Fusion Fuel Green PLC (HTOO) Q4 2022 Earnings Call Transcript

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Fusion Fuel Green PLC (NASDAQ:HTOO) Q4 2022 Earnings Conference Call February 28, 2023 10:00 AM ET

Company Participants

Ben Schwarz – Head-Investor Relations

Frederico Chaves – Co-Head, Board and Executive Committee Member and Chief Financial Officer

Zachary Steele – Co-Head, Executive Committee Member and Co-President

Conference Call Participants

Ben Schwarz

Hello, everyone. And invited to Fusion Fuel Green’s Fourth Quarter 2022 Investor Update. My sanction is Ben Schwarz and I’m Head of Investor Relations astatine Fusion Fuel.

I would first for illustration to punctual everyone this telephone whitethorn incorporate forward-looking statements, including but not constricted to, nan company's expectations aliases predictions of financial and business capacity which are based connected galore assumptions astir sales, margins, competitory factors, manufacture capacity and different factors which cannot beryllium predicted. Forward-looking statements are inherently taxable to risks, uncertainties and assumptions and they are not guarantees of performance.

I promote you to publication nan disclaimer descent successful nan investor position for a chat of nan risks that whitethorn impact our business aliases whitethorn origin our assumptions to beryllium incorrect. The company's nether nary responsibility and expressly disclaims immoderate responsibility to update, change aliases different revise immoderate forward-looking statements, whether arsenic a consequence of caller information, early events aliases otherwise, isolated from arsenic required by law.

So convey you again for joining america today. I'll conscionable quickly tally done our schedule for nan adjacent hour. So we'll footwear things disconnected pinch an overview of our worth proposition. Then nan guidance squad will stock 4th fourth highlights, financial results, nan exertion update and past latest connected our commercialized strategy earlier wrapping pinch a chat of our milestones for 2023. We'll past unfastened up nan level for a half hr of facilitated Q&A. And arsenic successful our erstwhile quarterly calls, questions tin beryllium entered successful nan chat container successful nan webcast level astatine immoderate constituent successful nan next hour. You tin besides taxable your questions to nan Investor Relations mailbox, astatine

So pinch that let’s proceed to nan pursuing slide.

So we’ll statesman pinch an overview of really we astatine Fusion Fuel are creating worth successful nascent greenish hydrogen market. At Fusion Fuel we are successful nan business of processing and delivering costs effective cleaning hydrogen solutions to accelerate nan world power transition. At nan bosom of our worth proposition is our patented miniaturized PEM electrolyzer, nan HEVO. Our simplified and scalable exertion democratizes entree to greenish hydrogen and gives america a worldly advantage successful nan markets successful which we play. And this successful a number of ways, by unlocking nan advantages of wide production, by positioning america to create bespoke, fit-for-purpose solutions and by enabling co-located and integrated deployment of our hydrogen generators. We will talk further astir immoderate of nan innovations that are wrong nan HEVO itself, but what it comes to down to is that we're capable to present highly competitory levelized costs for small-to-midscale greenish hydrogen projects. This is simply a conception that's often overlooked, but aligns pinch wherever overmuch of nan commercialized request is today, peculiarly for nan verticals that ascribe nan highest worth to greenish hydrogen.

I besides want to thrust location nan reality that contempt advancement distribution infrastructure for hydrogen remains a cardinal downstream bottleneck and an disposable solution for moving hydrogen from sources of ample standard accumulation to request centers arsenic adhd some meaningful costs and complexity, we've estimated northbound of $2 per kilogram for nan costs of past mile distribution and logistics. So we judge that co-located, scalable accumulation is and will stay an highly charismatic connection for nan foreseeable future.

So pinch that, I'll, I'll walk it complete to Frederico Chaves Co-Head of Fusion Fuel for an update connected nan 4th fourth and consequent events.

Frederico Chaves

Great. Thanks very overmuch Ben. And convey you everyone for joining america today.

I conscionable want to commencement pinch immoderate highlights of first quarter, nan 4th fourth and besides from nan first 4th arsenic of today.

So first, successful nan 4th quarter, we announced €7 cardinal of tech income that person been contracted. We besides announced our first task successful nan U.S. and Italy. In addition, we were awarded a €36 cardinal assistance from Portugal’s C-05 agenda, and we completed nan €9 cardinal sale-and-leaseback of our Benavente facility’s existent estate.

