Pipeline 2020+

Custom Enginered

While this category has been headlined by San Quintin and Ivory Coast, we must not forget the other projects that were commissioned in 2019 or due to be in 2020.

2019 commissioning
- €3.9m ArcelorMittal Steel Belgium waste-to-energy
- US$3.5m Argentina power plant
- €1.7m waste-to-energy ArreBeef Energia Argentina

2020 commissioning
- US$20m Egypt Hassan Allam EPC 40k m3/day desal
- US$10m Brazil Desal Plant (12k m3/day)
- US$3m Lithium brine treatment - Argentina

These are on top of the recently announced financial close for the €165m Ivory Coast water treatment plant, which will in due course come with an O&M contract that will generate multi-year recurring revenues. Even without the O&M contact, if we get US$20m recognised in Q1 2020 (as I expect we will), we are looking at US$100m in 2020 in revenues... already in backlog. US$100m in revenues. Need I repeat that again?

The San Quintin project has possibly soured the excitement for the Ivory Coast, with the funding issues and delayed construction. But with a dissapointing 2019 for this project, Fluence have the finance in place to get this project back on track in 2020. I am expecting an update on this this quarter.

Smart packaged solutions

Where do I start ... we started 2019 with one MOU with iTEST to purchase US$45m Aspirals in 3 years... after one year, they have purchased over 100 units and I estimate they have fulfilled approximately 25% of the estimated volume to date. I am expecting a ramp up in 2020 from iTEST with their next bulk order shortly after Chinese new year (last year it was in March).

The end of 2019 should also have seen the Greenfield SUBRE projects in Panjin and Sichuan (Class IV) commissioned. These two wins mark an exciting new revenue stream that Fluence will look to grow in 2020, and have agreements in place to do so with Liaoning Huahong being the partner signing up the Panjin installation and following that up with a multi-year agreement for Aspiral and SUBREs (52,500 m3/day) by the end of 2021. No follow up orders just yet, but post Chinese New Year would be a likely time for them to place their order IMO.

Aerospace Kaitian also signed up to a multi-year agreement to deliver 40,000 m3/day through Aspirals by the end of 2021. After signing this in Aug19, by the end of the year they have already purchased over 20% of their expected orders out to 2021.

Two assembly sites were due to be complete by the end of 2019, but realistically early 2020 is more likely IMO.

The US$7.6m New Mansoura installation would have completed in 2019, with 12 Nirobox' commissioned providing 12,000 m3/day of fresh water. This is on top of the US$8.4m Peru BOOT where 5 Nirobox will product 1.1m m3/year and generated US$1.7m of recurring revenue over 10 years. After a slow start to the year, we had a nice emergency order for 5 Nirobox in Sep19, which should have been commissioned already (2 week commissioning).

A nice surprise in thsi space was the US$5m Lithium containerised SPS solution win in Nov19, which is due to be delivered in late 2020 and commissioned in early 2021.

So 2019 ended with three multi-year agreements in place for Aspirals and SUBRE in China, a ramp up in production from one to three shifts, topped off with the addition of two new assembly and distribution sites. Nirobox has some catching up to do, with some BOOT's now overdue, so hopefully they will be announced in early 2020. A healthy pipeline, spear headed by some serious momentum building in China. How many multi-year agreements will be have by the end of 2020?

Share price
Open 2 Jan19: $0.305 cents
Close 31 Dec19: $0.43 cents
Change: $0.125 cents (+40.1%)