WINGARA AG LTD — Interim / Quarterly Report 2023

Oct 25, 2022

Wingara AG Limited ACN 009 087 469 Level 1, 10 Oxley Rd Hawthorn, VIC 3122

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ASX Announcement

26 October 2022

Quarterly Activities Report

Q2 FY23 highlights:

• Operating cash receipts of $15.0 million, up 9% and 23% on Q2 FY22 and last quarter, respectively.

• Positive operating cash flows continue from Q1 FY23 ending the quarter on $1.0 million.

• JC Tanloden sales volume of 24,491 MT for Q2 FY22, taking H1 FY23 sales volumes to 51,440 MT, up 16% from H1 FY22.

• Austco Polar business sale completed on 7 October 2022 marking the end of a long divestiture.

Wingara AG Limited ( ASX: WNR ) (“Wingara” or the “Company”), the owner and operator of value-add, mid-stream assets specialising in the processing, storage and marketing of agriculture produce for export markets, is pleased to provide this quarter’s activities report alongside its Appendix 4C (Quarterly Cashflow Report) for the three months ended 30 September 2022 (Q2 FY23).

Commenting on Q1 FY23, Wingara’s Chief Executive Officer James Whiteside said:

“The completion of the sale of Austco Polar Cold Storage marks an important milestone for the Company, as a non-core asset is divested, and focus can be applied entirely to JC Tanloden. We were grateful for the support and patience of the Austco management during the long sales process and wish the business the very best under its new owners.

“It is pleasing to report continued growth in sales volumes at JC Tanloden in the first half of the year although the very real challenges we have had to recruit and retain an engaged workforce has impacted particularly hard in this second quarter. We also experienced some planned and unplanned plant outages in Q2 FY23. We have seen some improvement in the labour market recently and it appears that the worst of these labour shortages are now behind us. Demand in all major markets has remained very strong and we have been able to largely recover the high cost of fodder and sea freight in our pricing.”

Wingara AG Limited ACN 009 087 469 Level 1, 10 Oxley Rd Hawthorn, VIC 3122

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Record cash receipts in Q2 FY23

($m)	Q1 FY22 Jun-21	Q2 FY22 Sep-21	Q3 FY22 Dec-21	Q4 FY22 Mar-22	TOTAL FY22 YTD	Q1 FY23 Jun-22	Q2 FY23 Sep-22	TOTAL FY23 YTD
Receipts from customers	11.6	12.2	14.5	12.8	51.1	13.7	15.0	28.7
Net Cash from Operating activities	1.5	0.2	0.2	2.4	4.2	1.2	1.0	2.2
Total Hay volumes MT (JCT)	19,852	24,344	26,919	25,466	96,581	26,949	24,491	51,440
Available Hay MT (JCT)	10,520	11,476	12,069	8,389	8,389	6,390	4,607	4,607
Blast cartons (k) (Austco)	471	499	406	414	1,790	439	485	924

Wingara has delivered record receipts from customers of $15.0 million, up 9% on prior quarter due to product sales mix and favourable AUD/USD foreign exchange rate movements. Net cash from operating activities continues to be positive in FY23 ending the quarter on $1.0 million. The decline from prior quarter is predominantly due to timing of payments, continued increases in sea freight costs and costs pertaining to planned maintenance on our plant and equipment.

JC Tanloden

• Hay volumes processed at JC Tanloden ended Q2 FY23 on 24,491 MT, up 1% from prior comparative period but down 9% on prior quarter. The reduced production from prior quarter was a result of downtime from maintenance programs run in August and September 2022.

• Continuing trends of high sea freight costs, shipping delays and difficultly in labour resourcing not abating in Q2 FY23, though the business continues to manage these challenges well with market demand for our product remaining strong.

• The impact of the unseasonably high spring rainfall is an uncertain outlook. We are working closely with our grower network across southern Australia to track crop yields and flood and rain related damage. A number of contingencies are being planned for.

Austco Polar Cold Storage

• The sale process of Austco Polar completed on 7 October 2022 resulting in $1.0 million in cash consideration (plus a working capital adjustment) which will assist with the business’ working capital requirements in Q3 FY23.

Financial update

Receipts from customers were $15.0 million for Q2 FY23. Net financing payments of $1.5m relating to fluctuations in our revolving loan facility and repayments of lease liabilities. The table below provides a summary of Receipts and Expenditures and business activities for Q2 FY23 (refer also the accompanying Appendix 4C):

Receipts from customers Operating costs SG&A (corporate overhead) Investing activities Financing payments / receipts	Q1 FY23 (3 months to 30 Sep 2022) FY223 (YTD) $’000 $’000
	15,035 28,722 (10,108) (18,446) (3,962) (8,140) (119) (177) (1,511) (2,143)

Note: Numbers in the table are presented on a cash basis, consistent with the Appendix 4C.

