SANDNES, Norway, Nov. 15, 2024 /PRNewswire/ -- Desert Control AS (DSRT) announces its third-quarter report and interim financial results for the fiscal period ending 30 September 2024.
Desert Control continued its positive momentum in the third quarter of 2024, achieving milestones in market expansion, pilot progress, and initiation of licensing revenues in the Middle East. The quarter saw strong results from pilots in agriculture and landscaping, supporting negotiations for larger commercial projects in the United States. Growing traction in the Middle East further strengthens the foundation for sustainable growth under the company's royalty-based licensed operator model.
Operational Highlights:
Solid Pilot Results Strengthen Validation and Support Negotiations for Larger Contracts in the United States
- Landscaping Success in the U.S.: Landscaping pilots in California achieved over 25% irrigation savings, with some clients reporting water reductions exceeding 50%. These results drive negotiations for larger contracts as high water costs continue to rise.
- First Contract for a Complete Golf Course: On November 8th, Desert Control signed an agreement with Berkeley Country Club with potential value exceeding NOK 6 million, marking the first commitment for full-course LNC deployment in the U.S.
- Agricultural Gains: Harvest data from an LNC-treated date farm in Arizona showed nearly double the yield, underscoring LNC's economic impact on high-value permanent crops and supporting Desert Control's agricultural market expansion.
First Licensing Royalties from the Middle East
- Revenue Milestone: Desert Control recorded its first licensing royalties from the Middle East. While modest, this revenue marks the beginning of a scalable revenue stream following the strategic shift to a royalty-based licensed operator model for the region.
- New Contracts and Expanding Pilots: A new contract for 1.8 million liters of LNC was secured for a UAE real estate project. Landscape nursery pilots in the UAE and Saudi Arabia demonstrate LNC's effectiveness in the growing sustainable landscape management sector.
R&D and Technology Advancements Strengthen Delivery Capabilities for Current and Future Pipeline
- Syngenta Partnership Accelerates R&D: Collaboration with Syngenta has shown promising lab results of synergies with LNC. Field trials in the Middle East, set for Q4 2024, aim to further validate the impact on soil health, crop yields, and water efficiency.
- Next-Gen Production System Progress: Development of the next-generation LNC production system is on track, with capacity nearing 120,000 liters per hour. Achieving this targeted capacity will unlock large-scale opportunities that require high volumes within short time windows, enabling projects previously out of reach.
Financial Highlights:
In the first nine months of 2024, Desert Control reached a record number of installations, increased LNC deployment volumes, and more than doubled LNC revenue compared to the previous year. These achievements highlight enhanced operational efficiency driven by the new prototype LNC production system, streamlined integration with irrigation systems, and insights gained from pilots and prior projects.
- Revenue Increase: Year-to-date LNC revenue totaled NOK 1.88 million, more than doubling from the same period in 2023. Total revenue and other income for Q3 2024 was NOK 0.18 million, up from NOK 0.01 million in Q3 2023.
- EBITDA Improvement: For the first nine months of 2024, EBITDA improved to NOK -44.95 million from NOK -60.81 million in the same period last year. Q3 2024 EBITDA was NOK -14.16 million, an improvement from NOK -17.9 million in Q3 2023, driven by efficiencies from transitioning to the licensed operator model.
- Cash Position: The company ended the quarter with a cash balance of NOK 75 million, compared to NOK 35 million at the same time last year. The company continues to operate with no interest-bearing debt.
The growth in project volume and LNC deployment, combined with improved EBITDA figures, underscores the enhanced efficiency of operations. The ability to handle larger volumes at a reduced cost base positions Desert Control to maintain healthy margins as the company scales up.
Outlook:
With solid progress in the U.S. and Middle East, Desert Control is positioned to transition pilot projects into larger contracts and expand LNC adoption. The upcoming readiness of the next-generation LNC production system and strengthened R&D partnerships underscore the company's commitment to scalable, sustainable solutions for soil health and water conservation globally.
Key Figures (in MNOK):
First nine months 2024 [first nine months 2023 in brackets]
- LNC Revenue: 1.88 [0.85]
- Licensing Royalties 0.07 [0.00]
- Total Revenue and Other Income: 1.95 [1.38]
- EBITDA: -44.95 [-60.81]
Third quarter 2024 [third quarter 2023 in brackets]
- LNC Revenue: 0.11 [0.00]
- Licensing Royalties 0.07 [0.00]
- Total Revenue and Other Income: 0.18 [0.01]
- EBITDA: -14.16 [-17.90]
Total cash balance 30.09.24 (bank deposits and funds): 75 [35]
Equity 30.09.24: 86.3 (equity ratio 95.4%) [52.5 (60.0%)]
Q3 Report 2024:
- The information enclosed is subject to the disclosure requirements pursuant to sections 5-12 of the Norwegian Securities Trading Act.
- The report can be downloaded from the company webpage: https://desertcontrol.com/investors/
- A webcast presentation for Desert Control Q3 2024 Report and Company Update is hosted on 15 November 2024 at 10.00 AM, Central European Time (CET). Register: https://go.desertcontrol.com/Q3-2024
Cautionary Note:
Disclaimer related to forward-looking statements. This release contains forward-looking information and statements relating to the business, performance, and items that may be interpreted to impact the results of Desert Control and/or the industry and markets in which Desert Control operates.
Forward-looking statements are statements that are not historical facts and may be identified by words such as "aims," "anticipates," "believes," "estimates," "expects," "foresees," "intends," "plans," "predicts," "projects," "targets," and similar expressions. Such forward-looking statements are based on current expectations, estimates, and projections, reflect current views concerning future events, and are subject to risks, uncertainties, and assumptions, and may be subject to change without notice. Forward-looking statements are not guarantees of any future performance, and risks, uncertainties, and other important factors could cause the actual business, performance, results, or the industry and markets in which Desert Control operates to differ materially from the statements expressed or implied in this release by such forward-looking statements.
No representation is made that any of these forward-looking statements or forecasts will come to pass or that any forecasted performance, capacities, or results will be achieved, and you are cautioned not to place any undue reliance on any forward-looking statements.
For more information, please contact:
Ole Kristian Sivertsen
President and Group CEO
Email: oks@desertcontrol.com
Mobile (NOR): +47 957 77 777
Mobile (USA): +1 650 643 6136
Leonard Chaparian
Chief Financial Officer
Email: leonard.chaparian@desertcontrol.com
Mobile (NOR): +47 90 66 55 40
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https://mb.cision.com/Public/22706/4066565/9bea31ebdc1d18ef.pdf | DC Q3 2024 Report |
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