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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Thank you for standing by, and welcome to the Capral Limited FY '22 Results Investor Webinar. [Operator Instructions] I would now like to hand the conference over to Mr. Tony Dragicevich, Managing Director and CEO. Please go ahead.
Good morning, everyone. Welcome to Capral's full year results presentation. I'm Tony Dragicevich, the CEO of Capral, and I'm joined this morning by Tertius Campbell, our CFO.
It's pleasing to be able to share with you a strong set of financial results for the 2022 year. Before we go into the detail, I'd like to do a quick introduction to the capital business for those of you that are here first time.
So on Page 2 of the presentation, we have a summary of our business. Capral is Australia's leading supplier of aluminum extrusion and rolled products. We're the largest extrusion manufacturer in Australia with 6 manufacturing plants; 8 extrusion presses, producing an annual capacity around 65,000 tonne. We're also Australia's largest importer and distributor of aluminum rolled products. And together with our extrusion products, we distribute aluminum through 8 trade distribution centers -- sorry, 8 distribution centers and 14 trade centers nationally.
Our key markets are residential building, commercial construction and a variety of industrial segments. And around 25% share of the Australian market turnover in the last 12 months, it's a bit under $700 million. Total assets, $450 million and over 1,000 employees.
Okay. Let's turn to the agenda for today. I'm going to run through the financial highlights for the year. Tertius will run through the detailed financials and then I'll come back and talk about our high-level strategies and outlook and guidance for 2023.
So turning to the next page. Just in summary, our full year highlights. Capral reduced a record full year underlying earnings driven by improved sales mix from growth in high-value sales channels and higher productivity from investments in our manufacturing facilities, and in particular, the restructuring that was undertaken in Bremer Park, our largest manufacturing site from 2019.
In 2021, we saw demand to reach extreme levels driven by housing market and import supply chain disruption, bringing more supply back on to local manufacturing. So we started off 2022 with a huge order book, and we delivered a record first half as a result.
Demand has softened or did soften in the second half of 2022, but remain pretty solid, and we will discuss detail later about the balance of the year.
Okay. So let's turn to Page 5 and run through the performance highlights for the year. Very pleased to present a record result, a second consecutive one for Capral. And this one was achieved on 71,800 tonne, which was 6% lower than last year.
However, our sales revenue driven by record high aluminum prices lifted 17% to a bit over $690 million, producing an underlying EBITDA of $62.2 million, which was up 10% on last year, and I said, driven by improved sales mix and margin in particular.
Underlying EBIT of $40.8 million, up 13%, and all that delivering an underlying earnings per share at $1.96 per year, up 9% on 2021. This allows us -- allowed us to declare a final dividend of $0.50 per share fully franked, taking our total dividend for the 2022 year to $0.70 per share.
Strong balance sheet with net cash at the end of December at $24.9 million. Our net tangible assets per share at $9.14 a share, up 40% on the same period or same time last year. And we're very proud to announce an exceptional safety performance for Capral in 2022 was only 4.3 total reportable injury frequency rate, well down on the same period last year and well below the peer average for other building products, listed building products companies of 9.8, so an exceptional year on the safety front for Capral.
Now turning to Page 6 to talk about our sales channels and industry exposure. Hope to start at the bottom left of that slide. Capral volume is split between Extrusion and Rolled Products. So Extrusion is clearly at 85% of our total volume, our main product line, which we manufacture here in Australia.
We also import aluminum rolled, which is thick and plate to support our -- particularly our industrial sales business. So our channels to market in the last 12 months, 56% of our volume went directly from our extrusion plants to our large customers.
The balance of our volume was 64% -- sorry, the 44% of our volume went through our distribution centers, of which extruded aluminum made up 29% of our total volume and rolled product 15%.
One of the big changes this year and one of the reasons for our improved profitability is that we put more volume through the higher value channels, in particular, our distribution volumes increased to 29% of our total volume as opposed to 26% for 2021.
