Interra Resources (5GI) H2 2023 earnings summary

Executive summary

• FY2023 remained profitable for a third consecutive year, but lower realized crude prices and a $4.88 million Kuala Pambuang impairment reduced earnings materially.

• Myanmar field production increased, while renewable energy ventures broadened planned income streams through a wood pellet plant and a 2-MW solar farm.

Financial highlights

• Revenue fell 21.9% YoY to $19.13 million; transacted crude averaged $81.27/barrel versus $99.31/barrel in FY2022, with sales volumes comparable.

• Gross profit was $7.18 million versus $12.63 million; consolidated net profit was $1.12 million versus $9.51 million, after the $4.88 million exploration impairment.

• Net profit attributable to equity holders was $2.52 million versus $9.58 million; pre-tax profit was $2.19 million versus $10.43 million.

• Other income rose to $3.23 million, including a $1.71 million patent-disposal gain; interest income also increased as rates rose.

• Operating cash flow was $8.12 million; year-end cash and equivalents were $17.26 million, up from $14.14 million.

Outlook and guidance

• FY2024 Myanmar plans include two Chauk development wells plus workovers, well reactivation, additional perforation and continued waterflood activity.

• A second Kuala Pambuang exploratory well is planned; the exploration period runs through 14 March 2025, with site preparation in the 2024 work programme.

• The Sumatra wood pellet plant was on schedule, with production expected in Q4 2024 if no unforeseen impediments arise; the Sabah solar project is a 2-MW farm.

• Crude prices are expected to remain volatile and range-bound in 2024; outlook depends on global growth, OPEC+ supply restraint and geopolitical disruption.

• No FY2023 dividend was recommended; management may consider FY2024 dividends if cash reserves remain strong and the outlook permits.