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Quarterly Report

For the period ending on 30 September 2022



- Acquisition of the Lakeland Solar & Storage Project completed


- Receipts from customers steady at $1.34 million – reflecting the first revenue contribution from the Lakeland Solar & Storage Project – and an improvement on the last two quarters


- $5.1 million term loan with St George Bank extended by 12 months to July 2023


- Completed $1.7 million placement with funds used to advance the Build Own Operate portfolio as well as other growth initiatives


- Advanced the Build Own Operate initiative with the Moulamein Renewable Energy Project added to the portfolio


- Cash of $1.8 million at quarter end and growing revenue streams from the Lakeland asset



Sydney – 31 October 2022 – MPower Group Limited (ASX: MPR)



MPower, Australia’s leading specialist renewable energy, battery storage and microgrid business, is pleased to provide the following report on its activities for the quarter ending on 30 September 2022 (Quarter).


Financial Overview


Customer receipts increased for the third consecutive quarter to $1.34 million (prior quarter: $1.18 million) driven by the first revenue being booked from the Company’s maiden revenue-generating solar and battery storage asset, the Lakeland Project, located in Cooktown Shire, North Queensland. First revenue materialised midway through the quarter, and as such, the revenue contribution from Lakeland is expected to increase in the December quarter.


During the period, the Company successfully completed a $1.7 million placement, before costs, with funds deployed to advance the Build Own Operate (BOO) strategy and for general working capital purposes. $0.38 million of the $1.7 million was committed by interests associated with the Company’s Chief Executive Officer and Chairman.


In July 2022 MPower successfully extended its banking facilities with St George Bank for a further 12 months. The term loan has been extended to 15 July 2023. Three principal repayments totalling $123,000 were made during the quarter, reducing the loan balance to $5.04 million at the end of the Quarter.


The acquisition of the Lakeland Solar & Storage asset includes $7.5 million of limited recourse project finance from NORD/LB. The long-term facility matures in 2031, with interest and principal repayments to be made every six months. The project finance facility has a fixed rate of 5.6% for the duration of the facility.


MPower’s cash balance was $1.8 million at the end of the Quarter. Cash receipts from operating activities amounted to $1.34 million, up from $1.19 million in the previous quarter.


Operational overview


During the Quarter, MPower completed the acquisition of the profitable Lakeland Solar & Storage Project. As reported, this is a major milestone given the project is now delivering direct sales of clean energy to the Queensland domestic market. Lakeland is the first of a number of a distributed portfolio of clean energy generating and storage assets that MPower is establishing across Australia and aligns with its Build Own Operate (BOO) strategy. The project has been in operation since 2017 has a long-term power purchase agreement out to 2030 with Origin Energy for 100% of the solar power output. Annual revenues of $1.8 million are projected and the asset is on track to deliver $800,000 in annual earnings before interest, tax, depreciation and amortisation (EBITDA), before cost savings materialise.


The BOO strategy gained further momentum in the Quarter with the Company adding the Moulamein Renewable Energy Project, located in Murray River Council region of southern NSW, to its portfolio of development projects. MPower now has a portfolio of more than 10 project sites across New South Wales, Victoria, Queensland and South Australia that are in various stages of development and one in operation. The Company, together with its development partners, continues to make steady progress achieving key development milestones in respect of its pipeline projects.


MPower continued to negotiate potential debt and equity funding options for the BOO portfolio and has a number of funding channels under consideration and at various stages, which are being progressed in parallel with project development. The Board Is committed to ensuring a funding outcome that results in the most favourable long-term outcome for shareholders. The level of interest from potential investors is most encouraging and they support MPower’s diversified portfolio approach which focuses on projects of ~5MW in size.


The Company also assessed other acquisition opportunities, similar in nature to the Lakeland project, where MPower can deploy its operating team to improve the asset’s financial performance. This is an ongoing focus.


Comment


Chief Executive Officer Nathan Wise commented: “The September quarter has been one of considerable progress with Lakeland contributing first revenue, our BOO portfolio expanding, and meaningful progress being made on the funding of this portfolio. With the transition to clean energy gathering momentum, the number of potential funding partners continues to expand; our challenge, and the opportunity, is to align with funding sources that maximises returns for our shareholders. We are also pleased to see a modest uptick in quarterly revenue as a result of the initial contribution from Lakeland, and we expect this trend to continue in the December quarter. Lakeland is performing well and we are confident we can further enhance its performance. We will update shareholders on further progress as the quarter unfolds. We have a number of growth initiatives advancing.”

Payments to related parties


Payments of $167,000 to related parties and their associates relate to remuneration payments made to the directors of the company.



Ends


Contact

For further information, please contact:


Nathan Wise

Chief Executive Officer

(02) 8788 4600


Ben Jarvis

Six Degrees Investor Relations

0413 150 448


This announcement has been authorised by the board of MPower Group Limited.


About MPower

MPower Group Limited (ASX: MPR) is a technology-led company with a long history specialising in the delivery of reliable on-grid and off-grid power solutions for blue chip corporate and government customers. Headquartered in Sydney, MPower's team of professionals has successfully delivered turn-key solar, battery storage and micro grid projects across the region.

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