FREYR Battery (NYSE: FREY) (“FREYR” or the “Company”), a
developer of clean, next-generation battery cell production
capacity, today reported financial results for the first quarter of
2023.
Highlights of the First Quarter 2023 and Subsequent
Events:
- In March, FREYR hosted customers, strategic partners,
government officials, and other key stakeholders at the Chapter One
opening event at the Company’s Customer Qualification Plant (“CQP”)
in Mo i Rana, Norway. The event marked the completion of
construction and the start of commissioning of the project that
FREYR’s Board of Directors initially authorized in July 2021.
- Following the opening event, FREYR’s project and operations
teams have been performing comprehensive commissioning,
integration, and production testing activities. With 296 of 388
distinct work packages integrating 35 production equipment packages
from 16 discrete suppliers complete, FREYR now expects to begin
casting electrodes with active cathode and anode materials in 2Q
2023. In the interim, FREYR’s teams are meticulously tuning in the
production line equipment to prepare the operators for the
interaction of the various production steps. Operating safely and
securely while clearing punch items and conducting initial systems
integration processes is a top priority as the active electrode and
battery cell production milestones approach.
- FREYR has received a letter from the Norwegian Government
stating that it is updating and augmenting its response to the
Inflation Reduction Act (“IRA”) and the EU’s Temporary Crisis
Transition Framework (“TCTF”). According to the letter, the
Norwegian Government is targeting solutions that enhance Norway’s
comparative advantages and preconditions. The letter included a
reiteration of Norway’s ambition to be an attractive host nation
across the battery value chain and to attract large battery related
investments in gigafactories through its national battery strategy
in close collaboration with the European Union. The Government has
also indicated that a detailed summary of its IRA response will be
coming this summer.
- With the tailwinds from recently announced support packages for
gigafactories in Germany, France, and Spain and in anticipation of
a response from the Norwegian Government, FREYR is proceeding with
development of Giga Arctic at a measured pace to facilitate the
optimization of project economics from a potential incentive
package. Developing Giga Arctic and Giga America in parallel is
intended to maximize option value for the Company, its customers,
and other key stakeholders.
- FREYR’s team has begun accelerated development of Giga America
as a multi-phase manufacturing project to maximize the financial
benefits of the IRA. The Company is now executing against a plan to
develop Giga America in two phases consisting of an initial two
production lines of 2.5 GWh of nameplate capacity with targeted
Start of Production (“SOP”) in summer 2025, followed by an
additional eight production lines yielding a combined total of 38
GWh of nameplate capacity subject to planned production line
equipment upgrades and final product specifications.
- FREYR’s financing activities are advancing through project
level financing efforts with strategic and financial stakeholders.
Discussions include the initial and subsequent phases of Giga
America, which is supported by the IRA; and Giga Arctic, which is
supported by the ongoing project financing process and the
anticipated Norwegian IRA response. Both processes are linked to
relevant progress on battery cell performance and operating
parameters at the CQP.
- In March, FREYR announced that the Company had entered into
discussions to form a strategic coalition with Glencore Plc (LN:
GLEN), Caterpillar Inc. (NYSE: CAT), Siemens AG (GY: SIE), and
Nidec Corporation (TSE: 6594) to pursue the scale up of sustainable
battery solutions across Europe, North America, and beyond.
Representatives from each of the four partners subsequently
participated in a panel with FREYR at the Chapter One CQP opening
event to discuss the aspirations of the coalition.
- In April, Siemens and FREYR announced that the two companies
have established a strategic partnership in alignment with the
proposed coalition to achieve giga scale battery production using
Siemens’ Xcelerator open digital business platform and the
immersive industrial metaverse co-created with Nvidia (NYSE: NVDA)
and AWS. Additionally, Siemens and FREYR indicated that they are
exploring potential project level financing solutions. The
partnership with Siemens is intended to significantly enhance
FREYR’s own ongoing developments in leveraging AI and digitally
enhanced simulation systems to improve future battery cell
performance and reduce testing and production lead-times.
