RIVCO AUSTRALIA LTD — Net Asset Value 2020

Apr 14, 2020

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ASX CODE (Shares) D20
Shares on Issue (March) 119,375,450
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The primary investment objective of Duxton Water is to build a portfolio of permanent water entitlements and utilise this portfolio to provide flexible water supply solutions to our Australian farming partners. The Company generates a return by offering irrigators a range of supply solutions including long term entitlement leases, forward allocation contracts and spot allocation supply.

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NET ASSET VALUE PER SHARE Entitlement Portfolio
Value by Region
Duxton Water’s NAV at 31 March 2020 was $1.68 per share.
The after-tax NAV figure takes into account the provision for deferred tax on set-up costs and 13%
estimates of net tax provisions that may arise should the entire portfolio be disposed of on the above
date. The Company does not expect to trigger these tax provisions through the turnover of these 14%
assets and expects to maintain its low entitlement turnover ratio. The NAV excluding tax provisions
for unrealised capital gain is $1.91. NAV is calculated based on an independent monthly portfolio 4%
valuation performed by Aither Pty Ltd (“Aither”).
69%
NET ASSET VALUE PER SHARE – SINCE INCEPTION
1.800 Murray Goulburn
1.750 Murrumbidgee Lachlan
1.700 March
1.650 Dividend 2.6 cents
1.600 @100% Franked March
1.550 August Dividend 2.8 c@100% Frankedents Water Portfolio
1.500 Dividend 2.5 cents Diversification
1.450 April @ 75% Franked
1.400 Dividend 2.4 cents @ 60% Franked April
1.350 10.1 million
1.300 November Placement
Dividend 2.3 cents October
1.250 @ 75% Franked 7.5 million
1.2001.150 March May & June 16.4 million Insto Offer 2.45 million sharesSPP May 36%
1.100 1.7 million Options Exercised November
1.050 Options Exercised Retail Offer10.8 million 64%
1.000
Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 Mar-20
Unleased Leased
PERFORMANCE
1 Month 3 Months 6 Months 12 Months Inception
-2.88% -2.55% 6.89% 18.63% 76.31% Water Security
These figures are based on NAV movements and include franked dividends for the period. Breakdown
INVESTMENT UPDATE 1%
At 31 March 2020, Duxton Water Ltd is invested in approximately $330.9 million of water assets with the 18%
remainder of the portfolio held in cash and net current assets. The Company has approximately 16ML ($0.07
million) of water entitlements in its acquisition pipeline at 31 March 2020.
Whist we have seen retracement in permanent entitlement values over the last couple of months, the
value uplift experienced over the last 36 months reflects long-term drivers rather than the recent drought 81%
conditions. Irrigators have over the last 10 years significantly enhanced their marginal return per megalitre
through both more efficient use of water and conversion to higher value commodities. At the same time,
we have seen significant steps taken to return water to the environment with Government purchases of
between 20-22% of entitlements that were previously available to the consumptive pool. The combined HS GS Bore
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DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500

ASX CODE (Shares) D20 Shares on Issue (March) 119,375,450

impact has seen stronger demand for a reducing available water supply and subsequent increased asset prices. Irrigators themselves have been the greatest beneficiaries from this capital appreciation as they collectively own the majority of water entitlements on issue in the market.

Throughout March, the Murray Darling Basin (MDB) experienced below average temperatures, while ex tropical cyclone Esther brought heavy rain to many regions within the MDB. These rains improved soil moisture through the delivery of in-valley rainfall, however there has been limited improvement in southern basin water storage levels to date. Murray, Goulburn and Murrumbidgee storages decreased by 161 GL collectively through March, reaching levels not seen since the millennial drought. While the Medindie Lakes saw a 203 GL increase through March, and is projected to reach 395 -425GL of resource, the majority of this volume is likely to be quarantined for operation of the Lower Darling and environmental flow over the next 12-18 months, and will deliver little addition resource to Murray Irrigators.

The current volume of water available within the Murray-Goulburn system is 30% of storage capacity levels; 6% lower than 12 months ago. Northern basin storage levels are currently 15%; 3% higher than 12 months ago.

Duxton Water continues to support its irrigation farming partners into the 2019/20 water year. This involves the provision of leases to over 70 family farming and corporate businesses. Irrigators attention has moved to balancing 2019/20 water use and the emerging conditions and supply into the 2020/21 water year.

The Company actively manages its allocation holding in order to deliver on demand for spot allocation sales, meet its obligation for the provision of forward allocation sales and deliver on new entitlement lease arrangements. With low storage levels, visible water supply through the provision of these products area critical tool that irrigators use to risk manage their water requirement. In the offering of these products, the Company supports market liquidity and risk management options for our irrigation partners.

