• Revenue: NOK 72 million, primarily from the SALSK contract.

• Gross Margin: 26% for the quarter.

• Direct Materials Cost: NOK 53 million.

• Payroll Expenses: Increased to NOK 40 million, driven by operations in China.

• Other Operating Expenses (OPEX): NOK 18 million, down from NOK 25 million in Q2.

• EBIT: Minus NOK 44 million.

• Net Loss: NOK 38 million for the quarter.

• Cash Position: NOK 188 million at the end of the third quarter.

• Backlog: Decreased from NOK 416 million to NOK 341 million.

• Investment: NOK 50 million in the quarter for electrode manufacturing capacity in Denmark.

• Warning! GuruFocus has detected 8 Warning Signs with STU:R6Z.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• HydrogenPro ASA (STU:R6Z) reported a significant increase in revenues, reaching NOK72 million in the third quarter, up from NOK50 million in the previous quarter.

• The company achieved a gross margin of 26%, indicating strong profitability in its operations.

• HydrogenPro ASA received EU funding approval of EUR16.5 million for its expansion project in Denmark, which is progressing on time and within budget.

• The company is positioned as one of the few OEMs with operational mega projects, enhancing its reputation and market position.

• HydrogenPro ASA has successfully attracted around NOK200 million in funding for technology development, showcasing its strong R&D capabilities.

Negative Points

• The company reported a net loss of NOK38 million for the third quarter, highlighting ongoing financial challenges.

• HydrogenPro ASA experienced a reduction in its backlog from NOK416 million to NOK341 million, indicating a slowdown in new contract acquisitions.

• There were eight recorded accidents in 2023, although all were minor, it underscores the need for improved safety measures.

• The company faces uncertainties due to EU restrictions and the unclear criteria from the European Hydrogen Bank, which could impact future projects.

• HydrogenPro ASA has not announced any new contracts in the quarter, reflecting challenges in securing new business amidst a more challenging market environment.

Q & A Highlights

Q: With new restrictions imposed by the EU, what is the impact for you and how do you adapt to this going forward? A: We do not see any significant impact on our pipeline or projects. We qualify through the SALSK project and are confident with our European operations. Most of our projects are not dependent on EU funding, so we do not foresee negative impacts or changes.

Q: Why do you have a high focus on Denmark in terms of R&D efforts and grants? A: As a technology company, investing in high-tech like our electrode technology is crucial. Denmark offers public grants that support our R&D, making it cost-efficient. We are moving forward with submitting the final application within the EU.