Carnegie Clean Energy

Income statement

Notes and sources: Sales revenue and net loss FY2022–FY2026 from the five-year table in the FY2026 Remuneration Report. FY2024 total revenue and other income derived from the FY2025 Appendix 4E (FY2025 total of A$405,371 represented a 9.4% decline). FY2024 EPS from Simply Wall St (consolidated basis). Derivations: operating loss = loss before tax + finance costs − interest income; EBITDA = operating loss + depreciation (FY2026: −2,760 + 931 − 43 + 248; FY2025: −2,316 + 601 − 70 + 282). Note that FY2025 "employee share-based payments" of A$48,523 exclude the A$573,162 option value attributed to the loan, which flows through finance costs via amortised deferred borrowing costs.

Margins and growth

Revenue CAGR FY2022–FY2026 (4 years): 9.0% (derived: 454/322 to the power of 0.25). The FY2026 gross margin spike reflects cost of sales falling from A$167k to A$11k, which the filings do not explain; it likely reflects reclassification of O&M costs or non-recurring FY2025 repairs and should not be treated as a structural improvement.

Commentary. The income statement is not the right lens for valuing Carnegie, but three observations matter. First, sales revenue is small, volatile and tied to a single ageing asset whose output is constrained; FY2026's 43% increase reflects improved availability or tariff effects rather than growth in the core business. Second, the cash cost base is stable at roughly A$3.4M of gross expenses before the capitalisation credit, and the reported loss has crept up mainly because of finance costs (A$931k in FY2026 versus A$601k), driven by the 15% Ballamena loan and amortisation of option-based borrowing costs. Third, the unusually low FY2023 loss (A$0.63M) stands out against a A$1.9M–A$2.8M run-rate; the cause (likely higher capitalisation, grant or R&D refund timing) is not explained in the sources reviewed.

Balance sheet

Sources: FY2026 Financial Report (statements of financial position and changes in equity, Notes 8, 11, 13, 17, 18). FY2023 equity of c. A$21.2M from InvestSMART (secondary). FY2024 PP&E is the sum of opening FY2025 microgrid (A$1,997k) and plant (A$60k) balances. Short-term debt FY2026 = Ballamena loan A$2,500,000 + other short-term borrowings A$71,193. Net debt = debt − cash.

Commentary. The balance sheet is dominated by a single Level-3 intangible (82% of total assets) that has never been amortised because it is "not yet ready for use". Its recoverable amount is tested using a relief-from-royalty model with a 19% discount rate, 15-year forecast plus terminal value and 3%–5% royalty, which the auditor flags as a Key Audit Matter. Shareholders should recognise that tangible book is effectively nil (NTA per share −0.01 cents at 30 June 2026). Liquidity deteriorated sharply in FY2026: cash fell 66% to under A$1M, working capital deficit doubled to A$2.46M, and the group moved from net cash to net debt. The A$2.5M July 2026 placement and the A$1M loan upsizing in August 2026 partially repair this, but the A$3.5M facility falls due on 30 June 2027. The A$784k RENMARINAS liability represents grant cash received in advance and already partially spent, so it is not a cash buffer.

Cash flow statement

Free cash flow defined as operating cash flow plus net investing cash flow, because development grants are received through investing activities. Net borrowings FY2026 = proceeds 120 − repayments/borrowing costs 49 − transaction costs 616; FY2025 = proceeds 2,500 − borrowing costs 316.

Commentary. The company burns roughly A$3M–A$3.5M a year of free cash flow even after A$4.4M–A$4.6M of annual grant receipts. Gross development spending rose 28% in FY2026 to A$4.9M as ACHIEVE moved into fabrication. The large FY2026 "transaction costs related to loans and borrowings" (A$616k) is notable and is not itemised in the filings. Funding has come in roughly equal parts from equity (SPP plus options, A$2.33M in FY2026), debt (A$2.5M in FY2025) and tax/grant monetisation (Spanish R&D deduction sale €773k; ATO refund A$569k).

