Ann: DEL Enters Landmark Collaboration Agreement with Brickworks, page-133

No, I have no information related to VIC1 Stanhope construction. However, in the 1H22 report they did note that there is a

@Bestshares999 - the question of cash flow on EPC contracts and the infrastructure division is really important. My general belief is that I do not feel the cash flows from near-complete projects will be sufficient. Access to finance is crucial.

Looking at the most recent cash flow statement, one can see that net outflows was $9m vs cash balance of $4.5m.. add in the $6.1m cap raise, and we're talking $10.6m available cash without any financing. Not enough. But that's not the full story..



Delorean had at 31 December 2021 around $3.2m of "accrued income" under their trade receivables - that's what I think you were referring to, the amount they have paid for contracts but yet to receive the money from the clients. However contrasting that, they also have $4.8m of "accrued expenses" under their trade payables - that's materials and whatnot they have received that they are yet to pay for. So actually they still owe $1.6m on those.

It's worthwhile looking at the one-off significant items from the report. The LGC Shortfall (~$600k) is a temporary non-cash write off now but should be reversed in 2024 if they get all their large scale generation certificates. Ought to be no issue there. The Ecogas project in NZ has a ~$1m non-cash write down due to delays - the client never asked Delorean to pay it, but it remains a liability, so hasn't impacted the cash flows but will need to be paid. The liquidated damages ~$600k is a concern, because it's for delays that the client could ask Delorean to compensate them for. My guess is this is for the delays related to the Blue Lake SA project (anyone know for sure?). While they are negotiating to not have to pay it, well it's in the contract so who knows what the outcome there.



The point is while those are non-cash, I wouldn't be assuming that we'll be getting a cash windfall from completed projects to fund the new pipeline at this point. The reality is that the margins were compressed due to covid (additional costs on the EPC contracts that couldn't be passed through, as well as the delays). This has impacted Stanhope, but shouldn't be the case for Salisbury because FID was after all the inflationary costs - I believe Hamish noted they had updated their contracts by that time.

All of that to say - capital financing is super important, and that's the crux of the 'bet' we are making imho. Financing in bioenergy has been totally terrible recently as far as I can tell. LGI (who has Vik Bansal as a non-exec director flogging the IPO - previously Cleanaway and now Boral CEO) have not been able to get $25m for their IPO as far as I understand. Moreover, while they have a decent portfolio of assets generating around $15m of revenue per annum (only $0.6m from infrastructure), they have also not announced any new assets or investments that I am aware of for the past year .https://www.lgi.com.au/news


Also ARENA, despite releasing their bioenergy strategy, and giving grants for other projects, have not funded bioenergy since 2020. For whatever reason, they have been delaying this. Delorean has a $5.3m application pending since September 2021 for Salisbury. No doubt if that comes through, then other financing will follow (that's the purpose of ARENA).


Always wanting to end on a positive note - Delorean 17days ago put out on Seek a recruitment for Salisbury's Project Manager. Make of that what you will.
https://www.seek.com.au/job/57530906?type=standard#sol=325362307d8a56968c36e81c505d70f52de4838a