Morning, ladies and gentlemen. On behalf of the board, it is my pleasure to welcome you to the Bisalloy Steel Group annual general meeting. My name is David Balkin, and I'm the Chairman of the Board. Allow me to begin by introducing my fellow directors and the management team. In the room, we have our non-executive directors, Michael Gundy, Ian Greenyer, and Bernie Landy. Rowan Melrose on my right, who's Managing Director and Chief Executive, and Carl Bowdler, Chief Financial Officer and Company Secretary, and Matt Embom, our Chief Operating Officer. Also in attendance today are the Company's Auditors, Ernst & Young Australia Partners, represented by lead partner Louis Quintal. I also welcome Paul Lutonsky, representative of the company's share registry, Computershare Investor Services. It is past 11:00 A.M., and the company secretary advises me that we have a quorum present. I now declare the meeting and the poll open.
Now, let me start with some procedural matters. The notice for this Annual General Meeting was circulated to shareholders within the required period. There are no objections. I would like to move that the notice be taken as read. Only Bisalloy shareholders or their duly appointed representatives or proxies are eligible to vote at this meeting. Voting on all resolutions at today's meeting will be conducted by way of a poll, to be held at the end of all the items of business. Being a virtual meeting, we are unable to meet with you in person today. I would like to thank those shareholders who are joining us via the Computershare Meeting platform. The agenda for today's meeting will be as follows. We will proceed with the formal matters to be considered at today's AGM.
We will conduct a poll, after which we will close the formal part of the meeting. Finally, there will be an opportunity for questions or comments. Shareholders and proxies can submit questions at any time. To ask a question, select the Q&A icon. You may enter a selected topic from the drop-down menu to which your question relates and type your question into the text box. Once you have finished typing, please press the Send button. Please note that while you can submit questions from now on, they will not be addressed until the relevant time in the meeting. Please also note that your questions may be moderated, or if we receive multiple questions on one topic, amalgamated. Voting today will be conducted by way of a poll on all items of business. If you are eligible to vote, press the Vote icon.
The resolution will be activated with voting options. To cast your vote, simply select one of the options. There is no need to hit a Submit or Enter button, as the vote is automatically recorded. You will receive a vote confirmation notification on your screen. Shareholders in attendance by Computershare Meeting platform that have already submitted a vote by proxy should note that your votes will already be counted towards the poll. You do not need to lodge another vote unless you wish to change your proxy instruction. You can change your vote up until the time I declare voting closed. Please note that the online voting portal is open and will remain open until the poll is declared closed. Your votes must have been submitted prior to the poll being closed for them to count. The results of the poll will be notified to the ASX.
Published on Bisalloy's website following the meeting. A copy of the meeting transcript will be available on Bisalloy's website. At this meeting, there will be four items of business with three requiring shareholder resolutions. Each resolution will be proposed and voted on as a simple majority to be carried. As well as those shareholders present here today, the holders of 19,262,265 ordinary shares, or 40.1% of the company's total issued share capital, have sent in valid proxies. Immediately before a vote is taken on each resolution at today's meeting, I will announce the total number of valid proxies received for that item and the manner in which those proxies have been directed. These figures will be as at the closing time for receipt of proxies, which was at 11:00 A.M. on the 4th of November 2025. That is two days ago.
In my capacity as Chairman, I will vote all available undirected proxies in favor of each item of business. Before the main business of the meeting, Rowan Melrose, our Managing Director, and I, would like to address shareholders in relation to the company's progress in 2025 and our objectives going forward. Copies of our presentations to shareholders have been lodged with the ASX. Let me start with my comments.
For the second year in a row, we are having to hold our Annual Meeting remotely because our business continues to be targeted by protesters who want to stop Australian trade with Israel, and who seek to end our 20+ year business relationship with several leading Israeli companies. We stress again that the plate we supply to these companies is sold under license, approved by the Australian government.
That the quantities we supply are insufficient to make the heavy weapons we are accused of abetting. It is extremely disappointing that we cannot guarantee that the officers we conduct our Annual Meeting from will not be damaged or disrupted by these protesters, and that the safety of those attending cannot be assured. This morning, we announced another special dividend of AUD 0.164. The company has built up a substantial reserve of Franking credits, which are only valuable to our shareholders and can only be monetized by paying dividends. This special dividend is paid from earnings we have already generated, and we are confident that its payment will not constrain our growth objectives. I would like to confine my remarks about our business to six key topics. First, past year's earnings are significantly skewed to the one-off AUKUS "plate testing program".
