Hørsholm, Denmark,August 22, 2023- Bawat Water Technologies AB (BAWAT) today announces its Q2 Report for 2023. The report is available on Bawat's website (investor.bawat.com)

BAWAT is a leading supplier of sustainable ballast water treatment technology and services. BAWAT was listed on Nasdaq First North Premier Growth Market in Stockholm in March 2022.
 

• Order intake in the second quarter was SEK 11.21m.
• The Gross Profit in the quarter was reported at 35.0%, which raises the H1 Gross profit to 28.3%, in line with the long-term projection of 30% pending product mix.
• Sales in Q2 amounted to SEK 4.14m.
• Fleet order for European customer for 10+ vessels received.
• Quoting activity for BaaS (Ballast as a Service) is on the increase which also was reflected in first long term committed contract (12-18 months service) with a US customer through company Freedom Ballast which came into effect in the quarter.
• Bawat has signed a Term Sheet agreement with Damen Green Solution whereby the parties are aiming to establish a 50/50 Joint Venture focusing on the assembly and sales of mobile BWMS under the brand name `Invasave powered by Bawat'.
• NEFCO (Nordic Environment Finance Corporation) gave final approval for a finance commitment for SEK 25m to be disbursed in 2023/2024 and subject to 1:1 equity match from Shareholders. Subsequently Bawat has carried out a directed share issue raising SEK 18.8m to more than match the first tranche of NEFCO loan of EUR 1.3m.
• The Bawat port-based patent received Intention to Grant from the European Patent authorities in May and a few weeks later in June received the equivalent Notice of Allowance from the US authorities.
• The Order Intake for the quarter supports a repeated guidance for the year in the SEK 40-60m range, although the influence from mobile BWMS orders will still have large impact on final outcome in positive or negative direction.

• Ship installations USD 3bn
• Mobile installations USD 2bn (total market)
• Ballast-water-as-a-Service (BaaS) USD 5bn

FINANCIAL KEY FIGURES Q2 2023

SEK '1000 Q2 2023 H1 2023 H1 2022
Order intake 11.212 20.557 9.286
Sales 4.135 8.294 10.162
Gross Profit 1.447 2.346 504
Gross Profit % 35,0% 28,3% 5,0%
EBITDA* -5.944 -12.601 -11.948
Result for the period -11.487 -21.708 -23.807
Earnings per share -0,23 -0,48 -0,60
Cash flow from operations** -2.038 -9.267 -10.141
Net working capital -3.450 -3.450 -6.284
Equity ratio % 6,9% 6,9% 38%

*In addition to this, Capital raise and other related non-recurrent items SEK 1,0m (SEK 6.6m in H1 2022)
**In addition to this, Capital raise and other related non-recurrent items SEK 4,0m (SEK 8.1m in H1 2022)

Marcus P. Hummer, CEO comments on the developments in the second quarter: "The quarter was influenced by a combination of operational and financing activities and has multiple positive achievements to report on. The Term Sheet agreement with Damen Green Solutions targeting a Joint Venture for the assembly and sales of mobile units does not only validate Bawat technology and experience in mobile BWMS systems, but also gives us quality in scaling and execution from the global Damen yard network. We are pleased that a global player like Damen Green Solutions will close its own mobile BWMS program `InvaSave' and join forces with Bawat in a combined effort branded as `InvaSave powered by Bawat'.

We closed a large fleet order for ship installations in the quarter, adding both significant volume to our order book, but also expanding our reference list. The fleet order is for 10+ Vessels and will be delivered in 2023 and 2024. Overall, we are delivering with quality to our customers on our BWMS solutions and our half year gross profit margin of 28.3% steadily increases towards our long-term projection of 30%. Quoting activity is still high though Q2 dropped from record levels in Q1 and Q4 2022 to a level above SEK 55m in quotes for the quarter.

