Bawat Water Technologies (BAWAT) Q1 2024 earnings summary

Executive summary

• Q1 sales trailed behind pro rata for the full year due to slower backlog conversion and delays in new orders, especially in the new building segment.

• Achieved first Ballast as a Service (BAS/BaaS) jobs in Northern Europe in Q1 2024, with further jobs in April and May, and a permanent installation in Hamburg Port.

• Significant uplift in pipeline activity, particularly for mobile systems, with increased demand from fleet owners, ports, navies, and authorities.

Financial highlights

• Q1 2024 sales reached SEK 4.4m, slightly above Q1 2023 but below full-year prorate due to slow backlog conversion and order delays.

• Gross profit for Q1 2024 was SEK 0.8m, with a gross margin of 18.6%, down from 21.6% in Q1 2023.

• EBITDA loss of SEK -5.8m in Q1 2024, an improvement from SEK -6.7m in Q1 2023.

• Guidance maintained for full-year sales between SEK 42 million and SEK 54 million.

• Future jobs are expected to carry higher gross margins, with guidance for gross margin above 30%.

Outlook and guidance

• Full-year sales guidance remains unchanged at SEK 42-54m, supported by a strong pipeline and increased activity in mobile systems and BAS.

• Expectation of recurring revenue from BAS, especially as permanent installations in ports like Hamburg attract regular customers.

• Regulatory changes, including IMO and US Coast Guard rules, are driving demand for compliant ballast water discharge solutions.

• Anticipation of presence in more Northern European ports by year-end.