Rex International Holding Limited: FY2025 Financial Analysis and Outlook

Rex International Holding Limited (“Rex”) released its unaudited condensed interim financial statements for the six months and full year ended 31 December 2025. The following analysis highlights key financial metrics, trends, and significant events impacting the company’s performance and outlook. This review is designed for investors and market observers seeking insight into Rex’s current standing and future risks.

Key Financial Metrics and Comparative Table

Note: NM = Not Meaningful. The company recorded substantial losses in 2H 2025, with the EPS and NAV per share turning negative.

Historical Performance Trends

• Revenue: Full-year revenue increased by 7% YoY to \$319.7 million (FY2025), mainly due to higher sales volume in Norway and Germany, though offset by lower oil prices and reduced volume in Oman.
• Profitability: The Group swung to a substantial loss after tax of \$152.7 million in FY2025 (vs. \$50.2 million loss in FY2024), driven by significant impairments and a spike in operating costs.
• Operating Expenses: Production and operating expenses increased sharply to \$175.4 million (from \$95.3 million), reflecting higher production activity, cost overruns, and one-off events such as tanker replacement in Oman.
• Impairments: Other expenses more than doubled to \$108.7 million, with \$88.7 million in impairment losses on oil & gas properties (mainly Norway and Benin), \$10.9 million in exploration write-offs, and an \$8.7 million provision for onerous contracts.
• Liquidity: Cash and equivalents declined to \$49.1 million (from \$117.2 million), with total cash and quoted investments at \$56.3 million.
• Balance Sheet: Net asset value per share turned negative (-\$0.0725) due to accumulated losses and impairments; working capital is negative by \$81.3 million, heightening liquidity risk.

Exceptional Items and Corporate Actions

• Impairments & Onerous Contracts: Major impairments in Norway (Yme Field) and Benin, plus provision for an onerous rig contract, weighed on results.
• Fundraising & Bonds: The Group issued new NOK- and USD-denominated senior secured bonds totaling \$143.1 million in 2025 to refinance and fund operations, resulting in a rise in loans/borrowings to \$248.7 million.
• Placement: In early 2026, Rex raised S\$1.83 million (~US\$1.44 million) from a treasury share placement and issued new shares and warrants, aiming to shore up liquidity.
• Divestments & IPOs: Xer Tech AB was spun off and listed in Sweden via reverse takeover, with Rex retaining a 50.4% stake. This gives Xer access to Swedish equity/debt capital and allows the Group to focus on core energy assets.
• Legal/Operational Risks: Drilling delays and technical complications in Benin resulted in cost overruns and delayed production, severely impacting the financial position of subsidiary Lime Petroleum Holding AS (“LPH”). LPH is now undergoing a strategic and financial review, including potential restructuring.
• No Dividend: No dividend for FY2025 or FY2024 due to negative earnings.

Directors’ Remuneration and Related Party Transactions

• Directors & Key Executives Compensation: Totaled \$9.57 million in FY2025 (down from \$10.91 million in FY2024).
• Related Party Transactions: Various consultancy fees were paid to companies linked to directors and controlling shareholders, but these were not material to the Group’s financial position.

Significant Events and Risks

• Liquidity Crisis: Negative working capital, heavy debt, and ongoing cost overruns—especially in Benin—make liquidity a key risk. The Group’s ability to continue as a going concern depends on the success of LPH’s restructuring or refinancing efforts.
• Macroeconomic & Oil Price Headwinds: Oil prices fell sharply in 2025 (Brent: \$60.84/bbl, -20% YoY), with forecasts for further softness in 2026. This adversely impacts revenue, asset values, and cash flows.
• Operational Delays: Technical complications in Benin led to a three-month production delay, higher drilling costs, and material adverse impacts on LPH’s finances.
• Restructuring Uncertainty: LPH is exploring mergers, asset sales, debt amendments, or broader restructuring. The outcome is uncertain and could materially affect group finances.

Chairman’s Statement

“Overall production for the Group remained steady at over 10,000 boepd in 2025, with Lime Resources Germany GmbH (LRG) contributing to the monthly production since 2025…
While Akrake has since completed drilling of the AK-2H production well in the Sèmè Field and achieved first oil in February 2026, LPH has engaged a financial advisor and legal counsel to undertake a comprehensive strategic and financial review, to evaluate all available alternatives to strengthen LPH’s balance sheet and secure a sustainable capital structure…

The Group will update shareholders whenever there are material developments to its operational plan.”

Tone: The Chairman’s statement is cautious and realistic. While highlighting operational achievements, it directly acknowledges the seriousness of LPH’s financial difficulties and the need for urgent restructuring. The tone is not optimistic, reflecting the gravity of recent liquidity challenges.

Outlook and Forward Guidance

The company’s outlook remains highly uncertain. Key risks include:

• Ongoing liquidity crisis and negative working capital.
• Dependence on successful operational turnaround and/or restructuring at LPH.
• Potential for asset sales or debt amendments to stabilize the balance sheet.
• Continued oil price volatility and macro headwinds.
• No dividend in the foreseeable future.

Conclusion and Investor Recommendations

Overall Assessment: Rex International’s financial performance for FY2025 is weak, with deepening losses, heavy impairments, and liquidity pressures. Significant operational and strategic risks cloud the near-term outlook. While there are pockets of operational progress (e.g., production ramp-up in Germany, successful drilling in Benin), these are overshadowed by financial headwinds, especially at LPH.

• If you are currently holding this stock: Exercise caution. The company faces acute liquidity risk and may need to restructure debt, sell assets, or undertake further dilutive fundraising. Review your risk tolerance and monitor developments in LPH’s review process and bondholder negotiations closely. Consider reducing exposure if you seek lower risk or more stable investments.
• If you are not currently holding this stock: Avoid initiating new positions until the outcome of the strategic review and restructuring at LPH is clarified. The risk of further losses, dilution, or even going concern issues is elevated.

Disclaimer: This analysis is based solely on the latest available financial statements as of 31 December 2025. It does not constitute investment advice or take into account your individual circumstances. Please consult your financial advisor before making any investment decisions.

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