Brooge Energy

Phase II underway, Phase III feasibility study

Brooge Energy 12 March 2021 Update
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Brooge Energy

Phase II underway, Phase III feasibility study

Operating update

Oil & gas

25 March 2021

Price

US$10.8

Market cap

US$1,184m

Net debt ($m) at 30 June 2020

118

Shares in issue

109.6m

Free float

14.4%

Code

BROG

Primary exchange

Nasdaq

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

2.3

15.4

(16.0)

Rel (local)

1.7

7.3

(41.6)

52-week high/low

US$12.5

US$7.8

Business description

Brooge Energy is an oil storage and service provider strategically located in the Port of Fujairah in the UAE. Current storage capacity stands at 399,324m3 and will be increased by 602,064m3 once Phase II storage facility is completed.

Next events

FY20 results

March/April 2021

Update on Phase III

Q2 2021

Analyst

Marta Szudzichowska

+44 (0)20 3077 5700

Brooge Energy is a research client of Edison Investment Research Limited

Brooge Energy (BROG) recently engaged Ernst & Young to perform a feasibility study for its Phase III oil storage facility, an important step towards starting construction. Meanwhile, BROG’s Phase I operations are benefiting from current high demand for oil storage and in December it novated contracts for 58% of total storage capacity, at 50% and 60% premiums to previous contracts, paving the way to higher revenue and EBITDA in FY21. Updating on Phase II, BROG expects a six-month delay due to the COVID-19 situation. While this reduces our FY21 forecasts, the underlying fundamentals remain unaffected. Our updated valuation, based on Phase I and Phase II, using a blend of DCF, EV/EBITDA and P/E approaches, increases to $11.4/share (from $11.0/share).

Year-end

Revenue
($m)

Adjusted EBITDA*
($m)

Operating
cash flow ($m)

Net debt**
($m)

Capex
($m)

12/18

36

30

28

129

(0)

12/19

44

37

53

100

(60)

12/20e

47

38

21

172

(90)

12/21e

86

76

62

143

(32)

Note: *Profit before finance costs, income tax expense (currently not applicable in the UAE), depreciation, listing expenses and net change in the value of derivative financial instruments. **Including financial leases.

Operations buoyed by high oil storage demand

BROG’s Phase I facility has been operating at full capacity, reflecting high oil storage demand. The highly automated operation was unaffected by COVID-19 restrictions and new offtake contracts announced in December will boost FY21 results. However, pandemic disruptions have led to a circa six-month delay in Phase II construction. While this leads us to reduce our FY21 estimates as we defer Phase II revenues and cash flows into FY22, it does not affect the underlying fundamentals.

Phase III feasibility study to begin

In February management engaged Ernst & Young to perform a feasibility study for its Phase III facility. This is a key milestone, setting things in train towards finalising financing and project development plans ahead of starting construction, potentially during 2021. Once all in place, completion could reasonably be expected within a two- to three-year timeframe. The facility will add up to 3,500,000m3 capacity, at a total cost of around $1bn and, on completion, will make BROG the largest oil storage provider in the Port of Fujairah. For now, we exclude this from our modelling and valuation, pending the outcome of financing planning from management.

Valuation: $11.4/share; Phase III future upside

Our valuation is a blend of DCF and FY22e P/E and EV/ EBITDA multiples. Our updated valuation increases to $11.4/share from $11.0/share, as we roll forward our calculations to use FY22 estimates instead of FY21 in order to capture the full year effect of both Phase II and the modular refinery projects. In this note we still ascribe no value to Phase III, pending further information from management on project development and the financing strategy. However, we highlight that there is potential for significant upside to our current $11.4/share valuation.

High demand boost to FY21 margin; Phase II underway

BROG’s development of its oil storage terminal facilities is a three-stage process. Phase I has been operational since 2017. Phase II, with a COVID-19 related delay of about six months, is now expected to be fully operational by end July 2021. Phase III, which will make BROG into the largest storage operator in Fujairah, is about to start a feasibility study, which, on current management assumptions, could lead to construction starting as soon as summer 2021 and completion potentially by mid 2023, as long as financing and project development plans are in place.

