VALOE OYJ
Valoe Corporation Half-Year Report
VALOE HALF-YEAR REPORT 1 JANUARY – 30 JUNE 2020
SUMMARY
- During April -
June 2020 , the net sales ofValoe Group , under the IFRS standards, increased by 428 percent. The net sales wereEUR 0.4 million (in 2019 EUR 0.08 million). The EBIT wasEUR -0.6 million (EUR -0.7 million ), the profit for the period wasEUR -1.0 million (EUR -1.3 million ), undiluted earnings per share wereEUR -0.01 (EUR -0.07 ), diluted earnings per share wereEUR -0.01 (EUR -0.07 ) and the EBITDAEUR -0.3 million (EUR -0.3 million ). - During the second quarter of 2020, the company's financial situation improved after the company agreed on new financing facilities totaling approximately
EUR 6.35 million . InApril 2020 , Valoe entered into a convertible note facility agreement withWinance Investment (”Winance”) concerning a funding arrangement of up toEUR 3,000,000 in convertible loan notes that will be accompanied by share subscription warrants. In an offering arranged inMay 2020 ,Nordic Environment Finance Corporation (NEFCO) investedEUR 1.25 million in Valoe’s equity and also granted anEUR 1.25 million loan to Valoe. At the end of the reporting period, inJune 2020 , the company arranged another directed share issue with which the company collected in totalEUR 0.85 million new capital. Further, in the offerings arranged in May andJune 2020 the debts of the company decreased in total byEUR 1.5 million as the subscribers converted their receivables into shares. - The last installment of the purchase price of Valoe's cell plant in
Lithuania was paid inMay 2020 . The ownership of the cell plant had been transferred to Valoe already inOctober 2019 . The first IBC test cells were manufactured at the cell plan inMay 2020 . Travel restrictions related to Covid-19 pandemic and difficulties in the delivery of materials and services due to the pandemic have during the reporting period hindered and continue to hinder the start of production of solar cells and the start of deliveries to customers. According to current estimates, deliveries will commence in October-November 2020 . - In April-
May 2020 , Valoe transferred its solar module production from Mikkeli toJuva ,Finland , where the company has remarkably larger production facilities. Module production commenced at theJuva plant inJune 2020 . At the new plant, Valoe is building a modernized production line, designed by the company itself, for conventional solar modules which will also enable the mass production of bifacial solar modules calledChrystal Twin . The goal is to have the new production line in use during 2020. In addition, Valoe will launch a new production line, based on the company’s own design, which will be used to manufacture Valoe Odd Form modules and photovoltaic systems, e.g. for the automotive industry. The mass production of Valoe Odd Form modules is planned to commence in 2021. - More information on principle activities and events during and after the reporting period can be found in the stock exchange releases published on Valoe’s website at www.valoe.com. The Interim Report has been drawn up in compliance with the IAS 34 Interim Financial Reporting standard. In the Interim Report Valoe has applied the same accounting principles as in its Annual Report 2019. The Interim Report has not been audited.
MARKET GUIDANCE FOR 2020
Valoe estimates that Valoe Group’s net sales for 2020 will be approximately
Travel restrictions related to Covid-19 pandemic and difficulties in the delivery of materials and services due to the pandemic have slowed down Valoe’s module production and have hindered and continue to hinder the start of production of solar cells and the start of deliveries to Valoe’s US and other customers. According to current estimates, deliveries would commence in October-
THE FUTURE OUTLOOK
During the year 2020, Valoe aims to launch several new products whose success is crucial to the company's prospects. The sales of Chrystal and
Valoe estimates that both car manufacturers and business owners and operators in the logistics are working to start using solar energy in their vehicles on a large scale in the next few years. Valoe aims to be in a good position by the time growth in the VIPV (Vehicle Integrated Photovoltaics) applications begins. Valoe’s solar energy system developed especially for vehicles and other mobile installations and the associated Odd Form module are now ready for delivery to customers for field testing. In addition to other benefits from using the system, according to Valoe’s calculations the fuel consumption of a refrigerated trailer, for example, will decrease significantly in the Finnish conditions as well. Thus the amount of CO2 produced by logistics will reduce accordingly. According to Valoe’s calculations passenger car fuel consumption can drop by up to more than 0.6 liters per 100 kilometers by utilizing solar energy.
In
The capacity of Valoe's module production will increase significantly as the new production lines ramp up. The production line, designed by the company itself, for bifacial IBC solar modules called
IBC solar cells to be manufactured at Valoe’s Lithuanian solar cell plant have been sold as a component sale already before the plant was completed: In the summer 2019, Valoe signed a supply agreement with a US customer. Valoe estimates that the annual value of the agreement is approximately
MANAGING DIRETOR’S REPORT
In the second quarter of the financial year 2020,
In the second quarter of the financial year 2020, Valoe managed to secure financing facilities to complete the company's product development phase. According to the current assessment, the company has sufficient funding available to it until the cash flow from operating activities turns positive. There is currently a great deal of uncertainty about the future due to the second wave of Covid-19 pandemic and unpredictability of pandemic related government regulations. Although the company has a better financial position it cannot afford to delay estimated cash flows. Valoe’s cash flow situation continues to be very tight until its cash flow from operating activities turns positive.
FINANCIAL DEVELOPMENT
During the second quarter of 2020, the company's financial situation improved after the company agreed on new financing facilities totaling approximately
With the new financing facilities, Valoe was in
Valoe’s financial situation is described in more detail below under FINANCING.
