Hi @mac 4218I was just going back over the FY23 Annual Report...

Hi @mac 4218

I was just going back over the FY23 Annual Report and also took note when WAE's Elysia was launched. Here's what I found interesting.

I realise it's only been a few years since WAE was acquired by Fortescue, but the signs are already pointing to a steep increase in revenue in the Fortescue Energy business.

As highlighted, Fortescue Energy is comprised of Fortescue Future Industries, Fortescue Hydrogen Systems and Fortescue WAE.

I'm aware that potential revenue from Fortescue's green energy projects won't be factored in for a a number of years. So I'll get that point right out the way.

So where is that Fortescue Energy "revenue from external customers" coming from? If you refer to page 118 of the Annual Report below, you will note that it's coming from manufacturing and engineering services revenue².

That's from Fortescue's WAE battery systems business segment.

A little over a four x increase in revenue in one year for Fortescue Energy, which is primarily from Fortescue WAE at this stage.

Page 116 of the Annual Report

In FY22 Revenue - US$26m
Underlying EBITDA - (US$396m)

In FY23 Revenue - US$107m
Underlying EBITDA - (US$617m)

And yes also an increase in expenses, but that's to be expected this early in operations, but that's mostly from FFI research as you will note below.

¹ Research expenditure comprises of FFI research expenditures.

Research expenditure¹ for 2022 - US$354m
Research expenditure¹ for 2023 - US$553m

What's FY24 guidance for Fortescue Energy?

Energy net operating expenditure of approximately US$800 million and capital expenditure and investments of approximately US$500 million.

FY24 & FY25 is what I have my attention on.

What else is worth noting? WAE's Elysia only launched in April 2023. So that revenue would not have all come from Elysia, expenses yes but not revenue. What was also highlighted is that the company are already getting customers onboard and that's all in a little under one year. So what's the battery business segment and Elysia going to look like now?

I think this below is going to change the trajectory of the WAE business which is all going to tie in together.

Page 35 of the Annual Report highlights....

"We plan to expand our operations to include two new facilities in the United Kingdom, one in Kidlington and the other in Banbury. The Kidlington facility will focus on prototype development of power systems for multiple green mobility applications. The Banbury facility will focus on manufacturing heavy industry, zero-emission battery modules and fully assembled power systems."

Cash neutral first, then profitability.

References:

https://fortescue.com/investors/results-and-operational-performance/fy24-q2-results

and

https://cdn.fortescue.com/docs/default-source/announcements-and-reports/2597718.pdf?sfvrsn=edccad94_6 (FY23 Annual Report)

Tony