Forgent (LSE:FORG) — Interim Results for the six months ending 30 June 2022

0:01 Good morning, and welcome to the EQTeq PLC interim results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted anytime via the Q and A tab situated in the right hand corner of your screen. Just click Q and A, scroll to the bottom, type your question and press send. Company may not be in a position to answer every question received during the meeting itself. Have the company review all questions submitted today and with published responses where appropriate to do so. Before we begin, we'd like to submit the following part. I'd now like to hand you over to Jeffrey Vander Linden, COO, Norman Baber, CFO David Plumbow, CEO and will

0:33 shortly be joined by doctor Yale Hellman. Good morning. Good morning. Thank you, Paul. Welcome, everyone, to the half year twenty twenty two results update investor with company presentation. And we thank you for joining today, and we're gonna go through the financial information of the half year results. And then we're also gonna give you some of the, you know, rehash on the strategy of the company and give you the outlook that we see going forward in the market. From a revenue perspective, we recognize around 2,980,000 worth of revenue. This is six times what we have recorded in the first half of twenty twenty one, and it shows the maturing business rhythm whereby we are pulling more and more revenue towards the first half of the year and trying to reduce, you know, the lumpy nature of the revenue in the second half of the year.

1:31 The gross profits was up 240,000 versus 0.07 of first half of last year. In an in an absolute term, that's that's a higher number as compared to the first half of last year. However, from a gross margin perspective, obviously, as a business, we have had some headwinds from a supply chain perspective, which we are trying to mitigate and manage. The EBITDA loss is down as compared to the first half of last year, 1.97 recorded first half of twenty twenty two versus 3.49. What it shows is that the we are heading in the right direction because as a business, we have an aspiration to become EBITDA positive. So we're reducing the cost, refocusing the resources where where they're needed. And also, we are in the process of actually recovering more cost from our project than we did before.

2:26 In in terms of commercial and operational updates, we've been speaking, about the importance of the market development centers. I will ex expand a bit more on that as well. We have two of them, progressing towards a key milestone. I mean, we have Italy being commissioned in the year, and we have the other two, Croatia and France progressing, you know, very rapidly post period as well. In terms of The UK, the RDF projects, we have moved ahead with continue to move ahead the project and progressing with top tier partners as well. We have been shifting the the development liabilities, and we're moving more into our core expertise and and of being the technology provider and providing development services and being less involved in the investment around the development of these projects. In terms of contaminated plastic from an r and d point of view, I mean, we have we have now provided now the ability to have a solution for contaminated plastics.

3:22 And also, we have a partnership now to develop liquid fuels capabilities

3:28 with the partnership with company GTL. So we're adding these two new solutions to our portfolio, and we look forward to to develop also the the reference projects into these two type of applications. From a point of view of project finance, you know, acceleration and project development, we are focusing the the the the project where where where they are have a ready ability of either project funding being secured or or an off taker on on an operator interested on the project on commissioning. So we made good progress in the Greece project, and we made good pro project processing The U progress in The UK, particularly with the as as mentioned before, the the sale of some of these SPVs or the transition of the development liabilities to the original partners. And The US as well, I mean, we have a positive

4:20 funding offers for the second project in The US. And and at the same time, we are also addressing funding options for the completion of of the Norfolk community power project. One important thing that we have obviously spoken is the importance of the market development center. I mean, the market development center, as as we expressed before, they they are a commercial scale plan functioning profitably in their own rights, but they also prove not only

4:55 a life setting plan that you can take stakeholders and you can, you know, catalyze demand for this type of project. But more important is something where you we could also prove business models. We can also prove business model in case of what is the offtake, what is the application, and what are the commercial relationship and the commercial demand for this type of plan. So in terms of of building blocks of our strategy, this is this is one of the most important. As well, I mean, it's it's it's very has been very good for demand incubation, you know, having the r and d plant in France. But it's very different when you have a plan that you operate, and we can take, you know, our own, you know, stakeholders and customer strategic partners for training to accelerate and catalyze funding as well. I mean, in in Italy project that will be commissioned this year, we have a number of infrastructure investors and fund that have been all waiting to get this project commissioned as well, and

5:54 they are looking to take a portfolio approach on the funding of our pipeline, but, obviously, the first plant being operating that they can see day in, day out, and they can send the the the teams to do a technology review on a real life setting and on a desktop review of the technology will be very important to to capitalize demand. I don't know if you want to comment more on that. Yeah. I think I would just comment on the progress we're making. I mean, as David has mentioned, there are three market development centers that we're moving ahead on, and there are others that we have an eye on in the future. For now, our sticking to the knitting is about getting those three up and running. It should leave by the end of this year, you know, Croatia as soon as possible after that, and I was two weeks ago at our MDC in France.

6:41 I hope to publish soon a a video a site video of that visit as well so you can get a closer look. But that plant is very exciting. I think many of you will know it's a retrofit of a failed technology there. Joel, the CTO and the team, will be doing their visit as well and mapping that whole site and looking at precisely what it is that they're they're going to replace. I think they already have a very good view on that. But it's a very well built facility. It's got very good foundations, very good steel structures, and a very good control room control building that also holds the engines and so on. So it's also located within the middle of a much larger facility where we will be receiving mixed feedstock.

7:27 So, again, the other thing I'd say about this market development center in France is it will be a demonstration of another facility, but one where we are mixing two types of wood waste, one contaminated, and then a third type, which is RDF. And all three of those will go into the same plant, and we will be able to produce feedstock from that. That dramatically differentiates us, and it gives us another type of development center. Yeah. I think I think what is important there as well, this is a this is a a when we're talking about a mixed fits of usage in this plan in France, it's also a plant that having have all the development done along the civils that we've done is a is a plant where we can prove prove our commercial scale RBF much quicker than the larger projects in The UK, but it's still on a scale that is important. It's that 30 to 40,000 tons a year of mixed waste including RBF. In the case of Italy, it's agricultural waste with the production of biochar.

