Welcome to Hexagon Composites second quarter and half-year results for 2020. My name is Karen Romer, and I'll be moderating the session. Today I will be introducing our CEO, Jon-Erik Engeset, as well as our CFO, David Bandele, and also our President of Purus, Morten Holum. They will be holding the presentation and will take you through the agenda up here. The company update and market review, the summary and group highlights, and financials, the outlook, and this will be followed by a Q&A. We ask you to go ahead and input your questions into the questions section or the chat function of the TapIn platform, if you've registered for this broadcast. Otherwise, you can just submit your question by sending it to ir@hexagongroup.com. These questions I'll moderate at the end of the session.
Before I turn this over to Jon-Erik Engeset, I would like to share with you a film which we've made to mark a very important milestone in our history, the 20th anniversary of our listing on the Oslo Stock Exchange. Please roll the film.
Good morning, everyone. Thank you for joining us this morning. As you've seen from the film, we are very proud of our 20 years history on the Oslo Stock Exchange. We are no less excited about the next 20 years and beyond, and not least very proud to represent the driving energy transformation vision that we are running Hexagon on. Even the COVID-19 situation, we think will actually stimulate our business, and I will revert to that. Before that, we have had 14 cases of infections within our sites. Fortunately, 11 have recovered, and the remaining three are currently recovering, no with serious symptoms. We have first-hand experience with this disease. Currently, we have no major supplier disruptions. Our customers have come back in production. As you will hear from David, we have had some delays in orders in Q2.
We should expect to also experience some disturbance in the third quarter. Altogether, we feel that the markets are coming back to normal, and we are looking forward to a stronger second half. As I touched on, there are many voices out there suggesting we should take this opportunity to drive energy transformation as a measure of recovering from the pandemic. The director of the International Energy Agency has proposed a very considerable program. He is suggesting to invest more than $1 trillion annually to create more than 9 million jobs each year. Last but not least, save 4.5 billion tons of carbon emissions. There's almost a competition now between regions and countries about who will launch the most ambitious green energy plans and hydrogen societies.
I would have liked to talk about each one of these, but I will highlight maybe the European Union, who on the 8th of July launched their hydrogen strategy. A very ambitious program, pledging to spend EUR 450 billion by 2030. In the first few years, it will concentrate on the infrastructure build-out, which is directly relevant for Hexagon businesses. Refueling stations, transportation solutions, et cetera. That will have to start immediately in order to reach those targets. Also, in California, the California Air Resources Board announced new ambitions back in June. They have stated an ambition to phase out carbon heavy-duty vehicles by 2050. Starting already from 2024, there will be imposed regulations that will require operators to have a certain portion of their fleets as zero-emission vehicles, especially concentrated around the large ports and other heavily dense areas.
We are addressing these opportunities now through our two strategic focus areas, g-mobility and e-mobility. We have solutions across this spectrum. Far, Hexagon's business is mainly in the g-mobility space. That is, we say, in the early maturity phase, with emphasis on early, because there is a lot of growth opportunities for us in the near years, but also long term. If anyone thinks that this is just a transition technology, they're wrong because especially the blending of renewable natural gas, biogas, is maybe the cleanest alternative of all. That is going to be part of also the long-term solution. We see that a number of customers are focusing on this solution at this stage. In the refuse industry, there is substantial investment in CNG, Compressed Natural Gas technologies.
Recently, we've seen a number of the distribution transport companies that have focused on this. UPS, of course, being a leader, they are stating that by next year, 50% of their fleet of CNG vehicles should have renewable natural gas. Also more recently, Amazon has announced their very ambitious plan to go zero emission by 2040. That said, for us, there is also a very exciting opportunity for e-mobility. We are addressing that opportunity through Hexagon Purus. Hexagon Purus was established as a separate business area last year. It is managed by Morten Holum. He joined us a couple of years ago, has been instrumental in developing the Hexagon Purus strategy, and assumed the role as president of that business area from March of this year. Morten, please, stage is yours.