Ratios

Derived from FY2026 Financial Report. ROA FY2025 not computed because FY2024 total assets were not available. Runway = 30 June 2026 cash ÷ (FY2026 operating cash outflow ÷ 12).

Overall financial trend assessment. Carnegie's financial trajectory over five years is one of stable, modest losses (A$0.6M–A$2.8M) funded by repeated small capital raises, with the development asset growing by about A$1M–A$2M a year net of grants. The inflection point is not financial but technical: until CETO demonstrates performance at BiMEP, the company remains a cash-consuming option on wave energy commercialisation, with financing risk as its dominant near-term variable.

Management guidance

No financial guidance is issued. Operational guidance: first-stage ocean deployment of the ACHIEVE CETO unit at BiMEP from October 2026, beginning with the buoyant actuator, with PTO modules integrated in a later phase, followed by commissioning, testing and optimisation; a two-year operating period; development of a 6 MW CETO array at BiMEP; a MoorPower commercial pilot on a working barge; and continued exploration of Defence, aquaculture and data-centre applications. Management expects continued net operating cash outflows until positive cash flow is achieved and cannot predict when profitability will occur.

Consensus expectations

None (no analyst coverage).

Bull case

1. Demonstration catalyst: A successful staged deployment and commissioning at BiMEP would make Carnegie one of very few developers with a grid-connected device operating in European waters, directly supporting the 6 MW array and partner discussions that management has made central to its strategy.

2. Capital efficiency: The company has reached deployment on roughly €7M of non-dilutive programme funding plus tax monetisation, while keeping annual KMP costs near A$0.6M; partner-funded arrays would extend this leverage.

3. Optionality across markets: Defence (ASCA award), US aquaculture (TEAMER) and MoorPower add multiple adjacent pathways, and A$55.9M of carried-forward tax losses would shelter future profits.

Bear case

1. Liquidity and refinancing: With A$996k of cash at year-end, a going-concern uncertainty, and a A$3.5M, 15% facility due 30 June 2027, the company will likely need further dilutive raises during the critical testing period, potentially on poor terms if deployment slips.

2. Single-point technical risk: One unit, one site; supplier, vessel and weather risks are acknowledged by management, and the deployment has already slipped from 2025 to 2026.

3. Valuation already discounts success: At about A$74M, the market values the company at nearly four times the carrying value of the CETO asset and about 160 times sales after a more than 200% rally in 2026 without new fundamental disclosure, as the May 2026 price query response indicates.

Catalysts and monitorables (next 12 months)

Concluding analyst verdict

Carnegie Clean Energy is a high-risk, binary, event-driven exposure to the commercialisation of wave energy, and in October 2026 it stands at the most consequential moment in nearly a decade. After the reputational and financial damage of the 2016–2019 microgrid diversification, which ended in A$47M of write-downs and a CEO change, management has rebuilt a credible, disciplined technology programme. Its signature achievement is assembling roughly €7M of competitive European support, top-ranked independent validation through EuropeWave, a permitted grid-connected berth at BiMEP, and an industrial supply chain led by SKF, all on a shoestring corporate cost base.

The difficulty is that the balance sheet has not kept pace with the technical ambition. The company ended FY2026 with under A$1M of cash, net current liabilities of A$2.5M, an auditor's going-concern flag and expensive secured debt maturing in mid-2027, precisely when the CETO unit will be in its commissioning and early operating phase. The July 2026 placement at A$0.18 shows that capital is available at a much higher price than a year earlier, but the 2026 share-price surge preceded rather than followed demonstrable results.

Our view is that the investment case depends almost entirely on execution at BiMEP over the next two to three quarters. Clean deployment, safe commissioning and early power generation would validate the strategy, strengthen the hand of management in partner negotiations for the 6 MW array, and likely enable refinancing on better terms. Delay or technical failure would expose the company to severe dilution and potential impairment of its principal asset. Governance, with a three-person board and several related-party arrangements, is a secondary but real concern.