During the reporting period, the company transferred its module production and most of its research and development activities to the new plant in
Valoe’s order book includes an
Financial Result
The following financials include Valoe Group’s operations. The figures in brackets are comparison figures for the corresponding period in 2019, unless stated otherwise.
April –
- Valoe Group’s net sales increased by 428 percent to
- EBITDA was
- Operating profit was
- The profit before taxes was
- Profit for the period was
- Undiluted earnings per share were
- Diluted earnings per share were
January –
- Valoe Group’s net sales increased by 512 percent to
- EBITDA was
- Operating profit was
- The profit before taxes was
- Profit for the period was
- Undiluted earnings per share were
- Diluted earnings per share were
VALOE’S STRATEGY
The non-binding estimations in Valoe’s strategy are targeted to the future and based on the management’s current estimations. They involve risks and uncertainty by their nature and may be affected by changes in general financial situation or business environment.
Valoe's strategy is based on the fact that the limitations of solar energy utilization will be resolved in the future. Successful business requires capability to compete in the international markets. Valoe follows closely research and development related to its business and adapts applicable technologies to its own product concepts. Valoe's solutions are mainly based on Valoe's own technologies which the company has developed together with the world's leading experts and research institutes. The company strives for rapid and profitable growth in the future.
Valoe has defined that its strategy is based on the vision according to which solar energy will be the best solution to meet the world's energy needs in the future. Two minutes of the sun provide the world with one year’s energy needs of entire humanity. Solar energy is silent, odorless and the cleanest form of energy. The total volume of the solar energy business, excluding the price of electricity generated worldwide, is approximately
Valoe, as a promoter of solar power, is actively involved in the global development of solar applications and later also in storage applications. Valoe's technology partners have a key role in development worldwide.
Valoe's operations in technology development and manufacturing are based on in-depth knowledge of materials technology, knowledge and versatile use of laser technology, and experience as a supplier of automation and robotization applications worldwide.
Based on Valoe’s strategy the company has the following four service and product concepts:
1. SALES AND SUPPLY OF PHOTOVOLTAIC MODULES AND SYSTEMS (MODULES)
Sales of modules and small photovoltaic systems are Valoe’s most visible product group. All Valoe’s PV modules are manufactured at the company’s module factory in
Current Status of the MODULES Concept:
The cornerstone of Valoe's strategy is the IBC back contact technology and solar cells and modules based on it. The company intends to replace the current Chrome II glass-glass module with Chrystal IBC module family including a
Outlook for the MODULES Concept:
The company's goal is to introduce lightweight, flexible and efficient odd-form modules with polymer and composite structures into the new solar module market. The company started developing Odd Form modules together with its customers in 2018. Such modules can be used, for example, in vehicles, for off-site energy needs for logistics chains, or in aviation and aerospace applications. In these environments, energy supply problems have generally been solved in very expensive and less environmentally friendly ways, and there is no normal competition in the market. A solar power system must have very high efficiency combined with efficient space usage in order to succeed in this market. Valoe believes that the company’s back contact technology and IBC cells together provide Valoe with good conditions for developing photovoltaic applications for these markets.
In the long run, Valoe will include technologies related to energy storages and fuel cells as well as technologies increasing general usage of solar electricity in the company’s offering. With regard to the expertise in these technologies Valoe will cooperate with its technology partners.
2. DEVELOPMENT AND SALES OF PRODUCTION LINES AND RELATED COMPONENTS (PRODUCTION LINES)
Manufacturers operating in the developing markets like
Outlook for the PRODUCTION LINES Concept:
Valoe continues its development work in order to increase the efficiency of the production technology for back contact modules. Valoe has enhanced its module production technology sales and contacts with potential customers have been established. Valoe believes that in the future it will also be able to supply production lines to the customers starting to use Valoe’s odd-form modules.
3. MANUFACTURING PARTNER NETWORK (PARTNERS)
Valoe’s strategic goal is to sign manufacturing partnership agreements or technology licensing agreements with solar module manufacturers who as newcomers on the market would commit themselves to Valoe’s production technology and to using components designed for Valoe’s back contact technology. Valoe provides a partner with a turnkey delivery project; secures availability of components for a partner either by manufacturing components by itself or by procuring required components from elsewhere; and as a technology partner commits itself to minority shareholding in a manufacturing company. Manufacturing partners pursued by Valoe may operate e.g. on developing markets and produce solar energy modules for local and nearby markets. Value of a typical turnkey plant delivery is more than
Current Status of the PARTNERS Concept:
Valoe signed its first manufacturing partnership agreement with
On the basis of the early stages of the Ethiopian project, Valoe has gained valuable information on costs and profitability for future solar plant deliveries and projects. Valoe’s manufacturing plant concept, equipment, technology and deliveries are standardized and with the experience gained in the first project the profitability of the following project deliveries can be expected to be good. Further, each delivered manufacturing plant or production line generates to Valoe continuous profitable business through component sales. Valoe’s objective is that only Valoe’s components are used at the manufacturing plants and production lines Valoe has delivered. The product certificates Valoe has received on behalf of a customer are valid only if the customer uses components approved by Valoe. Valoe’s growth strategy is based on signing manufacturing partnership agreements.
