Ricegrowers Limited (7H0.F) Earnings Call Transcript

Good morning, and welcome to today's Annual General Meeting. It's 10:00 a.m., and I've been advised by the Company's Secretary that we have a quorum and declare the meeting open. Please note the important notice and disclaimer on the screen. This can also be found within the presentation lodged on the ASX and the Rice website. Today marks the 72nd Annual General Meeting of Ricegrowers Limited. For those of you who haven't met me, my name is Laurie Arthur, I'm the Chairman. It's wonderful to be back here in Jerilderie today with our growers and shareholders. And I also extend a warm welcome to those that are joining us via the live webcast. Seated at the head table with me today are Rob Gordon, our Group Chief Executive Officer and the Director.

Good morning, everyone.

Dimitri Courtelis, our Group Chief Financial Officer; and Kate Cooper, our Company Secretary.

Morning.

Our other directors are also here, and I ask them to stand as I mention their names. John Bradford, Dr. Andrew Crane, Ian Mason, Jeremy Morton, Dr. Leigh Vial, Julian Zanatta and Luisa Catanzaro, who is standing for reelection today.

Good day, everyone.

Director Ian Glasson is also joining us virtually from overseas. Also with us, the President of the RGA, Rob Massina; and Executive Director, Graeme Kruger; and Rice Marketing Board member, Melissa DeBortoli. And I particularly welcome all our growers and shareholders. In terms of today's agenda, Kate will go through procedural matters next. Before I give my Chairman's address, Rob will then deliver his CEO presentation. After that, we will conduct the formal business of the AGM. We will consider the annual financial report, directors' report and independent audit report for the year ended 30th of April 2022. During that item, shareholders as a whole, will be given a reasonable opportunity to ask questions or make comments about the management of the company. We will then proceed to considering the resolutions set out in the Notice of Meeting before the AGM draws to a close. The B Class meeting will follow either at 11:30 or immediately after the AGM, whichever time is later. Once the results for today's meetings are known, they will be announced on the ASX and the SunRice website. I confirm that I am holding directed proxies in my capacity as Chairman of the meeting, and I will vote those proxies in favor of each resolution. I will vote all directed proxies in accordance with the directions provided by the shareholders. I'd now like to hand over to our company Secretary, Kate Cooper, who will explain how to vote and ask questions during today's AGM. Thank you, Kate.

Thank you, Chairman. Voting today will be by way of poll, and the resolutions in the Notice of Annual General Meeting are only able to be voted on by A Class shareholders. The vote on Resolution 1 and Resolution 2 are by ordinary resolution, which requires a 50% majority of votes cast to pass. In accordance with the constitution, if you are the registered holder of a shareholding of first A Class share or multiple first A Class shares, you're entitled to 1 vote in respect of that shareholding. And if you are the registered holder of a second day Class share, you are entitled to 1 additional vote. We will share with you the proxy and direct voting results of each resolution before you vote. Please note, voting will close once Link Market Services has collected the voting cards at the end of today's AGM. As communicated in the Notice of Meeting, online proxy and other forms of voting ahead of the meeting closed at 10:00 on Monday. A Class shareholders present at the meeting here today are, however, able to cast their votes using the voting card they received during registration this morning. Before we go any further, I just wanted to check that everyone present today is holding either a voting or admission card. Okay. A Class shareholders and their proxies, attorneys and representatives will use the yellow voting cards for each resolution. A Class shareholders who are not voting at the general meeting today, for example, in joint holdings, should be holding a blue nonvoting admission card for this meeting. B Class shareholders who are not also A Class shareholders are not able to vote at today's AGM and should be holding blue nonvoting cards, and visitors have been issued with red admission cards are not able to ask any questions today. Does anyone not have a card? Okay, great. A representative of Link Market Services will conduct the poll as returning officer and at the end of today's meeting, the Link team will collect your voting card. If you have to leave after the poll is open, but before the end of the meeting, please just leave your vote out in the poll box on the registration table out the front. And I should note that if you have previously voted by proxy, your votes cast here today will override your previous proxy direction. As the Chairman noted, there will be time for questions from shareholders. However, as with all shareholder meetings, I ask you to confine your questions or comments to the matters under consideration today. If you have any general questions or comments about the management of the company or any questions or comments relating to the annual financial report, directors' report or independent audit report, please ask your questions or make your comments during our discussion of those reports. If you have any questions or comments relating to the remuneration report or the reelection of Ms. Luisa Catanzaro, please ask those questions or make those comments during our discussion of the relevant resolution. [Operator Instructions] Thank you very much. And I will now hand back to the Chairman.

