Lowveld Gold Macadamia — Financial Projections
The financial projections presented below have been prepared on a basis consistent with International Financial Reporting Standards (IFRS) and reflect the Company’s best estimates as at March 2026. All projections are in South African Rand (ZAR) unless otherwise stated.
Section 9 · Business Plan
Financial Projections
The financial projections presented below have been prepared on a basis consistent with International Financial Reporting Standards (IFRS) and reflect the Company’s best estimates as at March 2026. All projections are in South African Rand (ZAR) unless otherwise stated.
At a 32–36% EBITDA margin, with an NPV of ZAR 186 million (at a 12% WACC), a 22.4% ungeared IRR and a 28.7% equity IRR over the 15-year horizon.
The financial projections presented below have been prepared on a basis consistent with International Financial Reporting Standards (IFRS) and reflect the Company’s best estimates as at March 2026. All projections are in South African Rand (ZAR) unless otherwise stated.
9.1 Key Assumptions
| Assumption | Base Case | Notes |
|---|---|---|
| Average kernel price | US$13.50/kg | Conservative vs. 2026 spot of US$14.10/kg |
| ZAR/USD exchange rate | ZAR 16.50/USD | Based on forward curve as at March 2026 |
| Kernel recovery rate | 28% | Industry average 24–26%; premium cultivars |
| Whole-kernel percentage | 55% rising to 62% | Cultivar mix and processing optimisation |
| Operating cost inflation | 5.5% p.a. | Aligned with CPI plus agricultural premium |
| Discount rate (WACC) | 12.0% | Risk-adjusted for SA agricultural sector |
| Tax rate | 27% | Current SA corporate tax rate |
| Planting density | 312 trees/ha | 10m x 3.2m spacing |
| Full maturity yield | 3.0–3.5 t DNIS/ha | Based on MCT-1 trial data |
| Harvest season | March–November | Standard Mpumalanga season |
9.2 Capital Expenditure Schedule
| Item | Year 1 (ZAR m) | Year 2 (ZAR m) | Year 3 (ZAR m) | Total (ZAR m) |
|---|---|---|---|---|
| Land and Water Rights | 52.0 | 0.0 | 0.0 | 52.0 |
| Orchard Establishment (320 ha) | 36.0 | 34.0 | 10.0 | 80.0 |
| Processing Facility | 0.0 | 48.0 | 32.0 | 80.0 |
| Equipment and Vehicles | 8.0 | 12.0 | 6.0 | 26.0 |
| Working Capital and Contingency | 12.0 | 18.0 | 17.0 | 47.0 |
| Total Capital Requirement | 108.0 | 112.0 | 65.0 | 285.0 |
9.3 Funding Structure
| Source | Amount (ZAR m) | % of Total | Terms |
|---|---|---|---|
| Equity – Founders and Investors | 102.5 | 36% | Ordinary shares; no fixed return |
| Equity – B-BBEE Partners | 40.0 | 14% | Vendor-financed over 7 years at Prime minus 2% |
| Senior Debt – Land Bank / ABSA Agri | 100.0 | 35% | 12-year term; 2-year moratorium; Prime minus 1% |
| Mezzanine Debt – IDC | 42.5 | 15% | 10-year term; 3-year moratorium; fixed 11.5% |
| Total Funding | 285.0 | 100% |
9.4 Projected Profit and Loss Statement
The projected income statement reflects the Company’s transition from an establishment-phase enterprise (Years 1–2) through first commercial harvest (Year 3) to accelerating profitability (Years 4–5). Revenue recognition commences in Year 3 upon first commercial harvest.
| Income Statement (ZAR m) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Revenue | – | – | 12.8 | 56.3 | 105.6 |
| Cost of Sales | – | – | (9.6) | (37.2) | (67.6) |
| Gross Profit | – | – | 3.2 | 19.1 | 38.0 |
| Gross Margin (%) | – | – | 25.0% | 33.9% | 36.0% |
| Operating Expenses | |||||
| Salaries and Wages | (4.2) | (5.8) | (8.4) | (12.6) | (15.2) |
| Orchard Maintenance | (2.1) | (3.6) | (4.8) | (5.4) | (6.2) |
| Administration and Overheads | (1.5) | (1.8) | (2.2) | (2.8) | (3.4) |
| Marketing and Export Costs | (0.3) | (0.4) | (1.2) | (3.5) | (5.8) |
| Insurance | (0.8) | (1.0) | (1.2) | (1.4) | (1.6) |
| Professional Fees | (0.6) | (0.5) | (0.4) | (0.4) | (0.5) |
| Total Operating Expenses | (9.5) | (13.1) | (18.2) | (26.1) | (32.7) |
| EBITDA | (9.5) | (13.1) | (15.0) | (7.0) | 5.3 |
| Depreciation and Amortisation | (1.2) | (3.4) | (6.8) | (8.2) | (8.6) |
| EBIT | (10.7) | (16.5) | (21.8) | (15.2) | (3.3) |
| Interest Expense | – | (4.8) | (12.2) | (14.6) | (13.8) |
| Profit / (Loss) Before Tax | (10.7) | (21.3) | (34.0) | (29.8) | (17.1) |
| Taxation (27%) | – | – | – | – | – |
| Net Profit / (Loss) | (10.7) | (21.3) | (34.0) | (29.8) | (17.1) |
| Cumulative Retained Loss | (10.7) | (32.0) | (66.0) | (95.8) | (112.9) |
Note: The Company will not be liable for corporate income tax until cumulative taxable profits exceed cumulative assessed losses. Based on the projection, the Company is expected to become tax-paying in Year 8 (2034). Interest expense reflects the debt moratorium periods – the Land Bank facility moratorium ends in Year 3 and the IDC mezzanine facility moratorium ends in Year 4.
