Jatoil Limited - Renewable Energy in Vietnam

"As a result of Corality’s work, we have more confidence in presenting our models and analysis to sophisticated players in any forum."
Paul Hogan, General Manager

Jatoil Limited's mission is to be a socially, environmentally and economically sustainable producer of renewable energy. Jatoil’s business is based, initially, on establishing projects in Asia to grow jatropha curcas, a small, hardy, long-lived tree. The fruit of the tree contains oil seeds which are suitable for commercial biofuel production.

Advantages of Jathropa as a biofuel feedstock

Most of the world's biofuel feedstocks compete with resources that could also be used for food production. Jatropha is a second generation feedstock that can be grown economically on land with poor soils, making it suitable for cultivation on marginal land. Jatropha can represent a valuable income source in developing countries, helping to increase energy security and improving the living standards of rural communities.

Jatoil's commitment to social and environmental sustainability is supported by its partnerships with local established companies to leverage networks and knowledge and by its relationships with farmer co-operatives. Jatoil also has forged partnerships with a number of experts to ensure the application of leading industry practices, and with non-government / aid organisations to ensure probity in the Jatoil operations. The project in Vietnam is an excellent example of this collaboration. 

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“Corality’s work made our access to capital that much easier. The more robust your models are the less time you spend explaining and the quicker you get to a decision.”

Paul Hogan, General Manager, Jatoil 

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Sophisticated markets need sophisticated financial models

Jatoil plays in the international arena. As such, any financial modelling must be robust and comprehensively answer the questions of a variety of users with a multitude of disciplines. There is no room for ’financial typos’, as Paul Hogan, General Manager, Jatoil explains. “Sophisticated investors and financially literate merchant bankers place a lot of stock in the accuracy of your numbers.

If they find silly mistakes, your entire presentation becomes suspect.” Jatoil turned to Corality. “They supplied an independent, third eye to our models. Their ability, as specialists, to come in and understand exactly what was required was ideal for us as an end user.”

Why a third party for financial model audit?

Many would suggest it’s almost impossible to audit your own models. Paul agrees, “You get too close, you tend not to question your own assumptions to the detriment of your end result.” Having a third party specialist financial modelling company like Corality “helps you question your inputs, strengthen and expand your assumptions and enable your output to become clearer and more succinct,” says Paul.

He goes on to say, “Our thinking was tested every step of the way. The depth that Corality had to go to in order to understand our original model forced us to re-engage with our assumptions and evaluate new ones.”

Flexibility to meet our needs

Jatoil had very specific needs. As Paul explains, “Our business cuts across international boundaries, through various funding, taxation and legal regimes. We needed a company who could understand our own model and then suggest relevant, feasible alterations.

They (Corality) took our reasonably well developed model and checked our mechanics and suggested best-practice improvements. Corality made sure it linked to the business case and by doing that ensured evaluators got out of it what they needed to.”

Savings in time and money

Raising money in the current international environment is no easy task. Models are challenged in a far more vigorous way than ever before - to the betterment of all. Paul Hogan feels that, “Corality’s work made our access to capital that much easier.

The more robust your models are the less time you spend explaining and the quicker you get to a decision.” The truth of it is if your models contain errors you may not get a second opportunity to present your case. Getting it right first time round saves time and money. In many cases, the Corality work can even improve the underlying business models.

Financial modelling specialists provide broad service

The beauty of having specialists review your own models and recommend improvements is that they’re not locked into your own assumptions. As Paul Hogan suggests “a specialist, such as Corality is hooked into the mechanics of modelling. They understand where the traps are and understand implicitly what the prospective audience of merchant bankers and other professionals are looking for.”

“This just saves you time and money; you don’t have to go back with ‘revised figures’, you’re immediately impressive.“

Working with Corality

Preparing robust financial models is a matter of trust, delivered out of respectful, helpful relationships. Corality believes the time spent in getting to know a business will repay itself in the quality of its work and a long-term mutually rewarding relationship. Paul Hogan agrees, “They’ve engaged with our business on a smaller level and seem happy to grow with us in the longer term.” He continues, “And it makes sense for us to go back to them.

 

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“As a listed company we have a responsibility to present robust, ‘typo free’ financial models. Corality’s independent and professional model review delivers peace of mind.”

Paul Hogan, General Manager, Jatoil

 

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They know our business intimately and we’ll spend less time briefing them in the future.“ Paul highlighted some specific factors in working with Corality. “They’re quite happy to share their methodology and the staff are very instructive. Overall it’s been a good experience for us.”

The Corality financial model audit process

Corality’s understanding of the material and commercial issues that clients must contend with have lead them to a rigorous set of procedures that result in models clients can rely on in the most sophisticated of environments.

“They invariably find the weak spots,” says Paul. “And importantly, Corality understands that a good model is one that connects to the business case. Their suggestions helped maintain that focus.”

Would you recommend Corality?

Paul Hogan has the last word. “Yes, we would. They were originally recommended by our Company Secretary and they’re certainly up there with first tier providers and potentially more cost effective.”