- With the anticipated start of active electrode casting at the
CQP approaching and several other strategic and financial
initiatives gaining momentum, FREYR is proud to invite its
investors, analysts, and partners to the Company’s Chapter Two
event, FREYR’s inaugural Capital Markets Day, on June 27th at the
New York Stock Exchange. The Chapter Two event will be streamed
live and will feature remote video demonstrations of the CQP’s
functionality and electrode production on the SemiSolidTM platform
from Mo i Rana, Norway.
“The first quarter was punctuated by the start of FREYR’s
operational journey on the path to becoming a global producer of
clean, next-generation battery cells,” remarked Tom Einar Jensen,
FREYR’s Co-Founder and CEO. “With the grand opening of the CQP
behind us following the delivery of a remote, industrial scale
manufacturing project in under two years, our project, operations,
and technology teams have continued to work diligently to conduct
the complex and detailed commissioning, integration, and testing
activities that will enable us to reach initial battery production
and additional milestones in 2023. As a result of their continued
dedication and progress, I am very pleased to report that we expect
to begin producing electrodes with active cathode and anode
materials at the CQP in the current quarter, which is a key
milestone as we advance towards fully automated cell production.
With the tailwinds from the IRA prompting significant and timely
government support for gigafactories in Germany, France, and Spain,
FREYR is increasingly well positioned on both sides of the Atlantic
as we continue the development of Giga Arctic and Giga America in
parallel.”
“We are very happy to announce our phased project development
for Giga America with an initial targeted SOP in summer 2025 in
Coweta County, Georgia,” commented Jeremy Bezdek, President of
FREYR Battery US and EVP of Global Corporate Development. “We
currently project that this two-phase, ten production line project
could generate up to $8 billion in value to FREYR, and we have
initiated a capital raising process focused on project level
equity. We believe it’s very attractive for our strategic partners
to own plant level equity, and we expect that our shareholders will
be pleased that we are pursuing a funding solution for the project
that minimizes dilution.”
“As we enter the next phase of FREYR’s evolution, we intend to
communicate frequently about the relevant technical milestones
associated with scaling up clean battery production from the
SemiSolidTM platform, and we will regularly update the market on
the achievement of such milestones,” commented Jan Arve Haugan,
FREYR’s Chief Operating Officer. “With the help of 24M and our
other industrial partners, we are now positioned to begin producing
electrodes in the second quarter, with the ramp towards fully
automated production to follow.”
Business Update
- FREYR’s operations team is ramping up activities at the CQP
ahead of the anticipated first electrode production in 2Q 2023. In
the weeks subsequent to the Chapter One opening event, FREYR has
completed 296 of 388 distinct work streams integrating 35
production equipment packages from 16 discrete suppliers.
- Construction of Giga Arctic continues to proceed at a measured
pace in anticipation of a potential Norwegian response to the IRA.
FREYR spent $64.1 million on previously authorized capital
expenditures in 1Q 2023, approximately 75% of which were allocated
to Giga Arctic, with the remainder primarily going towards the
completion of the CQP.
- The project financing process for Giga Arctic has continued in
line with the pace of physical progress on the plant in
anticipation of a potential Norwegian response to the IRA. FREYR
continues to work with its banks, ECAs, and their consultants, and
the opening of the CQP marks a major progress point. Other
milestones key to the project financing include the CQP producing
testable batteries, acceptance of those batteries by customers, and
operational milestones that can be extrapolated to the performance
of Giga Arctic from an engineering perspective.
- FREYR is executing the Company’s plan to fast-track development
of Giga America. With an accelerated development timeline and
detailed project plan now in place, U.S. leadership is actively
engaging with potential strategic and financial partners to raise
project-level equity for Giga America. If the Company’s capital
formation endeavors proceed according to plan, FREYR is targeting a
final investment decision on the initial phase of Giga America
before year-end 2023.
- In conjunction with the start of Giga America project
development, FREYR has launched a capital formation process. For
the initial phase, FREYR is working with a financial advisor and is
pursuing project level investment from strategic and financial
partners to fund the accelerated two-line plan with a targeted SOP
in 2025. The Company plans to fund the subsequent phase through a
combination of traditional project financing and other
instruments.