Thank you, Kate. It's really good to be here with you all today. Our first AGM held face-to-face in Jerilderie for 3 years. And it was pleasing to see so many of our growers at the Australian Rice Growers' Conference held in the Riverina earlier this month, which SunRice was proud to support. I also acknowledge those A and B Class shareholders and other valued stakeholders who are viewing today's Annual General Meeting virtually. We were pleased to see a return to strong financial performance in financial year 2022, with the company able to reward our A and B Class shareholders with a naturally determined paddy price and a total dividend, both at the highest levels in the company's history. The resurgence of Riverina rice production in the 2021 season to 417,000 paddy tonnes represented a near tenfold increase from the prior year's crop of 45,000 tonnes, our second lowest crop on record. This underpinned the return of Australian rice to our most premium markets and allowed the Rice Pool business to absorb its fair share of overheads, a significant turnaround from the prior year when the group absorbed a significant loss from the Rice Pool business due to under recoveries. That, coupled with the realization of benefits from strategic growth initiatives and continued leveraging of our multi-origin multi-price point capability, saw a strong financial performance with the group revenue for the year, also a record. We are now processing and marketing the recently harvested 2022 crop, which at approximately 688,000 paddy tonnes was the largest in 5 years. And as we look ahead to planting for the next Riverina crop, conditions are favorable. Water availability and water pricing are at the most optimal level for rice production in many years, which would underpin another large crop. We were pleased this week to announce an upgrade to the lower end of this crop year '22 pool range from $390 to $400 per paddy tonne for medium-grain Reiziq, and we are finalizing contracting and pool arrangements for the 2023 crop that will be planted from October onwards. This upgrade and the delivery of a record naturally determined pool price in crop year '21 of $428 per paddy tonne was achieved in spite of significant challenges, particularly in relations to global supply chains. Of particular note are the continued high sea freight and other manufacturing input costs. In financial year 2022, the company incurred approximately $34 million in unplanned and additional freight costs at group level, approximately $17.5 million of which was borne by the Rice Pool business. This impacted the final paddy price by approximately $50 per tonne. Despite efforts across our markets to recover at least part of the additional cost in the form of sale prices, these supply chain constraints prevented a higher pool price being realized in crop year '21. When I reflect on the past 10 years, it is evident how much SunRice has evolved. It almost appeared that after the devastating Millennium Drought, Riverina rice production would rebound to our old planning base of a little over 1 million tonnes. And while the 2013 crop was 1.16 million tonnes, 3 of the 9 crops that followed were severely impacted by reduced water availability. Fortunately, tough lessons from the drought had not been forgotten. And SunRice had already embarked on our multi-origin international rice sourcing strategy, and this continues apace today, with our Californian and Vietnamese mills as standard examples. This investment, [indiscernible] and flexibility has generally held our growth and our shareholders in good stead over the last decade. International markets require long-term investment and consistent supply of high-quality product. Short-term exit from these markets is not possible without a serious loss of market share. For our Australian growers and A Class shareholders, our multi-origin sourcing strategy has enabled them to weather production downturns when conditions allow, do what they do best and grow some of the finest paddy in the world. For our B Class shareholders, this sourcing strategy, combined with our other strategic initiatives, has enabled SunRice to reward them with consistent dividends, including the record fully franked $0.40 per B Class share total dividend distribution for financial year 2022. There are a number of important items being considered at today's Annual General Meeting. The Board is seeking support from A Class shareholders to adopt the remuneration report for the year ended 30th of April 2022 and also for the reelection of our Non-Executive Director, Luisa Catanzaro. Luisa was reelected at the 2020 Annual General Meeting for a 2-year term, which was done in order to stagger Board reelections so as to avoid having all 3 independent nonexecutive non-grower Directors being due for reelection at the same time. This aligns with best practice governance and ensures continuity on the Board. We will also hold a set B Class Meeting immediately following the conclusion of the Annual General Meeting where B Class shareholders will be asked to endorse a new Non-Executive Director Share Rights Plan. I will go into more detail regarding these resolutions later in today's proceedings. Going forward, we will need a suite of initiatives to help further derisk the business from the vagaries of the agricultural cycle. But we don't have all the answers yet. Our new bold medium grain variety, V071, which was released as part of its first large-scale commercial trial for the 2021 crop and data