Desert Control Releases Q3 2024 Report and Year-to-Date Company Update

15 Nov 2024 06:30 CET

Sandnes, Norway, 15 November 2024 - Desert Control AS (DSRT) announces its third
-quarter report and interim financial results for the fiscal period ending 30
September 2024.

Desert Control continued its positive momentum in the third quarter of 2024,
achieving milestones in market expansion, pilot progress, and initiation of
licensing revenues in the Middle East. The quarter saw strong results from
pilots in agriculture and landscaping, supporting negotiations for larger
commercial projects in the United States. Growing traction in the Middle East
further strengthens the foundation for sustainable growth under the company's
royalty-based licensed operator model.

Operational Highlights:

Solid Pilot Results Strengthen Validation and Support Negotiations for Larger
Contracts in the United States
. Landscaping Success in the U.S.: Landscaping pilots in California achieved
over 25% irrigation savings, with some clients reporting water reductions
exceeding 50%. These results drive negotiations for larger contracts as high
water costs continue to rise.
. First Contract for a Complete Golf Course: On November 8th, Desert Control
signed an agreement with Berkeley Country Club with potential value exceeding
NOK 6 million, marking the first commitment for full-course LNC deployment in
the U.S.
. Agricultural Gains: Harvest data from an LNC-treated date farm in Arizona
showed nearly double the yield, underscoring LNC's economic impact on high-value
permanent crops and supporting Desert Control's agricultural market expansion.

First Licensing Royalties from the Middle East
. Revenue Milestone: Desert Control recorded its first licensing royalties from
the Middle East. While modest, this revenue marks the beginning of a scalable
revenue stream following the strategic shift to a royalty-based licensed
operator model for the region.
. New Contracts and Expanding Pilots: A new contract for 1.8 million liters of
LNC was secured for a UAE real estate project. Landscape nursery pilots in the
UAE and Saudi Arabia demonstrate LNC's effectiveness in the growing sustainable
landscape management sector.

R&D and Technology Advancements Strengthen Delivery Capabilities for Current and
Future Pipeline
. Syngenta Partnership Accelerates R&D: Collaboration with Syngenta has shown
promising lab results of synergies with LNC. Field trials in the Middle East,
set for Q4 2024, aim to further validate the impact on soil health, crop yields,
and water efficiency.
. Next-Gen Production System Progress: Development of the next-generation LNC
production system is on track, with capacity nearing 120,000 liters per hour.
Achieving this targeted capacity will unlock large-scale opportunities that
require high volumes within short time windows, enabling projects previously out
of reach.

Financial Highlights:

In the first nine months of 2024, Desert Control reached a record number of
installations, increased LNC deployment volumes, and more than doubled LNC
revenue compared to the previous year. These achievements highlight enhanced
operational efficiency driven by the new prototype LNC production system,
streamlined integration with irrigation systems, and insights gained from pilots
and prior projects.

. Revenue Increase: Year-to-date LNC revenue totaled NOK 1.88 million, more than
doubling from the same period in 2023. Total revenue and other income for Q3
2024 was NOK 0.18 million, up from NOK 0.01 million in Q3 2023.
. EBITDA Improvement: For the first nine months of 2024, EBITDA improved to NOK
-44.95 million from NOK -60.81 million in the same period last year. Q3 2024
EBITDA was NOK -14.16 million, an improvement from NOK -17.9 million in Q3 2023,
driven by efficiencies from transitioning to the licensed operator model.
. Cash Position: The company ended the quarter with a cash balance of NOK 75
million, compared to NOK 35 million at the same time last year. The company
continues to operate with no interest-bearing debt.

The growth in project volume and LNC deployment, combined with improved EBITDA
figures, underscores the enhanced efficiency of operations. The ability to
handle larger volumes at a reduced cost base positions Desert Control to
maintain healthy margins as the company scales up.

Outlook:

With solid progress in the U.S. and Middle East, Desert Control is positioned to
transition pilot projects into larger contracts and expand LNC adoption. The
upcoming readiness of the next-generation LNC production system and strengthened
R&D partnerships underscore the company's commitment to scalable, sustainable
solutions for soil health and water conservation globally.

Key Figures (in MNOK):

First nine months 2024 [first nine months 2023 in brackets]
. LNC Revenue: 1.88 [0.85]
. Licensing Royalties 0.07 [0.00]
. Total Revenue and Other Income: 1.95 [1.38]
. EBITDA: -44.95 [-60.81]

Third quarter 2024 [third quarter 2023 in brackets]
. LNC Revenue: 0.11 [0.00]
. Licensing Royalties 0.07 [0.00]
. Total Revenue and Other Income: 0.18 [0.01]
. EBITDA: -14.16 [-17.90]

Total cash balance 30.09.24 (bank deposits and funds): 75 [35]
Equity 30.09.24: 86.3 (equity ratio 95.4%) [52.5 (60.0%)]

Q3 Report 2024:

. The information enclosed is subject to the disclosure requirements pursuant to
sections 5-12 of the Norwegian Securities Trading Act.
. The report can be downloaded from the company webpage:
https://desertcontrol.com/investors/
. A webcast presentation for Desert Control Q3 2024 Report and Company Update is
hosted on 15 November 2024 at 10.00 AM, Central European Time (CET). Register:
https://go.desertcontrol.com/Q3-2024 (https://go.desertcontrol.com/Q3-2024  )

Cautionary Note:

Disclaimer related to forward-looking statements. This release contains forward
-looking information and statements relating to the business, performance, and
items that may be interpreted to impact the results of Desert Control and/or the
industry and markets in which Desert Control operates.

Forward-looking statements are statements that are not historical facts and may
be identified by words such as "aims," "anticipates," "believes," "estimates,"
"expects," "foresees," "intends," "plans," "predicts," "projects," "targets,"
and similar expressions. Such forward-looking statements are based on current
expectations, estimates, and projections, reflect current views concerning
future events, and are subject to risks, uncertainties, and assumptions, and may
be subject to change without notice. Forward-looking statements are not
guarantees of any future performance, and risks, uncertainties, and other
important factors could cause the actual business, performance, results, or the
industry and markets in which Desert Control operates to differ materially from
the statements expressed or implied in this release by such forward-looking
statements.

No representation is made that any of these forward-looking statements or
forecasts will come to pass or that any forecasted performance, capacities, or
results will be achieved, and you are cautioned not to place any undue reliance
on any forward-looking statements.

For more information, please contact:

Ole Kristian Sivertsen
President and Group CEO
Email: oks@desertcontrol.com
Mobile (NOR): +47 957 77 777
Mobile (USA): +1 650 643 6136

Leonard Chaparian
Chief Financial Officer
Email: leonard.chaparian@desertcontrol.com
Mobile (NOR): +47 90 66 55 40

About Desert Control:

Desert Control develops innovative solutions to enhance soil health, conserve
water, and promote ecosystem resilience. The company's mission is to combat
desertification, soil degradation, and water scarcity. Our patented Liquid
Natural Clay (LNC) transforms sandy, fast-draining soils to retain water and
nutrients, improving soil health, crop yields, and ecosystem vitality while
conserving water. Desert Control provides customized solutions to strengthen
sustainability, profitability, and prosperity for agriculture, forests, and
green landscapes. In collaboration with partners and clients, we aim to preserve
natural resources, restore biodiversity, enhance food security, and ensure a
climate-resilient future.

More information:
Access the news on Oslo Bors NewsWeb site

632315_DC_Q3_2024Report.pdf