Babylon Pump & Power : Quarterly Update and Appendix 4C

13 April 2022

Babylon Quarterly Update and Appendix 4C

Highlights1

• • Positive operational cashflow of $1.1M in the quarter

• • Cash receipts of $7.3M for Q3 FY22 up 156% over corresponding Q3 FY21

• • Receivables of $4.8M due from blue-chip client base

• • $3.2M of cash and undrawn debt at the end of the quarter

• • Strong ongoing demand and growth opportunities across all divisions

Specialist resources services provider Babylon Pump & Power Limited ("Babylon" or "the

Company") (ASX: BPP) is pleased to present a quarterly update and quarterly cash flow report for the period ended 31st March 2022.

The Company is pleased to report positive operational cashflow of $1.1M and cash receipts of $7.3M for the quarter which represents 156% increase over the corresponding Q3 FY21. The Company has now recorded positive operational cashflow in three of the last four reporting periods.

Record revenue and reduction in inventory have improved operational cashflow. Additionally, the Company has improved collections from debtors, while its strong sales efforts have maintained receivables at $4.8M, all within terms. The Company also has $3.2M of cash and undrawn debt facilities at the end of March.

Commenting on the results, Executive Chairman Michael Shelby said:

"It is exceptionally pleasing to be able to deliver yet another quarter of positive operational cashflow. The directors are confident in our ability to continue to grow and increase the utilisation of our assets across rental and industrial services. Enhancing operational efficiencies and profitability will continue to show improvement in cashflow and earnings as we close out FY22. We continue to see increasing demand for quality services and equipment from blue chip customers across the resources sector in particular, which gives us confidence of continuing strong growth in FY23 and beyond."

Operations Update

Babylon continues to pursue its business model which is focussed on three complementary areas which are in high demand within the resources sector:

• • Rental of specialty equipment;

• • Maintenance and rebuild services for large diesel driven equipment; and

• • Speciality services including high pressure water and abrasive blasting and ancillary services to the resources sector.

1 All revenue and financial figures provided in this announcement are unaudited.

Specialty Rental

Babylon continues to experience high levels of rental asset utilisation. Works continue to assemble more rental assets and Babylon is evaluating opportunities to further increase its rental fleet as the Company continues to field enquires from existing and new clients. High horsepower, high-head pumps are under build to complement pumps currently on client sites under longer term commitment.

Notably, during the quarter Babylon completed installation of an innovative assisted evaporation project for a large multi-mineral mine owner/operator. Once evaluation is complete, this trial project may lead to significant water management works across multiple sites.

Diesel Maintenance

Babylon continues to focus capacity in the Perth workshop on long term client contracts. The Company has successfully increased its scope of works with the supply of a service exchange Caterpillar C175 engine to a major iron ore producer.

During the quarter, Babylon has improved its margins and parts supply chain by adding new and lower cost suppliers as the visibility and lead times of contractual work has provided broader options to offset complications experienced due to COVID-19.

Structural and organisational changes at Primepower Qld during the reporting period have eliminated c.$0.8M in annual recurring costs. The Company has successfully consolidated back office and administrative functions in Perth, whilst operational improvements implemented in the quarter have provided additional recurring efficiencies.

Demand for the Company's diesel maintenance services has evolved from one-off transactional type client relationships to recurring works with active engagement in long-term planning.

Babylon's new Perth workshop, which is currently under construction and planned for completion at the end of 2022, will provide increased capacity to meet rising demand from clients. Babylon is currently in discussions with its Western Australian (W.A.) based clients to secure long term service exchange maintenance programs. Upcoming facility capacity, flexibility beyond the OEM and a growing record of quality positions Babylon for success in the marketplace.

Specialty Services

A change in management at the Company's industrial services subsidiary Ausblast and focus on asset utilisation has resulted in multiple new clients during the quarter. Ausblast entered a one-year contract for trial blasting and painting service works with a southwest W.A. bauxite mine site. To support project work in southwest W.A., assets have been relocated to Babylon's Perth workshop which has led to new clients in the metro area and further project work. Management is successfully diversifying commodity and geographical exposure in addition to increasing activity in the iron ore dominated Pilbara region of W.A.

Strategic positioning of assets, targeting projects where FIFO workers are not required, utilising full maintenance capabilities of the Company and increased sales efforts are expected to drive efficient growth for Ausblast in the near term.

Summary and Outlook

The Company's Board is confident in the ongoing growth in current service offerings and is focused on growing the more profitable specialty services and rental revenue streams whilst conducting an ongoing evaluation on improving operational efficiencies and profitability in maintenance services.

The Company's Appendix 4C follows for the quarter ended 31 March 2022.

For more information, please contact:

Michael Shelby

Executive Chairman [phone]

Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

Babylon Pump & Power Limited

ABN

47 009 436 908

Quarter ended ("current quarter")

31 March 2022

Consolidated statement of cash flows	Current quarter $A'000	Year to date (…9...months) $A'000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) research and development (b) product manufacturing and operating costs (c) advertising and marketing (d) leased assets (e) staff costs (f) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	7,279 (3,092) (4) (2,049) (615) (260) (130)	22,699 (13,816) (27) (6,454) (1,692) (735) - - (131)
1,129	(156)

2.

Cash flows from investing activities

2.1

Payments to acquire or for:

• (a) entities

• (b) businesses

• (c) property, plant and equipment

• (d) investments

• (e) intellectual property

• (f) other non-current assets

- (69)

(474) (1,327)

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter $A'000	Year to date (…9...months) $A'000
2.2 Proceeds from disposal of: (a) entities (b) businesses (c) property, plant and equipment (d) investments (e) intellectual property (f) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	118	316
49	(1,485)

3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	(1,433)	4,721 (2,840)
(1,433)	1,881

4.

Net increase / (decrease) in cash and cash equivalents for the period

4.1

Cash and cash equivalents at beginning of period

4.2

Net cash from / (used in) operating activities (item 1.9 above)

4.3

Net cash from / (used in) investing activities (item 2.6 above)

1,527 1,129

1,032

(155)

49

(1,486)