On
Outlook for the PARTNERS Concept:
Valoe is aiming to sign at least 10 manufacturing partnership contracts. After achieving this amount of partnerships, Valoe’s partnership network is so wide that even the biggest solar module manufacturers will not remarkably benefit from the advantage of economies of scale e.g. in raw materials purchases compared to Valoe’s network.
4. MODULE COMPONENTS SALES MAINLY TO MANUFACTURING PARTNERS (COMPONENTS)
Special components are the most important part in Valoe’s strategy in terms of net sales potential. Valoe’s first component is Conductive Back Sheet (CBS) that has been developed by the company. Based on current estimation, considering price level in the near future, each production line will annually require back sheets worth approximately 5 –
In the future, Valoe plans to provide its manufacturing partners and other customers also with the company’s solar cells based on the IBC technology and possibly also other special components. According to the company's estimates, a full-sized module factory could buy Valoe cells for about
Current Status of the COMPONENTS Concept:
As previously disclosed, Valoe has signed its first cell supply agreement worth about
Outlook for the COMPONENTS Concept:
Given the company’s need for cells for its own standard modules and Odd Form modules, and customers’ orders for cells, Valoe estimates that demand for IBC cells manufactured in its Lithuanian factory may in the future exceed Valoe's production capacity, provided production starts as expected. Valoe should consider and decide which business model would be best for it if demand exceeds the company’s production capacity.
MARKET CONDITIONS
The competitiveness of the solar electricity, compared to the fossil fuels and other renewable energy sources, will continue increasing faster and faster. Already in 2018, the production cost of solar electricity was below the cost of traditional electricity production in many geographical areas. According to the ITRPV 2019 report, the annual market now worth around
The objectives of Valoe's strategy are based on having the cell that is one of the most efficient cells in the growing market and combining it with the back contact technology used by Valoe and gaining more market share.
According to forecasts, the share of solar energy in transport energy consumption will increase significantly. Solar modules will be integrated for example in cars and other vehicles. Valoe develops odd-form modules with IBC cells just for this type of application.
Valoe is prepared for its competitors introducing their own back contact modules and other innovations in the near future. The companies that will succeed in price competition will continue decreasing the prices of their standard products based on sales volumes and increasing production capacity and will continue worldwide price war.
The Covid-19 pandemic has already changed the market traditionally dominated by large Chinese manufacturers. Disruptions to Chinese companies’ deliveries caused by the virus may have changed the supply chain permanently. Valoe, as a fully European manufacturer and a company using European core components, expects its potential to develop positively in such market changes.
Valoe is focusing on developing production technology for next generation cells and modules. In the high-end price categories ’s price reduction has not been as remarkable. Valoe views that the most favorable markets for the company are those where the turnover generated is not of interest to major manufacturers and where technological innovations are more important than price. Generally, Valoe's business models are always based on locally generated solar power, whether it concerns a geographical area or electrical equipment. Thus, the natural geographical markets for Valoe are countries and regions with incomplete or malfunctioning grid. Such areas exist primarily in
Valoe provides production technology to all companies interested in back contact modules, e.g. large and often national solar energy projects; module subcontractors; and/or original equipment manufacturers. However, the tough price competition may hinder a Valoe-sized company to succeed, regardless of quality or technical advantages.
Valoe views that diversified local production will increase significantly in the near future. However, Valoe is not aiming at becoming a local manufacturer but when the company decides to enter into new geographical area it always seeks for a local partner and an investor for a solar module factory project. Valoe is responsible for production technology, product quality and development. Local investors and partners are responsible for project funding as well as marketing and product sales.
FINANCING
In
During the second quarter of 2020, the company's financial situation improved significantly after the company agreed on new financing facilities totaling approximately
On
On
At the end of the reporting period, on
Valoe has a product development loan granted by Business Finland in 2015 in the amount of
Valoe is one of the partners of an about
Having the above mentioned financial facilities and the existing financial commitment related to the Horizon 2020 HighLite project, the company has assessed that it has sufficient financial commitments to complete the IBC cell plant investment in
If the company's cash flow from operations did not turn positive as planned, for example due to difficulties to ramp up production at the Lithuanian cell plant, the company's cash equivalents are estimated to be sufficient until
In order to partially execute the financing arrangement between the company and Winance disclosed on
In connection with the acquisition of Solitek’s solar cell production business between Valoe and BOD, Valoe issued a convertible bond of
The subscription period of the subordinated Convertible Bond 4/2019 issued by Valoe in
Cash flow from business operations before investments in January – June was
Financial Uncertainties
General uncertainty caused by the Covid-19 virus and possible worldwide deep recession increase business related risks remarkably. Valoe estimates that Valoe Group’s operative cash flow to turn positive on a monthly basis during the first quarter of 2021, provided that Covid-19 does not, directly or indirectly, further delay the start of mass production of solar cells at the Lithuanian plant and the start of full-scale deliveries. Should the positive turn in the cash flow be postponed beyond
The company has budgeted a significant part of the funding granted to it for the investment in the Lithuanian cell factory. Should unpredictable events cause a significant budget overrun, the current funding could prove too low.
Valoe’s financial and other risks have been handled in the item “Risk management, Risks and Uncertainties” of this Annual Report.
RESEARCH AND DEVELOPMENT
The objective of Valoe's product development is that the energy produced by Valoe’s solar modules shall be the greenest as well as the cheapest energy on the market. In addition, Valoe's goal is to produce solar modules whose materials are selected to extend the module’s economic life by more than 100 years.