recently released by the New South Wales Department of Primary Industries showed that it out-yield all our predominant Reiziq variety in all regions. We will offer it again this coming season, along with the Reiziq and our other specialty varieties. And if this new variety continues to perform, it should help to enhance the profitability of rice production, particularly in the tougher years. This leads me to sustainability. When I travel around the Riverina, I see with pride our growers taking passing on their land to future generations in a better state than when they started to farm it. Our growers don't see that as a chore, but as a responsibility they embrace. Our SunRice sustainability strategy has similarly strong foundations, and Rob will outline some of the highlights from the past year shortly in his address. While Riverina rice production has pleasingly increased off the back of improved seasonal conditions, water availability and water pricing in recent years, this is not the time to ignore serious equity issues that continue to impact annual cropping industries access to water. We continue to pursue a range of strong advocacy initiatives in this space in conjunction with the Ricegrowers' Association of Australia. Another significant event in financial year 2022 was the decision of the New South Wales government to continue the structured marketing or New South Wales rice vesting arrangements for a further 5-year period through to the 30th of June 2027. I believe this decision acknowledges the freight scale advantage and export price premium SunRice has been able to generate as a consequence of the vesting arrangements. With these benefits able to be passed through to our Riverina growers in the form of higher paddy prices, thanks to the unique structure of our industry and company. The Board retained a strong focus on engagement with our A and B Class shareholders throughout the year. A significant program of grower consultation engagement with our growers occurred around the changes to our company's A Class Share criteria, which were approved at the 2021 Annual General Meeting. The Board has remained focused on 3 key objectives with these changes. Firstly, to encourage more consistent Riverina supply to maximize benefits to the company; secondly, to reduce the Board's discretion in managing the A Class share register and lastly, to stabilize the A Class share register. The changes to the A Class share criteria were designed to achieve these objectives while ensuring continued alignment of our A and B Class shareholders, not causing any value shifts between our 2 classes of shareholders and being in the best interest of the company as a whole. The Board has been pleased to implement the new structure this year, allowing a second A Class share to be issued to some of our more consistent growers. Over the last -- over the past week, 225 new A Shares have been issued to our growers, and we are continuing to talk to a number of individual growers as we close out our review of the applications received this year. The second A Class share is intended to recognize our consistent growth in a way that is fair and objective so as to avoid growers looking to acquire additional A Shares through family members or companies. Under the new structure, one of the key principles that the Board will not generally -- is that the Board will not generally issue more than 2 A Class shares directly or indirectly to any individual person, and we have been mindful of this principle when exercising the Board's discretion under the constitution to issue A Class shares. I would encourage all rice growers who meet our delivery quotas to apply for their A Class share, to have a say in the direction of the company, the fact that we as growers control this company is something that remains very dear to my heart. The other important changes approved at the 2021 AGM was a further reduction in the size of the Board to better align the Board's size with best practice. I acknowledge Gillian Kirkup, who stepped down as a grower Director of the SunRice Board in December 2021 as part of this reduction of the Board -- of the size in the Board. Gillian served as a Grower Director on the Board since 2005 and made an immense contribution not only to SunRice, but to the broader Australian rice industry. During the past year, the Board has also overseen an external review of the Board's skills and composition and a refresh of the skills matrix, a realignment of the role and responsibility of the Board's committees and the review and refresh of the risk management framework. I'd like to acknowledge John Culleton, who this month concluded his appointment as the Chair of the Rice Marketing Board of New South Wales. I thank John for his support of the New South Wales rice industry during his time as Chair, and welcome Victoria Taylor as the Acting Chair of the RMB. Victoria has a long-standing connection with the Riverina rice industry and a strong understanding of our position in complex world rice markets. The SunRice Board looks forward to working closely with her and other RMB directors. I also thank the President of the Ricegrowers' Association of Australia, Rob Massina, and the RGA more broadly as well as SunRice's strong management team and my fellow Board members. I look forward to working collaboratively to ensure the continued success of our company into the coming year and into the future. I'd now like to invite our Group CEO, Rob Gordon to speak. Thank you. Thanks, Rob.

