One, two, three. Good morning, everyone. Thank you for listening in to the quarter presentation for Ocean Sun. Think Ocean at your next growth. This is the half year reporting. Our poster image on the front page, the Banja 2 MWp floating power plant has been in operation now since December last year, so gaining some good experience from that one. As always, we will do a short recap of the purpose of our activity and of course, the latest operational information and developments going forward. Of course, the financial numbers given by my colleague, the Chief Financial Officer, Karl Lawenius. This many have seen this before. Maybe this is the example of the biomimicry.
On the left, the photosynthesis and the floating water lily, and our special technical solution for the photovoltaics, which has many similarities on the flexible, thin membranes floating on the water. Of course, you can build many of these rings and together make large, significant utility sized power plants. The main highlights or selling points of this type of approach is, in our opinion, the best floating PV system that is available on the market. It has a especially low capital expenditure. It is the efficient use of materials and the lean design, and also the rapid, speedy installation that is possible on these circular discs.
On top of that, it also, in comparison to other existing floating PV system, it has a very favorable logistics and transportation needs because it is possible to fold and roll these large membranes inside the 40-foot transportation container. Of course, important in PV power plant is the efficiency, the performance of the PV device. These solar modules have a direct thermal contact with the water body it rests on, and thereby, we have the ability to, to lower the solar cell operating temperature. There is a direct correlation between the temperature and the efficiency in the solar cell, and it is more, a lot more efficient than the traditional air-cooled solar panels. If you look at also the floating photovoltaic market, there is a clear limitation on the seaworthiness of the different designs.
The mainstream systems typically rely on pontoons that are interconnected or put together and are more vulnerable when it comes to waves and high wind loads. Lastly, I would also like to mention the, the, the, the water containment possibility with this, and it goes two ways. It prevents the evaporation of fresh water from reservoirs, rivers, canals, for to save on valuable fresh water. Oppositely, it has the ability to collect or catch whatever precipitation or rainwater that falls on top of the membrane. This is important in, in many island communities or places with the scarcity of fresh water. Now to the ongoing operations that we have and the developments.
Most important, I think today, operation wise, is the Banja hydropower reservoir in Albania, where we have built together with Statkraft, 2 MWp , our first multi-ring floating system. It became operational in December 2022, I believe the power purchase agreement Statkraft has with the Albanian grid was initiated the 1st of January this year. There is a lot of learnings from this large full scale demonstrator, improvements on operational maintenance, operators becoming more and more familiar with the system. Also it is our primary object, where we develop our CBM or the condition-based maintenance application. This is a software that we develop that gives the owner and operator a very clear view on the operational status of the system.
Not only the output from the PV panels themselves, but split in on the string level and also the exact location, should there be any abnormalities in the system. It also correlates this with the insulation, weather data and not only regular weather, but also, for instance, Saharan dust storm events and like. Not at least, this is an extremely good demonstration site for us, and we have busloads, I would say, of visitors, clients that want to witness this, and they have their own reservoirs, where they also want to build a similar type of infrastructure. Now to maybe the most important market in the floating, floating photovoltaics, has been, and probably also in the future is, China.
Here we have, with an extremely important client, the SPIC, State Power Investment Corporation, the largest installer of solar in the world, we think. We are now finished the first phase of our sea trials in this R&D activity in outside the offshore Shandong province, Yellow Sea, and we had a lot of good learnings from that first activity. First of all, I think these floaters were built at record speed, and they one tugboat towing them 30 km offshore in one single operation. We will build upon the learnings from this exercise, and we have strong indications that this will be an ongoing and increased activity with SPIC, with the new floaters coming up in the future.
The Magat, our oldest floater in operation, this is now closing into. This is the fifth year of operation. We are now in the fifth monsoon season upon Luzon Island, the north island of Philippines. It's very good results from this extended the testing of that demonstrator. I think, with together with the client and this, that is good results also will lead now to an extension, we hope. This has been on the table for quite some time, for several years, actually, but we think things are on the move. We hope to see that this will materialize in not distant future. Interestingly, of course, is the high performance from this plant when compared to the air-cooled module. The location is favorable for to compare this, there.
