Ann: Preliminary Final Report, page-2

I've finally had a chance to digest this preliminary report for FY2021, pending the final annual report to be issued in the next 2 weeks. There is one main area of interest, if others could comment on this.

Firstly, I'm interested once the annual report is produced, and the accompanying notes, to understand how the basic and diluted EPS figures have been reached. As it stands, this is reported as a basic EPS of USD0.0072 and diluted EPS of USD0.0072. The comprehensive income attributable to owners of the parent for FY2021 is USD49,614,000. Shares outstanding as per the Appendix 2A on 27 April 2021 number 2,608,134,691 and warrants of 101,122,429. This is the amount of shares and warrants in circulation following the CR earlier this year.

By my calculation, this results in a basic EPS of USD0.0190 and diluted EPS of USD0.0183 for FY2021. According to the USD-AUD forex rate as at 30 June 2021, this comes to equivalent figures of AUD0.0259 and AUD0.0249, respectively. Meanwhile, the comprehensive income attributable to owners of the parent for FY2020 was USD11,960,000, less than one quarter of that reported for FY2021. However, the basic EPS for FY2020 was reported as USD0.0065. While not the main theme of this thought process, this is also incorrect, as the income figure for FY2020 was restated from USD11,591,000 (as per the FY2020 annual report) to USD11,960,000. This results in a restated basic EPS of USD0.0067.

For the basic and diluted EPS to otherwise hold much the same across FY2020 and FY2021, as per the FY2021 preliminary final report, would mean that the number of shares outstanding would have had to have quadrupled across the same time period, if we are to assume that the figure reported for comprehensive income attributable to owners of the parent for FY2021 is correct. Although we know that there has been a dilutive effect following the CR, it was not to this extent. Shares outstanding prior to the CR numbered 1,795,631,672, with no options or warrants on issue.

My point is - where has this calculation gone wrong? Am I way off? There is unfortunately no note to the financial statements in the preliminary report for FY2021 which outlines the EPS calculation, so I am unable to verify my workings against this. If my workings are correct, then the market is currently valuing the company at a basic PE of less than 3, and an EV/EBITDA of ~6.5 (that is, very low). In essence, the market is more or less pricing complete and utter failure to achieve commercialisation of assets under construction, resulting in a debt burden that represents a high multiple of current FCF. The market perspective is clear when viewing the book value per share against the market value per share.

So, as a second line of thinking, how likely is the failure to reach commercial success? This is harder to gauge, given the geopolitical risk inherent in developing and operating within the Philippines and Indonesia, and has been the topic of much of the conversation on this forum over the past 3+ years. Ultimately the success of this company, as with any company, will live and die by the efforts of management to execute successfully. I note that while the company has tended to present "ambitious" (or, cynically, inaccurate) timelines regarding project completion, there is a tone of increased accountability which has entered over the past year or so, as evidenced in the March 2021 investor presentation. I personally tend to remain optimistic.

AGM presentation 2018:



Investor presentation March 2021: