Alterra Ltd Quarterly Report and Strategic Updates - 16 July 2024
1AG (1AG) Share Update July 2024 Tuesday 16th
Alterra Ltd Announces Quarterly Report and Strategic Updates
Alterra Limited (ASX: 1AG) has released its quarterly report for the period ending 30 June 2024, detailing significant operational updates, financial performance, and strategic decisions.
Instant Summary:
- Winter irrigation maintenance program underway.
- Successful completion of 3100m subsurface water drainage.
- Stage 4 planting deferred to 2025.
- Dam 1 construction bulk earthworks complete, final work ongoing.
- No reportable safety incidents during the quarter.
- Completed shareholder buyback of 8,544,239 shares.
- Approval to sell interest in Carbon Conscious Investments Limited (CCIL) and delist from ASX.
- Cash position as of 30 June 2024 was $204K.
Operational Updates
Alterra Ltd has made significant progress in its operational activities during the quarter. The winter irrigation maintenance program is currently underway, ensuring the orchard's health and productivity. The orchard fertiliser and fungicide spray programs have been successfully implemented, and 3100m of subsurface water drainage has been completed.
Stage 4 planting preparation is well advanced. However, due to commercial considerations, the company has decided not to proceed with planting in 2024. An investment decision on the final scale and timing of Stage 4 will be made for the following year, subject to routine commercial considerations.
Dam Construction
The construction of Dam 1 has seen substantial progress, with bulk earthworks completed. Final work on the dam wall spillway is ongoing and is forecasted to be completed by the end of July 2024. The dam's storage volume is approximately 270ML above the latent storage capacity as the 596.5ML Class A license fills.
Safety and Corporate Updates
Safety remains a top priority for Alterra, with no reportable incidents during the quarter. The team has initiated an annual review of operational procedures to ensure a well-trained workforce is prepared to operate safely in the upcoming season.
On the corporate front, Alterra completed a minimum shareholder buyback, acquiring 8,544,239 shares at an aggregate cost of $51,265.49. The company also arranged a temporary extension of $500K to the NAB loan, with repayment due upon receipt of funds from the sale of its interest in Carbon Conscious Investments Limited (CCIL). Approval to sell its interest in CCIL and delist from the ASX was obtained at a general meeting on 28 June 2024, and the sale was completed on 5 July 2024, securing proceeds of $1.74m.
Financial Performance
Alterra's cash position as of 30 June 2024 was $204K. The company reported a net cash outflow of $823K from operating activities for the quarter. Payments made to related parties and their associates during the quarter included director fees, salaries, and superannuation amounting to $42K.
The decision to defer Stage 4 planting to 2025 may impact short-term growth projections but allows for more strategic planning. The completion of Dam 1 construction is a positive development, enhancing water storage capacity. The sale of CCIL and delisting from the ASX are significant corporate moves that aim to streamline operations and improve financial stability. These actions could lead to a mixed reaction from investors, balancing short-term operational challenges with long-term strategic benefits.
Investor Reaction:
Analysts have noted that the deferral of Stage 4 planting reflects prudent financial management given current commercial considerations. The completion of the dam and successful shareholder buyback are seen as positive steps. However, the delisting from the ASX has raised some concerns about liquidity and future investor engagement.
Conclusion:
Investors should closely monitor Alterra's strategic decisions and their impact on the company's long-term growth. The upcoming completion of Dam 1 and the strategic deferral of Stage 4 planting are key areas to watch. As Alterra transitions away from the ASX, investors are encouraged to stay informed about the company's progress and future plans.