Ocean Sun AS (OSUN) Q4 FY2025 Earnings Call Transcript & Summary

Welcome to the presentation of Ocean Sun's fourth quarterly results. My name is Kristian Torvold, and I'm the CEO of Ocean Sun. Today, as always, we will first briefly talk about the Ocean Sun solution before we go into a few updates and project developments. And then Karl will present the financials. Ocean Sun's patented technology is the world's best floating solar technology. It offers low CapEx due to low material use, fast and easy installation and lean transportation. It sees high efficiency due to the solar panels being directly water cooled. And the structure derived for more than 50 years of Norwegian Maritime heritage offers a seaworthy solution. In January, we finally launched the Soneva secret installation. We have worked really hard on these achievements. Not only because it's the first of its kind in the world, but also because it was really difficult. The remote island is a resort island that doesn't allow for any disturbance of the guests. And we, therefore, needed to do a lot of the welding work on neighboring islands and toll the floaters to site. All panels were delivered by feeder boats, and while always having to consider tide, wind and wave to make this a success. We are truly proud of this achievement. The system consists of 2-megawatt peak floating solar and 3-megawatt hours of battery. Once tuning is completed, the system will be powering the island up to 90% of the time. It replaces 1 million liters of diesel annually and saves up to 2,000 tonnes of CO2 emissions every year. Lastly, the system is paid back in 4 to 5 years, making it a really good investment. The achievement has been widely picked up in PV circles and used outlets, and we have received a lot of positive feedback from the market. And actually, today, 1 of our partners, Huawei, has released a video promoting this project. It's a beautiful video and I suggest you all check it out on either the Ocean Sun's LinkedIn or in YouTube. We had a successful private placement in December, raising about NOK 10 million from existing shareholders at NOK 2 per share. This is a 78% premium. This extends our runway as we keep growing our presence in the Tier 2 market with a growing pipeline. With this growing international pipeline and strong interest from developers, utilities and industrial stakeholders, the Board has decided to explore strategic alternatives that could unlock the full commercial potential of the Ocean Sun solution. Fearnleys Securities has been mandated to assist in this process, and we will provide further updates if and when appropriate. In November, Ocean Sun was awarded the world's first type certificate for a floating solar system. This certification from Bureau Veritas validates our membrane-based design and confirms the structural integrity, durability and safety of the system. All key requirements for utility-scale tenders and EPC adoption. It also strengthens bankability and partner confidence supporting commercial ramp-up in the fast-growing Tier 2 market. We have also strengthened our technical leadership with the hiring of Ole-Jorgen Myrtroen. He brings more than 15 years of engineering experience from Hydro Rein, Metier, Multiconsult and SN Power, and will play an important role in our technology development and competitiveness in both Tier 1 and Tier 2 segments. Ole-Jorgen is based out of Rio de Janeiro where he -- where we actually also signed a project just last year. And with his fluent Portuguese, he will help us expand our engagement with partners and new opportunities in Latin America. Project-wise, we have added Soneva project to our installed capacity. So backlog is reduced accordingly, while we've added about 8 megawatts to our pipeline, now adding up to 36-megawatt peak. As previously mentioned, the pipeline consists of projects we believe will be signed within the next 12 months. On the back of the Soneva project completion, we are becoming the enabling solution for islands around the world to be powered by solar. And we have seen an increasing interest from customers around the world and also a lot of added dialogue from resorts and islands in Maldives, Laccadive and also in the Caribbean. At Ocean Sun, we remain focused on the tasks ahead to really live our vision as the bold solution to our global energy needs. Now I invite Karl to give a quick update on the financials before we have Q&A. Karl?

Thank you. So in Q4, we recorded an income of NOK 4.9 million and this includes NOK 1.7 million in license revenue and service revenue from the Soneva project. With this, we ended up at a negative result of NOK 4.4 million for the quarter. With the net proceeds of about NOK 9 million from the direct share issue, the cash amounted to NOK 15.8 million by end of year. And with that, we open up for Q&A, and I invite Kristian back on stage.

Yes. Any questions?

Yes. Let me check. Yes. First question, what is status with the communicated Magat project?

Yes. We have a good dialogue with that. But at this point, we do not know more than what was stated in the Scatec press release a few months back. So yes, that's the status right now.

And then we have a question around the pipeline. Could you elaborate on the composition of your pipeline? You mentioned it's 36 projects -- 36-megawatt across 13 projects. Could you provide more detail on the regions? Yes, let's start there. You provide more details on the region and then I follow-up.

Yes, it's correct. It's a 36-megawatt peak across 13 projects. It is a few projects in Europe, Southeast Asia and South America largely. And we have decided not to break it down further at this point. But it's a project we believe will come along in the next 12 months, and we're working very hard on securing these strong leads.

Yes. And that's also the stage they're at. So completed within 12 months or signed within 12 months is what we believe. And then on Slide 8, Philippines is marked in blue, which according to the legend represent Ocean Sun project. Does this indicate that Ocean Sun is secured with the -- to win the contract for the Magat expansion? That's what you said before.

Yes. As I mentioned, we're currently don't know more about this than what we stated in the Scatec press release.

Good. And then this question about more details around exploration of strategic alternatives. And here, we refer to the press release. We have, with the growing interest in Ocean Sun decided to initiate an exploration of strategic alternatives and Fearnleys has been engaged to assist and we will, of course, update if and when appropriate. One question as well here around Huawei as a partner. Do you work with them on other projects as well?

Yes. We've used Huawei inverters for most of our projects because they have been very robust and good for our solution. So yes, we work closely with Huawei, and I really engaged -- I encourage everybody to have a look at the video that was just posted. It shows a lot about how we integrate with Huawei, both for inverters and transformer and also with batteries. So Huawei's a good partner.

Very good. And that was the last question.

Thank you very much. Yes.

Thank you very much.