Fusion Fuel Green PLC Q3 FY2023 earnings call

• Project Wins and Partnerships: Awarded a 300 kW electrolyzer contract, partnered with Elemental Clean Fuels for North America, received EUR4.2 million purchase orders, and secured a $20 million convertible debt facility with Macquarie.
• Financials: Recognized EUR2.5 million in Q3 revenue, reversed EUR0.5 million from a failed project, reduced operating costs for 3 consecutive quarters (with R&D expenses increasing).
• Operational Highlights: Madrid project provisionally accepted, continued selling/scrapping legacy HEVO-Solar inventory, engineering team designed over 10 green hydrogen plants in Portugal/Spain, and expects engineering services revenue starting next year.

During the third quarter, Fusion Fuel Green recognized EUR2.5 million in revenue from the Madrid green hydrogen project, with EUR0.7 million accrued and expected within 60 days. A EUR0.5 million revenue was reversed due to a project not proceeding within grant timeframe. The revenue from the Madrid project contributed a significant portion, while the reversed amount was from a technology sale contract that didn't align with Portuguese government grant timelines.

• 2023: Revised guidance holds, with EUR2.5 million recognized in Q3. 2024: Target EUR34 million revenue from technology/balance of plant sales and project sales, with 5 projects signed and Sines 1 project in negotiation, expecting cash inflows quarterly.

• Industry Challenges: Project delays, electrolyzer performance issues, scarce off-take agreements. Portugal Politics: Green hydrogen auction in Portugal postponed to early 2024, but projects themselves not affected.

Q: Are you seeing particular use cases with stronger business models?

A: Mobility has higher IRR at this point, but industrials are also investing in decarbonization for long-term needs.

Q: Update on Northern Europe projects?

A: Submitted offers for mobility sector in UK, France, etc., but FID takes time due to offtake negotiations.

Q: Engineering services revenue example?

A: Varies by project complexity (e.g., pressure/purity requirements), expecting EUR500k in 2024 and EUR1m in 2025 from engineering services.

Q: ATM facility post-Macquarie?

A: No immediate plans to use ATM, and it's a condition to operationalize Macquarie deal to cancel ATM.

Q: Timeline to profitability?

A: Expect 2025, with low cost base giving advantage in reaching cash flow break-even.

Q: Performance guarantees on large projects?

A: Industry lacks performance guarantees for large projects, Fusion focuses on small to mid-scale where risk is manageable.

Q: Headcount and cost structure?

A: Headcount around 130, rationalizing roles rather than reducing, leveraging lower Portugal salaries to manage costs