So that's a lift. Extruded aluminum made up 29% of our total volume and roll product 15%. One of the big changes this year and one of the reasons for our improved profitability is that we put more volume through the higher value channels, in particular, our distribution volumes increased to 29% of our total volume as opposed to 26% for 2021.
So that's a lift in volume to our building systems and our industrial -- direct industrial channels, which helped lift our overall margins and profitability for the 2022 year.
In terms of industry exposure, clearly, the residential housing market at 46% is the largest single driver of volume in our business. However, commercial construction represents 11%. But the industrial markets at 43% of our total volume are also a significant part of our business.
The key markets here for us are transport, marine and a number of other manufacturing sectors. In terms of our volume seasonality, unusually in 2022, our second half was lower than our first half, but our first half of the year was a record year, driven by very strong and buoyant housing markets through 2021.
But relative to other years, you can still see that the second half of 2022 produced good volumes. In terms of our volume seasonality, unusually in 2022, our second half was lower than our first half, but our first half of the year was a record year, driven by very, very strong and buoyant housing markets through 2021.
But relative to other years, you can still see that the second half of 2022 produced good volumes. So overall, for the year, volume was down 6%, and that softer volume was primarily came out of reduced volume to other aluminum resellers and solar rail distributors who returned some of their share back to imports as those supply chain problems eased.
And overall for the year, volume was down 6%, and that softer volume was primarily came out of reduced volume to other aluminum resellers and solar rail distributors who returned some of their share back to imports as those supply chain problems eased, also the softer housing market, partially offset by ongoing infrastructure investment and commercial projects.
Okay. So turning to Page 7, where we speak about the residential market, which is our largest individual segment. So the residential market has slowed from its record high of dwelling commencements in 2021.
The latest estimate, and we've obviously they're very close to being published at 190,000 starts in 2022, down 18% on the previous record high of 2021. When you see that graph on the right-hand side of the page, the green part of the graph or the dark green represents stand-alone detached housing.
The light green represents multi-res low rise, and the blue bar represents multi-res high-rise. Capral's volume is mainly aligned to detached low-rise dwellings, which obviously the green shaded bits in that graph and you can see there quite stand out that 2021 was by far and away a record year for the key volume drivers of our business.
That came -- those starts have come off in 2022 and the latest forecast for the December forecast received from BIS Oxford suggested that the 2023 numbers would be -- remain reasonably steady to 2022 dwelling starts that remains to be seen.
But you can clearly see here that the housing market has come off. It's highs, which were driven -- or record highs in 2021, which was driven by, obviously, the lower interest rates and net year, government incentives and they really saw a real kick on into that market. And that pipeline of work is continuing as we speak today and will last at least into the second half of the 2023 year, but their pipeline is emptying out.
So turning to the next slide. We just want to showcase a couple of featured projects that our products ended up in or aluminum extrusions ended up and in the 2022 year. So top left, the high-end residential home with windows and doors that were produced -- windows and doors produced by using Capral extrusion.
We are the exclusive agent for Schüco in Australia. Top right-hand is a log cabin in New South Wales utilizing Capral commercial window and door systems.
Bottom left, the Tasman Parliament Square in Tasmania, a commercial building produced by one of our large fabricators down there, CWD Custom Windows using Capral commercial curtain wall.
And bottom right hand, the Houston Center at the Victoria, one of our very important customers, BT windows down to Victoria, using Capral commercial window designs and Capral extrusion. So just some examples of some of the featured residential and commercial projects products featured in 2022.
So turning to the next page, when we address the industrial sector, which is also the second largest and a very big sector for Capral. As you can see there, our volumes slowed in the second half of 2022, but still remains strong relative to prior years.
Now most of that volume drop or all of that volume drop in 2022 was a reduction in volume to both solar rail distributors and to other aluminum resellers. Our sales and volumes into our core end-user customer base, both marine, industrial construction, general manufacturing and transport continued to be strong in 2022. And we see that sector remaining pretty robust in the year ahead as well.
