LiqTech International (LIQT) Q2 Earnings call transcript Aug 14, 2024

LiqTech International, a leading provider of filtration solutions, recently held its second quarter fiscal year 2024 financial results conference call, shedding light on the company's strategic initiatives and financial performance. The call, led by CEO Fei Chen and Interim CFO Phillip Price, provided a comprehensive update on LiqTech's ongoing efforts to expand its presence in key markets and capitalize on emerging growth opportunities.

Key Themes and Trends

A notable highlight of the call was the announcement of a significant order from a world-leading integrated energy company for a pilot system in produced water treatment in the U.S. This marks the second such order in just a few months, underscoring LiqTech's capabilities in addressing the most challenging purification applications within the oil and gas industry. The company's focus on produced water treatment is strategically important, as the broader oil and gas sector is increasingly recognizing the value of using produced water to offset fresh water demand. LiqTech's solution is poised to reduce operational expenses for customers and contribute to sustainability efforts.

Partnerships and Collaborations

LiqTech's strategic approach to partnerships and collaborations was another key theme of the call. The company has recently signed several distribution agreements with key industry players, including NESR in the Middle East and Razorback Direct in the U.S. These partnerships are expected to significantly contribute to LiqTech's growth within the produced water oil and gas industry. Additionally, LiqTech has entered into a partnership with Dan Marine Group to expand its presence in the Chinese shipbuilding and repair market for marine scrubber water treatment systems. This collaboration is expected to drive awareness and adoption of LiqTech's solutions in a key market.

Financial Performance

In terms of financial performance, LiqTech reported a revenue of $4.5 million for the second quarter, down from $5.2 million in the same period last year. The decrease is attributed to the delivery of a containerized oil and gas pilot system, which was strategically undertaken to showcase the technology's effectiveness. Despite the decline, LiqTech remains optimistic about its future prospects, particularly in the oil and gas market. The company is projecting revenue of about $4 million to $5 million in the third quarter, with significant growth expected in the fourth quarter. LiqTech's commitment to expanding its presence in key markets and strategic partnerships is expected to contribute to this growth.

Investor Insights

During the Q&A session, key shareholders and investors sought clarification on the company's progress in the U.S. pool market and the timeline for the produced water pilot system. Fei Chen provided insightful responses, emphasizing the importance of strategic partnerships and regulatory approvals in driving market entry and growth. The company's focus on the U.S. market is a strategic move, given the geopolitical instability in the Middle East. LiqTech's progress in the marine scrubber market, particularly in the EGR segment for dual-fuel marine vessels, was also a topic of interest. The company's collaboration with Dan Marine Group and its intentions to offer service packages are expected to enhance its competitive position in this market.

Looking Ahead

The earnings call provided a comprehensive overview of LiqTech's strategic initiatives and financial performance. The company's focus on produced water treatment, strategic partnerships, and expansion into key markets are promising signs of its growth potential. LiqTech's commitment to innovation and collaboration is evident in its efforts to penetrate the global oil and gas, chemicals, and pool system markets. As LiqTech continues to execute on its strategic initiatives, investors and stakeholders will be closely watching its progress in the coming quarters.