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Wello - Clean energy from ocean waves

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anonymous 6 days ago

Can you please elaborate turnover forecasts for 2019-2021? Very high growth rates in revenues combined with incredibly high EBITDA margins are likely to bring deserved distrust to forecasts amongst investors. How confident are you delivering e.g. 16M€ revenue in 2020 or is it just based on most optimistic excel-scenario? What real-world business drivers are behind these numbers? Given we have already passed Q1/2019 how do see currently achieving €2M turnover for 2019? There must be quite good visibility for the current financial year.

Wello
Wello Oy
6 days ago

In our business it is still challenging to give exact forecasts on development of turnover. It will stay in "zero" till it at once jumps to millions, and soon after that to tens of millions. When exactly that takes place is of course still unclear. It's when the customer makes the decision and commits.

I wouldn't call my forecast the most optimistic scenario. Based on our pipeline even a faster growth is possible.

anonymous 10 days ago

Hi, Has Fortum invested in this round?

Wello
Wello Oy
7 days ago

Fortum is not investing in this round but they are actively involved and spending money in our CEFOW project in Orkney Islands. They are the lead partner of the project.

Wello
Wello Oy
10 days ago

A small update.

We have now reached and surpassed our initial goal threshold of 1M €, and we're now sailing at full speed towards the upper equity ceiling of 2.5M€ (we're currently at 111% of the goal).

Key to reaching the goal was the announcement of the recent Letter of Intent we signed with Ixin Group (http://www.ixin.in). In collaboration with the Indian government, Ixin is interested in acquiring Wello's Penguin Core package for the construction of a 20MW and 10MW wave energy parks, to be deployed on the West coast near Mumbai, and East coast of India.

Two main Finnish business publications, among several others, have covered the news.

Read the Kauppalethi article: https://www.kauppalehti.fi/uutiset/kovien-tavoitteiden-espoolaisyritys-julkisti-merkittavan-hankkeen-intiaan-halutaan-kaksi-wello-aaltoenergiapuistoa/9851836b-c1e9-4c5a-81b4-15cf156d9736

Read the Tekniikka & Talous article: https://www.tekniikkatalous.fi/tekniikka/energia/espoolainen-wello-aikeissa-vieda-aaltoenergiaa-intian-lansi-ja-itarannikolle-petrokemian-ixin-ryhma-kumppanina-6762929

anonymous 11 days ago

Hi, Could you elaborate on the assumptions behind the abnormally high EBITDA-margins (84% and over 90%)for years 2020 and 2021. What volumes do those numbers imply? Could you provide a full P&L for the business for the forecast period, please.

Wello
Wello Oy
7 days ago

In the early years of the company we have been involved in constructing prototypes and technology. This is capital-intensive but has been necessary for proving the technology and survivability.

In our market entry strategy we are shifting towards providing Penguin Core: the design, rights, know-how, and software. We have a small number of different designs for different wave climates. This means that we are utilizing and multiplying something that we already possess, that has been created during earlier years of the company. The product will be delivered over internet and multiplying it from 5MW to 100MW for example does not increase our costs practically at all, but increases the income.

All figures are based on the expectation of the market growing fast and being practically unlimited in the beginning. This is of course speculative and nobody can foresee exactly how it finally realizes.

anonymous 11 days ago

  1. What are the maintenance costs for a Penguin after it is deployed?

  2. Are there ideas for using the power generator in normal boats or ships to generate electricity? If so, is there any plans regarding developing that?

Wello
Wello Oy
10 days ago

We do have some good experience on maintenance and maintenance costs in full scale device. In our LCO calculation we use figure 15 000€/device/year, which is conservative compared to figures that many of our competitors use in their calculations. We want our calculation to be on the safe side. This cost does not include the site specific costs.

We have a technology called Power Module under development. That would be a device to be installed directly to average vessels for power generation from vessel roll. This technology is currently under development, not a ready product yet.

JVH 11 days ago

Hello, I would like to hear what is the real current situation of Nusa Lembongan project in Indonesia.This was going to be a first commercial break-through for Wello Beginning of 2018 you told in your presentation that the project in Indonesia is agreed and in progress and should be completed within a year or so. However, since then it has been quite silent.So I would like to hear:
1. Do you have in your hands a purchase contract or a letter of intent with the Indonesian customer, i.e. like in India now or something more? 2. If you have a valid purchase contract, have you received any advance payments from the customer?A payment means a commitment from the customer, until that only promise.
3. Has any parts or components being purchased, being made or subcontracted by so far, and has any material been shipped to the site?

Wello
Wello Oy
11 days ago

Nusa Lembongan project in Indonesia is developing pretty well and as anticipated. We expected the consenting of the site to take at least one year. That is now clear. The Indonesian GEU has received one quotation for devices and another company is quoting at the moment. These quotes define the cost level and are necessary for decisions and final commitment of the company and the financiers.

The site requires mapping, surveying and planning for example to decide the cable routes and other installations and connection to grid. these are not in Wello's scope.

According to our market entry strategy we are not manufacturing ourselves but selling our know-how, design and IP for either partners or site developers. Our revenue comes when they commit to construct. This has not yet taken place.

