EuroSite Power Announces First Quarter 2022 Financial and Operational Performance
Strong performance delivers both positive EBIT and net profit for the quarter
After the UK operation moved into profit last year our goal was to deliver profits at the consolidated level, and I am more than pleased to see this happen so soon in the year.
DERBY, UK, May 12, 2022 -- EuroSite Power Inc. (OTCPK: EUSP, the "Company") an On-Site Utility solutions provider, offering clean electricity, heat, hot water and cooling solutions to healthcare, hospitality, housing and leisure centers in the United Kingdom (UK) and Europe, reported net profits of $22,983 for the first quarter of 2022, the first time the Company has reported a net profit, representing 122% improvement on the net loss of £104,969 reported for the first quarter of 2021. Revenues also increased by 91% to $1,588,338 compared to the $832,988 reported in Q1 last year. This continues the improving trend initially reported towards the end of 2020 and through 2021.
Commenting on the Company’s results Dr Elias Samaras, Chief Executive Officer said, “After the UK operation moved into profit last year our goal was to deliver profits at the consolidated level, and I am more than pleased to see this happen so soon in the year”. He continued, “Yes the profit is small, but we have to start somewhere and although I am sure there are some challenges ahead, I think we can all take confidence from the achievements of the first quarter”.
“Energy price rises are only now beginning to flow through to our customers and our revenues are responding accordingly, but margins are reducing as the rising gas price squeezes the spark spread, ” said Paul Hamblyn, Chief Operating Officer and Managing Director of the UK operating company. He added, “I expect margins to continue to get squeezed as the full effect of the recent gas price increases hit our customer’s energy bills. We are also beginning to see the impact of supply chain issues and labour shortages hit fleet performance, but with the steps we’ve taken we aim to minimise these as much as we can. Time will tell, but I look forward to continuing to report good results throughout 2022”.
First quarter Net Profit, continued positive EBITDA and strong liquidity
First quarter Net Profit of $22,983 in 2022 as compared to a Net Loss of $104,969 in quarter one of 2021, an improvement of 122%
EBIT or the gain from operations for the first quarter 2022 increased 197% to $74,035 from a loss of $76,626 in Q1 of 2021
First quarter EBITDA increased to $264,463, compared to $122,799 in the first quarter of 2021, an increase of 115%
Q1 2022 net profits for the UK operating company were £79,029 ($106,041), up 390% from the net loss of £27,208 ($37,503) reported in Q1 2021
Total revenue increased 91% to $1,588,338 for the first quarter of 2022 compared to $832,988 for the same period in 2021. This was largely due to the first quarter of 2021 being affected by COVID lockdown measures that did not apply this year
Overall gross profit including depreciation for Q1 2022 increased to $490,303 compared to $212,570 for Q1 2021, a rise of 130%
Overall gross margin including depreciation increased to 30.9% from 25.5% while gross margin excluding depreciation and impairment reduced to 42.8% for Q1 2022 compared to 49.3% for Q1 2021
Liquidity and cash position at March 31, 2022 remained strong at $1,954,542, down 5.1% on the cash held at March 31,2021
Q1 2022 GAAP diluted net gain per share (EPS) was $0.0003, an improvement over the $0.001 loss per share reported in Q1 2021
Total energy production increased by 25.3% to 12,876,247 kWh for the quarter ending March 31, 2022 as compared 10,277,608 kWh for the same period in 2021. This was directly attributable to COVID restrictions affecting operations in 2021
Operational fleet capacity at March 31, 2022 was 46 systems at 43 sites totalling 5,810kWe compared to 48 systems at 45 sites totalling 6,012kWe at the end of March 2021.
