Desert Control (DSRT) Q2 2024 earnings summary

Executive summary

• Achieved significant technological breakthroughs, including a new LNC production prototype with six-fold capacity, improved mobility, and reduced operational costs, enabling record installations.

• Record number of installations in the U.S., with 15 deployments since Q1 and strong traction in golf courses and permanent crops.

• Expanded project portfolio in the U.S. from 29 to 38 projects, with increased pilot acquisitions and market acceptance.

• Progressed regulatory integration and operational readiness in the Middle East, with new deployments and transition to a licensing model.

• Strengthened independent validation through partnerships with Syngenta, University of Arizona, and University of California.

Financial highlights

• LNC revenue in Q2 2024 exceeded NOK 500,000, up from NOK 20,000 in Q2 2023; H1 2024 revenue nearly NOK 1.8 million, more than doubling year-over-year.

• EBITDA improved by NOK 12.5 million in H1 2024 compared to last year; Q2 2024 EBITDA was NOK -16.0 million, up from NOK -19.5 million in Q2 2023.

• Net income declined by NOK 5 million in H1 2024 due to exchange rate fluctuations; Q2 2024 net loss was NOK -22.3 million.

• Closed Q2 2024 with NOK 91 million in cash and no interest-bearing debt.

• Equity ratio increased to 94.5% of total assets, with equity at NOK 99.9 million as of June 30, 2024.

Outlook and guidance

• Positive outlook with robust pipeline in the U.S. and Middle East, supported by regulatory integration and technological advancements.

• Anticipates continued growth in pilots and stage two deployments in agriculture and larger contracts in golf segment by year-end.

• Larger stage three contracts expected to be signed in Q4 2024, with deployments into 2025.

• No specific guidance on cash-neutrality; profitability expected from large-scale deployments in late 2025 and beyond.

• Positioned for larger-scale commercial deployments and long-term value creation for stakeholders.