That is largely complete and has demonstrated that our plate is performing well. Steel supply into global opportunities presented by the AUKUS program, while unconfirmed, remains a long-term goal for Bisalloy. Two, the growth in our Protection Plate Business demonstrates the critical importance of product diversification for all our stakeholders. Our Wear Plate Business is directed at and dependent on the mining industry, which is cyclical. In the last 12 months, we have seen how the cyclicality has reduced the demand for Wear Plate in Western Australia in particular. It is pleasing that we've been able to grow our Protection Plate sales to compensate for this Wear Plate decline. Three, our 14-year joint venture with Shandong Steel, established to market and sell Bisplate in China, is a consistent contributor to our earnings. We see significant opportunities to continue to grow Bisplate's share of the Chinese Q&T market.
Which will benefit both ourselves and our joint venture partner. Our partnership with Shandong is also allowing Bisalloy to grow its sales in international markets. Shandong's state-of-the-art mills at Laiwu and Rizhao produce Bisplate under license using Australian iron ore and coking coal. Number four, Shandong's cost of production enables Bisalloy to compete internationally. Their cost of electricity is a third of the cost we pay in Australia, and gas for our major U.S., competitor is also a third of ours. These are examples that support the statements of BlueScope leadership that such significant differences in energy costs are and will threaten the viability of heavy manufacturing in Australia unless federal and state governments support much higher levels of domestic gas production in the near future. Number five. Our OPTIWEAR® sensor development initiative is progressing very, very well.
Originally born from our ambition to create smarter steel for traditional applications of our Wear Plate. This initiative has uncovered significant additional opportunities across the mining production value chain. Trials at multiple mine sites have confirmed the reliability and functionality of our Sensor Technology for all applications we have tried. Our intellectual property position is strong. We expect to commercialize this product within the next 18 months as we finalize design, functionality, and installation protocols for each application. My final point relates to our corporate governance philosophy. Here I want to make two points. First is that we believe that substantial management and director shareholdings are the most powerful levers we have to align interests with our shareholders. The second is that we are committed to recruiting and promoting the best talent we can for every role in our company.
We believe these principles are and have been key contributors to the company's financial success. Since this board took over five years ago, when our share price was AUD 1.30. In addition to the more than a tripling of our share price. We have declared AUD 1.25 of fully franked dividends in this period. If you're satisfied with these outcomes, we ask that you vote your shares directly, rather than let third parties whose interests may not be aligned with long-term shareholder value creation vote on your behalf. We are proud of the progress we have made, and even prouder of the people driving it. Our success is built on the dedication, the skill, and the energy of our employees, the strategic and operational vision of our executive team, and the stewardship of a results-driven and forward-thinking board.
We also extend our sincere thanks to our loyal and supportive customers and shareholders. Your continued confidence empowers us to build a better, more profitable business. We look forward to the year ahead with optimism and determination, confident in the strength of our foundations and the opportunities that lie before us. I now would like to ask Rowan to make his remarks.
Thank you, Mr. Chairman, and good morning, everyone. It's a pleasure to welcome you to the Annual General Meeting of Bisalloy Steel Group. As David has mentioned, during this year, we have again been impacted by regular protest action from the pro-Palestine lobby in Wollongong. At times, crowds have exceeded 100 people, been very disruptive to both Bisalloy and other local businesses, and have caused property damage.
As a result, Bisalloy has upgraded physical security, added additional lighting and cameras, and worked proactively with local police and our workforce to minimize the impact the protesters have on our operations. It is regretful that we again are forced to hold the AGM virtually. However, our priority, as always, is on safety. We remain hopeful that next year we will be able to revert to a physical or hybrid AGM. In the 2024-2025 financial year—sorry, the 2024-2025 financial year—was another period of solid performance marked by strategic progress and resilience across our global operations, despite a range of external challenges. At the core of our success remains our ongoing commitment to health and safety. I'm proud to report another year of zero harm across our international operations in Indonesia, Thailand, and China, each now exceeding 11 years without a lost-time injury.
In Australia, we completed the full year without a first-aid injury, and our all-injury frequency rate has halved, underlining the maturity of our safety culture. While we did record two LTIs during the year, we remain resolutely focused on building safer, more supportive workplaces. We also advanced our environmental agenda, continuing our progress towards carbon neutrality by 2030. We have engaged external partners to explore technologies and practices that reduce our environmental impact, and we remain fully compliant with regulatory standards, often exceeding them through our own internal commitments. Domestically, our Australian business faced headwinds, particularly in Western Australia, following the suspension of BHP's nickel operations and a broader softening in the iron ore sector. These were partly offset by improved demand for gold, significant growth in armor and protection plate, and by progress in our involvement with the AUKUS Submarine Steel Program.
Elsewhere in Australia, performance remains steady and broadly in line with expectations. Our international joint ventures and subsidiaries continue to deliver strong contributions. The Chinese joint venture achieved year-on-year growth despite a challenging market. In Thailand, revenue and profitability improved due to a favorable product mix, and in Indonesia, solid execution and strong customer relationships helped overcome continued import license restrictions, delivering a positive result. At a group level, overall volumes were marginally down, but revenue held steady and profitability improved, driven by a favorable product mix led by armor and protection and excellent contributions from our international operations. Looking ahead, we are focused on three key growth initiatives. Firstly, expanding our presence in China and Southeast Asia through our CJV. Secondly, building global momentum in our Armor and Protection segment through dedicated resources and process optimization.