The Company promoted a long serving service technician to the role of Service Manager in January 2022 and hired a new senior service technician as his replacement towards the end of the quarter. Recruitment of a fourth service technician was also started during the quarter
A new remote fleet monitoring system was implemented early in the quarter. This was developed in-house and is aimed at boosting operational performance of the fleet
Various service technicians attended manufacturer training and gas safety permit courses during the quarter. These courses were long delayed due to COVID and while they resulted in some short-term operational challenges there are undoubted long-term benefits to such training
Business and strategic development
The Company signed a term sheet with Edwardian Hotels Group for a 355kW CHP solution at the Radisson Edwardian Blu Hotel Heathrow Airport in March 2022. The term sheet allows preliminary design works and application for various consents to be completed while commercial negotiations are concluded. The project will either proceed as a turnkey solution or fully funded, 15-year shared-risk On Site Utility Solution
The Company also continues to negotiate terms with Roko Health Clubs and Portsmouth Community Football Club for the replacement of their existing CHP solutions at a total of five sites. These new solutions will replace existing systems already under contract but extend these contracts to a full 15-years in each case. Negotiations are also underway with other existing customers to extend existing contracts
As reported previously the Company wishes to remind investors that the shareholders of FCN Energy Logistics Limited have concluded commercial terms with regards to a significant investment by the largest downstream LNG supplier in Europe, Molgas Energy Holdings, owned by French private equity firm InfraVia Capital Partners. Following Molgas’ investment, Blue Grid will focus on accelerating growth in LNG and bioLNG supply in the broader region of SE Europe and the Eastern Mediterranean
Outlook and risks
The Company reports that the supply of some spares for its fleet of CHP units are currently subject to extended lead times and delays. This is particularly the case for parts sourced form the USA and for any control equipment and sensors fitted with microprocessors. This could result in extended downtime if a unit breaks down or when routine services are due. Management have responded by increasing the stock levels of equipment held locally and by continuing to work with suppliers to minimise the impact of these shortages
Staff turnover and labour shortages, particularly amongst third party contractors also have the potential to impact fleet performance. Management have responded by recruiting additional in-house service staff such that a team of four plus a Service Manager will be in place by the end of May
Overall the Company continues to report that the outlook for 2022 appears good with increased revenue and gross profits expected as underlying energy prices rises start to impact results
The Company continues to find that new business development is being affected by the accelerating need to reduce reliance on imported fossil fuels while also delivering on net zero targets. Natural gas-fuelled CHP remains disadvantaged compared to the electrification of heat using heat pumps, but the Company’s Green CHP offer is now gain traction having been shortlisted for several Net Zero awards. In turn the Company reports that this is leading to an increased sales pipeline although no orders have yet been placed for this solution
Other risks remain in the form of the availability of project credit, the impact of reducing grid electricity carbon emissions on future sales, a possible shift in government energy policy in response to the Ukrainian crisis or unexpected equipment failures
The Company now files its financial statements under the Alternative Reporting Standard (ARS). Financial reports, which are prepared in accordance with US GAAP, are generally provided within 45 days of period end (90 days for fiscal year end results) and are reported to maintain at least the OTC Pink Limited Information tier.
Following corporate reorganisation and de-registration of the Company’s common stock, with effect from January 1, 2017 foreign exchange gains/losses are reported in the cumulative translation adjustment (CTA) account on the Company’s balance sheet.
Fiscal year-end financial reports for the operating company, EuroSite Power Limited are audited by a PCAOB registered firm and the Company provides current information for the purposes of SEC Rules 144(c)(2) and 10b-5 using the OTC Disclosure & News Service. Financial statements for EuroSite Power Limited are prepared in accordance with UK GAAP, and consequently differences in accounting treatment and presentation may arise.
EuroSite Power sells the energy produced from an onsite energy system to an individual property as an alternative to the outright sale of energy equipment. On-Site Utility solution customers only pay for the energy produced by the system and receive a guaranteed discount rate on the price of the energy. All system capital, installation, operating expenses and support are paid by EuroSite Power.
About EuroSite Power
The Company provides institutional, commercial and small industrial facilities with clean, reliable power, cooling, heat and hot water at lower costs than charged by conventional energy suppliers – without any capital or start-up costs to the energy user. More information can be found at www.eurositepower.co.uk.
This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements, as disclosed on the Company’s website and in financial statements held by OTC markets for the fiscal year ended December 31, 2021. This press release does not constitute an offer to buy or sell securities by the Company, its subsidiaries or any associated party and is meant purely for informational purposes. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
For further information: Elias Samaras, CEO
+44 800 028 8001
Dr Elias Samaras is the founder, president and managing director of Digital Security Technologies S.A. He was also the founder and president of Plefsis Information Systems S.A. and City Messengers. Elias holds a Master of Science degree from MIT, a Doctor of Philosophy from Columbia University in New York, where he was also a professor for several years and an OPM from Harvard Business School.