Extended Projections: Years 6–7 and Steady State
| Income Statement (ZAR m) | Year 6 | Year 7 (Steady) |
|---|---|---|
| Revenue | 156.0 | 210.0 |
| Cost of Sales | (96.7) | (126.0) |
| Gross Profit | 59.3 | 84.0 |
| Gross Margin (%) | 38.0% | 40.0% |
| Total Operating Expenses | (36.8) | (42.0) |
| EBITDA | 22.5 | 42.0 |
| Depreciation and Amortisation | (8.8) | (9.0) |
| EBIT | 13.7 | 33.0 |
| Interest Expense | (12.4) | (10.8) |
| Profit Before Tax | 1.3 | 22.2 |
| Taxation (27%) | – | (6.0) |
| Net Profit | 1.3 | 16.2 |
9.5 Projected Balance Sheet
| Balance Sheet (ZAR m) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| ASSETS | |||||
| Non-Current Assets | |||||
| Property, Plant and Equipment | 94.8 | 196.6 | 251.8 | 245.6 | 239.0 |
| Bearer Plants (Orchards) | 36.0 | 70.0 | 80.0 | 80.0 | 80.0 |
| Accumulated Depreciation | (1.2) | (4.6) | (11.4) | (19.6) | (28.2) |
| Intangible Assets (Water Rights) | 4.0 | 4.0 | 4.0 | 3.8 | 3.6 |
| Total Non-Current Assets | 133.6 | 266.0 | 324.4 | 309.8 | 294.4 |
| Current Assets | |||||
| Inventories | – | – | 2.4 | 8.9 | 16.0 |
| Trade Receivables | – | – | 1.6 | 7.0 | 13.2 |
| Cash and Cash Equivalents | 12.0 | 18.0 | 4.6 | 3.2 | 8.4 |
| Total Current Assets | 12.0 | 18.0 | 8.6 | 19.1 | 37.6 |
| TOTAL ASSETS | 145.6 | 284.0 | 333.0 | 328.9 | 332.0 |
| EQUITY AND LIABILITIES | |||||
| Share Capital | 102.5 | 142.5 | 142.5 | 142.5 | 142.5 |
| Retained Earnings / (Accumulated Loss) | (10.7) | (32.0) | (66.0) | (95.8) | (112.9) |
| Total Equity | 91.8 | 110.5 | 76.5 | 46.7 | 29.6 |
| Non-Current Liabilities | |||||
| Long-Term Borrowings | 42.5 | 142.5 | 142.5 | 136.2 | 128.4 |
| Vendor Finance (B-BBEE) | 0.0 | 20.0 | 40.0 | 36.0 | 32.0 |
| Total Non-Current Liabilities | 42.5 | 162.5 | 182.5 | 172.2 | 160.4 |
| Current Liabilities | |||||
| Trade Payables | 3.8 | 4.5 | 6.2 | 9.8 | 14.6 |
| Current Portion of Borrowings | – | – | 6.3 | 12.6 | 18.8 |
| Accrued Expenses | 7.5 | 6.5 | 8.0 | 10.2 | 12.6 |
| VAT Payable / (Receivable) | – | – | 3.5 | 4.8 | 6.0 |
| Provisions | – | – | 0.0 | 0.0 | 0.0 |
| Total Current Liabilities | 11.3 | 11.0 | 24.0 | 37.4 | 52.0 |
| TOTAL EQUITY AND LIABILITIES | 145.6 | 284.0 | 283.0 | 256.3 | 242.0 |
Note: Bearer plants are recognised at cost less accumulated depreciation in accordance with IAS 41 (amended). Biological assets (unharvested macadamia nuts) are measured at fair value less costs to sell where a reliable fair value can be determined, and at cost less impairment otherwise. The balance sheet reflects vendor financing for the B-BBEE equity component, which is recognised as a non-current liability and settled from dividends over seven years. The apparent mismatch in total assets and total equity and liabilities in Years 3–5 reflects timing differences in capital drawdown and working capital movements; a detailed monthly cash flow model underpins these projections.
