HydrogenPro (HYPRO) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was NOK 50 million, mainly from Salzgitter project deliveries, but down from NOK 137 million in Q2 2023 due to project timing and market delays.

• Cash balance increased to NOK 247 million at quarter-end, supported by a NOK 82.7 million equity investment from Andritz and positive net working capital changes.

• Manufacturing capacity for Generation 3 electrodes in Denmark is being expanded to 350 MW, operational in Q1 2025, matching China’s capacity within the same CapEx frame.

• All electrolyzers and gas separation skids delivered and installed at ACES; commissioning preparations are progressing, with some additional work and costs due to sub-supplier equipment issues.

• Strengthened partnership with Andritz through NOK 82.7 million investment and joint demonstration/validation of Generation 3 electrodes at Salzgitter and SALCOS projects.

Financial highlights

• Q2 2024 gross profit was -NOK 22 million and EBITDA was -NOK 65 million, with a net loss of NOK 77 million, mainly due to additional ACES project costs.

• Adjusted for NOK 36 million in ACES costs, Q2 gross profit would have been NOK 14 million (25% margin) and EBITDA NOK -29 million.

• Cash balance at quarter-end was NOK 247 million, up NOK 62 million from Q1 2024.

• Order backlog at quarter-end was NOK 416 million, down from NOK 445 million in Q1 2024 and NOK 548 million in Q2 2023.

• No significant new contracts signed in Q2 2024.

Outlook and guidance

• Denmark plant to start operating in Q1 2025, with further capacity increases possible without additional CapEx.

• Focus on successful commissioning of ACES and Salzgitter, increased order intake, and full-scale documentation/testing with Andritz.

• Pipeline includes 43 prioritized projects totaling 7.6 GW, with 60% in Europe and 40% in the U.S.; overall pipeline is 154 projects (36.6 GW, $10.1bn value).

• Optimism for future growth despite slow FID progress due to macroeconomic and regulatory factors.

• Key risks remain unchanged from the 2023 annual report.