Rubicon Water (RWL) H2 2024 earnings summary

Executive summary

• Revenue increased year-over-year to AUD 58.4 million (5.8% growth), with record US performance and a 200% increase in US orders; operational decisions in China and Chile negatively impacted both revenue and EBITDA, but set up a stronger base for future growth.

• Largest-ever contracts secured in Latin America (Costa Rica, $2.5 million) and the US (California, $4.5 million, stage one of a five-year program), with a milestone FarmConnect contract in California.

• Successful AUD 16 million ($16.0m) capital raise completed to support global expansion and reduce debt.

• Expansion of global operations, with personnel outside ANZ doubling from 67 to 140 over five years.

Financial highlights

• Reported FY24 revenue was AUD 58.4 million; underlying new revenues (excluding China contract reversals) were AUD 62.5 million, up 13% year-over-year.

• Gross margin improved to 40.2% (up from 33.7%), aided by favorable project mix and strong US/India performance.

• Underlying EBITDA loss (excluding one-offs) was AUD 2 million, a 77% improvement from last year's AUD 8.8 million loss; reported EBITDA loss was $5.4m, including $3.4m in one-off items.

• Net debt at year-end was AUD 31.6 million, up 10.7%, with gearing at 57% pre-capital raise; pro forma net debt post-capital raise reduced to AUD 15.6 million.

• Cash flow from operations was negative $7.0m for the year, but positive $1.5m in the second half.

Outlook and guidance

• Strong pipeline of AUD 225 million ($225m+) across 310 projects in 20 countries, with 12 key transformational opportunities representing 65%-70% of near-term projects.

• Growth expected to be driven by international markets, especially the US, India, Central Asia, North Africa, and Europe.

• Recurring revenue from software and maintenance is expected to grow as capital projects transition to support phases.

• Focus on clearing older Asian receivables in the first half of FY25.

• Positioned for substantial growth in FY25 and beyond, with a strong globalisation strategy and expanding addressable market.