Ann: DEVO Project - Final Investment Decision, page-34

Thanks EmptyTrolly, been nice chatting on FinTwit about this too!

Couple of things to note from my calculations:

• Thank you for picking up on the NZ construction - I have added that in to Biogass for FY22 based on ~$4m of pro rata contracts in that period.
• DEQO is included in there already under FY23 Biogas based on their timeline. So I think you may have double counted that.
• $100k p/a of EBITDA is included in their for O&M. Arguably, as more 3rd party infrastructure comes online this could increase, but I don't think it would be material.
• Timeframes are limited by their capital availability, so I appreciate being more aggressive but unless they build quicker, it's unlikely they can bring forward the FID. The reason for this is that they have only so much capital, and once the infrastructure is built only then can they get loans. They won't be issuing more capital as per Hamish Jolly's comments.
• CleanTech may grow revenues quicker than my estimate - I am happy to be conservative. But their margins will likely drop. So the bulk of their EBITDA margins are coming from their own energy. When they don't have enough, they have some third party agreements with solar/wind farms which is lower margin. When they don't have enough power to meet their customers need after that, then they are buying mixed energy (green and brown) from the open market - where they could actually be losing money. So any additional growth in revenue not met by their existing energy supplies may not materially impact the growth.

I'm OK to be more conservative - and to still be really bullish using conservative figures. The optionality is where the big gains will be made: more infrastructure asset recycling, expanding 3rd party options particularly in smaller scale / disconnected systems (think remote farms), and most importantly expanding the potential kerbside organic wastes such as with Yarra Council that they are currently bidding for.


P.S> Estimated 13% IRR over 10yrs at 22c even with only 5 years of development included; you could get +10% IRR on 32c per share which would be my hurdle.