Sharp uptick in order intake subsequent to quarter end Thermal Energy International Inc. (TSXV: TMG) (OTCQB: TMGEF) ("Thermal Energy" or the "Company"), a provider of innovative energy efficiency and carbon emission reduction solutions to major corporations around the world, today reported its financial results for the first quarter ended August 31, 2023. All figures are in Canadian dollars. Highlights:
"We are proud of the substantial growth in our revenue and gross profit during the quarter, as well as the strong turnaround in our bottom line compared to a year ago," said William Crossland, Thermal Energy CEO. "Subsequent to quarter end, we received our largest heat recovery order in several years - and our first turn-key heat recovery order from a pharmaceutical company. We also signed a Global Master Services Agreement with this customer and already have paid project development agreements ("PDA") for two other sites active with them. Earlier this month, we received $1.9 million in repeat business from a global nutrition company and $2.6 million in repeat business from a multinational dairy company." "Following our record order intake in fiscal 2023, we have already received orders totalling over $13.7 million just five months into fiscal 2024. Our order backlog is currently $22.0 million, and we have 27 active PDAs in place. Our strong order intake, order backlog, and project development activity are clear indications of the strong demand for our proven energy efficiency solutions as our global customer base actively pursues their carbon emissions reduction targets." First Quarter 2024 Financial Review
First quarter revenue was $5.2 million, up 66% from the same quarter the year before. The growth was mainly due to the higher revenues from both Custom Equipment and Turn-key Heat Recovery Projectsiii due to the increase in sales orders received in fiscal year 2023. Gross profit increased by 105% to $2.8 million, due to growth in revenues and improving margins across all key product categories. Operating expenses were $748 thousand more than the same quarter last year, with $338 thousand of the variance due to an increase in foreign exchange loss, and $410 thousand due to recruitment of additional project engineers, sales staff and investment in the digitalization and automation of the key business processes. Nonetheless, the higher revenues and gross profit led to increases of $670 thousand and $644 thousand for net income and EBITDA, respectively, compared to the first quarter of last year. Quarter end cash and working capital balances were around $4.1 million and $3.1 million, respectively. Business Outlook and Order Summary Orders received ("Order Intake") during the first quarter totalled $3.3 million. The Company ended the quarter with an order backlog of $11.6 million, up 93% from the $6.0 million at the end of the same quarter of prior year. The Company has also received $10.4 million in new orders subsequent to the August 31, 2023, quarter-end, bringing the current order backlog to $22.0 million as of October 24, 2023. A list and description of recent order highlights is available on page 13 of the Management's Discussion and Analysis filed today. Full financial results including Management's Discussion and Analysis and accompanying notes to the financial results are available on www.sedarplus.ca and investors-thermalenergy.com/en/financial-overview. About Thermal Energy International Inc. Thermal Energy International Inc. provides energy efficiency and emissions reduction solutions to Fortune 500 and other large multinational companies. We save our customers money by reducing their fuel use and cutting their carbon emissions. Thermal Energy's proprietary and proven solutions can recover up to 80% of energy lost in typical boiler plant and steam system operations while delivering a high return on investment with a short, compelling payback. Thermal Energy's common shares are traded on the TSX Venture Exchange (TSX-V) under the symbol TMG and on the OTCQB under the symbol TMGEF.
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Company’s order intake up 130% in fiscal 2023 Thermal Energy International Inc. (“Thermal Energy” or the “Company”) (TSX-V: TMG, OTCQB: TMGEF), a provider of innovative energy efficiency and carbon emission reduction solutions to major corporations around the world, today reported its financial results today for the fourth quarter and year ended May 31, 2023. All figures are in Canadian dollars. “The fourth quarter was one of our best quarters ever, setting new records for revenue and gross profit, and was a great finish to an excellent year,” said William Crossland, Thermal Energy CEO. “For the fiscal year, we had record gross profit and our second highest annual revenue and EBITDA. We saw a return in demand for our turn-key solutions, adding to the already strong growth we had in Custom Equipment. Additionally, our order intake and number of signed project development agreements in fiscal 2023 were higher than ever.” “We continue to see strong interest from companies looking to save money while reducing their carbon emissions. Since the end of our fiscal year, we’ve received $8.4 million in new orders, including a $4 million order from a multinational pharmaceutical company – our largest turn-key order since before the pandemic. Additionally, we have several active project development agreements that we expect to convert into orders, and we have a robust and growing business development pipeline, positioning us well for a solid fiscal 2024.” Fourth Quarter and Fiscal 2023 Financial Review
Fourth quarter revenue was $8.2 million, up 84% from the same quarter the year before. The growth was mainly due to the higher revenues from both Custom Equipment and Turn-key Heat Recovery Projects due to the increase in sales orders received in fiscal year 2023. Gross profit increased 101% to a quarterly record of $3.8 million, due to the growth in revenues. Operating expenses were $845 thousand more than the same quarter last year mainly due to staff's salary and incentive increase, change in foreign exchange gains and reduction in government subsidies received as compared to the last quarter of fiscal year 2022. Expenses are also up due to a number of growth-oriented investments being made such as additional project engineers, sales staff in new markets and a significant investment in the digitalization and automation of the key business processes, all of which are designed to increase efficiency, profitability and top line growth. Nonetheless, as a result of the increased revenues and gross profit, the net income and EBITDA for the quarter were $1.1 million and $967 thousand better than the fourth quarter last year, respectively. For the year ended May 31, 2023, revenue was $21.1 million, up 33% from last year. The increase in revenues was mainly due to increased sales orders received in fiscal year 2023. Gross profit for the year was $9.6 million, an increase of $2.8 million, or 42%, mainly due to the increased revenue from GEM. Operating expenses incurred for the year amounted to $8.3 million, $140 thousand more than last year mainly because of increased staff costs, investment in