Group financial development
Quarter 1: January –
- Net sales amounted to kSEK 224 (323)
- Operating profit/loss amounted to kSEK -112,577 (-129,584) after depreciation and amortisation of kSEK -44,992 (-40,231)
- Earnings per share before and after dilution totalled
SEK -0.36 (-1.12) - Profit/loss for the period amounted to kSEK -114,484 (-130,322)
- Cash flow for the period amounted to kSEK -95,740 (-154,264)
Significant events
Quarter 1: January –
- In January,
Azelio announced that sales of the Company's energy storage system have been slower than previously assumed. This affects the cash flow of the Company. The consequence of the delayed sales and its impact on cash flow led to the announcement from the Company that the delivery target that was set for 2023 will not be met, and that the Company will need additional financing during the second quarter of 2023. - Gustaf Albèrt was appointed new CFO of
Azelio in February and took up his position on 12 April.
After the end of the period
- On
May 2 , the Company communicated about its capital raising plans and process, which include both a loan and the intention to carry out a rights issue. A loan ofSEK 30 million has been received from the Company's principal shareholder. The loan is on market terms and constitutes a subscription and guarantee commitment in the rights issue. Repayment will be made on that part of the loan, if any, that cannot be used for settlement in the upcoming rights issue. Guarantor compensation is not issued. The loan is subject to approval by an extraordinary general meeting (EGM).Azelio 's Board of Directors intends to resolve on a rights issue of approximatelySEK 80 million , of whichSEK 30 million is guaranteed by the above-mentioned loan, subject to approval by shareholders at the EGM. The EGM is scheduled to be held on2 June 2023 . - On
May 2 , it was also announced that the Company is negotiating a strategic partnership that may include a significant commercial order as well as commercial and industrial cooperation. The strategic partner is a major international player with extensive ambitions in renewable energy. The negotiations on a long-term strategic partnership are taking place in two stages, with the parties having a common ambition to reach a declaration of intent during the summer and a final agreement in the autumn of this year. - Cost reduction measures were also communicated on 2 May.
Azelio is implementing several measures, including staff reductions and organisational changes, to reduce its costs. Today, the Company's assessment is that the measures, when fully implemented, will lead to cost reductions of approximatelySEK 100 million on an annualized basis, of which staff reductions (employees and consultants) correspond to approximatelySEK 65 million . - Two new subsidiaries were registered in the first quarter of 2023,
Azelio Inc. in theUS and Azelio APAC Pty Ltd inAustralia .
Other events
- In April,
Azelio 's TES.POD system was approved inSouth Africa at an inspection by the electricity public utility Eskom. The inspection approved the system’s fulfillment of all technical, safety, and legal requirements in the category of Small-Scale Embedded Generator (SSEG), which is a prerequisite for synchronizing (or grid-connecting) the system to ESKOM's electricity network. - In May,
Azelio announced that it has received a validation report from leading certification body DNV showing that the TES.POD system's availability over a 90-day period of analysis is 98%, excluding time for planned maintenance. Requirements for commercial energy storage installations are usually around 95-97%, with the exclusion of planned maintenance.Azelio has published a white paper on the system's availability, based on the same data used as a basis for DNV's validation report.
Comments from the CEO
The need for energy storage is clear
Globally, the need for a more sustainable energy transition is increasingly clear, and the key to solve this is increasing the share of renewables that can be stored and delivered cost-effectively. At the same time, there are currently a limited number of companies with a validated technology for long-duration storage that is commercially viable and available. Our solution has been in operation with commercial customers for some time. In May, we received a validation report from the leading certification body DNV showing that TES.POD system availability amounts to 98% when time for planned maintenance is excluded. This exceeds the requirement for commercial energy storage installations, which is usually around 95-97% when planned maintenance is excluded. Also, in April, the installation in
Revised direction with potential strategic cooperation
The company is in a challenging period and position but continues the intensive work of commercializing the technology. As communicated in
Despite a challenging situation, the company has in 2023 taken the necessary measures to ensure
An important part of this focus includes the new organizational structure and staff reduction as communicated on
Full focus in the near term is to conclude the negotiations on the strategic cooperation that we announced in early May.
Financial position
At the beginning of May,
The financing enables the Company to conclude the negotiations of intent with the strategic partner. Given current market conditions and turbulence, this is the company's best way forward. The contribution from the upcoming rights issue, together with the advance payment expected for the significant order, which is anticipated to constitute a first step in the strategic collaboration, is envisaged to finance the Company for the duration of 2023. We anticipate that additional financing will be needed in the future to secure the Company’s future capital needs. With the strategic collaboration in place, our assessment is that the right conditions are in place to achieve long-term success and profitability.
Opportunities both short and long term
The opportunities are there, both short and long term, and
Finally
I am impressed to see the goal-oriented and pragmatic attitude among all employees who, despite cost cuts, staff reductions and organizational changes, have maintained a high level of efficiency, innovation, and quality in their work to bring the Company forward. I am personally very grateful for the professionalism and great efforts of all employees in 2022 and 2023.
Jonas Wallmander, CEO
The full report is available as an attachment to this release and can also be found on the company website at the following link: https://www.azelio.com/investors/financial-reports-presentations/
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