Well, good morning, everybody. Thank you very much, Laurie. And it's a delight to see everybody here today. It's the first Annual General Meeting for SunRice in person since 2019. And after 2 years of quite extraordinary challenges, including the dual impacts of Australian drought, COVID-19, an unprecedented disruption to global supply chains, I'm really proud that our business has bounced back so quickly and was able to deliver strong performance in financial year 2022. Your business delivered an outstanding result in the last financial year, which shows that we're back on track as the investment in line with our strategy over the past few years is starting to deliver benefits, as is the return of Australian rice, and the continued strength of our international rice supply capability. And while we still face an uncertain and dynamic trading environment, we believe that the business is well-positioned for financial year 2023 and into the future. Now before I step through our financial year 2022 highlights, I wanted to briefly show you this slide, which demonstrates how we've continued to transform your business from a renowned Australian company into a global food company, known for its high-quality branded products across multiple categories, channels and geographies, many with market-leading shares. Revenue, naturally determined paddy price and dividend were all at the highest levels in the group's history in financial year 2022 and net profit after tax more than doubled compared with the prior year. This outstanding result followed 2 years of near record-low Australian rice production, a period in which the company diverted resources to maintain supply of key markets with rice from other origins while still progressing investment in new acquisitions and other organic growth initiatives. I'll step through a few of the highlights. Group revenue was $1.3 billion for the year, up 30% on the prior period. Earnings before interest, tax, depreciation and amortization was $91.3 million, up 86% on the prior year. Net profit after tax was $48.7 million, up 167% on the prior year. And earnings per B Class share was $0.772, up 123% on the prior corresponding period. A record naturally determined pool paddy price of $428 per tonne for our popular bold medium grain was also delivered while fixed price contracts of between $475 to $625 were paid for some of our specialty varieties. And this improved performance allowed the group to distribute total dividends of $0.40 per B Class share for the year, inclusive of a special dividend of $0.05 per share, which was also a record. There were a range of key contributors to this strong financial result, including the return of Australian rice and the performance of some of our profit businesses as well as realization of benefits from the ongoing execution of our growth strategy. Australian Riverina rice supply increased to 417,000 paddy tonnes in 2021, up from the 45,000 paddy tonnes in the prior year. There were market share gains in microwave rice products, underpinned by our investment in onshore manufacturing capability and in-house innovation. There was a focus on containment of costs across the business and increases to sale prices and volumes to help mitigate external headwinds and we made investing cash flows of some $54 million, driven by strategic acquisitions and capital expenditure to maintain our core assets. Now this slide briefly shows the results of each of our segments. If shareholders would like to see more detail on any individual segment performance, this presentation and our more detailed financial year 2022 results presentation are both available on the ASX and on our website. Now before I step through some of the key deliverables against our growth strategy in the year, I wanted to take a step back. Now while we've seen record performance across a number of key financial metrics in financial year 2022, what this slide shows is our financial performance through the cycle and highlights a number of longer-term, indicators demonstrating how we've transformed the earnings of the business away from being exposed to the Australian agricultural production cycle to being positioned in a diverse range of industries and markets with leading consumer food brands in core categories. How we've consistently delivered dividends to our B Class shareholders while maintaining a strong and flexible balance sheet to fund growth initiatives, and of course, the support for the Australian rice industry through drought, and the benefits of prompt access to high-value markets when Australian rice returns. And finally, the benefit of having invested in SunRice shares versus the Australian share market over the last 10 years. Now if you look at the top of the graph in the top left, you can see how earlier in this 10-year time series, the dark gray columns, which are the Australian crops, were closely tied to the overall group revenue. In recent years, we can see that even when Australian production fell away dramatically due to drought, our top line was largely maintained due to investment in diversification of earnings base into non-rice categories and the performance of our international rice supply capability. The bottom left shows that while profitability was impacted, we remained profitable and then the top right shows that we continue delivering consistent dividends through this entire cycle. And the bottom row shows a total shareholder return of 443% in the 10 years from the 1st of May 2012 and to the 29th of April 2022. And this compares to an ASX 300 Accumulation Index return of just 154% over the same time period. We've also invested $151 million in capital expenditure in the business in the 5 years since financial year 2017, and a further $113 million in strategic acquisitions aligned to our growth strategy in that same 5-year period. Our approach has been focused on optimizing returns for both classes of our shareholders. And to complete the picture, we've also paid out approximately $2.2 billion in paddy price payments to our A Class shareholders and other Australian rice growers in the 10 years since 2012. Now this disciplined approach has established solid foundations