Multistack International (ASX:MSI) has reported a significant downturn in its financial performance for the year ended 31 December 2024, with revenue plummeting by 78.8% to $374,032 and net losses widening by 88.2% to $1.68m.
The company attributed the steep decline in revenue to weak chiller sales, as economic uncertainty led customers to prioritise cost-cutting over high-efficiency cooling systems. Despite minimal changes to overhead costs, Multistack’s trading subsidiary, Multistack Australia Pty Ltd, recorded a pre-tax loss of $502,248, up from $286,325 in 2023.
No dividend was declared for the period.
Market shift and new product development
Multistack noted that demand for its oil-free maglev chillers had softened as customers became more cost-conscious. In response, the company has developed a new modular air-cooled chiller model incorporating a variable speed drive scroll compressor to offer a more affordable alternative.
Management expects a shift towards retrofit projects rather than new chiller plant installations and sees an opportunity to improve sales with the newly developed model. The company is also maintaining its focus on the data centre industry, which it considers a growth sector.
ORC technology and settlement with Danfoss
Multistack continues to face challenges in commercialising its Organic Rankine Cycle (ORC) technology, with potential customers hesitant to commit to capital expenditures. However, the company remains optimistic about the technology’s long-term prospects.
A legal dispute with Danfoss, relating to engineering components for the ORC product line, has been settled, ending arbitration proceedings in the United States. This resolution allows Multistack to proceed with re-engineering efforts and resume development of its ORC technology.
Financial position and risks
Multistack ended the year with a net liability position of $3.86m, compared to $2.18m in 2023. While the company had $975,608 in cash reserves, it remained reliant on loans from director-related entities, which have provided assurances that repayments will not be called in the next 12 months.
The company flagged several risks to its future financial performance, including the potential failure to commercialise the ORC technology, declining demand for chiller products, and heightened competition.
Multistack’s financial report remains subject to audit, with an emphasis of matter regarding its ability to continue as a going concern.
