Fusion Fuel Green Plc Q3 FY2022 earnings call

Key Points

• Frederico Chaves mentioned receiving a EUR10 million grant from Portugal's resilience and recovery plan, commencing work on the Exolum tech sale project in Madrid, announcing two EUR7 million tech sale contracts, disclosing the first U.S. project, and introducing the HEVO-Chain.
• Q3 operating loss was EUR5.5 million, driven by increased operating expenses. Admin expenses guidance adjusted to EUR4 million to EUR4.5 million per quarter for Q4 2022 and most of 2023.
• Plan to book Exolum project revenue in Q4 2022. Sale leaseback of Benavente expected to close in December.
• Zach Steele discussed commercial strategy, targeting over $40 million gross revenue in 2023, focusing on Iberian Peninsula projects, expanding into North America and Italy, leveraging IRA and other subsidies, partnership with Electus Energy in the U.S., and partnership with Duferco Energia in Italy.
• Frederico Chaves highlighted HEVO-Chain as a revolutionary product, able to work with any energy source, modular, scalable, and bringing affordable hydrogen solutions.

No specific detailed breakdown of financial performance by product segment in terms of absolute revenue and revenue contribution % was provided in the transcript.

Forward-Looking Statements

• Target to achieve over $40 million gross revenue in 2023.
• HEVO-Chain production planned for 2024.
• U.S. project in Bakersfield aims for FID in 2024 and commercial operations in 2025.
• Adjusted admin expenses guidance to EUR4 million to EUR4.5 million per quarter for Q4 2022 and most of 2023.
• Expect to book Exolum project revenue in Q4 2022.

Q: Breakdown of revenue between HEVO-Solar and HEVO-Chain looking out into the latter half of the decade.

A: Frederico Chaves stated HEVO-Solar will take bulk in short term, HEVO-Chain likely to overtake due to larger target addressable market.

Q: Plans to introduce other products across the hydrogen production chain.

A: Frederico Chaves mentioned focus on HEVO-centric products, with potential variations but primarily HEVO-Solar and HEVO-Chain for midterm.

Q: Commercial for H2 Pioneros Program in Spain, whether one project can be selected while others are not.

A: Zach Steele stated every project stands on its own, one project can move forward independently.

Q: Milestones and revenue recognition for Bakersfield project.

A: Zach Steele mentioned in concept stage, working on prefeasibility, expect update in next quarterly call.

Q: JV with Electus Energy, funding plan.

A: 50-50 JV, working on financing arrangements with financial investors.

Q: Partnership with Duferco, status of 50 HEVO-Solar pilot project in Sicily.

A: Under MOU/LOI, plan to convert to binding agreement in coming months.

Q: Broader pipeline and timing of revenue recognition.

A: Zach Steele mentioned updating to show FID date instead of COD for revenue recognition.

Q: Capital strategy and timeline to raising capital.

A: Frederico Chaves mentioned converting receivables, inventory to cash, considering debt, equity, etc.

Q: Current production capacity and expectations for 2023.

A: Frederico Chaves expected production capacity in 2023 between 40-50 MW, dependent on project needs.

Q: Grants, including 30 million grant and IPCEI grant.

A: 30 million grant secured, IPCEI in third wave, still pursuing but not disclosing timeline to avoid volatility.

Q: Interest in MENA region and potential opportunities.

A: Actively pursuing opportunities in Morocco, Egypt, with Duferco having presence in Algeria and Tunisia.

Q: Estimated revenue for 2022.

A: Likely under $2 million, expect to book partial Exolum revenue in Q4 2022.