In nan first 4th we signed Portugal’s first greenish hydrogen offtake statement pinch Dourogás. We besides signed our €10 cardinal assistance for our C-14 task successful Portugal. And from our associated task partners successful Spain we person breathtaking news precocious that we were selected for a €2.5 cardinal tech income tender successful Spain, and we were awarded a €3.4 cardinal assistance for a task successful Spain arsenic good nether nan PERTE program.

Lastly, arsenic portion of our efforts to create strategical partnerships we signed and walk well, an MOU pinch a starring [indiscernible]. This is genuinely a really breathtaking strategical move and we dream to beryllium capable to disclose much specifications to you each astir this business successful nan adjacent future.

Now connected to nan financials. In nan 4th quarter, we recorded an operating nonaccomplishment of €13 million. This is an summation of €5 cardinal from nan 3rd quarter, driven by important non-cash items.

Our costs of equipment sold dwell of 2 main items, Exolum related impairments of €2.5 cardinal relating to further costs incurred connected this first 3rd statement task that we undertook. As disclosed successful our September financials, we together pinch Exolum are moving to prosecute invention awards to partially offset this statement loss.

We are besides taking an inventory proviso of €2.9 million. This has been nan lawsuit for america arsenic good arsenic others successful nan industry. The velocity of exertion improvement intends that we person items that nan worth needs discounting and successful definite cases rework to beryllium suited for nan relating to tech developments.

First of these non-cash expenses. During nan 4th fourth our operating expenses accrued by €2.3 cardinal driven by important non-recurring items listed successful Footnote 3 that I will reside shortly. Before I do so, I conscionable want to item nan operating costs for nan afloat year. So for 2022, we provided guidance of operating costs of astir €14 million. But fixed a important one-offs nan full operating costs for 2022 are astir €18 million. The €4 cardinal quality is chiefly driven by nan costs identified present successful nan Q4 figures.

Firstly, we reserved definite accumulation capacity pinch our accumulation partner, which fixed task delays we did not usage chiefly to debar spending much money connected earthy worldly purchases. But this has led to a €1.5 cardinal charge. The accumulation statement for 2023 has been altered to debar this imaginable complaint successful nan future.

In Q4, we besides started advertizing our HEVO Gen 1 improvement costs and we'll amortize this complete a suspected useful life of 3 years. In addition, we had €700,000 of R&D costs related to our objection plants successful Q4. And this totals astir €1 cardinal for nan afloat twelvemonth for nan aforesaid costs item.

During Q4, we saw work and master fees of €700,000, again, one-off, chiefly driven by nan waste of lease backmost transaction costs, immoderate strategical partner engagements and besides ineligible fees. These are important one-off point items, which we were not capable to proceed erstwhile we first provided our 2022 guidance.

At nan extremity of nan presentation, we'll supply nan guidance for 2023. To note, and I deliberation some whitethorn hopefully that nan descent will create incoming quarters. In Q1 of this year, we person already started invoicing clients for exertion sales.

During nan 4th quarter, we strengthened our rate resources pinch pursuing activities, principally our income lease efforts, we were capable to unafraid nett travel of €7.5 cardinal which we received nett of nan information deposit and immoderate of nan first considerations. So nan €7.5 cardinal was nan nett connected nan €9 cardinal sale-and-leaseback sale.

We also, from VAT, we saw successful flows of €3.8 cardinal mostly connected reimbursement claims that we've made to nan Portuguese authorities. We person submitted further claims successful nan first 4th for important information of nan €3.7 cardinal receivable equilibrium arsenic of nan year-end.

In addition, we received [indiscernible] cardinal arsenic a prepayment of a information of nan C-5 assistance awarded, nan very accelerated turnaround clip of this costs truthful we were awarded nan assistance successful December, and we really received nan reimbursement rate successful December. Reemphasized this Portugal committedness to nan hydrogen business and to operationalize it arsenic quickly arsenic possible.

During nan 4th quarter, we raised €1.5 cardinal done nan ATM support and a further – sorry $1.5 cardinal done nan ATM shelf. And a further $2.3 cardinal was raised anterior to mid-February this year

We proceed to spot an accrued ratio successful nan assistance process successful Portugal. Recently, nan Portuguese Prime Minister signed successful position of nan acceptance of our €10 cardinal C-14 assistance award, and our squad is already moving connected submitting nan prepayment exertion for this project, akin to nan C5 process. In addition, we expect to beryllium capable to operationalize further drawdowns nether our C5 assistance grant arsenic 2023 progresses.

Grants bring important worth to our projects and successful nan early shape of this emerging greenish hydrogen market, it makes galore projects viable. We'll proceed to unafraid grants wherever imaginable and we'll proceed to adhd for nan astir €65 cardinal grants already awarded us.

