Aquaporin Q3 2024 Trading Statement

Company announcement
No. 19/2024

Aquaporin A/S
Nymøllevej 78
DK-2800 Kongens Lyngby
aquaporin.com
Company registration no.: DK28315694
 

Copenhagen, Denmark, November 14, 2024 – Aquaporin A/S (ticker: AQP) (“Aquaporin” or the “Company”), an innovative water technology company dedicated to rethinking water filtration with biotechnology, today announces the Company's Q3 2024 Trading Statement for the period January 1-September 30, 2024.

“Despite the recent setback in our revenue guidance, we have achieved several important targets so far in 2024. We have increased the number of Industrial Water customers, achieved all development milestones in Forward Osmosis, and advanced the development of a high protein density coating – Aquaporin Inside® Generation 2,” says Matt Boczkowski, Chief Executive Officer at Aquaporin.

Financial highlights as of September 30, 2024

•         Revenue for the period January 1-September 30, 2024 amounted to DKK 32.8 million (DKK 31.3 million for the same period in 2023).

•         For the third quarter of 2024, revenue amounted to DKK 3.6 million (DKK 11.1 million for the same period in 2023). The decrease compared to last year was primarily driven by a significantly lower-than-expected revenue inflow from Aquaporin’s largest Drinking Water customer, a slower conversion of membrane customers from testing to commercial, and the delay of a key Forward Osmosis project into 2025. Industrial Water revenue increased to DKK 2.1 million in Q3 2024 (DKK 0.5 million for the same period in 2023).

•         EBIT (before special items) improved to a loss of DKK 20.3 million in Q3 2024 (a loss of DKK 25.1 million for the same period in 2023).

•         Gross profit margin for the period remains in line with the guidance of 30-35%.

•         As of September 30, 2024, cash and cash equivalents were DKK 93.1 million (DKK 22.7 million as of September 2023). The Company completed a capital increase through a Rights Issue in the amount of DKK 172.4 million in April 2024

•         The Company maintains the financial guidance for the full year 2024 as communicated on October 8, 2024: Revenue of DKK 40-45 million; gross profit of 30-35%; EBIT (before special items) a loss of DKK 90 million.

•         For 2025, the Company expects to be back on its growth track, operating with a cost base lower than the cost base expected for 2024.

Business highlights Q3 2024

•         Entered strategic distribution collaboration with industry leader Brenntag for APAC and Turkey, marking a cornerstone partnership for significantly expanding Aquaporin’s reach in the industrial elements business.

•         Launched the CLEAR Series in China, introducing five brackish water reverse osmosis elements, designed for industry, municipalities, and businesses to increase energy-savings in water treatment.

•         Achieved development milestones with E. & J. Gallo Winery, continuing our successful Joint Development Project.

•         Opened a new polymer lab at Aquaporin HQ to further drive the development of the next generation Aquaporin protein technology.

Subsequent events

•         Announced the largest to-date individual order of Aquaporin’s innovative CLEAR elements to a municipal drinking water treatment plant project in Central Asia.

•         Announced recent laboratory advancements, showing promising progress in our membrane performance, with the potential to increase energy efficiency with the Next Generation Aquaporin Inside® technology

•         Expanded partnership with Brenntag for China with the signature of a Letter of Intent during the 7th China International Import Expo in Shanghai.

•         Aquaporin Space Alliance, a joint venture between Aquaporin and Danish Aerospace Company (DAC), signed a new contract with European Space Agency (ESA) for the development of a water recovery system for use in space.

Commentary Q3 2024

The period ending September 30, 2024, has included a number of important milestones for Aquaporin. We entered into a strategic partnership with industry leader within chemical and ingredients distribution, Brenntag, for Asia Pacific and Turkey for our CLEAR product series. With this partnership, Aquaporin will be able to deliver a growing number of industrial water membrane elements to customers in the water and wastewater space.

Throughout the course of the year, Aquaporin has successfully progressed the development project with E. & J. Gallo Winery, achieving several milestones towards an innovative FO solution for grape juice and wine concentration. In addition, Aquaporin opened a new polymer lab in Denmark to help advance the development of our next generation Aquaporin Inside® protein technology. Recent laboratory results show the promising potential of the Aquaporin Inside® Generation 2 formulation. These developments are central to the development of our Next Generation Aquaporin Inside® technology, designed to improve energy efficiency and overall performance of our membrane products. Aquaporin has filed a patent application to secure this innovative technology, which is at the foundation of our future membrane manufacturing.

On October 8, 2024, Aquaporin lowered its revenue guidance for 2024. The changed guidance was caused by unforeseen changes in planned orders from our main Drinking Water customer in China as well as a customer delay in an FO project into 2025. Cost control measures taken in 2024 allowed the Company to downgrade EBIT only to a lesser extent.

At the end of October, Aquaporin Space Alliance entered into a new contract with DAC and ESA for the development of a water recovery system for use in space, as Aquaporin continues its work with ESA for the General Support Technology Program, which covers the development of a full-ground prototype of a future space water purification system.

For further information, please contact:

Matt Boczkowski, Chief Executive Officer

Klaus Juhl Wulff, Chief Financial Officer

+45 53 55 55 19, investorrelations@aquaporin.com

About Aquaporin A/S
Aquaporin is an innovative water technology company with operations in Denmark (HQ), Singapore, Turkey, the United States, and China. We are committed to rethinking water filtration with biotechnology to solve global water challenges. By combining three disciplines from the world of natural sciences: biology, chemistry, and physics, we have created the unique, nature-inspired Aquaporin Inside® technology which we embed into all our membranes and solutions. Our technology is based on Nobel Prize-winning research and is used to clean and reuse water in industries, in our homes, and even by NASA in space. We work with customers and partners around the globe to responsibly treat industrial wastewater, concentrate food and beverage products in a natural way, and enhance drinking water quality and accessibility.

Forward-looking statements

Matters discussed in this company announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and that can be identified by words such as “believe”, “expect”, “anticipate”, “intend”, “estimate”, “will”, “may”, “continue”, “should”, and similar expressions, as well as other statements regarding future events or prospects. Specifically, this company announcement includes information with respect to projections, estimates, and targets that also constitute forward-looking statements. The forward-looking statements in this company announcement are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies, and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, and other important factors include, among others: Limited experience in commercialization of the Company’s products, failure to successfully implement strategies, dependence on third parties for manufacturing certain product components and the supply of certain raw materials,  manufacturing disruptions, strategic collaboration, protection of the Company’s intellectual property rights and other risks disclosed in Aquaporin’s annual reports, prospectuses and company announcements. Such risks, uncertainties, contingencies, and other important factors could cause actual events to differ materially from the expectations, projections, estimates, and targets expressed or implied in this company announcement by such forward-looking statements. The information, opinions, and forward-looking statements contained in this company announcement speak only as at its date and are subject to change without notice. Aquaporin expressly disclaims any obligation to update or revise any forward-looking statements, except as required by law.