Resources services provider Babylon Pump & Power Limited (ASX: BPP) has announced a strong performance quarterly cash flow report for the quarter ended December 31, 2021.
The company reported cash receipts of $7.5m for the quarter and record YTD cash receipts of $15.4M which represents 59% growth over the corresponding H1 FY21. First half revenue of $13.7M is an increase of 33% over the corresponding H1 FY21. Work in progress (WIP) across the company’s workshops has risen 32% to $3.6M during the first half of the year.
After two consecutive quarters of positive operational cash flow, net cash from operating activities for the reporting period has dipped to negative $1.49M.
The negative operating cashflow for the quarter is directly attributable to the 23% increase in WIP ($0.7M) and the 20% ($0.8M) increase in receivables over the reporting period. The increase in receivables reflects increased turnover.
Average debtor days have risen slightly to 63 which is within the industry norm. Operating cash flow for H1 FY22 has improved 54% over the corresponding first half of the previous year.
The company holds $2.5 million of cash and undrawn debt facilities at the end of December.
Specialty Rental
Utilisation of rental assets increased in Q2 FY22 with works continuing on Barrow Island during the quarter and water management projects beginning with new client Citic Pacific and at new sites with BHP. Worldwide supply chain disruptions are delaying availability of new assets and the company is receiving increased levels of enquiry for rental solutions.
Specialty Services
Ausblast has taken delivery of a new vacuum truck during the reporting period which has mobilised for short term project work in the Pilbara. Additionally, an order was placed for a long lead high pressure water blasting unit. At 1000HP the new water blasting unit will provide Ausblast with increased capabilities allowing management to confidently engage new clients and expand into new mineral sectors outside of our traditional iron ore base requiring higher horsepower pumps. During the reporting period works were completed in the lithium and iron ore sectors.
COVID effects
Delays in supply chain during the quarter have resulted in project delays pushing forecast rental and maintenance revenue into later reporting periods.