Thanks Tony & jbI did a bit of a dive into the reported numbers...

Thanks Tony & jb

I did a bit of a dive into the reported numbers for Energy in the half and full year reports from the FMG investor centre website. Apologies in advance for the long post.

Energy Revenues
These are the reported revenues for the last few periods for 'Energy' (original values & R = restated values) in US$m:

• total FY21 $0
• H1 FY22 $0
• H2 FY22 $0 (Restated as $26)
• total FY22 $0 (R = $26) - this was originally reported as $0m but the comparative value changed to $26m in the subsequent report
• H1 FY23 $1 (R = $54)
• H2 FY23 $53
• total FY23 $107
• H1 FY24 $26

The progression of restated revenues per half year for the last 4 half years are: $26* -> $54 -> $53 -> $26.
*assuming all of FY22 was H2 given I couldn't find any restated values for H1 of FY22.

WAE
The notes state WAE was reclassified from metals to Energy in the year ended June 2023. This is further evidenced by a subsequent breakdown of revenue under the category 'manufacturing & engineering services revenue'. It appears total Energy revenue excluding WAE totals $1m which was earned in H1 FY23. I believe all other Energy revenues have been from WAE.

Energy Capital Expenditure
What is good to see in the early years is that a lot of the expenditure was not capitalised, although it is getting up there now. Where it is capitalised and the project comes to nothing, this could result in a financial impairment for FMG (being the consequences of kissing frogs that do not turn into 'princes').

Total reported assets for Energy at H1 FY24 are $1,028. Actual expenditure may be higher given depreciation & amort charges, which I couldn't find after a cursory glance.

Energy Operating Expenditure
Restated expenditure for the last few half years in US$m:

• total FY21 $104
• H1 FY22 $174
• H2 FY22 = $248
• total FY22 = $422
• H1 FY23 = $356
• H2 FY23 = $368
• total FY23 = $724
• H1 FY24 = $346

Progression of Energy expenditure over the past 5 half years: $174 -> $248 -> $356 -> $368 -> $346

Conclusion
Nothing really other than doing this to satisfy my curiosity. And to jb's point, it may take while to see positive EBITDA and even longer to get a meaningful contribution to earnings. But so long as expenditure is controlled and they don't go overboard in capitalising costs of (subsequently) unsuccessful projects, then I see very little harm to the FMG results in the short term. Energy is therefore a long term play.