Ocean Sun AS (OSUN) Earnings Call Transcript & Summary

Okay. Welcome to the presentation of Ocean Sun's first quarter results live from Intersolar in Munich. My name is Kristian Torvold, and I'm the CEO of Ocean Sun. We have a lot of topics to talk about, so let's get started. Today, as always, we will first talk about Ocean Sun in brief before we go through the highlighted developments and project developments. And then Karl will present the financials. Our vision is that Ocean Sun shall be the world leading technology supplier for floating solar systems, a vision we work towards every day. Ocean Sun's proprietary technology is the world's best FPV technology. We have low CapEx due to the lowest material use, fast and easy installation and lean transportation, high efficiency through water cooled modules and the seaworthiness. And as you see in the picture behind, this is the ongoing installation of our project in Maldives, which segues nicely into this slide where we're finally under construction at Soneva Secret in Maldives. And we are really excited about the progress on the beach there. This 2-megawatt project is a milestone for Ocean Sun and for the floating solar industry as a whole. The construction brings some really interesting challenges. The space is limited, and we need to weld piping on one island and then move it several kilometers to the final position. This work is also largely manual because you can't really have large machinery and cranes on an island that doesn't have roads. We expect the project to be completed in July. So everyone should stay tuned to some fantastic pictures and videos of this groundbreaking project. We have delivered a pre-feasibility study for a demonstration system in Taiwan, and we expect this study to result in a new installation during the second quarter of 2025. As an island, Taiwan has limited space available for onshore solar, so the potential for coastal floating solar is very large. We're excited to see the progress and we'll have lots of opportunities and likely challenges in the Taiwanese market. The Qatar feasibility study we won, you'll see further announcements later. It is a good opportunity to learn and prepare for deployment in the Middle East in general. The region is known for great installation, but also a lot of sand soiling. So this is a challenge we're looking to overcome through innovative solutions, and this is also part of the feasibility study. Our new CCO, Kristin Husby Mork, has been with us for a month now. She's doing great, and we're thrilled to have her on our team. You can meet her here at Intersolar this week. And then lastly, our new CPO, David Knutsen, has now been with us for 6 months and has already progressed our technology substantially in regards to modeling the boundaries conditions of the waves that we can handle, helping us define what projects we can sell commercially. He's also been working a lot on an automatic cleaning solution for our system so that we don't only have the coolest modules in the industry, but also the cleanest. Meanwhile, he's taken all the project learnings we have into the new product development process and creating exciting new opportunities for us and for technology. So we're really happy to have David on our team. In terms of projects, there are a few changes since last quarter. A couple of projects have moved from the pipeline to the backlog, and we're working hard and now also with Kristin onboard to continue the growth of the pipeline. We have, over the past couple of years, signed several MoUs with Indian partners. And although these projects have taken longer than expected, there is definitely progress, there's dialogue and interest in the Ocean Sun solution. We are engaged in dialogue with NHPC, Tata Power, [indiscernible] and other strong partners who are planning to install pilot projects. India is a market we will be hearing a lot from in the coming months. So all in all, we are seeing a momentum in Ocean Sun towards more projects and more activity. With the new team finally fully in place, greatly improved internal processes and focus, we are in high spirits and are excited to see what's coming in the next few quarters. With that, I will let Karl talk about the financials.

Thank you, Kristian. Very excited to be here. The financials in Q1, we had an operating income of NOK 1.5 million, which primarily consists of contribution projects. The result ended at approximately NOK 5 million minus, which is as expected and with moderate cost levels as expected as well. We also have a cash flow that is largely driven by the result and the cash position by the end of the quarter of NOK 24.3 million. We are, of course, monitoring this closely, but we are also very confident with the cash level that we have, and we feel that we are in good control for the coming years. And with that, we open up for Q&A.

As always, I will read the questions behind the screen for Kristian. And first question is, will there be any new projects in China?

Yes. We still have our office in Shanghai, headed by [Du ZhongYi], and we are actively engaged in the market in China and very positive to the outlook there in the time to come. There is no announced projects there yet, but we are working hard in this event.

Great. Next question. How is the crowd at Intersolar this year?

The crowd at Intersolar is great. There is a lot of interest in floating solar in general. And our booth here at the Norwegian stand in Intersolar has seen a lot of attraction. There is not enough people here to manage, to be honest, because we have so many people visiting, showing interest in floating solar. So it really shows how the PV industry is looking to floating solar and are very interested in learning about the Ocean Sun solution as an alternative technology to implementing floating solar.

With regards to the technology updates, how big waves can you withstand? And what unique position do you get out of this?

Yes. So we have a strategy that is focused on the Tier 2 market. The Tier 2 market is what we call large reservoirs and nearshore coastal installations. And what we can say now with the updated or the new fundings and the boundaries, we are confident in pretty much all world's coastal nearshore locations and can handle both the wave height and the wavelength that will be thrown at us in the coastal areas around the world.

Great. And then a follow-up question for that. With regards to the cleaning solution, how will you get the cleanest modules in the world?

This is an ongoing project we are doing that we will be sharing more about as we go. But the structure of Ocean Sun is flat. The modules are flat. So it's in many ways like a living room floor. So we are looking to have not fully but ultimately cleaning of our modules.

And that was the last question.

Okay. Well, then thank you very much for listening in and looking forward to the next presentation. I hope we will have some good news for you coming up. Now we'll get to work here at the stand at Intersolar and make sure that the whole PV industry knows about us and Ocean Sun. Thank you.