On the marketing and sales activity, high activity, we, perhaps our largest initiative so far, on the Intersolar in Munich. This is by far the largest fair exhibition in within photovoltaics in Europe. Where we had our own booth and many of our sales and business developments and also engineers were visiting this and multiple leads generated out of this. Also on the right, the perhaps the largest in the world, the SNEC in Shanghai, with our head of Asia, Mr. Kristian Tørvold, and Du Zhongyi from Shanghai office, present there together with our partners in China.
I would also like to mention that years ago, when I was in the oil and gas industry, I've visited often Houston, and Houston is the location where traditional for the OTC, the Offshore Technology Conference, which was the largest event in Houston. Now I, we went to the CERAWeek conference, and I learned that now the CERAWeek discussing the renewable energies, has become a larger event than the OTC oil and gas fair. It's an interesting transition going on in the U.S. these days. We are very proud that also we were featured in a BBC podcast directly from Albania to discuss our floating initiative. Also, this was in a reputed Bloomberg article, discussing the advent of floating PV.
Also developments on the intellectual property, we had now patents granted recently in China and also in Brazil. The two very important markets for floating solar power. What can we expect from Ocean Sun in the near future? This will be very busy times going forward. Coming up now on two projects, two new demonstration projects in Spain, one on the mainland, in the Extremadura region, bordering to Portugal. This is an undisclosed independent power producer, but among the largest players, and it's extremely interesting to see that coming up.
We will also build the offshore, nearshore demonstrator project in the European Union Finance project, BOOST, together with partners, and this will be off the coast of La Palma, one of the more western Canary Islands. I think this is, if not the or very close, this is the southernmost point in Europe. It's a latitude of about 26 degree north or something. This is the more, more, more, among the more favorable locations for solar. Singapore, of course, the, the hub in Southeast Asia. This will be highly visible floating systems that you perhaps have the opportunity to see. If you have a window seat flying into the Changi Airport in Singapore, you will see this floating on the sea. It, one with the Keppel at the Jurong Island.
I believe 3 rings there, and also further out in the Strait of Singapore with the Sunseap EDP, our company, close to one of the islands there. Extremely exciting development for that region, thanks to also our Mr. Ari Glerum, the President of the Southeast Asia office. In Greece, good developments with MP Quantum. I think the most important partner when it comes to floating solar in Greece and the Cyprus region, the planned 2 x 2 MWp floating arrays. This will be then altogether 8 disks floating nearshore Greece mainland, on the ocean surface. Yeah, that it's progressing well. We expect the start of construction, first quarter next year.
I think, also in addition to this, there is a plethora of new activity and markets coming up. I think my colleague can talk a little bit about these opportunities.
Thank you, Børge. Yes, as usual, I will give a short update on the market. Starting to the left on this slide, you see a number of well-reputed players, and as Børge mentioned, it's very pleasant to see that soon we will be able to add another big name to this list, and it's also a great opportunity, since this player has previous experience with floating PV. We'll be able to show our, our technologies capabilities to a coming partner. On the market, starting in Europe, as Børge mentioned, we went to Intersolar earlier this year, and saw a lot of interest, a bit twofolded.
One from, from the partners in the south of Europe, looking to deploy solar on hydro dams and inland water reservoirs nearshore. The second cluster is the big oil companies and the big IPPs that are eyeing the combination of solar and offshore wind. This phase lies a little bit further ahead, since it's very exposed, but we see that we can, we can get a lot of good studies and a lot of good interaction with this these clients. In Brazil, we also see a lot of interest popping up. You have the big power producers and also the big power consumers interested in, in creating renewable energy.
You also have very favorable, favorable legislation, meaning that you can actually deploy floating solar under the distributed grid, and thus have a simpler permitting process. Otherwise, we see, as always, lots of interest in Southeast Asia and Northeast Asia, where the market has traditionally been. We are having a lot of interest related to our upcoming pilots in Singapore. Also, leading to new leads when it comes to the island nations, Maldives, for example, and also further on in Southeast Asia, in Malaysia, Indonesia, and Vietnam. China is also a country where we continue to have a strong position in the near and offshore market for floating solar.
