Management report
The first half of 2024 was a challenging period for ELMO Rent AS (hereinafter referred to as the "Company"), focusing on the implementation of the restructuring plan, restructuring of rental operations, and development of remote control technology. The Company's consolidated group continued its operations within two main business lines: fleet rental services and the development and international sale of remote control technology.
Key events in the first half of 2024
On February 6, 2024, ELMO Rent AS (hereinafter referred to as the "Company") submitted a restructuring plan to its creditors, which was approved on February 20, 2024. The plan categorized creditors into four groups, and their claims were reduced according to the conditions outlined in the plan. A total of 82.4% of the creditors voted in favor of the plan. The restructuring plan included adjustments to creditors’ claims, including the reduction of principal and interest demands, as well as a payment moratorium until December 2024. The claims will be settled in installments until 2027.
The Harju County Court confirmed the restructuring plan on June 18, 2024, providing the Company with the assurance to continue operations and focus on achieving its long-term goals. The objective of the restructuring plan is to overcome temporary financial difficulties and ensure the Company’s sustainability by fulfilling creditor obligations and stabilizing its financial situation.
In the first half of 2024, the management consistently worked toward meeting the obligations set out in the plan, while simultaneously continuing business operations in two main areas:
Fleet restructuring and rental operations adjustments
At the beginning of 2024, the Company continued the fleet optimization and suspension of the short-term rental service, which had begun in the fall of 2023. This step helped reduce rental operation costs, allowing a focus on long-term rentals. However, the sale of older vehicles did not proceed as expected, due to the low liquidity in the electric vehicle secondary market, which hindered the sale of vehicles at the projected prices. Consequently, the slow pace of sales prevented the acquisition of new vehicles and preparation for the 2024 peak season, and the revenue generated from the sales was sometimes insufficient to fully cover leasing obligations, negatively affecting the Company’s cash flow.
Development and sale of remote-control technology
The year 2024 has been exceptionally fruitful for the remote-control technology division. The Company’s subsidiary, Elmo Remote OÜ, actively continued the development and sale of remote-control technology in the first half of the year. Particularly significant were international clients, including contracts with Canadian companies, where remote control technology was applied to road maintenance and safety solutions. Specifically, remote control technology was successfully integrated into the Ford F550 for highway safety applications, and it was showcased for the first time in April at Intertraffic, Europe’s largest transportation fair, held in Amsterdam. Additionally, the subsidiary has initiated cooperation with Ukraine, where the technology is being utilized in war zones. These achievements confirm the technology's maturity, flexibility, and versatility, making it a key player in various sectors and markets.
In June 2024, the Company achieved a significant regulatory victory by obtaining permission to operate remote-controlled vehicles at speeds of up to 42 km/h on public roads. Furthermore, the Company set a test record for remote driving at a speed of 103 km/h, marking a major technological breakthrough and enhancing the reliability of the technology at higher speeds.
Through collaboration with Nokia and the integration of Starlink satellites, the reliability and range of the remote-control system have been further improved, enabling its use in challenging network conditions and diverse environments. This development allows the provision of technology that ensures uninterrupted connection and precise control.
Additionally, the Company has implemented the third generation of remote-control centers, enhancing user experience and safety. These new work environments increase efficiency and precision, providing remote operators with better control over vehicles for extended periods.
In partnership with the Swedish green technology company Elonroad, the Company has also developed and launched the world’s first fully automated charging station specifically designed for remotely operated vehicles in Tallinn. This innovation enables vehicles to be charged without human intervention, increasing the autonomy of the technology and reducing operational costs.
The Company has made significant progress and solidified its leading position in the remote-control technology sector. Successful technological development and international sales are critical to the subsidiary’s ability to support the restructuring plan and achieve long-term sustainability.
Financial performance
The first half of 2024 ended with a consolidated loss of €610,437, compared to a profit of €264,547 in the same period in 2023. The main reasons for the loss were the suspension of the short-term rental service, which led to a reduction in rental income, and the sale of fleet vehicles at prices lower than forecasted.
