Good day, thank you for standing by. Welcome to the VivoPower International PLC Fiscal Year 2022 full year earnings conference call. At this time, all participants are in a listen only mode. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kevin.
Thank you, Victor, and welcome everyone to the FY22 earnings call for VivoPower International PLC. We'll jump straight into slide two, which is the executive summary. In a nutshell, we've made significant strategic progress over the last 12 months, but we've had to contend with quite a few headwinds, including lingering COVID effects in our businesses in Australia as well as foreign exchange. Going through key points. Firstly, revenue declined to $37.6, primarily attributable to the COVID lockdowns, which we previously flagged at the half year result, which unfortunately did extend through the majority of the periods over the last 6 months as well. That caused delayed works for our business. In addition, there's been a sharp drop in the exchange rate since 2022.
On a constant currency basis, our revenue declined by 3% year-on-year. In terms of gross profits, this includes the discontinued operations. They decreased by $4.7 million to 1.4 million for the same reasons I mentioned before. In particular, we had a $1.9 million cost overrun on the Bluegrass project due to interstate border closures in Australia. Our GP margin declined to 4% versus 16% year-on-year. This, in turn, reflects, you know, increased compliance costs, increases in supply chain costs, as well as the one-off Bluegrass Solar project cost overrun. GP margin adjusted for the cost overruns for Bluegrass was 9% for FY22, and excluding the discontinued operations was 10%.
EBITDA, including discontinued operations, declined to $10.4 million loss versus $1.4 million loss in the previous year. Our operating loss widened to $14.6 million versus $4.8 million in the previous year. Again, this was driven by FX, the reduced lockdown period revenues in the H1 of the year, and the Bluegrass Solar project overrun. We did progress with budgeted increase in growth OpEx to support high-growth business. In terms of our cash balance, as at year-end, it was $1.3 million, down from $8.6 million in the previous year. However, post-balance date, we replenished this to $8.9 million. That was because of the sale of the non-core business units as well as the shelf raising we did in July.
In terms of uses of cash during the year, we were quite judicious in terms of how we invested cash necessarily for Tembo scale up and product development. That said, we did incur, as I mentioned, $1.9 million in one-off Bluegrass Solar costs that were unplanned and beyond our control. We did execute on a number of transformational strategic initiatives despite significant disruptions. In terms of our distribution partnership network, we expanded that to six continents and 50 countries with EV commitments and orders increasing to over 8,000. Very importantly, we secured a commercial design services agreement with Toyota Australia with prioritization of the developments of the next generation Hilux and version 2 battery conversion kit as the key focus.
We divested non-core businesses and that would enable proceeds to be reinvested in our higher growth business. We also established VivoPower and Tembo subsidiaries and operating units in key markets globally. As soon as borders reopened, that included the UAE there as well as Southeast Asia. Last but not least, we recertified our B Corp status, which is a mandatory requirement from B Corp. In terms of a reassessment, we were named again as one of the best B Corps in the world for governance and recognized as one of the top 100 global impact companies a year in a row by the Real Leaders Impact Awards. Turning to slide three.
This is a recap of the year and as well as an update on some of the prior announcements that we made. Significant strategic and operational progress despite the headwinds I mentioned. Key achievements included the definitive agreement with Toyota Australia, as well as with GHH and Bodizs. Winning record levels of solar electrical solutions contracts in Australia. Just going specifically to some of the previous announcements and updates on those. We had acquired full control of the U.S. solar portfolio. We rebranded that back in August of 2021, and pivoted to a Power to X strategy with a view to then launch a renewable powered digital asset mining operation to be spun off company. That is on hold at the moment due to market conditions.
Obviously there's been a sell-off in terms of digital mining. We have put that on hold for the time being. Other updates, we executed an LOI to acquire 100% of GB Auto. Decided, on a consensual basis, to cease that LOI as well as the distribution agreement. That's simply because Tembo is now directly listed on the ASX, and we will proceed to selling directly in our own right. With that, GB Auto remains a trusted and valued partner as well as subcontractor. We will still be working with them in terms of the localization of kits for the mining sector.
You know, elsewhere, as I mentioned, we've established subsidiaries and operating units now for Tembo in key markets globally. That is very much a focus and a priority going forward in terms of scale up assembly and production capability in key markets around the world close to our customers. It doesn't make huge amount of sense to assemble and manufacture out of the Netherlands and send it to places far away in Australia or Asia or Africa for that matter. That is a real focus. Going to the next slide. Just in terms of key objectives that we set out at the start of the fiscal year back in July last year. We've delivered on 13 out of the 18 objectives that we'd set.
In terms of the ones that are still outstanding, you know, assembly and scale up production is still to be executed upon. It's been a challenging period with logistics supply chain issues around the world. I mentioned it to scale up production out of Holland to send kits around the world. We have been producing and sending kits out. They haven't hit the scale-up stage in terms of volumes just yet. The other area where we have had slippages to the right is in terms of the SES business unit. We completed feasibility studies for its commercial partnership. That said, in terms of building our engineering and sales teams, we've not executed on that as yet.