for the SunRice Group and position the business ideally to pursue still larger growth opportunities ahead. We continue growing the global demand for our branded rice products, which now exceed the volume supply capable from Australia, and this has allowed us to do a couple of things. We continue to meet global demand with other international sources when Australian production is impacted by drought. And we've adopted a good, better, best model where we use our multi-origin supply capability to meet demand in approximately 50 global markets at multiple price points with your Australian rice always sold in our most premium markets when it's available. Now this strategy allows SunRice to supply our customers and consumers with high-quality rice products at different price points, highlighting the complementary nature of our multiple supply chains and of course, supporting continued growth into the future. We've also continued investing in our growth strategy, including through the difficult years. Our core focus in recent years has been acquisitive growth of our profit businesses with transformative and value accretive investments in our CopRice and Riviana Foods businesses being key highlights. Other examples of execution of our growth strategy in financial year 2022 included the acquisition of Pryde's EasiFeed business in the high-value branded equine market, which is already contributing strongly at both the top and bottom lines of the CopRice segment. We also continue to develop our internal innovation capabilities, leveraging our brands and deep insights with consumers to launch products which meet global food trends, an example of which is our new -- our best yet microwave rice range. And of course, ongoing integration of acquisitions from the prior years like KJ&Co Brands, which we purchased in financial year 2021 and which is delivering transformative earnings for Riverina Foods. We've built significant capability in mergers and acquisitions in recent years, maintaining a pipeline of strategic and organic growth opportunities, which continue to be actively assessed against our financial investment criteria. Our people are critical to the execution of this growth strategy and their effort and dynamism was a key aspect of our ability to successfully navigate a range of challenging factors over the last few years in particular. We engaged our employees across the group in financial year 2022 and refreshed our purpose, vision, mission, values and behaviors, and we're implementing a range of specific initiatives to attract and retain all of our key talent. Now sustainability remains at the heart of our business and remains integral to how we create value for our stakeholders. We continued making significant progress during the year against our sustainability strategy, including the finalization and adoption of specific targets underneath each of our 6 priority areas, and they are water efficiency, climate resilience, waste reduction, resilient communities, respecting human rights and food security and quality. We also finalized the climate scenario workshops and analysis and released our detailed response to the recommendations of the task force on climate-related financial disclosures. And importantly, we continue delivering for our communities, donating close to 500,000 meals to those in need and investing over $1 million in community organizations. Now as we progress into financial year 2023, we are still expecting top line revenue to build. While the last financial year finished strongly, this one has started with worsening inflationary pressures on key business inputs and costs, and continuing volatility and disruption to global shipping, which is placing pressure on earnings. In the last year, the company has incurred approximately $34 million in unplanned and additional shipping costs at the group level, approximately half of which was borne by the Rice Pool business. And put another way, this increased cost per paddy tonne by about $50 in the last year alone. And despite efforts across our markets to recover at least part of the additional costs in the form of sale prices, this increase in shipping costs still impacted the final CY '21 pool price. And of course, the Ukraine crisis has led to a step change in the cost of products from Europe for our Riverina business. We remain focused on recovering these additional costs, and we'll continue to do so progressively throughout this coming year. Against that backdrop, the continued resurgence of Australian rice, coupled with our multi-origin multi-market international rice supply capability has SunRice well-placed to benefit this year from an environment in which many key markets are undersupplied, which is largely due to the impact of severe drought on a number of Northern Hemisphere rice growing regions. The Riverina crop of approximately 688,000 paddy tonnes recently harvested is underpinning a positive expected contribution to both classes of shareholders through strong returns in the Australian Rice Pool business, and favorable input costs to our profit businesses, again demonstrating the complementary nature of our business model. And of course, we're again expecting another large crop to be planted due to continuing strong seasonal conditions. Now we've built a diversified portfolio and maintain balance sheet strength and flexibility, which means we are well placed to take advantage of further expansion opportunities either organically or through further acquisitions. And the continued execution of our sustainability strategy remains a core priority for financial year 2023, with all business units now pursuing individual sustainability plans aligned to our new group targets and ambitions. We've acquired value-accretive businesses which are supporting growth and diversification of earnings and our capability in international rice supply, together with the return of Australian rice, has your company well-positioned for financial year 2023 and beyond. I look forward to working with all of our important stakeholders to continue delivering value in the year ahead, and I thank you for your time today, and I'd now like to hand back to Laurie.

