FREYR Battery (NYSE: FREY) (“FREYR” or the “company”), a
developer of clean, next-generation battery cell production
capacity, today reported financial results for the second quarter
of 2022.
Highlights of the second quarter 2022 and subsequent
events:
- In June, FREYR’s Board of Directors sanctioned the construction
of its first commercial scale battery manufacturing facility, the
29 GWh nameplate capacity Giga Arctic development in Mo i Rana,
Norway.
- Launched Giga Arctic project financing efforts in mid-July with
the initiation of a market sounding process across a consortium of
commercial banks, Export Credit Agencies (“ECAs”) and Multinational
Development Financings Institutions (“MDFIs”).
- Advanced the site selection process in conjunction with Koch
Strategic Platforms of the joint venture’s first planned
Gigafactory in the U.S., Giga America, ahead of the proposal of the
Inflation Reduction Act of 2022. FREYR plans to develop Giga
America to a targeted nameplate capacity of 35 GWh with generation
3 technology from 24M Technologies.
- Hosted a delegation from the Norwegian Government at FREYR’s
Giga Arctic site for the announcement of the comprehensive
Norwegian national battery strategy, which includes an indicative
commitment of €400 million in loan guarantees and/or direct lending
from Export Finance Norway (“Eksfin”) to support FREYR’s
development of Giga Arctic.
- Identified total debt financing support of over $1.6 billion
based on visibility from ECAs and MDFIs, exceeding management’s
leverage target for the $1.7 billion estimated total capital cost
for the expanded Giga Arctic project.
“Our second quarter was punctuated by the achievement of key
milestones, the demonstration of meaningful financial support from
the Norwegian Government and other key OECD governmental entities,
the consummation of new strategic relationships across the battery
value chain, and accelerating commercial momentum,” remarked Tom
Einar Jensen, FREYR’s CEO. “As energy security and
government-backed decarbonization mandates gain traction in key end
markets across Europe and the U.S., we are advancing several
strategic initiatives to further our aspirations to become an
industrial partner of choice in the clean battery space.”
“Looking ahead to the second half of 2022 and beyond, our team
is focused on executing construction of the Customer Qualification
Plant and Giga Arctic projects in Mo i Rana, formalizing
commitments with our financial, governmental, and strategic
partners to accelerate our growth, and increasing our presence
across the battery value chain,” concluded Jensen.
Business Update
- FREYR is in advanced negotiations to convert the company’s key
COAs to value accretive long-term sales agreements.
- FREYR is deeply committed to accelerating its development plans
in the U.S. based on improving market conditions and the financial
incentives attendant to the proposed Inflation Reduction Act. In
conjunction with joint venture partner Koch Strategic Platforms,
the company has narrowed the candidate sites for its Gigafactory
development in the U.S. down to five potential locations and opened
an office in Boston, MA. The company expects to reach final site
selection during 2H 2022.
- FREYR’s Board of Directors has approved approximately $70
million of incremental capital spending on the Giga Arctic
development to ensure timely orders of critical path, long-lead
time items.
- Construction of FREYR’s CQP in Mo i Rana is progressing
steadily with anticipated factory acceptance testing in 2H 2022.
The facility is on track to commence a ramp up of sample cell
production in 1Q 2023.
- FREYR formally launched the project financing process for the
Giga Arctic development in mid-July. The company is engaged in a
market sounding process with a consortium of potential lenders that
includes 14 commercial banks, led by the mandated lead arrangers
Société General and DNB; four ECAs, including Eksfin; and two
MDFIs, the Nordic Investment Bank and the European Investment Bank.
Initial feedback from the market sounding process is anticipated
during 3Q 2022.
- FREYR finalized its previously announced long-term physical
supply agreement with Statkraft, Europe's largest producer of
renewable energy, which secures hydropower renewable electricity
for Giga Arctic and the Customer Qualification Plant on globally
competitive terms.
Results Overview, Financing and Liquidity
- FREYR reported net income for the second quarter of 2022 of
$4.7 million or $0.04 per diluted share compared to a net loss for
the first quarter 2022 of ($34.9) million or ($0.30) per diluted
share. Net income in the second quarter of 2022 was primarily due
to a $33.4 million gain on the fair value adjustment to our warrant
liability. This non-cash fair value adjustment can vary materially
from period-to-period based on several factors, including changes
to FREYR’s stock price.