We have several similar projects developing parallel to this and we expect fast growth in short time and in coming years. Our strategy enables fast scaling according to request.

anonymous 11 days ago

”Wello’s Penguin wave energy converter (WEC) has sunk at the European Marine Energy Centre (EMEC) Billia Croo wave test site, off the west coast of Orkney.” -Comments?

Wello
Wello Oy
11 days ago

This topic has been commented once in this Forum, so I'll copy that text as reply: Nine year old Penguin prototype reaches end of a long deployment. After a long deployment on March 22nd, the Penguin prototype sank at EMEC test site. This marks the end of first devices test period in the EU funded CEFOW-project, which will continue with the new devices. The prototype was launched in 2010 and had been deployed four times altogether. During the testing period the device fulfilled expectations and accomplished what the prototype was built for, having survived waves of over 18 meters, proving technology, mooring construction, cable connection, control software and power take off construction. The CEFOW project, coordinated by Fortum will continue with the deployment of two commercially ready devices. The first of these, the new Penguin WEC 2 will be installed to the EMEC test site this spring.

anonymous 9 days ago

Hello, could you elaborate a bit more of this topic. You didn't explain why did it sink, only that it has sunk. Is this due normal wear and tear ( which means the lifetime of a device is less than 10 years) or some other reason?

Wello
Wello Oy
7 days ago

The reason is not confirmed yet. It could be fatigue in hull construction or it could be some drifting object or a vessel colliding with Penguin.

It's important to remember that WEC 1 is a prototype: it was designed for short time testing, proof of concept and proof of storm survivability and built with a limited budget. All of these targets were reached perfectly. Our new device like all following units are designed for energy production and long-time use. The calculated life span is 30 years. The devices are equipped with watertight bulkheads and alarms for water ingress and changes in position. These are similar means as are used in all vessels to make them safe.

anonymous 12 days ago

Hi, the main Asset item in the balance sheet is Intangible assets (over 99% of total assets). Could you elaborate what are these Intangible assets and have they been tested for impairment recently? Why aren’t there any tangible assets?

Wello
Wello Oy
10 days ago

Our assets consist almost fully on our technology development costs, which is marked as intangible assets. This includes devices (WEC:s) that are intended for test use and not considered commercial technology. Intangible in proportion to tangible is in this case large. Tangible assets in our case would be commercial converters. Our intention is not to collect any tangible, to develop commercial sites, but to sell technology.

anonymous 13 days ago

Hi, how does Wello compare to Swedish CorPower Ocean which has recently secured a 2.3 Mio. funding?

Christoph

Wello
Wello Oy
12 days ago

I can't guarantee my knowledge about CorPower is perfectly up-to-date but I'll try to make a general level comparison.

Wello has been carrying out full-scale testing for several years in ocean conditions in northern Atlantic waves rising up to 18 metres, they have done scale testing in sheltered waters. Our technology readiness level TRL is higher.

Penguin construction is utmost simple and robust compared to all competitors that I know. Penguin is based on standard industrial components and can be constructed at average shipyards around the globe. These facts compared to competitors including CorPower provide Penguin superiority both in CAPEX and OPEX. Also the calculated lifetime of the device is longer in our case. All these facts result finally to cost of energy which is a critical fact for markets.

anonymous 21 days ago

  1. Any more public funding in the pipeline ?
  2. Would Brexit have impact on your plans as Scotland would not be EU any longer ?

Wello
Wello Oy
20 days ago

At the moment there is around € 5,5M granted public funding that Wello has not yet withdrawn. We will keep on applying for more once there are programs suitable for Wello.

We don't expect the British Exit from European Union to have a remarkable impact to our doings. Our current activities in Britain are around one project only and all other projects are developing somewhere else. Despite Britain's possible exit EU is taking care of earlier funding commitments till end.

Paul Kersey 24 days ago

Hello,

Could you tell a little bit on Nusa Lembongan wave park project. What is status of this and if things will be going well, when actual building starts?

Wello
Wello Oy
24 days ago

Wave climate in Indonesia, especially at the south-western coastline, is perfect for wave energy production. The site and the project in Nusa Lembongan has been developing during one year from scratch. The local partner Gapura Energi Utama (GEU) is keen on developing such sites around Indonesia; there are thousands of similar sites along the Islands where most of the energy is generated utilizing diesel. In addition to this the need of energy in Indonesia is increasing rapidly. Cost of energy is high. Political environment is positive towards development of renewables and especially ocean energy. These are exactly circumstances Wello is looking for to provide best benefit for all stakeholders: replacing diesel to prevent climate change, producing energy locally and economically, supporting local employment and protecting the landscape.

At the moment GEU assisted by Wello is looking for the best manufacturer for the devices taking into account the local content. This defines finally the costs and enables securing funding. Manufacturing the first device could theoretically begin pretty soon but no exact schedule has yet been set.

anonymous 26 days ago

Hello Wello! What is the situation with the new Penguin device that is under construction? When will it be deployed?

Wello
Wello Oy
26 days ago

Our new device, Penguin WEC 2, is close to ready now. The hull construction is finalized, closed and painted. Last electrical works are ongoing inside the device and the test-run and commissioning of power system, control and automation will take place during coming weeks. After that the tow towards Orkney waters and installation at site will take place.