29. September 2021 | 11:13 CET
Nel ASA, Water Ways Technologies, Veolia - Frightening development
Water is our most precious resource. Energy, food, transportation and nature all depend on a supply of clean, flowing water that is dwindling at an alarming rate. By 2050, demand will increase by 55%, according to an OECD study. According to the World Economic Forum, global water supply is one of the top 10 societal risks of our time. To avert disaster, companies are stepping up to revolutionize food production with new technologies such as smart irrigation, robotics, drones and the Internet of Things.
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ISIN: NEL ASA NK-_20 | NO0010081235 , Water Ways Technologies | CA9411881043 , VEOLIA ENVIRONNE. EO 5 | FR0000124141
Agriculture's largest consumer
Global warming, which is increasing water evaporation, and population growth, urbanization, and rising living standards, are reasons why water supply will become increasingly difficult. Agriculture is responsible for around 70% of global freshwater withdrawals. There is no question that a lot of water is wasted due to old irrigation systems. That is why Water Ways Technologies offers intelligent and complex irrigation and control systems for agricultural producers to 400 customers in over 40 countries.
The current Irri-Al-Tal subsidiary in Israel was founded back in 2003. The state, which has a population of only 9 million, is a world leader in the AgriTech segment and, although only 20% of its land is arable, produces 95% of its own food. By developing advanced agricultural systems, nearly USD 800 million in venture capital money flowed into Israel's AgriTech industry between 2014 and 2018 alone.
Israel the cradle of Agritech
At the time, the focus was still on providing irrigation solutions for open fields. There has also been a push to develop more precise irrigation and control systems in the last two years. Headquartered in Canada, Water Ways Technologies also has offices in Israel and China, where the Company has already established close relationships with key agribusinesses, including leading manufacturers, academies or AgriTech start-ups.
The vision of Water Ways Technologies is to scale the business globally and accelerate its growth through the establishment of subsidiaries and acquisitions. Impressive first-quarter figures show that the Canadians are on the growth path. At CAD 5.5 million, revenue increased by 70% compared to the same period last year, while EBITDA exploded by a whopping 1,300% compared to the first quarter of 2020.
Since January, the innovative Company has also recorded a record order intake of CAD 10.6 million. Against the backdrop of increasingly difficult freshwater sourcing, Water Ways Technologies is expected to continue its growth in the coming years. The market capitalization of the stock, which is also traded on the Frankfurt Stock Exchange in addition to Toronto, is currently a manageable EUR 22.87 million.
With sales of EUR 27 billion and a net income of EUR 950 million with a dividend yield of 4%, the French group Veolia is admittedly more broadly diversified. Still, the intention of supplying people with clean drinking water is the same. The Company employs about 171,000 people, of whom about 96,000 work in the water and wastewater segment. Veolia supplies 100 million people worldwide with drinking water, disposes of the wastewater of 71 million people and serves 40,000 industrial customers. In addition to water and wastewater, Veolia is also a leader in waste management and energy supply.
The Veolia group's ambition is to take over its competitor Suez, in which it has already acquired a 30% stake. The announcement of a capital increase in the order of EUR 2.5 billion is intended to finance part of the takeover. The issue of new shares at a subscription price of EUR 22.70 is the basis for acquiring a 70.1% stake in Suez worth around EUR 9 billion. The subscription period for the new shares has already been running since September 21 and ends on October 1.
Order from France
In contrast to water shares, hydrogen shares celebrated a real boom last year, and the correction that has been underway since the first quarter of 2021 is all the more painful for that. Symptomatic for the entire sector is the Norwegian Company Nel ASA, which supplies solutions for hydrogen production from electrical energy and its storage and distribution.
After building a double bottom, the value approached the broad resistance zone at EUR 1.48 in recent days but then fell again. The next support is at EUR 1.34. If this does not hold, the low for the year at EUR 1.22 will likely be tested again.
Meanwhile, the Odlo-based Company was able to report an order from France. Nel Hydrogen Fueling, a subsidiary of Norwegian hydrogen specialist Nel ASA, has received an order from the "Touraine Vallée de l'Indre" urban community, France, to supply an H2Station™ for light and heavy-duty fuel cell electric vehicles. The order is worth around EUR 1 million.
Water procurement is becoming a serious issue for our society in the long term. Water Ways Technologies stands out in this regard with its innovative irrigation systems. Veolia is a leader in the water and wastewater sector and should have further share price potential due to the acquisition of its competitor Suez. For Nel ASA, it is a case of wait and see.