Interim report for the period 1 January – 31 March 2020

First quarter of 2020

Numbers in parentheses refers to outcomes during the corresponding period of the previous year.

• Revenues of SEK 0 million (0).
• Operating costs increased to SEK 1.0 million (0.5) due to work with the Jaffa port expansion. Administrative expenses increased to SEK 3.3 million (0.9). The increase is largely explained by that the Company was not listed and had no office in Stockholm in Q1 2019 and that new hires have been made in Israel in the end of 2019.
• Profit (loss) for the period amounted to SEK -4.4 million (-1.7).
• Earnings per share of SEK -0.1 (-14.7).
• As of 31 March 2020, cash and cash equivalents amounted to SEK 105 million (0.9) and shareholders’ equity amounted to SEK 97 million (-3). Total number of outstanding shares amounted to 35.2 million (0.1).
• Cash flow from operating activities decreased to SEK -5.0 million (-1.8) due to increased costs.
• Average number of employees of 17 (14).

Significant events in the quarter

• In January, EWP finalized the assembly of the hydraulic energy conversion unit for its Jaffa Port project and entered the electrical assembly phase, which is executed by Siemens.

• In March, Siemens finalized the assembly of the electrical Section of the EWP conversion unit for the Jaffa Port project. Later the same month, EWP finalized the wave simulation testing of the fully integrated EWP conversion unit, which will be followed by automation system installation and calibration, breakwater reinforcement, floaters production and full system transportation to the final implementation site for installation and grid connection.
• In the same month, EWP installs a new combined wave and solar system in the EWP grid connected wave energy power station in Gibraltar, in line with its’ newly submitted patent for a combined wave and solar power station.

Significant events after the reporting date

In April, EWP entered into an official Concession Agreement with APDL (A Administração dos Portos do Douro, Leixões e Viana do Castelo) regarding the usage of an area potentially suitable for the construction, operation and maintenance of a wave energy power plant of up to 20MW in four locations owned and operated by APDL

According to the agreement entered between the parties, APDL will provide EWP with the concession for its’ breakwaters for a period of 25 to 30 years, while Eco Wave Power will be responsible for securing all the licenses, constructing and commissioning the power plant/s and selling the electricity to be generated by the power plant in accordance with an approved production quota, to be determined for each site.

The power plant is planned to be constructed and commissioned in two stages. At the first stage, Eco Wave Power will construct an up to 5MW project. Whereas in the second stage, Eco Wave Power will construct, operate and maintain the remaining capacity of the plant (15 to 19 additional MWs). APDL will have a right of first refusal (ROFR) to invest partially or fully in both stages of the project.

A Word From the CEO

This period has clearly shown the importance of what Eco Wave Power is doing.

It is an alarming period. Suddenly, the whole world faces a Corona virus outbreak, and it seems as though the whole world paused for an unknown period. Maybe it is trying to teach us something.

In the same time, pollution and greenhouse gas levels have taken a dramatic dip as travel has come to a halt. Fewer cars on highways, planes in the sky, and people commuting to work has resulted in clear skies in many of the world’s smoggiest cities. NASA and the European Space Agency’s pollution monitoring satellites show a 30% drop in nitrogen dioxide in China since the outbreak of coronavirus. Lack of boat traffic and cruise ship tourism has left Venice’s canals with clear water. Due to this sudden pause, we started getting images of clear skies and water all over the planet, which represents a glimpse of what it might look like if we took better care of the earth. We hope that images like these would instil in us more appreciation for clean skies and oceans, and motivate us to retain some of that, even as we hop back into polluting cars, boats and airplanes.

Now that we have seen how a cleaner world could look and feel like, it feels incredibly good that we have a solution that can help reverse the trend. We have a long way to go, but also a clear sense of urgency, which triggers thoughts on how we can scale up the business even faster. 

Our goal is to finalize the construction of the EWP-EDF One Project in Jaffa Port, Israel and to further develop the existing projects in our pipeline, while securing new concessions in target markets such as: North America, Europe and Australia. In the last month, this has started falling into place with an up to 20MW Concession Agreement entered with APDL, for a first EWP wave energy project in Portugal. Based on such achievement, we are putting efforts in the creation and standardization of a Concession process to be replicable for the rest of our projects pipeline and future projects. The goal is positioning wave energy as standard renewable energy solution, to enable faster licensing and concession procedures. 

The signing of the Concession Agreement with APDL in Portugal is a considerable step towards building our first commercial sized wave farm. The agreement is in line with the plan previously adopted by the Government of Portugal for ocean energy buildout and its’ industrial strategy to accelerate the development of Portugal’s ocean renewable energy sector. The major strategic objective is the creation of a competitive and innovative industrial export cluster for ocean renewable energies; Ocean renewable energies have the potential to supply 25% of Portugal’s annual power consumption, while the sector could generate €254 million in investment, €280 million in gross value added, €119 million in trade and 1,500 new jobs, the strategy states.

Generating electricity with our technology is done at a significantly lower cost compared to offshore wave energy developers, but debt financing for such projects is still lacking, while financing is a key factor in rolling out the technology at scale. Our public offering in 2019 assisted with this matter, by reinforcing EWP’s cash position to enable the company to match the EDF Renewables IL investment for the EWP-EDF One project and to secure the financing to commence development of a first commercial EWP wave farm.

The quarter’s main unforeseen challenge was the Corona virus outbreak, since our projects are mostly B2G (Business to Government). Understandably, most governmental organizations are currently focused on managing the Coronavirus crisis and this is likely to cause delays in certain project certifications and permits, and construction works, causing an overall delay in our deliveries. However, we are continuously moving forward, and the outlook is positive. Some examples of on-going activities are finalization of the assembly of the conversion unit for the EWP-EDF One project, Successful completion of the wave simulation testing with Siemens and EDF and installation of our new combined wave and solar technology in our grid-connected wave energy array in Gibraltar.

In summary, we have taken great steps forward. Despite unforeseen delays due to the Coronavirus outbreak, we are taking efforts to continue to deliver according to our plan. Eco Wave Power’s goal is to commercialize wave power and we intend to do what it takes to achieve our goal.

Kind Regards
Inna Braverman
CEO

For the full interim report, please click here.

About EWPG Holding AB

EWPG Holding AB (publ) (“Eco Wave Power” or “EWP”) is a leading onshore wave energy technology company that developed a patented, smart and cost-efficient technology for turning ocean and sea waves into green electricity. Eco Wave Power’s mission is to assist in the fight against climate change by enabling commercial power production from sea and ocean waves.

EWP is recognized as a “Pioneering Technology” by The Ministry of Energy of Israel and was labelled as an “Efficient Solution” by the Solar Impulse Foundation. Furthermore, EWP’s project in Gibraltar has received funding from the European Union Regional Development Fund and from the European Commission’s HORIZON2020 framework program. The company was also recently recognized by the United Nations in receiving the “Climate Action Award”, which was granted to the company during COP25 in Madrid, Spain.

Eco Wave Power was founded in 2011 and has operations in Sweden, Gibraltar, Australia, Mexico, China and Israel. The major Swedish shareholders in EWPG Holding AB are AP4 and Skandia Fonder. The Eco Wave Power share is traded on Nasdaq First North Growth Market.

Read more about Eco Wave Power at: www.ecowavepower.com.

For more information, please contact:

Yair Rudick, Business Development and Strategy
yair@ecowavepower.com
+972 350 940 17

Andreas Kihlblom, CFO
andreas@ecowavepower.com
+46 (0)8 420 026 94