Freemelt (FREEM) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw high activity in commercial and technical development, including the successful installation of the first eMELT industrial machine and a focus on tungsten and fusion applications.

• Strategic collaborations and feasibility orders increased, especially in the U.S. defense and energy sectors, with new orders in North America and EMEA, including the first e-MELT®-iD order in North America and follow-up orders from UKAEA.

• The company ramped up commercial efforts in North America and EMEA, leveraging partnerships to address capacity constraints and market education.

• Accelerated demand in Defense, Energy, and MedTech sectors, with a focus on tungsten, copper, and titanium applications.

• Operating result was -26,739 KSEK, lower than -22,890 KSEK in Q2 2023, due to delayed income and higher costs from intensified commercialization and product development.

Financial highlights

• Net sales for Q2 were 2,410 KSEK, with two machine deliveries: one second-hand to University of Sheffield and one to Mid Sweden University, both at lower commercial value.

• Aftermarket recurring revenues increased year-over-year, driven by a growing installed base.

• Order book stood at 9,473 KSEK at quarter-end, rebounding from a Q1 slump.

• Operating cash flow was SEK -11 million, impacted by higher inventory and receivables in preparation for future deliveries.

• Cash at period end was 47,179 KSEK, boosted by a rights issue completed in May.

Outlook and guidance

• The company expects continued growth in feasibility studies and machine orders, especially as commercial activities intensify and the U.S. team expands.

• Sales cycles remain long (12–18 months), but a stronger pipeline and increased industry pull are expected to drive future machine sales.

• Ahead of 2030 plan due to accelerated customer demand for feasibility studies and application development.

• Continued focus on commercialization in Europe and North America, targeting industrial serial production.

• No specific forecasts were provided, but management is optimistic about harvesting results from recent investments.