On November 9, 2023, FREYR Battery (FREY, Financial), a developer of clean, next-generation battery cell production capacity, announced its financial results for the third quarter of 2023. The company is adapting to a volatile market by focusing on balance sheet strength, liquidity, and strategic flexibility. Despite the challenges, FREY has made significant progress in its operations, including the advancement of technical milestones and the commissioning of equipment at its Customer Qualification Plant (CQP).
Operational Updates and Strategic Shifts
FREYR Battery (FREY, Financial) has faced delays in the commissioning of the CQP, moving the timeline beyond Q4 2023. In response, the company has formulated a plan to mitigate further delays, involving increased expert involvement and the formation of a Technology Advisory Board. The company has also decided to minimize spending on the Giga Arctic project in 2024, focusing instead on technology development at the CQP and seeking competitive regulatory conditions in Norway and Europe.
Furthermore, FREYR is engaging with potential financial sponsors and strategic partners for the Giga America project-level equity raise. The company has updated its development plan and is pursuing multiple financing options, including the U.S. Department of Energy process.
Financial Performance
FREYR Battery (FREY, Financial) reported a net loss attributable to ordinary shareholders for the third quarter of 2023 of $(9.8) million, or $(0.07) per diluted share, a significant improvement from the net loss of $(93.9) million, or $(0.80) per diluted share, in the third quarter of 2022. The reduced net loss was primarily due to corporate overhead, project support, and research and development spending, offset by a non-cash gain on warrant liability fair value adjustment.
As of September 30, 2023, FREYR had cash, cash equivalents, and restricted cash of $327.9 million, with no debt on its balance sheet. The company expects to exit 2023 with approximately $250 million in cash after fulfilling its commitments and covering fourth-quarter overhead.
Balance Sheet and Cash Flow Highlights
The balance sheet as of September 30, 2023, shows total assets of $738.8 million, with a strong equity position of $634.4 million. The company's current assets include $299.4 million in cash and cash equivalents and $28.4 million in restricted cash. Property and equipment, net, stand at $349.4 million, reflecting ongoing investments in production capacity.
The cash flow statement reveals a net loss of $(48.3) million for the nine months ended September 30, 2023. Cash used in operating activities amounted to $(54.0) million, while cash used in investing activities was $(168.0) million, primarily for property and equipment purchases. The company's cash position decreased by $(235.2) million over the nine months, largely due to these investments and operating losses.
Looking Ahead
FREYR Battery (FREY, Financial) remains focused on completing the commissioning of the CQP, securing project-level equity for Giga America, and maintaining a strong balance sheet. The company is also working towards finalizing its redomiciling process to the U.S. by the end of 2023, which is expected to enhance its eligibility for inclusion in equity indexes and attract more investment.
The company's strategic adjustments and cost rationalization initiatives are designed to navigate the current market environment effectively and maximize the value of its real options. FREYR Battery (FREY, Financial) is committed to advancing its mission of providing clean battery solutions and contributing to the global decarbonization effort.
For more detailed information on FREYR Battery (FREY, Financial)'s financial results and strategic outlook, investors and interested parties can access the full earnings report and presentation materials at FREYR Battery's Investor Relations website.
Explore the complete 8-K earnings release (here) from FREYR Battery for further details.