You know, priority has been very much on the EV side of things, and to focus our resources and attention on that front. That said, on a post-balance date basis, we have executed a couple of investments in joint ventures to increase our capabilities with (uncertain). That includes an investment in an Australian mining energy storage company called Green Gravity. On to the next slide. This is a quick update in terms of the team. We've been focused in the last six months on reshaping the team for the next phase of strategic execution. Our HR strategy in that regard has three objectives. Number one is orienting the leadership team to capabilities in operations, product engineering, assembly, as well as microfactory. We've also wanted to strengthen our safety, quality, development, testing capabilities in Tembo.
We have also executed on outsourcing middle office and back-office functions to the Philippines, to help us to scale further at a cost-effective level. Some of the key hires that we've made during the year. Alan Evans has joined as Tembo Head of Quality. Nathan McCormick as Tembo Head of Environmental and Safety, as well as Testing Manager. Juan Diego Bannon, who's with me on the call today, as VivoPower's Head of Corporate Development, also joined recently. Key promotions. Matthew Nestor has stepped up to the Head of Global Partnerships. He's taking over from Matthew Cahir, who's been instrumental in really getting VivoPower and Tembo to where we are today. Matt will be leaving to focus on personal matters.
Matthew Nestor is taking the baton and has, you know, been really instrumental in driving all the partnerships that we have secured today. Gary Challinor has been promoted to Group Chief Operating Officer and has done a great job, particularly in relation to the Toyota relationship, as well as helping to internationalize that role in terms of its mindset as well as focus. Iain Folley has been promoted to Financial Controller in the Asia-Pacific region. Iain's been overseeing the Aevitas operations in particular, so this recognizes his impact and growth in that. On to the next slide. We, as I mentioned, retained our B Corp and have been recognized again for global impact leadership.
Importantly, we were named one of the best B Corps for governance by B Lab UK, and this is a very important attribute that as a group hopefully we. Moving on to page seven, just delving into the numbers a bit more. So in terms of the Aevitas Critical Power operations, you'll see there a breakdown between the discontinued as well as retained operations, which include the fast-growing solar segment. Operations accounted for $0 million of revenues. More on that in terms of going to the balance sheet on page 11. So project investments increased from $4.5 million to 16.4 million. That includes intangible development costs that have been capitalized in both Caret as well as Tembo.
As mentioned, had our cash balance decline from $8.6 million to $1.3 million, but on a post-balance date pro forma basis, has been replenished to $8.9 million. In terms of net debt, that increased from $14.5 million to $22.3 million. On a pro forma basis, however, that $19.7 million post-balance date. Most of that, in terms of debt, is attributable to shareholder loan from the new holdings, which, as mentioned before, a very supportive shareholder as well. Going to the individual business units. Firstly for Tembo, you know, we made significant progress during the year, but deliveries haven't. The outlook remains, you know, very positive.
We get approached on a daily basis by people seeking to convert kits. We are, as mentioned from a focus perspective, prioritizing the release of the next generation 22 kWh in early calendar 2023, and we expect to go into scale-up production release of that kit to late. We're very much focused on continuing execution with respect to our microfactory strategy and the rollout of these new markets. We have identified the UAE, Southeast Asia and etc. as markets to launch these microfactories. In addition, what we're also doing is opportunistically recruiting world-class EV talent that has become available as a result of the headcount reductions that are going on at many other EV companies.
The capital that we've raised is enabling us to attract talent otherwise would not have been available, and certainly were not available if we rewind to 12-18 months ago. We are taking advantage of the dislocation in the markets and some of the other EV players to add to our talent base. One development in the Middle East, just to flag, is that we have signed a MoU with a Jordanian state-owned enterprise, which involves 1,000 EV kits over the next 20 years. You know, our expansion of our presence in the UAE last year is starting to bear fruit.
With regards to Toyota, that partnership and relationship continues, and we're very much enjoying working with the Toyota credit team, and looking to hit the mutual objectives that we've set in the Aevitas. Protracted Australian lockdowns very much impacted our results, but the outlook is very positive. There is an unprecedented pipeline of over 27 gigawatts of solar farm projects being built across Australia at the moment. This has been buoyed by the election of a new federal Labor government in May 2022, who are very supportive of work towards more renewables across Australia. We are very much experiencing a green rush, if you will, in Australia, very much the gold rush of the nineteenth century.
We are targeting for our solar electrical solutions business to deliver revenues exceeding the revenues that were divested that were contributed by the divested North40 business unit. In terms of compounding growth rate, that solar electrical solutions business has grown 57% year-on-year since FY 2019. We have a very strong pipeline with significant opportunities to take advantage of. Looking for that to, you know, contribute in excess of what we. In terms of SES, we have started to focus on the mining sector, augmenting our Tembo EV practice, as well as other industries. We're seeing an increasing number of SES opportunities as more customers seek fleet electrification solutions.
