Eco Wave Power Global AB (publishing) (NASDAQ:WAVE) First Quarter 2024 Earnings Call Transcript May 17, 2024 at 9:00 a.m. ET
Participating company
Aharon Yehuda – Chief Financial Officer
Inna Braverman – Managing Director
Operator
Greetings. Welcome to Eco Wave Power’s First Quarter 2024 Earnings Conference Call. Currently, all participants are in listen-only mode. (Operator Instructions) Please note that this conference is being recorded.
I will now turn the floor over to your host, Aharon Yehuda, CFO of Eco Wave Power. You can start.
Aharon Yehuda
Thank you all for taking the time to join us this morning for this conference call. In the first quarter of 2024, Eco Wave Power continued its cost reduction strategy while accelerating the progress of existing and planned projects. In the first quarter of 2024, we achieved a cost reduction of 3.5% compared to the same period of 2023. This cost reduction is in line with the cost reduction presented for the full year 2023, which amounts to a total of 26%.
Moving on to our detailed cost structure, our operating costs decreased from $683,000 in Q1 2023 to $659,000 in Q1 2024. We can see a specific decrease in R&D costs, which decreased by $210,000. $ in the first quarter of 2023 to $177,000 in the first quarter of 2024. R&D spending is expected. will increase in the next quarter due to the addition of a VP R&D to lead our engineering team, which aims to strengthen the company’s ability to manage new customer orders and existing projects.
Sales and marketing expenses were reduced from $76,000 in the first quarter of 2023 to $65,000 in the first quarter of 2024. Also during the first quarter of 2024, we recorded net financial income of $132,000 from $160,000 in the first quarter of 2023. The company ended the period with $7.96 million in cash and cash equivalents and short-term bank deposits. We look forward to executing its project plans in the United States and in Portugal, about which Inna Braverman, our CEO, will provide you with further information.
I will now turn the floor over to Inna Braverman, CEO of Eco Wave Power. Inna, you can start.
Inna Braverman
Thanks, Aaron. So, over the past month, a table ETFs dedicated to key aspects of the energy transition, from renewable energy production to smart grid management, have all recorded positive returns. We can see that Eco Wave Power stock followed a similar pattern with WAVE stock rising. During this period, WAVE stock has outperformed the Global Alternative Energy Index by posting growth of 136.4% over the past three months. We believe what has enabled the growth and increasing interest in WAVE stock is the fact that the company has delivered on its promises and made significant progress during each quarter while reducing its net loss and operating expenses and by increasing their income.
As Aharon mentioned in the first quarter, we were able to maintain the low level of expenses and thus demonstrate our resilience by decreasing our operating expenses by 3.5% compared to the first quarter of 2023 and over the period with 7.96 million dollars in cash and short-term bank deposits. At the same time, we were able to make progress across all of the company’s projects with key improvements in operational results for the EWP-EDF One project in the Port of Jaffa, Israel; submission of final licensing documents for the installation of our first project in the United States in the Port of Los Angeles; and moving forward with our megawatt-scale project in the city of Porto in Portugal.
And a little more detail, in Israel, the EWP-EDF One project has been providing clean electricity from waves to the Israeli national power grid since connecting to the grid in late 2023. A project opening ceremony will take place. as soon as the company believes that the geopolitical situation in Israel has improved. Eco Wave Power and EDF Renewables IL have started an analysis of the first set of results from January 2024 to April 2024. The project results are encouraging as we can see an improvement from month to month, both in terms of production of energy and in terms of a significant reduction in plant downtime. Downtime fell from 35% in January 2024 to 26% in February, to 13.4% in March and to just 3.6% in April 2024. Additionally, the company was able to get closer to 8%. of its energy production objectives.
Regarding the Port of Los Angeles, in January 2024 we announced the signing of a strategic investment agreement with Shell MRE to implement our first US-based wave energy project, all continuing the authorization process. We have submitted our complete project engineering plans to the Port Authority and requested final licenses from the Port of Los Angeles and the Army Corps of Engineers. The last notice we submitted is a notice that the site where we are installing is not a historic site, which was requested by the Army Corps and we are now awaiting further updates. Due to the growing interest and opportunities we are seeing in the US market, we have also conducted a comprehensive feasibility study with Shell MRE aimed at identifying the best locations for a commercial onshore wave energy station along the coast American and around the world. The three-month in-depth feasibility study, now completed, showed favorable conditions for clean energy production at 77 sites in the United States, compatible with the installation of Eco Wave Power technology.
In Portugal, we received the necessary final approval for the start of construction work on our first megawatt-scale project in Porto from the APDL port authority. As a result, we have issued a performance bond, essentially a bank guarantee, intended to consolidate our commitment to construct the first commercial wave power plant within two years. We believe this will be the first wave energy project in the world to demonstrate significant energy production through wave power. During the first quarter of 2024, we finalized the construction plan for the energy conversion units and held an official kick-off meeting with the port and the site architect. Next steps include finalizing detailed construction plans for the entire 1 megawatt power plant, including floats, which will be followed by an official visit from the Eco Wave Powers engineering team and the start of actual construction, which is expected to take up to 24 months. The Portuguese project is expected to be Eco Wave Power’s first megawatt-scale project, which we believe will position Eco Wave Power as a leading developer of wave energy and will be an important step towards the commercialization of wave energy. wave energy on a global scale.
We have also strengthened our engineering team and plan to create a US-based sales and business development team to enable the company to enter into agreements for turnkey wave energy projects, which, in our opinion, will significantly increase the company’s revenue. to the revenue the company already generates through feasibility studies and other related engineering services. Expanding the engineering team in Israel and BDN’s new sales team in the United States will take time. However, we believe that such an improved corporate structure will lead to positive financial results and an accelerated project delivery schedule.
I would like to end by thanking all our existing shareholders and the new ones who have joined us over the last few months and reiterate our enthusiasm regarding the new agreement with Shell MRE and the progress of all our projects and inform you that Eco Wave Power is still operating . with a view to receiving approval from the SFSA for a repurchase of up to 10% of our shares.
Thank you so much.
Operator
Thank you so much. This concludes today’s conference and you can now disconnect your phone lines. Thank you for your participation.
Question and answer session
End of questions and answers
