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Bawat Water Technologies AB: BAWAT Announces Q2 Report 2024

Bawat Water Technologies
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Hørsholm, Denmark,August 31, 2024- Bawat Water Technologies AB (BAWAT) today announces its Q2 Report for 2024. The report is available on Bawat's website (investor.bawat.com)
BAWAT is a leading supplier of sustainable ballast water treatment technology and services. BAWAT was listed on Nasdaq First North Premier Growth Market in Stockholm in March 2022.
First BaaS installation permanent in place in Hamburg Port and continued efforts to introduce BaaS (Ballast-as-a-Service) in larger scale to market.
Q2 2024
  • Sales in H1 was SEK 8.9m, slightly higher than H2 2023. Sales is still trailing behind prorate for the Full Year. Main reason is still low conversion of back-log and delay in the actual placement of new orders for particularly mobile systems.
  • Sales guidance for the Year is changed to SEK 30-42m, from previously SEK 42-54m. Impacted significantly (SEK 9.2m) by post quarter dissolvement of the partnership with American Green Swan Partners. The drop in sales will however be more than fully compensated in earnings over time by having full ownership of the BaaS (Ballast-as-a-Service) business.
  • As of mid June Hamburg Port now has a permanent BaaS offering with a trained operating partner Jongen GmBH to physically provide the service. A first of its kind in the world. A record achievement by Bawat.
  • The change in the global ballast water regulation as from 8. September 2024 after years of implementation will result in significant expected growth of both mobile BWMS units and the Bawat BaaS business leg. The Port State Authorities in general enforcing the ballast water convention are aware of the very large (+30%) non-compliancy of the discharges coming from vessels operating ballast water, and thus a gradual and steady enforcement is foreseen. Shortly before the deadline, more than 20,000 vessels of the global fleet have still not installed ballast water systems according to Clarksons Research (World Fleet Register).
  • With Bawat's innovative Ballast-as-a-Service offering, it is expected gross profit margins will increase to around 40% after a phase-in period from previous guidance of +30%
Bawat is investing significantly into the business opportunity that Ballast-as-a-Service provides. With the ballast water convention coming to its final implementation in September 2024, whereafter the national authorities can inspect and test the system functionality as well as the discharged ballast water. With the introduction of Ballast-as-a-Service concept, Bawat can help non-compliant vessel owners when it comes to ballast water. The market for BaaS is coming both from non-compliant vessels arriving in port, non-compliant discharges from docks and yards, but Bawat is also experiencing interest in BaaS as prioritized availability for customers, ensuring fleet compliance relative to ballast water. With its unique one-pass technology, Bawat BaaS is positioned well as first mover in the BaaS market.
After considerations, Bawat has post quarter also decided to move into the BaaS space without financial partners and have thus parted with its American partners, Green Swan. This separation allows Bawat to drive its BaaS business 100% to its own bottom line at own effort. Post Quarter Bawat has therefor raised SEK 25m in a directed share issue to finance the manufacturing of mobile units that can be deployed into the BaaS business model. The units will be debt financed to largest extent possible and build by the Bawat Damen Joint Venture for mobile BWMS units.
Short term the separation will affect sales for 2024 with negative SEK 9.2 m and will delay EBITDA break even with one quarter, but medium to long term the separation will more than be made up in earnings as the service business now is 100% owned by Bawat.
