Business context and reporting period
Fusion Fuel Green plc’s Form 20-F is an audited annual report for the fiscal year ended December 31, 2023—not a standalone 2023 Q4 filing. The Irish-domiciled company develops and sells HEVO electrolyzer systems and green-hydrogen solutions, and also pursues engineering, procurement and project development. Financial statements are prepared under IFRS in euros. The report was signed April 30, 2024.
2023 was the company’s first revenue-generating year: it recognized technology-sale revenue from the Exolum and CSIC projects. The company shifted new proposals toward its modular HEVO-Chain system and away from HEVO-Solar.
Financial performance and position
Amounts below are in € millions unless stated otherwise. Comparisons are with the year ended December 31, 2022.
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | 4.144 | 0 |
| Cost of sales | 20.088 | 8.765 |
| Gross loss | (15.944) | (8.765) |
| Operating expenses | 21.119 net, after other income | 25.982 net, after other income |
| Operating loss | (37.063) | (34.747) |
| Net finance income | 6.451 | 8.062 |
| Net loss | (31.016) | (27.347) |
| Basic and diluted loss per share | €(2.12) | €(2.05) |
| Net cash used in operating activities | (9.182) | (29.851) |
| Cash and cash equivalents, including restricted cash, at year-end | 1.147 | 8.164 |
Revenue comprised €2.5 million from Exolum and €1.6 million from CSIC. Cost of sales included €9.011 million of technology-sale costs, €15.227 million of inventory write-offs/scrapping, a net €7.794 million reversal or use of onerous-contract provisions, and €3.317 million impairment related to HEVO-Sul. The resulting gross loss substantially exceeded revenue.
Administration expenses declined to €15.835 million from €18.416 million; reported R&D expense was €1.925 million versus €0.908 million. The company also reported €1.6 million of grant income credited against qualifying R&D personnel costs. Net finance income included a €6.886 million non-cash fair-value gain on warrant liabilities; this reduced the reported net loss but did not represent operating cash generation.
At December 31, 2023, total assets were €42.351 million and total liabilities €39.620 million, leaving net assets of €2.731 million, down from €29.353 million. Current assets were €11.323 million against current liabilities of €20.363 million. Cash included €0.287 million restricted and unavailable for general use; unrestricted cash was €0.860 million. Trade and other payables were €15.312 million. The company reported €1.326 million of short-term borrowings under a recourse factoring arrangement and €10.784 million of lease liabilities; it said it had no external debt apart from the factoring arrangement.
Operating cash outflow improved year over year, but year-end cash fell sharply. Investing cash flow was an outflow of €1.158 million, while financing cash flow provided €3.074 million, including €3.001 million of net ATM share proceeds and €1.326 million from factoring. The group reported an accumulated deficit of €222.793 million.
Material changes versus the prior comparable period
- Revenue began in 2023, versus none in 2022, but the group’s net loss widened by €3.669 million and operating loss by €2.316 million.
- Inventory fell to €3.672 million from €22.336 million, largely reflecting a €13.936 million inventory impairment. Management said the write-down affected components for legacy designs where prospective-buyer negotiations had stalled.
- Property, plant and equipment impairment was €5.482 million in 2023, compared with €3.321 million in 2022. The HEVO-Sul development project was fully impaired after the project would not proceed as originally planned.
- Onerous-contract provisions fell to €0.609 million from €8.403 million, principally following use or reversal of prior provisions as projects progressed.
- Cash including restricted cash decreased from €8.164 million to €1.147 million. Trade and other payables rose to €15.312 million from €7.262 million.
- Net finance income remained positive, but the warrant fair-value gain declined to €6.886 million from €7.620 million.
Outlook, risks and unusual items
The auditor highlighted substantial doubt about the group’s ability to continue as a going concern. The company has incurred losses since inception, expects further losses, and depends on additional debt or equity funding. Management said it expected to seek funding to support operations through the end of 2024 and beyond; it cautioned that funding might not be available on acceptable terms or at all. The financial statements were prepared on a going-concern basis and contain no adjustments for the outcome of this uncertainty.
In November 2023, the company agreed to a financing facility of up to $20 million in senior convertible notes with Belike Nominees, a Macquarie Group entity. Drawdowns are tranche-based and subject to conditions and mutual agreement; the first tranche, expected to be $1.15 million, was anticipated in Q2 2024. The filing provides no assurance that the facility will be completed. The company also reported $6.398 million of net proceeds from ATM share sales during 2024 through the report’s subsequent-events disclosure. Further equity issuance may dilute existing shareholders.
Capital commitments for Benavente production-line work were approximately €6.5 million at year-end, all due in 2024. Management described continued investment in manufacturing, commercialization and R&D. No specific consolidated revenue or earnings guidance is provided.
Commercial milestones and prospects include five contracted Iberian projects ranging from 300 kW to 1.25 MW; the first full client plant, Exolum Torrejon, was accepted in September 2023. The company planned to complete remaining CSIC project phases in the first half of 2024 and expected its first Italian project in 2024. These schedules and announced pipelines are subject to execution, customer financing, permitting and other conditions; the filing cautions that projects may not be completed or convert to revenue.
After year-end, the European Commission selected the company’s HEVO-Portugal project for approval under the IPCEI Hy2Infra program. The proposed Sines project is described as €650 million, 630 MW, with expected output of 62,000 tonnes of hydrogen annually. Approval enables funding negotiations; it is not disclosure that the project is fully financed or that the stated output or timing is assured. Other subsequent developments included grant approvals or provisional approvals for projects, including €5 million for the proposed 25 MW Aveiro project.
Key risks include severe liquidity and funding needs, low cash relative to near-term liabilities and commitments, early-stage commercialization, long sales and installation cycles, customer concentration, supply-chain constraints, project delays and cancellations, regulatory and subsidy dependence, competition, and the safety and warranty exposure inherent in producing flammable hydrogen. The company also disclosed that disclosure controls and internal control over financial reporting were ineffective at year-end due to material weaknesses in control processes, segregation of duties and IT general controls; remediation remained ongoing. Management reported no identified financial-statement misstatements from these weaknesses.
Unusual items include the large inventory write-down, project and plant impairments, the reversal/use of onerous-contract provisions, and non-cash warrant remeasurement gains. The auditor identified valuation of a plant held for sale and impairment testing of an energy-production plant as critical audit matters. The company classified €0.833 million of assets as held for sale, with sale expected by the end of 2024.
Most important facts for investors to verify
- Available liquidity, restricted-cash limits, payable settlement timing, 2024 capital commitments, and whether the company can obtain funding before cash needs exceed resources.
- Whether the conditional convertible-note facility closes and on what terms, including the warrants attached to the notes; also verify subsequent ATM issuance and resulting dilution.
- Actual project financing, grants, permits, offtake arrangements and customer commitments for Sines, Aveiro and other announced projects; distinguish selections or provisional approvals from cash received and projects under construction.
- Whether HEVO-Chain deployments meet performance, cost, commissioning and customer-acceptance expectations, and whether the Exolum warranty period or CSIC project phases create additional costs.
- Recoverability of inventory and capitalized project assets, the basis for the impairments and held-for-sale valuation, and any further write-downs or onerous-contract losses.
- Progress in remediating the disclosed material weaknesses and whether internal-control deficiencies or reporting delays persist.
- The filing reports 17,371,968 shares as outstanding on the cover as of December 31, 2023, while the financial statements report 14,919,017 shares at that date and elsewhere give 17,371,968 as of April 25, 2024. Verify the correct year-end share count and subsequent share movements.