Quarterly Activities/Appendix 4C Cash Flow Report

• Duxton Water held 87 GL of water entitlements valued at $354 million as of June 2024
• Sold 2.8 GL of NSW high security entitlements to Treasury Wine Estates, using proceeds to pay down debt
• Commenced on-market share buyback program to enhance shareholder value

Duxton Water Limited (ASX:D2O) has released its quarterly activities and cash flow report for the period ending June 2024. The company held approximately 87 gigalitres (GL) of permanent water entitlements, valued at $354 million, as of the end of the quarter. During the period, the company settled on the sale of 2.8 GL of NSW high security entitlements to Treasury Wine Estates, with the proceeds used to offset the company's debt facility, providing additional balance sheet flexibility. The June 2024 quarter presented drier than usual conditions, particularly in the southern regions of Australia, including the Murray Darling Basin. This led to increased allocation trade volume as irrigators sought to secure water supply. In early July 2024, the government announced plans to purchase 70 GL of water entitlements through an open tender process. The company also entered into several forward contracts with irrigators to help them hedge against potential allocation market price volatility. Duxton Water's post-tax net asset value (NAV) decreased by 10 cents to $1.51 per share during the quarter, primarily due to softening water entitlement values and the payment of a 14th consecutive dividend. The company's debt facility headroom stands at $24 million, with a net debt to water assets ratio of 29%, well below the maximum covenant of 40%. Duxton Water also announced the commencement of an on-market share buyback program, with the Board believing the current share price does not accurately reflect the underlying value of the company's assets.

The company reported net cash inflows of $36 million from investing activities, primarily driven by the sale of water entitlements. The company also reported positive net cash flows of $7.8 million from operating, investing, and financing activities for the June 2024 quarter.

The company entered into several forward contracts with irrigators seeking to secure a stable water supply at a fixed cost for the upcoming season, which will help hedge against potential allocation market price volatility. The company also announced plans to participate in the government's upcoming tender to purchase 70 GL of water entitlements in the southern connected Basin.