Merus Power Plc's Half-year Report January 1-June 30, 2024: Strong order intake – profit remains poor
Merus Power Plc, company release, August 22 2024 at 8:30 a.m.
This company release is a summary of Merus Power's half-year report for January-June 2024. The full report is attached to this company release and available on our website at:
https://sijoittajat.meruspower.fi/en/for-investors/reports-and-presentations/
Merus Power PLC’s HALF-YEAR REPORT January 1–June 30, 2024
Unless otherwise indicated, the figures in parentheses refer to the corresponding period of the previous year.
Strong order intake – profit remains poor
JANUARY–JUNE 2024 IN BRIEF
- Net sales were MEUR 6.7 (13.6), which is a decrease of 50.8%
- EBITDA stood at MEUR -3.4 (-0.4)
- EBIT was MEUR -4.0 (-0.7)
- Earnings per share was EUR -0.56 (-0.11)
- New orders were MEUR 39.7 (24.6), which is an increase of 61.3%
- Merus Power receives 38 MW/40 MWh energy storage order from eNordic Oy and Lappeenrannan Energia
- Oy Herrfors Ab deploys Merus Power’s trading service
- Sallila Energia deploys Merus Power’s trading service
- Merus Power supplies 30 MW/36 MWh energy storage system for a Swiss company called Alpiq
- Merus Power announces on June 19 2024 that the financial guidance remains unchanged
- Merus Power supplies a compensator to Saudi Arabia
EVENTS AFTER THE REPORTING PERIOD
- Merus Power supplies compensators for the production of green steel
- Merus Power supplies two compensators to support railway traffic in Estonia
- Merus Power announced on August 13, 2024 that it will lower its guidance on EBITDA: the company's EBITDA will decrease compared to the previous year and is estimated to be negative by EUR 0-1 million.
KEY FIGURES
|
EUR 1 000 |
|
|
1-6/2024 |
1-6/2023 |
2023 |
|
|
|
|
|
|
|
|
Net sales |
|
|
6 666 |
13 559 |
29 031 |
|
Change in net sales |
|
|
-50.8% |
114.9% |
79.2% |
|
EBITDA |
|
|
-3,403 |
-393 |
187 |
|
% of net sales |
|
|
-51.0% |
-2.9% |
0.6% |
|
EBIT |
|
|
-4,008 |
-709 |
-509 |
|
% of net sales |
|
|
-60.1% |
-5.2% |
-1.8% |
|
Profit/loss for the financial period |
|
|
-4 320 |
-826 |
-798 |
|
Earnings per share, EUR (undiluted) |
|
-0.56 |
-0.11 |
-0.10 |
|
|
Earnings per share, EUR (diluted) |
|
|
-0.56 |
-0.11 |
-0.10 |
|
Equity per share, EUR |
|
|
1.02 |
1.58 |
1.58 |
|
Balance sheet total |
|
|
27 529 |
22 145 |
21 189 |
|
Equity |
|
|
7 852 |
12 063 |
12 092 |
|
Equity profit % |
|
|
-43.3% |
-6.6% |
-6.4% |
|
Interest-bearing net liabilities |
|
|
-3 351 |
906 |
1 400 |
|
Gearing ratio, % |
|
|
-42.7% |
7.5% |
11.6% |
|
Equity ratio, % |
|
|
28.5% |
54.5% |
57.1% |
|
Liquid assets |
|
|
6 578 |
2 321 |
2 615 |
|
Operating cash flow |
|
|
5 568 |
-1 340 |
-108 |
|
Number of shares, 1,000 pcs |
|
|
7 670 |
7 645 |
7 645 |
|
Average number of shares, 1,000 pcs |
|
|
7 658 |
7 645 |
7 645 |
|
|
|
|
|
|
|
|
Orders received |
|
|
39 657 |
24 578 |
33 805 |
|
Order book |
|
|
46 833 |
20 087 |
13 841 |
|
Average number of employees |
|
|
113 |
82 |
88 |
FINANCIAL GUIDANCE FOR 2024 (ISSUED ON FEBRUARY 8, 2024)
The company repeats the guidance published on August 13, 2024.