digitalization, less government subsidies received, offset by the reduction in acquisition costs in the amount of $188 thousand, and the increase in foreign exchange gains of $84 thousand. As a result, the Company achieved net income of $720 thousand and EBITDA of $1.7 million, both representing an increase of $2.5 million from the prior year. Business Outlook and Order Summary Orders received (“Order Intake”) during the year totalled $27.3 million, an increase of 130% compared to $11.8 million in the prior year and the highest 12-month order intake in the Company’s history. As a result, the Company ended the year with an order backlog of $13 million, up 166% from the $4.9 million at the end of the prior year. The Company has received $8.4 million in new orders subsequent to the May 31, 2023, year-end, bringing the current order backlog to $21.4 million as of September 26, 2023. A list and description of recent order highlights is available on page 15 of the Management’s Discussion and Analysis filed today. About Thermal Energy International Inc. Thermal Energy International Inc. provides energy efficiency and emissions reduction solutions to Fortune 500 and other large multinational companies. We save our customers money by reducing their fuel use and cutting their carbon emissions. Thermal Energy’s proprietary and proven solutions can recover up to 80% of energy lost in typical boiler plant and steam system operations while delivering a high return on investment with a short, compelling payback. Thermal Energy’s common shares are traded on the TSX Venture Exchange (TSX-V) under the symbol TMG and on the OTCQB under the symbol TMGEF. For more information, visit the Company's investor website at https://investors-thermalenergy.com. Source: Thermal Energy International Durum Carbon LP offers exposure to rapidly growing carbon credit asset class Durum Capital Inc. today announced the launch of Durum Carbon LP, an investment vehicle created to provide financial exposure to global climate change policies while capturing the demands of environmentally conscious investors today. Canada’s transition to a low-carbon economy and tightening environmental regulations have led to the creation of a unique market opportunity for the purchase and sale of carbon credits in Canada. Durum Carbon LP ultimately seeks to participate in this market through the strategic acquisition and management of a carbon credit portfolio. What are carbon credits and how do they work? Climate change has become an increasingly important issue for many investors around the globe. Many governments around the world have implemented policies to incentivize heavy emitters to reduce greenhouse gas (“GHG”) output in an effort to slow the climate change trend. Putting a price on carbon is widely recognized as one of the most efficient means to reduce GHG emissions while also driving innovation. A carbon credit system is a market-based mechanism that incentivizes organizations to reduce overall emissions through the buying and selling of “carbon credits.” Carbon credits are tradable certificates that allow the holder to emit one tonne of carbon dioxide equivalent (“CO2e”) for each carbon credit utilized. For a visual comparison, one carbon credit would equal the carbon dioxide output of approximately 500 fire extinguishers combined. The cost of these emissions is equal to the cost of carbon credits in the market. As environmental regulations continue to tighten, it is expected that the value of carbon credits will increase, further raising the cost of GHG emissions. Canada’s transition to a low-carbon economy, tightening environmental regulations, and ambitious emission reduction goals by corporations are expected to increase the demand and value for carbon credits over the decade. Alberta’s Compliance Carbon Market A carbon credit is created in one of two ways:
These carbon credits can then be sold to and utilized by emitters in the marketplace that exceed their allowable emissions threshold. The purchase of carbon credits will allow the emitter to achieve compliance with environmental regulations and avoid paying a penalty in the form of the TIER Fund Credit price or carbon price. Carbon credits trade over the counter and are typically priced at a discount to the prevailing government mandated carbon price, currently set at $50/tCO2e. Durum Carbon LP strategy The Government of Canada has proposed an increase in the carbon price of $15/tCO2e each year until 2030. From the current level of $50/tCO2e, this equates to an increase of 240%. In a market known for its opaqueness and complexity, Durum Carbon LP’s strategy is a novelty in that it is both transparent and simple. Durum Carbon LP will purchase over-the-counter carbon credits, hold them and then sell them at a premium as the carbon price appreciates and when return targets are met. Management will actively monitor international compliance and voluntary markets to assess arbitrage opportunities and/or rebalance the carbon credit portfolio as global carbon markets mature. Through Durum Carbon LP, investors gain unique exposure to the rapidly growing asset class of carbon credits. The importance of strong governance in an emerging asset class
Climate change and associated carbon markets have garnered the interests of some of the most influential organizations in the world: governments, insurance agencies, pension plans and even central banks. With that type of attention, there will inevitably be a variety of different carbon-related investment opportunities on the horizon. While Durum Carbon LP’s investment strategy is simple, the execution may not be. It is important to understand the different types of carbon credits and evolving policies governing the many different carbon markets around the globe today. Durum Carbon LP is a listed entity on the Alberta Carbon Registry and currently purchases carbon credits under Alberta’s Technology Innovation and Emissions Reductions (TIER) regulatory framework. Durum Carbon LP’s strong governance, robust credit strategy, extensive network and years of energy trading experience provides a competitive advantage in today’s thinly traded carbon market. For additional information on Durum Carbon LP, carbon credits, and this rapidly growing asset class, please contact your authorized dealing representative. About Durum Carbon LP An investment vehicle created to provide investors with unique exposure to the rapidly growing asset class of carbon credits. Canada’s transition to a low-carbon economy and tightening environmental regulations have led to the creation of a unique market opportunity for the purchase and sale of carbon credits in Canada. Durum Carbon LP ultimately seeks to participate in this market through the strategic acquisition and management of a carbon credit portfolio. About Durum Capital Inc. Durum Capital Inc. is an asset manager focused on investments that require unique skills to uncover true value. Durum offers expertise in financing, governance, and operational efficiencies, ultimately creating alternatives to bring transparency to opaque situations in private markets. Source: Durum Capital Inc. |
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