On the right-hand side of that page, we talk about the transport market, which is our single largest industrial market. And you can see there that the bottom of that page of the graph representing new truck and van builds for 2022 was a record year. And all of our large truck building customers have a pretty full order book right through 2023. So that's a positive sign for that industry.
So just turning to the next page, where we highlight some recent Capral industrial projects, just to give you some idea of the vast array of industries that Capral's industrial products can end up.
So top left-hand corner is a playground equipment produced by customer of ours in Queensland called and they produce, right throughout Australia, a number of playgrounds, children's playground utilizing aluminum in the manufacturing process.
Top left hand -- sorry, top right-hand corner, HSP our Victorian customer producing and in this case, for a range of 4x4 vehicles throughout Australia.
But on left-hand corner is a recreation vessel produced by one of our large customers, Kirby Marine. And bottom right-hand corner, we just spend a little bit of time here. Vawdrey, our -- one of Australia's largest truck body builders in Victoria our Victorian customer, producing ute lids and in this case, range of 4x4 vehicles throughout Australia.
This year, Capral has developed a crafted with Capral series of 5-minute videos in print media, showcasing some of Capral's key industrial customers. This material or these videos and print media are used by us for both digital and print marketing.
And we now have a video -- one of those videos, and this is only a shortened version of it. So it's certainly one I think about a 90-second video, just to give you an idea of what we do with our crafted with Capitan series, and this is like now to introduce Vawdrey, the owner of Vawdrey Australia.
[Presentation]
That is a short extract of our cut -- one of our crafted with Capral case studies to give you some insight into some of our marketing materials and also inside into one of our largest industrial customers in Australia Vawdrey. So I'd like now to hand over to Tertius Campbell, our CFO, to run through our full year financials.
Thanks, Tony, and good morning, everybody. I agree with Tony. It's a very pleasing result indeed. Capitan delivered another very strong performance. Our integrated value chain benefited from the lower but still a relatively high volume, good asset utilization, strict cost control and disciplined capital expenditure. Overall, the key financial outcomes for the year were strong earnings, a solid balance sheet and a comfortable cash position.
If you turn to Page 12, the profit and loss. You can see that Capral's underlying EBITDA at $62 million was 10% better than prior year. The 6% lower sales volume had a $2.6 million negative impact on our earnings. However, the higher LME price of aluminum combined with better mix and some improvement in our margin led to a revenue growth of 17% on last year, delivering a bottom line improvement of around $12 million.
The relatively high demand ensured good utilization of our production and our warehouse facilities, providing ongoing operational leverage. These gains were, unfortunately, partly offset by the inflationary impact of around 4.5% on our nonmetal costs, around costing us about $ 8.7 million.
Cost savings and other efficiency projects delivered around $4 million to address some of these inflationary impacts. So meaning the underlying EBIT of EUR 40.8 million, a 13% improvement on last year. In line with the expectations of sustained strong future earnings, Capral recognized an additional deferred tax asset of $8.4 million during the year, leaving our net profit after tax of $40.8 million, just shy of $2 million below last year's which is mainly due to the negative LME revaluation of $2 million.
The underlying earnings per share, $1.96 per share grew by 9%, supporting the payment of a final dividend of $0.50 per share.
Turning to Page 13. Capral's overall financial position remained strong, and we ended the year with a net cash position of $24.9 million on the balance date. That's after accounting for a few trade loans.
Receivable levels remained elevated due to the higher LME despite excellent metrics on days outstanding below last year at 48 days. In addition, the high-rolled stock, combined with the rebuild of our low extrusion stocks done at record metal prices, increased inventory by $25 million.
Our overall working capital requirement increased around $47 million year-on-year and is expected to moderate over the next 6 to 12 months, obviously, depending on sales levels and aluminum input costs in 2023.
Capral has a balance date around just over $8 million in credits available for distribution, of which $3.8 million will be distributed with the dividend next month. A further $ 130 million accumulated tax losses are still available for deferred tax asset recognition in future periods.