Phase I operations ran at full capacity in 2020, with a combination of high storage demand, new contracts and high automation, which resulted in no adverse impact from COVID-19 restrictions. For most of 2020, Phase II’s construction was not meaningfully disrupted by the COVID-19 situation; however, the second wave of the pandemic at the end of the year led to supply chain disruptions, such that management now expects operations to start in July 2021, around six months behind the earlier schedule. Phase II is already fully contracted; management confirmed that the signed agreements are not affected by the launch delay and budgeted Phase II capital expenses remain unchanged, totalling $160.6m. On completion of Phase II, Brooge’s storage capacity will be expanded by 602,064m3, which, together with Phase I, will take the total capacity of the BPGIC Terminals to 1,001,388m3. That will make BROG the second largest independent storage operator in Fujairah.

Meanwhile, BROG has been involved in negotiations for the 25,000b/d, low-sulphur, modular refinery with Phase I off-taker Al Brooge International Advisory (BIA). The refinery construction was postponed due to the COVID-19 pandemic, and BROG’s management currently expects the refinery activities to commence in Q122, six months behind previous expectations. The refinery will be operated and maintained by BROG, while BIA will build and own it. BROG has moved the project location from Phase II land to Phase III land, as there is more space available for the refinery, although the refinery construction and operations will be independent from Phase III investments and decisions. We have incorporated this delay into our FY21 forecasts.

Contracts with premiums support EBITDA margin in FY21

The current global shortage of oil storage space has created high demand for BROG’s terminals from trading companies that require reliable storage facilities, crucial for their ability to trade physical oil. BROG took advantage of that situation and novated part of Phase I’s contracts, for 58% of total storage capacity, leading to a higher EBITDA margin in FY21. In December, the company announced new offtake contracts for a total storage capacity of 129,000m3 (with three oil trading companies, from November) and 104,074m3 (with two oil trading companies, from December) at a 50% and 60% premium respectively to previous contracts. Under the terms of the new contracts, BROG will provide storage at its Phase I facility for one year consisting of an initial six-month period, plus an additional six-month renewal period, subject to mutual agreement.

Looking at Phase II we cannot expect any similar announcements of contracts with premiums. The Phase II storage capacity is already fully contracted, and the price flexibility is very low. The agreements may be renegotiated not earlier than after two years.

Changes to forecasts

In this note, we update our forecasts to reflect the delay in Phase II and the modular refinery (25,000b/d) start-ups and the additional concluded offtake agreements for 26% of Phase I full storage (not included in our last valuation). Key components of our overall 34% reduction in FY21 EBITDA estimates comprise: 1) the delay in Phase II start-up, which reduces our FY21 EBITDA estimate by 30% (we now expect Phase II to become fully operational at end July 2021 (from January 2021 in our previous estimates); 2) a 5% reduction to reflect the delay of the refinery start-up (Q122 compared to Q321 previously), hence no inflow from the refinery business in 2021; and 3) a partly offsetting 3% increase due to the most recent offtake contracts being at a 60% premium to previous contracts for 104,074m3 of storage capacity (the contracts for 129,000m3 storage capacity was already discussed in the December update note). Our FY22 estimates are not affected by the delays and we leave these essentially unchanged.

Exhibit 1: Edison forecasts

$m

New

Old

Difference

2020e

2021e

2022e

2020e

2021e

2022e

2020e

2021e

2022e

Phase I

 

 

 

 

 

 

 

 

 

Fixed consideration

25.4

32.0

25.6

24.2

28.6

28.3

5%

12%

-9%

Ancillary services

21.6

22.1

22.6

21.6

21.1

21.7

0%

5%

4%

Phase II

 

 

 

 

 

 

 

 

 

Fixed consideration

-

16.8

38.7

-

37.4

38.4

N/A

-55%

1%

Ancillary services

-

14.7

34.2

-

33.3

34.1

N/A

-56%

0%

Refinery 25,000bbld

-

-

13.9

-

6.9

13.8

N/A

-100%

1%

Total revenue

46.9

85.5

135.0

45.8

127.3

136.2

2%

-33%

-1%

Direct costs

10.5

15.2

24.5

10.5

23.5

25.0

0%

-35%

-2%

Adjusted EBITDA

37.5

76.3

121.2

36.4

115.3

123.7

3%

-34%

-2%

Source: Edison Investment Research

For FY20, we estimate revenue and EBITDA in line with FY19, but include one and two months’ impact of offtake agreements (started in November and December 2020), at $1m or +3% on EBITDA versus our previous estimates. Full year results will be published in March/April 2021.

