PT Barito Renewables Energy (BREN) Q3 2024 earnings summary

Risk factors and uncertainties

• Exposure to market risk includes foreign exchange, interest rate, and commodity price risks; commodity price risk is minimal due to long-term fixed pricing in contracts, only adjusted for inflation.

• Credit risk is concentrated as 83% of bank deposits are with one bank (Aa1 rating), and all electricity and steam sales are to two Indonesian SOEs (PLN and PGE) with no history of default.

• Liquidity risk is managed by maintaining sufficient cash, committed credit facilities, and matching asset-liability maturities; as of 30 September 2024, financial liabilities due within one year total $372.3 million.

• The Group's gearing ratio is 69% as of 30 September 2024, reflecting a high reliance on debt financing.

• Government audit claims and tax disputes remain ongoing, with provisions recognized for probable losses, but management believes the probability of guarantee calls is remote.

Capital allocation and financing

• Net debt as of 30 September 2024 is $1,656.2 million, with total equity at $736.5 million.

• The Group maintains a gearing ratio of 69%, indicating significant leverage.

• Capital structure is managed through dividend adjustments, capital returns, or new share issuance, with no changes in policy during the period.

• Liquidity is supported by adequate reserves and banking facilities, with continuous monitoring of cash flows.

Significant events and developments

• Ongoing government audit claims and tax disputes, particularly related to production allowances, parent company overhead, and deferred VAT, with several cases resolved and provisions recognized for probable losses.

• Settlement agreement reached with PT PLN Indonesia Power for a steam sales dispute, with future excess steam deliveries agreed as settlement.

• Guarantees related to Salak-Darajat and Sekincau acquisitions are assessed as having a remote probability of being called.

• The Group continues to pursue recovery of deferred VAT balances, with management confident in eventual reimbursement.