Key strategic initiatives executed upon despite COVID-19 disruptions
Revenue, GP and EBITDA decline due to strict prolonged COVID-19 lockdowns in key markets, especially Australia
Definitive distribution partnerships for Tembo e-LV kits executed with GHH and Bodiz
Full ownership of US solar portfolio secured, rebranded to Caret, and launched cryptomining venture, Caret Decimal
VivoPower today announced its half-year results for the six months ended December 31, 2021.
Highlights for the half-year ended December 31, 2021
- Group revenue declined 11% to $18.9 million due to strict COVID-19 lockdowns affecting projects and deliveries.
- Group gross profit down 85% year on year to $0.5 million as a result, with group gross profit margin down to 3% (from 16%).
- Underlying group adjusted EBITDA loss of $4.9 million, representing a decline versus $1.2 million profit in previous corresponding period.
- Tembo e-LV distribution partner network expanded to six continents and 3,350 additional conversion kit pre-orders.
- Full control of U.S. solar joint venture secured with plans to launch renewable powered digital asset mining business, Caret Decimal.
- B Corp recertification completed and recognized as a top global impact company for the second consecutive year by the Real Leaders Impact Awards.
Kevin Chin, VivoPower’s Executive Chairman, and Chief Executive Officer said, “Our half-year results reflect another period where we have been adversely impacted by extended lockdowns in our key markets, particularly in Australia (which further tightened its international and interstate domestic borders from July 2021). These lockdowns and border restrictions have caused significant delays in both projects and deliveries, resulting in revenues being below budget. This includes a one-off loss of $1.1 million at the gross margin level, attributable to the Bluegrass solar project in Australia, which became unprofitable directly as a consequence of COVID-related interstate border closures and strict COVID related rules and regulations. Furthermore, the imposition of additional COVID-19 related compliance costs as well as increases in supply chain and logistics costs eroded our gross profit margins. As a result of these factors, we decided to delay some of our budgeted opex and capex investment until such time there was greater clarity on when lockdowns would be lifted and borders would be reopened. At the time of writing, it is pleasing to note that our key markets, including Australia, have announced the reopening of international borders from late February 2022 and we have been prepared in anticipation.
“While plans for both our Aevitas and Tembo business units were materially curtailed over the past six months, we were able to make significant progress with our US solar business, which has been renamed to Caret. During this period, we secured 100% ownership of the business, rebranded, announced a new Power-to-X strategy, and signed a letter of intent to form a renewable-powered cryptocurrency mining company, Caret Decimal together with an experienced New York-based cryptomining group, Decimal Digital. As part of this deal, we expect to contribute 206.5 MW-DC of solar power development sites to Caret Decimal for a value of $20 million, received in the form of equity in Caret Decimal. Post balance date, Caret Decimal has signed a letter of intent to acquire the assets of Decimal Digital, which includes 1,000 mining rigs and relevant contracts. Caret Decimal has engaged capital raising advisers and is progressing with a $50+ million raised at the Caret Decimal level.
“We are pleased to have successfully passed our B Corp reassessment and retained our B Corp status. In addition, we are proud to have been recognized for the 2nd year in a row as one of the world’s top 100 impact companies by the Real Leaders Impact Awards. Upholding our B Corp and impact leadership status is an ongoing priority for the board and management team. In the spirit of this, I am pleased to also announce that we have nominated Peter Jeavons, who is a non-executive director on the board to be the Company’s Senior Independent Director. In addition, Matthew Cahir will step off the board and focus on his executive role. The rationale for this is to ensure there is a clear majority of independent directors on the board and that they are sufficiently empowered to deliver on their fiduciary duties. As appropriate, we will also seek to appoint another independent non-executive director.”
A reconciliation of IFRS (“International Financial Reporting Standards”) to non-IFRS financial measures has been provided in the financial statement table included in this press release. An explanation of these measures is also included below, under the heading “About Non-IFRS Financial Measures.”
About Non-IFRS Financial Measures
Our preliminary results include certain non-IFRS financial measures, including adjusted EBITDA, adjusted net after-tax loss, and adjusted EPS. Management believes that the use of these non-IFRS financial measures provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our results of operations, and also facilitates comparisons with peer companies, many of which use similar non-IFRS or non-GAAP (“Generally Accepted Accounting Principles”) financial measures to supplement their IFRS or GAAP results. Non-IFRS results are presented for supplemental informational purposes only to aid in understanding our results of operations. The non-IFRS results should not be considered a substitute for financial information presented in accordance with IFRS and may be different from non-IFRS or non-GAAP measures used by other companies.
The tables included in this press release titled “Reconciliation of Adjusted (Underlying) EBITDA to IFRS Financial Measures” and “Reconciliation of Adjusted (Underlying) Net After-Tax Loss and Adjusted (Underlying) EPS to IFRS Financial Measures” provide reconciliations of non-IFRS financial measures to the most recent directly comparable financial measures calculated and presented in accordance with IFRS.
Reconciliation of Adjusted (Underlying) EBITDA to IFRS Financial Measures
| Six months ended December 31 | ||
| (US dollars in thousands except per share amounts) | 2021 | 2020 |
| Net Loss | (10,031) | (382) |
| Income Tax | (815) | 366 |
| Net finance expense / (income) | 3,021 | (2,259) |
| Share based compensation | 1,284 | 704 |
| Restructuring & other non-recurring costs | 514 | 1,900 |
| Depreciation and amortisation | 1,173 | 889 |
| Adjusted EBITDA | (4,854) | 1,218 |
Reconciliation of Adjusted (Underlying) Net After-Tax Loss and Adjusted (Underlying) EPS to IFRS Financial Measures
| Six months ended December 31 | ||
| (US dollars in thousands except per share amounts) | 2021 | 2020 |
| Net Loss | (10,031) | (382) |
| Restructuring & other non-recurring costs | 514 | 1,900 |
| Adjusted (Underlying) Net After-Tax Profit / (Loss) | (9,517) | 1,518 |
| Group Basic EPS (dollars per share) | (0.49) | (0.03) |
| Restructuring & other non-recurring costs (dollars per share) | 0.02 | 0.13 |
| Group Adjusted (Underlying) EPS (dollars per share) | (0.47) | 0.10 |
To read our full press release, and to keep up with all of VivoPower’s releases, visit our Press Releases page.