ENTITLEMENT MARKET

Duxton Water Ltd is engaged in building a targeted portfolio of water entitlements predominantly across the southern MDB. The Company has invested in both surface and ground water assets. At 31 March 2020, the Company holds approximately 83,714ML of water entitlements across 19 different asset types and classes.

March delivered some retracement in the value of the Company’s permanent portfolio on the back of relatively low levels of entitlement trade.

Ongoing maturity of permanent plantings has seen greater water demand from high value crop industries such as almonds

and citrus. Demand for long-term water security such as high security entitlement ownership and long-term leases continues to increase. The Company’s view in this regard has been further supported by a new report released by the Victorian Government (www.waterregister.vic.gov.au/) which indicates that demand by horticultural industries is estimated to be 55% greater at crop maturity than ABARES have previously estimated*.

Aither Pty Ltd values the Duxton Water Ltd portfolio monthly, on a dry (without allocation) equivalent basis. There were notable movements in values and are shown below:

SOUTHERN BASIN

•  8.2% in Vic 6 Murray HR (~10.6% of portfolio)

•  3.9% in NSW Murrumbidgee 13 HS (~8.3% of portfolio) •  2.6% in NSW Murrumbidgee 13 GS (~4.6% of portfolio)

•  2.3% in Vic 7 Murray HR (~11.4% of portfolio)

•  1.3% in SA Murray HS (~8.7% of portfolio)

•  1.2% in Vic 1A Goulburn HR (~13.1% of portfolio)

NORTHERN BASIN

•  16.7% in NSW Lachlan GS (~2.8% of portfolio)

ALLOCATION MARKET

Allocation prices have continued to soften, with pricing in the below choke Murray and Murrumbidgee through the end of March trading between $475-490/ML, with the Goulburn and above choke Murray around $400-450/ML.

Contracts for forward allocation sales to be delivered in the 2020/21 water year are currently completing at between $675-750/ML.

LEASES

No new leases were entered into in March; however, the Company continues to work with a number of farming partners in looking ahead to 2020/21 water requirements. These new leases would not be recognised until the 1 July 2020.

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Interstate Water Trading Zones 1 – Greater Goulburn 3 – Lower Goulburn 4a – Part Campaspe 4c – Lower Campaspe 5a – Part Loddon 6 – Vic Murray above Barmah Choke 6b – Lower Broken Creek 7 – Vic Murray from Barmah Choke to SA Border 10 – NEW Murray above Barmah Choke 11 – NSW Murray below Barmah Choke 12 – South Australia Murray 13 – Murrumbidgee 14 –Lower Darling 15 – Lachlan 16 – Lower Lachlan Groundwater 17 – SA Mallee Groundwater Murray Darling Basin River

DUXTON WATER PORTFOLIO – SMDB EXPOSURE

* https://waterregister.vic.gov.au/images/documents/Water-Supply-and-DemandReport_Aither_FINAL.pdf

DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500

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ASX CODE (Shares) D20
Shares on Issue (March) 119,375,450
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The leased portion of the water entitlement portfolio currently sits at ~64%. This represents ~74% of the Company’s high security entitlement holding.

The current weighted average lease expiry (WALE) remains at 3.0 years. Inclusive of renewal options this pushes the WALE to 5.3 years. The Company continues to work towards its long-term goal of having 70-80% of the portfolio under lease.

DIVIDENDS & BUY BACK

The Company paid a fully franked final dividend on 30 March 2020 of 2.8 cents ($0.028) per share.

The Board maintains its commitment to providing our shareholders with a bi-annual dividend. With the increased forward-looking leasing revenue the Company is also now in a position to provide a targeted figure for the interim dividend of 2.9 cents ($0.029), fully franked, expected to be paid in September 2020 and a 3.0 cents ($0.03), fully franked, expected to be paid in March 2021.

On 10 September 2019, the Company announced a share buyback. As of 31 March 2020, the Company had purchased 2,301,857 shares at

an average price of $1.442/share. The Board believes the purchase of the Company’s shares at the current discount to NAV is in the interest of all shareholders.

STORAGE LEVELS IN MAJOR DAMS

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Total Murray Goulburn 30%36%
Lake Eildon 36%39%
Menindee Lakes 1% 12%
Lake Victoria 34%
32%
Hume 13% 19%
Dartmouth 47% 63%
Total Murrumbidgee 28% 41%
Blowering 26% 45%
Burrinjuck 31% 36%
2020 2019 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
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DAILY INFLOWS TO THE MDB

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260,000
240,000
220,000
200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2016-17 2017-18 2018-19 2019-20 Long term average
Murray System Daily Inflows (excl. Snowy Darling, inter-valley trade and environmental inflows) -
5 day rolling average
I-Jun I-Jul I-Aug I-Sep I-Oct I-Nov I-Dec I-Jan I-Feb I-Mar I-Apr I-May I-Jun
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DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500

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ASX CODE (Shares) D20
Shares on Issue (March) 119,375,450
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MARKET UPDATE & OUTLOOK

Rainfall through March and heavy rainfalls in early April have been a welcome start to Autumn however the drought in many places is far from over. While these rains have increased soil moisture, they have only provided marginal replenishment to water storages. Following up from above, average rainfall will be required for several months to increase stream flows and to have a material impact on water storages levels.

