Half Year 2021 VivoPower International PLC Earnings Call
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Yeah.
Ladies and gentlemen, thank you for standing by and welcome to the vivo power International plc half year results Conference call.
All participants are in a listen only mode.
Please be advised that today's conference is being recorded.
Have you ever call out any further assistance. Please press star zero and I went.
And I would like to hand, the conference over to your speaker for today, Kevin Chen Chairman and CEO. Thank you. Please go ahead Sir.
Ladies and gentlemen, thank you for standing by and welcome to the vivo power International plc half year.
<unk> conference call at this time all participant lines are in a listen only mode. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero and I would now like to hand, the conference over to your speaker today, Kevin Chen Chairman and CEO. Thank you. Please go ahead Sir.
Welcome to the PV power International half year results presentation for the six months ended 31 December 2020 and.
And when it kicked off with the strategic and operational review and then I'll also cover.
Actual review for the period.
So just going straight to the executive summary, which is set out on page three.
And as our results for the half year were affected by strict Covid lockdown.
Lockdowns.
Our growth outlook is very strong as a result of the Tambo acquisition.
Our revenues declined 28% year on year to $22 seven mill.
Primarily as a result of strict COVID-19, Lockdowns and Australia.
Causing delays to schedule works for our business.
Business units.
As a consequence gross profit decreased 18% year on year.
And $4 six Mil.
And notwithstanding that our GP margin did improve to 20% versus 18% and the previous corresponding year and.
And that was the results of strong focus on project execution and labor efficiency.
Our EBITDA declined to $1 two mill for the half year period.
And from $4, two mill and the previous corresponding periods and again the primary drivers were the Covid lockdown related revenue drop.
But in addition, we did increase our head count.
Support the hub scaling up the timber business.
Yeah.
Our balance sheet has been however, 40 plants with the capital raising that was consummated and October 2020.
Raising gross figure of 28, seven and $5 million.
Our cash balance as a result has increased from <unk>.
And $2 eight mill is at the end of June 2022.
To $17 4 million assets.
31 December.
Same here.
We also refinanced our parent company shareholder loan and this is consummated in January with a longer maturity dates and lower interest rates, which reflects the improved credit profile of the company.
And as I mentioned at the outset, the timber acquisition has really transformed the growth trajectory of vivo pals.
We completed the 51% acquisition of timber and November 2020.
And subsequent to.
This.
Reporting periods.
Moving to 100% ownership and February 2021.
We also signed a major partnership deal with <unk> also.
To distribute <unk> timber electric vehicles in Australia.
And that deal is worth up to 250 million and U S dollars.
And revenue over four years.
Last but not least I'm also pleased to announce and report that.
We have secured our first sustainable energy solution.
Deal.
<unk>.
And with Tottenham Hotspur football club and the U K one of the world's leading.
Football clubs.
And we've become the global Patrick partner is.
As part of the from the transaction as well.
This is.
Our first SCS holistic.
Do you and.
And also are first in relation to infrastructure assets.
Being the stadium, Tottenham Hotspur and the UK as well as their training facilities.
We expect further orders in the second half of FY 'twenty one from.
Our mining sector customers in particular.
Loss per club.
Jumping to page four.
Just two.
Review, where we are at and some of our FY 'twenty, one key objectives, which we.
Should the market back in August at the time about full year results.
We're ahead of schedule at the moment and.
And in a nutshell, we are tracking at 55% completion.
In terms of the objectives that we set out and we're on track to deliver on the risks before the end of June.
2021.
Yeah.
Moving on to the specific business units, Firstly I'll touch on our beaches, which is our critical power.
And site specific electrical infrastructure business in Australia.
Revenues GP and EBITDA declined across the board again due to the strict COVID-19 lockdowns that were experienced and Australia.
The business delivered $22 three.
Millions and revenues.
Which is down 29% year on year.
Profit was $4 6 million compared to $5 6 million and the prior period.
Gross margins did however, and improve as a result of efficiency gains.
The underlying EBITDA for the business was $3 three milk that is down 18%.
Reflecting the lower gross profits.
Although that was partially offset by further overhead cost savings.
Notwithstanding these results we continue to win work.
And deliver on it we are seeing.
Conditions improved since the start of calendar 2021.
And.
The outlook remains very buoyant for the <unk> business unit.
We've also completed the refinancing of funding facilities.
Which have resulted in a 38% per cent reduction and.
Financing costs as well as the retirements of some <unk>.
Redundant and working capital lines that we no longer need.
