Tirupati Graphite (TGR) H2 2024 earnings summary

Executive summary

• Major board and management changes in late 2024 addressed prior governance failures and financial distress, including the replacement of the CEO and restructuring of the board.

• Strategic refinancing in early 2025 raised £4.5 million in convertible loan notes, with further restructuring of existing debt to stabilize operations.

• Production at Madagascar's Vatomina and Sahamamy projects reached a record 7,096 MT in FY2024, but was hampered by funding shortages and operational inefficiencies.

• Acquisition of Suni Resources in Mozambique added two large-scale graphite projects, significantly increasing the resource base.

• Post-year-end, production was temporarily suspended due to financial distress, but has since resumed with improved volumes and customer demand.

Financial highlights

• Revenue increased 70% year-over-year to £4.9 million, with sales volume up 87%.

• Gross margin fell to £0.5 million due to higher unit costs; operating loss widened to £5.1 million (2023: £2.1 million loss).

• EBITDA loss of £3.6 million (2023: £0.8 million loss).

• Loss after tax was £13,000, a significant improvement from the prior year’s £2.4 million loss.

• Net assets at 31 March 2024 were £22.9 million; net debt was £2.8 million.

• Cash and cash equivalents at year-end were £0.2 million.

• A £6.1 million gain on bargain purchase was recognized from the Suni Resources acquisition.

Outlook and guidance

• Production at Vatomina is on track to exceed breakeven and reach 1,000 MT/month by July 2025.

• Graphite markets are stabilizing, with strong demand from energy storage and electric vehicles.

• The company aims to ramp up Vatomina capacity to 18,000 tpa by December 2025 and resume development in Mozambique as security improves.

• Risks remain around achieving production targets and successful conversion of convertible loan notes to equity.