Turning to Page 14. Our cash earnings was impacted mainly by working capital increases, as explained this has led to low but still positive operating cash flow.
In addition to the $10 million spend as planned on the CapEx program, as outlined earlier in the year, $12 million was returned to shareholders through dividend distributions during the year.
Various short-term loans were entered into to fund the increased working capital. Most of these have been repaid with the remainder to be repaid as cash debts released from inventory and receivables over the next 6 months.
In closure, the final dividend of $0.50 per share will be paid in September. The Board has decided not to activate the DRP for this distribution. Tony, that basically covers most of the financials. So back to you.
Thank you, Tertius. I will now move to the next page and talk about, at a high level, our strategy and then our outlook for the year ahead.
Okay. Major focus has been for the last 3 or 4 years is to drive the return on the investments that we're making and to keep improving our long-term competitive position. So our 3 key pillars are building on our strengths, optimizing what we do and growing for the future.
So in terms we turn to Page 16. In terms of our manufacturing operations, we will continue to focus on process improvement programs in all our extrusion plants the Smithfield plant we acquired at the beginning of 2021 is now running -- when we acquired, it was running on 1 shift and had been for many, many years.
Now it is currently running at 3 shifts, and we continue to improve and bring that plant up to Capral's productivity standards. But Bremer Park, our largest manufacturing facility based in Queensland, which underpin a significant restructure in 2019, we continue to focus on process improvement in that plant and deliver greater returns.
Throughout our manufacturing operations, we do spend around $4 million to $5 million worth of maintenance capital per year to ensure the ongoing reliability and efficiencies of our clients. extrusion presses have a very long economic life around 30 to 35 years, providing you look after the properly, which we do.
We're progressively upgrading our shop floor control systems to a common platform, a very modern platform, which helps us become more efficient and improving our productivity around all of our manufacturing operations. So just over half of our plants have been upgraded, and the final couple of plants will be done this year.
In January, last month, we completed the first stage of the upgrade of our Penrith extrusion plant, rebuilt the press, replaced all the hydraulics in the plant, plus all the electrical, low-voltage and high-voltage systems, a significant project take place over 8 weeks, shutdown at the end of November and up and running last week in January and successfully commissioned and operational, as we speak, back to 3 shifts running and almost back to full production levels today. So a massive undertaking by the capital engineering team and the tremendous result and a real asset for the business going forward.
The second stage of that project is the new billet furnace, which will be around $1 million capital investment, which will take place over the Christmas period later this year.
Our distribution business during 2022, we reduced our new wind-down door product range and a new system software. That's been very well received from the market. We look forward to growth in that area of our business in the years ahead. We enhanced our product range by the purchase of the edge, high thermal performance window systems range from a Victorian competitor aluminum industries.
We've made that acquisition around midyear, and we continue to develop those products into the future is as high demand for better performing from a thermal perspective, window systems throughout Australia, particularly the colder climates.
We installed a new paint line in a New South Wales distribution center in the final quarter of last year is currently undergoing commissioning, which we expect to have it up and running in the next 3 or 4 weeks. This is the first time that Capral will have a paint line in New South Wales, and that will help deliver a better quality, better service and also reduced freight costs and getting painted product to our customers in New South Wales.
Our overall goal has been for a number of years is to grow Capral's direct distribution channel that's both through our distribution business and directly through our manufacturing plants as well. That will deliver higher value and margin to capital this organization. In terms of sales activities, just spoke about our Crafted with Capral videos and print material.
We continue to invest in technology to improve our sales effectiveness. We are doing another upgrade to start another upgrade process to our website and redeveloping our eStore to ensure they remain at the leading edge of digital marketing and digital presence. And we continue to seek opportunities to expand our regional footprint.
We've recently acquired 2 trade centers, 1 in North Brisbane and 1 in add to our extensive trade center network throughout Australia. Just in terms of some of the key markets, solar is a very, very big market, but it's very competitive. The number of extrusions limit are very small. Therefore, they're high volume. Traditionally been the domain of imports, Capral and other local extruders did pick up a share of this market through COVID when supply chains were disrupted, and we are fighting hard to retain a share of that market.
