Desert Control publishes its Q2 2022 report and its interim financial results

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Sandnes, Norway: Desert Control today released its second quarter 2022 report and interim financial results.

The company grew beyond expectations in the United States and continued to meet its commitments in the second quarter.

Highlights of Q2 and H1 2022

Commencement of business activities in the UAE:

  • The first commercial deliveries began in the United Arab Emirates at the end of June according to plan and included customers in the agriculture and landscaping sectors.
  • Desert Control’s first Dubai-based customer pilot has been converted to paid delivery, extending LNC treatment to the entire property on commercial terms.
  • Mawarid Desert Control LLC is gradually becoming operational after a slow start in the first half.
  • Recruitment activities to strengthen the UAE sales force with Mawarid Desert Control began in June, and new salespeople are expected to be onboarded during the third quarter.

Ahead of expectations in the United States:

  • The LNC validation study with the University of Arizona shows positive interim results.
  • Awareness of desert control and LNC is growing in Arizona, thanks to the collaboration with the University of Arizona and the continued severity of droughts and water scarcity.
  • The US team is preparing to engage with commercial farmers in Yuma alongside Stage 2 of the validation study with the University of Arizona in H2. Progress with the first potential customer is expected in the third quarter, well ahead of the original plan.
  • The US operational headquarters was established in central Arizona, strategically positioned to serve the initial target market in the United States.
  • LNC’s production capacity increased with the arrival of two new LNC (half-cluster) production units in Arizona from the United Arab Emirates ahead of the Q2 ultimo plan.
  • Hiring activities to staff the additional production capacity began in June, and staff are expected to be onboarded during the third quarter.

Continued compliance with commitments:

  • Reinforcement of the management team and integration of new team members from July 1st. (The accelerated learning kicked off with a field visit to the UAE from July 2).
  • Hired a business development team to accelerate go-to-market initiatives.
  • Prototype successfully deployed to accelerate large-scale open-field LNC application.
  • The completion of LNC’s third production hub confirms the availability of on-demand capacity, and the units deployed in the United States demonstrate the potential for global asset mobility.

Financial Key Figures

Second quarter 2022 [second quarter 2021 in brackets]

Turnover NOK 0.5 million [NOK 0.0M]

EBITDA NOK -20.3m [NOK -3.4M]

Profit or loss for the year NOK -16.8M [NOK -3.4M]

Gross R&D expenditure NOK 0.9m [NOK 0.2M]

Innovation Norway grants NOK 0.9 million [NOK 1M]

First semester 2022 [first half 2021 in brackets]

Turnover NOK 1 million [NOK 0.0M]

EBITDA NOK -43.1m [NOK -12.6M]

Profit or loss for the year NOK -40.5M [NOK -12.7M]

Gross R&D expenditure NOK 2.5m [NOK 4.1M]

Innovation Norway grants NOK 2.9 million [NOK 1M]

Total cash balance 30.06.22 (bank deposits and funds) NOK 122.9m [NOK 204.5M]

Equity 30.06.22 NOK 150.4M (equity ratio 92.4%) [NOK 213.3 (94.5%)]

-Ends-

About Desert Control

Desert Control specializes in climate-smart agro-tech solutions to combat desertification, land degradation and water scarcity. Its patented Liquid Natural Clay (LNC) enables sustainable management of ecosystems by restoring and protecting the soil’s ability to retain water and increase yields for agriculture, forests and green landscapes.

For more information please contact:
Ole Kristian Sivertsen
Chief executive officer
Email: oks@desertcontrol.com

Marianne Vika Boe
Financial director
Email: marianne.boe@desertcontrol.com

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