Why the Hazer (ASX:HZR) share price is lifting today

Investors are displaying optimism following Hazer’s update, as the daily share volume surpasses 1.7 million.

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The high flying share price of Hazer Group Ltd (ASX: HZR) is pushing upwards on Monday. Shares in the hydrogen production company are front and centre today after the release of its quarterly activities report.

At the time of writing, the Hazer share price is fetching $1.45, up 3.93%. This boost puts the company’s year-to-date performance at 82%.

This brings us to the information contained in Hazer’s report for the quarter ending 30 September 2021. It was a busy time for the ASX-listed small cap. So, let’s delve into what occurred during Q1 FY22.

Hazer share price lifts on progress

Investors are displaying optimism following Hazer’s update, as the daily share volume surpasses the average amount traded. Presently, more than 1.7 million shares have swapped hands during Monday’s session.

Today’s report shares Hazer’s progress on its Commercial Demonstration Project (CDP), under development at the Woodman Point waste-water treatment facility. Following the commencement of site works in March this year, the company has completed site civil preparation and civil construction works.

The project is moving forward to the mechanical, instrument, and electrical works. However, Hazer has revised the project schedule due to delays caused by supply issues for specialist high-temperature materials. As a result, the commissioning of the project will move to the first quarter of the 2022 calendar year.

A quick recap, the CDP is a low-emission hydrogen production facility that is expected to produce 100 tonne per annum. The biogas generated by the treatment plant will be used as feedstock to produce hydrogen and graphite. Given the recent trend in hydrogen power, this development by Hazer has helped push its share price higher.

At this stage, Hazer is forecasting a final cost of $21 million to $22 million for the sizeable engineering project. Although, the company noted that it continues to see cost pressures across materials, equipment, labour, and freight.

Capitalising on the booming interest, Hazer is progressing an engineering study with Chiyoda Corporation which will feed into the concept study for a Hazer plant capable of 2,500 tonne per annum. Furthermore, the company will use this study to advance discussions with potential collaborators across Japan, Europe, Asia, North America, and more.

What’s the cash position of Hazer Group?

At the end of the quarter, the company maintained $27.3 million in cash and cash equivalents. Part of this stash is $5.4 million in grant proceeds from the Australian Renewable Energy Agency (ARENA). Hazer managed to fulfil the milestone conditions to unlock $1.77 million of this capital.

Regarding cash flow, net operating cash outflows of $1.44 million were recorded during the quarter. Meanwhile, net cash inflows from financing activities amounted to $8.67 million – $7 million of which came from the issue of new shares.

Lastly, based on the current Hazer share price, the company commands a market capitalisation of $231 million.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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