Financials

Short-term financial forecasts will be driven by Phase I and the Phase II storage project, and ancillary services revenue. In H120, storage revenue accounted for c 53% of revenues and we estimate this will reduce modestly to c 50% once Phase II becomes operational. The ancillary services revenue may vary and depends on end-user needs, according to expected refinery product prices and trading activity. Consequently, there is significant uncertainty about the timing for revenue and cash flow forecasts for ancillary services. However, overall, and, at this point excluding any future outlays or financing for the Phase III project, we expect BROG to generate positive free cash flow starting from FY21. The company is relatively unlevered, with total debt at 30 June 2020 of $119m based on a number of term loans and net debt of $118m. We expect net debt to have increased to c $172m at end FY20 as capital is invested in Phase II, with $90m and $32m of total capex of $160.6m deployed in 2020 and early 2021. For Phase III, as feasibility study has now been announced, management should be able to provide further details on financing and project development plans in Q221. This would give a clear roadmap for the project, at which point we would be able to incorporate Phase III into our model and valuation.

Exhibit 2: Net debt and net debt/EBITDA estimates

Source: Brooge Energy accounts, Edison Investment Research. Note: Does not take into consideration the impact of Phase III on debt as there is insufficient clarity on project development details and project financing.

Valuation

We value BROG using a blend of DCF, and leveraged and unleveraged multiples, arriving at a valuation of $11.4/share, up from $11.0/share. The increase in the blended valuation reflects peer-based valuation and the roll forward of our calculations to FY22 to capture the full year effect of both Phase II and the modular refinery operations.

Exhibit 3: BROG valuation based on historical peer multiples and Edison DCF

Source: Edison Investment Research. Note: Price as at 11 March 2021.

Our base case DCF valuation reduces to $12.38/share from $12.90/share, reflecting the impact of delays in Phase II and in the modular refinery start-ups. We continue to use 2020 forecasts as a base as the company has not yet released FY20 results. In Exhibit 4 we provide a sensitivity to the impact of varying costs of capital and terminal growth on the DCF valuation, and in Exhibit 5 the consequent impact on our blended valuation.

Exhibit 4: DCF ($/share) sensitivity to terminal growth and WACC

Exhibit 5: Blended valuation ($/share) sensitivity to terminal growth and WACC

Terminal growth/
WACC

0%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

6%

14.1

15.1

16.4

17.9

19.8

22.3

25.6

7%

11.7

12.4

13.2

14.2

15.3

16.8

18.6

8%

9.9

10.4

10.9

11.6

12.4*

13.3

14.4

9%

8.5

8.8

9.3

9.7

10.3

10.9

11.6

10%

7.4

7.6

7.9

8.3

8.7

9.1

9.6

Terminal growth/
WACC

0%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

6%

12.0

12.3

12.8

13.3

13.9

14.7

15.8

7%

11.2

11.4

11.7

12.0

12.4

12.9

13.5

8%

10.6

10.8

10.9

11.2

11.4*

11.7

12.1

9%

10.1

10.2

10.4

10.5

10.7

10.9

11.2

10%

9.8

9.8

9.9

10.1

10.2

10.3

10.5

Source: Edison Investment Research. Note: *Base case.

Source: Edison Investment Research. Note: *Base case.

Terminal growth/
WACC

0%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

6%

14.1

15.1

16.4

17.9

19.8

22.3

25.6

7%

11.7

12.4

13.2

14.2

15.3

16.8

18.6

8%

9.9

10.4

10.9

11.6

12.4*

13.3

14.4

9%

8.5

8.8

9.3

9.7

10.3

10.9

11.6

10%

7.4

7.6

7.9

8.3

8.7

9.1

9.6

Source: Edison Investment Research. Note: *Base case.

Terminal growth/
WACC

0%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

6%

12.0

12.3

12.8

13.3

13.9

14.7

15.8

7%

11.2

11.4

11.7

12.0

12.4

12.9

13.5

8%

10.6

10.8

10.9

11.2

11.4*

11.7

12.1

9%

10.1

10.2

10.4

10.5

10.7

10.9

11.2

10%

9.8

9.8

9.9

10.1

10.2

10.3

10.5

Source: Edison Investment Research. Note: *Base case.

Exhibit 4: DCF ($/share) sensitivity to terminal growth and WACC

Terminal growth/
WACC

0%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

6%

14.1

15.1

16.4

17.9

19.8

22.3

25.6

7%

11.7

12.4

13.2

14.2

15.3

16.8

18.6

8%

9.9

10.4

10.9

11.6

12.4*

13.3

14.4

9%

8.5

8.8

9.3

9.7

10.3

10.9

11.6

10%

7.4

7.6

7.9

8.3

8.7

9.1

9.6

Source: Edison Investment Research. Note: *Base case.