Defense Capral is an approved supply to major defense projects, and there's a number of those being undertaken with both offshore patrol vessels and submarines coming up.
Cladding systems. We work with a number of cladding system suppliers to address the new fire standards and recleaning opportunities that are becoming available in the market and those opportunities are currently presenting.
In terms of imports and antidumping. Capral, as you all know, has been at the forefront of leading the fight against dumped aluminum extrusion in Australia now for over a decade. Our focus will be this year in terms of retaining the market share gains against imports, particularly on large end-user industrial customers that we took back over the last few years. We will continue to fight the fight for fair trade on behalf of the overall aluminum extrusion industry in Australia.
We've appealed the decision to discontinue measures on Malaysia and Vietnam, and that's currently under review, and we've applied for a variable measure review on Chinese imports, which is currently underway. So we're looking for an increase in the dumping duty rate on aluminum extrusions out of China.
We have measures in place through to 2025, but we have the ability to review the rates midway through that process, which we've undertaken
So turning to Page 17 and just talk about our sustainability platform and what we're doing within our business at Capral. We developed an active Sustainability Committee in 2020. We set a target of net 0 by 2050, and we've developed our road map to achieve it. Our focus is on the 4 main pillars, which is minimization of energy waste and paper in our organization. And we've also developed an ethical purchasing policy, whereby all of the products that we produce, we ensure come from ethical suppliers.
During 2022, I'll just run through some of the highlights, it would be quite a number this year. We entered into the first ever scrap recycling arrangement with an Australian smelter that was with the Tomago aluminum smelter in Newcastle. And we're looking to double the amount of volume being recycled through that agreement in 2023.
We've invested in solar energy on our Campbellfield site and that investment is currently producing around 15% of the site's energy consumption. We replaced all of the high bay warehouse in our huge Bremer Park facility, reducing our energy consumption on that side quite significantly.
We have joined the Aluminum Stewardship Initiative, which is an international certification body focusing on aluminum chain of custody, and we'll be undertaking an auditing process to achieve that chain of custody certification in March of this year.
And that combined with our introduction of low-carbon aluminum which I'll talk about in a minute that will help us in the market in terms of being able to provide lower carbon aluminum options to the customers.
We've also joined MECLA, which is materials -- which is a local organization standing for Materials Embodied Carbon Leader Alliance, and this is really around reducing the amount of carbon and the built environment in Australian construction and using -- particularly for us using more sustainable aluminum in those projects.
So late in 2022, we introduced LocAl green and LocAl Super Green, which is a recycled and hydro-sourced aluminum, hydro power source aluminium as lower green -- sorry, lower carbon aluminum actions across Capral's locally manufactured extruded products.
And together with ASI certification, which we hope to have in the next few months, we'll be able to provide customers with that lower carbon alternative. In addition to those initiatives, we also had the manufacturing plants, introduced variable speed drives and the pro of the upgrade, reducing that plants energy consumption by 20%.
And we've also introduced latest generation multi-zone billet heating containers at 5 extrusion presses are reducing the energy consumption on those presses by around 15%. So quite a number of sustainability projects active within the business and that will continue in the years ahead as we head down the journey of net 0.
Turning to the next slide. Focusing on LME and aluminum costs. So metal costs hit record highs in the second quarter of 2022. And you can see on that graph there, which shows that evidently, well above previous highs and metal costs over the last 5 years. And probably -- and certainly, there was a record price here in Australia it in the second quarter of 2022.
So in addition to LME, the average billet premiums increased by 89% during the year due to a significant increase in smelter billet premiums at the beginning of 2022. In terms of LME, LME increased 20 % -- sorry, 22% during the year to AUD 3,900 tonne due to high global demand.
The international LME price impacted by global supply factors not the least of which Russias invasion of Ukraine in the beginning of 2021, which saw metal price or LME go on a run on the threat of sanctions being imposed on Russia, which is the second largest aluminum producer in the world.
