Fusion Fuel Green PLC Q1 FY2024 earnings call

Key Points:

• Received European Commission acceptance of HEVO-Portugal Project as IPCEI.
• Raised €5.9M via ATM facility in February, with significant trading volume post-IPCEI award.
• Received over €1M grant as part of H2tALENT consortium and provisional grant approval for 25-MW HEVO-Aveiro project (~€5M).
• Convened EGM to secure shareholder approval for allotting securities above 20% annual cap.
• Drew down first tranche of Macquarie facility ($1.15M) and completed installation of 300-kW HEVO-Chain system for a global cement leader.
• Signed technology sale contract for 100-kW HEVO-Chain system for a hospital client in Iberia.
• Have over 200 MW of offers/tenders in 16 markets and six fully owned development projects with government funding.
• Sines project designated as IPCEI (630-MW capacity) and awarded €1M Work Package for H2tALENT project.
• Aim to deliver 5-6 full HEVO-Chain systems in 2024, focus on certifying product for NA/Australia, and reduce product transformation costs by 70% by year-end.
• Established relationships with multi-project developers for small projects.

No specific product segment financial performance with absolute revenue and contribution % provided in the transcript.

Guidance:

• Maintaining 2024 guidance as communicated earlier.
• Intend to exit cash burn by end of 2025.
• Seek strategic and structural financing to execute business plan and accelerate growth.
• Plan to deliver 5-6 full HEVO-Chain systems in 2024.
• Expect to certify product for North American and Australian markets by year-end.
• Aim to reduce product transformation costs by 70% by year-end.

Risks:

• NASDAQ non-compliance regarding shareholder equity ($10M requirement), with plan to be submitted within 45 days.
• Potential delays in customer decisions for follow-on projects, especially in hydrogen applications.
• Uncertainties in finalizing partnerships and due diligence for large projects like Sines IPCEI.
• Subsidies/grant deadlines could impact project timelines and revenues.

Q: Why elected not to provide formal update on 2024 revenue guidance?

A: Maintaining guidance as best estimate; no substantive changes since last communication, and Sines portfolio monetization takes time.

Q: Steps required to certify HEVO-Chain in North America and Australia?

A: Engage external certification company like TUV, capture certifications/requirements, test compliance.

Q: Customer feedback on HEVO-Chain solution?

A: Cement client has asked for follow-on proposals, but plant not yet live.

Q: Capital raise plans to strengthen balance sheet?

A: Plan to submit to NASDAQ within 45 days, Macquarie drawdown improves equity situation, focus on cash flow break-even.

Q: Timing expectation for cement customer's additional projects?

A: No specific timing, decisions likely after go-live, which is soon.

Q: Average project size in under 5 MW pipeline?

A: Average around 3 MW, ranging from 0.1 MW to 5 MW.

Q: Status of prospective project sales and grant funding expiration?

A: Grants have deadlines up to 2026, Sines 1 has 2024 expiration, but extension sought as part of Sines IPCEI.

Q: Conversations with IPCEI project partner and due diligence timeline?

A: Due diligence ongoing, negotiation stage, expected to take months.

Q: NASDAQ non-compliance plan and equity requirement?

A: Submitting plan within 45 days, Macquarie drawdown improves equity, option to transfer to capital markets.

Q: Opportunities in U.S. market and PTC guidelines?

A: U.S. market is critical, working on certifications, focusing on under 10 MW projects initially.

Q: Runway for current cash position?

A: Operational inflows, Macquarie drawdown provide runway for capital raise efforts.

Q: Production capacity at Benavente facility?

A: One production line can make 40 MW of electrolyzers per year, can double capacity with €1-1.5M investment.