8:22 You know, that's a very specific application. We're getting a lot of interest now also in Europe, like, was in The US about, you know, biochar selling to anything between €800 to a thousand euros per ton. And then in the case of Croatia, this is an industrial setting where we're taking a portion of industrial waste, and we are providing heat and power to an industrial customer that is right next. The industrial customer will have demand for more capacity, so there's an opportunity as well to scale up Croatia from 1.5 megawatt all the way to 4.5 megawatt. So this is something that we've shared, before, in a slightly different view. We talked about the importance of transforming, the business model of the company from being one focused on project by project, one time revenues to one where we are earning recurring revenues.

9:20 And inevitably, those are going to be as much or more at the back end of the life cycle, by which we mean, through construction and commissioning into operations and maintenance on the front end. And, of course, right now, given where we are as a business, we're still very focused on developing projects to move forward. But as I think you you will have seen in the interim announcement now and some of our recent communications, we are already taking steps to move in this direction. We are, as David was saying a moment ago, you know, and and Nomon as well, starting to pull out our direct investments in that development. As much as we are still exerting our influence and, indeed, expertise on developing these projects successfully, we are not putting our money at risk. And, increasingly, we are looking for other investors to take these projects forward and allowing them to invest in these. Towards the long term, which is David was just saying, we see not only having project finance come in, but also owner operators themselves

10:19 buying our plants or the portfolios of our plants. This continues to be the strategy, and one by one, we will start to do this. Another key thing that we've done is that we have unbundled the pricing, which, again, we've talked about this before. Previously, our our model was such that we did not recover a lot of our engineering and the technology and innovation fees until financial close when we would start billing for the technology. What we've now done is we've unbundled those, by which I mean, we are starting to charge for early stage, for example, pre FEED engineering engineering services, FEED engineering services, front end engineering design services, all the way through up to financial close. So we're starting to to bill an invoice, you know, earlier and more often. And then, of course, it's gonna help us with cash flow and help get that cash into the company that we can use to reinvest.

11:11 So we are we are moving along this journey. You know, as David has said many times, the strategy is the strategy, and we are still pursuing it. And you you should start to see an increasing number of these types of activities that move us in this direction. You know, continuing the strategy's execution. I mean, we we have often spoken about the important building blocks for our strategy. So, you know, as as Jeff alluded before, yes, there's been you might as well. There's been some headwinds in the market. I mean, it's it's it's it's impossible to not see it. I mean, it's happening, you know, on a daily basis.

11:49 And we get news about, you know, risk off in the market, etcetera, etcetera. And the availability of capital in the market obviously is significantly reduced. Having said that, we have a number of of strategic outcomes or milestone that we need to achieve. And the advantage to our strategy is that we could still choose what gave us that strategic result, you know, that catalyze. You know, what is that market development center? Okay. Instead of doing three, you know, we can choose to do one, but the effect of having the market development center is the same. The same goes to SPV sale. How many are gonna sell? One, two, or three? It doesn't really matter. The SPV sale will prove then the demand for a buyer of the development asset. The same thing goes to the refiners of the project. So if if you you look at this table, it's literally the building blocks of our strategy and how we, every year, are feeling more of those, you know, strategic outcome or milestones. In terms of market development center, we already comment this.

12:43 You know, we we go eat Italy, Croatia, and France on a very good footing. You know? And we have, you know, already have identified what could be the market development center in The UK, doing R and D to hydrogen, and possibility as well in Greece and in The USA. In terms of the go to market, you know, although we also comment recently that we are taking much more of a, you know, focused approach to looking at which projects are strategic to us. You know, we still, are working through go to market partners or go to market subsidiaries. You know, Croatia has been, you know, established now for a while. You know, Greece as well. France is is the earliest one the the the latest one to be established, but it's also the one that have yielding very rapidly results. And one of the reasons for that is having Lorraine as a as a RV facility where people can go and see. And now when we have a larger plant, like a market development center, we expect France will catalyze a lot of demand both for funding and, you know, all the strategic partners in the in the in Europe wide.

13:46 When you look at the technology, you know, when you look you can tell that we've been filling, you know, the buckets as well of applications. So, you know, we have or pipeline region that was mainly about biomass to power. You know, we now have also RDF projects that are, you know, well developed, you know, close to, financial close to construction like the one in France again. And then we also start bringing those solutions like the ability now to in Lorraine to produce synthesis gas to be analyzed for hydrogen production for synthetic natural gas or biofuel production. So we are very happy now how the technology

14:23 you know, we have enough of the reference plan to position ourselves like a like the, you know, world class technology in in the synthesis gas for all these applications. In terms of the project as well, you know, we are now start proving different business models. You know you know, the the the small local community, you know, selling to the grid, the The US type of environmental remediation type of project with biochar and the removal of forestry waste. And then you can see now industrial applications like in in in Croatia

14:56 as well. So we are proving also different business model and different structures for, you know, who are the potential off takers of this plant and who are the interested buyers or operators of this plant as well. And in terms of partners as well, the more project we developed in partnership with of our, you know, top tier partners, you know, like in Nigeria, Wood, like in Beach, Petrofac, and the conversation with all the other partners, you know, now are seen as well as being catalyzed by the market development center, by the application of technology, and the business model. So So all of

15:27 this is start building towards, you know, a strategy where we have more and more potential license source of our technology, but also more and more demand for owning this new energy transition infrastructure that we are building powered by the EcoTech technology. Yeah. If I if I can just comment on something that David said a few minutes ago, you know, we are a technology company, and our intent is to become a dedicated technology company focused on innovating at the front edge of the technology capability, and licensing it to as many places as possible. If you think through how about that looks like in practice, therefore, it's not about project a needing to be the next project or project b being the next project. We need a project that gets our technology demonstrated in a specific environment as quickly as possible.

