ORBITAL CORPORATION LIMITED (“Company”) ABN 32 009 344 058 __________________________________________________________________________________________________ APPENDIX 4E PRELIMINARY FINAL REPORT 1. Results for Announcement to the Market Current reporting period: Previous corresponding period: Year ended 30 June 2023 Year ended 30 June 2022 Amount $’000 16,802 20 20 Revenue from ordinary activities Profit for the year Proft after tax attributable to members % Change up(+)/down(-) +7% +100% +100% 2. Dividends Information The directors do not recommend the payment of a dividend in relation to the financial year ended 30 June 2023 (2022: nil) 3. Net tangible assets/(liabilities) per share 2023 $ 2.18 Net tangible asset/(liability) backing per ordinary share 4. 2022 $ (1.70) Commentary on the results Revenue from ordinary activities for the year was $16,802,000. This compared with revenue of $15,720,000 for the year ended 30 June 2022, an increase of 7%. Prior announcements indicated total revenue of $17,240,00 which has subsequently been adjusted to account for $438,000 in deferred revenue into FY24. The Group recorded a net profit after tax of $20,000. This compared with a net loss after tax of $11,626,000 for the year ended 30 June 2022, a decrease in losses of 100%. The net profit after tax represented a profit of 0.02 cents per share (basic and diluted), compared to a loss 12.92 cents per share for the year ended 30 June 2022. Net cash outflows of $21,000 were attributable to operating cash outflows of $2,748,000, investing cash outflows of $1,097,000 and financing cash inflows of $3,866,000. At year-end, the Company held $2,292,000 in cash (30 June 2022: $2,363,000) and recorded net assets of $6,938,000 (30 June 2022: $2,199,000) and net current assets of $1,817,000 (30 June 2022 net current liabilities: $4,977,000). In November 2022 and January 2023, the Company completed a successful $5,000,000 capital raising, issuing 25,000,000 new ordinary shares and new 17,500,000 share options to fund new engine development and supply additional working capital. The Company forecasts the new engine will enter production in FY24. 5. Audit report The preliminary final report is based on accounts which are in the process of being audited and is likely to contain a statement of material uncertainty on going concern similar to prior periods. 6. Approval This preliminary final report announcement was approved by Board resolution on 31 August 2023. 1 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2023 __________________________________________________________________________________________ Continuing operations Sale of goods Engineering services revenue Royalty and licence revenue Interest revenue Total revenue Other income Materials and consumables expenses Reversal/(write down) of excess inventory Employee benefits expenses Depreciation expenses Amortisation of intangibles Engineering consumables and contractor expenses Occupancy expenses Travel and accommodation expenses Communications and computing expenses Patent expenses Insurance expenses Audit, compliance and listing expenses Finance costs Allowance for impairment of other receivables Warranty expenses Other expenses Foreign exchange gains/(losses) Profit/(loss) before income tax from continuing operations Income tax expense Profit/(loss) for the year from continuing operations Notes 2023 $'000 2022 $'000 2 2 12,350 4,426 26 16,802 5,711 (8,216) 404 (8,648) (1,046) (276) (792) (718) (255) (744) (191) (832) (540) (214) (236) (249) 60 20 20 12,641 3,075 5 1 15,722 2,543 (6,511) (2,980) (9,641) (980) (276) (526) (542) (306) (981) (386) (1,047) (465) (670) (75) (91) (580) 731 (7,061) (4,070) (11,131) 2 22 (495) (11,626) 22 22 (11,626) (11,626) Other comprehensive income Exchange differences on translation of foreign operations Total comprehensive profit/(loss) for the year Attributable to: Equity holders of the parent Total comprehensive profit/(loss) for the year Earnings per share Basic profit/(loss) for the year attributable to ordinary equity holders of the parent (cents) Diluted profit/(loss) for the year attributable to ordinary equity holders of the parent (cents) 6 0.02 (12.92) 6 0.02 (12.92) Earnings per share from continuing operations Basic profit/(loss) for the year attributable to ordinary equity holders of the parent (cents) Diluted profit/(loss) for the year attributable to ordinary equity holders of the parent (cents) 6 0.02 (12.92) 6 0.02 (12.92) The accompanying notes form part of the financial statements. ORBITAL CORPORATION LIMITED - ABN 32 009 344 058 2 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023 __________________________________________________________________________________________ 2023 $'000 2022 $'000 2,292 751 2,125 5,980 191 430 11,769 2,363 586 1,007 11,074 172 184 15,386 Non-current assets Intangibles Plant and equipment Inventories Right-of-use asset Finance lease