I would to now return a infinitesimal to genuinely thrust location what makes our exertion truthful special, arsenic we are unsocial successful nan market. Our exertion centers astir nan HEVO, arsenic you spot image location connected nan slide, it is astatine nan bosom of some HEVO-Solar and nan HEVO-Chain. It has a unsocial membrane and electrochemical compartment creation that allows for reduced powerfulness strategy costs, [indiscernible] strategy degeneration, and issues arsenic our membranes run independently and not successful nan accepted stack. It allows for a modular attack utilizing this miniaturized electrolyzer, which reduces O&M costs and complexity, arsenic good arsenic strategy downtime these modules tin beryllium replaced individually. We tin usage inexpensive structural materials and simplified engineering and assembly, which reduces costs further. All of this enables america to create an manufacture starring costs of greenish hydrogen, which Ben showed previously, an advantage that is amplified further successful mini to mid-scale projects.

To statement we had 2 halfway products. We person our HEVO-Solar, which is for those of you who person been pursuing america for immoderate clip are hopefully very acquainted with. This is an integrated star hydrogen generator. It integrates nan CTV exertion to our miniaturized PEM electrolyzer, nan HEVO and allows to person a grid independent and modular solution that requires bully star radiation levels and disposable land.

In addition, we besides person our different HEVO-Chain, which is besides modular and scalable and are highly businesslike extremity solution. The HEVO-Chain is simply a containerized PEM solution that uses our miniaturized PEM electrolyzer, nan HEVO moving successful a series. The absorbing point is it becomes location and powerfulness agnostic. It tin beryllium deployed, connected, to immoderate root of energy. So we person received questions what are nan European Union’s – what are nan implications of European Union’s information of atomic powerfulness arsenic renewable, but HEVO-Chain tin activity pinch immoderate root of energy, including nuclear. So we really person a merchandise that fits for respective types of requirements.

I'll now walk onto Zach.

Zachary Steele

Thank you, Frederico. It's bully seeing everybody this morning. I want to commencement pinch a quote from nan awesome Jack Welch. Strategy is simply assets allocation. When you portion distant each nan noise, that's what it comes down to. Strategy intends making clear trim choices astir really to compete. You cannot beryllium everything to everybody, nary matter what nan size of your business aliases really heavy your pockets are. This is very timely, not only for Fusion, but nan full industry.

Such a monolithic addressable market, we request to boil down to nan halfway what makes america competitive. Our cardinal assets are nan HEVO proprietary technology, our strategical onshore and grants we've secured and our people. Our business exemplary is transitioning much to a solutions supplier than conscionable a exertion company, arsenic that allows our exertion to ramp up production, getting galore accommodation operational to build up way record, while getting to standard done hydrogen accumulation focusing connected development. First, that nan HEVO exertion is peculiarly competitory astatine little than 10 megawatts projects, truthful focusing our efforts connected small- to mid-size projects. We spot astir of nan contiguous marketplace successful nan adjacent mates years arsenic nether 10-megawatt projects and that's a beardown pipeline of opportunities to execute this.

As antecedently noted, nan marketplace is mobility, logistics centers, business and state blending opportunities. Regarding our technology, we person collaborated pinch upstream exertion partners specified arsenic Ballard connected nan Évora Project, and precocious we signed a collaboration statement pinch nan world instrumentality supplier to thief america build retired our mobility and logistic applications. Over nan adjacent fewer years, our scheme is to ramp-up accumulation by investing successful Benavente and expanding our addressable marketplace pinch HEVO-Chain. This allows america to attraction connected each of Europe and North America arsenic our halfway markets versus conscionable markets pinch beardown star irradiance.

After an appraisal of ourselves, our accumulation capacity cannot meet nan demands of our task portfolio and our tech income are mostly driven from our improvement efforts. For these reasons our improvement portfolio is truthful strategic. Developing our ain projects allows america to power our ain destiny by having much power complete our early tech income pipeline. Our squad has done an unthinkable occupation connected establishing nan balanced of astir 200 megawatts of hydrogen capacity successful onshore that's been secured and €50 cardinal and grants person been secured.

As we proceed to activity connected business improvement opportunities, we're seeing a clear favoritism betwixt projects that are nether 10 megawatts and larger standard projects. As I noted, this allows america to create nan existent market, which is still successful a nascent stage, which are chiefly smaller projects but besides having an oculus to nan early for larger projects and larger demand. With our exertion accumulation estimated to beryllium 250 megawatts of capacity till nan extremity of 2025, and our improvement pipeline being substantially larger astatine estimated 1.5 gigawatts, we look to maximize shareholder worth by besides moving pinch different exertion providers to execute our portfolio projects.

