Energy World Posts $346M Profit Driven by $390M Debt Restructuring Gain
Energy World Corporation Ltd reports a remarkable turnaround to a $346 million profit for FY25, driven by a $390 million gain from debt restructuring and the sale of a key Indonesian asset. The company faces funding challenges as it advances LNG and power projects in Southeast Asia.
- Reported $346 million profit after prior year loss of $801 million
- Completed $35 million sale of 51% interest in Indonesian Sengkang PSC
- Recognised $390 million gain from debt restructuring agreement
- Ongoing development of LNG hub and power plant projects in the Philippines
- Entered debt-to-equity conversion agreement pending shareholder approval
Financial Turnaround Amid Strategic Divestments
Energy World Corporation Ltd (ASX – EWC) has reported a striking financial turnaround for the year ended 30 June 2025, posting a net profit of US$346.1 million compared to a loss of US$801.5 million in the previous year. This swing was largely driven by a one-off gain of US$390.4 million arising from a Debt Restructuring Implementation Agreement with Energy World International Ltd and the Slipform Group.
In October 2024, the company completed the sale of its 51% participating interest in the Sengkang Production Sharing Contract (PSC) in Indonesia for US$35 million. This asset had been a significant revenue generator, and its divestment marks a strategic shift as Energy World focuses on advancing its remaining projects.
Project Development in Southeast Asia
Energy World continues to develop major LNG and power infrastructure projects in the Philippines and Indonesia. The Philippines project includes a 130,000 cubic meter LNG hub terminal and a 650MW combined cycle gas-fired power plant on Pagbilao Grand Island. Construction has been paused due to funding constraints and awaiting completion of local substation infrastructure, but the company is actively seeking strategic investment and project financing, supported by comprehensive technical and legal due diligence.
In Indonesia, the company retains the Sengkang LNG Production Plant, designed to produce 2 million tonnes per annum of LNG. Despite previous construction halts due to permit issues, the project is well advanced with key equipment installed. Energy World is negotiating long-term tolling agreements to secure supply and offtake arrangements, although details remain confidential.
Australian Asset Disposals and Provisions
Energy World has announced plans to dispose of its remaining Australian interests, including properties in Brisbane and Alice Springs, and is managing the sale of gas assets in the Eromanga and Gilmore fields. The company has made provisions totaling US$7.6 million for the relinquishment of plant, equipment, and the plugging and abandonment of up to 16 gas wells across these sites, reflecting a strategic exit from Australian operations.
Balance Sheet and Going Concern Considerations
The company’s balance sheet shows a significant improvement with net assets of US$297.8 million at 30 June 2025, reversing a net liability position of US$48.1 million the prior year. However, Energy World acknowledges material uncertainty regarding its ability to continue as a going concern due to the need for additional funding to complete ongoing projects.
To address this, Energy World has engaged an investment bank to assist with capital raising efforts, including potential equity, debt, or project financing. The company has also entered into a debt-to-equity conversion agreement with Energy World International Ltd and Slipform Group, which, if approved by shareholders at the upcoming AGM in November 2025, will convert over US$440 million of liabilities into shares at a conversion price of $0.88 per share, significantly strengthening the financial position.
Outlook and Market Implications
While the debt restructuring and asset sales have provided a much-needed financial boost, the company’s future hinges on successful capital raising and project completion. The LNG and power projects in the Philippines and Indonesia represent significant growth opportunities but require substantial investment and operational execution. Investors will be watching closely for the AGM outcome and the company’s ability to secure strategic partnerships and financing.
Bottom Line?
Energy World’s financial recovery is promising but hinges on shareholder approval and successful capital raising to unlock its Southeast Asian LNG and power projects.
Questions in the middle?
- Will shareholders approve the proposed debt-to-equity conversion at the November AGM?
- Can Energy World secure the necessary project financing to resume construction in the Philippines and Indonesia?
- What impact will ongoing impairment testing have on the valuation of Energy World’s major assets?
