Earnings call transcript: Ocean Sun highlights solar innovation in Q1 2025

Ocean Sun, known for its cutting-edge floating solar technology, reported its financial performance for the first quarter of 2025. According to InvestingPro analysis, the company maintains a strong financial foundation with more cash than debt on its balance sheet. Despite a net loss, Ocean Sun remains optimistic about its future projects and market expansion, with analysts projecting sales growth and profitability in the current year.

Key Takeaways

• Ocean Sun reported a Q1 operating income of 1.5 million NOK.
• The company ended the quarter with a cash position of 24.3 million NOK.
• New hires include a Chief Commercial Officer and Chief Product Officer.
• Ongoing projects in the Maldives and feasibility studies in Taiwan and Qatar.
• Strong interest in floating solar technology in markets with limited land space.

Company Performance

Ocean Sun’s performance in Q1 2025 was highlighted by its robust cash position, with a current ratio of 4.21x indicating strong liquidity. Despite a net loss of approximately 5 million NOK, the company described its financial performance as "as expected," maintaining moderate cost levels. The company achieved impressive revenue growth of 128.77% over the last twelve months, while maintaining a healthy gross profit margin of 47.82%. The introduction of new key hires aims to bolster its commercial and product development capabilities.

Financial Highlights

• Q1 Operating Income: 1.5 million NOK
• Q1 Net Result: -5 million NOK
• Cash Position at Quarter End: 24.3 million NOK

Outlook & Guidance

Ocean Sun is focusing on expanding its project pipeline with expected installations in Taiwan by Q2 2025. The company is also enhancing its technology, particularly in wave handling and module cleaning. Expansion efforts are underway in China, India, and the Middle East, where Ocean Sun sees significant market potential.

Executive Commentary

Christian Torval, CEO, emphasized the company’s vision to become the world-leading technology supplier for floating solar systems. He noted the momentum towards more projects and increased activity. Carl, CFO, expressed confidence in the company’s cash level, highlighting its importance for future growth.

Risks and Challenges

• Supply chain issues could impact project timelines.
• Market saturation in key regions might limit growth opportunities.
• Macroeconomic pressures, such as currency fluctuations, could affect financial performance.
• The competitive landscape in the solar technology sector presents ongoing challenges.
• Regulatory changes in target markets could influence project feasibility.

Ocean Sun’s Q1 2025 earnings call highlighted its continued innovation and strategic expansion efforts in the floating solar market. With a strong cash position and a focus on technological advancements, the company is poised to capitalize on emerging market opportunities. For deeper insights into Ocean Sun’s financial health and growth potential, InvestingPro subscribers can access additional ProTips and comprehensive analysis, including detailed valuation metrics and growth forecasts.

Full transcript - Ocean Sun As (OSUN) Q1 2025:

Christian Torval, CEO, OceanSense: Welcome to the presentation of OceanSense first quarter results live from InterSolar in Munich. My name is Christian Torval, and I’m the CEO of OceanSense. We have a little talk to talk about, so let’s get started. Today, as always, we will first talk about OceanSun in brief before we go through the highlighted developments and project developments.

And then Karn will present the financials. Our vision is that OceanSun shall be the world leading technology supplier for floating solar systems, a vision we work towards every day. OceanSun’s proprietary technology is the world’s best FPV technology. We have low CapEx due to the lowest material use, fast and easy installation, and lean transportation. High efficiency through water cooled modules and the seaworthiness.

And as you see in the picture behind, this is the ongoing installation or is the project in The Maldives, which segues nicely into this slide where we’re finally under construction at Sunniva Secret in Maldives, and we are really excited about the progress on the beach there. This two megawatt project is a milestone for OceanSun and for the floating solar industry as a whole. The construction brings some really interesting challenges. This space is limited, and we need to pipe weld piping on one island and then move it several kilometers to the final position. This work is also largely manual because you can’t really have large machinery and cranes on an island that doesn’t have roads.

We expect the project to be completed in July, so everyone should stay tuned to some fantastic pictures and videos of this groundbreaking project. We have delivered a pre feasibility study for a demonstration system in Taiwan, and we expect this study to result in a new installation during the second quarter of twenty twenty five. As an island, Taiwan has limited space available for onshore solar, so the potential for coastal floating solar is very large. We’re excited to see the progress and will have lots of opportunities and likely challenges in the Taiwanese market. The Qatar feasibility study we won, we’ll see further announcements later.

