Ann: Appendix 4C - quarterly, page-40

A very interesting debate around profitability versus cashflow. The problem with cashflow is timing differences - you spend a $ today and you get a return at some point in the future (typically in a different accounting period). Accrual accounting (P&L) tries to "match" revenues with expenses to determine if a business is making a profit or a loss. It's not perfect though, particularly if an outgoing is capitalised when it should be expensed as incurred. You can argue that point on marketing spend and even perhaps feed/bio mass.

Increasing EBITDA is usually a good thing. Negative cash flow is not necessarily bad thing if it's the result of an investment today for a return tomorrow (see company's comments on biomass investment).

However, running out of cash is not a good thing at any time. Usually means a CR at a time not of the company's choosing = bad for shareholders. We can only trust management's judgement that 1) its investment in biomass will generate a positive return and 2) its debt facilities are sufficient to fund the investment until it produces that return without having to resort to an ill-timed CR.