VivoPower(VVPR) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for the six months decreased by 11% year-on-year to $18.9 million, primarily due to extended COVID lockdowns in Australia [4][5] - Gross profit and gross profit margin both declined as a result of the revenue drop, with adjusted EBITDA declining to negative$4.9 million compared to positive $1.2 million in the previous year [6][28] - Operating loss increased to$7.3 million from $0.4 million in the prior year, reflecting increased corporate costs and investments in growth [6][28] - Cash balance declined from$8.6 million to $3.3 million, but has increased post-balance date due to incoming data collections and strategic funding [7][30] Business Line Data and Key Metrics Changes - Tembo electric vehicles reported revenues of$0.9 million, impacted by operational disruptions and delays in assembly and delivery of kits [19] - Aevitas business recorded $18 million in revenue, down 14$0.8 million from $2.3 million in the prior year [20] - Caret Solar, the U.S. solar business, contributed 206.5 megawatts of advanced projects valued at$20 million, with ongoing reassessment of previously marketed projects totaling about 1.1 gigawatts [24] Market Data and Key Metrics Changes - The company has expanded its distribution partner network to six continents and established a subsidiary in the UAE, the largest off-road market [8] - There is a strong interest in renewable power sites in the U.S., particularly from crypto hosting companies facing long lead times [25] Company Strategy and Development Direction - The company is focused on strategic initiatives despite disruptions, including the development of a 72 kilowatt-hour battery kit and entering into letters of intent for renewable-powered digital asset mining [8][16] - The company aims to create infrastructure for blockchain applications beyond crypto mining, accommodating high energy-intensive computing applications [40][41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced due to COVID lockdowns but expressed optimism about the removal of restrictions and positive developments in the pipeline [32] - The company is navigating supply chain issues and is focused on non-dilutive funding options to support growth [29][15] Other Important Information - The company has been recertified as a B Corp, recognized as a top global impact company for the second consecutive year [9] - The company is exploring collaborations with major mining and infrastructure companies for electrification projects [22] Q&A Session Summary Question: Interest in creating Tembo facilities closer to Southeast Asia, Australia - Management confirmed ongoing interest in establishing micro factories in Thailand and the UAE, leveraging local automotive ecosystems [36] Question: Clarification on Caret Decimal's focus on blockchain applications - Management explained that Caret Decimal is designed to support various energy-intensive blockchain applications, including crypto mining, content creation, and smart contracts [37][38] Question: Strategy regarding potential regulatory scrutiny of crypto - Management acknowledged the likelihood of crypto regulation but emphasized that the infrastructure being developed is intended for broader blockchain applications, not solely dependent on crypto mining [40][41]