Going forward with the financials, we had an operating income of NOK 4.7 million this first half year. Negative results of NOK 10 million both in line with the expectations. The cash flow ended up at NOK 11.6 million, where we had some working capital in relation to the upcoming project in Spain. Where we will carry out the projects as an EPC and deliver them on turnkey basis. The cash position at the end of the half year was NOK 51.2 million, and still very solid, and still very comfortable level to carry out our plans and strategies. With that, we open up for Q&A.
Thank you very much.
We have a couple of questions already. First question is, what is key points as you see it, that is causing delays to when we will see utility scale projects? Do you aim to install a large project next year? Where are you currently most optimistic? Three questions in one.
Many questions, yes. To start lastly, I, I think it's now the momentum slowly building now. More and more people realize the enormous potential and the advantages with the floating solar. I think it's almost difficult to highlight particular regions. Of course, generally speaking, in the lower latitudes, high population density areas with, where, where you start to meet difficulty with, big solar farms, in conflict with agriculture or other activities, recreation, urbanizations, this is the most promising areas. And, and also forward-looking politicians, administrations that see this. I, I, I would not single out certain governments. We, we see a broad interest internationally for this.
Is the current market environment and tensions between the West and China affecting your projects in any way?
No, I would not say that. There, there's very good, good industrial and finance relations for for our part with China. I think you can compare much of this industry with, let's say, the electrical vehicles. Where also you have Western companies investing in China, and and products freely traveling internationally. I think this is a comparable, this is the renewable energy sector. I think this is for the benefit on a global perspective.
Perhaps I can also mention that, although we currently see that most of the solar panels are coming from China, since they are most competitive, we in Ocean Sun can use panels from any supplier, and can also establish suppliers in outside of China.
Yes, that, that is correct. Yes.
I think there's one question here coming in earlier on markets and new leads, and where they are located. I think we, we have touched upon that already. We have one question, if we are working with any class societies or external company to verify our technology?
Yes, it's an very important activity, and that we started many years ago, almost at the beginning of the company. Now we have, I would especially highlight our group of naval architects that have ongoing activity with the DNV, the BV, the Bureau Veritas, and other entities. This, this has to do with the overall acceptance of the technology, and, and, and these third-party verifications are instrumental for the insurance and bankability of floating solar at a large scale. So we are investing heavily in, in engineers and scientific research. We also have tight collaboration with institute sector, institutions like SINTEF Ocean and, and university. We will also now embark on a PhD student thesis on, on, on the, this type of membrane floating PV.
Very excited about this, yes.
Next question, with regards to competitors: How do you see your technology compared to your peers? Has there been any important developments from your side or their side in terms of technology improvements?
Well, technology improvements is ongoing all the time. This is a continuous development within the area. What we see is, I, I would say, more companies coming out, offering various floaters. You, you, you see variations on when it comes to these pontoons and how to arrange them and interconnect them. You see some development and, and, and also perhaps the segment of the fully offshore or designs, we're having similarities with almost with rigs. Large metallic structures in aluminum or galvanized steel. Yeah, so this is more the rafts or big floating units, so it's more and more companies. I think if you look at Norway, we started floating solar in 2016.
That's the first company in Norway, and, and now I believe you have at least four different companies just in Norway, looking at floating solar.
There's one question, perhaps addressed to me. You're talking about a comfortable cash position, $50 million, but the net result for this quarter is $10, - $10 million. The burn rate is quite fast, or is it a controlled and comfortable burning rate? I'd like to say that the net result for the quarter is not $10 million, that's for the first half year. The burning rate is lower than indicated by the question. We see that we have an increasing trend on the revenue, or we forecast an increasing trend on the revenue, meaning that the current cash position is good until we start making money.
Yeah, we, we, we are not. We are not concerned about this situation. We, we have expectations that we will reach profitability towards the end of next year. That, that is what we are aiming at. In that context, this is not critical for us.
That also answered another question coming in here. And, I think that was it. We have one question here: Do you see any possibility being part of Statkraft through their investment vehicle?
I think you would need to ask Statkraft about that. interesting idea from... Yeah.
Currently, we see them as a, as a project collaborator and a, a developer that we are working with.
Yes. Statkraft is an important client-
Yeah
... for the current system at one of their reservoirs.
Yeah, that was, that was all questions for now.
Yeah, many good questions today. Thank you for sending in and for listening to the quarter presentation and half-year report from Ocean Sun. See you all at the next quarter. Thank you.