16:19 And as we look at project execution, we'll talk a bit more about that, no doubt, when we when we go into q and a. When we look at project execution, there are some projects that start to slow and others that start to pick up speed. And our our focus is on devoting as much energy as we can to the ones that are going to go fastest to close as quickly as possible. There are those of you who have had experience and so on in large scale infrastructure investment and construction and so so on know that there are all number of hurdles, more so now than perhaps in the past given, you know, a number of conditions in the post COVID world. But with all those, wherever we can go

17:00 the fastest, whichever projects will advance the furthest most quickly are the ones that we turn our attention to. Because our interest is having our technology demonstrated in those facilities, not necessarily in having a project or any specific project done in a specific period of time. And so that is that is exactly where we're focused. These are the routes to market for this technology, and we will push them as far and as fast as they're willing to go.

17:29 Talking about the, the the look ahead effectively. So from a financial perspective, what we are focusing on is to ensure that we bring more cash into the business, and that is, being achieved through kind of three tier strategies. So first of all, we are refinancing the projects which will reach commercial operation so that the loan or the equity that we have invested into the project, we're able to recoup that back. The second is more around the SPV sales. As David mentioned earlier,

17:59 we have bring we are bringing The UK audio projects to a point whereby there are interested parties to actually take the project on and take it to financial close and then to construct. So that would unlock a lot of capital both in terms of development service fees and the equity that has been injected into projects. And the third element is more around the unbundled pricing, which Jeff alluded to earlier to ensure that we are bringing in we are invoicing much earlier in the process for the services that we are providing, you know, prefeed, feed, and before financial flows. The second element is more around the the revenue and bringing more,

18:37 certainty and sustained growth from a revenue perspective. So we are being very, very careful in terms of the projects that we are deploying capital to, what they capitalize in terms of the demand, and how it would translate into revenue. There is a lot of planning which goes behind thinking through these projects and the type of revenue that we can we can we can get from that. This also includes the fact that soon we will be moving more towards the technology less and SOAR piece, which we have been talking about as part of our strategy.

19:05 And from an SPV sale perspective, I think there are two two key elements to it. One is we are once we are executing these deals, we're proving the capital like nature of the model. And two, the development capital in which EQT has been deploying so far on these projects, we want to shift those liabilities to other interested parties who want to take that development risk and the upside in association in association with that. So all in all, shifting liabilities, ensuring capital light nature of the model is actually implemented and moving more towards the technology license or part of our strategy, which is which is our end goal. In terms of commercial operation, in terms of our outlook outlook, we see we discussed this already technology. You know, we'll continue to push new applications and continue to to be at the leading edge of, you know, synthesis gas technology.

19:57 So we will be able to take all technology partners, you know, before year end to test or synthesis gas for the hydrogen production, for the biofuels production. The r and d

20:07 facility is being has had a lot of activity this year. We'll continue to have a lot of activity with a lot of stakeholders engaged in that activity. In terms of the innovation as well, you know, we have you we will have now, you know, RDF as a priority in the plant also in France as well. So we'll celebrate, you know, RDF solution for combined heat and power, but also RDF for the production of hydrogen, like we're looking to do in in in in Southport. That's very important because we'll be very soon able to give a levelized cost of the production of hydrogen that is an alternative to electrolysis, you know, and will have a very interesting price point as well. In terms of the pipeline, I mean, the important thing is now this is all about being more attractive and accelerate the relationship with the strategic partners that will scale or partner. And those strategic partners are typically of the of the form you'll see now. Discussions are with other industrial partners to build in their own premises, the the or type of infrastructure utilities to build,

21:10 the infrastructure and then sell the power or the fuels to the industrial partners, infrastructure investor, energy transitions investors, and municipalities. In terms of the project, again, you know, we we we will continue to focus on the project that are funded, that are permitted, or they are they are coming from some of the strategic partners where already the heavy lifting will be done from the from the partner. And in terms of the partners, you know, we'll see coming in the next months more tier one partners, both from the point of view, funders, you know, advisers, EPCs, developer, and, you know, we'll make sure that we keep the marketing form with all this, you know, exciting development going forward.

21:57 Fantastic. Thank you very much indeed for your presentation. Ladies and gentlemen, just while the team review those questions that have been submitted already, I'd just like to remind you that the copy of the presentation along with the published Q and A can be accessed via Investor Meet company dashboard. Perhaps before we go into some of the questions we've had during the meeting itself, we did have several pre submitted questions. And if I may just read those out to you to start with, and then I'll hand over Jeff, if I could, to you just to take any of those questions through the meeting. The first one reads as follows. The results point points out that your h one revenue this

22:28 year is much healthier than last year. Why the improvement?

22:33 So I think the the improvement first of all, it's as as I mentioned earlier, it's all about it's all about the maturing business rhythm. So bringing the revenues earlier and moving away from the lumpy nature of the development services and other aspects that we see of. So we we have been carefully ensuring that if you move towards and I I don't think we're there yet, but we're moving in the right direction. You move towards a point where it's it's a it's a more, you know, a clear the market has a clear understanding of the first half revenues and the second half revenues, and not everything is coming in in the second half.

