Range International sharply reduced its quarterly cash outflow while lifting pallet volumes and building a larger rental fleet. But the next phase still depends on a partly subscribed entitlement offer, external funding and several customer opportunities that remain indicative.
- Operating cash outflow fell 80% against the one-year quarterly average
- Indonesian revenue held at US$445,000 and 33,181 pallets were delivered
- Pallets covered by rental contracts rose 19.6% to 13,694
- A confirmed 17,000-pallet order supports the Q4 delivery schedule
- A$1.686 million entitlement offer remains central to rental expansion funding
Cash burn falls as funding remains the constraint
Range International Limited (ASX:RAN) cut its operating cash outflow to US$37,000 in the September quarter, an 80% reduction against its one-year quarterly average. The improvement came as manufacturing, staff, administration and corporate costs all declined, although the company still ended the period with only US$60,000 in cash and US$40,000 of unused financing capacity.
That leaves reported funding cover at 2.7 quarters based on the quarter’s operating cash outflow. The calculation does not include the proposed capital raising, which remains unresolved: Range is seeking up to A$1.686 million through a 1-for-1 entitlement offer priced at A$0.09 a share, with almost 60% of the proceeds earmarked for pallet rental expansion if fully subscribed. The A$1.69 million entitlement offer was opened earlier this month, with non-participating shareholders facing dilution if the offer is fully taken up.
Indonesian volumes hold steady while factory efficiency improves
Indonesian sales revenue was broadly unchanged from the June quarter at US$445,000, while pallet deliveries edged ahead to 33,181 units. Range said gross margins remained elevated, and production against plan improved from 68% in July to 91% in September.
Rejects at the Pasuruan facility fell 67% from the previous quarter, warehouse stock was halved and a temporary August feedstock disruption was followed by the onboarding of two new suppliers. The company also secured ISO 9001, HACCP and ISO 8611:2025 certifications, which it said support sales to food and fast-moving consumer goods customers. Management expects Indonesian EBITDA to move towards positive as volumes increase, but that remains an expectation rather than a reported result.
Rental fleet grows as customer commitments build
Pallets covered by rental contracts rose 19.6% during the quarter to 13,694. By 22 October, the rental portfolio had reached 15,444 pallets across seven clients and 11 sites, with a weighted average daily revenue of IDR336 per pallet and an average contract term of 37.7 months.
Range also has a confirmed purchase order for 17,000 pallets scheduled for staged delivery through the rest of the December quarter. A major Indonesian third-party logistics provider expects to issue an initial order for 500 pallets in the first half of November, potentially followed by an order for 35,000 pallets in late Q4 or early Q1 2027. Those larger opportunities are not confirmed purchase orders, and the company says the potential rental fleet could reach 70,944 pallets by the end of May 2027 only if the pipeline converts.
The company’s operating reset follows the interim CEO appointment announced in September, when Richard Jenkins also took on greater responsibility for Indonesian operations. Range said the changes were intended to reduce costs and create a more focused platform for pallet sales, rentals and regional expansion.
Funding discussions and order conversion remain key tests
Range is still negotiating with three bank and non-bank intermediaries for a larger rental funding arrangement, with no agreement reached by the report date. Its A$454,000 secured facility is fully drawn, while directors and management continued to support the business through an unsecured debt facility. The existing facilities carry reported interest rates of 18% and 14% respectively, making faster conversion of customer demand important to the economics of expansion.
The company said an existing client is expected to place an order for 3,000 to 4,000 pallets alongside the purchase of 338 tonnes of feedstock plastic on commercially attractive terms. It also expects Q4 sales revenue to challenge, but not exceed, the record levels reached in FY25. The immediate question is whether the confirmed order and anticipated purchase orders arrive quickly enough to turn improved factory performance into cash generation before the current funding cushion narrows.
Bottom Line?
Operational discipline is improving, but Range’s next growth step hinges on the entitlement offer, rental funding and the conversion of indicative pipeline into paid orders.
Questions in the middle?
- How much of the A$1.686 million entitlement offer will be subscribed, and what funding gap will remain?
- Will the expected 500-pallet and 35,000-pallet Indonesian orders convert on the stated timetable?
- Can higher rental volumes and improved production efficiency move Indonesian EBITDA into positive territory without heavier borrowing?