Leclanché’s H119 performance was adversely affected by delays in completing financing for the St Kitts project. Management had expected construction to start in Q219 but it has been pushed back to Q419. Given the scale of this project, which is the largest the company has undertaken to date, our estimates remain under review until there is greater visibility on when different phases of the project are scheduled to complete. We note that this project pushes the order book above CHF100m, with an additional CHF166m qualified pipeline projects for delivery between 2020 and 2023, including lithium-ion battery systems for Bombardier trains. Management is seeking CHF70m funding to realise this potential.
Leclanché’s H119 results were adversely affected by delays in completing financing for a large solar generation plus energy storage facility in St Kitts and extended product qualification times. Group revenues declined from CHF22.3m in H118 to CHF7.0m. Because the cell manufacturing facility was underused and staffing was increased to support the ongoing e-transport and pending St Kitts projects, EBITDA losses widened by 31% y-o-y to CHF28.6m. Including CHF5.9m in additional debt related to the introduction of IFRS16, net debt reduced by CHF9.4m during the sixmonth period to CHF25.1m, as CHF36m convertible loans held by majority shareholder FEFAM were converted to equity, increasing its shareholding to 61%.
Including c US$57m for the turnkey EPC contract in St Kitts, which remains subject to completion of due diligence by the financing entity in November, the group’s order book for delivery in H219 and FY20 is CHF120m. There is an additional CHF166m of qualified pipeline projects for delivery in FY20–FY23. However, to execute on these projects and be certain of continuing as a going concern, management is raising CHF30.0m to finance working capital requirements for FY20 and CHF40.0m to increase both cell and module production capacity.
Our valuation and our estimates remain under review until there is greater clarity on the funding and the timing of deliveries for the St Kitt’s project.