This is simply a strategy we already kicked disconnected and announced past twelvemonth successful our statement pinch Toshiba research coagulated oxide solution for definite ample standard projects. This strategy solidifies Fusion Fuel arsenic a holistic greenish hydrogen solutions provider. To do this, we person dedicated – decided to create aggregate improvement partnerships. First, we person Fusion Fuel Spain, which is doing an unthinkable occupation and build a pipeline of projects successful Spain that's grown to 500 megawatts of precocious value opportunities that are successful various stages of development. The squad successful Spain continues to do a awesome job. Secondly, we are creating a improvement institution to attraction connected building retired improvement opportunities, focusing connected nan North American market, 1 of nan astir important hydrogen markets currently.

Given our costly improvement experience, this will beryllium led by myself and Jason Baran. We'll proceed to de-risk our portfolio by moving pinch world-class engineering, procurement, and building companies to minimize building consequence and motion semipermanent customer agreements to supply certainty of recurring revenues and EBITDA. These cardinal elements mixed pinch what we've already initiated pinch entitling our portfolio will make this charismatic to third-party capital. We proceed to activity pinch investors astatine 50 megawatts of capacity and nan equilibrium of our portfolio projects successful Portugal and Europe is really we get to an aggregated full of 1.5 gigawatts.

We'll person 200 megawatts of imaginable exertion income from nan improvement activities, perchance 30 megawatts – complete 30 megawatts of tech income from 3rd parties. As much and much of nan improvement projects person to operational projects utilizing HEVO exertion that will build up our way record, I'll make it easier to do a accepted tech income model. And we besides use from having perchance recurring revenues from nan improvement projects that again will further de-risk nan wide business.

Fusion Fuel strategy creates a diversified gross exemplary pinch accepted third-party exertion income and income from our projects created by Fusion Fuel Spain and our different improvement company. We're presently focusing connected – we're presently forecasting complete 230 megawatts of imaginable exertion income till nan extremity of 2025 based connected our existent pipeline and our forecast. Our 3rd statement exertion income are focused connected Iberian Peninsula successful Italy. We're seeing astir 10 megawatts of imaginable income this year, and arsenic Fred highlighted earlier we're precocious been awarded different mobility task and winning different assistance successful Spain.

We'll proceed to research further exertion income and activity connected them successful nan existent and our different halfway markets. We person besides started commissioning of Exolum plans and signed contracts for Alcalá task and began invoicing to our customer KEME successful Portugal. All this brings our committed tech income to a full of €12.5 cardinal for 2023. We are projecting further opportunities to grow nan exertion waste successful Alcalá, besides to complete nan waste of a precocious awarded task successful Spain, and a fewer different adjacent word opportunities to bring our target to complete €25 cardinal successful gross this year.

We expect breathtaking things from our business pinch Duferco, and are forecasting further opportunities successful 2024 and 2025 of them based connected our caller efforts. Fusion Fuel Spain and our different improvement entity person a pipeline arsenic I noted of complete 200 megawatts of tech income for Fusion Fuel into 2025. This will – this strategy besides monetizes astir of our brands and provides a dependable fare of task pipeline for Fusion, while we build up much accepted tech income exemplary successful our halfway markets.

As noted earlier, a strategy is to attraction connected creating worth for our shareholders and task improvement and our technology. We spot nan benefits of nan Fusion Fuel being that we execute perchance up to 200 megawatts of tech income arsenic I've noted, during imaginable equity returns via recurring gross and fees from creating worth successful nan improvement process. We're besides building a footprint and way grounds successful 5 halfway markets: Portugal, Spain, Italy, USA, and Canada. Our improvement strategy will beryllium to proceed titling our projects done securing strategical existent estate, grants were disposable and licensing these projects.

Secondly, we'll commercialize our pipeline by securing offtake agreements and signing EPC contracts to de-risk nan construction. We precocious signed our first statement pinch Dourogás and we scheme to proceed building disconnected this by signing further offtake agreements arsenic our projects move towards last finance decision. This attack will summation shareholder worth by monetizing nan grants, nan onshore and trading our technology. We'll besides perchance seizure upside successful development, while controlling our ain destiny done having our ain task portfolio we've created that gives a reliable backlog of tech sales.

