Multistack Advances Q4 Sales Amid Danfoss Arbitration Settlement Talks
Multistack International Limited reported steady sales of water chillers in Q4 2024 while progressing toward a settlement in its arbitration with Danfoss. The company maintains a solid cash position supported by related-party loans as it continues to promote its ORC technology aligned with global carbon reduction goals.
- Q4 sales include water-cooled and air-cooled chillers plus spare parts
- Settlement in principle reached in arbitration with Danfoss, final documents pending
- Cash reserves near $1 million with controlled operating expenses
- Multiple related-party loans secured to fund ongoing operations
- ORC technology promotion continues despite limited progress on cost-effective expander
Steady Sales Performance in Q4
Multistack International Limited (ASX: MSI) has reported its quarterly activity for October to December 2024, highlighting continued sales of its core products, water-cooled and air-cooled chillers, specifically models SRA290H and SRW132C, alongside spare parts. This steady revenue stream underscores the company’s ongoing foothold in the HVAC equipment manufacturing sector despite broader market challenges.
Arbitration Settlement Nears Completion
A significant development during the quarter was the progress in the arbitration proceedings against Danfoss in the United States. Multistack has reached a settlement in principle with Danfoss, with final documents currently under negotiation. This resolution could remove a considerable overhang for investors, potentially unlocking operational focus and strategic clarity once formalised.
ORC Technology: A Strategic but Challenging Frontier
While the Organic Rankine Cycle (ORC) technology remains a strategic priority aligned with global carbon reduction initiatives, progress on developing a cost-effective expander has been limited. Notably, Danfoss’s support is being sought to enhance technical know-how in this area, reflecting a collaborative approach despite prior disputes. Multistack continues to market its existing ORC products, betting on their relevance amid increasing environmental regulations and sustainability trends.
Financial Position and Funding Structure
Financially, the company ended the quarter with cash and cash equivalents of $975,608, maintaining disciplined operating expenditure of $88,867. This includes $10,706 in trading and operating expenses and $78,161 in staff and corporate costs. To underpin its operations, Multistack has secured multiple loans from related parties, including a $1.09 million AUD unsecured loan from A.C.R. Equipment (HK) Ltd at 6% interest, expiring in March 2025, and a $3.55 million AUD secured loan from Super Link Company Ltd at 5% interest, linked to the acquisition of Verdicorp assets. These arrangements highlight the company’s reliance on related-party funding to sustain growth and operational continuity.
Looking Ahead
As Multistack navigates the final stages of its arbitration settlement and continues to push its ORC technology agenda, the company’s ability to convert these developments into tangible financial and operational gains will be critical. Investors will be watching closely for the formalisation of the Danfoss settlement and any breakthroughs in ORC technology that could position Multistack as a leader in sustainable HVAC solutions.
Bottom Line?
Multistack’s upcoming arbitration resolution and ORC technology progress will be pivotal in shaping its next growth phase.
Questions in the middle?
- What are the detailed terms and financial impact of the Danfoss arbitration settlement once finalised?
- Can Multistack achieve a breakthrough in cost-effective ORC expander technology with Danfoss’s support?
- How sustainable is the company’s reliance on related-party loans for ongoing operations?