Thank you, Rob. As the formal proceedings are about to commence, I would declare the poll on each of the resolutions open. As Kate has just mentioned, for the purpose of voting, each A-class shareholder or their proxy, attorney or representative will have received 1 yellow voting card. Following the changes to our constitution at last year's AGM, if you are the registered holder of a shareholding of a first A Class share or multiple first A Class shares, you are entitled to vote 1 vote in respect to that -- of that shareholding. And if you are the registered holder of a secondary share, you're entitled to 1 additional vote. You will see that this voting card includes a space for voting on each of the resolutions. A Class shareholders may use their yellow voting card and place an X in the relevant for or against or abstained boxes for each resolution. All members have been provided with the annual report, including the financial report, directors' report and the independent audit report for the financial year ended 30th of April 2022. I note Mark Dow, partner from our auditing firm, PwC Australia, who's here with us today in Jerilderie, and available to answer your questions. Thank you, Mark. You have heard from both Rob and myself and Kate, are there any questions or comments in relation to these documents or any general comments or questions about the management of the company -- submitted by shareholders in today's -- in advance of today's meeting.

Thanks, Chairman. We have received 3 questions. The first question is from our shareholders, Lawrence and Tracy Watkins, and their question is, "I'd like to congratulate the team for the annual improvement in safety performance, a 55% reduction in lost time injuries and a 27% reduction in total injuries is to be applauded. However, both of these measures do not talk to what the focused effort may be to prevent serious injuries, occupational diseases and fatalities. What specific measures and initiatives are being implemented in this area?"