As portion of creating this improvement entity we'll opportunistically look to bring successful third-party superior to support nan backing of nan projects, some successful nan improvement shape and nan building phase. The much we entitle and commercialize our portfolio projects, nan much charismatic nan portfolio will beryllium to third-parties Fusion will equilibrium really acold it takes nan portfolio anterior to bringing successful third-party superior to maximize shareholder worth by besides keeping an oculus connected our financial exposure. This will beryllium managed by myself, Frederico and different elder managers of nan existent squad and will beryllium adding further members to support successful this effort.

Frederico, backmost to you.

Frederico Chaves

Great. Thank you Zach.

So now I'm going to supply immoderate overview and guardant guidance connected 2023 and outlook for 2024, 2025 quarterly guidance.

So want to statement that for 2023, we're providing guidance that will beryllium seeking to execute €25 cardinal of revenues. This is based connected 5 projects of which €13 cardinal of those person already been contracted. As mentioned before, we've already invoiced clients for exertion income astatine this constituent successful clip pinch invoice small complete €1 million. For immoderate of these projects we're besides trading nan equilibrium of [indiscernible] equipment, truthful increases nan gross for megawatt we're capable to secure. I want to make that clear conscionable that group don't simply disagreement these megawatt by revenues to effort and cipher nan costs of megawatt of our system.

We'd for illustration to statement that for 2024 we're aiming for €80 cardinal successful revenues of 2025, complete €140 cardinal successful revenues. These are mostly driven by projects that we are processing ourselves. This is partially by improvement effort of ourselves and nan improvement partnerships that we have. So those projects are intelligibly identified arsenic that nan wide pipeline 1.5 gigawatts and we're talking astir 220 megawatts for some 2024 and 2025 of axenic tech sales. As noted we conscionable – we person not reflected immoderate further income, but we expect to revise from our improvement activities specified arsenic fees for imaginable equity returns aliases shares. The logic for that is that astatine this stage, it's excessively early. The worth of specified fees aliases specified aliases efficacy returns we mightiness person [indiscernible], truthful astatine nan infinitesimal it's excessively early to beryllium capable to accurately forecast what those revenues aliases income would be.

Only to statement that we are aiming to beryllium rate travel aforesaid capable and beryllium capable to present affirmative nett income successful 2024. If successful, we'll beryllium 1 of nan first companies successful this manufacture to do so. Also want to item arsenic we ever person immoderate – our halfway milestones for 2023. Naturally I person not included booking of first revenues, but that is evidently implied pinch nan erstwhile targets that I noted earlier. So from our production, we want to support expanding our accumulation capacity and build retired nan number of installation Benavente. We want to finalize nan improvement of HEVO-Chain arsenic we've announced we want to beryllium putting it retired successful nan marketplace commercially successful nan first half of 2024.

From our commercialized side, we want to make judge we person evidently each gross 2023 contracted. As noted, we are good precocious connected that shape is already 13 cardinal there, and nan remainder coming from very circumstantial projects that are very precocious astatine this stage. And arsenic good to person 2024 pipeline into confirmed orders. We've intelligibly done a bully occupation of securing nan grants nan institution precocious already astatine this stage. I'd opportunity we've outperformed immoderate expectations connected nan magnitude of grants that we could dream to unafraid for our projects. We'll support processing projects that are successful our pipeline and of people it besides requires licence and downloads for our portfolio.

Safety is ever a halfway for us, and this is we want to make judge that we support information – forefront of our mind arsenic we make judge that we support that present successful our cardinal priorities for 2023 arsenic always. Note, arsenic nan manufacture marketplace takes style and is taking shape, we've noticed that location are advantage successful our exertion solution for a peculiar marketplace needs go clearer and clearer. In addition, nan advantage of our task improvement pipeline sets america isolated from our competition.

We dream that pinch our expertise to beryllium delivering revenues and delivering connected nan products we person successful 2023, but nan marketplace and nan manufacture recognizes nan clear worth that Fusion Fuel has and we're capable to alteration nan people of our – our marketplace headdress and our stock has taken complete nan caller history.

So pinch that, I'll region and I'll unfastened up to Q&A.

Question-and-Answer Session

A - Ben Schwarz

Frederico, and acknowledgment to everyone who person submitted questions frankincense far. We person rather a few. So we'll statesman pinch immoderate questions from Chris Tsung of Webber Research. He asks astir nan Dourogás off-take agreement, which was announced a mates weeks backmost specifically astir nan long of that agreement, nan volumes considered successful price, and besides really will nan hydrogen beryllium transported from Evora wherever it's being produced, to wherever it will beryllium injected?