We commenced delivering on the first long term service contract for BaaS in America through company Freedom Ballast. The contract is between 12-18 months and marks the first long term commitment from a customer of having need for both mobile BWMS service as well as stand by service for a vessel operating in the Gulf of Mexico. In general, we are experiencing a steady increase in request for BaaS both in the USA but also increasingly so in Western Europe, and thus activity during the quarter has also been towards identifying potential service partners in Western Europe for BaaS activities.

From a financing point of view, we are pleased that we have been able to secure needed funding for the onwards growth and operation in a challenging financial market. However, once again Bawat shows that there is a strong belief from both current and new shareholders in the long-term perspectives in its technology and business model. The financing package is a loan facility from NEFCO (Nordic Environment Financing Corporation) of SEK 25m that has to be matched by equity in 1:1. Bawat has thus carried out a directed share issue raising SEK 18.8m to more than match first tranche of NEFCO loan of EUR 1.3m. The directed share issue was conducted at a share price of 1.60 SEK/share. The net-proceeds from a full SEK 25m equity raise and the full NEFCO financing are considered to be sufficient until Bawat reaches a positive cash flow from its operation.

Order intake of SEK 11.2m supports our full year guidance of SEK 40-60m. For this overall guidance, the positive or negative impact including timing of mobile orders will to a large extent influence Order Intake for year end and thus guidance. We expect that BaaS order intake start to have a gradual and positive value from H2 of 2023. As BaaS contractually is secured through part owned companies, the effect on the total Bawat P&L will be reflected thereof. However, the consolidated margin is expected to be above 30% as margin consists of both hardware sales of mobile units as well as margin from BaaS.

Last but not least, did we receive during the quarter, from both the US and European patent authorities Intention to grant (Europe) and Notice of Allowance (USA) on our mobile systems. This further secures IP rights to our innovative approach to ballast water handling". We have now 4 patents issued in different jurisdictions in the world and 2 patents in process with relevant patent authorities.

Find the full Q2 2023 report here: https://investor.bawat.com/company-reports/
FORWARD-LOOKING STATEMENTS

This announcement contains forward-looking statements. Words such as `believe', `expect', `may', `will', `plan', `strategy', `prospect', `foresee', `estimate', `project', `anticipate', `can', `intend', `outlook', `guidance', `target' and other words and terms of similar meaning in connection with any discussion of future operating or financial performance identify forward-looking statements. Statements regarding the future are subject to risks and uncertainties that may result in considerable deviations from the outlook set forth. Furthermore, some of these expectations are based on assumptions regarding future events which may prove incorrect.
FOR MORE INFORMATION, PLEASE CONTACT:

Investors & Media:

Marcus P. Hummer, CEO, E-mail: mph@BAWAT.com

John B. Henriksen, CFO, E-mail jbh@BAWAT.com
 

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ca@skmg.se

This press release constitutes inside information that Bawat Water Technologies AB is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was sent for publication, through the agency of the contact persons set out above, at the time stated by the Company's news distributor, Cision, at the publication of this press release on August 22nd, 2023.

For further information about Bawat Water Technologies AB, please contact above.

About Bawat
The development of an entirely new approach to ballast water treatment utilizing onboard waste heat to treat ballast water led to the founding of Bawat in 2011. A ballast water treatment system avoids disposal of untreated water in seas and harbors.

Bawat's BWMS is a system that is simple, cost-effective, and sustainable, build on a zero environmental impact, using standard marine components. No filters, no chemicals no UV. And is the first to market a USCG/IMO Type Approval BWMS that uses pasteurization to treat ballast water in a one-pass process.

• Ship BWMS (https://www.bawat.com/ship-bwms/) for Retrofit and New Builds
• Mobile containerized solution (https://www.bawat.com/mobile-bwms/) for multiple vessel usage in a port, on a ship or for rigs
• Ballast Water as a Service (https://www.bawat.com/ballast-water-treatment-as-a-service/ballast-water-treatment-as-a-service/) for contingency services in ports

Bawat is an engineer-driven company that is rooted in the tradition of Danish maritime innovation and with a deep maritime insight: www.bawat.com.