Fluence Share Price Up on Large Contract in Egypt

At time of writing, the share price of Fluence Corporation Limited [ASX:FLC] is up 7.59%, trading at 42.5 cents.

It’s been a choppy 12 months for the stock, with peaks in April, August and October:

Fluence Share Price

Source: tradingview.com

The latest news out of the company is that it has been awarded a contract to help design and supply parts for a desalination plant in Egypt.

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Fluence share price responds positively to the news

The share price of Fluence warmed to the news immediately on opening, going as high as 43 cents in early trading.

As per the announcement released this morning, through its Egyptian joint venture, IWSI, Fluence will provide the technology, design the process and supply a range of equipment for the plant for a total contract share of $20 million.

Local works will be undertaken by their partner Hassan Allam and the plan is to have the plant ready in 18 months.

When the plant has been completed it will provide 40,000 m3/day of potable water to New Mansoura city, with the potential for future capacity of 80,000 m3/day. This will provide water for 250,000 people.

New Mansoura is a city currently being built near the sea-side tourist hub of Gamasa on the Mediterranean.

Fluence’s Managing Director and CEO hailed the contract win, saying:

The New Mansoura plant will be among the larger desalination plant references for Fluence to date and, if expanded, one of the largest in all of Egypt. Together with the US $7.6 million NIROBOX™ Smart Packaged desalination plant order IWSI secured in Egypt in October 2018, this contract reinforces Fluence’s growth strategy.

The structure of the deal is likely advantageous for Fluence, as they don’t have to deal with the regulatory complications associated with completing local works in Egypt.

What is the outlook for Fluence?

For the moment, it looks relatively rosy as a growth opportunity.

Its most recent results announcement outlines that revenue for ordinary activities is up 204.9% to just over US$100 million.

However, it still posted a loss for the year of around US$63 million, due in large part to a goodwill impairment of US$56 million.

It has cash and cash equivalents of around US$38.7 million on hand.

The company has big plans for growth in China and has released guidance for, ‘sustainable EBITDA profitability by Q4 2019 on the basis of continued strong growth in sales of Smart Products Solutions.

With the market for water hardly going away…ever, Fluence may be well positioned to deliver projects in places such as Egypt and China going forward.


Lachlann Tierney,
For Money Morning

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Lachlann Tierney is an Analyst for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently he has been working with Ryan Dinse. Lachlann is involved in two publications:

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