Zachary Steele

Would you for illustration to return that Frederico? I'll work, acknowledgment man. I'll activity successful nan inverse. So we scheme to return it from Evora and link it via pipeline. We were moving pinch nan section pipeline usability travel successful connected connecting to nan grid. The statement is simply a marketplace based value contract. It's based connected forward-looking earthy state pricing and c offsets. And nan measurement is based connected america nominating measurement from nan project. So correct now, we person capable measurement retired of nan Evora project, and that's what it was. That was what nan scheme was, but we could person opportunity to grow pinch early projects done having this beryllium a bully solution for trading our merchant capacity.

Ben Schwarz

Thanks, Zach. Second mobility was astir nan C5 funding, which arsenic a reminder was $36 cardinal to nan Fusion Fuel Consortium of which Fusion Fuel would person $22.5 cardinal for its HEVO-SUL and SINES project. Will nan institution person each of that $22.5 cardinal erstwhile FID is reached aliases will it beryllium distributed arsenic definite milestones are achieved?

Frederico Chaves

So it’s distributed erstwhile definite milestones are achieved really arsenic instrumentality is delivered, location is simply a definite magnitude that is disposable and we person really received related to expenses that we expect to person for improvement costs of nan project. That is nan lawsuit for C-5 and besides nan C-14.

Ben Schwarz

Yes. Finally, this 1 for Zach. Any updates connected nan Bakersfield task successful California pinch electives, what is needed to scope FID and erstwhile is your anticipation of erstwhile that’s achieved?

Zachary Steele

Thanks, Ben. So we are concluding our conception study pinch Black & Veatch. We scheme to do that adjacent month, and past we’ll make a determination pinch our partners astatine electives to move to nan adjacent shape of work, which is pre-feasibility and feasibility, which is permitting astatine connected nan consequent calls and nan first 4th telephone will supply much guidance connected timing. So I don’t person nan study conscionable yet, but our anticipation is simply a precocious 2024 early – successful California.

Ben Schwarz

Moving now to immoderate questions from Erwan Kerouredan astatine Royal Bank of Canada. He asked astir nan gross nickname timeline for Exolum. Frederico, if you tin touch connected that?

Frederico Chaves

So we tin commencement recognizing revenues for Exolum erstwhile nan acceptance of nan task starts that will beryllium limited connected nan really nan commissioning process goes. As noted, we – during March, we will commencement nan commissioning process.

Ben Schwarz

And there’s a abstracted mobility astir what are those – nan expected revenues related to that project, if we tin share.

Frederico Chaves

So $13 cardinal chiefly already contracted conscionable by $2 cardinal is related to Exolum.

Ben Schwarz

Thanks. Second mobility from Erwan is pinch respect to impairment charges, is location immoderate anticipation of further impairment successful nan first 4th of 2023 and beyond?

Frederico Chaves

Not astatine this stage. In truth if we had – we would’ve had – we would’ve already had to admit it successful Q4, moreover if it was – moreover if we only learned astir it subsequently. So astatine this shape we judge we had taken nan advance.

Ben Schwarz

Great. Last mobility here. What’s your position connected latest argumentation developments successful nan EU successful consequence to nan Inflation Reduction Act present successful nan U.S.? Do you expect further backing imaginable successful nan near-term aliases incremental commercialized opportunities arsenic a consequence of nan latest developments, whether that’s nan EU greenish business scheme aliases nan delegated acts? I cognize we touched connected that somewhat successful our shareholder letter, but if you person immoderate thoughts connected that.

Frederico Chaves

So I tin commencement and past Zachary conscionable add. But really nan 1 that acold connected precocious level statement opportunity that nan IRA has been phenomenal for nan industry. I cognize this is not regarding Europe, but evidently it has pushed Europe different markets. So we are now seeing Europe, we’re besides seeing Australia commencement processing akin activities and commencement beefing up their support for nan hydrogen industry.

So we find this into nan breathtaking nan activity successful Europe. Naturally, location has been evidently immoderate unit from nan atomic broadside to see atomic power nether nan renewable cap. Again, for us, this is indifferent for america from a HEVO-Chain perspective, that is powerfulness root agnostic. So we’re thrilled to spot nan developments. We judge this will continue.

We’ve already been proceeding from Spain that they are really expanding nan grants available. In fact, they are already reopening immoderate of nan existent lead programs to see backing immoderate of nan projects that were not awarded. So we do expect that inclination successful Europe to continue. Hopefully akin to nan U.S., location will besides beryllium much support connected nan request broadside and not only connected nan CapEx front. In Portugal, that is expected to return style pinch a hydrogen auction later this twelvemonth wherever akin to nan power market, location will beryllium a benignant of, let’s telephone it, velocity and tariffs for greenish hydrogen blended into nan earthy state grid. We do expect to spot much of that besides look successful Europe. Zach, you want to adhd immoderate colour to that.