Thank you very much, and good morning, everybody. I want to talk to you about some of the exciting things that we have ongoing in Hexagon Purus. Hexagon is, as you know, a world leader in Type IV cylinder technology. These cylinders are lightweight and extremely robust, so they can contain high pressure. This is important for the storage, the amount of storage you can have on the vehicle, and thus the vehicle range. They're also very durable, made from high-strength carbon fiber, and they're non-corrosive, using a polymer liner instead of metal. Our technological capabilities goes far beyond the cylinder. We make hydrogen systems, which you see on the upper left part of this picture, and also battery packs. Then we also make and design other vehicle subsystems and software and combine that with third-party components and do a complete vehicle integration.
In North America, we are a Tier 1 supplier in heavy-duty trucking. We also do then complete vehicle integration. We know how to combine all of these systems onto a truck and packaging all of that heavy equipment on in a weight optimal way. Hydrogen is still in the early technology development phase, but it's more than just theory. We have solutions on the road, and they actually work. Now I thought I would take you on a short tour of some of the solutions that we deliver. First, what you see on this picture is a Toyota fuel cell electric truck. We have worked with Toyota for a number of years on different systems. In the transit segment, this is a picture of a Solaris bus. We also work with Caetano in Europe and companies like New Flyer in North America.
On the passenger vehicle side, we work and have worked with several OEMs on their development programs. This particular one is a Mercedes-Benz GLC F-CELL, which is a plug-in hybrid fuel cell electric SUV. Distribution modules will be a very important business as the hydrogen economy grows, transporting hydrogen from the source to where it's being used. This particular module is our X-STORE. It stores energy at 500, or stores hydrogen at 500 bar, and can store more than one ton of hydrogen. It's the largest and the most efficient hydrogen distribution module worldwide. In the marine segment, here you see a picture of the Golden Gate Ferry. It's a combination of fuel cell and batteries, and it's the first commercial hydrogen vessel in the U.S. This will be launched in the San Francisco Bay later this year. We also work with rail applications.
This is a commuter train, hydrogen-powered. We delivered the tanks for this. It's running in Northern Germany, storing hydrogen at 950 bar pressure. We delivered the ground storage tanks to the first hydrogen refueling station in Western Canada. Our Type 4 tanks are actually ideal for ground storage applications since their cycling fatigue properties, they are made with a plastic liner instead of metal. The world needs to solve the global climate crisis, the hydrogen is gaining popularity in this sector. We need by 2050, every sector of society needs to contribute to reducing global greenhouse gas emissions, the transportation sector accounts for about 70% of these greenhouse gas emissions, or 20%, sorry. It needs to come down by around 70% by 2050.
This is really a massive task, but the good thing is that the solutions to be able to achieve this are actually available, and the hydrogen economy can scale up and can solve this problem. We announced some time ago that we are ready to enter Asia, and China is the largest automotive market in the world and is set to become the largest market for hydrogen mobility in the world. The Chinese authorities are committed to hydrogen because they want to reduce the harmful global greenhouse gas emissions and also to clean up local air pollution. We have partnered with the CIMC Enric, which is a Chinese major clean energy supplier. We are aiming to form the joint venture agreement or to finalize the joint venture agreement with CIMC Enric by the end of Q3 this year.
Jon Erik mentioned the competition on these type of measures that governments put together, and the EU also aims to be a global leader in hydrogen. Hydrogen is gaining popularity among governments all over the world because of its potential to work across the energy system and to decarbonize some of these areas which are very difficult to achieve using batteries. The EU has put an ambitious plan in place. They are focusing on green hydrogen production and want to scale up by 2030 to make hydrogen available in Europe at scale. Finally, I want to take you on just a short reminder of some of the contracts that we have announced lately. This is a picture of the Toyota truck. It's actually the fourth version of this truck that we are working with Toyota on.
