VivoPower International PLC Reports Financial Results for the Six Months Ended December 31, 2022

Tembo distribution partner network scale considerably expanded; additional agreements signed adding 5,000+ EV conversion kits to commitment and order book pipeline

First version of next generation EUV (Electric Utility Vehicle) conversion kit ready and subsequent first order received from Accès

Revenue, GP and EBITDA for half-year to December 31, 2022, decreased as materially adverse weather in Australia affected Aevitas Solar

Net After Tax Loss flat due to increased Tembo R&D capex focus and more control over variable payroll expense

Cash balance at December 31, 2022, increased to $3.2 million

LONDON, Feb. 24, 2023 (GLOBE NEWSWIRE) -- VivoPower International PLC (Nasdaq: VVPR, the “Company” or “VivoPower”) today announced its half year results for the six months ended December 31, 2022.

Highlights for the half year ended December 31, 2022

• Half year group revenue from continuing operations declined 23% year-on-year (“y-o-y”) to $8.7 million, primarily due to fewer solar projects being executed at Aevitas Solar, with ongoing skills shortages in the Australian electrical and building & construction industry causing difficulties in resourcing projects to meet demand, as well as a further decline in the Australian dollar versus the US dollar. Excluding the effect of movements in the AUD/USD exchange rate, half year group revenue from continuing operations declined by 17%.
• Half year group gross loss from continuing operations was down y-o-y to ($3.6) million from ($0.5) million gross loss in the previous corresponding period for Fiscal Year 2022 (“FY22”) due to unseasonal wet weather conditions in Australia (as a result of the La Niña weather phenomenon) which delayed the ability to progress works. The loss recognized during the period for the Edenvale solar farm in Aevitas Solar amounted to $3.6 million. Excluding this one-off loss, group gross profit was ($0.1) million.
• Half year net after-tax loss from continuing operations of ($10.4) million and earnings per share ("EPS") of ($0.44) per share, flat from a ($10.3) million loss and ($0.51) per share in the previous corresponding period for FY22. Half year adjusted net after-tax loss of ($6.7) million and adjusted EPS of ($0.28) per share narrowed from a ($8.7) million loss and ($0.43) per share respectively in the previous corresponding period for FY22.
• Half year underlying group adjusted EBITDA loss from continuing operations was ($7.5) million, representing a decline versus ($5.6) million EBITDA loss from continuing operations in the previous corresponding period for FY22. Adjusted EBITDA loss from continuing operations excluding one-off Edenvale solar project weather-driven cost overruns was ($3.9) million, compared to an adjusted EBITDA loss of ($4.5) million in the previous corresponding period for FY22 excluding one-off Bluegrass solar project COVID-19 related overruns.
• Group cash levels increased from $1.3 million at June 30, 2022 to $3.2 million at December 31, 2022 (excluding restricted cash balances, bank guarantee deposits and other cash equivalents) having secured further bridge financing from its major shareholder, AWN Holdings Limited (“AWN”) of $3.0 million, which will be used for Tembo’s growth, including the engineering, assembly and delivery of conversion kits.
• Post December 31, 2022, AWN agreed to amend the loan and bridge financing facilities terms so as to extend the repayment date by 18 months to 1 April 2025.
• Tembo signed new commercial agreements during the period including a definitive agreement with ETC Mauritius to distribute 4,000 kits in Kenya.
• VivoPower was recognized by B Lab United Kingdom as one of the Best for the World (BFTW) for Governance in 2022 and by Real Leaders as one of the top 200 global impact companies in the 2023 Real Leaders Impact Awards for the 3^rd year in a row.

“Our half year results reflect a period where we have been negatively impacted by unexpected and prolonged adverse weather conditions and skills shortages in Australia, where the majority of our revenue, gross profit and earnings are generated. These factors have resulted in significant delays in both projects and deliveries, resulting in gross profit being below budget. This includes a one-off loss of $3.6m at the gross profit level, attributable to the Edenvale solar project in Australia, which became unprofitable directly as a consequence of extreme weather conditions and damage to completed works, requiring remediation. However, Edenvale is now on track to conclude by the end of February 2023.

“Whilst plans for Aevitas were curtailed over the past 6 months, Tembo was able to make significant commercial and operational progress. On the commercial side, Tembo signed various agreements which pushed its order and commitment kits pipeline past the 10,000 kits mark. On the operational side, the first version of the next generation EUV conversion kit was fully integrated into a vehicle in December. This vehicle has now travelled more than 400km without trouble as the team focuses on preparing the ramp-up in production required to meet the demand from our existing partners and customers. Post balance date, it was very pleasing to have received a first material order of our next generation kits from our key partner in Canada, Accès. On the Caret front, based on renewed interest, we are optimistic on executing with the right partners to achieve our Power-to-X strategy for our US solar projects.

“In light of the upcoming production ramp up for Tembo, we have been recruiting selectively to ensure we scale sustainably, with quality and experienced talent readily available on the market, especially in the EV sector. Most recently, Phil Barker joined as our Head of Engineering for Tembo. We have also taken the opportunity during the EV winter where other EV companies are laying off staff to identify and recruit top talent. As before, the VivoPower team remains resolute as a team focussed on achieving its medium to long term strategic, financial and impact goals,” said Kevin Chin, VivoPower’s Executive Chairman and Chief Executive Officer.

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 for Continuing Operations to IFRS Financial Measures” and “Reconciliation of Adjusted (Underlying) Net After-Tax Loss for Continuing Operations 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 for Continuing Operations to IFRS Financial Measures

Note: (1) Non-recurring cost of sales are related to one-off loss on Edenvale solar farm in FY23 and Bluegrass project in FY22.

Reconciliation of Adjusted (Underlying) Net After-Tax Loss for Continuing Operations and Adjusted (Underlying) EPS to IFRS Financial Measures 

Note: (1) Non-recurring cost of sales are related to one-off loss on Edenvale solar farm in FY23 and Bluegrass project in FY22.

About VivoPower

VivoPower is an award-winning global sustainable energy solutions B Corporation company focused on electric solutions for customised and ruggedised fleet applications, battery and microgrids, solar and critical power technology and services. The Company's core purpose is to provide its customers with turnkey decarbonisation solutions that enable them to move toward net-zero carbon status. VivoPower has operations and personnel in Australia, Canada, the Netherlands, the United Kingdom, the United States, the Philippines and the United Arab Emirates.

Forward-Looking Statements

This communication includes certain statements that may constitute “forward-looking statements” for purposes of the U.S. federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include, for example, statements about the benefits of the events or transactions described in this communication and the expected returns therefrom. These statements are based on VivoPower’s management’s current expectations or beliefs and are subject to risk, uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operation of VivoPower’s business. These risks, uncertainties and contingencies include changes in business conditions, fluctuations in customer demand, changes in accounting interpretations, management of rapid growth, intensity of competition from other providers of products and services, changes in general economic conditions, geopolitical events and regulatory changes and other factors set forth in VivoPower’s filings with the United States Securities and Exchange Commission. The information set forth herein should be read in light of such risks. VivoPower is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of new information, future events, changes in assumptions or otherwise.

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