Eden Innovations Ltd

EDE Details

Eden Innovations Ltd (ASX: EDE) produces and sells a high-performance concrete admixture, EdenCrete® and retrofit dual fuel technology, OptiBlend®, developed for diesel generator sets.

Result Performance (FY21 Ended 30 June 2021)

• The company’s revenue from ordinary activities for the period stood at $3.28 million, an increase of 35% on previous year.
• Loss from ordinary activities after tax attributable to shareholders for the period stood at $5.80 million, compared to the loss of $9.11 million in the previous year.
• Net tangible assets per share for the period stood at $0.0043, compared to $0.0044 in the previous year. No dividends were declared during the period.

Source: Company Reports, Analysis by Kalkine Group

Q1FY22 Update:

During the September quarter period, the company’s net cash used in operating activities stood at $1.44 million; Net cash used in investing activities stood at $32k; and Net cash from financing activities stood at $1.26 million. Cash and cash equivalents at end of period stood at $2.04 million.

Recent Update:

On 4 January 2022, the company highlighted that with its significantly expanding US sales footprint, the ongoing DOT EdenCrete® trials (particularly for bridges) in various States, plus the approvals for DOT use in 22 States, EdenCrete® is very well placed to participate in the expected significant market growth from an additional US$110 million under US Federal infrastructure programme. This Federal funding is in addition to US$905 million of US Federal funding awarded to 24 projects in July 2021 under the Infrastructure for Rebuilding America programme.

Outlook:

In spite of continued significant ongoing disruption, the company’s markets and activities, to all of Eden’s activities during the entire 2021 financial year, the total sales increased by 36% compared with the previous year that was only impacted for six months, with EdenCrete® sales increasing 17% to A$1,755,000 and OptiBlend® sales increasing by an impressive 65% to A$1,528,000 compared to the prior year, as the negative impact of COVID-19 intermittently and gradually started to reduce.

Eden India believes the growth in demand for its OptiBlend® systems in India, that it has experienced over the past year, is likely to continue for the longer term and spread to other regions of India apart from greater Delhi, as the rollout of Natural Gas pipelines extends to new areas, driven by the compelling market drivers of the far lower cost Natural Gas and the various Government regulations and decisions detailed above.

Key Risks:

The company is susceptible to financial risks such as interest rate risk, credit risk, foreign currency risk and liquidity risk.

Daily Price Chart

Source: REFINITIV

Stock Recommendation:

The company is exposed to the risks related to the COVID-19 pandemic. The pandemic can result in significant disruption in all its markets as well as activities which could adversely affect its sales. Also, the company is exposed to fluctuations in the foreign currencies due to the sale as well as purchase of goods and services in currencies other than the companies’ functional currency. Therefore, we suggest investors to book profit on the stock. Thus, we give a “Sell” recommendation on the stock at the current market price of $0.024 as on 11:30 am (GMT+11) Australia Time as on 12 January 2022.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Note 3: The stock is a part of Kalkine's Global Green Energy Portfolio

Disclaimer

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