23:08 Yeah. I think I think it's it's as as Omar said, it's the maturity of the of the business as well and the fact that the the the fees are more distributed because also you have more demand for your services because all services have has been validated already by project that we have developed. So now we've seen some of the strategic partners, some of the larger developers, operators coming to us saying, you know, you don't need to advance the the the capital. You know, we'll pay development service fees for

23:34 you to develop the project with us. And, also, what Jeff was mentioning that we are focusing more on the real value added that we bring in terms of technology expertise and let larger developers dealing with the, let's say, commoditized or or nondifferentiated part of the development like planning and civils and things like that.

23:55 Thank you very much indeed. Next question we've got here is why is it taking so long and requiring so much capital to close projects?

24:05 Yeah. Well, there are a number of reasons why there are a number of reasons why these things take long. We we look at in, you know, four different things when we develop any project. You know, funding, we look at the commercials based upon a financial model that makes sense and that delivers a double digit IRR unlevered. You know? And we those financial models now are a level of sophistication, and we believe robustness that we we're feeling increasingly confident, and we're getting that kind of feedback from people who are taking a look at those as well.

24:35 So the funding and the commercial. We also, of course, look at the technical and the engineering. And, of course, that involves not just our own core technology and engineering in which we have great confidence and faith, but it also involves the engineering and the capabilities of our partners. And so, for example, wood bringing methanation technology and hydrogen technologies. We've recently announced compact ETL. Sorry. Our lights are turning off here. We've also announced compact GTL, and we'll announce other, you know, technology partners, Energia, of course, for anaerobic digestion and for, you know, sorting and MERV technology. So technical and engineering component is the third one. The fourth one that we're that we look at is is the planning and the readiness to deliver and construct the plant, you know, with with the quality we want.

25:23 We are extremely confident in three out of four of those.

25:27 Certainly, the technology and engineering we are. We are very, you know, confident in the delivery readiness part of that. And as we bring in, you know, some of the partners that we've announced recently, Petrofac and so on, are coming to work with us, Black and Veatch on this side, you know, we are even more confident of that one. The commercials, as I say, you know, we've we've spent a long time really getting in all the insights we have and the understanding we have about the the market dynamics so that we can have very strong financial models so that we can negotiate the feedstock

25:58 contracts, the offtake contracts, you know, the disposals, the o and m, and so on into that. And we're feel feeling very confident there about that. And so you could tick on most of our prop box on most of our projects, boxes. We've made huge progress in pushing those forward. Look. And then lo and behold, COVID happened. But coming out of COVID, even more importantly, 2022 happened. And that kind of snowballing effect that we knew would happen in terms of revenues, such as Nomam was, you know, commenting commenting on on coming out of last year, we suddenly hit a market where that snowball was not going to grow as fast and at the pace that we thought it would. And funding that one outstanding point is really what has proven, to be the most difficult, not because it's not available, but because that funding will come from very specific sources that we have to do a much better job of targeting, and we also have to compete with the same number of people going for a much more specific set of pots of that funding.

26:56 And that has really been what has slowed down the projects more than anything at all. It doesn't mean they've gone away. Quite the contrary. We still have got a a very strong pipeline, and it's growing. What we now have to do is execute funding excellence with our partners, without the liabilities that the guys were talking about on our books, and pursue that, you know, with with, you know, much stronger now than perhaps we have in the past. I I want to add to that as well. I mean, slowing speed is a relative point here as well. I mean, we need to see we are benchmarking this against what. And if you look at this type of size of projects being built, even incineration plants, which are a proven technology, you know, how many have been built in the last three years in The UK? You know, if you look at refineries, if you're looking at even some of the of the, you know, battery parts, these these things take five, ten years to develop some of them. You know? We are, in fact, given our resource base as well, we are advancing development very rapidly.

27:57 For us, it's more important than for anyone else because a large infrastructure player can slow down and accelerate the development of a project. Like, no one now is building anything because it's very different to price, you know, cost of construction. No EPC just give you a fixed fee contract at this stage. So so when you have a portfolio and you are a a big, you know, owner operator infrastructure, you accelerate and slow down when you need to address the market. I mean, we don't have that luxury because, you know, we are in the process of validating or selling with a small small cap company in the public markets, and we constantly need to be showing progress as well. But I think the speed of which this project have been developed I mean, you look at the amount of work that has been done in this side commercially and designed in the space of two years is incredible, you know, with the resource that that that we have had. Same thing in billing. Billing has been working for years. It's been reconfigured. It's been changed. So I think I think slowing down the speed is is a relative term, and we need to benchmark it against similar infrastructure and seeing really what has been built in the in the market in this environment.

29:02 Thank you. Next one we've got here. Does the update and guidance indicate that project opportunities are weakening? If not, what's behind this? So I think we definitely don't see the the the demand weakening or the projects kind of falling falling off. What we what we are doing is we are making a conscientious decision around which projects to pick and which service catalyzes for us with the deployment capital that we have. So ensuring that, you know, what whatever capital we have, it goes a lot further than than, you know, it it normally would. So if we are if if it means that we are shifting some of the projects out to the next year, so be it, but we will ensure that it is everything that we deliver is aligned to our strategy and validate those data points. Absolutely. I'll I'll add context to that as well. I mean, in in a in a in a model where we were being very protective about not advanced cost on projects until for the supply until the project was fully funded. We are in a market now that is impossible to fix a price if you don't buy in advance from your suppliers, and you lock in a significant amount of capital to be able to deliver that revenue, to recognize the revenue, but also to be

30:13 able to deliver that equipment on-site. You know?