Thank you. I'd like to thank you for that question. And I'd like our CEO, Rob Gordon, to answer that question, please.

Thanks, Laurie. First of all, I thought it may be worthwhile just sharing a little bit of a perspective on these 2 particular metrics that were mentioned in the question. So in order to benchmark safety across different businesses, there's a rough ready reckoner of -- called lost-time injury frequencies. And essentially, what that means is that the number of people who are injured and not able to return to work for their next shift, record a lost time injury. And then we divide that by 1 million hours so that we get a rate, an injury rate. And the same is with the recordable injuries, which are those that are not quite so severe, but nevertheless still reported. Both those are real looking. They're after the event, if you like, and therefore, they're called trailing indicators. And they are already reckoner. What -- how we manage safety is somewhat differently, which is very much proactively and looking forward. So we have a top-down group strategy for safety, which is rolled out across the group and is common. And then each site is required to think through that strategy and what the particular hazards are on their own site. And then to adopt a tailored strategy that is most pertinent to the hazards on their site. Managements are all required to do leadership walks and those leadership walks are recorded and there's a compliance rate against those. All of our staff are required to do safety walks where they look to identify either unsafe work practices, behaviors, equipment condition and then report those. And then any hazards that are identified through that process are closed out at a given time frame, and then we measure whether they're done on -- they're closed out in a timely manner. And all of those leading indicators of how quickly we close out those, whether people have done their safety walks are all recorded. And I'm pleased to say, even though we don't report it in the annual report, that all of those are trending very, very positively indeed and have contributed to the improvement in the trailing indicators. Further, we then look for particular areas to do a deep dive. And in this last year, we've done a deep dive on our chain of responsibility. That's anybody who provides transport services to us and whether they are doing that in a safe manner. We've also looked through fatigue management. So whether we're asking our employees to work hours that are extended and, therefore, may enhance or make the risk of them being injured higher and, therefore, then do something about that. And we've also done training around forklift trucks because powered mobile plant often is involved in accidents. So there's a range of different measures, metrics and training that are put in place. And then to cap that all off, we've recently in the last year, sought accreditation to a new ISO Standard 45001 and have now got 80% of all of our sites globally accredited to that standard. So I think it's a very comprehensive plan, and all of it can only be effective if we have the engagement of our workforce. And that, I think, has made the strongest, most important change through the business where that culture of engagement and everybody being involved has driven the improvement in safety.

Thanks, Rob, and it's certainly a priority issue for the Board. Kate, are there any other questions?

Yes, Chairman. The second question is from a shareholder, Dr. Patrick Meneley, who asked, "What market power does SunRice have to counter inflation creep of cost for its sales to maintain margins?"

Thanks. I think that's an excellent question for our CFO, Dimitri Courtelis.

Thank you, Chair. As has already been called out, we experienced about $34 million of inflationary pressures in the prior period. That's above our base plan that we were expecting to incur last year. We do have a portfolio of some very strong brands right across the world, whether it's Sun White and the Middle East, Trukai, SolRice, Island Sun across the Pacific and, of course, KJ&Co, Always Fresh and the Toscano brands in the Riviana portfolio. So we've tried to take price where possible, but it's not a one-for-one exercise because these inflationary pressures are unprecedented and rather severe. And of course, the seal, the sole and exclusive export license has significantly helped because we've been able to generate about $20 million in an export price premium that we've been able to get back to the pool in revenue. And that's -- if you look at the last 10-year period, added up to about $450 million in export price premium and a price scale advantage, which has also added up to about $60 million over that same period. So between cost control, the growing portfolio of brands that we have in the wider business. And of course, the seal. This is all added to try and avert the inflationary pressures that we've absorbed. And this theme is expected to continue into the current year as well as has been called out in our outlook statement.

Yes. Thanks, Dimitri. Kate, I believe we have an additional question.