FINANCIAL KEY FIGURES Q2 2024
+---------------------------+-------+-------+-------+-------+--------+
|SEK '1.000                 |Q2 2024|Q2 2023|H1 2024|H1 2023|12M 2023|
+---------------------------+-------+-------+-------+-------+--------+
|Sales                      |4.424  |4.135  |8.786  |8.294  |19.140  |
+---------------------------+-------+-------+-------+-------+--------+
|Gross Profit               |343    |1.447  |1.155  |2.346  |10.704  |
+---------------------------+-------+-------+-------+-------+--------+
|Gross Profit %             |7,8%   |35,0%  |13,2%  |28,3%  |55,9%   |
+---------------------------+-------+-------+-------+-------+--------+
|EBITDA*                    |-6.576 |-5.144 |-12.381|-12.601|-14.701 |
+---------------------------+-------+-------+-------+-------+--------+
|Result for the period      |-11.155|-11.487|-21.562|-21.708|-33.603 |
+---------------------------+-------+-------+-------+-------+--------+
|Earnings per share         |-0,20  |-0,30  |-0,39  |-0,56  |-0,71   |
+---------------------------+-------+-------+-------+-------+--------+
|Cash flow from operations**|-5.543 |-2.038 |-11.871|-9.851 |-26.568 |
+---------------------------+-------+-------+-------+-------+--------+
|Net working capital        |-3.978 |-3.450 |-3.978 |-3.450 |-732    |
+---------------------------+-------+-------+-------+-------+--------+
|Equity ratio %             |-47,9% |6,9%   |-47,9% |6,9%   |-17,5%  |
+---------------------------+-------+-------+-------+-------+--------+
*In addition to this, Capital raise and other related non-recurrent items SEK 0.8m in H1 2024 (SEK 1.0m in H1 2023)
**In addition to this, Capital raise and other related non-recurrent items SEK 1.2m (SEK 4.0m in H1 2023)
Marcus P. Hummer, CEO. "We are very proud to have introduced Ballast-as-a-Service in Hamborg Port in June this year. Hamburg Port has taken a first step as a first port to ensure that vessels unable to discharge compliant ballast water now have an option to stay in port and continue planned cargo operations. We are in dialogue with the other port authorities in Germany and neighboring countries for a further introduction of Bawat BaaS".
"Capital is needed to roll out our BaaS strategy, and I'm pleased that we in a very short timeframe in the post quarter have raised SEK 25m primarily dedicated towards BaaS BWMS equipment".
"We see Bawat BaaS as an opportunity for port state and vessels owners to bridge the ballast water compliance gap that recent years' experience building so clearly has demonstrated. With the full implementation of the ballast water convention on 8th September 2024, we must expect a significant change in Port State Authorities regulatory regime in order to reduce non-compliant ballast water discharges".
Guidance 2024
  • Full year guidance for the company is changed to Sales between SEK 30-42m from original SEK 42-54m and EBITDA to SEK -17--12m from SEK -12 - -7m.  Sales are impacted negatively with SEK 9.2m by the separation from Green Swan Partners and total EBITDA negatively with SEK 5.0m.
  • Guidance figures for 2024 are NOT comparable to 2023 actual figures due to new P&L consolidation methods after having established the Bawat Damen JV.
  • EBITDA break-even is expected in Q1 2025 - one quarter later than latest guidance.
Find the full Q22024 report here:https://investor.bawat.com/company-reports/
FORWARD-LOOKING STATEMENTS
This announcement contains forward-looking statements. Words such as `believe', `expect', `may', `will', `plan', `strategy', `prospect', `foresee', `estimate', `project', `anticipate', `can', `intend', `outlook', `guidance', `target' and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Statements regarding the future are subject to risks and uncertainties that may result in considerable deviations from the outlook set forth. Furthermore, some of these expectations are based on assumptions regarding future events which may prove incorrect.
FOR MORE INFORMATION, PLEASE CONTACT:
Investors & Media:
Marcus P. Hummer, CEO, E-mail:mph@BAWAT.com
John B. Henriksen, CFO, E-mailjbh@BAWAT.com
Certified Adviser
Svensk Kapitalmarknadsgranskning AB
ca@skmg.se
This press release constitutes inside information that BawatWater Technologies ABis obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was sent for publication, through the agency of the contact persons set out above, at the time stated by the Company's news distributor, Cision, at the publication of this press releaseon August 31st, 2024.
For further information aboutBawatWater Technologies AB, please contact above.
The development of an entirely new approach to ballast water treatment utilizing onboard waste heat to treat ballast water led to the founding of Bawat in 2011. A ballast water treatment system avoids disposal of untreated water in seas and harbors.
Bawat's BWMS is a system that is simple, cost-effective, and sustainable, build on a zero environmental impact, using standard marine components. No filters, no chemicals no UV. Bawat is the first to market a USCG/IMO Type Approval BWMS that uses pasteurization to treat ballast water in a one-pass process.
Bawat has built upon its innovative breakthrough and offers ballast water solutions to the maritime industry in three categories:
Bawat is an engineer-driven company that is rooted in the tradition of Danish maritime innovation and with a deep maritime insight: (http://www.bawat.com/)www.bawat.com. (http://www.bawat.com/)