Delorean Corporation’s SA1 Salisbury renewable gas project is more than 85% complete after the company returned to near break-even EBITDA in FY2026. But the annual report carries a material uncertainty over going concern, leaving commissioning, refinancing and new funding as critical tests for the ASX-listed developer.
- SA1 Salisbury construction exceeds 85% completion, with first gas targeted in FY2027
- FY2026 EBITDA improved to $0.98 million from a $6.61 million loss
- Up to $55 million of SA1 revenue is contracted with Origin Energy and Supagas
- NAB project finance and $30.5 million of NSW1 grants support the build-out
- Auditor flags dependence on SA1 commissioning, refinancing and covenant arrangements
SA1 approaches first gas as funding risk remains
Delorean Corporation Limited (ASX:DEL) is close to the operational phase it has spent years financing: its SA1 Salisbury bioenergy facility in South Australia was more than 85% complete at the reporting date, with waste acceptance and first gas targeted for FY2027. The project is intended to produce mains-grade biomethane from commercial and industrial organic waste, alongside biogenic carbon dioxide and other revenue streams.
That progress sits alongside a clear warning in the accounts. BDO gave Delorean an unmodified audit opinion but drew attention to a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern. The company says it remains dependent on completing and commissioning SA1, achieving forecast operating cash flows, extending or refinancing debt, agreeing revised covenant arrangements and retaining access to debt and equity funding.
FY2026 earnings improved before operating revenue arrives
Delorean reported revenue of $9.34 million for FY2026, down from $19.52 million as the Lilydale construction contract moved towards completion, but EBITDA swung to a $0.98 million profit from a $6.61 million loss. The net loss narrowed sharply to $115,080 from $8.98 million, helped by $5.41 million of other income, including $5.27 million in research and development tax incentives.
The improvement does not yet represent the recurring earnings profile management is targeting. Operating cash flow remained negative at $5.87 million, while capital investment reached $21.14 million. Cash and term deposits fell to $5.61 million from $10.66 million, even as total assets increased 38% to $63.97 million, largely reflecting spending on projects under construction.
Contracted SA1 revenues and project finance take shape
Delorean has secured a long-term biomethane offtake agreement with Origin Energy covering up to 200 terajoules a year from SA1 on a take-or-pay basis, with Supagas contracted to buy liquid biogenic carbon dioxide. Together, the company puts the contracted revenue associated with those agreements at approximately $55 million. SA1 has also received GreenPower accreditation, allowing it to generate Renewable Gas Guarantees of Origin linked to production.
The financing structure remains the more immediate pressure point. Delorean drew $10 million of a $14.5 million NAB facility for SA1 by 30 June, while $37.29 million was outstanding under the Tanarra corporate debt facilities. The NAB facility was subsequently extended from 1 October to 31 December 2026, and the company disclosed that it had previously obtained waivers after breaching Tanarra’s interest coverage covenant at the December 2025 testing date.
NSW1 advances, but still needs $31.6 million
Delorean’s second major project, NSW1 at Brickworks’ Horsley Park site, received a positive final investment decision subject to financial close. The project has $30.5 million of government grant support and 25-year lease and gas offtake arrangements with Brickworks, but construction remains conditional on raising the remaining $31.6 million. The company is targeting construction commencement in the final quarter of calendar 2026.
The company also identifies VIC1 Stanhope as shovel-ready pending finance, while QLD1 and a broader national pipeline remain at earlier stages. The Lilydale facility provides an operating and maintenance contract after practical completion, but FY2027 will test whether Delorean can move from project construction into dependable cash generation without stretching its balance sheet further.
Bottom Line?
The investment case now turns less on the size of Delorean’s pipeline than on whether SA1 reaches first gas on schedule and generates enough cash to support refinancing and the next wave of construction.
Questions in the middle?
- Can SA1 complete commissioning and begin waste acceptance without further funding pressure or material delay?
- Will Delorean secure revised Tanarra covenant arrangements and refinance the NAB facility before the extended maturity date?
- Can the company close the remaining $31.6 million for NSW1 while funding VIC1 and maintaining liquidity?