Release Date: July 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fluence Corp Ltd (EMFGF, Financial) reported a 14% increase in SPS and recurring revenue in its core business units over the first half of 2023.
- Gross margins improved, remaining above 30% for the year, representing an 8.3% increase over the first half of 2023.
- The company achieved approximately 20% savings in SG&A and R&D expenses in the first half of 2024 compared to the same period in 2023.
- Fluence Corp Ltd (EMFGF) has a current backlog of orders at $96 million, an increase of over 83% compared to the first half of 2023.
- The company successfully repaid its loan facility with Upwell and secured a more favorable revolving credit facility, providing financial flexibility and interest savings.
Negative Points
- First half results were lower than budget and expectations due to project delays, particularly the Ivory Coast Addendum project.
- Revenue in the first half of 2024 was $20.1 million, which was $10.5 million lower than the first half of 2023.
- The company experienced an EBITDA loss of $1.6 million in Q2 2024 and $3.6 million in the first half due to delays and market weaknesses.
- Fluence Corp Ltd (EMFGF) had to revise its 2024 revenue guidance to $70 million to $75 million, with EBITDA expected to be breakeven.
- Cash flow was negative $6.3 million in Q2, underperforming compared to forecasts due to project and collection delays.
Q & A Highlights
Q: Can you provide an update on the USA production line for the membrane unit?
A: We are on track to have it operational by year-end. We are relocating a smaller machine from Israel to the US and subleasing a facility to set it up. This approach allows us to start production while designing a new machine with updated technology.
Q: What is the plan for the revised financing with a term of less than two years?
A: Our intention is to repay within two years, using cash flow and arranging a more traditional commercial credit line with a bank.
Q: Can you update us on the Ivory Coast project going live and the operations contract?
A: The Ivory Coast project is currently in testing phases. A short-term operations contract is expected to keep the plant idling until the distribution system is ready. A longer-term contract will follow once the system is fully operational.
Q: Are there any updates on the JBS projects?
A: We are setting up meetings with JBS corporate executives as the projects are beyond the capability of individual plant management. Corporate involvement is needed to move forward.
Q: What is the outlook for growth in the North American market?
A: We are seeing significant backlog growth, particularly in the Municipal Water & Wastewater market, with new orders more than doubling compared to last year. The pipeline is growing, and we are making headway in North America.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
