Brooge Energy (BROGF) H2 2023 earnings summary

Executive summary

• Brooge Energy Limited reported 2023 revenue of $105.7M, a net loss of $48.3M, and Adjusted EBITDA of $79.7M, with gross profit up 44% year-over-year due to higher storage rates.

• The net loss was driven by a $55.7M litigation settlement, $18.2M expected credit loss, and a $15M write-off of contractor advances.

• The company operates oil storage and related services in the Port of Fujairah, UAE, with 1M m³ capacity and is expanding into Phase III and green energy projects.

• The company is in technical breach of bond covenants but has not defaulted on payments and is seeking waivers.

• A major shareholder is in liquidation, and the company underwent significant board and management changes in 2023–2024.

Financial highlights

• 2023 revenue: $105.7M (up from $81.5M in 2022); gross profit: $81.9M (up from $56.8M); net loss: $48.3M (vs. $27.2M profit in 2022).

• Adjusted EBITDA: $79.7M (75% of revenue), up from $53.9M (66%) in 2022.

• Direct costs decreased 4% to $23.8M; general and administrative expenses rose to $54.1M, mainly due to litigation, credit losses, and write-offs.

• Finance costs fell 18% to $20.9M due to lower interest and absence of one-off bond waiver payments.

• Cash and equivalents at year-end: $28.4M; negative working capital of $320.4M.

Outlook and guidance

• Management expects stable operating margins until new projects (Phase III, Green Hydrogen/Ammonia) commence.

• The company is actively seeking waivers for bond covenant breaches and is confident in meeting future bond obligations.

• Ongoing negotiations for a potential sale of UAE subsidiaries to GulfNav, with consideration to include cash and shares.