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Range achieves revenue growth as it awaits hearing date for the Indonesian tax office case

  • In News
  • November 1, 2023
  • Alinda Gupta
Range achieves revenue growth as it awaits hearing date for the Indonesian tax office case

After struggling with cash and being suspended from the ASX, Range International (ASX: RAN), the manufacturer of Re>Pal ‘zero-waste’ plastic pallets, has reported its Q3 2023 results, achieving its second-highest quarterly sales revenue. 

The impact of the US currency exchange rate was evident in Re>Pal Indonesia’s Q3 2023 sales revenues, which, at $802.1k, fell below the quarterly average of FY22.

Q3 2023 revenue rebounded after a disappointing Q2, achieving the second-best result ever in IDR terms. Year-to-date sales revenue of IDR 19.4 billion (AU$1.9 million) is in line with FY21 figures and is not expected to surpass the record result of IDR 28.7 billion (AU$2.8 million) achieved in 2022 for the year.

In Q3, Range Indonesia’s cash flow was positive, but parent entity costs resulted in a negative cash flow for the Group. The Company reported an average quarterly cash burn of $44k for FY23, representing an improvement compared to the average FY22 cash burn of $193k.

The Company has been working to cut down on the costs of materials and processing by outsourcing some of its material processing tasks. Range is also discussing with big Indonesian conglomerates about recycling their plastic waste to make Re>Pal’s pallets.

Range has plans to commission two new pallet moulds, including a heavy-duty 1165 x 1165 pallet designed for the Australian market and a medium-weight 1200 x 1100 pallet tailored for ‘closed-loop’ use with a large multinational. Pre-sales marketing support for these new products is nearing completion.

Range is currently negotiating with an Indonesian company for the sale and leaseback of its factory in East Java, with the entire settlement expected to be completed by mid-November 2023. This transaction aims to bolster the Company’s liquidity position, which has been under pressure due to the unresolved appeal to the Indonesian tax assessment and the related ASX trading suspension.

The Board feels that its appeal against the Indonesian tax office’s assessment for the year ending 2018 regarding withholding and value-added taxes is strong and can be successfully resolved. However, a hearing date is yet to be advised.

In the third quarter ending on September 30, 2023, Re>Pal Indonesia reported a 29% gross margin as a percentage of sales revenue and a 2% operating margin as a percentage of sales revenue, stemming from an EBITDA profit of $14.9k, including disposals of fixed assets for the quarter. The sale of surplus plant and equipment in Q3 2023 contributed to a profit on disposal of $18.4k as part of the restructuring of Re>Pal Indonesia’s plastic processing and pallet production.

Since September 2022, the Group has faced significant liquidity pressures. While the Indonesian business has been self-funding for the past year and has supported much of the parent entity’s operating costs throughout Q3 2023, the parent company had to borrow $20.5k from a Related Party on commercial terms to meet its funding requirements in Q3 2023.

To address costs, the Company is exploring opportunities to expand its production capabilities beyond Indonesia and strengthen its relationships with multi-national corporate customers. Range is also considering alternative sources of funds, including an equity placement.

The Company ended the quarter with $50.5k in cash.

  • About
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Alinda Gupta
Alinda is a Business Reporter for The Sentiment
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  • About
  • Latest Posts
Alinda Gupta
Alinda is a Business Reporter for The Sentiment
Latest posts by Alinda Gupta (see all)
  • Ovanti’s iSentric signs contracts worth $14.4m with Malaysian commercial bank - June 27, 2024
  • Baby Bunting fights back from retail downturn with 5-year strategy, includes Gen-Z focus and self-funded growth - June 27, 2024
  • CLEO meets with US FDA to develop strategy for ovarian cancer test launch - June 26, 2024

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  • About
  • Latest Posts
Alinda Gupta
Alinda is a Business Reporter for The Sentiment
Latest posts by Alinda Gupta (see all)
  • Ovanti’s iSentric signs contracts worth $14.4m with Malaysian commercial bank - June 27, 2024
  • Baby Bunting fights back from retail downturn with 5-year strategy, includes Gen-Z focus and self-funded growth - June 27, 2024
  • CLEO meets with US FDA to develop strategy for ovarian cancer test launch - June 26, 2024
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