The importance of the research and development for the company is well illustrated by the human resources allocated to research and development:
During the recent years, the focus of Valoe’s research and development has been on a project relating to cell development and efficiency improvement as well as on development of IBC cells. In 2019, product development resources were further increased to rapidly introduce Valoe Odd Form modules in the market. Valoe develops flexible and lightweight composite modules for new applications to be used in the automotive, aviation, and aerospace industries. With the introduction of such a new application, Valoe will have an opportunity to cooperate closely with its customer on product development and industrialization. The customer commits and Valoe gets a long-term customer, for example, for its robotic assembly lines. Valoe is also prepared to offer its customers contract manufacturing of the products or components it develops.
The cooperation for self-charging electric vehicles with
In 2019 and 2020, the main challenge for Valoe's research and development was, as the first and according to Valoe’s knowledge the only company in
In
Over the past three years, Valoe has created a global partner network to support the company’s own research and development. With the partners Valoe develops its products and technology to implement the next phase of the company’s growth strategy. During the financial year 2018, Valoe signed a development and technology transfer agreement with ISC Konstanz that is one of the leading solar energy research institute in
Valoe’s other main technology partners include
Additionally, Valoe’s research and development focuses on developing the production line concept. Equipment and machinery needed in automated module manufacturing process are based on Valoe’s own innovations and designed by Valoe.
Valoe is aiming at protecting its innovations in all important geographical areas.
The Group’s research and development costs during the reporting period amounted to
INVESTMENTS
Gross investments in the continuing operations during January – June period amounted to
PERSONNEL
At the end of
SHARES AND SHAREHOLDERS
At the end of the reporting period Valoe’s share capital amounted to
The company had a total of 9,984 shareholders at the end of
The largest shareholders on
| shares | percentage | ||
| 1 | SAVCOR TECHNOLOGIES OY | 36 970 914 | 18,3 |
| 2 | NEFCO | 23 148 148 | 11,4 |
| 3 | GASELLI CAPITAL OY | 13 098 979 | 6,5 |
| 4 | SAVISALO IIKKA | 6 216 709 | 3,1 |
| 5 | 5 740 616 | 2,8 | |
| 6 | APTEEKKIEN ELÄKEKASSA | 5 550 000 | 2,7 |
| 7 | SCI-FINANCE OY | 5 406 722 | 2,7 |
| 8 | OLLILA JORMA | 4 525 640 | 2,2 |
| 9 | SAVCOR OY | 4 384 449 | 2,2 |
| 10 | HISINGER-JÄGERSKIÖLD | 3 750 000 | 1,8 |
| OTHERS | 93 697 389 | 46,3 | |
| TOTAL | 202 489 566 | 100,00 |
As per the date of this Interim Report Valoe’s share capital amounted to
| shares | procentage | ||
| 1 | SAVCOR TECHNOLOGIES OY | 39 470 914 | 18,8 |
| 2 | NEFCO | 23 148 148 | 11,0 |
| 3 | GASELLI CAPITAL OY | 13 098 979 | 6,3 |
| 4 | OLLILA JORMA | 7 303 417 | 3,5 |
| 5 | SAVISALO IIKKA | 6 216 709 | 3,0 |
| 6 | APTEEKKIEN ELÄKEKASSA | 5 550 000 | 2,7 |
| 7 | SCI-FINANCE OY | 5 406 722 | 2,6 |
| 8 | RELANDER PÄR-GUSTAF | 4 477 778 | 2,1 |
| 9 | K22 FINANCE OY | 4 447 777 | 2,1 |
| 10 | KAKKONEN KARI | 4 447 777 | 2,1 |
| OTHERS | 96 050 974 | 45,8 | |
| TOTAL | 209 619 195 | 100,00 | |
The members of the Board of Directors and the President and CEO, either directly or through companies under their control, held a total of 56.029.459 shares in the company on
The price of Valoe’s share varied between
SHARE ISSUE AUTHORIZATIONS IN FORCE
The company has a share issue authorization in force granted by the Annual General Meeting 2020 according to which the Board of Directors is authorized to decide on a share issue with and/or without payment, either in one or in several occasions, including right to resolve on option rights and other rights entitling to shares pursuant to the Chapter 10, Section 1 of the Finnish Companies Act so that the number of new shares issued based on the authorization or number of shares issued based on option rights and other special rights entitling to the shares pursuant to the Chapter 10, Section 1 of the Finnish companies Act, would equal to the total maximum amount of 150,000,000 shares. The authorization does not exclude the Board’s right to decide also on directed issue of shares or option rights and other special rights pursuant to the Chapter 10, Section 1 of the Finnish Companies Act. It was resolved that the authorization may be used for important arrangements from the company’s point of view e.g. to strengthen the capital structure, to finance investments, for acquisitions and business transactions or other business arrangements, or to expand ownership structure, or for incentive plans, or for other purposes resolved by the Board involving a weighty financial reason for issuing shares or option rights or special rights entitling to shares pursuant to the Chapter 10, Section 1 of the Finnish Companies Act. The share issue may be executed by deviating from the shareholders' pre-emptive subscription right provided the company has a weighty financial reason for that. The authorization is in force until
THE MAJOR EVENTS DURING THE REPORTING PERIOD
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On 24 April Valoe disclosed a notice to annual general meeting.
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On 8 May Valoe announced that the company repaid the short-term loan to Winance, issued convertible notes and warrants pursuant to the finacing facilities between the company and Winance, and disclosed a conversion of convertible notes.
