Chrysos Corporation Limited (YI1.F) Earnings Call Transcript & Summary

Good morning, shareholders. Thank you all for joining us today for the presentation of our audited financial results for the year ended 30th of June 2025. I'm joined by our Managing Director and CEO, Dirk Treasure, who will take part in the Q&A at the end of this presentation. There is no operational update, and the operational slides from the trading update are unchanged. We are now including the financial slides, which I will be presenting. Our international tax position that delayed the full financial results release and which we have provided guidance as to the tax expense being in the range of $5 million to $10 million. We are pleased to confirm this ended at the lower end of the range at $5.3 million. I will speak more about tax later in the presentation. It's also a great overall result, unchanged from our trading update 2 weeks ago with total revenue of $66.1 million, up 46% on FY '24, reflecting excellent adoption of PhotonAssay throughout the year. EBITDA for the year of $16.1 million demonstrate solid growth of 80% on FY '24, and continue to demonstrate improvement on conversion with margin improving from 20% to 24%. With that, let's move into some more detail, and we will now move to Slide 11. Achieving our revenue of $66.1 million is pleasing on the back of increased geographic diversity, with international non-APAC operations now representing 65% of total revenue, up 55% from FY '24. Americas revenue grew 138% year-on-year, EMEA rose by 44% in the same time, while APAC increased 13%. This diversification across regions reduces concentration risk and highlights our global growth trajectory. Our trading update 2 weeks ago spoke to the exciting opportunities to deploy in Chile with Bureau Veritas and also in Suriname with Newmont. This will continue to diversify our revenues, and it's great to be starting in a new region that we've been talking to you for a while, a region that represents around 20% of those mines producing more than 40,000 ounces of production, an important part of our global markets. Before we move to the next slide, the logical question is also what other costs are associated with the new region. Aside from the direct costs with scale with each unit deployment, we expect both head count in people and culture and finance, potentially maintenance management, and filling out our sales team. The sales team, we expect 2 in each region. We currently have 1 in South America. We also work closely with our advisers for each new country, so we'll incur some costs for each new country entry, but not to a material extent. Slide 12, please. Minimum monthly assay payments, or MMAP, remain the backbone of our revenue, providing secure forecastable income. In FY '25, MMAP accounted for 85% of PhotonAssay revenue and has grown consistently with our installed base. In FY '25, additional assay charges, or AAC, grew in line with the continued adoption of PhotonAssay and exploration volumes, accounting for about 15% of our income. This combination of fixed MMAP and variable additional assay charges gives us both revenue stability and upside leverage when sample volumes accelerate, particularly across our laboratory partners. PhotonAssay unit costs remain with our target gross margin range of 70% to 80%, supported by our hub strategy and increased in-house maintenance capabilities. We've spoken about our indirect costs becoming increasingly incremental and costs other than people are starting to demonstrate this. In terms of people, teams continue to stabilize in their growth rates, such as finance and people and culture. At the same time, the focus on product improvement and performance have been growth areas throughout the year. Overall, EBITDA grew 80% year-on-year to $16.1 million, with margins improving from 20% in FY '24 to 24% in FY '25. Importantly, revenue grew faster than expenses with operating expenses increasing around 35%, in line with our expanding footprint, while revenue rose at 46%. Tax, what can I say? We recorded a $5.3 million tax expense at the lower end of our guidance. This reflects the Australian tax laws where international sales created a local profit that uses past losses and shows an expense in our accounts. Importantly, we cannot yet recognize the $3.6 million of expected international tax benefits, which creates a timing difference. These benefits are expected to flow through in future years. You will also see in the cash flow statement, tax is included as an outflow. This is a result of taxes payable international operations and withholding tax on remittances to Australia. I think in this great result, we've talked enough about tax, and we should move to Slide 13. This slide is a favorite of mine. This shows the strength of our unit economics, underpinned by the MMAP versus our target range of direct costs. We've chosen to include in our direct cost here the quality control. We talk about eyes on glass 24/7. This team operates around the clock and is now established in Adelaide, [ Accra ] and Vancouver, and becomes incremental moving forward. But for example, we have global coverage, but no Spanish speakers. As we move into Latin America, we might need to add Spanish-speaking head count to maintain our delighted customers. We've spoken in the past about the benefits of hubbing. And also today, I've spoken about our indirect cost expectations moving into South America. As we have more units across the region at a direct cost level, we can capitalize on adjacent or closely located maintenance engineers and less spares. Additional assay charges from conversions of customers to existing PhotonAssay services and upsides based on market cycle provides additional revenue opportunities with 15% of the revenue for the year derived from additional assay charges. This demonstrates a strong close to the financial year. Overall, the combination of strong unit economics against our broadened geographic footprint provides significant financial leverage moving into FY '26. Slide 14, please. We continue to increase our operating cash flow, up from $3.6 million last year to $8.8 million this year. Changes in working capital reflect our growing global footprint with additional units and customers largely related to a movement in receivables. I touched on international taxes paid earlier. These and the growing scale and growth in receivable impacts the cash conversion from EBITDA, albeit improvement this financial year from last increasing from 40% to 55%. However, collections remain a continued focus for our team. Sustaining CapEx. This was largely driven by the Tonsley sites being built over the last couple of years and is not expected to continue into FY '26. Remembering there's no sustaining CapEx associated with the fleet of PhotonAssay units with all costs associated with them included in the direct costs. Across the fleet of PhotonAssay units, $60.1 million was spent. This ranges across the life cycle, which is updated in the next slide. This position us well in terms of ongoing deployment capability, the components representing work in progress, the spares per unit and being able to meet appropriate level of deployment cadence. There was also a reduction in the group's capital commitments associated with the purchase of PhotonAssay units of $29.6 million. We spoke in our trading update about the next-generation unit, the XN. As a reminder, this is focused on providing the same groundbreaking PhotonAssay analysis with even greater efficiency. That means less time to install, lower transportation costs, simpler operator interaction and reduced maintenance requirements. In essence, this system is designed to be even easier system for customers to use, while costing Chrysos less to install and to maintain. We will continue to invest in this exciting project during the next years. Confirming as of 30th of June, we had cash and available debt of $99.1 million. We remain well funded for continued growth. Slide 15, please. To give you a bit clear visibility to the capital flow of units, we have updated the unit life cycle metrics here, reflecting the current results. Noting the actual cost per unit has remained relatively constant, just under $4 million during the financial year. We also spent around $400,000 on spares per unit, which over the life of the unit is expensed in direct cost as used. At any time, we have units at various stage of order production to meet our deployment plans. We do expect each of these units to generate in excess of $20 million cash in their lifetimes, and these assets underpin the reliable revenues of Chrysos. Slide 16, please. At 30th of June, we had $21.5 million of cash on hand and have drawn $17.4 million of our debt with an additional $10.9 million drawn post year-end, leaving significant headroom for future growth. Trade receivables have increased in line with our deployments and industry cycle and noncurrent assets continue to grow with our expanding PhotonAssay fleet. Our balance sheet remains robust and positions us well to fund continued growth. Thank you, and we'll move to questions.

[Operator Instructions] There are no questions at this time. I would like to turn the call back over to Brett for closing remarks.

Thank you, Paul, and thank you to everyone for attending today. I'm proud to deliver these strong results and look forward to our continued growth across the globe. Thank you.