At the investor update via teleconferencing, CFO Mr Paul Lewis...

At the investor update via teleconferencing, CFO Mr Paul Lewis said that QUB did not just make acquisitions for financial reasons but also for cost and revenue synergies. QUB prefers to negotiate bilaterally with vendors and thus try to ensure that any business acquired was after suitable due diligence, and that the transaction did not involve excessive goodwill. Vendors were often not able to grow the business as QUB ought be able to.

Potentially, with the Moorebank monetisation proceeding, QUB may be able to declare a special dividend or have a share buyback.

The Moorebank IMEX (import-export) rail terminal came in for much questioning from analysts as it only achieved 18000 TEU (container) volume in FY 21. QUB said given the approval by the NSW Government of A-Double trucking licences ("an announcement that blindsided QUB a bit, and was not in line with the policy of transferring more freight to rail"), IMEX would now be a longer journey. NSW Ports has invested in rail at Pt Botany.

However in FY 23/FY 24, volumes by rail through IMEX should increase: more road congestion (assuming people return to offices!) and higher road transport operating - through motorway tolls - costs were some factors that would make Port Botany to Moorebank transfers of containers by rail cost competitive, along with the FY 23 completion of stage two of rail works at the port. It was already advantageous for Moorebank warehouse clients (who will come on board in time) to use rail not road.

Grain and other agricultural volumes continue to be very positive, aided in part by bulk movements by rail ex Quattro facilities at locations such as Coonamble, NSW. For grain exported in containers, 'triangulation' of import containers has helped drive efficiency. Customers (as in handlers or even graingrowers) decide whether exports will be containerised or moved in bulk hopper wagons. QUB can do either (although from memory, it lacks a large rail hopper wagon fleet).

QUB has ample liquidity. Strong cash conversion of underlying earnings.

There continues to be a dispute with MIC re Moorebank construction, but in fairly guarded terms, QUB said that MIC was 'wanting to be sure all its requirements are met' as once completed, it has to deal with two parties not just QUB. Discussions are continuing. There is a contractual requirement to complete Stage 1 of the Moorebank interstate terminal, so works for it are a priority.

The BlueScope contract may see greater volumes handled by QUB than with previous operator Pacific National. QUB wants to build up teh steel trains with (mostly) loaded container wagons. (This may be difficult given the existing length of some steel trains, and maximum Australian Rail Track Corporation permitted train lengths).

Shipping lines are experiencing delays, and sometimes if a ship was scheduled to make port calls at three ports in Australia (such as Botany - Sydney - first, then Melbourne and finally Brisbane - it may miss one port to regain time, but Mr Digney did not know the extent of landbridging by rail. He said QUB would watch this over the next two to three years to try to establish if it was merely a temporary COVID-19 situation or permanent.

QUB has received a large Federal Government grant to build diesel fuel storages at Pt Hedland, WA and Pt Kembla, NSW. The answer was a little confusing as QUB referred to a 'feasibility study'. If built, these will serve QUB petroluem industry customers.

Overall QUB believes the next 12 months should be positive but COVID-19, to state the obvious, introduces uncertainties.