- Now that the Giga America development plan has been defined,
FREYR has accelerated its discussions with the U.S. Department of
Energy Loan Production Office, particularly with respect to the
eight-line phase of the project. FREYR is also carefully monitoring
grant opportunities at the U.S. federal, state, and local levels
and received $20 million in cash from Coweta County in 1Q 2023, as
well as approval to receive another $7 million from the State of
Georgia later this year. These grants are part of the previously
announced multiple phase state and local incentive package of
approximately $410 million.
- The work on operationalizing the strategic coalition to
accelerate the energy transition is progressing. The proposed
coalition members have identified core focus areas that will
require substantial scale up of sustainable battery solutions. Such
focus areas currently include the decarbonization of heavy industry
and mining, providing energy as a service product, enabling
sustainable supply chains, ensuring recycling and circular
solutions as well as the decarbonization of other sectors. Since
the launch of this initiative, FREYR has been approached by a broad
range of other multinational companies from various sectors
expressing interest in joining the coalition.
- FREYR continues to make significant progress developing its
global supply chain by evaluating, pursuing, advancing, and signing
raw materials agreements with its growing network of partners. In
accordance with the Company’s plan to develop Giga Arctic and Giga
America in parallel while localizing supply chains, FREYR is
expanding existing relationships with suppliers to include U.S.
plant development and pursuing backup and alternative sources of
key material inputs.
Overview of Financial Results
- FREYR reported a net loss attributable to ordinary shareholders
for the first quarter of 2023 of $(12.7) million, or $(0.09) per
diluted share compared to a net loss for the first quarter 2022 of
$(34.9) million or $(0.30) per diluted share. The net loss in the
first quarter of 2023 was due to corporate overhead, spending to
support FREYR's projects and business development activities, and
research and development spending, partially offset by gains on
foreign currency transactions.
- As of March 31, 2023, FREYR had cash, cash equivalents, and
restricted cash of $474.8 million.
Business Outlook
FREYR is focused on advancing the following strategic mandates
and milestones:
- Produce the first battery from the CQP, integrate production
line equipment modules to reach fully automated production of cells
and modules, and ramp production of testable batteries. The
capability to produce sample cells from the CQP is expected to
accelerate and cement customer dialogues, fortify FREYR’s
competitive position, demonstrate the scalability of the 24M
manufacturing process, and satisfy key technical performance
milestones for financing purposes.
- Accelerate the Company’s expansion in the U.S. to address
customer inquiries for fit-for-purpose ESS solutions and to
maximize the financial impact of the IRA along with state and local
tax incentive packages.
- Work with leading strategic, financial, and government
stakeholders to advance FREYR’s capital formation journey. FREYR’s
intensifying financing processes include prospective project level
investment discussions; engagement with the U.S. Department of
Energy to secure financial assistance packages; advancing the Giga
Arctic project financing, and a range of industrial partnership
opportunities.
- Based on starting operations of a highly automated and
significantly simplified battery production process through the 24M
platform, FREYR intends to accelerate the development of its
proprietary, in-house development of AI and digitally enhanced
simulation systems. Battery design and production represent the
next frontier in AI-supported production with the potential to
dramatically improve future battery cell performance, as well as
testing and production lead times in deep collaboration with
globally leading companies.
- FREYR and its partners in the planned energy transition
coalition intend to work together to take on problems and
opportunities that exist across the battery value chain. The group
is focused on making a collective effort to solve issues faster
while also identifying commercial opportunities for each of the
members of the coalition.
- Advance 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 broaden and augment FREYR’s value proposition 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 forge new
strategic and financial partnerships that advance and accelerate
the Company’s industrialization plan and capital formation.