The Company’s consolidated group assets decreased to €3,016,443 by the end of the first half of 2024, compared to €4,866,599 in the same period in 2023, representing a 38% decline. This was mainly due to the sale of fleet vehicles at lower-than-forecasted prices, negatively impacting the value of assets. Current assets declined to €172,240 (2023: €530,458) due to difficulties in realizing assets and receivables.
The Company’s consolidated group had total liabilities of €4,414,812, which includes the creditors’ principal and interest claims restructured according to the terms of the restructuring plan. The Company remains focused on meeting its obligations as per the restructuring plan’s schedule, with a final deadline of December 2027.
Revenue fell to €113,948, compared to €394,696 in the same period the previous year, representing a 71% decrease. The primary reason for the decline in revenue was the suspension of the short-term rental service as part of the fleet restructuring. As the Company focused on long-term rentals and reducing its fleet, short-term rental income significantly decreased.
As of June 30, 2024, the consolidated group’s workforce decreased from 34 to 7 employees, marking an 80% reduction. The significant decrease in staff was due to the suspension of the short-term rental service and a focus on technology development aimed at reducing operating costs and aligning the Company’s activities with the restructuring plan and new business strategy. Despite the reduction in workforce, the Company’s consolidated group has maintained its ability to provide quality services and continue developing its technologies.
Future activities in 2024
In the second half of 2024, the Company’s consolidated group will focus on the development and international sale of remote-control technology. It will continue to collaborate with international partners and seek new licenses to expand the use of the technology globally. The Company also plans to continue seeking a strategic investor for the development or sale of its rental operations, with the main focus on raising investments directed toward technology.
The restructuring process remains a top priority, and management is focused on meeting creditor obligations and identifying opportunities to raise capital to support technology development and ensure the sustainability of operations.
Consolidated balance sheet
(euros)
| 30.06.2024 | 30.06.2023 | ||||
| Assets | |||||
| Current assets | |||||
| Cash | 6,099 | 41,968 | |||
| Receivables and prepayments | 165,079 | 453,986 | |||
| Inventories | 1,062 | 34,504 | |||
| Total current assets | 172,240 | 530,458 | |||
| Fixed assets | |||||
| Property, plant and equipment | 996,726 | 2,488,664 | |||
| Intangible assets | 1,847,477 | 1,847,477 | |||
| Total fixed assets | 2,844,203 | 4,336,141 | |||
| Total assets | 3,016,443 | 4,866,599 | |||
| Liabilities and equity | |||||
| Payables | |||||
| Current liabilities | |||||
| Loans payable | 1,207,717 | 796,917 | |||
| Payables and prepayments | 1,129,942 | 748,502 | |||
| Total current liabilities | 2,337,660 | 1,545,419 | |||
| Long-term liabilities | |||||
| Loans payable | 2,077,153 | 2,478,641 | |||
| Total long-term liabilities | 2,077,153 | 2,478,641 | |||
| Total liabilities | 4,024,060 | ||||
| Equity | |||||
| Share capital at nominal value | 245,636 | 245,636 | |||
| Share premium | 2,286,645 | 2,286,645 | |||
| Other reserves | 10,000 | 10,000 | |||
| Retained loss | -3,330,212 | -1,964,289 | |||
| Profit (loss) for financial year | -610,437 | 264,547 | |||
| Total equity held by shareholders of parent company | -1,398,368 | 842,539 | |||