It is a good opportunity to learn and prepare for deployment in The Middle East in general. The region is known for, great installation, but also a lot of sand soiling. So this is the challenge we’re looking to overcome through innovative solutions, and this is also part of the feasibility study. Our new CCO, Kristin Husebin Moik, has been with us for a month now. Doing great, and we’re thrilled to have her on our team.

You can meet her here at this week. And then, lastly, our new CPO, David Knitsen, has now been with us for six months and is already progressed our technology substantially. In regards to modeling the boundaries conditions of the waves that we can handle, helping us define what projects we can sell commercially. He’s also been working a lot on an automatic cleaning solution for our system so that we don’t only have the coolest modules in the industry, but also the cleanest. Meanwhile, he’s taken all the project learnings we have into the new product development process and creating exciting new opportunities for us and for technology.

So we’re really happy to have David on our team. In terms of projects, there are a few changes since last quarter. A couple of projects have moved from the pipeline to backlog, and we’re working hard. And now also with Kristin on board to continue the growth of the pipeline. We have, over the past couple of years, signed several MOUs with Indian partners.

Although these projects have taken longer than expected, there is definitely progress. There’s dialogue and interest in the OSHA solution. We are engaged in dialogue with the NHHP NHPC, Telta Power, Alert, and other strong partners who are planning to install pilot projects. India is a market we will be hearing a lot from in the coming months. So all in all, we are seeing a momentum in Ocean Sun towards more projects and more activity.

With the new team finally fully priced in place, greatly improved internal processes and focus, we are in high spirits and are excited to see what’s coming in the company in the next few quarters. With that, I will let Carl talk about the financials.

Carl, CFO, OceanSense: Thank you, Kristen. Very excited to be here. The financials in q one, we had an operating income of 1,500,000.0 kroner, which primarily consist of contribution projects. The results ended at approximately 5,000,000 NOK minus, which is as expected and with the moderate cost levels as expected as well. We also have cash flow that is largely driven by the results and the cash position by the end of the quarter of 24,300,000.0 NOK.

We are, of course, monitoring this closely, but we are also very confident with the cash level that we have, and we feel that we are in good control for the coming years. And with that, we open up for q and a. And as always, I will, read the questions behind the screen for Christian. Mhmm. And first question is, will there be any new projects in China?

Christian Torval, CEO, OceanSense: Yes. We still have our office in Shanghai headed by, institute Zhang Yi, and we’re actively engaged in, the market in China and, very positive to the outlooks there in the time to come. There is no announced projects there yet, but, we’re working hard in this event.

Carl, CFO, OceanSense: Great. Next question. How’s the crowd at Intelslare this year?

Christian Torval, CEO, OceanSense: The crowds at Intislar is great. There is a lot of interest in, floating solar in general, and our booth here at the Norwegian stand in Intislar has seen a lot of attraction. There is, not enough people here to to manage, to be honest, because we had so many people visiting, showing interest in floating solar. So it really shows how the PV industry is looking to floating solar and are very interested in learning about the ocean solution as an alternative technology to implement the.

Carl, CFO, OceanSense: With regards to the new technology updates, how big waves can you withstand, and what unique position do you get out of this?

Christian Torval, CEO, OceanSense: Yeah. So we have a strategy that is focused on the tier two markets. The tier two market is what we call large reservoirs and the near shore coastal installations. And what we can say now with the updated or the the new fundings and the boundaries, we are confident in pretty much all world’s postal nearshore locations, and they can handle both the wave height and the wavelength that will be thrown at us in the coastal areas around it.

Carl, CFO, OceanSense: Great. And then a follow-up question for that. With regards to the cleaning solution, how will you get the cleanest modules in the world?

Christian Torval, CEO, OceanSense: This is an ongoing project we are doing, that we will be sharing more about as we go. But the structure of Oxusan is flat. The modules are flat, so it’s in many ways like a living room floor. So we are looking to have not fully, but automatic cleaning of our modules.

Carl, CFO, OceanSense: And that was the last question.

Christian Torval, CEO, OceanSense: Okay. Well, then thank you very much for listening in, and looking forward to next presentation, I hope that we’ll have some good news for you coming up. Now we’ll get to work here at the stand against the slide and make sure that the whole TV industry knows about us and knows us. Thank you.

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