It's the advanced stage version, which we are delivering the hydrogen fuel system for. We announced a sale of hydrogen transport modules in the U.S., which is the first hydrogen modules we sell there. Our customer is a hydrogen fuel provider and a refueling station operator, which will use these transport modules to transport hydrogen from the source to the stations. This will be our launch customer in the North American market. Very excited about that. We also received in July a grant from the U.S. Department of Energy, where we will study more how to get the cost down of the carbon fiber cylinders without compromising on the safety.
This is an initiative, the H2@Scale in the U.S., which explores ways in which hydrogen could be utilized also in the U.S. at the grand scale. Last but not least, we are going into space for the second time. In July, we got a contract with a major commercial aerospace company to deliver cylinders to a new spacecraft. We're very excited, of course, about this. I think this is the most demanding operating environment that you can imagine for these cylinders, and it's a testament to our capabilities that we are able to get these contracts. Finally, Hexagon Purus, I think is well-positioned to capture the opportunity of the growing hydrogen economy. It's a massive market opportunity, but we are well-positioned. We have leading product competence, both in the carbon fiber cylinders, but also in fuel systems. We have trusted customer relationships.
We have an established operational footprint with serial production facilities in Europe and in North America, and soon in Asia. We have an extensive track record with decades of experience in this business. We are mobilizing to capture the benefits of the scaling hydrogen economy. Thank you very much. David, for the numbers.
Thanks a lot, Morten. Okay. Exciting stuff there that's happening or to happen. Let's just take a quick financial update on the impacts of COVID-19. You heard from Jon Erik some of the operational impacts. Last quarter, we used three slides. We're able to compress this into one slide this quarter. Certainly, in the second quarter, we felt the financial impacts more deeply than the first quarter. Particularly in Agility, where transit bus volumes are down in North America, especially. Also in Europe, due to a lot of the shutdowns of the OEMs at the time. I will say, though, that in Europe, the momentum is still stronger YoY. Great stuff going in transit in Europe. On Mobile Pipeline, also quite impacted by the macro factors related to COVID-19. In LPG Hexagon Ragasco, so far these have been robust.
Ragasco has been robust in its activities, although we will say a large market, Bangladesh, has been particularly impacted by COVID-19. To date, we haven't had any orders to Bangladesh, but we expect some by second half of the year. It's always difficult to assess or predict with precision the future broad effects of COVID-19, and the actual ongoing impact will depend on many factors beyond the company's control and knowledge. What we can say is that we expect a negative full year impact to 2020, mainly contained to Q2 . With that, we do not expect or definitely haven't implemented any material impairments within the balance sheet. I will stress that liquidity is good. Hexagon remains financially robust. At the end of Q2 , we had undrawn committed facilities of NOK 655 million. In addition, we had NOK 128 million in cash.
Our net interest-bearing debt is at NOK 1.3 billion. That remains only 16% of market cap. A very good cushion there. We also have very flexible arrangements with our principal financier. That's very important. It allows us headroom, allows us to operate at underlying higher leverage and provides plenty of headroom for us to continually invest in e-mobility, especially through the challenging 2020 times. We also have access to relevant government programs where required. Highlights for Q2 2019. Again, as I mentioned, Agility was quite impacted, much lower revenues and EBITDA. However, good to stress that there was very good cost control, so those impacts were somewhat dampened. It was really good news that Agility secured a new major customer in the logistics sector. Of course, the logistics sector has been one of the winners, particularly in North America.
In terms of Mobile Pipeline, a very weak quarter. Again, buoyed by securing a NOK 7 million contract in the quarter for deliveries later in the year. Purus CNG light-duty volumes remain low, and that's due to the ongoing planned relocation of Volkswagen, which was due to ramp up and start again in the third quarter. Quite the opposite has been Purus e-mobility market. You saw some of that with Morten. We're very pleased to win the contract for the third-generation Toyota fuel cell electric truck. The term sheet with CIMC Enric will certainly boost us in the future as we look to enter the Chinese market, largest fuel cell market in the world. Of course, as Jon Erik covered very well, there's a very strong international focus on the hydrogen green tech space.
