Fluence China, page-22

sludge can't be avoided, but as noted above using MABR results in less of it (as a positive bi-product of the chemical reactions inherent in the MABR process) and thus less frequent tankers to dispose of it. And it isn't labour intensive, rather it is simply getting a truck with a tank to the waste water plant, hook it up and release the sludge from the MABR plant.

in terms of cash flow sustainability, I don't believe we are quite there yet. progress has definitely been made, and the business may be EBITDA positive.. but the interest, tax and depreciation and amortisation still accounts for a large amount of cash outflow in the business. However being EBITDA positive means that the 'business' itself is a successful one, but the only missing piece is scale. The business has not yet achieved a large enough scale to cover the 'non-operating' costs.

That is why they have a debt facility, which Richard has noted may be increased as necessary. However Fluence will not be in a position to pay back the debt until scale is reached, and if scale is not reached in time.. they may need to resort to a capital raising.

That being said, COVID is probably one of the key factors holding back a quicker uptake in Asia and the Middle East. Some parts of Asia are doing better than others, but COVID is still hampering business (travel restrictions, quarantine and lock-downs). But as Richard says (and I believe him), the underlying issues still exist and are in fact getting worse... governments and industry are looking for solutions, and so the demand is still there and growing as time goes by.

So it won't take much for the business to reach scale if Asia and the Middle East start ordering SPS products, given these are much higher margin than CES and the more uptake of MABR, the more confidence and awareness within the industry and governments... and the flood gates will literally open. And because SPS is an 'off-the shelf' product, the ability to meet demand at short notice and achieve production scale is not only achievable, but can be done quickly and very cheaply (three more production lines can be added at a cost of approx $2m each).

First half of the year is usually quite slow in terms of orders, with the second half a lot more active ... so I expect some decent sized orders to be announced in the coming months.

goodluck