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On 8 June 2020Valoe disclosed that it has resolved on the share subscription based on the conversion of the promissory notes issued under the company's convertible bond 4/2019. In the said share subscription, the lender of the convertible bond 4/2019 subscribed in total 1,155,921 new shares in the company by converting the promissory notes into the new shares pursuant to the conversion request delivered to the company.
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THE MAJOR EVENTS AFTER THE REPORTING PERIOD
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RISK MANAGEMENT, RISKS AND UNCERTAINTIES
Valoe’s Board of Directors is responsible for the control of the company’s accounts and finances. The Board is responsible for internal control, while the President and CEO handles the practical arrangement and monitors the efficiency of internal control. Business management and control are taken care of using a Group-wide reporting and forecasting system.
The purpose of risk management is to ensure that any significant business risks are identified and monitored appropriately. The company’s business and financial risks are managed centrally by the Group’s financial department, and reports on risks are presented to the Board of Directors as necessary.
Due to the small size of the company and its business operations, Valoe does not have an internal auditing organization or an audit committee.
Risks Related to Financial Situation and Financing
These risks have also been described in the section Financing, risk related paragraph.
There are significant risks related to Valoe’s financing. During the second quarter of 2020, the company agreed on new financing facilities totaling approximately
Having these new financial facilities as well as the funding commitment relating to the EU’s Horizon 2020 HighLite project, with remaining amount of
If the company's cash flow from operations did not turn positive as planned, for example due to difficulties to ramp up production at the Lithuanian cell plant, the company's liquid assets are estimated to be sufficient until
Failure to realize the assumptions related to the company's cash flow forecasts could lead to a situation where the company's impairment tests would indicate the need to write down the company's intangible and tangible assets or goodwill. In such a situation, an impairment of intangible and tangible assets could have a material adverse effect on the company's financial position. A detailed description of the company's impairment testing can be found in Note 12 to the consolidated financial statements.
The Covid-19 virus has caused general uncertainty and exceptional circumstances in the world, which significantly increase business risks. The Company estimates Valoe Group’s operative cash flow to turn positive on a monthly basis during the first quarter of 2021, provided that Covid-19 pandemic does not, directly or indirectly, further delay the start of mass production of solar cells at the Lithuanian plant and the start of full-scale deliveries. Should the turn in cash flow be postponed, for example due to contraction in the market of Valoe's
In exceptional circumstances, banks or public or private funding organizations may face unpredictable pressures that could slow the payment of already agreed funding to Valoe. Such a situation could, in some circumstances, cause the company's working capital situation to tighten again.
The company has budgeted a significant part of the funding granted to it for the investment in the Lithuanian cell factory. Should unpredictable events cause a significant budget overrun, the current funding could prove too low.
Risks Related to the Strategy, Business Operations, New Technologies, and Manufacturing
Valoe develops solar module and solar cell technology. Development and commercialization of new technologies involves always uncertainties and significant risks. If the company’s product development projects were not successful, or business environment or market situation changed, the company’s ability to provide its customers with competitive products or services could be threatened. In such a situation, the company’s the profitability could be lower than expected which could have a significant effect in company’s profitability and financial situation.
If Valoe was not able to ramp up its Lithuanian cell plant or its processes, and the quality or quantity requirements for IBC cells were not met, it could affect the deliveries of the IBC cell technology. These include e.g. deliveries of Valoe Chrystal and Valoe Chrystal Twin modules as well as Valoe Odd Form Modules including the planned cell deliveries to a US customer mentioned below. On
The company uses components from international suppliers and subcontractors to produce its products. The main raw materials and factors of production used in the components are plastics and metals, the market prices of which vary according to market conditions. The main raw materials in solar power modules are silicon and silver. The most important component in the cell production is wafer. Should the market prices of these main materials rise, it could affect negatively the company’s profitability and financial situation, if the company fails to pass on any rising procurement costs of the components and raw materials to its customer prices.
The Covid-19 pandemic can be assumed to have an effect on the world market prices and availability of the components. Further, travel restrictions related to Covid-19 pandemic and difficulties in the delivery of materials and services due to the pandemic have slowed down Valoe’s module production and have hindered and continue to hinder the start of production of solar cells and the start of deliveries to Valoe’s US and other customers. At the moment, it is impossible to estimate the final effect pandemic has on Valoe.
Risks Related to the Ethiopian Order and Operations in Emerging Markets
The company is using part of its resources to market and sell its technology in emerging markets. So far, there has been no significant orders from emerging markets except for the Ethiopian order for a solar plant worth
Administrative and Legal Risks
Public funding and investment subsidies have a significant incentive effect in the solar energy business. In
Risks Due to the Covid-19 Pandemic
The company cannot assess whether the Covid-19 pandemic, with its official regulations and guidelines, will directly or indirectly further change the company's current estimates of, for example, the completion time of the Lithuanian cell plant. Significant postponement of completion would affect both the timing of the start of cell deliveries and the delivery schedule for the power plants based on the IBC cells. Delays can occur for example due to travel restrictions, difficulties in deliveries of materials and services or a sudden drop in end-customer demand.
Should the Covid-19 pandemic cause a substantial delay in the ramp-up of the cell plant in
The certain statements in this Interim Report and especially the non-binding estimations in Valoe’s strategy are targeted to the future and based on the management’s current estimations. They involve risks and uncertainty by their nature and may be affected by changes in general financial situation or business environment.