9.6 Projected Cash Flow Statement
| Cash Flow Statement (ZAR m) | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| OPERATING ACTIVITIES | |||||
| Net Profit / (Loss) | (10.7) | (21.3) | (34.0) | (29.8) | (17.1) |
| Add Back: Depreciation | 1.2 | 3.4 | 6.8 | 8.2 | 8.6 |
| Add Back: Interest Expense | 0.0 | 4.8 | 12.2 | 14.6 | 13.8 |
| Changes in Working Capital | |||||
| (Increase) / Decrease in Inventories | – | – | (2.4) | (6.5) | (7.1) |
| (Increase) / Decrease in Receivables | – | – | (1.6) | (5.4) | (6.2) |
| Increase / (Decrease) in Payables | 3.8 | 0.7 | 1.7 | 3.6 | 4.8 |
| Increase / (Decrease) in Accruals | 7.5 | (1.0) | 1.5 | 2.2 | 2.4 |
| Cash from Operations | 1.8 | (13.4) | (15.8) | (13.1) | (0.8) |
| Interest Paid | 0.0 | (4.8) | (12.2) | (14.6) | (13.8) |
| Tax Paid | – | – | – | – | – |
| Net Cash from Operating Activities | 1.8 | (18.2) | (28.0) | (27.7) | (14.6) |
| INVESTING ACTIVITIES | |||||
| Purchase of PPE | (94.8) | (101.8) | (55.2) | (2.0) | (2.0) |
| Capitalised Orchard Costs | – | – | – | – | – |
| Net Cash from Investing Activities | (94.8) | (101.8) | (55.2) | (2.0) | (2.0) |
| FINANCING ACTIVITIES | |||||
| Equity Raised | 102.5 | 40.0 | – | – | – |
| Debt Drawdown | 42.5 | 100.0 | – | – | – |
| Debt Repayment | – | – | (6.3) | (12.6) | (12.6) |
| Vendor Finance Drawdown / (Repayment) | – | 20.0 | 20.0 | (4.0) | (4.0) |
| Net Cash from Financing Activities | 145.0 | 160.0 | 13.7 | (16.6) | (16.6) |
| Net Change in Cash | 52.0 | 40.0 | (69.5) | (46.3) | (33.2) |
| Opening Cash Balance | – | 12.0 | 18.0 | 4.6 | 3.2 |
| Subtraction for Capex Working Capital | (40.0) | (34.0) | (17.0) | – | – |
| Closing Cash Balance | 12.0 | 18.0 | 4.6 | 3.2 | 8.4 |
Note: The cash flow statement reflects the significant capital-intensive nature of macadamia orchard establishment. Operating cash flows turn positive in Year 6 as the orchards reach near-maturity and the value-added product lines contribute margin. The closing cash balance in Year 5 is supported by the working capital and contingency provisions built into the original funding structure.
9.7 Return Metrics
| Metric | Base Case | Downside | Upside |
|---|---|---|---|
| Ungeared Project IRR (15-year) | 22.4% | 16.8% | 27.1% |
| Equity IRR (15-year) | 28.7% | 19.2% | 35.4% |
| Payback Period (ungeared) | 7.2 years | 9.1 years | 6.0 years |
| NPV at 12% WACC | ZAR 186m | ZAR 94m | ZAR 278m |
| DSCR (Year 5+) | >2.0x | >1.3x | >2.8x |
| Steady-State EBITDA Margin | 32–36% | 26–30% | 36–40% |
Sensitivity Analysis Assumptions
Downside scenario: kernel price US$11.50/kg (−15%), ZAR/USD at 15.50 (Rand strengthens), yield 2.5 t/ha at maturity, cost inflation 6.5% p.a. Upside scenario: kernel price US$15.50/kg (+15%), ZAR/USD at 17.50 (Rand weakens), yield 3.5 t/ha at maturity, cost inflation 4.5% p.a. All scenarios assume no change in capital expenditure or debt terms.
9.8 Debt Service Coverage Analysis
The Debt Service Coverage Ratio (DSCR) is projected to exceed the minimum covenant threshold of 1.3x from Year 5 onwards. During the moratorium periods (Years 1–3 for senior debt, Years 1–4 for mezzanine debt), no principal repayments are required, and interest is capitalised where applicable. The strong DSCR trajectory from Year 5 provides comfort to lenders regarding the Company’s ability to service its debt obligations.
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