Presentation of First Quarter 2023 Results
A presentation will be held today, May 15, 2023, at 8:30 am
Eastern Daylight Time (2:30 pm Central European Time) to discuss
financial results for the first quarter 2023. 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: +44 20 3936 2999 United States: 1 (646) 787 9445
Spain: +34 919 01 16 44 Germany: +49 32 2210983334 Sweden: +46 10
884 80 16 Switzerland: +41 22 518 90 26
The participant passcode for the call is: 230388
A webcast of the conference call will be broadcast
simultaneously at
https://freyr.eventcdn.net/events/q1-2023-earnings-conference-call
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 the U.S. and Vaasa,
Finland. 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, financing, construction,
timeline, capacity, and other usefulness of FREYR’s CQP, Giga
Arctic, Giga America, and other planned or future production
facilities or Gigafactories (collectively, the “FREYR Facilities”);
the phased development of Giga America consisting of an initial two
production lines of 2.5 GWh of nameplate capacity with targeted
start of production in summer 2025, followed by an additional eight
production lines, yielding a combined total of 38 GWh of nameplate
capacity that could generate up to $8 billion in value to FREYR;
the progress and expected outcomes of FREYR’s industrialization
plans and capital formation; FREYR’s targeted start of casting
electrodes at the CQP with active cathode and anode materials in
2Q, and to reach initial battery production and additional
milestones in 2023; the progress and development of FREYR’s
strategic and financial partnerships, including the strategic
coalition with Glencore Plc, Caterpillar Inc., Siemens AG, and
Nidec Corporation; the progress and development of FREYR’s joint
ventures and partnerships; the exploration of FREYR's progress
toward additional debt or equity capital raises and project level
financing efforts, including project financing of Giga Arctic,
project-level equity for Giga America, and securing other financial
support to fund FREYR’s planned expansions; 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
commitment to accelerating its development plans in the U.S. based
on the financial incentives attendant to the Inflation Reduction
Act or from any state or local governments; the anticipation that
the Norwegian Government may provide a favorable response to the
Inflation Reduction Act and the EU’s Temporary Crisis Transition
Framework; the expectation that the sample cells from the CQP will
accelerate customer dialogues, fortify FREYR’s competitive
position, demonstrate the scalability of the 24M manufacturing
process, and satisfy key technical performance milestones; 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; FREYR's partnership with Siemens to achieve giga scale
battery production using Siemens’ Xcelerator open digital business
platform and to significantly enhance FREYR’s own ongoing
developments in leveraging AI and digitally enhanced simulation
systems to improve future battery cell performance and reduce
testing and production lead-times; FREYR’s intention to maximize
sustainable long-term shareholder value and enhance its competitive
position; FREYR’s intention to establish decarbonized and localized
supply chains, and expanding existing relationships with suppliers
to include U.S. plant development and pursuing backup and
alternative sources of key material inputs; the development of 24M
Technologies, Inc.’s technologies and their use in the FREYR
Facilities; 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-3 filed with the U.S. Securities and Exchange
Commission (the “SEC”) on September 1, 2022 and (ii) FREYR's Annual
Report on Form 10-K for the year ended December 31, 2022 that was
filed with the SEC on February 27, 2023, 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 materially from those expressed in any
forward-looking statements.
