Redflow Limited (RFX) today announces its results for the six months ending 31 December 2018 (1H19), during which the Company increased its manufacturing capacity, received initial orders of zinc-bromine batteries from new customers in target markets, and built up its sales pipeline to drive long-term commercial success.
The 1H19 results reflect Redflow’s re-engagement with the market and re-emerging customer demand as it ramped up production from the Company-owned manufacturing facility in Thailand. Revenue was down 58% to $0.5 million and the Company posted a loss after income tax of $4.9 million (loss of $3.9m in pcp).
Redflow CEO and Managing Director Tim Harris said: “The past six months were significant for Redflow as we re-engaged with the market after establishing our new in-house manufacturing capabilities in Thailand,” he said.
“As we ramped up production from our Thai factory, we’ve re-established relationships with our partners and end customers which have resulted in some exciting initial orders in target markets along with a number of other promising opportunities.”
Redflow has established its Thai factory as a core capability during the past six months. Within 12 months of successfully making its first battery stack in Thailand, Redflow successfully produced 150 batteries during December 2018. As demand increases, the facility can rapidly expand to 250 batteries per month – which equates to the production capacity of 30 MWh per annum.
This stable production facility equips Redflow to confidently execute on a number of key engineering projects and incremental productivity improvements that will add yield and reduce the cost of manufacturing its zinc-bromine flow batteries by 30% by the end of 2019.
Sales momentum gained during 1H19
During the period Redflow increased orders across its key Telco, Commercial and Industrial and Residential verticals. In Telco, Optus selected Redflow’s ZBM2 batteries for deployment at their Cape Tribulation site in the Daintree rainforest, ordering six batteries for a mobile phone tower at this environmentally sensitive location. In South Africa, an initial order for five batteries for remote mobile phone towers used by a leading South African telco was followed by a second order for 32 batteries.
In the Commercial & Industrial (C&I) sector in Australia, Redflow has seen demand driven by increasing adoption of solar and storage by organisations seeking to mitigate rising and volatile energy prices and support corporate carbon-pollution reduction programs. Redflow announced an order in November 2018 from Knox City Council in Melbourne for two childcare centres. The initial sale of 32 ZBM2 batteries, capable of storing 320 kilowatt-hours (kWh) of energy, has since grown to 360 kWh. This deployment showcases the ability of its batteries to meet energy storage needs and deliver clear sustainability benefits.
In Thailand, Redflow and its local partner TSUS have successfully deployed a 10-battery, 100kWh ZBM2 energy storage system that is providing power for an isolated village, showcasing the inherent advantages of flow batteries over traditional battery solutions in the global mini-grid market.
Mr Harris said Redflow’s sales pipeline had grown considerably during 2018 from a low base. “We are very pleased with an important set of initial orders and our growing list of opportunities,” he said. “We have established momentum which continues to build. A number of the orders received in 1H19 will be delivered and payments received in coming months, positioning us for a strong second half of the year.”
Enhanced Board and management team to drive commercialisation
During the half, Redflow made several key Board and management appointments, in line with the Company’s focus on manufacturing optimisation and commercialisation. After becoming CEO in March 2018, Tim Harris joined the Board as Managing Director in July 2018. Other senior appointments include Trudy Walsh as Chief Financial Officer. Ben Shepherd as Chief Commercial Officer and Tim MacTaggart in early 2019, as Chief Deployment Officer.
Technology expert and businessman John Lindsay joined the Board in September 2018 as Non-Executive Director, allowing Simon Hackett to transition from the Board to a newly created role as System Integration Architect. David Brant joined the Board in October 2018, bringing substantial strategic manufacturing expertise to the Board.
A Positive Outlook
Mr Harris said Redflow was optimistic about its prospects for this year. “Having invested in building up our in-house manufacturing capabilities, we have reached a point where we can confidently scale up capacity to meet demand from our customers,” he said.
“We see opportunities to translate our initial orders in volume orders and deploy our solutions at scale across our target markets and end customers. Having made a number of important hires, we have an excellent management team in place to drive growth during the remainder of FY19 and beyond.”
Date: Feb 26, 2019