Moving on to our solid development business, which is called vivo solar and so we have both the U S portfolio.
And as well as in Australia and portfolio, starting off with the U S portfolio first.
And as mentioned during the full year results back in August we have taken over management control.
Off the joint venture from our joint venture partner.
We've been focused on maximizing value across the portfolio.
We are however, still have strong buy.
The negotiations that continue with our joint venture partner in relation to <unk>.
Settlements.
Of.
Uh huh.
Settlements of.
The joint venture arrangements.
Where we are seeking as a minimum and they have offered as a minimum.
And they're 50% of the portfolio phenomenal consideration.
We are.
Still alive and Simpson negotiations on that.
Do expect to complete that before the end of the fiscal year.
As far as the portfolio is concerned.
<unk>.
Net megawatts is 882.
And which.
And that's in total.
And that is slightly down on the original economic share that we had at the outset, which is 922.
That said, we have made progress in terms of the day.
Development path.
For a number of these projects.
The outlook also has improved and obviously with the board and presidency.
Being far more accommodating to renewable.
As an industry and the U S. So that's a that's been a real positive.
For that portfolio.
On the Australia fronts we.
We have been seeking to monetize our smaller solar projects and that market.
And.
During the post balance date period. So we have successfully managed to sell Daisy Hill and <unk>.
Closing and on a sale of your Jollies solar as well.
And both are expected to be profitable overall.
Additionally, Jeremy Matson, which is one of our pizza business units has successfully completed.
Over 150 megawatts of solar projects now.
And they have another 300 megawatts and the pipeline.
So the solar development activities in Australia have feds.
J a margin business in terms of electrical on sites.
Installations for solar farms.
Moving on Oh, I'm going to talk about timber and now so timber obviously as electrical vehicle business that we acquired back in November last year.
And moved to 100% ownership Bulker and February this year. So just to recap it focuses on customized and ruggedized applications, including for the mining sector globally and.
That's very much been a focus of attention.
As far as securing orders.
Other sectors that are we are prioritizing our infrastructure.
Which is where the taught them deal fits in.
As well as utilities.
And government services.
We signed a landmark deal with <unk> group.
In January 2021, as well and that.
Agreements six GB also well very well regarded and this trend and marketplace, particularly amongst the mining <unk>.
Companies.
They are committing to purchase at least 2000 timber EV kits.
And the first four years of a seven year agreement with a minimum and 500 kits and the first year.
Steel as I mentioned before is worth up to U S $250 million.
And you go power and GB also are working very closely on a number of opportunities that we're seeking to close before the end of the financial year.
In terms of results.
The revenues contribution from timber was pretty small.
And the half year periods, our consolidated revenues of zero point full mill.
And I can only two months of contribution post the acquisition in October.
And that was primarily from delivery of existing orders to key longs and customers.
Revenues work excuse me lower year on year due to operational disruptions and.
And delays and production and delivery as a result of COVID-19, Lockdowns and.
The Netherlands, and and the customer market small.
Net loss for the period was a <unk> 5 million driven by a number of nonrecurring items.
Book Importantly has commenced on the next generation and 72 kilowatt per hour battery platform.
And so the vivo power on boarding and integration program commenced and is.
It's near completion.
And at the time of.
This.
Update.
We are also live up our recruitment campaign to beef up the same Sims and engineering capabilities.
Hello.
So moving along.
And again, we've flagged previously at the full year results presentation.
Timber really enables who can go powered to provide a holistic.
Decarbonization solution, which helps our customers to move towards achieving net zero status.
And the key elements of that Ses solution as we call it.
Firstly, the electric vehicle set.
Secondly sites electrification, including micro grids and charging stations.
And last but not least our battery life cycle management.
And that program.
Yeah.
SCS is fundamentally and enterprise solutions. So it comprises a full suite of hardware software and services.
Uh Huh, that's our encompass and our battery management systems telematics and vehicle monitoring systems.
And hardware and the form of vehicles, the hardware and the form of micro grids and charging stations and batteries.
And.
This is ultimately where we are going to see the business of vivo Pal moved towards as far as providing this holistic solution.
To our customers.
On that notes, Oh, I'm going to talk a bit more about the battery partnership with Tottenham Hotspur.
And <unk>, which was announced today.
So this is a platform for our first full suite Ses deal.
And so taught them have engaged us to help them achieve net zero carbon status and so.
First of its kind deal with AR with them.
And so it's part of the drive to become a net zero carbon business.
