HeiQ (HEIQ) H1 2024 earnings summary

Executive summary

• Revenue for the 18-month period ended June 30, 2024 was $62.3m, up from $47.2m in the prior 12 months, but annualized revenue declined 12.3% due to weak demand in core markets.

• Gross margin improved to 36.6% from 28.5% year-over-year, driven by inventory adjustments and cost controls.

• Adjusted EBITDA loss reduced to $9.9m (annualized: -45.6% vs. prior period); operating loss narrowed to $19.0m from $29.2m.

• Loss after tax was $21.3m, improved from $29.8m year-over-year; cash at period end was $5.0m, net debt $13.4m.

• Announced delisting from LSE effective Nov 19, 2024 to reduce costs and enable focused private fundraising for growth ventures.

Financial highlights

• Revenue: $62.3m (18 months), up from $47.2m (12 months prior), but annualized revenue down 12.3%.

• Gross profit: $22.8m; gross margin: 36.6% (vs. 28.5%).

• Adjusted EBITDA loss: $9.9m (vs. $12.2m prior); operating loss: $19.0m (vs. $29.2m); loss after tax: $21.3m (vs. $29.8m).

• Cash: $5.0m; net debt: $13.4m; equity ratio: 41% (down from 57%).

• Net cash from operations: -$3.7m; investing: -$8.4m; financing: +$8.7m.

Outlook and guidance

• Advanced Materials markets expected to remain weak until at least H2 2025; consolidation into three hubs (USA, Portugal, Thailand).

• LifeSciences unit expected to grow significantly as pro-/postbiotic solutions gain traction.

• 2025 is critical for venture units: proof of concept (GrapheneX), market launch (Xpectra), and financing for AeoniQ's first commercial plant.

• Additional restructuring to reduce costs by 20% by end of 2025; further corrective actions or fundraising possible if markets deteriorate.