Synertec : Appendix 4D Statement & Interim Financial Report FY22 H1

For personal use only

Synertec Corporation Limited ARBN 161 803 032

Half-year report for the period ended 31 December 2021

Lodged with the ASX under listing Rule 4.2A

Results for announcement to the market

Synertec Corporation Limited (ASX:SOP)

Appendix 4D	31 Dec	31 Dec	Variance	Variance
Reference		2021	2020
		$'000	$'000	$'000	%
2.1	Revenue from ordinary activities	5,846	3,536	Up 2,310	Up 65%
2.2	Loss from ordinary activities after tax attributable to the	(1,556)	(1,916)	Up	359	Up 19%
	owners of Synertec Corporation Limited
2.3	Loss for the year attributable to the owners of Synertec	(1,556)	(1,916)	Up	359	Up 19%
	Corporation Limited
2.4	Dividends/distributions	No dividends were paid during the period, and no
		dividends have been proposed for payment
2.5	Record date	Not applicable
2.6	Explanation of the figures in 2.1 to 2.4	Refer to Directors' Report within the Interim
		Financial Report for the Half Year Ended 31
		December 2021 - 'Review of Operations' section.
3	Net tangible assets per share (cents)	0.02	0.01	Up	0.01	Up 83%
4	Details of entities over which control has been gained or	The was no control/further control gained over any
	loss	entities during the period.
5	Details of Individual and total Dividends	Not applicable
6	Details of dividend reinvestment plans in operation	Not applicable
7	Details of associates or joint venture entities	There are no associates or joint venture entities.
8	Foreign entities	Not applicable

• The Company's Interim Financial Report and accompanying notes for the Half Year Ended 31 December 2021 has been reviewed by its Auditor and is not subject to a modified opinion, emphasis of matter or other matter paragraph.

Attachments	The Interim Financial Report of Synertec
	Corporation Limited for the Half Year Ended 31
	December 2021 is attached.

Signed:

Mr. Michael Carroll

Managing Director

Melbourne, Australia

Date: 24 February 2022

For personal use only

Synertec Corporation Limited

ARBN 161 803 032

Interim Financial Report

For the Half-Year Ended

31 December 2021

For personal use only

Synertec Corporation Limited

Table of Contents

For the period ended 31 December 2021

Directors' Report	4
Statement of Profit or Loss and Other Comprehensive Income	11
Statement of Financial Position	12
Statement of Changes in Equity	13
Statement of Cash Flows	14
Notes to the Financial Statements	15
Directors' Declaration	25
Independent Auditor's Review Report	26

These interim financial statements do not include all the notes of the type normally included in the annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual financial statements for the year ended 30 June 2021 and any public announcements made by Synertec Corporation Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

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Corporate Directory

Directors

onlyCompany Secretary

Principal registered office in Bermuda

useRegistered agent office in Australia

personalShare registry Auditor

ForStock exchange listing

Website address

Mr. Dennis Lin (Non-Executive Director, Chair) Ms. Leeanne Bond (Non-Executive Director) Mr. Michael Carroll (Managing Director)

Mr. David Harris (Executive Director)

Mr. David Harris

Ground Floor

2-6 Railway Parade

Camberwell, Victoria 3124

Australia

Clarendon House

2 Church Street

Hamilton HM11

Bermuda

Ground Floor

2-6 Railway Parade

Camberwell, Victoria 3124

Australia

Telephone: +(61 3) 9274 3000

Boardroom Pty Limited

Grosvenor Place

Level 12, 225 George Street

Sydney, NSW 2000

Australia

Telephone: [phone] (within Australia)

+(61 2) 9290 9600 (outside Australia)

Facsimile: +(61 2) 9290 9655

Grant Thornton Audit Pty Ltd

Collins Square

Tower 5

727 Collins Street

Melbourne, Victoria 3008

Australia

Synertec Corporation Limited shares are listed on the Australian Securities Exchange (ASX)

ASX Code: SOP (fully paid ordinary shares)

www.synertec.com.au

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For personal use only

Synertec Corporation Limited

Directors' Report

31 December 2021

The Directors present their report together with the financial statements of the consolidated entity for the half-year ended 31 December 2021.

1. Directors

The following persons were directors of Synertec Corporation Limited during the whole of the financial half-year and up to the date of this report:

Mr. Dennis Lin (Non-Executive Director, Chair)

Ms. Leeanne Bond (Non-Executive Director)

Mr. Michael Carroll (Managing Director)

Mr. David Harris (Executive Director)

2. Significant changes in the state of affairs

No significant changes noted in the half year ended 31 December 2021.

3. Review of operations

Profit and loss performance

Synertec generated revenue for the half-year ended 31 December 2021 ("FY22 H1", or "Period") of $5.8 million, up 65% on the prior comparable period ("pcp") (31 December 2020: $3.5 million). This result was underpinned by strong growth in the engineering consultancy services revenue category, which generated $4.3 million of revenue at strong gross margins, an increase of 97% on pcp (31 December 2020: $2.2 million).

The Board assesses the underlying performance of the business based on measures of Adjusted EBITDA which exclude the effect of non-operating and non-recurring items. Outlined below is an analysis of Adjusted Earnings Before Income Tax Depreciation Amortisation ('EBITDA') and Adjusted Net Profit After Tax ('NPAT') in the current period which is calculated after excluding the effects of costs incurred and subsidies received but not related to underlying operations or expected to occur in the future.

Summary Profit & Loss Performance	FY22 H1	FY21 H1	% Change
($'000s)	($'000s)
Total Revenue	5,846	3,536	Up 65%
Engineering Consultancy Services Revenue	4,302	2,185	Up 97%
Adjusted EBITDA before R&D activities	(669)	(1,171)	Up 43%
Adjusted EBITDA	(844)	(1,171)	Up 28%
EBITDA	(1,329)	(586)	Down 123%
Adjusted NPAT	(1,126)	(1,654)	Up 32%
NPAT	(1,556)	(1,916)	Up 19%

The Adjusted EBITDA was a loss of $0.8 million (31 December 2020: $1.2 million loss), an improvement of 28%. Adjusted EBITDA excludes costs which are discretionary for the purposes of exploring strategic long term growth opportunities and/or activities and expenses which are not considered to be typical ongoing operational overheads for the business. Such items include corporate development costs of $0.1 million (31 December 2020: $0.2 million), share-based payments of $0.4 million approved by the Company's shareholders at the 2021 Annual General Meeting (31 December 2020: $nil), and Federal Government JobKeeper payments for which there were none received in the Period (31 December 2020: $0.7 million).

Note; COVID-19 is reflected in Adjusted EBITDA only by the exclusion of government subsidies, with no attempt to include a corresponding adjustment for the abnormal (but difficult to measure) reduction in revenue and increase in costs.

Included in the Adjusted EBITDA is applicable technology research and development ("R&D") costs of $0.4 million primarily for development of the Powerhouse and LNG Custody Transfer System ('CTS') technologies, which has been expensed for tax and accounting purposes (31 December 2020: nil), enabling the Group to achieve tax credits for this expenditure which are expected to be refunded in cash to the Group following lodgement of its annual income tax return. The Group also recognised the anticipated tax refund as other income of $0.3 million (31 December 2020: nil) for the Period. On a like-for-like basis between the two periods by excluding R&D costs and income, the Adjusted EBITDA for the Period is a loss of $0.7 million (31 December 2020: $1.2 million loss).

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