30:16 The the more we move away from the procurement ourselves with strategic partner for licensing, a, the problem goes away. But this is a problem that large, you know, supply chain managers and procurement companies, you know, like the EPCs are facing. You know, we have a lot less buying power of of them. We need to pick and choose which supplier we have the relationship where we can use our capital to maximum efficiency like like Mumar is saying, and we then need to make the certain adjustment to be, you know, protected to that market headwinds that we're facing. You know? As we say in an interview yesterday, we don't think this is going to improve in in the next, you know, three to six months. So we need to make adjustment, and we need to be resilient enough to take to run this path for the next twelve months because the markets are gonna be, you know, pretty tricky for a extended period of time.

31:06 That's great. Thanks, David. Next one we've got here. The company has made substantial investment in North Fork, The UK projects, and others. How will it get its money back? Great. I can answer that. Are you Well, I just gonna say, I mean, the, you know, the the straight answer to that for all of our projects is that no matter what we do, no matter what arrangements and you all seen this with our Southport announcement, the d side announcement. The very first thing we do is safeguard and contract for charging the development fees that we are due for all of the investments that we've made. These are not write off situations where we're looking at, you know, losing money or capital that we put into it. Quite the contrary, we're we're we will safeguard that, and we will build fees, which will bring us some margin as well. The the the answer to that, the the the to add to that is exactly that we will do. It's either the sale of the SPV where we have a a secured charge on the SPV or it's a sale of the asset once when it's when it's operation. In case of North Fork, know, obviously, North Fork has faced any challenge that you you could could imagine.

32:06 And and now, you know, the discussions are to get Norfolk commission, you know, with someone else, you know, covering the the the the gap. And for us, Norfolk value is to have a plant operating in California. But this this has no implication in our revenues anymore, but it's something that we want to have there to be able to catalyze the remaining pipeline that we have in The US. That's great. Thank you very much. Last pre submitted question we've got here. You said that in past, the company is more valuable than ever. What's the basis for that statement? Yeah. I think I'll say that one, so I'll take that one. The company is is is is in terms of we're talking about value versus stock market valuation. The value is in the fact that we have a very mature pipeline of projects. We have a secure pipeline of projects that are now very, you know, close to financial close. Some of them have been built. We have much more assets from a technology point point of of view.

33:02 View. We have stronger IP. We have stronger know how. We have a very good team that has been now galvanized in in a tough market, which is what you want from a team. You want you want a team that that has the strength to withhold the different market situation. And and and that's that's and we have the commercial infrastructure and the relationship. All our strategy, all the building block of strategy, that slide that we were showing about, is being continue to pursue at different speeds, but continue to pursue. I mean, we are in an environment with, you know, most companies that need to go backward. You know? We are just slowing down, and it's it's it's it's fine to slow down, and it's prudent to slow down to be able to then, you know, accelerate when the market and the the the strategic allows.

33:48 Fantastic. That concludes those pre submitted questions. Jeff, I may just hand over to you just to to click on that q and a tab where appropriate to do so. Just read out the question and give you a response. And, of course, any questions that we don't get get around around to to answering, the team will be able to review those. We'll publish responses where appropriate to do so. Thank you, Jeff. Yes. Thank you very much. I'm I'm just looking through them now. There's a question here about how are you keeping control of your projects and ensuring that EQTech are still going to be in the picture, for instance, with Southport. If I can make some general comments, and then maybe, David, you want to follow-up on Southport as well. But, you know, in it's it's a very it's a very pertinent question because of what we've described here as being our our shift from being, you know, the owner of the project and trying to have others be the owner of the project and us simply, you know, being a supplier to that project. We still have a very strong interest, of course, in the quality of the work, in the timeliness of the project management such that, you know, we do not want EcuTech technology to be associated with projects that are over budget, over time, or or deep failed altogether for things that don't have to do with EcuTech.

34:54 So it's a good question, you know, in in terms of that. The most critical projects for us are the MVCs where we do stay very much in control on those, and we do that with intent because those are the showcase facilities that we will very proactively want to use as demonstration facilities for a a range of of potential customers, partners, and other stakeholders. But even on the projects such as Southport, as you mentioned, or or Deeside or those in The UK, we still have a very strong interest in in staying involved. And in every case that I can think of, the the potential you know, the investors who are looking at this, the funding sources that that are looking at this, wants us to stay involved. They want us to be very actively part of the team. They want us to sit on the project boards and continue, to be actively involved in it. But as we move over time, we want to become less and less concerned with needing to be in control.

35:47 And bringing in some of the partners we're bringing in and some of the big names we're bringing in helps to stabilize those projects and give us confidence that we don't need to be in control. You know, if a if a black and and beach comes in, for example, or a similar, you know, quality company comes in and takes over as EPC, there is not a strong need, we would say, because we prequalified that partner. We built a relationship, and they have a very strong brand and a strong track record for delivery. And so, again, that gives us confidence that that project will continue without our deep engagement beyond the core technology and engineering, and and it will still mitigate the risk that that project could go south. And so over over the long term, our plan, therefore, is to get start working with bigger and bigger and better established companies that mitigate any risks that the project would not go where we want it to. Well, Specifically on software and and and some of the project in in this side. I mean, we we there's two ways that we protect that that that project department.

36:44 You know, first of all, you know, all fees is is a choice from us, the fact that we maximize the development services fee instead of the equity portion of that because that's the way the the the structure of our business model is. In in in in this side, you know, we will sell the SPV, but we'll still be one of the biggest creditors of the SPV. And we'll still have typically, by the way of development agreement or typically, by the way of the fact that we have developed a project here and have all the the data will be involved in the development continue to be involved in the development. In the case of, SFR, SFR is completely two separate projects. SFR is not integrated like this side. SFR, you have an an ID project, and you have the gasification project, which is the RDS to hydrogen.

