Hi team,

Further to the email last week on the Fuel Crisis.

The latest numbers show the increase in fuel costs per month to the company is now approx. $400k per month and rising. We are now paying more than double what we were at the start of March and it continues to increase. It is not only fuel that is increasing in cost but this is our major focus right now that we can all impact in some way.

I want to reinforce that the issue for us is not a supply issue, we are fully committed to continuing normal operational levels in our business on productive work. It is a cost issue. To help combat the rapid cost increases, we need hyper vigilance around our fuel use.

To help drive this we expect the following;

LIGHT VEHICLES

Unnecessary travel is stopped wherever possible

This can be achieved by;

  • Opt for teams meetings instead of face to face travel where possible
  • Rationalise light vehicles driven to site – for cost, and optics, reasons
  • Managers have been tasked with working with teams to reduce light vehicle use on sites over the coming weeks – i.e 4 people to a ute, use of vans etc
  • We are assigning more pool cars for use to limit the need for people to use personal cars or if asked to park up their normally assigned vehicle
  • No travel outside of region without Exec level approval in advance
    - NB; Personal travel outside of region will require approval, and provable reimbursement of payment of fuel costs (I,e goes out full, comes back full)
  • Personal use of vehicles within region is by exception
    - NB; Personal use of vehicles during a weekend will require provable reimbursement of payment of fuel costs (I,e goes out full, comes back full)

Improve efficiency of travel when travel is necessary

  • Driving vehicles at or just under speed limits, and smoothly, can save 5-15% in fuel use
    - NB: Vehicles are being monitored through E Roads– best performance for individuals and teams will receive rewards, poor performance will be followed up on
  • Utlise Hybrids ahead of 100% fuel vehicles where possible
  • Reduce weights in vehicles, check tyre pressures, remove roof racks etc (10% plus in fuel efficiency gained)
  • Rideshare whenever possible during work
    - NB: Largest reductions / savings in fuel use for teams and individuals will be rewarded, poor performance will be followed up on

HEAVY VEHICLES / PLANT

  • Improve efficiency wherever possible
  • Cut idling to a minimum (can save 10-30% fuel use)
  • Utlise the right machine for the task
  • Remove unnecessary items / remove inefficient plant from site where possible
  • Make use of full loads – i.e Truck and Trailer vs Truck only
  • Reduce use of mini tippers
  • Operate and drive as efficiently as possible
    - NB: Most Trucks and Plant items are being monitored through E Roads– best performance for individuals and teams will receive rewards, poor performance will be followed up on

FUEL SECURITY – Stop fuel theft

  • Ensure all plant and sites are secure as possible to deter opportunist theft
  • Bring all mobile fuel storage back to locked yards at the end of each shift

Paying attention to, and implementing these basic actions, is the only way we will reduce our fuel costs without putting in more restrictive measures. We are not at that point yet.

However, if we cannot achieve meaningful savings, OR COSTS CONTINUE TO INCREASE, we will need to make more restrictive decisions quickly.

POTENTIAL FUTURE INITIATIVES

  • A portion of light vehicles parked up until further notice (ALL STAFF LEVELS)
  • Forced carpooling
  • Van use
  • Working from Home options considered for some roles where productivity is not impacted

Lastly, the main Road Show topic of 12-24 months ago was “SAVE 2%”, this message is more relevant now than ever before. Anything you can do to reduce waste, improve efficiency, and therefore reduce costs will have a meaningful impact as we work through the unprecedented cost increases we are experiencing as a business. Many of which cannot be passed on to customers.

Senior Management are fully aware of these expectations and are expected to support all in the business to help drive these efficiencies where possible. This needs to be a daily discussion across all teams around what can be done.

I will update weekly on progress we are making, recognise and celebrate the wins we have, and raise where we can be better.

I appreciate this isn’t a positive message (when there are many positives in the business as well), but this message is very necessary. I need all to take it seriously and do what we can to reduce the impact.

Regards,

Jeremy Dixon

Chief Executive Officer