Conversations have now pivoted to not just EV kits, but also on-site critical power, EV charging, EV maintenance, energy storage, microgrids, battery reselling as well. We're focused on expanding our capabilities through partnerships and joint ventures. As mentioned before, we've made a seed investment in Green Gravity, an energy storage business in Australia focused on the mining sector. That will help expand our capabilities. In terms of Caret, we created, you know, incremental value over the year through development activities. Very much feel there's more to come from the Inflation Reduction Act. It's very positive for Caret solar. There is a renewed, you know, focus on data infrastructure, including digital asset mining.
We are seeing more inbound interest in partnerships involving our various solar projects. So notwithstanding the digital asset mining correction that we've had over the last six months, we are still pushing ahead with our Power to X, albeit you know time that appropriately as far as any investment. Overall, you know, the plan is to spin off this business unit and to reinvest the proceeds into our core EV as well as our SES and solar. Turning to the FY23 and our key objectives. So focus is on scale up assembly and production for our Tembo EV. I won't go through every single item here, but again, there's 18 items that we're targeting expanding on.
The microfactory is a key element and a key enabler of the scale up of assembly and production. Just to touch on page 17, events post financial year-end. We've had a solid performance up to FY 2023. We secured 1,000 new kits in terms of EV elements from a Jordanian state-owned enterprise, as I mentioned before. We have, however, put on pause the Arctic Trucks LOI, given our need to very much focus on the Toyota Australia and Land Cruiser. Arctic Trucks is focused on Hilux, which we very much want to electrify as well. Given resource and time commitments, we do need to focus on Toyota Australia as well as the Land Cruiser, which is what most of distributors and customers want.
We obviously executed on strategic transactions to bolster our cash balance at $8.9 million in divesting the non-core business units as well as completing an offering on Nasdaq. We are capitalizing on opportunities to hire world-class EV talent and take advantage of the mini EV winter that's happening with many other countries at the moment. We're one of very few that are still in hiring mode, but we're doing it on a very selective and judicious basis. Very importantly, we secured important ESG certifications and awards, this is with VivoPower Electrical as well as VivoPower. We've reoriented the GB Auto relationship post The second question is, does the SEMI series have digitalization features that allow for location and status capabilities to help manage vehicle fleets when inside mines?
What are you doing to make sure you're on top of technology when the mines' battery electric vehicles are being used more and more? Are you looking for ways to create new technologies or making sure the technologies are compatible with one created by companies like BHP? This is a great question. The short answer is yes. You know, Tembo series can accommodate digitalization features that allow for geolocation or status tracking. That is very much data that's important for the miners. In terms of our software, including telemetry, this very much is designed to capture. Yes, we are always looking for ways to create new technologies, new IP. So the short answer to that is yes.
Next question is, knowing the demand for the Semi series is high, combined with supply chain and semiconductor shortages, is still having ripple effects, how is the Toyota pause on the Semi series affecting your production? Have there been conversations with Toyota to produce only the necessary components of the Semi series to speed up the installation of production kits? Could something like this help Toyota to ship the semi-series out faster? And is this a possible solution to help streamline production? Again, a great question. Obviously, you know, Toyota is the gatekeeper in terms of releasing vehicles, their own vehicles.
With respect to the semis, I think I'm gonna say without breaching confidence, we are comfortable, you know, in terms of what's available to meet short-term requirements, especially in Australia, where most of the demand is coming from at the moment. We will continue to work very closely with Toyota to ensure mutually that our demands are met. At this moment, we don't see any issue in the short term. I think in terms of medium-term, we're all expecting that the supply chain and semiconductor that's coming on stream, particularly with semiconductors. Short- term, we don't envisage a real issue.
You know, medium-term, yes, it's contingent upon supply chain and semiconductor. Next question is, can you confirm or deny whether the Tembo kits broke down in Namibia during testing, and this I think came out in a well-respected publication a few months ago. Again, without sort of breaching confidences, we have not put out a statement to deny that, nor has any other party involved. So, yeah. I think we're very confident in the capability of our kits and you know, fair to say that once Land Cruiser has a Tembo kit inside, it becomes a very powerful animal.
You know, the torque is amazing, and for those who are into off-road driving as I am, you would appreciate the effect of EV torque on off-road vehicle. Next question is, you know, when are you expecting to buy shares? I made a commitment that I would. Unfortunately or perhaps fortunately, I have been not able to because of information that we've had, you know, for most of the last six months, where we've had, you know, deals and transactions in our agreements that have been delayed in terms of being able to announce and therefore not being able to buy. I have committed for my salary to be directed to shares.
Once we're in an open window, I will be buying, you know, I haven't been able to in period. That hasn't changed, you know. As I've mentioned before, this is very much a long mission that the team is very determined to successfully deliver on and to, you know, help our customers and help the impact on business and really deliver. Those were the key questions. I think we'll wrap up on that basis. Obviously if there's any other questions, feel free to reach out to the shareholders at VivoPower's line. We have a dedicated person now building that. Thank you for joining the call.
This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a good