37:34 The AD AD project was only developed as a mean to an end to access the second side. Now that that project has been developed, then someone else can finish to develop AD plant and commission and build it because there's no other than or secure development services fee on the project, which is secured by a convertible secure convertible note. You know, we we have no we have no revenues associated to that project anymore. All our interest is is in the RDF to have them. So we are secure on this project either by a way that we are the core technology. All the planning and the design and the financeability of the project depend on our technology, or we have a very specific legal arrangement, which through a a development agreement or a secure as a secure creditor, you know, any sale or anything in the project needs to be, you know, paid or fees before. And that's and that's very common in in in in in project development.

38:27 So I mentioned our partners in in my response to the previous question. There's another question here that says, are future projects now being chosen based on having superior partners than was more of the case in the past? This is a a very exciting question, I think, because I mean, the answer is yes. It's a conservative yes because it's still early days. But, you know, I think we've communicated in the past that, you know, we announced at the end of last year our relationship with Wood. Have very regular meetings with Wood. They're structured meetings with very specific agendas, very specific projects such as Southport that we're working on together, but also a pipeline of of opportunities. And Wood is bringing as many opportunities to that as we are. And so gradually, we will see more and more interest. And in fact, you know, Yoel and and the team are getting directly involved in working with Wood in responding to some of those those customers even in the early stages.

39:26 So, you know, we will gradually begin to see our pipeline expand by virtue of working with these partners. The other thing is as we work with them, of course, we build a way of working. They build confidence in understanding, our technology and understanding, you know, how they can construct it and commission it in the best possible way. We understand how best to work with them, how to engage, them, how to work with them in the case of an EPC as as the lead contractor and so on. So as we build those ways of working over time and we build that confidence, we will build more projects more quickly in more places. Because most of these are multinational companies, they will be taking us into markets that we would not have have otherwise gone as quickly without their involvement. So that, you know, strong ability to take us to market as well. Yeah. Yeah. But let let let's also not forget that we we have catalyzed that interest and that demand for the larger partners by having a pipeline of projects. So, initially, in all this relationship, we have bought more project into the relationship because we have relationship with smaller developers that have developed a portfolio, which a such organization would not be doing particularly when they come in into a new sector. They will not they will not have the the buy internal buy in to start looking at, you know, smaller developers and aggregate a portfolio. We've done that for them. So we become also catalyzing to a, you know, to a pipeline that then they can use as a reference to then use their scale and their resources to

40:56 then, you know, go and look at this project, attract all the investors, and use the initial project that we bought into the into the relationship as a reference point. There's another question here. With the energy prices up sharply, has it made some of your projects more commercially viable? I think there are two elements to it. So first, yes. From a revenue perspective, the answer is yes, that it has improved the I project IRRs and so on and so forth. At the same time, from a supply chain perspective, the costs have also gone up. And although we do feel that both from a energy price point of view and supply chain point of view, there would be stability coming into the market in the next, you know, two to three years.

41:45 We we do see that, you know, the revenue the impact on revenue outstrips the increase in cost in the supply chain that we currently see in our financial models. Yeah. I think what also, I think that has has bought it has bought a new sense of urgency. I mean, we we talked about this before. You we have conversation that started year, year and a half ago with corporates, you know, you know, the likes of it could be a Procter and Gamble. It could be a, you you know, know, any company that just wants to decarbonize the industry, and it was driven by an ESG agenda. You know, they were moving very slowly. They were exploring technologies. Suddenly, know, they go back into six six months ago and said, we need to find a way to replace natural gas weaker. We now have buy in. We need to find you know, we have a budget now to develop the first project. We need to find ways to replace, you know, the all sources of electricity.

42:33 You know? So there's a sense of urgency that have come with that situation, and it's it's normal. If we go back to project execution, there's a question here. What sort of specific issues are you seeing on the ground in moving projects, especially MDCs? Sorry. Moving those projects forward. Are you seeing any labor shortage issues, or is this being adequately managed by contractors? I mean, I think we can comment and and, you know, we can say more about the Italia MDC as an example. You know, I think going back to what I said earlier, you know, I think funding has been the single biggest challenge. That's the market environment that we're in right now. It's interesting, the Italia MDC, because it's in the middle of the Valdorca, which is one of the most scenic, you know, greenest, you know, the most beautiful parts of of Tuscany and indeed, you know, part of Italy.

43:23 So which is exciting because we're going to put a very clean plant there that's going to do great things locally for the community without, you know, the emissions footprint that, you know, others would be fearful of seeing. So that's very exciting. But, you know, if we look around there, it's not exactly a heavy heavily industrialized area such as Teeside, you know, in The UK. And so, therefore, when you go and you look for labor and, you know, and Joel and the O and M team have been looking for labor with our partners over in Italy. And we've we've found, you know, very good results. We found a very good manager. We found very good people who are ramping up right now and being trained to operate that facility. And so, yes, it takes extra effort, but it is possible to do even in the most difficult of circumstances.

44:14 But I think the the you know, money doesn't solve all problems. But when you're when you're trying to get capital projects moving, funding, you know, right now is a key accelerator that we've been looking for. I think I think in terms of the the the labor issues as I mean, from an operating point of view, as Jeff was saying, the the advantage that we have of plants are heavily automated, and we need to train anyone. Doesn't matter how which industry they came in, they need to be trained to the plant. So we we we have a broad range of people that we can bring in and train for that. In terms of the labor for the construction, you know, this is this is something that that, you know, is is is part of the of the supply chain challenges that we have, and this is why many of the large capture project have have been put on hold now because no one wants to commit on, you know, the price inflation on the material, the price inflation of the bid.

