Norsk Titanium AS, Hønefoss, Norway, has published its annual report for 2021 which was approved by the board of directors on March 30, 2022. The company’s total revenue and other operating income in 2021 was reported to be $5.3 million, up from $1 million in 2020. Total loss before tax was $16.1 million in 2021, compared to a loss of $42.8 million in 2020, and net loss after tax was $16.0 million, down 63% from the $42.9 million loss in 2020.
Operating costs and EBITDA operating expenses amounted to $22.0 million in 2021, a 22% decrease from $28.3 in 2020. Norsk Titanium stated that there were two main drivers behind this decrease: the reduction of general operating expenses, including litigation expense as a result of settlement of a claim, and reduction of salary and personnel expenses as part of the organisational restructuring in 2020 necessitated by COVID19 impacts on both its supply chain and end markets.
In total, the net change in cash and cash equivalents was $21.3 million, and 2021 ended with a cash balance of $22.9 million compared to $2.2 million at the end of 2020. The cash balance at year end is expected to fund the operations through 2022, however, the company states it will continue to raise capital to fund operations to reach its long-term goals
2021 was said to be have been an eventful year for Norsk Titanium. In addition to delivering parts to its commercial aerospace customers, the company expanded its product offering to the defence industry in the US and select industrial groups. It also continued to achieve 100% on-time deliveries to tier-1 Boeing suppliers. The software development kit, RPD Builder™ is reported to be at the forefront of the company’s expansion into the industrial and defence markets, used to produce and deliver parts for Hittech, the company’s first industrial customer, as well as parts for a US defence prime contractor.
“Norsk Titanium began 2021 with a focus on expanding application of our RPD® technology in the commercial aerospace market and in other attractive industries,” Michael J Canario, CEO of Norsk Titanium, commented. “Although we continue to believe that the large opportunity in commercial aerospace makes this the most attractive market for our technology, we see potential for fast technology adoption rates in our new markets.”
“In another milestone for the company, we successfully completed the listing of our shares on the Euronext Growth trading platform in May 2021. This enabled us to increase our public profile with investors and raise an additional $38 million in capital to fund our development efforts. The capital raise also improved our balance sheet position and allowed us to participate in the Innovation Norway grant program. The grant awarded by Innovation Norway was NOK 35 million (approximately $4.0 million), giving us sufficient cash to complete our planned efforts in 2022.”
The impacts of COVID-19 were still playing out for the company in 2021. The drastic downturn in commercial air travel as a result of the global pandemic had a significant impact on the commercial aerospace industry, which hampered Norsk Titanium’s ability to further qualifications and the adoption of its technology within the commercial aerospace sector. While domestic air travel rebounded in 2021, international remains at depressed levels compared to pre-pandemic. The resulting partial rebound did not translate immediately into increased demand for new aircraft, in part due to large inventory levels. This in turn limited the company’s ability to penetrate the market for titanium parts on commercial aircraft and continued to impede various qualification efforts already underway.
Regarding its future outlook, Norsk Titanium states that its current qualifications are expected to create a long-term pipeline of visible revenue as it becomes qualified to manufacture parts for platforms with ten-plus-year production runs. At the same time, it sees significant potential in expanding into new sectors over time, leveraging its published material specification and instant part development software, RPD Builder.
The company notes that it will continue to raise additional capital to fund ongoing development and production activity until such time as revenue from operations can support the business and reiterates its target to generate $150 million in sales revenues in 2026.
“I am immensely proud of the fact that while our growth may have slowed as a result of the global pandemic, it has never stopped. We proved that we are nimble as we adjusted our strategy. We ended 2021 actively working with global Tier-1 customers across industries and application complexities, all in different stages of RPD technology adoption. I am excited to see expansion of our capabilities into new markets while continuing our progress in commercial aerospace and look forward to building on these efforts in 2022 and beyond,” concluded Canario.