Incitec Pivot Ltd T.IPL

Good Q call

[Rakaposhi]

Just listened to the Q call. I think they did a good job. Chris' underlings are very confident and composed when answering. Most questions on HPC. Some of the numbers ($150M for Covid) were estimates that seemed aggressive. I think they underestimated the start-up costs as the construction was only $100M off. It's clear that if the storage business would have been sold (apparently it was a week or two away), we would not have had a dividend cut as the other debt instruments well cover what is needed for HPC. No impacts on volumes from producers or estimated slowdowns, so no risk to the core business from Covid. Storage likely to be sold in the next few years but not urgent at the moment. HPC partner most likely scenario for some financial relief. I don’t think they are looking for a chemical company per se. Even a good investor taking half the risk off the books would be good. They seem comfortable operating it by themselves. Long term you have to believe in what they are doing I suppose. So in short, if Covid hadn’t happened, we’d have storage sold, dividend intact and HPC a few months late and a bit over budget, also in part to Covid. Seems reasonable.