WINGARA AG LTD — Interim / Quarterly Report 2020

Oct 30, 2019

Wingara AG Limited ACN 009 087 469 5-7 Leslie Road Laverton North, Victoria 3026

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ASX Announcement

31[st] October 2019

WINGARA 4C COMMENTARY Q2, FY20 Highlights

• Financial performance was maximised with cash inflow of $8.1m based on available inventory while continuing upgrade program at Austco Polar

• Over $5 million capital gain from the Austco Polar sale and lease back

• Proven platform for value-adding to assets to become EBITDA accretive provides potential for new acquisition opportunities

Results

Wingara AG Limited (“Wingara” or “the Company”) owns, develops and grows high-quality processing and logistic assets focusing on agriculture produce for export markets.

Wingara is pleased to provide its 4C report demonstrating a continued growth trajectory.

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4C Quarterly performance
10,000
5,000
-
Q3 FY19 Q4 FY 19 Q1 FY 20 Q2 FY20
$A'000 $A'000 $A'000 $A'000
-5,000
Receipts from customers Net Cash from Operating activites
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Austco Polar Property Sale and Leaseback

In July 2019, Wingara announced the sale of the Austco Polar Cold Storage property for $21 million with lease back terms of 15 years and two further 10-year options. The transaction does not impact the operation of Austco Polar, and the business unit will continue to implement its growth plan to deliver increased EBITDA to Wingara.

The transaction is in line with Wingara’s overall business strategy allowing the Company to:

• Crystallise a capital gain of $5.06m through improvement in Austco’s financial performance over the past 15 months;

• Transforming its capital structure with core debt to equity at approximately 30%; and

• Continue to pursue investment opportunities in value added midstream assets that can deliver strong return in the agriculture sector with a focus in the protein supply chain.

The Wingara Platform

Over the past 3 years Wingara has developed its growth strategy to build a sustainable platform for processing and marketing agricultural products. Wingara differentiates itself through a reputation for high-quality service to both our primary producers and to export customers in key Asian markets.

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This has been possible through a series of strategic acquisitions – Epsom fodder processing facility, development of Raywood fodder processing facility, and most recently Austco Polar Cold Storage. The strategy has been the same for each:

• Buy: Acquire relevant assets on attractive terms with potential upside

• Improve: Upgrade capacity and improve efficiencies to support top line and bottom line improvements

• Accelerate: Use Wingara contacts, influence, distribution and marketing channels in Asia markets to accelerate sales

• Capitalise/crystallise: Deliver EBITDA accretive results and large capital returns from corporate transactions

An overview of how Wingara has delivered value from its assets to deliver overall EBITDA increases is outlined below:

				Capitalise /
	Buy	Improve	Accelerate	Crystallise
Epsom	 Acquired JC	 Upgraded design	 Increased sales	 Increased
(processing &	Tanloden	and improved	to Asia export	production
storage) with option	operations for	efficiency while	territories –	capacity from
at Horsham site	$4.9m in 2015	using it as a	Korea, Taiwan	16,000 MT to
	 Took option on	blueprint for	and China	over 40,000 MT
	Horsham site	Raywood
	with a long term	development
	view	 Solar installation
Raywood	 Greenfield site	 Stage 1	 China export	 Continuous
(processing &	acquired in 2017	completed with	approval	improvement
storage)		storage of	 Stage 2 planned	will see the site
		20,000 MT and	to add further	as the largest
		70,000 MT	storage and	fodder
		throughput	throughput	production site
		capacity	capacity	on the East
				Coast
Austco Polar	 Raised $6.8m in	 Upgraded to	 Commenced	 Sale of building
(cold storage)	equity to acquire	50,000 MT	sales to Asia	for $21m, long
	for $18.5m in	throughput	markets	term lease back.
	2018 ($3.4m for	 Efficiency and	 Increase	Crystallise $5m
	business,	capital	customer base	for growth
	$15.1m for	improvement	and throughput
	building)	programs

Most recently, the sale and leaseback of the Austco Polar property adds the option to realise hidden value in the owned properties and deploy the realised capital on assets with higher returns on equity. Wingara will remain alert to relevant opportunities with strategic fit to the Wingara platform.

Forward growth by utilising the Wingara Platform

Wingara has proven itself with its capital and asset management skills – its ability to buy, improve, accelerate and crystallise value from relevant agriculture produce assets. Wingara will continue to seek to replicate its models with the acquisition of relevant strategic assets. Wingara will favour opportunities that are capital efficient and with a clear pathway to growth.

Wingara has extensive reach through international markets and receives significant, high-quality deal flow of agriculture and food opportunities that have the potential to be EBITDA accretive. The Board believes in a blended approach to growth – both organically and through acquisition as an optimised strategy that maximises potential value to Wingara while minimising downside risk.

