HydrogenPro: 2021 Integrated Annual and ESG Report

8th of April 2022. – HydrogenPro has today published its 2021 Integrated Annual and ESG Report. The report is attached and available on the Company’s website.

The report includes the complete 2021 Annual Accounts with notes, prepared under IFRS, and the Company’s initial ESG report.

Highlights during 2021 and year-to-date in 2022 include:

• Received one of the world’s largest electrolyser system purchase orders
  • April 2022: Received firm purchase order from Mitsubishi for one of the
    world’s largest electrolyser system contracts ever, with an initial
    contract value exceeding USD 50 million.
• Acquired world-leading electrode company
  • Jan 2021: Acquired world-leading electrode technology through ASP in
    Denmark. This is a game changing technology advantage that reduces
    electricity consumption by 14% which equals approx. the investment
    cost for the entire plant in a total cost of operation perspective,
    with variations depending on the electricity price. Industrial-scale
    production facility in operation from end of 2021.
• Strategic move to manufacture complete electrolyser systems
  • Nov 2021: Signed agreement to acquire leading Chinese high-pressure
    alkaline technology company, including world-wide IP rights. The
    capacity of the Chinese entity has been expanded to more than 30
    people with a new board and CEO. The first HydrogenPro electrolysers
    are in production, and capacity will be 300 MW per year.
• Achieved ISO certification
  • To ensure products and services meet the needs of customers through an
    effective management system through internationally recognized standards.
• Active sales pipeline by year end 2021 of 12 GW
  • Never seen a stronger market. In addition, several engineering studies
    are in progress for major companies for large scale production plants.

Update on purchase order announced on 24th of August 2021:

The world’s largest single-stack high-pressure alkaline electrolyser system is currently being fabricated in China. Covid-19 infection control measures in China in 2022 have led to a lockdown which has caused delays. The main part of the gas separator skid has been completed, and the assembly of the electrolyser is ongoing, where progress is pending a Covid-19 lockdown at a sub-supplier. The production of the system will be finalized within four weeks after the sub-supplier re-opens its facilities. The current delay has no negative contractual implications for HydrogenPro. After the system is completed, it will be transported to Norway for installation and commissioning.

Impact of transition from NGAAP to IFRS:

The effect of the transition from NGAAP to IFRS on equity and financial position and the consolidated profit and loss are explained in detail in the notes to the consolidated financial statements. The main effect on the profit and loss account for 2021 was an increase in personnel and other operating expenses of NOK 6.3 million and a reduction in depreciation of NOK 1.0 million due to a difference in consideration of the recognition criteria under IAS 38 (intangible assets under IFRS) vs. NGAAP, leading to a reversal of NOK 6.3 million previously capitalized costs, which increased the personnel and other operating expenses in the income statement by NOK 1.3 million and NOK 5.0 million respectively. The decrease in depreciation and amortization under IFRS reflects a reversal of deferred tax liability related to the technology of the subsidiary, Advanced Surface Plating ApS. As a result, the initial value at the date of purchase was decreased, influencing the basis for amortization in 2021. Consequently, the loss before tax was NOK 5.2 million higher under IFRS than under NGAAP, whereas the net loss for the year end increased by NOK 5.4 million.
The conversion effects on the financial position resulted in a decrease of NOK 13 million in total assets, mainly related to intangible assets and the treatment of leases by right-of-use assets recognized under IFRS 16. Current assets were unchanged. Non-current liabilities decreased by a total of NOK 9 million, reflected by the deferred tax liability reversal of NOK 10.4 million, and a recognition of non-current lease liability of NOK 1.4 million. In current liabilities, a lease liability of NOK 1.6 million was recognized. Total reduction in equity as a result of the IFRS-transition was NOK 5.6 million.

For more information, please contact:
Martin T. Holtet, CFO, +47 92 24 49 02, martin(at)hydrogen-pro.com

About HydrogenPro:
HydrogenPro designs and supplies customized hydrogen plants in cooperation with global partners and suppliers, all ISO 9001, ISO 45001 and ISO 14001 certified.

The Company was founded in 2013 by individuals with background from the electrolysis industry which was established in Telemark, Norway by Norsk Hydro in 1927. We are an experienced engineering team of leading industry experts, drawing upon unparalleled experience and expertise in the hydrogen and renewable energy industry.

Our core product is the alkaline high-pressure electrolyser. With the new electrode technology, we are able to increase the efficiency of each unit by 14% to reach 93% of the theoretical maximum. This is a significant step forward as the cost of electric power, depending on market prices, amounts to 70-90% of the cost of producing hydrogen, the value of such increased efficiency equals approximately the investment cost for the entire plant in a Total Cost of Operation perspective. The Company is targeting a production cost for green hydrogen of USD 1.2 per kg in 2022.

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.