Eco Wave Power Global AB (publ) (NASDAQ:WAVE) Q1 2024 Earnings Call Transcript May 17, 2024 9:00 AM ET
Company Participants
Aharon Yehuda – Chief Financial Officer
Inna Braverman – Chief Executive Officer
Operator
Greetings. Welcome to the Eco Wave Power’s First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note this conference is being recorded.
I will now turn the conference over to your host, Aharon Yehuda, CFO of Eco Wave Power. You may begin.
Aharon Yehuda
Thank you all for taking the time and joining us this morning for this conference call. In the first quarter of 2024, Eco Wave Power continued in its cost reduction strategy while accelerating its progress with existing and planned projects. In Q1 2024, we achieved a 3.5% cost reduction compared to the same period of in 2023. This cost reduction joins the cost reduction presented for the whole year of 2023, which amounted to a total of 26%.
Now turning to our detailed cost structure, our operating cost decreased from $683,000 in Q1 2023 to $659,000 in Q1 2024. We can see specific decrease in R&D costs, which decreased from $210,000 in Q1 2023 to $177,000 in Q1 2024. The R&D expenses are expected to increase in the next quarter due to adding a VP R&D to lead our engineering team, which is meant to drive the company’s ability to handle new orders from clients and existing projects.
Sales and marketing costs reduced from $76,000 in Q1 2023 to $65,000 in Q1 2024. Also during Q1 of 2024, we recorded net financial income of $132,000 versus $160,000 in Q1 2023. The company ended the period with $7.96 million in cash and cash equivalents and in short-term bank deposits. We look forward to execute its plans for projects in the US and in Portugal, which Inna Braverman, our CEO, will provide you with further info about.
I will now turn the conference over to Inna Braverman, CEO of Eco Wave Power. Inna, you may start.
Inna Braverman
Thank you, Aharon. So over the past month, an array of ETFs dedicated to key aspects of energy transition from renewable energy generation to smart grid management have all posted positive returns. We can see that Eco Wave Power stock followed a similar pattern with the rising of WAVE stock. During this period, WAVE stock outperformed the Global Alternative Energy index by showing growth of 136.4% in the last three months. We believe that what enabled the growth and rising interest in the WAVE stock is the fact that the company delivered on its promises and reached significant progress during each quarter while cutting down its net loss and operational expenses and boosting revenues.
As Aharon mentioned in Q1, we were able to keep the low level of expenses and thus demonstrate our resilience by decreasing our operating expenses by 3.5% compared to Q1 2023 and in the period with $7.96 million in cash and short-term bank deposits. In the same time, we were able to achieve progress in all the company’s projects with key improvements in the operational results of 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 US 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 details, in Israel, The EWP-EDF One Project has been delivering clean electricity from the waves to the Israeli national electrical grid since its connection to the grid in the end of 2023. An opening ceremony for the project will be held as soon as the company deems 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 results from the project are encouraging as we can see a month-to-month improvement, both in terms of energy generation and in terms of significant decrease in downtime for the power station. Downtime has decreased from 35% in January 2024 to 26% in February to 13.4% in March and only 3.6% in April 2024. In addition, the company was able to get closer to its energy generation targets by 8%.
As to the Port of Los Angeles, in January 2024, we announced that we signed a strategic investment agreement with Shell MRE for the implementation of our first US based wave energy project, while in the same time also moving forward with licensing process. We submitted our comprehensive project engineering plans to the port authorities and have requested the final licenses from the Port of Los Angeles and the Army Corps of Engineers. The last opinion that we submitted is an opinion saying that the sites where we’re installing is not a historic site, which was requested by the Army Corps and now we’re waiting further updates. Due to the rising interest and opportunity that we see in the US market, we also conducted a comprehensive feasibility study with Shell MRE aimed at identifying the best locations for commercial onshore wave energy station along the US coastline and worldwide. The three-month, in-depth feasibility study which now has been completed, showed favorable conditions for clean energy generation in 77 sites in the US compatible for the installation of Eco Wave Power technology.
In Portugal, we received the final approval necessary for the commencement of the construction works of our first megawatt scale project in Porto from APDL Port Authority. As a result, we have issued a performance bond, a bank guarantee basically, meant to solidify our commitment for the construction of the first commercial wave energy power station within a two years period. We believe this will be the first wave energy project in the world to show significant energy production from the power of the waves. During Q1 2024, we finalized the construction plan of the energy conversion units and held an official kickoff meeting with the port and the architect of the site. The next steps include finalizing detailed construction plans for the whole 1 megawatt power plant, including the floaters, to be followed by official visit of Eco Wave Powers engineering team and commencing 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 wave energy developer and serve as a significant milestone toward the commercialization of wave energy globally.
We have also reinforced our engineering team and are planning on establishing a US-based sales and business development team to enable the company to enter deals for turnkey wave energy projects, which, we believe, will in turn significantly boost the company’s revenues to be added to revenues that the company is already generating from feasibility studies and other related engineering services. The expansion of the engineering team in Israel and the new BDN sales team in the US will require some time. However, we believe that such an enhanced company structure will lead to positive financial results and accelerated project delivery timeline.
I would like to finish by thanking all our existing shareholders and the new ones that joined us in the recent months and reiterate our excitement about the new deal with Shell MRE and the progress with all our projects and update you that Eco Wave Power is still working towards receiving an approval from SFSA for a buyback of up to 10% of our shares.
Thank you very much.
Operator
Thank you very much. This does conclude today’s conference and you may now disconnect your phone lines. Thank you for your participation.
Question-and-Answer Session
End of Q&A