| Total equity | -1,398,368 | 842,539 | |||
| Total liabilities and equity | 3,016,443 | 4,866,599 | |||
Consolidated income statement
(euros)
| 01.01.2024-30.06.2024 | 01.01.2023-30.06.2023 | ||
| Sales revenue | 113,948 | 394,696 | |
| Other operating revenue | 253,180 | 46,376 | |
| Capitalised costs in production of fixed assets for own use | 0 | 1,630,442 | |
| Goods, raw material and services | -132,979 | -392,998 | |
| Other operating expenses | -90,223 | -464,862 | |
| Staff costs | -177,463 | -511,949 | |
| Depreciation and impairment of fixed assets | -166,937 | -269,583 | |
| Other operating expenses | -403,364 | -41,476 | |
| Operating profit (loss) | -603,838 | 390,645 | |
| Interest expenses | -6,599 | -126,008 | |
| Other financial income and expenses | 0 | 0 | |
| Profit (loss) before income tax | -610,437 | 264,638 | |
| Income tax | 0 | -91 | |
| Profit (loss) for reporting period | -610,437 | 264,547 |
Consolidated statement of cash flows
(euros)
| 01.01.2024-30.06.2024 | 01.01.2023-30.06.2023 | ||||
| Cash flows from operating activities | |||||
| Operating profit (loss) | -603,838 | 390,646 | |||
| Adjustments | |||||
| Depreciation and impairment of fixed assets | 166,937 | 269,583 | |||
| Profit (loss) on sales of non-current assets | 19,509 | -18,157 | |||
| Other adjustments | 0 | -1,630,533 | |||
| Total adjustments | -186,445 | -1,379,107 | |||
| Change in receivables and prepayments related to operating activities | 146,204 | 235,068 | |||
| Change in inventories | 16,450 | -8,193 | |||
| Change in liabilities and advances relating to operating activities | -47,562 | 115,856 | |||
| Total cash flow from operating activities | -302,300 | -645,731 | |||
| Cash flow from investing activities | |||||
| Paid upon acquisition of tangible and intangible assets | 347,337 | -234,160 | |||
| Proceeds from sale of property, plant and equipment and intangible assets | -145,909 | 155,387 | |||
| Loans granted | 0 | 0 | |||
| Total cash flow from investing activities | 201,428 | -78,773 | |||
| Cash flow from financing activities | |||||
| Borrowings | 118,328 | 1,357,029 | |||
| Repayments of borrowings | -29,823 | -297,223 | |||
| Finance lease principal repayment | -2,914 | -199,176 | |||
| Interest paid | -6 599 | -126,008 | |||
| Received from issue of shares | 0 | 0 | |||
| Total cash flow from financing activities | 78,992 | 734,621 | |||
| Total cash flow | -21,880 | 10,118 | |||
| Cash and cash equivalents at beginning of period | 27,979 | 31,850 | |||
| Net change in cash and cash equivalents | -21,880 | 10,118 | |||
| Cash and cash equivalents at end of period | 6,099 | 41,968 | |||
Consolidated statement of changes in equity
(euros)
| Share capital at nominal value | Share premium | Other reserves | Retained loss | Total | |
| 30.06.2022 | 245,636 | 2,286,645 | 10,000 | -1,224,536 | 1,317,745 |
| Loss for reporting period | 0 | 0 | 0 | -739,753 | -739,753 |
| 31.12.2022 | 245,636 | 2,286,645 | 10,000 | -1,964,289 | 577,992 |
| Profit for reporting period | 0 | 0 | 0 | 264,547 | 264,547 |
| 30.06.2023 | 245,636 | 2,286,645 | 10,000 | -1,699,742 | 842,539 |
| Loss for the reporting period | 0 | 0 | 0 | -1,630,470 | -1,630,470 |
| 31.12.2023 | 245,636 | 2,286,645 | 10,000 | -3,330,212 | -787,931 |
| Loss for the reporting period | 0 | 0 | 0 | -610,437 | -610,437 |
| 30.06.2024 | 245,636 | 2,286,645 | 10,000 | -3,940,649 | -1,398,368 |
A more detailed overview of the results of ELMO Rent AS for the first half of 2024 can be found in the attached document.
Additional information:
Enn Laansoo Jr
Member of the Management Board