Desert Control (DSRT) Q3 2024 (Q&A) earnings summary

Executive summary

• Achieved first large-scale golf course contract in the US with Berkeley Country Club, introducing a recurring revenue model and potential NOK >6 million over five years.

• Recorded first licensing royalties from the Middle East and secured a new 1.8 million liter contract in the UAE.

• Pilots in California showed >25% irrigation savings; Arizona date farm nearly doubled yield, supporting expansion in agriculture and landscaping.

• Next-generation LNC production system on track for >120,000 l/hr capacity, with upgrade kits planned for 2025 to boost CAPEX value.

• Strengthened leadership with new Executive Chair and expanded R&D, soil science, and commercial teams.

Financial highlights

• Q3 2024 LNC revenue NOK 0.11m (vs. NOK 0.00m Q3 2023); YTD 2024 LNC revenue NOK 1.88m (vs. NOK 0.85m YTD 2023).

• Total revenue and other income Q3 2024 NOK 0.18m (vs. NOK 0.01m Q3 2023); YTD NOK 1.95m (vs. NOK 1.38m YTD 2023).

• EBITDA Q3 2024 NOK -14.16m (improved from NOK -17.90m Q3 2023); YTD NOK -44.95m (vs. NOK -60.81m YTD 2023).

• Net income Q3 2024 NOK -15.21m (vs. NOK -19.33m Q3 2023); YTD NOK -45.43m (vs. NOK -56.86m YTD 2023).

• Cash balance at quarter end NOK 74.83m; equity ratio 95.4%.

Outlook and guidance

• Anticipates several full-scale golf and landscape deployments in California in 2025, driven by high water costs and faster validation cycles.

• Expects multiple stage 2 conversions for high-value permanent crops in 2025, building a pipeline for large-scale deployments in 2026+.

• Middle East licensing royalties and contracts expected to grow steadily, with significant upside from large-scale opportunities.

• Next-gen production system and upgrade kits to drive hardware revenue from 2025; commercial readiness targeted for H1 2025.

• R&D and partnerships (Syngenta, Siemens) to enhance LNC value, cost efficiency, and scalability.