And decarbonize both of their key infrastructure assets being there.
Stadium in North London, as well as the state of the Art training Center.
Not too far from the stadium.
And so we're targeting actionable outcomes by the end of June.
So all of them and recently named the Premier League screen as club and flowing is falling and study carried out by BBC sports.
And the U N back sports positive summit.
Also a signatory of the UN sports book climate action framework.
So what will vivo power be doing four taught them.
I will start off by evaluating with a view to supplying installing and maintaining.
A large solid state battery life.
Likely to be more than street megawatts at the stadium.
This will be the largest of any stadium and arena and Europe.
And the purpose is to balance and guarantee the venues palace supply.
In addition to that we are evaluating the.
And the potential to install a full suite sustainable energy solutions at their training grounds. So that will include rooftop solar panels battery storage and custom microgrid capacity.
And as well as electrical infrastructure to enable EV usage.
So that will run in parallel to the process.
With respect to the stadium.
Also as the clubs are official battery technology partner and people power will benefit from visibility on digital signage and.
Tottenham Hotspur and matches be featured and content.
On the clubs are popular social media channels.
Which last year had and audience reach.
All of the 433 million simple fence.
So we're very excited by the steel it also.
Is our first deal in the U K market for SCS.
U K is arguably the most attractive market for battery storage and the world at the moment so.
We are confident that this deal will catalyze for their interest and what vivo power can offer.
Two other corporates and the U K.
Okay.
Just to wrap up on the strategic and operational.
Review.
Some other corporate developments that were completed.
Completed.
And this and the last six months, so we established and advisory Council with World class experience and relevant skills.
And they are adding significant value in terms of our growth plan, particularly for timber.
And we've also added to the board, so Jim and Godfrey, especially in London.
Has joined US. So she has extensive entrepreneurial experience and financial services technology.
And media public policy and sustainability.
On the executive front, so we hired Matthew Nestor.
Sales director for North America.
Which is which is a key market focus for us going forward.
Gary Chelan and has joined US as director of sustainable Energy solutions for Australia, and New Zealand.
And so we've just recently hired a general counsel.
Announcement will be formally made.
Shortly.
And so team has been beefed up and we expect to add for the highs and the.
And the near term.
Yeah.
We're very pleased also to have been awarded are the real leaders top 50 impacts.
Woods.
And so we ranked 47th globally and most of 150 leading companies.
Can't positive social or environmental impacts on the world.
So are the real leader impact award winners include Tesla Patagonia.
As well as our parents and see I don't want them.
By virtue of the timber acquisition, we now have a presence and the U T U with the Netherlands, obviously being the price of a timber activities at present.
We've also opened new offices in Virginia, and the U S as well as Toronto and Canada.
Both homes to some of the world's largest mining infrastructure and utility companies.
And we continue to maintain a strong presence and they started market.
So jumping to the financial review I'll cover that as well.
So just to recap.
Revenues were down and and for the half with 22.2 mill versus $31 3 million.
Previous corresponding period.
As for the last period, there was very little by way of solid developments.
Revenues.
And 10 Boes contribution to the half year result was really just two months.
And point full mill is the revenue contribution there.
Gross profit wise.
And it comes primarily from the critical power services business in Australia as mentioned before GP margin improved.
But oh, it's still down overall versus the prior period.
Our adjusted EBITDA is one or ended at $1 3 million.
Versus $5 four mill.
And the previous corresponding period.
There are number and nonrecurring costs that were and cuts are principally relating to litigation expenses involving the former CEO and pleased to say that that's chapter has that's been concluded and.
And Oh, we have a clear it's all those expenses relating to that matter.
Group basic EPS.
Negative three cents was positive and they make sense from the previous period.
On an underlying basis, it's 10 versus 14 since.
For the same periods and question.
Yeah.
I'll jump straight to the balance sheet summary.
So in terms of the balance sheets.
The key item to note here is obviously the increase and unrestricted cash.
From 2.8 mill.
As at the end of June to $17 4 million.
As at the end of December.
In addition to that Oh.
And there's been a decrease and kind of liabilities.
Well as a decrease and long term liabilities.
And.
Net assets have improved and increased significantly.
As a result of the equity capital raising that we completed in October last year.
Net net has has as a result declines from $23 1 million that's.
Two 8.3 meal, so that's significantly improve.
The credit profile of the company.
Thank you for listening into today's updates and if.
If you have any questions. Please feel free to email shareholders that fever panel dotcom.
Ladies and gentlemen. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.
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