Thanks, Chairman. The final question is from Mr. [ Oliver Moffitt ], and he has asked, "What is the company currently doing to reduce its detrimental impacts on the environment? And what else can the company do to be more sustainable?"

Thank you. Rob, I like you to answer that one.

Thanks. I think everybody associated with the Australian Rice Industry understands that we are one of the most sustainable rice industries anywhere in the world with yields for our popular varieties at more than double global average and water usage, half global average. However, we do understand that sustainability covers a number of different areas. And you'll see in our annual report that there are 6 areas that we've identified where we can make a substantial difference and the work would also benefit the company and all of its stakeholders. There's a lot of detail and a lot of targets in the annual report and on our website. I would highlight that there's a couple of areas that I think we can make a very substantial difference in, and they are around water use efficiency being the first. And those of you who are at the recent Rice Conference would have heard the launch of a new rice breeding program, which has a very aspirational target of lifting the yield per mega liter of water from an average of about 0.8 tonnes per megaliter now to 1.5 tonnes per megaliter, on average for the industry by 2027. It is indeed a very aspirational target. But nevertheless, the industry is investing heavily behind it. And this new rice breeding program being put in place to achieve that. Connected to that is that we're looking to reduce our carbon footprint and have stated a goal of net zero by 2050, at the latest. The reason that we've made the 2050 at the latest but also then underpin that with some metrics for achievement by 2030 is that our carbon footprint falls into 3 major buckets. First ones are called Scope 1 and 2, and they're effectively the carbon footprint generated by our operations, then the carbon footprint generated by power and energy that we consume off the grid. And thirdly, called Scope 3 of the carbon footprint of people who are our suppliers. And we have a responsibility to work with our suppliers to minimize that as well. We will be making significant inroads into reducing Scope 1 and 2. In other words, those impacts of our -- from our activities and facilities largely through efficiency drive, doing things differently and also purchase of renewable energy. And then on the Scope 3, which may take longer is to really model the amount of carbon that's generated from all of our suppliers, and that includes rice growing, and then work to find different practices to try to reduce the carbon footprint from those suppliers. Importantly, and this is why it's linked, changed farm practice is already evident across the Riverina in drill selling, delayed permanent water and those activities actually aim to already reduce the carbon footprint. And if we can bring more coal tolerance through the breeding program, then we can actually further that work and reduce the carbon emissions from rice growing in total. So if people are interested in more detail than I just provided, that is in our -- on our website and in the report and covers all of the other areas of those 6 priorities.

Thanks, Robin. I would like to congratulate the growers we have here today because it's quite evident the incredible advances you've made over the last 10 years in relation to sustainability. So well done by you all. I don't think we have any additional questions from guests -- all right. Thank you. I'd now like to invite questions, comments from shareholders present with us today in Jerilderie on the Annual Financial Report, Directors' Report and the Independent Audit Report. I'd also like to remind you that this is the portion of the meeting to ask general questions or comments about the management of the company in general. So I invite you all to ask some questions or some of you may like to make a comment about the general nature of the business, the management of the company? Feel -- yes. I think it's -- yes, Cliff. If you could just let us know, for the benefit of everybody, who you are, Cliff.

Yes, I'm [ Lucky ].

Sorry, Lucky, sorry.

Yes. Sorry about that.

I do apologize.

I hear always great results, but I'm wondering about if we look back to the Ebro days to today, our growth from $1 billion to $1 billion is something -- is still about the same, the revenue is about the same. Why don't we have a more commercial ambitious drive in management to make the company bigger? In 10 years, we should have been able to grow from $1 billion to $2 billion. It seems to me that we're very focused on compliance, and we're very focused on sort of a farmer's mentality of year-by-year handling what the season does, but we should be a global company and growing globally and therefore, growing well. So my question is why aren't we more aggressively commercial?

Thank you, Lucky. I think that's a very good question for our CEO to answer.