receivable Total non-current assets Total assets 3,238 1,299 2,238 1,141 253 8,169 19,938 3,402 1,705 1,776 341 7,224 22,610 LIABILITIES Current liabilities Trade payables and other liabilities Deferred revenue Borrowings Government grants Lease liabilities Provisions Total current liabilities 1,979 1,243 1,452 1,182 4,096 9,952 3,060 4,046 8,486 113 766 3,892 20,363 Non-current liabilities Lease liabilities Borrowings Provisions Total non-current liabilities Total liabilities Net assets 653 2,344 51 3,048 13,000 6,938 48 48 20,411 2,199 41,380 1,033 2,594 (38,069) 6,938 37,683 2,605 (38,089) 2,199 Notes ASSETS Current assets Cash and cash equivalents Other financial assets Trade and other receivables Inventories Prepayments Finance lease receivable Total current assets Equity Share capital Option reserve Reserves Accumulated losses Total equity 3 4 5 The accompanying notes form part of the financial statements. ORBITAL CORPORATION LIMITED - ABN 32 009 344 058 3 Employee equity benefits reserve Foreign currency translation reserve Option reserve Total equity $'000 5 $'000 5 $'000 4 $'000 $'000 37,683 - (38,089) 20 - 2,665 - (60) 2 - 2,199 20 2 - 20 - 2 - 22 3,662 36 41,380 (38,069) (13) 2,652 (58) 1,033 1,033 3,662 1,033 23 6,938 31,265 - (26,958) (11,131) - 2,600 - 435 (495) - 7,342 (11,131) (495) - (11,131) - (495) - (11,626) 6,374 44 - 65 - - 6,374 109 (38,089) 2,665 (60) Share capital (Accumulated losses) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2023 __________________________________________________________________________________________ Notes 3 $'000 At 1 July 2022 Profit for the year Foreign currency translation Total comprehensive profit for the year Issue of ordinary shares Issue of share options Share based payments At 30 June 2023 At 1 July 2021 Loss for the year Transfer to accumulated losses Foreign currency translation Total comprehensive loss for the year Issue of ordinary shares Share based payments At 30 June 2022 37,683 The accompanying notes form part of the financial statements. ORBITAL CORPORATION LIMITED - ABN 32 009 344 058 4 - 2,199 CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEAR ENDED 30 JUNE 2023 __________________________________________________________________________________________ Notes Cash flows from operating activities Cash receipts from customers Cash paid to suppliers and employees Cash receipts from R&D rebates Interest received Interest paid Net cash used in operating activities Cash flows from investing activities Payments for financial instruments Purchase of plant and equipment Grant rebates received Payments for intangible asset Net cash used in investing activities Cash flows from financing activities Proceeds from issues of shares Share issue transaction costs Principal elements of lease payments Net cash from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at 1 July Effects of exchange rate fluctuations on the balances of cash held in foreign currencies Cash and cash equivalents at 30 June The accompanying notes form part of the financial statements. ORBITAL CORPORATION LIMITED - ABN 32 009 344 058 5 2023 $'000 2022 $'000 11,481 (15,460) 1,456 26 (251) (2,748) 18,918 (22,886) 1 (127) (4,094) (166) (291) 196 (836) (1,097) (505) (1,697) (2,202) 5,000 (305) (829) 3,866 21 2,363 6,479 (105) (986) 5,388 (908) 3,116 (92) 155 2,292 2,363 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 __________________________________________________________________________________________ 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation This preliminary final report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2022 and any public announcements made by Orbital Corporation Limited, during the reporting period, in accordance with the continuous disclosure requirements of the ASX listing rules. This preliminary final report including any commentary on the Company results was authorised for issue in accordance with a resolution by the board of directors. Rounding Off The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Director’s Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that instrument, amounts in the financial report have been rounded off to the nearest thousand dollars unless otherwise indicated. 