Contact:

Roger Prezens Director of Investor Relations and Investment Ph: +61 (0) 408 520 008

About Wingara Ag Limited:

Wingara AG Limited aims to be the leader in the sale of agricultural products to the domestic and international markets, particularly focusing on the export of hay products to Asia. By adhering to the highest standards of production we ensure a reliable source of

hay to our clients, enabling them to meet their business demands confident in the quality of our product.

We are also dedicated to supporting local producers and our commitment to providing an equitable relationship with Australian farmers allows us to source the best product available. Wingara is committed to ensuring we uphold the highest standards of integrity throughout the organisation, ensuring that we create an environment in which individuals continue to strive to meet our goals.

Forward-Looking Statements:

Certain statements made in this release are forward-looking statements and are based on Wingara Ag’s current expectations, estimates and projections. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “guidance” and similar expressions are intended to identify forward-looking statements. Although Wingara Ag believes the forward-looking statements are based on reasonable assumptions, they are subject to certain risks and uncertainties, some of which are beyond Wingara Ag’s control, including those risks or uncertainties inherent in the process of both developing and commercialising technology. As a result, actual results could materially differ from those expressed or forecasted in the forward-looking statements. The forward-looking statements made in this release relate only to events as of the date on which the statements are made. Wingara Ag will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this release except as required by law or by any appropriate regulatory authority.

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

+Rule 4.7B

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

Name of entity

Wingara AG Ltd

ABN Quarter ended (“current quarter”) 58 009 087 469 30 September 2019

Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) research and development (b) product manufacturing and operating costs Hay purchases (c) advertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	8,127 - (2,337) (1,058) (49) (451) (2,626) (193) - - (320) - - -	15,756 - (4,170) (2,258) (54) (603) (4,584) (401) - - (669) - - 3
	1,093	3,020
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) businesses (see item 10)	(347) -	(772) -

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
(c) investments (d) intellectual property (e) other non-current assets 2.2 Proceeds from disposal of: (a) property, plant and equipment (b) businesses (see item 10) (c) investments (d) intellectual property (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - 21,028 - - - - - - -	- - - 21,028 - - - - - - -
	20,681	20,256
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	- - - - - (18,376) - - (95)	- - - - - (19,284) - - (95)
	(18,471)	(19,379)
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of quarter/year to date 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above)	1,247 1,093 20,681 (18,471)	664 3,020 20,256 (19,379)

• See chapter 19 for defined terms

1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of quarter	6	(5)
	4,556	4,556
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter(Amount excludes bank overdraft of $222k which is shown as current liability)	4,556	1,247
	4,556	1,247
6. Payments to directors of the entity and their associates Current quarter $A'000 6.1 Aggregate amount of payments to these parties included in item 1.2 163 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 - 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
		Current quarter $A'000
		163
		-
7. Payments to related entities of the entity and their associates Current quarter $A'000 7.1 Aggregate amount of payments to these parties included in item 1.2 - 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 - 7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2
		Current quarter $A'000
		-
		-

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

8.	Financing facilities available	Total facility amount	Amount drawn at
	Add notes as necessary for an	at quarter end	quarter end
	understanding of the position	$A’000	$A’000
8.1	Loan facilities	10,037	9,386
8.2	Credit standby arrangements	97.5	97.5
8.3	Other (please specify)	40	-
8.4	Include below a description of each facility above, including the lender, interest rate and
	whether it is secured or unsecured. If any additional facilities have been entered into or are
	proposed to be entered into after quarter end, include details of those facilities as well.

	Facility	Facility Limit	Drawndown	Interest Rate
		($,000)	($,000)
	InventoryLoan Facility	5,000	5,000	BBSY + 1.73
	Assetfinancefacility	1,586	1,313	4.94%
	Bank overdraft	600	222	6.99%
	StandbyLetter of Credit or Guarantee Facility	97.5	97.5
	Westpac Facility- Elect Performance Group	2,851	2,851	BBSY + 1.73
	Corporate Card	40	-
	Totals	10,174	9,484

9. Estimated cash outflows for next quarter	$A’000
9.1 Research and development 9.2 Product manufacturing and operating costs 9.3 Advertising and marketing 9.4 Leased assets 9.5 Staff costs 9.6 Administration and corporate costs 9.7 Other (provide details if material) 9.8 Total estimated cash outflows	(4,500) (50) (500) (2,500) (500)
	(8,050)

10. Acquisitions and disposals of business entities (items 2.1(b) and 2.2(b) above)	Acquisitions	Disposals
10.1 Name of entity
10.2 Place of incorporation or registration
10.3 Consideration for acquisition or disposal
10.4 Total net assets
10.5 Nature of business

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here: (Director)

Date: 31 October 2019.............

Print name: Zane Banson......................................

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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