In Mikkeli,
Board of Directors
| Consolidated statement of comprehensive income | ||||||
| (unaudited) | ||||||
| 1 | 4-6/2020 | 4-6/2019 | 1-6/2020 | 1-6/2019 | 1-12/2019 | |
| Net sales | 428 | 81 | 759 | 124 | 328 | |
| Cost of sales | -630 | -221 | -1 155 | -421 | -1 147 | |
| Gross profit | -202 | -140 | -396 | -297 | -818 | |
| Other operating income | 11 | 133 | 11 | 133 | 177 | |
| Product development expenses | -151 | -440 | -468 | -822 | -1 873 | |
| Sales and marketing expenses | -116 | -112 | -234 | -234 | -467 | |
| Administrative expenses | -143 | -150 | -372 | -328 | -649 | |
| Other operating expenses | 0 | 0 | 0 | 0 | -45 | |
| Operating profit | -601 | -709 | -1 457 | -1 548 | -3 674 | |
| Financial income | 0 | 0 | 0 | 0 | 0 | |
| Financial expenses | -410 | -561 | -876 | -1 060 | -2 097 | |
| Profit before taxes | -1 011 | -1 270 | -2 333 | -2 608 | -5 771 | |
| Income taxes | 0 | 0 | 0 | 0 | 0 | |
| Profit/loss for the period | -1 011 | -1 270 | -2 333 | -2 608 | -5 771 | |
| Profit/loss attributable to: | ||||||
| Shareholders of the parent company | -1 011 | -1 270 | -2 333 | -2 608 | -5 771 | |
| Earnings/share (basic), eur | -0,01 | -0,07 | -0,02 | -0,15 | -0,14 | |
| Earnings/share (diluted), eur | -0,01 | -0,07 | -0,02 | -0,15 | -0,14 | |
| Total comprehensive income for the period | -1 011 | -1 270 | -2 333 | -2 608 | -5 771 | |
| Total comprehensive income attributable to: | ||||||
| Shareholders of the parent company | -1 011 | -1 270 | -2 333 | -2 608 | -5 771 | |
| Consolidated statement of financial position | ||||
| (unaudited) | ||||
| Adjusted | ||||
| 1 | ||||
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment | 9 500 | 4 695 | 8 996 | |
| Consolidated goodwill | 441 | 441 | 441 | |
| Other intangible assets | 4 062 | 4 801 | 4 325 | |
| Available-for-sale investment | 9 | 9 | 9 | |
| Non-current receivables | 672 | 672 | 672 | |
| Total non-current assets | 14 684 | 10 618 | 14 443 | |
| Current assets | ||||
| Inventories | 766 | 739 | 833 | |
| Trade and other non-interest-bearing receivables | 1 061 | 667 | 429 | |
| Cash and cash equivalents | 754 | 2 | 7 | |
| Total current assets | 2 581 | 1 409 | 1 268 | |
| Total assets | 17 265 | 12 027 | 15 712 | |
| EQUITY AND LIABILITIES | ||||
| Equity attributable to shareholders of the parent company | ||||
| Share capital | 80 | 80 | 80 | |
| Other reserves | 25 614 | 12 081 | 21 243 | |
| Retained earnings | -26 964 | -20 726 | -24 607 | |
| Total equity | -1 270 | -8 566 | -3 284 | |
| Non-current liabilities | ||||
| Non-current loans | 6 602 | 5 299 | 4 934 | |
| Other non-current liabilities | 3 095 | 6 628 | 4 013 | |
| Other non-current liabilities | 691 | 396 | 686 | |
| Total non-current liabilities | 10 388 | 12 322 | 9 632 | |
| Current liabilities | ||||
| Current interest-bearing liabilities | 3 690 | 3 285 | 3 723 | |
| Trande and other payables | 4 216 | 4 787 | 5 391 | |
| Current provisions | 241 | 123 | 249 | |
| Total current liabilities | 8 147 | 8 195 | 9 363 | |
| Liabilities directly associated with assets classified as held for sale | 0 | 75 | 0 | |
| Total liabilities | 18 535 | 20 593 | 18 995 | |
| Equity and liabilities total | 17 265 | 12 027 | 15 712 | |
| Valoe recategorizes equipment that was previously incorrectly categorized in the balance sheet as part of its product development costs. The error has been corrected to the comparison figures | ||||
| Consolidated statement of cash flows | |||||
| (unaudited) | |||||
| 1 | 1-6/2020 | 1-6/2019 | 1-12/2019 | ||
| Cash flow from operating activities | |||||
| Income statement profit/loss before taxes | -2 333 | -2 608 | -5 771 | ||
| Non-monetary items adjusted on income statement | |||||
| Depreciation and impairment | + | 594 | 831 | 1 699 | |
| Unrealized exchange rate gains (-) and losses (+) | +/- | 0 | 0 | 2 | |
| Other non-cash transactions | +/- | -315 | -333 | -130 | |
| Change in provisions | +/- | -8 | -184 | -58 | |
| Financial income and expense | + | 876 | 1 060 | 2 095 | |
| Total cash flow before change in working capital | -1 186 | -1 235 | -2 163 | ||
| Change in working capital | |||||
| Increase (-) / decrease (+) in inventories | 67 | -80 | -56 | ||
| Increase (-) / decrease (+) in trade and other receivables | -600 | -65 | 17 | ||
| Increase (+) / decrease (-) in trade and other payables | -376 | 270 | -136 | ||