LPG Ragasco, very strong sales volumes, about 75% of sales to Europe, but we also saw additional sales to Middle East, Africa, and customers in South America. In terms of the numbers, let's start from the left-hand side. For revenue, we did NOK 683 million this year versus NOK 882 million the year before. You can see that for the quarter, been quite a significant top-line impact again mainly due to COVID-19. Within that, as I said, LPG remains strong. When we come to EBITDA in the center, we did NOK 19 million in EBITDA versus NOK 62 million the previous year's quarter. Of course, the effect of such a large top-line effect, you would expect much larger impact to profitability. That was considerably dampened due to good cost control as the business areas implemented programs to counter the impacts of COVID-19.
On E-mobility, I'm pleased to say the ramp-up effect has been lower than last year. Last year was -NOK 30 million. This quarter, we had -NOK 17 million. That's mainly to do, we had good commercial contracts and income at commercial margins through distribution for one. As we go over to profit after tax, we recorded a -NOK 77 million loss versus the -NOK 27 same quarter last year. The additional YoY impacts are quite small in net. Small impact by depreciation, increasing by NOK 6 million YoY. A positive charge, mark-to-market charge on the swap was a credit in the quarter of +NOK 19 million. Interest costs YoY +NOK 1. FX, currency movements non-cash -NOK 25, tax charges +NOK 4 YoY. Of course, we look at our business within these brackets of G-mobility, you can see in the base, and e-mobility more for future growth.
On the G-mobility business, these numbers provided are the first half year. For Q1 and Q2 together, just short of NOK 1.4 billion in revenue and NOK 126 million in EBITDA for a 9% EBITDA margin. Those margins, again dampened by the impacts of COVID-19, normally trading at double-digit margins. Up top on e-mobility, the Purus business did NOK 174 million in revenue and minus NOK 68 million in EBITDA. You can see quite a different margin there. When you combine the two, this does dampen the Hexagon group level margin to 4%, as you see on the right. On the balance sheet, strong balance sheet. Most of the movements have just been currency movements. In Q1, we had quite unprecedented rates on the dollars and the euro when you translate to NOK, and that really increased the values of the balance sheet.
That has unwound a little bit. Some of those rates coming down, and you see consequently a reduction in the balance sheet. Let's switch gears to outlook. Starting with Agility Fuel Solutions, the heavy-duty truck business is expected to pick up in the second half of 2020. Actually just the ink isn't dry, but we've just been able to announce a very large order from Anheuser-Busch for $8 million. Again, testament to how g-mobility is really driving, particularly in the heavy-duty truck side in America. Large number of deliveries to the new major logistics supplier referred to. We got orders in Q2. We expect additional orders in Q3, which will support then the uptick in the heavy-duty truck. On the European bus business, after the COVID-19 disruption, we will see a pickup, and we are expecting a record year there.
However, for transit bus in North America, we expect that to be relatively slow YoY going into Q3. On Purus e-mobility, we signed our first contract for hydrogen transport modules in the U.S. as Morten went through. This contract does include additional purchase options if exercised, and that will bring the total to NOK 7 million. The picture on the right is an example of one of those modules that can go on a vehicle and be transported to wherever it needs to be. In terms of battery electric vehicle and the hydrogen heavy-duty trucks, we talked about Toyota have actually doubled the order size now to NOK 2 million. That's great. On the pure battery electric, the Daimler anchor customer that we have have now logged successfully 300,000 miles. That is a well-liked product by all those who are driving them.
The fleets have had very good feedback or given very good feedback to those products. We also include then a prototype that we have that on the road now, an electric Hino XL7. A lot of momentum there on heavy duty battery electric as well as the fuel cell electric. CNG light duty vehicles. We do see the ramp-up starting in Q3. We've already had some call-offs in July, and we expect some more by the end of Q3. That's a very good sign to see CNG LDV back in motion. During the shutdown or the planned relocation of Volkswagen, we also were having sales to SEAT in Spain. That has been able to somewhat retain some volumes even through the first half of the year. Much stronger second half of the year expected as they ramp up.