Those sanctions did not eventuate. And LME started to slide back or come back a bit in the third quarter of the year and in the fourth quarter of the year and is now relatively stable. We do expect LME to fall in the second quarter and the second half of 2023.
But currently, as you can see, there's still a relatively high numbers compared to where it has been historically. And as Tertius mentioned, it's had a significant impact on our working capital requirement in the last 12 months.
Turning to the next page. And I'll finish up before we hand over to questions, and we'll talk about the outlook and our earnings guidance for 2023. So the residential building market, which has been well spoken about in the media is forecast to remain on par with 2022.
That may be a little optimistic. These forecasts were produced in December by being BIS Oxford. But with continual interest rate rises, that house -- new house sales are slowing and slowing quite quickly, and that will -- may see that pipeline of work start to tail off at the end of 2023.
We are, however, confident our other key markets, both commercial and industrial are expected to remain at relatively high levels throughout the year ahead. The reseller volumes, which we enjoyed in 2021 will remain subdued as those poor supply chains have normalized, but we will retain our share of the business that we've won directly with large customers that came back from import supply to local the year ahead.
The reseller volumes, which we enjoyed in 2021 will remain subdued as those poor supply chains have normalized, but we will retain our share of the business that we've won directly with large customers that came back from import supply to local supply over 2020 and 2021.
As I just spoke about, LME records in levels in 2022. And -- but we do expect it to fall moderately in the second half of 2023. Inflationary cost pressures, as Tertius discussed, a short while ago, continue to impact, especially in the year ahead. with employee costs, which we're looking to manage quite carefully.
Energy costs, particularly gas prices have gone up significantly. Packaging costs, a lot of that -- we use a lot of timber in our packaging, and those costs have more than doubled over the past 12 months, and everyone will be aware of the -- certainly the high fuel costs driving freight costs up as well. So quite significant inflationary pressure is far and away and above what we've seen previously, have led us to announce a price increase on the first of February.
To recover these costs has been the highest price increase that we've announced certainly in the last 10 years, and we're working through with our customers to pass these increases on this year.
So absent any unforeseen events, we expect the -- forour EBITDA in 2023 to be in the range of $54 million to $58 million, slightly down on last year, which was a record year. And net profit after tax in the range of $26 million to $30 million, delivering an earnings per share between $1.46 and $1.69 per share.
Our working capital forecast is to return to more historical levels, increasing our free cash flow in 2023. Capital expenditure to be broadly in line with last year at $10 million. And on this basis, Capral would be in a position to continue the payment of dividends.
So I'll now throw back to Harmony for any questions that anyone on the call may have, we'll do our best to answer them.
[Operator Instructions]
Do we have any questions?
Nothing
Okay. Must be all very self-explanatory. Okay. It doesn't look like we've got any questions come through.
There's one.
Hang on, we do have one.
We just received the question. What has been driving up the billet premiums and what are the expectations for FY '23?
Okay. That's a very good question. The smelter billet premiums are set at the end of each year for the next 12 months. So our billet premium negotiations take place in November each year and they're set for the -- and the come into effect for the January to December shipments in the subsequent year.
So the billet premiums at the -- that we saw in 2022 were set in at the end of 2021 when there was a huge global demand for aluminum on the back of governments or certainly, governments and most of the world stimulate the economies post COVID.
So we saw base billet premiums go up dramatically. In fact, they more than double. That situation has changed in -- for this year. But what has kept premiums have changed somewhat, but they haven't come down to the extent that they've gone up. They've come off slightly, but high international shipping costs, at the time these premiums are being negotiated, have seen premiums come off slightly in -- for 2023.
But that is also -- but that's going to be offset by lower scrap recovery prices. So -- on balance, the net metal cost, if you take the slightly lower income down to the extent that they've gone up, that they've come off slightly but high international shipping costs at the time these premiums were being negotiated have seen premiums come off slightly for 2023. But that is also -- but that's going to be offset by lower scrap recovery prices.