| Change in working capital | -909 | 125 | -174 | ||
| Adjustment of financial items and taxes to cash-based accounting | |||||
| Interest paid | - | 163 | 115 | -223 | |
| Other financial items | - | 31 | 8 | 30 | |
| Financial items and taxes | -194 | -123 | 193 | ||
| NET CASH FLOW FROM BUSINESS OPERATIONS | -2 289 | -1 232 | -2 144 | ||
| CASH FLOW FROM INVESTING ACTIVITIES | |||||
| Investments in tangible and intangible assets | - | 830 | 306 | 1 152 | |
| Acquisition of subsidiaries and other business units | - | 1 062 | 0 | 1 938 | |
| Grants received | + | 483 | 0 | 0 | |
| NET CASH FLOW FROM INVESTMENTS | -1 409 | -306 | -3 090 | ||
| CASH FLOW FROM FINANCING ACTIVITIES | |||||
| Proceeds from share issue | + | 1 911 | 0 | 3 159 | |
| Financing arrangement with | + | 1 000 | 0 | 1 000 | |
| Proceeds from non-current borrowings | + | 1 659 | 960 | 1 010 | |
| Proceeds from current borrowings | + | 539 | 940 | 2 112 | |
| Repayment of current borrowings | - | 664 | 381 | 2 062 | |
| NET CASH FLOW FROM FINANCING ACTIVITIES | 4 445 | 1 519 | 5 219 | ||
| INCREASE (+) OR DECREASE (-) IN CASH FLOW | 747 | -19 | -15 | ||
| Consolidated statement of changes in equity | ||||
| (unaudited) | ||||
| 1 | Share capital | Distributable non-restricted equity fund | Retained earnings | Total equity |
| 80 | 21 243 | -24 607 | -3 284 | |
| Profit/loss for the period | - | - | -2 333 | -2 333 |
| Translation difference, comprehensive income | - | - | 0 | 0 |
| Transactions with owners: | ||||
| Sale of own shares Winance | 0 | 870 | 0 | 870 |
| Share issues | 0 | 3 689 | 3 689 | |
| Share issue expenses | -189 | - | -189 | |
| Own equity component of the convertible bond | 0 | 0 | -24 | -24 |
| 80 | 25 614 | -26 964 | -1 270 | |
| 1 | Share capital | Distributable non-restricted equity fund | Retained earnings | Total equity |
| 80 | 11 804 | -18 927 | -7 044 | |
| Profit/loss for the period | - | - | -2 608 | -2 608 |
| Translation difference, comprehensive income | - | - | 0 | 0 |
| Transactions with owners: | ||||
| Sale of own shares | 0 | 277 | 0 | 277 |
| Own equity component of the convertible bond | 0 | 0 | 810 | 810 |
| 80 | 12 081 | -20 726 | -8 566 | |
| Key figures | |||||
| (unaudited) | |||||
| 1 | 4-6/2020 | 4-6/2019 | 1-6/2020 | 1-6/2019 | 1-12/2019 |
| Net sales | 428 | 81 | 759 | 124 | 328 |
| Operating profit | -601 | -709 | -1 457 | -1 548 | -3 674 |
| % of net sales | -140,3 % | -876,8 % | -192,0 % | -1252,3 % | -1118,9 % |
| EBITDA | -297 | -307 | -863 | -717 | -1 975 |
| % of net sales | -69,4 % | -379,4 % | -113,7 % | -580,1 % | -601,4 % |
| Profit before taxes | -1 011 | -1 270 | -2 333 | -2 608 | -5 771 |
| % of net sales | -236,1 % | -1569,6 % | -307,4 % | -2109,7 % | -1757,4 % |
| Balance Sheet value | 17 265 | 12 027 | 17 265 | 12 027 | 15 712 |
| Equity ratio, % | -7,4 % | -71,2 % | -7,4 % | -71,2 % | -21,1 % |
| Net gearing, % | neg. | neg. | neg. | neg. | neg. |
| Gross investments | 1 041 | 252 | 1 280 | 386 | 4 767 |
| % of net sales | 243,2 % | 311,7 % | 168,7 % | 312,5 % | 1451,8 % |
| Research and development costs | 151 | 440 | 468 | 822 | 1 873 |
| % of net sales | 35,3 % | 544,3 % | 61,6 % | 664,7 % | 570,3 % |
| Order book | 16 673 | 17 064 | 16 673 | 17 064 | 17 187 |
| includes | 15 834 | 15 834 | 15 834 | 15 834 | 15 834 |
| Personnel on average | 34 | 24 | 33 | 25 | 26 |
| Personnel at the end of the period | 34 | 24 | 34 | 24 | 32 |
| Non-interest-bearing liabilities | 4 216 | 4 862 | 4 216 | 4 862 | 5 391 |
| Interest-bearing liabilities | 14 078 | 15 608 | 14 078 | 15 608 | 13 355 |
| Share key indicators | |||||
| Earnings/share (basic) | -0,01 | -0,07 | -0,02 | -0,15 | -0,14 |
| Earnings/share (diluted) | -0,01 | -0,07 | -0,02 | -0,15 | -0,14 |
| Equity/share | -0,01 | -0,48 | -0,01 | -0,49 | -0,08 |
| P/E ratio | -10,65 | -2,48 | -4,18 | -1,18 | -0,69 |
| Highest price | 0,09 | 0,43 | 0,10 | 0,80 | 0,80 |
| Lowest price | 0,04 | 0,17 | 0,04 | 0,13 | 0,07 |
| Average price | 0,07 | 0,27 | 0,07 | 0,29 | 0,15 |
| Closing price | 0,07 | 0,18 | 0,07 | 0,18 | 0,10 |
| Market capitalisation, at the end of the period, MEUR | 14,0 | 3,2 | 14,0 | 3,2 | 11,4 |
| Calculation of | |||||
| EBITDA, %: | Operating profit + depreciation + impairment | ||||
| Net sales | |||||
| Equity ratio, %: | Total equity x 100 | ||||
