Hexicon (HEXI) Q3 2024 earnings summary

Executive summary

• Focused on floating offshore wind, with a global portfolio of 22 GW gross and 6.5 GW net capacity, emphasizing core markets in South Korea, South Africa, Italy, and Sweden.

• MunmuBaram project in South Korea achieved EIA approval in August, regulatory approval for full ownership in November, and signed a TSA with KEPCO in October.

• Swedish government rejected 13 Baltic Sea wind projects, impacting two local projects, but approved the first floating offshore wind project on the West Coast.

• Portfolio streamlined by cancelling Pohang project, exiting the US market, and seeking a partner for TwinHub in the UK.

• Optimism remains for Swedish offshore wind, with ongoing regulatory reviews and constructive government-industry dialogue.

Financial highlights

• Q3 2024 net revenue: SEK 3.8 million (Q3 2023: SEK 0.8 million); operating loss: SEK -32.9 million (Q3 2023: SEK -27.6 million); loss before tax: SEK -54.1 million (Q3 2023: SEK -44.3 million).

• Cash at period end: SEK 38.2 million; available credit facility: SEK 5.0 million; equity/assets ratio: -23%.

• Liquidity is constrained, with a credit facility due December 31 and significant debts maturing; multiple workstreams underway to address short-term financing.

• Financial structure improvement is a top priority, with optimism following regulatory clarity on MunmuBaram.

• Cash flow from operating activities improved to SEK -28.3 million (Q3 2023: SEK -80.4 million).

Outlook and guidance

• Priorities include securing and improving financial structure, establishing a new ownership structure for MunmuBaram, divesting selected projects, and focusing on core, near-term revenue-generating projects.

• Awaiting Swedish government approval for Mareld project, which could proceed to construction if approved.

• Long-term optimism for floating offshore wind, but near-term industry conditions remain challenging with delays and cost increases.