45:09 Just looking at some other questions coming in. Yeah. It seems your biggest problem is in funding is funding. You've previously spoken about receiving interest from parties, including family investment funds, on a on a regular basis. Is that still interest there? Is that interest still there, or what has happened to all of them? I can I can take that one? So, yes, so it it is a perfect example. Italy, we we you know, it was a small project that we did with three with two family offices that they could have taken the project alone themselves and more than one. They they they were just, you know, wanted to get into the project, and the reason we invite them to is to get an experience at commission on this plant and, you know, then move into other projects and move into apartment. You know? Be that risk equity that goes before before we can refine on this project with institutional or or sell them. And the the the the Italian family officer is involved in in in Italy. We already discussed and also to to refine the project and move into Croatia and move into into our pipeline. And in fact, they're also generating now a pipeline and bringing project that, you know, very well established locally in terms of renewable infrastructure.

46:23 So we'll see this as well happening, you know, with with some of the investors that we'll have in Croatia, and they they'll be the same thing with some of the investors that we have in France. So so so that initial equity risk equity that comes that now are comfortable to do the development part as well because they have seen us. They have gone through a project under the bells with us where they can see the capabilities for us to we also have reacted to the challenges in market. I mean, I think that's very important. I mean, when you when you are looking to co invest or invest into management or into a partner, you want to know how they react when things are not going well. And that's and that's been a good opportunity, and that has catalyzed the relationship as well. And just to indicate that apart from, obviously, the family offices and the existing relationships, we are also increasingly seeing institutionals as well coming into this space because of any energy security related, you know, issues, decarbonization related aspects, so on and so forth. So previously, once the funds were set up, they had a very strict criteria to actually get these projects, financed.

47:26 Now we are seeing a slightly more flexible approach towards that, and we are going to, you know, in in the next months ahead or so, ensure that we tap that part of the market as well. We have a question. How big is the retrofit market similar to the first French project? Is that where mass scale might sit? It's a very interesting question. Yeah. I mean, we should remind ourselves that, you know, the MDCs that we're target targeting, the first two are recommissioning of decommission plants. And then the third, as you as you say, is a retrofit of a failed another company's failed gasification technology will be putting it in. Now, I mean, Yoel is far more of an expert. Unfortunately, we're having some sound difficulties with it, but there are pros and cons to retrofitting, of course, because because you're not building everything from scratch. You have to get to know the existing infrastructure very, very well, and you have to look at it in detail to make sure that you replace absolutely everything that needs to be replaced and leave as much of it as is reusable as you possibly can.

48:30 And that takes time in a different way than, for example, building stuff from scratch. And it takes, you know, direct engagement of experts and and so on and so forth. We still have got to renew the contracts or, I should say, novate the contracts for feedstock and offtake and so on that preexisted us. We have to go through and get an update to the environmental permit, for example, because it will be using a different technology that hasn't gone through that process yet. So you're still facing some of those things, and there's still tricks with it. If I move out to a macro that's the micro kind of perspective and the pros and cons of doing kind of retrofits and and recommissioning. If I if I move out, though, and I look at the macro picture, you know, we've looked across Europe and indeed rest of world, for example, for incineration.

49:16 And we look at how many incinerate incinerators are going to start to reach end of life over the next decade or so. And if you start to look at that, that opens up the opportunity to go in and start to retrofit with with gasification technologies. We've even said, why not build gasification technologies on incineration sites to coexist so that then you have a choice of of how you, you know, ramp down one technology and bring in another? So, yes, that very much is an option. And in fact, we've had, even recently, some of the, you know, large owner operators of incineration technology approach us to begin to have these sorts of discussions as they look further down their road maps. We've had opportunities in France, for example, to go in and and look at retrofitting some of the coal fired power stations that they've been running there as well. So these opportunities do exist.

50:08 And, yes, I do think it's worth looking at it as as potential accelerator or at least a complimentary way and a new line of business for us, a complimentary way of delivering our technologies. Just looking through. Well, the inevitable quick. Are we concerned about the share low share price? Well, concern I mean, we're we're obviously not happy. We're all all, you know, heavy invested, you you know, know, personally personally into into the company. We continue to be. I mean, we we obviously find it in one way natural than in the environment. You know, obviously, we we only are focused on what we do in ourself, but we see that it's it's not associated with equity.

50:55 It's associated to everyone in the space. You know? In fact, we're still in terms of of resilience of our plan. We believe that we are much more we are not building, you know, big piece of infrastructure in five years to then start setting equipment. We are not building one or two plans. Like, they slow down. Everything slow down. We have resilience built into that, so we believe we are much stronger to come out of this. Our numbers, you know, still going into the right direction. Yeah. We we have adjusted revenues, but we're still going in the direction of reducing losses and increasing revenues and profit. So so, you know, the time will come when when when we, you know, we we break from the pack. But at the moment, I mean, we don't see you know, we need to focus on as I mentioned as well in the interview before, we as entrepreneurs and, you know, and and and the early stage companies, technology, innovators, we we don't have time to comment on the market. We need to act on it. We need to be able to be decisive and to with best available data, make our calls so we deliver the strategy. This is not the next year what the share price is gonna be doing. This is, you you know, in the next five years, be powering 90% of the new energy infrastructure required for decentralized and distributed power. You know? That's the that's the aim.

52:12 You know? How we get there in the next twelve to eighteen months is just as quick as possible. You know? And that will create the value required, and, you know, that's that's the that's the the goal. The questions that we challenge ourselves with are regularly, and we have vigorous debates with each other and with the board at large as well as inside with the team and and with partners and so on. Number one, do we have the right strategy? Does EQTech have the right strategy? Are we aiming for the right things? And the feedback that we've had from institutions, as as well as from some of our larger, you know, shareholders and so on has been that they feel we have a more coherent and clearer strategy than many other competitors in the market do. And it's one that is tried and tested.

