Ann: Appendix 4E - Preliminary Final Report, page-2

At first glance, it seems like an ugly result, like the one I brought home for my parents to sign when I was a kid. However, with some insight onto what had happened in the last few years, I think it is a pretty good result.

Just a bit of history. It was only in 1Q2020 that we achieved financial close for Ivory Coast. For that, we booked in a revenue of $34m for the work we had done prior. According to Richard, the margin was about 30-35% for that prior work... and we waited and waited for signature from ASHRA to release payment. It was only till Nov 2020 when ASHRA plus the Italian export insurance credit signed the final document that we received the payment of the $34m plus about another $27m payment to us as restricted money (a bond) that we can only draw down at every stage of completion of the project. In other words, that $27m is a prepayment for future performance.

With this hindsight, I made this adjustment to compare actual performance:


2020 was a year of cleaning up the RWL legacy. Actual revenue is only $32.4m of SPS; $8.1m of Recurring Revenue and the remaining $15.5m were in CES. The gross margin ex IC prior work came up to only 9.77%, which indicates a gross loss situation for the CES if we assume the SPS and RR margins are in the 30s%. So in November, "goodbye Henry, hello Richard".

As for cash flow, for performance measurement, I would add the funds transferred to/from term deposit to operating activities. (Not sure if I should plus/minus the extra borrowing from Upwell which might also be transfer into term deposit, if they do, the Net cash inflow from operation would be even higher). Nevertheless, on performance, 2020 actually had a cash outflow of $5.65m, whereas 2021 records a net inflow of at least $3.9m.

Now for 2022, bearing a loss on sales of Italian and Peruvian operations, and the unpredictive "other gains/losses", if we could hit $55m in SPS; $6m in RR; $60m from IC; $5m from CES, assuming Finance cost of $3.5m; further reduction in SGA by $1-2m, we could be in net profit territory. Hope to see a final EBITDA of much higher than the guided $3m for this year. The most pleasing thing in my opinion, is we have achieve a real positive operating cash flow in 2021.