Finally, advancing the commercialization of Bisalloy Digital Solutions and, in particular, our OPTIWEAR® Sensor Technology, where early trials with major mining customers have been very encouraging. We anticipate this business will become profit-generating within the next two years. Since year-end, we have experienced the impact of mine shutdowns in Queensland as a result of royalty changes, and we have had to respond to an unexpected production shutdown at the BlueScope Plate Mill in October by bringing forward purchases of marine feed. Offsetting this, we continue to see continued growth in our armor and protection order book. Despite these challenges, the ongoing disruptions in the global environment and in the absence of one-time gains, we remain optimistic of continued solid results, albeit softer than FY 2025.
In closing, I would like to sincerely thank the entire Bisalloy team for their hard work and our customers and partners for their ongoing trust and support. With strong foundations in place, we are confident in our ability to deliver sustainable long-term value for all our stakeholders. Thank you, Mr. Chairman.
Rowan, thank you. Okay. Now I'm going to move on to the business of the meeting. Item one. The first item of business is the consideration of Bisalloy's Audited Financial Statements and related reports for the year-ended 30th of June, 2025. The Corporations Act requires that audited financial statements and related reports for the 2025 financial year be laid before the meeting. I now declare that these reports, which were made available to shareholders on the 30th of August, 2025, have been laid before the meeting. Although shareholders are not required.
To formally vote on the company's financial and related reports. I would welcome any decision, discussion, or questions related to them. The company's auditor is Ernst & Young Australia Partners, and Louis Quintal. The partner responsible for the company's audit, is present at the meeting today and is willing and able to answer any questions on the conduct of the audit or the contents of the auditor's report. Are there any questions, Carl?
Not on this motion. There are some questions for the end, but not for this one.
I'm advised by the auditor that no relevant questions for their attention were received prior to the meeting. Are there any questions or comments on the company's financial reports for the year ended 2025? None? There have no questions been received.
If there are no further questions, I ask that the Company Secretary report that the Audited Financial Statements and related reports for the year ended 2025 have been received and considered by shareholders. The next item of business is Resolution One. It is a non-binding resolution to adopt the company's remuneration report, which is set out in the company's 2025 annual report. The Resolution appears on the screen, and I will take it as being read. Are there any questions on this Resolution? Okay. There are no questions. We've received none. Also appearing on the screen are details of the valid proxy votes on the Resolution. I formally put the Resolution to the meeting. As mentioned earlier, this Resolution and all other Resolutions will be voted by way of a poll. You can vote if you want to, but the voting will only close at the end of the meeting.
I will now move on to Resolution T wo. The next item of business relates to the re-election of Mr. Bernard Landy, on my left, as a director. Mr. Landy was appointed to the board on the 1st of March, 2022, and last re-elected by shareholders on the 19th of October, 2022. His qualifications, background, and experience are summarized in the notice of meeting. We are extremely pleased that Mr. Landy agreed to join our board in March 2022. Mr. Landy is an experienced executive with 40 years of steel industry experience spread across Australia, Southeast Asia, and China. It goes without saying that the board fully supports formally electing Mr. Landy as a director. The Resolution appears on the screen, and I will take it as being read. Are there any questions on this Resolution?
There is one question from Mr. Stephen Main addressed to Bernie. Could the only director up for re-election today, Bernard Landy, comment on how he feels about the fact there are no female directors for Bisalloy Steel? Has this caused a protest vote against Bernard's re-election, and has our largest institutional shareholder, Samuel Terry, taken issue with the lack of diversity in our board? Will there be a female director up for election at next year's AGM? We've got a few more.
Okay. I'll comment, and I'll support what the chairman said earlier in the meeting about the approach to talent, recruitment, and retention in Bisalloy. Bisalloy has no biases against gender and selects both executives and directors on the basis of talent, regardless of gender. I don't believe that rules out any future selections of females onto our board should a vacancy arise.
Let me add, as I said last year, this is a younger board. Most board directors spend 8-9 years on a board. This board only came into existence five years ago. I think the directors are doing a great job, and there's no intention of changing them for a period of time.
On the other questions, I'm not aware of any adverse commentary from shareholders about the composition of our board.
Okay. Appearing on the screen are the details of the valid proxy votes on the Resolution. I put this Resolution to the meeting by way of poll. Resolution Three. Approval for the issue of share rights to our Chief Executive, Mr. Rowan Melrose, under the LTIP program. This item of business seeks shareholder approval for the issue of share rights to Rowan Melrose under the company's Long-Term Incentive Plan. ASX rules require that any rights or shares issued to a director need to be approved by shareholders. The Resolution appears on the screen, and I will take it as being read. Are there any questions on this resolution?