52:59 We've seen happen with other technology companies, you know, a little bit outside of our industry. So one is the strategy. The other the the the other question is, are we executing on projects as well as we could be? The answer is always no because we can always find areas of improvement. But as I outlined those four areas of focus earlier, you know, we feel we have covered three out of four of those extremely well, and we have now reconfigured our corporate center team to focus now on the fourth, which is the funding. You know, we have launched specific projects to go out now and really ensure that we are targeting, getting deeper insights into what motivates those funders to invest in certain kinds of investments and ensuring that we maximize our ability to be the ones who win that investment.

53:45 We are operationally much slicker now at preparing to engage those funders. As I said, we have much more robust financial modeling capability, and in fact, some of probably the leading thinking in this industry around some of the the financial modeling that we're doing. And we are engaging third parties to constantly challenge us with their market knowledge as well. But then we're moving that on. We're producing much higher impact presentations and pitch decks for the funders and then allowing them very quick visibility so we can help drive due diligence, which takes time, as quickly as we possibly can. So we're operationalizing. We're not just time trying to target those funders better. The way we engage them and get them on board, we're trying to reduce the risk of and increase the probability that we're going to be able to land them. So all of these things are aimed now at at executing against a strategy that we still believe is right, but but executing with higher precision. And I'll go back in a market environment where but by no means is is this an EQ tech challenge. Every single company we encounter is is is facing the same things. Every webinar I attend, whether it be with the public with with Bays or with another part of of the government, whether it's a private sector, you know, FT led conference or webinar or whatever, this is the discussion that whether big or small or midsize, all of all companies in our sector are having, which is they're struggling to get to FID. They're struggling to get to financial close because they they cannot get the funding directed

55:17 to where they are. To add I want to add something there as well. We've been engaged in discussion with a number of large investment bank just just initiated by them as well because, obviously, I I would you know, banks that otherwise would not be involved with us because of the size of the of the company at this stage, but but they are interested because of the size of the infrastructure opportunity and the real dislocation of how far advanced we are compared to other technologies. And very interesting comments from from quite senior people in the bank. They're they're mentioning some of the transactions that have been happening in the in the sector you know, in Europe. I was in evaluation with not much there. And they say the issue now is that a lot of those investors have been, you know, written off or not really being what expected. Said because people the the the statement that they made that was very interesting is say, people are hiring PR operate operatives instead of engineers. You know, we got technology companies that go with a story, and a lot of PR and not enough engineer. I mean, we need to remember as well, but for the size and the ambitions of what we're having, we have 20 engineers and another 15 people in the corporate center.

56:31 You know? We are still a very small company, but we are much larger than than, you know, the the the the all the companies that are there that they literally are, you know, couple of guys with an idea and a good PR. Maybe the final question now, given the time. Please, can you explain why the recent change in joint broker? Well, I mean, you know, that that was something that was on the cards for long time, and we we are looking to, you know, we have, you know, great great relationship with Arden, but I think we we have outgrown the the the the relationship. And we also believe that, you know, Family Gordon is a has a differentiator that is interesting about attracting strategic investors that are not necessary in the capital markets.

57:22 So, you know, we also like very much the analyst of of Pioneer has a a lot of credibility in the market in renewables. And, you know, and we're looking we're looking forward to the relationship. That's fantastic. Thank you. Yeah. Fantastic. Thank you, Jeff. And, of course, just to remind investors, the company can review all those questions submitted today, we publish responses where appropriate to do so on the investment company platform. David, just before redirecting investors to give you some feedback, I'd just ask you just for a few closing comments, please. Yeah. Thank you very much, Paul. Well, you know, I I I continue to to to bang the same drum. I mean, I think we are, you know, the whole team is working, you know, incredibly hard for achieving, you know, a very large dream, which is being at the heart of decarbonizing decentralized infrastructure for power and fuels.

58:18 You know, we are that missing link has been difficult to do the transition between fossil fuels and alternatives. You know, there's no other pathway than gasification to turn out a low value solid into a gas. Doing that successfully is already downstream proven in petrochemical. We just need to replace that fuel that will be feeding the system. That's a massive task. That's a massive task that we have. You know, we we we are going against the very established, obsolete infrastructure, the status quo, but that change is coming quickly. I mean, there have been, you know, delays because of the the current market conditions for everyone, but that is something that is significant transformational to the market.

59:04 It's something that we need in in in the environment. You know, it's something that we need to address very quickly, and it's the disruption that's gonna make us been able to be self sustainable with energy security and with decarbonized future that's gonna gonna be relying a lot into electricity. So, you know, all all I want to say is, like, the the we have a great investor base. It's still very much we have a lot of retail, but we have retail investor that are more prepared and more informed than some of the institutional investors that we have had. And, you know, we appreciate the the trust. You know? I know it's painful to be an equity holder of anything in this environment. It's painful for us. You know, as much as it's for you. We just need to continue to plow ahead and deliver the strategy and deliver the outcome that we are set to deliver. So for all that, thank you for the trust. Thank you for the critical comments. And, you know, we continue to be here adapting and incorporating those into our strategy.

1:00:06 David, thank you. And thank you, Jeffrey Norman as well and also on the line. For your update today, could I please ask investors not to close this session? You should be automatically redirected to provide your feedback in order that management can better understand your views and expectations, which I know will be greatly received. This only takes a few moments to do so, so do please spare the time. On behalf of the management team of EQTEC PLC, we'd like to thank you for attending today's presentation. That concludes today's session. Thank you, and good morning to you all. Thank you, Keith.