Osmosun (ALWTR) H1 2024 earnings summary

Executive summary

• Specializes in low-carbon, solar-powered desalination with patented technology, offering units from 1 to 50,000 m³/day.

• 73 units sold as of June 2024, producing 4 million m³ of drinking water and avoiding ~6,569 tonnes of CO2.

• H1 2024 results reflect a challenging market with delayed client decisions and a focus on investment in larger projects.

• Workforce increased to 32.3 FTE in H1 2024, reflecting strengthened operations and development.

• Group underwent reorganisation and governance changes to adapt and accelerate project transformation.

Financial highlights

• H1 2024 revenue rose 15% year-over-year to €1.5m, driven by large and small project contracts.

• Gross margin negative at -€0.6m due to high subcontracting costs and low-margin contracts.

• Net loss widened to -€2.6m in H1 2024 from -€1.1m in H1 2023.

• Operating free cash flow was -€2.8m in H1 2024, with net cash position at €2.1m as of June 30.

• Personnel costs up 46% to €1.1m; average headcount up 32% to 32.3 FTE.

Outlook and guidance

• Order backlog of €1.7m with 10 projects, 90% to be delivered by year-end 2024.

• Advanced negotiations on ~80 projects worth €88m, but with low visibility on conversion timing.

• Expects steady revenue and reduced loss in H2 2024 compared to H1.

• Cost and cash flow optimisation measures underway; additional funding may be considered if needed.

• Strategic review underway to improve project management, reduce cash consumption, and accelerate project materialization.