Provaris Energy Ltd engages in the development of hydrogen production projects in Australia and internationally. The company owns 100% interest in the Tiwi Islands Hydrogen Export project located in the Northern Territory, Australia. It also develops compressed hydrogen shipping solutions. The company was formerly known as Global Energy Ventures Ltd. and changed its name to Provaris Energy Ltd in May 2022. Provaris Energy Ltd was incorporated in 2004 and is based in Claremont, Australia.

Australia

Provaris Energy Ltd

Energy

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

PV1.AX reported revenue of AUD 0mn in the last 12 months, down 0% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 91% from FY23 to AUD -0.00. Market expects EPS to reach AUD -0.01 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 34ppts over six months and grown 17ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

In the last 12 months, the return on capital employed (RoCE) declined to -0.4%, below the peers. 

Provaris Energy Ltd reported a return on equity (RoE) of -0.4% in the last 12 months, down from -0.2% in FY24. 

Another important profitability metric, return on assets (RoA), amounted to -0.2% in the last 12 months, a decrease from -0.2% in FY24. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -8.0 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

PV1.AX has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is usually stable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, and poor cash flow generation. We note an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, PV1.AX is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, PV1.AX is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

From both historical and forecast perspectives, the stock is underpriced compared to similar stocks. In particular, the stock is undervalued on P/FCF. 

Provaris Energy Ltd

A$ 0.01

3

Provaris Energy Ltd

A$ 0.01

3

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A$ 0.01

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