Wingara AG Limited ACN 009 087 469 Level 1, 10 Oxley Rd Hawthorn, VIC 3122

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Payments to related parties over Q2 FY23 were $48,462, which included fees paid to directors.

This announcement has been approved for release by the Board of Directors of Wingara AG Limited.

For further information please contact:

Jae Tan Chief Financial Officer

E: jae.tan@wingaraag.com.au

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.

For further information, please visit: https://wingaraag.com.au/

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. 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.

Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

Wingara AG Ltd

ABN 58 009 087 469

Quarter ended (“current quarter”)

30 September 2022

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	15,035 (5,158) (4,950) - (3,317) (303) (306) (36) -	28,722 (9,919) (8,526) - (6,928) (651) (524) (36)
	965	2,136
2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) businesses (c) property, plant and equipment (d) investments (e) intellectual property	(144)	(202)

ASX Listing Rules Appendix 4C (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 4C Quarterly cash flow 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
(f) other non-current assets 2.2 Proceeds from disposal of: (a) entities (b) businesses (c) property, plant and equipment (d) investments (e) intellectual property (f) 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	25	25
	(119)	(177)
3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 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) Payment for leased assets (i) 3.10 Net cash from / (used in) financing activities	3,200 (3,401) (20)	6,150 (5,789) (75)
	(1,290)	(2,429)
	(1,511)	(2,143)

(i) The Group has adopted accounting standard AASB 16 Leases with effect from 1 April 2019. In accordance with the requirements of AASB 16 cash payments for the Group’s Lease Liabilities are presented within financing activities.

ASX Listing Rules Appendix 4C (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 months) $A’000
4. 4.1 4.2 4.3 4.4 4.5 4.6	Net increase / (decrease) in cash and cash equivalents for the period Cash and cash equivalents at beginning of period Net cash from / (used in) operating activities (item 1.9 above) Net cash from / (used in) investing activities (item 2.6 above) Net cash from / (used in) financing activities (item 3.10 above) Effect of movement in exchange rates on cash held Cash and cash equivalents at end of period	2,108 965 (119) (1,511)	1,628 2,136 (177) (2,144)
		1,443	1,443
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 (should equal item 4.6 above)		1,443	2,108
		1,443	2,108
6. Payments to related parties of the entity and their associates			Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1 48 6.2 Aggregate amount of payments to related parties and their associates included in item 2 - Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.			48
			-

ASX Listing Rules Appendix 4C (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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

7. 7.1 7.2 7.3 7.4 7.5 7.6		Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 Loan facilities 10,472 8,007 Credit standby arrangements 35 Other (please specify) Total financing facilities 10,507 8,007 Unused financing facilities available at quarter end 2,500 Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. Facility Facility Limit ($,000) Drawndown ($,000) Interest Rate Inventory Loan Facility 5,000 3,350 BBSY+1.12% Westpac Facility-Elect Performance Group 436 436 BBSY+1.58% WBC BBBL 1,830 1,830 BBSY+1.55% Commercial Loan 750 750 5.00% Asset finance facility 1,856 1,641 5.50% Bank overdraft 600 - 6.84% Corporate Card 35 - Total 10,507 8,007	Total facility amount at quarter end $A’000	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000	Amount drawn at quarter end $A’000
			10,472		8,007
			35
			10,507		8,007
		Facility	Facility Limit ($,000)	Drawndown ($,000)		Interest Rate
		Inventory Loan Facility	5,000	3,350		BBSY+1.12%
		Westpac Facility-Elect Performance Group	436	436		BBSY+1.58%
		WBC BBBL	1,830	1,830		BBSY+1.55%
		Commercial Loan	750	750		5.00%
		Asset finance facility	1,856	1,641		5.50%
		Bank overdraft	600	-		6.84%
		Corporate Card	35	-
		Total	10,507	8,007

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6	Net cash from / (used in) operating activities (item 1.9) 965 Cash and cash equivalents at quarter end (item 4.6) 1,443 Unused finance facilities available at quarter end (item 7.5) 2,500 Total available funding (item 8.2 + item 8.3) 3,943 Estimated quarters of funding available (item 8.4 divided by item 8.1) N/A Note: if the entity has reported positive net operating cash flows in item 1.9, answer item 8.5 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.5. If item 8.5 is less than 2 quarters, please provide answers to the following questions: 8.6.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?	965 1,443 2,500
		3,943
	Answer:

ASX Listing Rules Appendix 4C (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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

• 8.6.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?

Answer:

• 8.6.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

Answer:

Note: where item 8.5 is less than 2 quarters, all of questions 8.6.1, 8.6.2 and 8.6.3 above must be answered.

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.

Date: 26/10/2022...................................................................

Authorised by: The Board...................................................................

(Name of body or officer authorising release – see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow 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 cash flow 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. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 4C (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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