- As of June 30, 2022, FREYR had cash, cash equivalents, and
restricted cash of $488.4 million.
Business Outlook
FREYR is focused on advancing the following strategic mandates
and milestones over the next 18 months:
- Finalize commitments of capital support from ECAs, MDFIs, and
commercial banking partners to fund the construction of the Giga
Arctic project.
- Complete the site selection process for the Giga America
project in the U.S. and engage with key stakeholders to accelerate
development in accordance with the Inflation Reduction Act.
- Based on the continued favorable evolution of supply-demand
dynamics in core end markets, FREYR has established upsized
capacity targets for 2025 of a minimum of 50 GWh, over 100 GWh by
2028, and more than 200 GWh by 2030, respectively.
- Replicate the Giga Arctic development across multiple
jurisdictions based on a commercial framework of allocating 50% of
respective plant capacities to long-term sales agreements and 50%
to merchant sales. FREYR’s planned 50/50 approach aligns with an
increasingly favorable supply-demand environment for clean battery
production.
- Pursue a technology licensing agreement with Aleees (TWSE:
5227) that will unlock the potential construction of a lithium iron
phosphate (“LFP”) cathode plant in the Nordic region to
significantly reduce costs and CO2 footprint.
- Progress discussions that will further FREYR’s ambition to be
an industrial scaling partner of choice for leading complementary
technology platforms that target distinct and additional end market
applications across the ESS, passenger EV, and commercial electric
mobility markets.
- Continue to advance FREYR’s augmented value proposition
strategy with the intention to maximize sustainable long-term
shareholder value and enhance the company’s competitive position.
Key objectives in accordance with this strategy are to continue to
evaluate opportunities to diversify FREYR’s position across the
global battery value chain; and to explore potential partnerships
that would enable FREYR to broaden its participation across the
battery technology spectrum.
Presentation of Second Quarter 2022 Results
A presentation will be held today, August 8, 2022, at 7:30 am
Eastern Daylight Time (1:30 pm Central European Time) to discuss
financial results for the second quarter 2022. The results and
presentation material will be available for download at
https://ir.freyrbattery.com.
To access the conference call, listeners should contact the
conference call operator at the appropriate number listed below
approximately 10 minutes prior to the start of the call.
Participant conference call dial-in numbers:
United Kingdom: 020 3936 2999 United States: 1 (646) 664 1960
All other locations: +44 20 3936 2999
The participant passcode for the call is: 868004
A webcast of the conference call will be broadcast
simultaneously at https://streams.eventcdn.net/freyer/2022q2/ on a
listen-only basis. Please log in at least 10 minutes in advance to
register and download any necessary software.
A replay of the webcast will be available at
https://ir.freyrbattery.com/events-and-presentations/Events-Calendar/default.aspx
About FREYR Battery
FREYR Battery aims to provide industrial scale clean battery
solutions to reduce global emissions. Listed on the New York Stock
Exchange, FREYR’s mission is to produce green battery cells to
accelerate the decarbonization of energy and transportation systems
globally. FREYR has commenced building the first of its planned
factories in Mo i Rana, Norway and announced potential development
of industrial scale battery cell production in Vaasa, Finland, and
the United States. FREYR intends to deliver a minimum of 50 GWh of
battery cell capacity by 2025, over 100 GWh of annual capacity by
2028, and over 200 GWh of annual capacity by 2030. To learn more
about FREYR, please visit www.freyrbattery.com.