So on balance, our net metal cost, if you take the slightly lower premiums, but the lower scrap costs we're going to get for our production scrap this year will mean that the overall impact of that will be pretty much neutral in the 2023 year. So hopefully, that explains it.
Next question is, what is the significance of the scrap recycling agreement? In example, where was your scrap going before this?
Okay. Another good question. All of the production scrap or all of the -- pretty much all aluminum being recycled for recycling in Australia is shipped offshore. Australia does not have any significant scrap recycling capability for aluminum in Australia. So up until this agreement, the vast majority of aluminum scrap was collected and shipped to Asia, in particular, and New Zealand. We shipped some of our to New Zealand for remelting and recycling.
This is the -- this agreement with the smelter is the first of this kind. We also hope to have a similar arrangement come into play with the Rio Tinto smelter, which is our major supplier, up in Queensland catch later this year.
So it is significant. It is -- it doesn't really generate us any additional income, but it is -- it's a move in the right direction in terms of our sustainability and allows us to also make available a greener or a super green aluminum product for available, recycled product available for sale to customers here in Australia.
Next question is, does higher working capital this year as a result of the higher inventory mean lower margins next year given the LME prices?
No. We've put our prices have been increased to reflect the higher cost of product in stock. And as you can see from our results in 2023, we've been able to recover those aluminum higher aluminum prices and maintain our margins and we expect that will continue into the year ahead.
Next question is, how are you likely to be placed for dividend franking, assuming you will be able to pay dividends going forward?
We have franking credits in place to see us through pretty much to 2023 dividend should they remain at current levels of dividend payment once those franking credits have disappeared or been used up then we will then we won't have any franking credits until such time as we've become a taxpayer again. And the fact as Tertius has mentioned, we've got $300 million worth of tax losses to utilize that there won't be any time soon. But we will be looking at other forms of capital management in 2024 and 2025.
How important is the volume of AI coming from Malaysia and Vietnam? And when do you expect the response on your appeal?
The response on the appeal is overdue. It's been pushed back until May this year, we will find out, which is disappointing. The antidumping commission is running months and months behind schedule in terms of its reviews because of resourcing requirements and the fact that it has been able to travel due to COVID to a number of these countries to investigate.
The Malaysia and Vietnam imports are a relatively small proportion of the imported volume. I think they make up less than 10% of the imports coming into Australia. So it's not overly material, but we need to be vigilant on all fronts in terms of antidumping because as we've seen in the past, when one door when we close one door another door can open. So currently, it's not a big impact, but we just need to be vigilant.
What's your plan around ESG in the years ahead?
As you can see from the presentation, we've been very active on this front over the last few years. Our biggest carbon footprint relates to the energy that we use in our manufacturing operations, and we can do so much in terms of becoming more efficient in our usage of electricity and gas by having more modern and up-to-date equipment to minimize the usage of those 2 forms of energy and rolling out solar on our facilities with our landlords as part of that.
However, we are largely dependent on the carbonization of the grid to move to that net 0 by 2050. So we're doing a bit. As you can see by all these initiatives we've got underway, not just an energy reduction, but also waste, managing waste as well. So we're very active.
There's no more further questions, Tony.
Okay. Thank you for those questions. I think they're all really good ones. I'd like to just conclude today's presentation with thanking you for your attendance and those of you that are shareholders, thanking you for your ongoing support. It's really satisfied to present such a strong set of results over the last 3 years in the last 2 years in particular, delivering outstanding profit results for Capral has done in the past. We know we've come off the back of a very strong housing market to stimulate the economy.
But -- we're confident the company is well positioned to withstand any downturn, which obviously there is going to be some in 2023. We're well-positioned the businesses is well managed, it's sound, and we've got very good foundations in place. So we're looking forward to the year ahead. It's going to be challenging, but it's one that we think we're up for.
So thanks very much for your attendance today and wish you all the best. Thank you.
Thank you.