Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- HydrogenPro ASA (STU:R6Z, Financial) reported a significant increase in revenues, reaching NOK72 million in the third quarter, up from NOK50 million in the previous quarter.
- The company achieved a gross margin of 26%, indicating strong profitability in its operations.
- HydrogenPro ASA received EU funding approval of EUR16.5 million for its expansion project in Denmark, which is progressing on time and within budget.
- The company is positioned as one of the few OEMs with operational mega projects, enhancing its reputation and market position.
- HydrogenPro ASA has successfully attracted around NOK200 million in funding for technology development, showcasing its strong R&D capabilities.
Negative Points
- The company reported a net loss of NOK38 million for the third quarter, highlighting ongoing financial challenges.
- HydrogenPro ASA experienced a reduction in its backlog from NOK416 million to NOK341 million, indicating a slowdown in new contract acquisitions.
- There were eight recorded accidents in 2023, although all were minor, it underscores the need for improved safety measures.
- The company faces uncertainties due to EU restrictions and the unclear criteria from the European Hydrogen Bank, which could impact future projects.
- HydrogenPro ASA has not announced any new contracts in the quarter, reflecting challenges in securing new business amidst a more challenging market environment.
Q & A Highlights
Q: With new restrictions imposed by the EU, what is the impact for you and how do you adapt to this going forward?
A: We do not see any significant impact on our pipeline or projects. We qualify through the SALSK project and are confident with our European operations. Most of our projects are not dependent on EU funding, so we do not foresee negative impacts or changes.
Q: Why do you have a high focus on Denmark in terms of R&D efforts and grants?
A: As a technology company, investing in high-tech like our electrode technology is crucial. Denmark offers public grants that support our R&D, making it cost-efficient. We are moving forward with submitting the final application within the EU.
Q: Given the Giga factory has an estimated cost of NOK 500 million with corresponding 500 megawatt electrode capacity, how is this different from the current 350 megawatt capacity for NOK 70 million investment?
A: The NOK 500 million figure was preliminary. With improvements in the production line, we can produce significantly higher volumes at the same investment cost, expecting more output for NOK 500 million.
Q: Do you intend to sell electrodes only?
A: Currently, we focus on delivering electrodes for the SALSK project and our sales pipeline. We do not exclude the possibility of selling electrodes as an additional revenue source in the future.
Q: How do you see the US election result impacting activity for green hydrogen going forward?
A: Despite Trump's stance on hydrogen, many red states have high renewable energy activities. While there might be uncertainties regarding the IRA, our US prospects are not showing major concerns, and projects are progressing as planned.
Q: Do you already have projects with JHK in the pipeline, and how mature are these projects?
A: We have not yet included projects with JHK in the pipeline. We are addressing specific projects they have, which prompted the partnership. These projects are in the early stages.
Q: The reclassified personnel expenses are higher than in quarters last year when project delivery was significantly higher. What is the reason for this?
A: The increase in payroll is due to increased activity in our Tianjin plant for the SALSK project. We have also reduced other OPECS. Cost consciousness is crucial, and we are adjusting activity levels accordingly.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