Exhibit 5: Blended valuation ($/share) sensitivity to terminal growth and WACC

Terminal growth/
WACC

0%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

6%

12.0

12.3

12.8

13.3

13.9

14.7

15.8

7%

11.2

11.4

11.7

12.0

12.4

12.9

13.5

8%

10.6

10.8

10.9

11.2

11.4*

11.7

12.1

9%

10.1

10.2

10.4

10.5

10.7

10.9

11.2

10%

9.8

9.8

9.9

10.1

10.2

10.3

10.5

Source: Edison Investment Research. Note: *Base case.

Our DCF approach is based on Phase I and Phase II only. Although BROG has achieved important milestones for the Phase III project by undertaking some pre-construction work, including front end engineering and the soil investigation and environmental report, and commissioning (in February 2021) a feasibility study for its Phase III oil storage facility, management has yet to finalise and report details around timings and the project financing structure. Phase III will be transformational for BROG and will involve an investment of c $1.1bn. BROG is involved in an ongoing process of negotiations with banks to secure financing of this investment; we assume it is likely to be a mix of debt and equity. There is therefore significant upside potential to our valuation of the company. Once we have more clarity around these developments and how they might be funded, we will update our valuation accordingly.

Our peer-based valuation of BROG uses FY22 multiples. We believe the market is already attributing value to Phase II and therefore, for comparison, FY22 numbers are more relevant as they include the full year impact of both Phase II and modular refinery operations. In light of the market volatility over the last year, we look back to peer metrics since FY18 to account for historical and actual valuations. The peer group average P/E from FY18 to date is 12.5x and 10.2x for EV/EBITDA (down versus 12.7x and 10.3x respectively in our previous note). Despite lower peer group multiples, our valuation has increased as we roll our calculations forward to FY22 to capture the full year effect of both Phase II and the modular refinery operations. Our December note was based on FY21 numbers, which considered only half year operations of the modular refinery (planned to commence in Q321) and led to deflated peer-based valuation as BROG’s FY21 EBITDA and EPS do not yet include full year contributions. That explains part of the increase in our total valuation, as we migrate to FY22 numbers. Another factor that needs to be considered is the fact that FY22 numbers are positively affected by an additional year of inflation, which is also increasing our valuation.

Exhibit 6 shows a detailed reconciliation of changes in our modestly increased valuation. The starting point is the previous blended valuation from our December note: $11.0/share as an average of peer-valuations EV/EBITDA ($9.9/share), P/E ($10.2/share) and DCF approach ($12.9/share). Moving down, we present the impact of each factor on our price per share valuation, for each valuation methodology. At the bottom, the sum of all the changes leads to our current valuation: $11.4/share as the average of peer-valuations EV/EBITDA ($11.0/share), P/E ($10.9/share) and DCF approach ($12.4/share).

Exhibit 6: Reconciliation of changes in valuation comparing to previous note

Old valuation:

EV/EBITDA (old)

$9.9/share

P/E (old)

$10.2/share

DCF (old)

$12.9/share

Weighted average

$11.0/share

Changes in valuation

Inflation

0.3

Inflation

0.1

Phase II delay

(0.4)

Refinery – to full year

0.6

Refinery – to full year

0.8

Other

(0.1)

 

Change in peer multiple

0.0

Change in peer multiple

(0.2)

 

Other

0.3

Other

(0.1)

 

Current valuation:

EV/EBITDA (new)

$11.0/share

P/E (new)

$10.9/share

DCF (new)

$12.4/share

Weighted average

$11.4/share

Source: Edison Investment Research. Note: Valuation at 11 March 2021 (new) and at 22 December 2020 (old).

The main change comes from including a full year impact of the refinery, instead of a half-year (‘refinery – to full year’). The effect of ‘change in peers’ multiple’ was not significant. The ‘other’ line in the EV/EBITDA valuation column includes the positive impact from our estimated decline in net debt (end-2022 vs end-2021).

On our assumptions for FY22, BROG currently trades at a P/E of 12.4x and an EV/EBITDA of 10.7x. Looking at the peer group multiples on FY22e (Exhibit 7), BROG trades at a premium on both metrics (peers currently trade at an FY22e P/E of 10.6x and an EV/EBITDA of 8.5x) and we believe the premium the market is attributing to BROG accounts for the fact that it is a growing company with efficient operations and significant expansion potential in the near future.