Cautionary Statement Concerning Forward-Looking
Statements
The information in this press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements, other than statements of present or historical fact
included in this press release, including, without limitation,
statements regarding the development, construction, timeline,
capacity, and other usefulness of FREYR’s CQP, Giga Arctic, and
other planned or future production facilities or Gigafactories in
the U.S. (collectively, the “FREYR Facilities”); the ability to
secure critical path, long-lead time equipment for the FREYR
Facilities in a timely manner; the construction of FREYR’s CQP and
its anticipated factory acceptance testing in H2 2022, as well as
the commencement of a ramp up of sample cell production in Q1 2023;
the progress and development of customer relationships and offtake
agreements; FREYR’s ability to convert any conditional agreements,
including heads of terms agreements, into definitive agreements;
the development and growth of FREYR’s target markets; the progress
and development of FREYR’s joint ventures and partnerships; the
development and commercialization of other battery technologies or
battery chemistries; exploration of or progress toward additional
debt or equity capital raises, including securing financial
support, such as loan guarantees and debt financing support from
governments and other entities, to fund FREYR’s planned expansion;
FREYR’s ability to advance strategic initiatives to further its
aspirations to become an industrial partner of choice in the clean
battery space; FREYR’s expansion across the battery value chain;
FREYR’s commitment to accelerating its development plans in the
U.S. based on improving market conditions and the financial
incentives attendant to the proposed Inflation Reduction Act; the
continued favorable evolution of supply-demand dynamics in core end
markets; FREYR’s ability to replicate the Giga Arctic development
across multiple jurisdictions based on a commercial framework of
allocating 50% of respective plant capacities to long-term sales
agreements and 50% to merchant sales; the pursuit of a technology
licensing agreement with Aleees; the progress of discussions that
will further FREYR’s ambition to be a scaling partner of choice for
leading parallel technology platforms that target distinct and
complimentary end market applications across the ESS, passenger EV,
and commercial electric mobility spaces; the advancement of FREYR’s
augmented value proposition strategy and the ability to meet its
key objectives in accordance with this strategy; and the attainment
of operational milestones are forward looking statements.
These forward-looking statements involve significant risks and
uncertainties that could cause actual results to differ materially
from the expected results. Most of these factors are outside
FREYR’s control and are difficult to predict. Additional
information about factors that could materially affect FREYR is set
forth under the “Risk Factors” section in (i) FREYR’s Registration
Statement on Form S-1 filed with the Securities and Exchange
Commission (the “SEC”) on August 9, 2021, as amended, and (ii)
FREYR’s annual report on Form 10-K filed with the SEC on March 9,
2022, available on the SEC’s website at www.sec.gov.
Except as otherwise required by applicable law, FREYR disclaims
any duty to update any forward-looking statements, all of which are
expressly qualified by the statements in this section, to reflect
events or circumstances after the date of this press release.
Should underlying assumptions prove incorrect, actual results and
projections could differ material from those expressed in any
forward-looking statements.
FREYR BATTERY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In Thousands)
(Unaudited)
June 30,
December 31,
2022
2021
ASSETS
Current assets:
Cash and cash equivalents
$
484,204
$
563,956
Restricted cash
4,160
1,671
Prepaid assets
19,348
15,882
Other current assets
5,728
1,282
Total current assets
513,440
582,791
Property and equipment, net
45,339
21,062
Convertible note
20,722
20,231
Equity method investments
2,475
2,938
Right-of-use asset under operating
leases
12,785
—
Other long-term assets
11
11
Total assets
$
594,772
$
627,033
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
9,025
$
3,813
Accrued liabilities and other
31,853
15,077
Accounts payable and accrued liabilities -
related party
620
3,316
Deferred income
1,236
1,380
Share-based compensation liability
985
2,211
Total current liabilities
43,719
25,797
Warrant liability
24,420
49,124
Operating lease liability