Merus Power expects its net sales to increase and its EBITDA to decrease compared to the previous year. The EBITDA is expected to be negative by 0-1 million euros.
Previous guidance for 2024 (published 8.2.2024, repeated 19.6.2024):
Merus Power estimates that the company's net sales and EBITDA will increase compared to the previous year.
CEO KARI TUOMALA COMMENTS ON THE FIRST HALF OF 2024:
In recent times, there has been less coverage in the news of the green transition and growth in renewable energy because of the challenges in geopolitics. Nevertheless, according to the International Energy Agency, the green transition has progressed and the global community still has a chance to reach the goal of limiting the temperature increase to 1.5 degrees. The strong growth trend of the green transition continues, and the use of renewable energy is increasing. That being said, the growth goals of energy efficiency have not reached the requisite level.
Growth concentrated in the second half of the year
In the first six months of 2024, Merus Power’s net sales fell short of the goals and was lower than last year. Still, the company expects full-year net sales to grow as previously reported. The concentration of net sales towards the end of the year is due to the inflow of orders for modular long term deliveries in the second half of the year. The growth will be driven by deliveries of energy storages and heavy industrial power quality solutions.
Delays in projects and, as is typical of a growth company, investments aimed at strong growth weighed on EBITDA, which remained negative by EUR 3.4 million in the first half of the year. Merus Power has invested significantly in increasing its personnel and in product development, including product, software and service development for energy storages. Our workforce grew by 25 employees, which will enable Merus Power to continue to grow and prosper in the future. These investments are part of the company's growth strategy to enable us to succeed in the fast-growing energy storage market and create a stronger market position in power quality technology. In addition, the result will be impacted by significant one-off costs due to the delay in the delivery of the first full responsibility energy storage project in Lempäälä.
Order intake at a record level
Merus Power has been successful in securing new orders. Our growth strategy for the energy storage technology is yielding good results, and we have established customer relationships for two large energy storage systems: a 38 MW/40 MWh energy storage system for Lappeenrannan Energia and Ardian’s eNordic in Lappeenranta and a 30 MW/36 MWh energy storage system for Alpiq in Valkeakoski. Both deals also include a maintenance contract and serve as good examples for deliveries that cover the entire life cycle.
We will continue to grow our service business with customers in the energy storage and heavy industry. The MERUSCOPE™ remote service and management software, developed by Merus Power, provides an excellent foundation for the company to serve its global customers in a timely manner. In accordance with our strategy, we have also made agreements for our other service product, a trading service, with two of our energy storage customers. With the growth in product and project sales, an increasing base of installed products provides a foundation for steady growth in our service business.
The financial uncertainty has continued to impact the early part of 2024, even though the decrease in interest levels promises a slight economic recovery. However, the geopolitical tensions add risks in the latter part of the year. The heavy industry customers have become more active after the slow market period. The growth in the energy storage technology continues to appear strong, and we are carrying on with our investments in the market.
FINANCIAL COMMUNICATIONS
Press conference
Merus Power will arrange a press conference for the media and analysts in Finnish at 10:30 am on August 22, 2024. The event will be held as a Teams webinar. The link below can be used to register for the event in advance.
After the event, the materials will be released on our website at https://sijoittajat.meruspower.fi/en/for-investors/reports-and-presentations/.
Merus Power Oyj
Board of Directors
Additional information:
Merus Power Oyj, CEO Kari Tuomala, telephone: +358 20 735 4320
Aktia Alexander Corporate Finance Oy, approved advisor, +358 50 520 4098
Distribution:
Nasdaq Helsinki Oy
Financial supervisory authority
Key media
Merus Power in brief:
Merus Power is a technology company promoting the shift toward sustainable energy. We design and produce innovative electrical technology solutions, such as energy storage systems, energy quality solutions and services for renewable energy and industry. With our scalable technology, we enable the increase of renewable energy in electricity grids and improve the energy efficiency of society. We are an innovative company from Finland specializing in electrical technology and operating in global and rapidly growing markets. Our staff represents internationally valued engineering expertise. Our net sales in 2023 totalled MEUR 29, and our stock code in the Nasdaq First North Growth Market Finland marketplace is MERUS.
The original of this document has been made in Finnish. In case of any discrepancy, the Finnish version will prevail.