Zachary Steele

No. In fact, 2 things. So besides different marketplace that we’re successful Canada is besides benignant of counterbalancing against what nan Inflation Reduction Act has been doing by moving to walk a 40% finance taxation in installments successful hydrogen, which will thief trim CapEx. And I’d opportunity nan past portion would beryllium California arsenic a leader successful nan U.S. and conscionable wide moreover successful biology and renewable markets and nan low-carbon substance modular in installments that has really helped thrust nan mobility marketplace successful California for hydrogen refueling infrastructure. We’re seeing that replicated aliases being discussed beryllium replicating different states passim nan United States, which will thief grow mobility which is simply a benignant of a halfway marketplace for Fusion Fuel.

Ben Schwarz

Thanks. There’s a mobility present astir nan greenish hydrogen tender that Portugal precocious announced and successful Puerto Rico, you conscionable said to that. The mobility was whether we – Fusion Fuel intends to use for parts of this tender. I deliberation you mightiness will reply that explicitly, moreover though you already did.

Frederico Chaves

So, I mean nan hydrogen tender, yes, absolutely. We expect to not only participate for our ain projects, but besides apt participate together pinch partners arsenic well.

Ben Schwarz

Pivoting to HEVO-Chain briefly, a mates questions present astir customer guidance to aliases early indications of liking from prospective customers regarding nan HEVO-Chain?

Frederico Chaves

I deliberation there’s been important liking successful HEVO-Chain, pinch moreover existing partners that were already acquainted pinch HEVO-Solar arsenic good arsenic new. Obviously nan truth that it opens up important further markets for america helps. But nan HEVO-Chain solution, nan truth that it is modular, scalable seems to beryllium [indiscernible]

Zachary Steele

Yes. Only point I would adhd is nan unnamed caller announcement of a world instrumentality supplier really is simply a bully fresh pinch our HEVO-Chain product. And what we deliberation that there’ll beryllium a batch of opportunities that travel retired of that successful nan logistic and mobility market. So what we’re excited astir nan product, nan advantages nan merchandise has. And we’re besides seeing opportunities successful conscionable based connected nan creation of HEVO-Chain arsenic Frederico said that it’s rather unsocial compared to our peers.

We’re seeing a batch of opportunity wrong curtailed powerfulness and mineral connection solutions that makes america rather unsocial putting costs speech compared to immoderate of our peers, conscionable based connected nan basal creation of nan system. So what we’re excited astir nan mobility marketplace and really tapping into curtail powerfulness opportunities wrong nan European marketplace and state blending and different applications.

Ben Schwarz

Thanks. Question present from Amit Dayal astatine H.C. Wainwright. How overmuch do you expect from improvement economics connected a per megawatt basis? And tin you talk astir nan costs that will beryllium incurred upfront and perchance supported by nan equilibrium sheet?

Zachary Steele

Yes. So it’s a awesome question. As I’m smiling because each project’s unique, right? So what nan scheme is, and I should addressed it successful nan beforehand extremity of nan position is, nan scheme going guardant connected early quarterly calls is, arsenic projects reached a last finance determination aliases we adjacent nan last finance decision, we’re going to item those successful nan presentation, truthful that measurement we tin talk about, what it intends to Fusion Fuel from a exertion income standpoint? What does it mean, really do we finance it? Did we get improvement fees? Did we get equity returns retired of it aliases an equity ownership interest? And past I deliberation nan past portion is nan scheme for nan institution is to proceed seeding nan improvement of nan projects until there’s a balance, arsenic I noted successful my successful my remarks. There’s a equilibrium of seeding nan projects until a constituent wherever we tin create capable worth to bring successful third-party capital. But we, nan full scheme is to bring successful a third-party superior connected nan improvement and money nan projects erstwhile they scope last finance decision. That is not successful our scheme for Fusion Fuel to do that and return connected that superior exposure. Fred, do you want to adhd anything?

Frederico Chaves

Oh, perfect.

Ben Schwarz

In truth this is simply a mobility that I’ve, received connected nan number of occasions fig we’ll inquire it here. When do you expect news astir nan successful stack [ph] backing decision?

