of SHA outcome - no disruption to industry

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Sugar Terminals Ltd. published this content on 29 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2022 08:04:13 UTC.