Desert Control Reports Exceptional Growth and New Innovations in Q4 2024 Update

Desert Control AS Q4 2024 Financial Report and Company Updates

Desert Control AS (DSRT) recently released its financial results for the fourth quarter of 2024 along with an update on company developments over the past year. The report indicates a phenomenal year for Desert Control, showcasing significant advancements in its operations, sales growth, and strategic partnerships.

Key Highlights of Q4 2024

Major Commercial Contracts Secured

One of the standout achievements for Desert Control was the signing of contracts for the deployment of its innovative Liquid Natural Clay (LNC) technology at two golf courses in California. This represents the company's first full-scale commercial projects in this sector, illustrating a successful shift towards a recurring revenue model based on a pay-as-you-save approach. The estimated contract value exceeds NOK 14 million, providing immediate financial benefits to clients while fostering quicker adoption of the technology.

Surge in Licensing Revenue

Desert Control experienced a remarkable threefold increase in licensing revenue and project deployments in the Middle East during Q4. This growth was primarily driven by expanding initiatives in the UAE and Saudi Arabia, including pivotal agreements for commercial real estate in the UAE and collaborations aimed at promoting sustainable agriculture in Saudi Arabia via Estidama.

Selection for UN WFP Innovation Program

The company’s LNC technology was recognized by the United Nations World Food Programme (WFP), leading to the selection of Desert Control for a funded demonstration project in Iraq. This initiative aims to revitalize degraded land, addressing issues of soil fertility and climate resilience, and is expected to serve as a model for responding to drought and enhancing food security.

Advancements in Production Capacity

Desert Control announced the successful field testing of its next-generation production system, capable of producing 120,000 liters per hour—a significant eightfold increase in capacity. This system is slated for commercial readiness by mid-2025, which should lower costs and enhance the scalability of the technology.

Partnership with Oasis Date

In an additional positive development, Desert Control secured a NOK 1.5 million contract with Oasis Date on January 15, 2025. The contract pertains to the application of LNC technology across 160 acres of a Medjool date farm, with the potential for expansion to 5,000 acres.

Financial Performance Overview

Desert Control’s revenue doubled in 2024, bolstered by technological advancements and heightened project activity. The total revenue for the year reached NOK 1.88 million, marking a substantial increase from NOK 0.89 million in 2023. The fourth quarter alone saw revenue rise to NOK 0.22 million, a significant improvement from the previous year's figures.

Improved EBITDA

The company also reported a notable improvement in EBITDA, which went from NOK -60.05 million in 2023 to NOK -56.78 million in 2024. This improvement reflects operational efficiency and the transition to a licensed operator model in the Middle East, though the reported figures are impacted by a one-time gain from discontinued operations in Q4 2023. When excluding this anomaly, the year-on-year improvement in EBITDA was close to NOK 19 million.

Cash Position

Desert Control concluded 2024 with NOK 64 million in cash, down from NOK 119 million at the end of the previous year. Notably, the company operates with no interest-bearing debt, positioning itself strongly for future operations and expansions.

Looking Ahead

Entering 2025, Desert Control is poised for robust growth, advancing from pilot projects to larger commercial deployments in sectors such as golf, agriculture, and urban landscaping. The anticipated launch of the next-generation production system is expected to unlock additional capacity and further operational efficiencies. With an expanding commercial pipeline and increasing licensing revenues, Desert Control is well-positioned to capitalize on opportunities within the soil health and water conservation markets.

In summary, the combination of doubled revenues, improved operational metrics, and a solid cash position underscores Desert Control's efficient scaling strategy. With ongoing advancements in their production technology, the company appears set for sustained growth and a deeper impact on sustainable practices in agriculture and conservation.