M Vest Water (MVW) Q3 2024 earnings summary

Executive summary

• Achieved 56% year-over-year sales growth in Q3 2024, with year-to-date revenue up 83% compared to 2023, driven by recurring sales to salmon slaughterhouses and expansion in international markets.

• Shifted revenue base from non-recurring equipment sales to recurring chemical sales, enhancing long-term revenue stability.

• Expanded presence in the Middle East through an exclusive agent agreement, enabling direct tender submissions to major oil operators.

• Achieved a technological breakthrough with NORWAFLOC, enabling full substitution of synthetic chemicals in multiple industries, notably in Germany.

• Secured contracts with two additional salmon slaughterhouses, including the first outside Norway (Iceland), driving recurring revenue growth.

Financial highlights

• Q3 2024 revenue reached NOK 5.3 million, up from NOK 3.4 million in Q3 2023 (56% growth year-over-year).

• Gross margin improved to 62% in Q3, up from 38% in the prior year period.

• Loss before tax was NOK 6 million in Q3 2024.

• Negative cash flow from operating activities of NOK 8.1 million in Q3 2024; cash and cash equivalents at NOK 7.7 million.

• Equity ratio remained strong at 80% at the end of Q3 2024.

Outlook and guidance

• Anticipates further recurring revenue growth as more discharge exemption applications are processed in aquaculture and international sales expand, especially in the Middle East Oil & Gas sector and European dredging markets.

• Focused on converting a growing pipeline of tenders and sales leads into contracts, especially in oil and gas, aquaculture, and dredging.

• EBITDA break-even expected upon reaching 10-12 long-term contracts, or sooner if a large oil and gas contract is secured.

• Well positioned for further contract wins as more Norwegian salmon slaughterhouses comply with new EU regulations.

• Focused on full-scale qualifications, sales, and contract signings in Norway, Germany, and the Middle East.