| Total assets - advances received | |||||
| Net gearing, %: | Interest-bearing liabilities - cash and cash equivalents | ||||
| and marketable securities x 100 | |||||
| Shareholders' equity + non-controlling interests | |||||
| Earnings/share (EPS): | Profit/loss for the period to the owner of the parent company | ||||
| Average number of shares adjusted for share issue | |||||
| at the end of the financial year | |||||
| Equity/share: | Equity attributable to shareholders of the parent company | ||||
| Undiluted number of shares on the balance sheet date | |||||
| P/E ratio: | Price on the balance sheet date | ||||
| Earnings per share | |||||
| Related party transactions | |||
| (unaudited) | |||
| The Group has sold and purchased goods and services from companies in which the majority holding and/or power of decision granting control of the company is held by members of the Group's related parties. Sales of goods and services carried out with related parties are based on market prices. | |||
| The Group entered into the following transactions with related parties: | |||
| 1 | 1-6/2020 | 1-6/2019 | 1-12/2019 |
| Sales of goods and services | |||
| 0 | 3 | 3 | |
| Total | 0 | 3 | 3 |
| Purchases of goods and services | |||
| 24 | 24 | 48 | |
| Basso J., business management services in | 79 | 0 | 0 |
| 18 | 28 | 59 | |
| 60 | 39 | 61 | |
| 3 | 4 | 8 | |
| 0 | 6 | 8 | |
| 4 | 0 | 0 | |
| Other | 22 | 0 | 0 |
| Total | 210 | 101 | 183 |
| Interest expenses and other financial expenses | |||
| SCI-Finance Oy | 69 | 35 | 112 |
| 62 | 166 | 292 | |
| 8 | 16 | 28 | |
| 1 | 0 | 0 | |
| Others | 35 | 85 | 137 |
| Total | 175 | 302 | 569 |
| Non-current convertible subordinated loan from related parties | 461 | 2 461 | 415 |
| Non-current other subordinated loan from related parties | 141 | 2 011 | 1 160 |
| Other current liabilities to related parties | 485 | 1 032 | 565 |
| Current interest payable to related parties | 151 | 764 | 429 |
| Trade payables and other non-interest-bearing liabilities to related parties | 476 | 642 | 468 |
| Trade and other current receivables from related parties | 14 | 22 | 14 |
| 1 | 1-6/2020 | 1-6/2019 | 1-12/2019 |
| Wages and remuneration | |||
| Salaries of the management and Board | 247 | 240 | 491 |
| Fair values | ||
| (unaudited) | ||
| Carrying amount | Fair value | |
| 1 | ||
| Financial assets | ||
| Available-for-sale investments | 9 | 9 |
| Trade and other receivables | 1 061 | 1 061 |
| Cash and cash equivalents | 754 | 754 |
| Financial liabilities | ||
| R&D loan, non-current | 5 352 | 5 352 |
| Non-current subordinated loan | 3 095 | 3 095 |
| Other non-current liabilities | 1 941 | 1 941 |
| Convertible bond, current | 420 | 420 |
| Loans from financial institutions, current | 1 125 | 1 125 |
| R&D loan, current | 495 | 495 |
| Other loans, current | 755 | 755 |
| Other liabilities, current | 894 | 894 |
| Trade payables and other non-interest-bearing liabilities | 1 862 | 1 862 |
| The fair value of non-current liabilities is expected to correspond to the carrying amount and recognized to their fair value when recorded. There has been no significant change in common interest rate after the withdrawal of the loans. | ||
| Other non-current and other current liabilities include | ||
| Change in intangible and tangible assets | |||
| (unaudited) | |||
| 1 | |||
| Includes tangible assets, consolidated goodwill and other intangible assets | |||
| Carrying amount, beginning of period | 13 762 | 9 486 | 10 381 |
| Depreciation and impairment | -597 | -831 | -1 699 |
| Acquisition of a subsidiary | 0 | 0 | 3 433 |
| Additions | 1 280 | 1 282 | 998 |
| Adoption of a new Standard (IFRS 16) | 0 | 0 | 649 |
| Disposals | -443 | 0 | 0 |
| Carrying amount, end of period | 14 002 | 9 936 | 13 762 |
| The assets and liabilities of the contracts have been recognized in IFRS 16 leases and properties at the date of transition | |||
| Commitments and contingent liabilities | |||
| (unaudited) | |||
| 1 | |||
| Assets pledged for the company | |||
| Loans from financial institutions | 425 | 475 | 450 |
| Other liabilities | 281 | 281 | 281 |
| Promissory notes secured by pledge | 4 700 | 4 700 | 4 700 |
| Operating lease liabilities | |||
| Payable within one year | 667 | 299 | 500 |
| Payable over one year | 1 210 | 438 | 1 000 |
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