11,090
—
Long-term share-based compensation
liability
2,583
6,627
Total liabilities
81,812
81,548
Commitments and contingencies
Shareholders’ equity:
Ordinary share capital, no par value,
245,000 ordinary shares authorized and 116,854 issued as of both
June 30, 2022 and December 31, 2021 and 116,704 and 116,854
ordinary shares outstanding as of June 30, 2022 and December 31,
2021, respectively
116,854
116,854
Additional paid-in capital
539,639
533,418
Treasury stock
(1,052
)
—
Accumulated other comprehensive (loss)
income
(7,982
)
(524
)
Accumulated deficit
(134,499
)
(104,263
)
Total shareholders’ equity
512,960
545,485
Total liabilities and shareholders’
equity
$
594,772
$
627,033
FREYR BATTERY
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In Thousands, Except per
Share Amounts)
(Unaudited)
Three months ended
Six months ended
June 30,
June 30,
2022
2021
2022
2021
Operating expenses:
General and administrative
$
28,150
$
7,176
$
52,764
$
16,188
Research and development
3,082
3,045
5,941
5,952
Equity in losses from investee
296
—
463
—
Total operating expenses
31,528
10,221
59,168
22,140
Loss from operations
(31,528
)
(10,221
)
(59,168
)
(22,140
)
Other income (expense):
Warrant liability fair value
adjustment
33,392
—
24,704
—
Redeemable preferred shares fair value
adjustment
—
69
—
75
Convertible notes fair value
adjustment
270
—
491
—
Interest income
26
2
61
8
Interest expense
(12
)
—
(32
)
—
Foreign currency transaction gain
(loss)
1,421
(208
)
1,090
(188
)
Other income, net
1,102
2,322
2,618
2,322
Total other income (expense)
36,199
2,185
28,932
2,217
Income (loss) before income taxes
4,671
(8,036
)
(30,236
)
(19,923
)
Income tax expense
—
—
—
—
Net income (loss)
$
4,671
$
(8,036
)
$
(30,236
)
$
(19,923
)
Weighted average shares outstanding:
Basic
116,830
37,452
116,842
37,452
Diluted
119,250
37,452
116,842
37,452
Net income (loss) per share:
Basic
$
0.04
$
(0.21
)
$
(0.26
)
$
(0.53
)
Diluted
0.04
(0.21
)
(0.26
)
(0.53
)
Other comprehensive income (loss):
Net income (loss)
$
4,671
$
(8,036
)
$
(30,236
)
$
(19,923
)
Foreign currency translation
adjustments
(7,791
)
177
(7,458
)
234
Total comprehensive loss
$
(3,120
)
$
(7,859
)
$
(37,694
)
$
(19,689
)
FREYR BATTERY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Six months ended June
30,
2022
2021
Cash flows from operating activities:
Net loss
$
(30,236
)
$
(19,923
)
Adjustments to reconcile net loss to cash
used in operating activities:
Share-based compensation expense
2,923
4,688
Depreciation
186
24
Reduction in the carrying amount of
right-of-use assets
746
—
Warrant liability fair value
adjustment
(24,704
)
—
Redeemable preferred shares fair value
adjustment
—
(75
)
Convertible note fair value adjustment
(491
)
—
Equity in losses from investee
463
—
Foreign currency transaction net
unrealized gain
(2,113
)
—
Other
—
28
Changes in assets and liabilities:
Prepaid assets
(5,229
)
(1,049
)
Other current assets
(7,434
)
(50)
Accounts payable and accrued
liabilities
15,265
3,659
Accounts payable and accrued liabilities –
related party
638
950
Other current liabilities
(1
)
—
Deferred income
—
1,431
Operating lease liability
(443
)
—
Net cash used in operating activities
(50,430
)
(10,317
)
Cash flows from investing activities:
Proceeds from property related grants
4,874
—
Purchases of property and equipment
(26,420
)
(107
)
Investments in equity method investee
(3,000
)
—
Purchases of other long-term assets
—
(12
)
Net cash used in investing activities
(24,546
)
(119
)
Cash flows from financing activities:
Repurchase of treasury shares
(1,052
)
—
Proceeds from issuance of redeemable
preferred shares
—
7,500
Net cash (used in) provided by financing
activities
(1,052
)
7,500
Effect of changes in foreign exchange
rates on cash, cash equivalents,
and restricted cash
(1,235
)
73
Net decrease in cash, cash equivalents,
and restricted cash
(77,263
)
(2,863)
Cash, cash equivalents, and restricted
cash at beginning of period
565,627
14,945
Cash, cash equivalents, and restricted
cash at end of period
$
488,364
$
12,082
Reconciliation to consolidated balance
sheets:
Cash and cash equivalents
$
484,204
$
11,279
Restricted cash
4,160
803
Cash, cash equivalents, and restricted
cash
$
488,364
$
12,082
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220808005189/en/
Investor contact: Jeffrey Spittel Vice President,
Investor Relations jeffrey.spittel@freyrbattery.com Tel: (+1)
281-222-0161
Media contact: Katrin Berntsen Vice President,
Communication and Public Affairs katrin.berntsen@freyrbattery.com Tel: (+47)
920 54 570
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