As we mentioned in our initiation note, we highlight that there is not an extensive group of listed midstream companies identical to BROG. Most peers are North American companies that, in addition to storage terminals, also own pipeline networks or distribution infrastructure, with recent valuations and earnings directly affected by COVID-19 as oil demand reduced and oil exports and trading decreased. Exhibit 7 shows the impact of COVID-19 on the share prices of BROG’s peers.

Exhibit 7: Peer market value and Brent evolution since 2018

Source: Edison Investment Research. Note: Prices 11 March 2021. BROG, not shown above, commenced trading in Q419.

We believe the most similar peer to BROG is Dutch company Koninklijke Vopak. Although Vopak is significantly bigger than BROG, in market value and storage capacity, its business model is more in line with BROG than the North American peers. Like BROG, Vopak’s share price has largely held its value in 2020. Since the market recovered from its March/April 2020 COVID-19 related collapse, BROG’s share price has increased by 16%, while Vopak’s decreased by 6%. Exhibit 8 shows the peer group valuation.

Exhibit 8: Peer group valuation

 

Market cap
($m)

EV
($m)

P/E FY21e
(x)

P/E FY22e
(x)

EV/EBITDA FY21e
(x)

EV/EBITDA FY22e
(x)

P/CF FY21e
(x)

P/CF FY22e
(x)

FCF yield FY21e
(%)

FCF yield FY22e
(%)

Net debt/
EBITDA FY21e
(x)

Net debt/
EBITDA FY22e
(x)

Dividend yield FY21e
(%)

