Investor Presentation • Nov 9, 2021
Investor Presentation
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Q3 REPORT 09.11.2021
Operations and business developments
Ocean Sun has signed an agreement to license its proprietary floating solar technology to the developer Sunneng Technology for the construction of a 1 MWp FPV pilot in Yantai, in the Province of Shandong, China. The project is fully funded by String Capital, a Beijing based energy investment fund.
Ocean Sun has been present in China since 2018 and established a Chinese subsidiary in 2020. With approximately 45% of the global installed floating solar capacity to date, China is by far the world's largest market for floating solar. There are several utility-scale deployments in the country already, so far on benign waters such as lakes, irrigation dams and on flooded quarries and mines. In addition, China has a strong drive to replace fossil energy production and the regulatory process is quick and effective. This makes China one of Ocean Sun's most important markets. This first nearshore demonstration system will create local awareness and qualify Ocean Sun for future utility-scale installations on seawater.
The project will be located a few hundred meters from shore close to the city of Yantai. The local conditions are well suited for the Ocean Sun solution, with sea conditions comparable to that of Norway. With support from the Yantai Economic and Technological Development Zone, there will be substantial potential for utility-scale projects in the future. Ocean Sun's license fee for the project is in line with what has earlier been communicated and is divided on two installments. The first installment was paid during October and the second installment fall due after project commissioning.
Ocean Sun has received a Notice to Proceed (NTP) regarding the reconstruction of the first floater on the Banja hydro powerplant in Albania. Following the NTP, complementary materials needed for reconstructing the first floater has been ordered and the ambition is to reconstruct the system during December 2021 or early 2022 depending on material lead time and local weather forecasts.
Project details
Ocean Sun and Statkraft have signed an agreement to construct a 2 MWp floating solar power plant on Statkraft's 72-megawatt hydropower plant in Banja, Albania. The first 0.5 MWp floater was successfully built and connected to the Albanian grid in June 2021. However, only a few weeks later the floater experienced an incident during a tornado, partly submerging the ring and two connected barges. Following the incident, Ocean Sun has conducted a thorough root cause analysis and proposed design modifications and new operational practices. These have been verified by expert meteorologist and naval architects from well reputed third-party institutions. After the reconstruction of the first floater the remaining 1.5 MWp is expected in a second phase during 2022.
The Green Platform is an initiative that gives companies and research institutes funding for research and innovation-driven green growth. Based on 44 project applications, The Research Council, Innovation Norway, and Siva have allocated almost one billion NOK to eleven projects, with the purpose to create green jobs and a more sustainable future. Ocean Sun is part of two consortiums that have received funding under the initiative.
The first consortium is led by Scatec and has been awarded NOK 79 million to develop the world's first large-scale hybrid hydro and floating solar power plant. At the same time, the partners will develop a unique platform for planning, dimensioning, design, optimization, and operation of hybrid power plants. In addition to Ocean Sun and Scatec, Prediktor, SINTEF Energi, IFE and Solenergiklyngen are also part of the consortium. Ocean Sun's part of the grant is ~8.5 million NOK with 60% contribution over 3 years starting from Q1'2021.
The second consortium, AluGreen, is led by Norsk Hydro and will explore, develop, and pilot high value circular Aluminum (Al) products, based on recyclable aluminum and renewable energy. The total grant for the consortium is NOK 77 million. Ocean Sun is part of a work package focusing on Subsea cables for energy distribution together with Hydro, Nexans, Metalco, Statnett and the research institutions Sintef and NTNU.
The European Patent Office (EPO) has issued a decision to grant communication in one of Ocean Sun's patent applications (European Patent Application EP3465907). This decision to grant follows patents issued in several other countries, including the United States (US patent 10,644,645), and further strengthens the IP protection for Ocean Sun's innovative membrane based FPV Technology.
Patent protection has high priority at Ocean Sun in order to protect our technology leadership. Ocean Sun currently has 2 patent families, with patents either granted or pending in most parts of the world that have a well functioning patent system.
An independent IP evaluation performed by Zacco stated that:
"Ocean Sun's technology should therefore be well suited for commercialization, either through direct utilization or via IP licensing"
– Rikard Mikalsen , PhD and European patent attorney, Senior Partner at Zacco
| Income Statement | |||||
|---|---|---|---|---|---|
| Unaudited | Unaudited | Unaudited | Unaudited | Audited | |
| NOK'000 | Q3'2021 | Q3'2020YTD Sep21YTD Sep20 | FY2020 | ||
| Revenue | - | - | 25 | 718 | 1 146 |
| Contributions | 1 163 | 739 | 4 742 | 3 914 | 4 983 |
| Total revenue | 1 163 | 739 | 4 767 | 4 632 | 6 129 |
| Materials & consumables | (823) | (265) | (2 922) | (1 661) | (2 946) |
| Personnel costs | (2 807) | (2 504) | (6 960) | (6 109) | (8 474) |
| Other operating exp. | (2 804) | (1 007) | (7 544) | (3 846) | (5 390) |
| Depriciation | (5) | (4) | (14) | (11) | (15) |
| Operating result | (5 276) | (3 040) | (12 673) | (6 995) | (10 695) |
| Net financials | (3) | 2 | (51) | 105 | 172 |
| Result before tax | (5 278) | (3 038) | (12 724) | (6 890) | (10 524) |
| Income tax | - | - | - | - | - |
| Result of the period | (5 278) | (3 038) | (12 724) | (6 890) | (10 524) |
For accounting principles, please refer to Annual report 2020.
