Discontinued operation lifts NPAT 449.7% as pre-lease FCF swings to -$33.7m

Headline NPAT rose 449.7% to $17.2m, but $11.6m of that came from the discontinued-operation line; continuing-operations NPAT was $5.6m versus -$4.9m in HY21. Continuing-operations revenue was $29.8m at a stated ~66% EBITDA margin, so the -74.1% revenue and -52.6% EBITDA comparisons reflect a base-mix change rather than deterioration in the ongoing business.

Operating cash flow swung from +$22.4m to -$14.8m and pre-lease free cash flow moved to -$33.7m from +$1.2m. Gross borrowings fell to $223.3m, but on the smaller EBITDA base net debt to EBITDA stepped up to 10.94x versus the 6.2x-6.8x range in the supplied historical baseline for stable operating periods. No dividend was declared.

1. Continuing-operations NPAT of $5.6m is the cleaner read; PBT growth of 236.3% is also distorted by the negative prior base. The continuing EBITDA margin near 66% suggests the new infrastructure model can earn well, but on a far smaller revenue line than the historical refinery business.

2. Cash quality deteriorated materially. OCF/EBITDA at -75.4% sits below the 48.8%-81.9% supplied historical range (mean 69.1%); pre-lease FCF at -$33.7m is $62.3m below the historical mean of +$28.6m. Capex consumed 63.2% of revenue, and inventory days at 31.6 sit well above the 13.4-15.7 day baseline. Cash fell from $34.5m to $8.0m, consistent with the disclosure that operating cash flow funded only two-thirds of conversion spend.

3. Leverage stepped up despite lower nominal debt. Net debt of $215.3m against a much smaller annualised continuing EBITDA produces 10.94x leverage versus the 6.20x-6.80x stable-state range. Whether this is a transition reading depends on how quickly the new infrastructure model scales toward a steady-state EBITDA base.

Management commentary points to a "return to Dividends for FY22" but gives no payout shape. The supplied second-half pattern shows HY21 was 57% of FY21 EBITDA, but the post-refinery business has no precedent for second-half weighting, so that template should not be applied mechanically.

Annualising current continuing EBITDA implies roughly $39m versus FY21 EBITDA of $72.8m, though the transition timing makes a clean annualisation unreliable. The release confirms a continuing-operations EBITDA margin of c.66%, which is a useful steady-state anchor but does not bound full-year volume or the residual conversion capex envelope.

Continuing-operations earnings appear genuine on margin but are early-cycle and partly aided by a $11.4m working-capital release. The supplied historical baseline classifies that release as below normal range (mean +$4.8m build), so reversibility should be assumed. Inventory days at 31.6 versus a 14.4-day mean point to a balance-sheet build, likely tied to transition stock dynamics rather than steady-state working-capital intensity.

The headline NPAT result is not durable in its current shape. It is supported by the after-tax discontinued-operation gain ($11.6m of the $17.2m total) and is contradicted by negative operating cash flow. The combination of -$33.7m pre-lease FCF, capex at 63.2% of revenue, and net debt to EBITDA at 10.94x means the reported earnings did not fund the period's cash needs; the balance sheet did, with cash drawn from $34.5m to $8.0m.

This briefing cannot assess management's internal volume or margin trajectory for the converted import terminal beyond the disclosed c.66% continuing EBITDA margin reference.