Lichtenburg Nut Company Business Plan — Scenario and Sensitivity Analysis

What moves the outcome: groundnut price, selling price, volume and aflatoxin rejection, with scenarios.

Section 31 of 37

Scenario and Sensitivity Analysis

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30.1 Scenario definitions

Table 67. Scenario definitions

Driver	Upside	Base	Downside	Stress
Sales volume	+10%	Plan	−18%	−32%
Realised price	+2.5%	Plan	−3.5%	−6.0%
Groundnut input cost	−4%	Plan	+9%	+22%
Operating cost base	−2%	Plan	+5%	+9%
Capital cost	Plan	Plan	+7%	+12%
dtic APSS grant	Full R15.0m	Full R15.0m	Half	None
Interest rates	Plan	Plan	Plan	+250 bp
Narrative	Anchor contract plus a second national account; a favourable crop; snack nuts list nationally	Anchor contract secured; ramp broadly as planned; one good and one poor crop year in five	Slower ramp, competitive price response, one drought year, partial grant	Anchor contract lost or materially reduced; two poor crop years; no grant; rate increase

Figure 1. The downside case produces negative EBITDA in every year

30.2 Scenario outcomes

Table 68. Scenario outcomes

Measure	Upside	Base	Downside	Stress
Year 5 net revenue (R million)	241.1	213.8	169.2	136.7
Year 5 EBITDA (R million)	44.4	25.3	-5.1	-27.7
Year 5 EBITDA margin	18.4%	11.8%	-3.0%	-20.2%
Year 5 net profit (R million)	23.2	5.4	-19.3	-38.3

Enterprise value, ten-year DCF (R million)	106.1	10.9	-252.7	-431.2
Project IRR	20.8%	13.5%	Negative	Negative
Equity IRR, ten-year hold	22.9%	12.8%	Total loss	Total loss

Peak debt drawn (R million)	67.6	97.1	107.6	107.6
Minimum DSCR after moratorium	2.19x	1.28x	-0.58x	-2.11x
Additional equity required (R million)	0.0	0.0	274.5	526.0
Balance sheet check, maximum error	0.00	0.00	0.00	0.00

30.3 Sensitivity grids

Table 69. Year 5 EBITDA (R million) by realised price and groundnut input cost

Groundnut cost \ price	-6%	-3%	+0%	+3%	+6%
-10%	21.5	27.8	34.1	40.3	46.6
-5%	17.2	23.4	29.7	36.0	42.2
+0%	12.8	19.1	25.3	31.6	37.9
+5%	8.4	14.7	21.0	27.2	33.5
+10%	4.1	10.3	16.6	22.9	29.1
+15%	-0.3	6.0	12.2	18.5	24.8

Figure 2. Year 5 EBITDA turns negative where a price shortfall meets a cost increase

Table 70. Year 5 debt service cover ratio by sales volume and groundnut input cost

Volume \ groundnut cost	-10%	-5%	+0%	+5%	+10%	+15%
-20%	0.81x	0.59x	0.38x	0.16x	-0.06x	-0.27x
-10%	1.49x	1.07x	0.79x	0.56x	0.31x	0.07x
+0%	2.41x	1.80x	1.28x	0.94x	0.68x	0.41x
+10%	3.08x	2.67x	2.02x	1.41x	1.02x	0.74x
+20%	3.70x	3.28x	2.83x	2.11x	1.45x	1.06x

Values below 1.20x represent a covenant breach on the proposed package.

Figure 3. Cover falls below covenant on any adverse move from the base case

30.4 Switching points

Table 71. Switching points: how far each driver can move before a threshold is crossed

Driver	Adverse move required	To reach	Assessment
Sales volume	34.1% decline	Zero Year 5 EBITDA	Reasonable buffer
Realised price	12.1% decline	Zero Year 5 EBITDA	Reasonable buffer
Groundnut input cost	29.0% increase	Zero Year 5 EBITDA	Reasonable buffer, but a drought year could exceed it
Sales volume	0.6% decline	DSCR below 1.25x	Effectively no buffer
Groundnut input cost	0.4% increase	DSCR below 1.25x	Effectively no buffer
Realised price	0.2% decline	DSCR below 1.25x	Effectively no buffer
Sales volume	1.9% decline	Zero enterprise value	The base case sits within 2% of value neutrality

The contrast between the EBITDA buffers and the covenant buffers is the central finding of this section. The business can absorb a poor year operationally; the capital structure cannot.