Norsk Titanium Reported today. The share price is down 40% today on delayed revenues and concerns about capital raisings. I summarize below the main points from the presentation.
Norsk Titanium summary
- Pioneer in titanium parts printing.
- Titanium printing consumes up to 80% less titanium in the production of parts for aviation and defense. Being first in the field is an opportunity and risks:
- Aviation is a highly regulated industry – to break through the licensing takes a long time.
- Once this is achieved the opportunity is very material – Norsk Titanium can disrupt traditional titanium producers.
- Over USD400 million invested in technology
- USD90 million market capitalization
- No material debt
- 170 patents
- 100+ employees
- 35 machines with 700 tons capacity
- USD300 million annual revenue capacity
- Revenue guidance for 2023 of USD7 million
Production update 1H23
- 8 titanium parts in production for Airbus, ASML, and others (7 at 2022 year-end)
- 20 titanium parts in preparation for production (9 at 2022 year-end)
- Recurring revenue from parts in the pipeline – USD24 million (USD3m at 2022 year-end)
Airbus qualification and industrial trials
• Continued strong engagement in exploring new additional parts
• End-to-end qualification ongoing; awaiting Airbus approval
Qualification with US Department of Defence prime contractors and production order
• Added to Northrop Grumman’s approved special processor listings
• Completed part of transition change board with a DoD prime contractor; production in early 2024
• Completed initial development of a large part with General Atomics AS
ASML/Hittech demonstrator part and first production order
- ASML is the world’s leading producer of machines for the production of chips
- Commenced production of an initial 30 parts under a contract awarded in late 2022
- Additional production orders anticipated in 2023
- Experienced and resolved production transition issues
Partnership with ATI announced
- ATI is a global producer of Titanium and other products with USD4 billion mkt cap
- In essence, ATI is Norsk Titanium’s direct competitor
- The CEO was vague on the scope of cooperation. He mentioned that it will relate to the development of new products.
Capital raising should be completed by the end of September.
The CEO said, that the presentation was reviewed by its major clients. The original presentation included much more information, but had to scale it down based on the client requests.
Link to the presentation
In summary, Norsk did not deliver today. The CEO seemed to be bullish. All is eminent. We will achieve the capital raise during September. We are in very active dialogue with Airbus. We have been very active dialogue with Boing during the last 30 days. If Norsk Titanium delivers the stock price should jump materially. High risk-return play.
Disclosure:
The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice. Please do your own research before making any investment action.
Fit Investment Ideas 