Aurora Downstream Energy Business Plan › Section 14 › Financial Plan

The financial plan is built from a single integrated model in which
the income statement, balance sheet and cash-flow statement are fully
linked and the balance sheet reconciles to zero in every year.
Projections are presented in South African Rand (R’m) at a planning
exchange rate of R16.50/USD. All operating, capital and financing
assumptions are set out in the assumptions register below, and every
table and chart in this section is derived from the same model, ensuring
internal consistency.

14.1 Assumptions register

Table 20. Key modelling assumptions

14.2 Projected income statement

Table 21. Projected income statement
(R’m)

Figure 9

Figure 10

14.3 Projected balance sheet

Table 22. Projected balance sheet (R’m)

The balance sheet reconciles to zero in every year, confirming
the integrity of the integrated model. Net PP&E reflects the phased
capital programme net of depreciation; cash includes the funded
debt-service reserve.

Figure 11

14.4 Projected cash-flow statement

Table 23. Projected cash-flow statement
(R’m)

Figure 12

14.5 Working-capital build

Trading volumes require investment in inventory and receivables,
partly offset by supplier payables. This working-capital build is
financed by the ring-fenced revolver and is excluded from senior
debt-service cover. The day-cycle assumptions and resulting net working
capital are shown below.

Table 24. Working-capital build (R’m and
days)

Figure 13

14.6 Debt amortisation & cover

The senior facility of R330m carries a 8-year tenor with a 2-year
capital-repayment grace period (interest-only), after which principal
amortises. The all-in rate is assumed at 11.75%. A funded debt-service
reserve provides additional protection during the commissioning and ramp
years.

Table 25. Senior debt amortisation and service
(R’m)

Table 26. Debt-service cover ratio (DSCR)
schedule

Figure 14

Figure 15

14.7 Ratio analysis

Table 27. Key financial ratios

Figure 16

Figure 17

14.8 Break-even analysis

On the modelled cost structure, the business reaches operating
break-even at approximately R1,468m of revenue — around 71.8% of
projected Year-3 revenue — reflecting a contribution margin of about
16.3% against a largely fixed infrastructure and overhead base.

Figure 18

14.9 Sensitivity & scenario analysis

Because the principal commercial variables — international product
prices, the ZAR/USD rate, volumes and margins — sit largely outside
management control, the plan is stress-tested across single-factor
sensitivities and multi-factor scenarios. The tornado below ranks the
drivers of Year-5 EBITDA; the exchange rate is by far the most
material.

Figure 19

Three integrated scenarios are modelled: a base case; a downside
combining weaker volumes, margin compression and an adverse rand; and a
severe stress. The downside breaches the DSCR covenant in a single year
(designed to be cured by the funded reserve), while the severe case
would require active lender engagement.

Figure 20

Figure 21

14.10 Monthly Year-1 cash flow

Given the commissioning-year risk, Year-1 cash flow is modelled
monthly to demonstrate that the funded structure carries the business
through the ramp. The cumulative cash position remains positive
throughout, supported by the equity drawdown, debt-service reserve and
grace period.

Figure 22

14.11 Valuation

Two complementary approaches are presented. A discounted cash-flow
valuation — at a WACC of 15.5% and 4.5% terminal growth — yields an
intrinsic enterprise value of approximately R706m and equity value of
about R549m; this is deliberately conservative and reflects the value
created net of all capital deployed. A market-multiple exit at 5.0x
EV/EBITDA in Year 5 implies an enterprise value of approximately R1,825m
and equity value of around R1,669m. The gap between the two illustrates
how much of the equity value is contingent on achieving the assumed exit
multiple.

Table 28. Valuation summary

Figure 23

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