Total revenue amounted to NOK 1.2 million in Q3'2021 and relates to R&D contribution from the BOOST project as well as from the Research Council of Norway.
The year-on-year cost base has increase in Q3 primarily as a result of business upscaling. Personnel costs increased due to two new employees in Norway during 2021. External consultants have also been engaged driving the cost of Materials and consumables up. The increase in Other Operating Expenses is explained by an expansion of Ocean Sun's China office as well as higher spending on legal, recruitment and a new office in Norway.
| Balance sheet | ||
|---|---|---|
| Unaudited | Audited | |
| NOK'000 | 30.09.2021 | 31.12.2020 |
| Assets | ||
| Office equipment | 42 | 56 |
| Investments in subsidiaries | 280 | 280 |
| Total fixed assets | 322 | 336 |
| Accounts receivables | 16 | - |
| Other receivables | 7 566 | 7 326 |
| Cash and cash equivalents | 83 189 | 94 951 |
| Total current assets | 90 771 | 102 277 |
| Total assets | 91 093 | 102 613 |
| Equity and liabilities | ||
| Total equity | 87 386 | 100 166 |
| Accounts payable | 889 | 639 |
| Public duties payable | 283 | 590 |
| Other short-term liabilities | 2 535 | 1 218 |
| Total current liabilities | 3 708 | 2 447 |
| Total liabilities | 3 708 | 2 447 |
| Total equity and liabilities | 91 093 | 102 613 |
Cash and cash equivalents amounted to ~83 million as per 30.09.2021, of which NOK0.8 million was restricted cash.
Equity ratio amounted to 96% and the Company had no interest-bearing debt. Ocean Sun is well capitalized with available liquidity to support future growth.
Other receivables included receivables for material purchased on behalf of customers as well as accrued revenue related to R&D projects.
Other short-term liabilities consisted of provisions for personnel expenses as well as prepayment of the EIC grant related to the BOOST project.
For accounting principles, please refer to Annual report 2020.
| Cash flow statement | |||
|---|---|---|---|
| NOK'000 | Unaudited 01.07- 30.09.2021 |
Unaudited 01.01- 30.09.2021 |
Audited 01.01- 31.12.2020 |
| Net income | (5 278) | (12 724) | (10 524) |
| Depreciation | 5 | 14 | 15 |
| Change in accounts receivables | 30 | (16) | 11 |
| Change in accounts payables | 396 | 250 | (119) |
| Change in other operating assets | (1 266) | 771 | (4 349) |
| Cash flow from operating activities | (6 115) | (11 706) | (14 966) |
| Investment in subsidiaries | - | - | (250) |
| Office equipment | - | 0 | (34) |
| Cash flow from investing activities | - | 0 | (284) |
| Share capital increase Costs associated with share capital |
- | - | 102 017 |
| increase | - | - | (6 326) |
| Purshase of own shares | - | (56) | - |
| Cash flow from financing activities | - | (56) | 95 691 |
| Net cash flow in the period | (6 115) | (11 762) | 80 441 |
| Cash and cash equivalents at the beginning of the period |
89 303 | 94 951 | 14 510 |
| Cash and cash equivalents at the end of the period |
83 189 | 83 189 | 94 951 |
Cash flow from operations amounted to -6.1 million NOK in Q3'21. Apart from the operating loss, additional capital was tied up related to prepayments of materials on behalf of customers.
Total cash and cash equivalents as per 30.09.2021 amounted to ~NOK 83 million. The cash position of the company is sound.
For accounting principles, please refer to Annual report 2020.
For accounting principles, please refer to Annual report 2020.
Share information
Ocean Sun is since 26th of October 2020 listed on Euronext Growth Oslo under the ticker OSUN.
The listing price for Ocean Sun was NOK 18 kr per share and the price as of 30 September 2021 was NOK 17.3 kr per share.
The Company has 44,986,200 outstanding shares. The share capital as of 30th of September 2021 amounted to NOK 44,986 kr.
Børge Bjørneklett, CEO, +47 90195778 Karl Lawenius, CFO, +47 45633881
| Event | Date |
|---|---|
| Q3 Report | 09.11.2021 |
| Q4 report | 10.02.2022 |
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