2. SEGMENT INFORMATION Segment revenue EBIT Finance expenses Profit/(loss) before income tax Assets Liabilities Net assets Australia 2023 2022 $'000 $'000 16,802 15,722 449 (5,921) (192) (645) 257 (6,566) US 2023 2022 $'000 $'000 (215) (470) (22) (25) (237) (495) Consolidated 2023 2022 $'000 $'000 16,802 15,722 234 (6,391) (214) (670) 20 (7,061) Australia 2023 2022 $'000 $'000 19,938 22,457 12,052 20,199 7,886 2,258 US 2023 2022 $'000 $'000 153 948 212 (948) (59) Consolidated 2023 2022 $'000 $'000 19,938 22,610 13,000 20,411 6,938 2,199 Australia 2023 2022 $'000 $'000 16,802 15,722 16,802 15,722 US 2023 2022 $'000 $'000 - Consolidated 2023 2022 $'000 $'000 16,802 15,722 16,802 15,722 Revenue Revenue Total external revenue Timing of revenue recognition At a point in time Over time 12,376 4,426 16,802 12,647 3,075 15,722 ORBITAL CORPORATION LIMITED - ABN 32 009 344 058 6 - - 12,376 4,426 16,802 12,647 3,075 15,722 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 __________________________________________________________________________________________ 3. ISSUED CAPITAL 2023 $'000 41,380 2022 $'000 37,683 Movement in ordinary shares At 1 July 2021 Issue of ordinary shares Share issue transaction costs Employee Share plan At 30 June 2022 Number 77,658,776 12,985,114 352,804 90,996,694 $000's 31,265 6,479 (105) 44 37,683 At 1 July 2022 Issue of ordinary shares Share issue transaction costs Employee Share plan At 30 June 2023 90,996,694 25,000,000 1,238,610 117,235,304 37,683 3,968 (306) 36 41,380 Ordinary shares issued and fully paid Recognition and measurement Share capital is recognised at the fair value of the consideration received. The cost of issuing shares is shown in the share capital as a deduction, net of tax, from the proceeds. Own equity instruments that are re-acquired are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. The Company does not have authorised capital or par value in respect of its issued shares. Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after creditors and are fully entitled to any proceeds of liquidation. 4. OPTIONS RESERVE Issued Options Movement in options At 1 July 2022 Issue of options Revaluation At 30 June 2023 2023 $'000 1,033 2022 $'000 - Number 17,500,000 17,500,000 $000's 1,033 1,033 As part of the new share issue during the year, 17,500,000 new Options were issued for nil cash consideration and were valued at $1,033,205 using the Black Scholes method of calculation at issue date of 7 February 2023. A volatility rate of 99.8% and a risk-free rate of 3.16% was used in the calculation. The options are exercisable at $0.35 on or before the date that is 3 years after the date of issue. ORBITAL CORPORATION LIMITED - ABN 32 009 344 058 7 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 __________________________________________________________________________________________ 5. RESERVES Employee benefits reserve $000's 2,600 65 2,665 . 2,665 (13) 2,652 At 1 July 2021 Foreign currency translation Rights issued pursuant to performance rights plan At 30 June 2022 At 1 July 2022 Foreign currency translation Rights issued pursuant to performance rights plan At 30 June 2023 Foreign currency translation reserve $000's 435 (495) (60) Total $000's 3,035 (495) 65 2,605 (60) 2 (58) 2,605 2 (13) 2,594 Nature and purpose of reserves Foreign currency translation reserve Used to record foreign exchange differences arising from the translation of the financial statements of foreign entities from their functional currency to the Group’s presentation currency. Employee benefits reserve The employee benefits reserve records the share-based payments provided to key management personnel as part of their long-term incentive remuneration. ORBITAL CORPORATION LIMITED - ABN 32 009 344 058 8 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 __________________________________________________________________________________________ 6. EARNINGS PER SHARE Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of Orbital Corporation Limited (“the Parent”) by the weighted average number of ordinary shares outstanding during the year. Performance rights granted to key management personnel were deemed potential ordinary shares. Refer to Note F.3 for further details. Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the Parent by the weighted average number of ordinary shares outstanding during the year, plus the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares. There have been no transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorisation of the financial statements. The number of potential ordinary shares not considered dilutive and contingently issuable are as follows: The following table reflects the income and share data used in the basic and diluted EPS computations: 2023 $'000 2022 $'000 20 - (11,131) - 20 (11,131) 2023 Number 104,435,036 2022 Number 86,161,094 104,435,036 86,161,094 Cents 0.02 0.02 Cents (12.92) (12.92) 2023 Number 2022 Number Performance rights 430,464 1,549,105 Total 430,464 1,549,105 Profit/(loss) attributable to ordinary equity holders of the Parent: Continuing operations Discontinued operations Profit/(loss) attributable to equity holders of the Parent for basic earnings Weighted average number of ordinary shares for basic EPS Weighted average number of ordinary shares adjusted for the effect of dilution Earnings per share Basic profit/(loss) per share Diluted profit/(loss) per share Earnings per share from continuing operations Basic profit/(loss) per share Diluted profit/(loss) per share Cents 0.02 0.02 Cents (12.92) (12.92) ORBITAL CORPORATION LIMITED - ABN 32 009 344 058 9