FREYR BATTERY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In Thousands)
(Unaudited)
March 31, 2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
392,536
$
443,063
Restricted cash
82,240
119,982
Prepaid assets
6,070
8,293
Other current assets
11,275
8,117
Total current assets
492,121
579,455
Property and equipment, net
265,439
210,777
Intangible assets, net
2,925
2,963
Long-term investments
22,658
—
Convertible note
—
19,954
Right-of-use asset under operating
leases
23,415
14,538
Other long-term assets
14
11
Total assets
$
806,572
$
827,698
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
11,941
$
6,765
Accrued liabilities and other
43,953
51,446
Share-based compensation liability
4,382
4,367
Total current liabilities
60,276
62,578
Warrant liability
32,439
33,849
Operating lease liability
18,884
11,144
Other long-term liabilities
20,000
—
Total liabilities
131,599
107,571
Commitments and contingencies
Shareholders’ equity:
Ordinary share capital, no par value,
245,000 ordinary shares authorized and 139,854 and 139,705 ordinary
shares issued and outstanding, respectively, as of both March 31,
2023 and December 31, 2022
139,854
139,854
Additional paid-in capital
774,069
772,602
Treasury stock
(1,041
)
(1,041
)
Accumulated other comprehensive (loss)
income
(24,624
)
9,094
Accumulated deficit
(215,780
)
(203,054
)
Total ordinary shareholders' equity
672,478
717,455
Non-controlling interests
2,495
2,672
Total equity
674,973
720,127
Total liabilities and equity
$
806,572
$
827,698
FREYR BATTERY
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In Thousands, Except per
Share Amounts)
(Unaudited)
Three months ended
March 31,
2023
2022
Operating expenses:
General and administrative
$
30,002
$
24,614
Research and development
4,844
2,859
Share of net loss of equity method
investee
25
167
Total operating expenses
34,871
27,640
Loss from operations
(34,871
)
(27,640
)
Other income (expense):
Warrant liability fair value
adjustment
1,405
(8,688
)
Convertible note fair value adjustment
1,074
221
Interest income, net
3,003
15
Foreign currency transaction gain
(loss)
16,048
(331
)
Other income, net
641
1,516
Total other income (expense)
22,171
(7,267
)
Loss before income taxes
(12,700
)
(34,907
)
Income tax expense
(203
)
—
Net loss
(12,903
)
(34,907
)
Net loss attributable to non-controlling
interests
177
—
Net loss attributable to ordinary
shareholders
$
(12,726
)
$
(34,907
)
Weighted average ordinary shares
outstanding - basic and diluted
139,705
116,854
Net loss attributable to ordinary
shareholders per share - basic and diluted
$
(0.09
)
$
(0.30
)
Other comprehensive loss:
Net loss
$
(12,903
)
$
(34,907
)
Foreign currency translation
adjustments
(33,718
)
333
Total comprehensive loss
$
(46,621
)
$
(34,574
)
Comprehensive loss attributable to
non-controlling interests
177
—
Comprehensive loss attributable to
ordinary shareholders
$
(46,444
)
$
(34,574
)
FREYR BATTERY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three months ended
March 31,
2023
2022
Cash flows from operating
activities:
Net loss
$
(12,903
)
$
(34,907
)
Adjustments to reconcile net loss to cash
used in operating activities:
Share-based compensation expense
1,477
2,047
Depreciation and amortization
208
92
Reduction in the carrying amount of
right-of-use assets
399
285
Warrant liability fair value
adjustment
(1,405
)
8,688
Convertible note fair value adjustment
(1,074
)
(221
)
Share of net loss of equity method
investee
25
167
Foreign currency transaction net
unrealized gain
(15,488
)
—
Changes in assets and liabilities:
Prepaid assets and other current
assets
(3,403
)
(4,848
)
Accounts payable, accrued liabilities and
other
21,477
(1,228
)
Operating lease liability
(1,862
)
(210
)
Net cash used in operating activities
(12,549
)
(30,135
)
Cash flows from investing
activities:
Purchases of property and equipment
(64,067
)
(7,932
)
Investments in equity method investee
(1,655
)
(3,000
)
Purchases of other long-term assets
(1,000
)
—
Net cash used in investing activities
(66,722
)
(10,932
)
Cash flows from financing
activities:
Net cash used in financing activities
—
—
Effect of changes in foreign exchange
rates on cash, cash equivalents, and restricted cash
(8,998
)
14
Net decrease in cash, cash equivalents,
and restricted cash
(88,269
)
(41,053
)
Cash, cash equivalents, and restricted
cash at beginning of period
563,045
565,627
Cash, cash equivalents, and restricted
cash at end of period
$
474,776
$
524,574
Significant non-cash investing and
financing activities:
Accrued purchases of property and
equipment
$
24,402
$
11,289
Reconciliation to condensed
consolidated balance sheets:
Cash and cash equivalents
$
392,536
$
523,208
Restricted cash
82,240
1,366
Cash, cash equivalents, and restricted
cash
$
474,776
$
524,574
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230515005409/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 katrin.berntsen@freyrbattery.com Tel: (+47)
920 54 570
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