Edison estimate - BROG

1,184

1,301

23.6

12.4

17.0

10.7

19.4

10.7

3.3%

10.0%

1.9

0.3

0.0%

Peer group average

12,178

25,128

11.1

10.6

8.8

8.5

6.1

5.9

17.3%

20.6%

3.8

3.6

7.7%

Delek Logistics Partners

1,596

2,584

8.4

8.2

7.1

7.0

6.5

6.1

16.9%

17.6%

3.1

2.8

10.4%

Enable Midstream Partners

3,106

7,692

11.8

9.3

7.6

7.1

4.8

4.3

7.7%

16.1%

4.4

4.1

9.3%

Energy Transfer

22,592

87,280

6.6

6.3

8.0

7.8

3.5

3.5

25.8%

29.0%

4.3

4.1

7.4%

Enterprise Products Partners

50,831

80,760

11.3

10.5

9.7

9.7

7.8

7.5

10.1%

12.1%

3.3

3.1

7.9%

Genesis Energy

1,130

5,432

10.4

6.9

7.6

7.0

3.1

2.9

20.4%

22.3%

4.9

4.5

6.5%

Holly Energy Partners

2,046

3,627

9.7

9.3

9.8

9.3

6.6

6.3

13.9%

14.4%

3.2

2.7

7.3%

Kinder Morgan

36,669

71,304

17.4

16.7

10.2

10.2

8.2

7.8

10.2%

9.8%

4.6

4.3

6.9%

Koninklijke Vopak

6,158

9,459

11.0

9.6

9.8

9.0

7.3

7.3

7.7%

8.0%

2.8

2.3

4.0%

Magellan Midstream Partners

10,070

15,036

11.0

10.6

10.3

9.7

8.8

8.5

9.9%

10.7%

3.5

3.3

9.1%

MPLX

27,309

49,259

9.8

9.3

9.1

9.1

6.6

6.4

11.9%

14.7%

3.6

3.5

10.5%

NGL Energy Partners

332

4,520

N/A

16.6

7.5

6.5

1.1

0.9

72.2%

86.2%

5.8

4.9

2.2%

Noble Midstream Partners

1,390

3,462

7.3

6.4

8.4

7.7

4.9

4.1

16.9%

17.6%

3.3

N/A

4.9%

NuStar Energy

2,187

6,987

14.4

15.5

9.0

8.5

5.5

6.1

11.5%

8.4%

5.2

5.1

8.0%

ONEOK

22,427

36,163

15.6

14.3

10.9

10.5

9.4

9.3

9.3%

10.2%

4.1

3.9

7.5%

PBF Logistics

881

1,565

7.0

6.2

7.2

7.3

5.1

4.8

18.4%

19.7%

2.4

N/A

8.5%

Pembina Pipeline Corp

16,767

28,403

19.4

18.4

10.2

10.2

9.5

8.6

9.4%

10.0%

3.5

2.0

5.4%

Phillips 66 Partners

7,017

11,961

8.2

7.9

8.3

7.3

6.7

6.4

10.2%

12.6%

3.1

2.7

11.1%

Plains All American Pipeline

6,961

19,589

6.8

6.8

8.3

7.9

4.4

4.2

18.3%

19.9%

4.2

3.6

7.6%

Plains GP Holdings

1,879

21,793

7.9

7.4

9.1

N/A

3.5

3.7

41.9%

67.1%

3.8

3.7

7.6%

Shell Midstream Partners

5,380

6,741

8.5

8.3

7.5

8.3

7.1

7.2

11.5%

14.7%

2.9

2.8

12.3%

Williams Companies

29,010

54,061

19.9

18.9

9.9

9.7

8.1

7.7

9.9%

11.2%

4.1

4.0

7.1%

Total average

11,678

24,044

11.7

10.7

9.2

8.6

6.7

6.1

16.7%

20.1%

3.7

3.4

7.3%

Source: Edison Investment Research, Refinitiv estimates. Note: Prices at 11 March 2021.

Exhibit 9: Financial summary

 

 

$m

2018

2019

2020e

2021e

2022e

Year end 31 December

 

 

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

36

44

47

86

135

Cost of Sales

(10)

(10)

(10)

(15)

(25)

Gross Profit

26

34

36

70

110

EBITDA

 

 

30

37

38

76

121

Adjusted EBITDA

 

 

30

37

38

76

121

Operating Profit (before amort. and except.)

 

 

24

31

32

65

105

Intangible Amortisation

0

0

0

0

0

Exceptionals

0

0

0

0

0

Other

0

0

0

0

0

Operating Profit

24

31

32

65

105

Net Interest

(8)

(107)

(8)

(15)

(10)

Profit Before Tax (norm)

 

 

16

(75)

23

50

95

Profit Before Tax (FRS 3)

 

 

16

(75)

23

50

95

Tax

0

0

0

0

0

Profit After Tax (norm)

16

(75)

23

50

95

Profit After Tax (FRS 3)

16

(75)

23

50

95

Average Number of Shares Outstanding (m)

80.0

88.1

109.6

109.6

109.6

EPS - normalised fully diluted (c)

 

 

20.1

(85.5)

21.4

45.7

87.0

Dividend per share (c)

0.0

0.00

0.00

0.00

0.00

Gross Margin (%)

73.2

76.9

77.7

82.2

81.8

EBITDA Margin (%)

83.5

84.1

80.0

89.2

89.8

Operating Margin (before GW and except.) (%)

67.5

70.9

67.4

76.4

78.1

BALANCE SHEET

Fixed Assets

 

 

198

285

369

390

375

Intangible Assets

0

0

0

0

0

Tangible Assets

198

263

347

368

353

Investments

0

22

22

22

22

Current Assets

 

 

2

22

13

13

28

Stocks

0

0

0

0

0

Debtors

2

2

11

11

11

Cash

0

20

2

2

17

Other

0

0

0

0

0

Current Liabilities

 

 

(111)

(95)

(95)

(95)

(95)

Creditors

(10)

(78)

(75)

(75)

(75)

Short term leases

(2)

(2)

(3)

(3)

(3)

Short term borrowings

(99)

(15)

(17)

(17)

(17)

Long Term Liabilities

 

 

(28)

(103)

(154)

(125)

(29)

Long term borrowings

0

(74)

(125)

(96)

0

Long term leases

(28)

(29)

(29)

(29)

(29)

Other long term liabilities

(0)

(0)

(0)

(0)

(0)

Net Assets

 

 

61

109

133

183

279

CASH FLOW

Operating Cash Flow

 

 

28

53

21

62

111

Net Interest

0

0

0

0

0

Tax

0

0

0

0

0

Capex

(0)

(60)

(90)

(32)

(1)

Acquisitions/disposals

0

0

0

0

0

Financing

(36)

30

0

0

0

Dividends

0

0

0

0

0

Net Cash Flow

(8)

24

(69)

29

111

Opening net debt/(cash)

 

 

121

129

100

172

143

HP finance leases initiated

0

0

0

0

0

Other

0

6

(3)

0

0

Closing net debt/(cash)

 

 

129

100

172

143

32

Closing net debt excluding financial leases

99

69

139

111

0

Source: Brooge Energy accounts, Edison Investment Research


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United Kingdom

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Frankfurt +49 (0)69 78 8076 960

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60325 Frankfurt

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London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

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Level 4, Office 1205

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NSW 2000, Australia

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This report has been commissioned by Brooge Energy and prepared and issued by Edison, in consideration of a fee payable by Brooge Energy. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

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Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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