Frederico Chaves

I will springiness you, no, I deliberation what we are – we’re connected a wasting shape here. So what we don’t person further guidance arsenic to what that news mightiness come, what we statement is that what we’ve done and successful each our pipelines and truthful on, numbers we’ve been giving, we haven’t included it truthful that it does not importantly distort nan figures while we hold for that use. At this shape and this has been nan lawsuit correct from nan beginning. We return this arsenic nan first-come first-serve. We proceed to create our ain projects. We proceed to prosecute pinch third-party clients and we’re moving guardant pinch our hydrogen projects arsenic accelerated arsenic we can. When we opportunity gets announced, we’ll person to spot really we grip our accumulation constraints and plans accordingly. But astatine this stage, we don’t cognize thing else?

Ben Schwarz

Thanks, Frederico. Question present around, tin you elaborate connected your plans for Morocco, Middle East, India, Australia, each places wherever partnerships person been announced successful nan past?

Zachary Steele

Do you want return that Fred, aliases you want maine to?

Frederico Chaves

Yes, arsenic I conscionable noted right, we’ve, and again, this benignant of goes into nan strategy, I conscionable want to beryllium clear connected that. We are not – we are, I don’t want this, I don’t want america to beryllium look for illustration we’re awesome that we are abandoning Australia aliases Morocco aliases North Africa opportunities. We person finite resources, we person created important opportunities, momentum successful nan 5 markets that we talked astir earlier. And location we spot astir adjacent word opportunities for technology, income aliases maturation successful these improvement pipeline projects.

So, we proceed to create and push guardant successful Australia and North Africa. We dream to person immoderate successful news successful nan coming months successful those markets, truthful we tin past adhd them into nan pipeline chat that we've been having. But we want to make judge that we are being cognizant of wherever we are and trying to springiness assurance to nan marketplace that we're focused connected adjacent word actionable opportunities that person land, person identified customers are successful licensing aliases licensed person grants successful bid to show a existent way to getting to our forecasted pipeline successful revenues.

Zachary Steele

And I will conscionable adhd is that for that reasons meant nan attraction that we person our partnerships for those markets. So successful Morocco astatine slightest wherever we person partnerships pinch TCC, and truthful on, this is wherever we're counting connected some partners to thief america bring nan task to a further shape of maturity wherever will commencement to disclose nan advancement connected those arsenic good astatine this shape pinch [indiscernible] sole rule power correct now.

Ben Schwarz

Thanks. Okay. Well, past mobility here. So if you do person last questions, do get them in. The levelized costs of hydrogen floor plan connected Slide 5, is that for nan HEVO-Solar, HEVO-Chain, aliases both? I'll return that 1 and you guys tin correct maine if I'm wrong.

As we are still successful nan process of industrializing nan equilibrium of systems for nan HEVO-Chain which will person an effect connected nan levelized costs aliases nan costs floor plan of that product, that floor plan reflects an estimated costs for nan HEVO-Solar. Of course, nan levelized costs of hydrogen from that merchandise is highly limited connected wherever that merchandise is deployed, right? In Northern Europe would look a batch different than successful Southern Europe aliases successful California. So, we do presume our benchmark location successful confederate Portugal. But again, if that's deployed location pinch superior star radiance, that number is beneath that scope that we provided, et cetera. So, that's nan reply then.

So successful nan absence of here's 1 last mobility here. With respect to, I deliberation liquidity and financing connected successful wide and successful our ain task portfolio is nan institution successful chat pinch imaginable superior partners.

Frederico Chaves

So I deliberation that connected the, connected our superior effort arsenic truthful we'll, we'll break that onto 2 pieces connected nan task side. As I mentioned pinch nan improvement company, our thought is to person partnerships to money nan improvement costs of that benignant of important improvement portfolio. That's nan easy mobility connected that side. On nan firm broadside arsenic mentioned earlier successful america earlier we person respective options that we are pursuing and we are considering for nan superior and to guarantee nan institution is efficaciously capitalized.

This is thing that nan committee guidance is acutely keeping an oculus on. And we would for illustration to beryllium capable to find a superior solution for nan semipermanent that is strategical astatine this shape I don't want to opportunity more, and can't springiness much specifications connected that without getting myself into problems. But this is surely thing that is being looked to beryllium addressed by guidance and board.

Ben Schwarz

Thanks, Frederico. Last 1 present is not really a mobility – a request, is it imaginable for early presentations to supply penetration into really overmuch gross will beryllium recurring versus one-off? Yes, we will make a statement of that for early reference. So successful nan absence of further questions, I conjecture we we'll wrap it up here. So acknowledgment to everyone who joined and contributed questions. If location are further questions that travel up, please consciousness free to scope retired to maine and nan IR squad astatine and we look guardant seeing you each again successful our adjacent update.

Frederico Chaves

Thank you.

Editor: Naga

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