No.
There are no questions. On the screen are the details of the valid proxy votes on the Resolution. I formally put this Resolution to the meeting by way of a poll. That concludes the Resolutions to be voted on today. As noted, we are conducting a poll on the resolutions. Please remember that to record your vote, you should be able to see a green tick confirming the vote has been received. I would like to advise that voting on the Resolution will close shortly. I will provide you all with a few moments now to allow you to finish voting. Please complete your voting now. It appears as though the voting process has been completed. I therefore declare the poll closed.
Rather than keep you waiting for the result. As I said earlier, I propose to close the meeting at this point. The results of the poll will be notified to the ASX and published on Bisalloy's website following the meeting. Now, we have a short opportunity for some general questions. I'd now like to take questions from the floor.
Okay. I have three questions, two from Mr. Stephen Main and one from State Guild Chair. I'll read Mr. Chairman's question first. We congratulate Bisalloy on yet another 100% dividend payout year. We understand the attention to ensuring the payout does not constrain growth objectives. Your comments on the relevant considerations on reinstating the DRP would be appreciated.
Do you go ahead?
Sure. What I will say about the DRP scheme along with dividend payouts is this board looks at all of its armoury around capital requirements and capital allocation. As we've seen 3x a year. At this stage, the board has decided to continue to suspend the DRP, but that will be reviewed again in time for the next dividend announcement, which is likely to be early next year. Okay. The second question from Mr. Stephen Main. Sorry. What caused the 19% protest against the CEO's LTIP grant? And the question is, did a proxy advisor recommend against, and what was the issue?
Want to comment?
Do you want to go through the response? That's the whole thing. There's probably another answer for you. Get viewed as normally. That's a good answer.
We acknowledge the perspective of there were two proxy advisors, ISS and Glass Lewis. They both had concerns about some of the disclosures related to our STI and LTI targets. However, we believe that disclosure of targets is prejudicial to the commercial interests of the business. Given the small number of competitors in our Q&T model. We further note and agree with ISS that the company's remuneration practices are in line with market standard. We note that the rights which vest depending. Depend on achieving a target. ROIC, with 100% vesting on achieving the ROIC, and no rights vesting if actual ROIC is less than the target ROIC. Any rights to which the employee may become entitled upon achieving the performance criteria are still subject to being employed by Bisalloy for the whole performance period. The LTI target has been set to ensure that minimum acceptable performance conditions are met across the industry cycle before any benefit is received from LTI performance rights. As such, it protects shareholders during the low points in the industry cycle.
Ensures that there is no additional benefit when macro-economic conditions result in strong performance conditions, which would unduly benefit participants. It is important to note that even though LTI vesting levels occurred, target performance levels are met, the actual LTI opportunities remain below peer group company levels in value. We believe that ROIC is a key value driver in a capital-intensive business such as Bisalloy and is the appropriate measure to assess the efficiency of Bisalloy's use of assets and equity. Our rolling three-year target is set to exceed the performance relative to industry peers and is in excess of Bisalloy's cost of capital over the industry cycle. While an ROIC measure is used in both the STI and the LTI plans, the STI plan focuses on rewarding the achievement of shorter-term returns, and as such, the target is revised each year once the annual budget is approved.
The LTI plan focuses on rewarding longer-term performance and for capital projects that will generate returns over the long term. The LTI ROIC threshold represents the minimum acceptable level of ROIC performance over a three-year performance period and has been set at a level materially above the long-term performance of Bisalloy. However, the organization targets and has outperformed the three-year rolling threshold since FY 2023.
One more question from Mr. Stephen Main, which asked, "How many full-time equivalent staff do we have? Are we expecting that to fall with the rollout of AI?"
How many people on equivalent staff?
in Australia? Seventy-five?
Seventy-five.
In Australia?
Yeah. So seventy-five people in Australia. I think to answer the question, I think we're always looking at how we can improve and how we can be more efficient. That is everything through automation, through the factory, whatever steps we can take. Although we do not have anything planned at this stage, something is always on the agenda and always something we will consider. We made significant change three years ago where we let 25% of the workforce go, and we have not dropped our production efficiency. It is our role to continually assess that and monitor.
There is no plan. There is no plan because of AI.
It is a topic that we discuss, and it is a topic that we talk to engineering about. It is a topic we talk to maintenance about. It is a topic we talk to IT about. I mean, it is in everyone's wheelhouse to understand AI and what the potential benefits will be. Yeah.
There are no further questions.
There are no further questions. Thank you all for attending. This concludes the business of the meeting. Once again, thank you all for joining us today. Sorry you couldn't be able to join us in person. I now declare the meeting closed.