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, supporting scalability and market expansion.

• Record number of installations in the U.S., with 15 deployments since Q1 and strong traction in high-value markets such as golf courses and sports fields.

• Expanded project portfolio in the U.S. from 29 to 38 projects, with pilots advancing more quickly to commercial contracts.

• Substantial progress in the Middle East, including new deployments in the UAE and Saudi Arabia, regulatory integration, and transition to a licensing model.

• Strengthened independent validation through ongoing research with University of Arizona, University of California, Riverside, and Syngenta.

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 H1 2023; Q2 2024 EBITDA was NOK -16.0 million, up from NOK -19.5 million in Q2 2023.

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

• Positive cash balance of NOK 91 million at Q2 end, with no interest-bearing debt.

• Equity ratio increased to 94.5% from 91.2% year-over-year.

Outlook and guidance

• Positive outlook with a robust pipeline in the U.S. and Middle East, and progress on regulatory integration.

• Anticipates continued growth in pilots and second-stage deployments, with larger golf course contracts expected by year-end and deployments in 2025.

• Financial runway extends to Q4 2025, with no immediate need for capital raises.

• Profitability expected to strengthen with stage three large-scale deployments, particularly in agriculture, anticipated from late 2025 onward.

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