Australia’s major climate drivers are currently neutral and are likely to remain neutral through winter. However warmer than average waters to the northwest of Australia are likely to bring tropical rainfall across the continent through April. May to July rainfall is likely to be marginally above average across the majority of the country. Temperatures are likely to be above average in the northern half of Australia and below average in the southern half of Australia.

CHANCE OF ABOVE-AVERAGE RAINFALL MAY 2020 – JULY 2020

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80
75
70
65
60
55
50
45
40
35
30
25
20
Chance of exceeding median rainfall (%)
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Inflows have tracked significantly below average throughout 2019/20. This delivered little improvement in resource availability has produced only a small net increase in storage levels since February. In the northern and southern MDB, storages are now at 15% and 30%, compared to 12% and 36% this time last year.

Within Victoria, a conservative approach to their water resource management has enabled them to deliver increased allocation on the back of small resource improvements. As of the 1 April 2020, South Australian irrigators have received 100% allocation whilst Victorian Murray and Goulburn irrigators have received 66% and 80% respectively. NSW Murray and Murrumbidgee HS licences received 95% and 97% respectively. NSW Murrumbidgee GS licences have received an allocation of 6% for the 2019/20 water year, however resource deficits in the NSW Murray have seen no allocation to Murray GS licence holders for the second year in a row.

COVID-19 UPDATE

The Investment manager and Board of Duxton Water Ltd continue to monitor the on-going Covid-19 pandemic. The Investment manager has put in place measures to ensure staff are able to continue to operate effectively whilst adhering to Government recommendations. This has enabled the day to day operations of the Company to continue with little impact. The distancing measures will require the Company to hold its AGM, scheduled for 19 May 2020, via an audio webcast. The Notice of Meeting will be posted to shareholders in the coming days. While the Board will continue to monitor and advise of any change, it does not currently foresee any significant operational impact to the business and has reaffirmed its September 20 and March 21 dividend targets.

VALUATION METHODOLOGY

Aither undertake a monthly valuation of the Duxton Water portfolio. Total assets of the Company are valued based on an assessment of fair market value. Aither has adopted the Australian Accounting Standards Board (AASB) 13 Fair Value Measurement definition of fair value. Further information can be found on www.duxtonwater.com.au

This announcement has been authorised for release by the Board of Duxton Water Limited.

DISCLAIMER: This factsheet is prepared by Duxton Capital (Australia) Pty Ltd [ACN: 164 225 647; AFSL no. 450218] (“Duxton Capital (Australia)”). Duxton Capital (Australia) is the Investment Manager of Duxton Water Limited [ACN 611 976 517] (“Duxton Water”). This factsheet has been prepared for the purposes of providing general information only and does not constitute an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any securities in Duxton Water. Information from this factsheet must not be issued in any jurisdiction where prohibited by law and must not be used in any way that would be contrary to local law or regulation. The terms of Duxton Water are set out in the prospectus of Duxton Water (“Prospectus”), and should there be any conflict between the terms set out in this factsheet and the Prospectus, the terms in the Prospectus shall prevail. The forecasts provided are based upon our opinion of the market as at this date and are subject to change, dependent on future changes in the market. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance. Investments are subject to risks, including possible loss of principal amount invested. The value of shares/ units and their derived income may fall as well as rise. Past performance or any prediction or forecast is not necessarily indicative of future performance. No assurance is given that the investment objective or the targets will be met. This document does not constitute investment, tax, legal or any other form of advice or recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. Investors should study all relevant information and consider whether the investment is appropriate for them. If you require investment or financial advice please contact a regulated financial adviser. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in this presentation. The Duxton Group or its affiliates may hold positions in the securities referred. Where stocks are mentioned, it should not be construed that these are recommendations to buy or sell those stocks. You are not authorized to redistribute this document nor qualified to make any offer, representation or contract on behalf of Duxton Capital (Australia) or its affiliates. Although the information was compiled from sources believed to be reliable, no liability for any error or omission is accepted by Duxton Capital (Australia) or its affiliates or any of their directors or employees. The information and opinions contained may also change. Copyright protection exists in this presentation. To the extent permitted by applicable law, none of the Duxton Group, their affiliates, or any officer or employee of the Duxton Group accepts any liability whatsoever for any direct or consequential loss arising from any use of this factsheet or its contents, including for negligence.

DUXTON WATER LTD DUXTON HOUSE. 7 POMONA ROAD STIRLING SA AUSTRALIA 5152 [+61]8 8130 9500