On the hydrogen project pipeline, here's where there's a real hotbed of activity. You can see quite a plethora or a multitude of projects here. We have very many light-duty vehicle programs, multiple OEMs. We were informed that one OEM on a very small project has discontinued their project at this time, but we'll be available at a point when they want to start that up again. Otherwise, a lot of activity there in light-duty vehicles, as I mentioned. We saw some of the medium and heavy-duty projects that are ongoing. They are very near term, I would say. Exciting projects to be working on. In terms of distribution, we continue to have a very good project pipeline in order to satisfy the demand and momentum that we see in the distribution of hydrogen gas as the refueling infrastructures increase and certain projects increase.
For example, we talked about maritime railway projects. These all do need some sort of refueling or distribution network. In the other box, I guess we can claim aerospace, very exciting project to come. Mobile Pipeline, again, very challenging first half of the year. We expect the impacts of COVID-19 to continue as well as the onshore oil and gas activity to be low. Q3 we expect to be similarly a weak quarter. Very good new opportunities, though. I mean, that's what we are really searching for. We have a great little project in Indonesia or contract, for micro CNG and also, similarly, mobile refueling business. We had our first SMARTSTORE order. New customer and additional orders expected there. The Virtual Interconnect, we have a large backlog for Q4 .
We are hoping and expecting actually additional orders or options to that order to have that order intake in Q3 to further boost Q4's deliveries. Finally, in Latin America, you can see we've had that market come back to us with activity in Q1 and Q2. We expect this positive trend to continue in Q3. Hexagon Ragasco LPG. Maybe one benefit from the COVID-19, certainly on the leisure side, we have had good demand in Europe. People appear to be barbecuing more. However, as I mentioned, we should expect delays to those countries that are significantly impacted by the pandemic. For us, the largest country is obviously, in terms of our sales last year and to-be, is Bangladesh. However, we expect to have some orders already in either Q3 or Q4 towards Bangladesh as they come out of the pandemic. Also, always celebrate new markets.
We have a new country in the Caribbean. Orders are received for those, and that's always exciting to add yet another country to Ragasco's roster. In summary, we have to say that COVID-19 probably will have some disruption and therefore impact earnings in Q3 2020. Barring any further unforeseen COVID-19 developments, though, we expect a stronger market outlook in the second half of the year. Strong liquidity and business resilience remains, and as we saw earlier, we are moving from containment to recovery, and we can visibly see that the g-mobility and e-mobility drivers have been strengthened. Hexagon does remain well-positioned to capture these opportunities. With that, thank you, and we'll go to Q&A.
Okay. Those of you that would like to ask questions, I've gotten a few in. You just need to go into the chat function on the TapIn platform where you registered, or you can go to the link on our front page of the website, or send to ir@hexagoncomposites.com. We have received a few questions. The first we'll start, it's regarding Ragasco, and you just addressed it, but the question is coming from Tuk Erantala. In the report, you said that Hexagon Ragasco had problems with Bangladesh because of the pandemic. However, they now have taken bottles from Aburi Composites and started marketing their bottles. Are you losing this customer? She follows up with the question: Will the Bangladesh Composite Cylinders deal continue with Beximco?
No, we're not losing the customer. In fact, we have begun with orders for the second half of the year. Should be business as usual. Main thing is we're very pleased that Bangladesh has been able to come over the worst and get back into the ordering business.
Great. Another question from Buru Alvin Edwards Sagstuen. Does Hexagon have any plans to look into reverse osmosis water filtration systems in the future? They require large composite tanks and therefore should be a huge growth opportunity. Erik?
We are aware of that opportunity. We don't have any concrete plans to address it. It's one of those opportunities that we have on our monitoring list. Wherever there is an opportunity to produce composite products at scale, that's where we would take an interest.
Excellent. We have received just those three questions. I am just checking to see if we have any questions on our email. I guess we addressed most of the questions in the presentation. Feel free to reach out to us after that if you wish. With that, I think we can thank our audience and wish them a safe and good rest of the week.
Thank you.
Thank you very much.