Chief Operating Officer
Paul Hamblyn is Chief Operating Officer of EuroSite Power Ltd with responsibility for strategic and new business development of the business.Paul is highly experienced in the energy sector having built an enviable track record prior to joining EuroSite Power. This includes strategic level roles with Corona Energy and the ENER-G Group including 3 years as the Managing Director of ENER-G Efficiency.A leading expert on UK carbon regulation Paul is a regular speaker at major conferences including those organised by the Major Energy Users Council, the Local Government Association and the Westminster Energy Forum. He is also a formerCouncil Member of the Energy Services and Technology Association (ESTA). Paul is a CIBSE accredited Low Carbon Consultant and Energy Assessor as well as principal author of the award-winning CRC Toolkit developed for the London Energy Project.
UK General Manger
Chris Marsland is UK General Manger of EuroSite Power Ltd. He leads the UK operational company and directs its operational and administrative functions. Prior to joining Eurosite Power, Chris built up years of sector expertise in senior positions including the role of Technical Director at Centrica Business Solutions, formerly ENER-G Combined Power Limited. He also Chaired the Association for Decentralised Energy Commercial Forum and is an Association Board Member. Chris earned a first-class bachelor’s degree in electronic engineering and is both a Chartered Engineer and Fellow of the Institute of Engineering & Technology.
Financial Controller & Company Secretary
Laura Chambers is EuroSite Power Ltd’s Financial Controller and Company Secretary. An experienced finance professional, Laura has undertaken financial planning and analysis roles at number of blue-chip businesses including Astra Zeneca. She also spent 7 years at Kellogg’s European Finance Services Centre (EFSC). Qualified as a Chartered Accountant at KPMG’s Manchester office, Laura brings strong organisational skills and broad finance experience to the team.
Head of Operations
Stephen Butler is EuroSite Power Ltd’s Head of Operations. Having joined the company in 2012 as Chief Engineer, Stephen has moved through the business into his current role. With an impressive resume that includes senior mechanical engineering roles at Thames Water and ENER-G Combined Heat and Power Ltd, Stephen brings strong operational, project management and technical experience to the team. He is a Technician Member of the Institution of Engineering and Technology (TMIET).
UK Sales Manager
Martin Evans is our UK Sales Manager. A well-known and seasoned energy sector specialist, he brings a wealth of commercial experience - from start-ups to corporate level engagement – to our team. With a career spanning over 30 years, he has spent much of his career in technology led businesses and manufacturing including aviation and automotive. Martin’s previous roles at cutting-edge low carbon businesses including Grid Beyond, WEMS International and EnergyQuote JHA have given him a unique insight into the challenges faced by many of the UK’s most intensive energy users. He has also amassed over 15 years direct experience in commercial asset finance. Martin studied Applied Chemistry at the University of Manchester.
Mark Brown is our Account Manager. An experienced energy sector professional - particularly in the fields of CHP and renewable technologies - Mark has worked in engineering and technical roles for over 20 years. This includes 11 years at Cogenco UK (now fully integrated into Veolia’s CHP business). A great communicator with a positive approach to creative problem solving and troubleshooting, Mark is a key member of our customer-facing team. He holds qualifications from the Institute of Leadership and Management.
Jacques de Saussure
Non-Executive Chairman of the Board
Jacques de Saussure was Senior Managing Partner of the Pictet Group from 2010 until June 2016 after being elected partner of Pictet in 1987. Founded in Geneva in 1805, Pictet Group is one of Europe’s leading independent wealth and asset managers with EUR 437 billion of assets under management and custody as of 31 December 2015. Jacques is a member of the board of the Swiss Bankers Association and has also served as Vice Chairman of the Swiss Stock Exchange, which merged into SIX group in 2008, where he remained member of the board until 2010. Jacques holds a Master’s degree from MIT’s Sloan School of Management.
Dr Ahmed F. Ghoniem
Dr. Ahmed F. Ghoniem has been a member of our Board of Directors since January 2011. He is the Ronald C. Crane Professor of Mechanical Engineering at the Massachusetts Institute of Technology (MIT). He is also the director of the Center for 21st Century Energy and the head of Energy Science and Engineering at MIT, where he plays a leadership role in many energy-related activities, initiatives and programs. Ahmed holds a Ph.D. in Mechanical Engineering from the University of California, Berkeley, and an M.S. and B.S. in Mechanical Engineering from Cairo University.
Joan Giacinti is the founder and Chief Executive Officer of Sofratesa Group with headquarters in Santo Domingo, Dominican Republic. Joan is also a founder of Aerodom, a concessionaire chosen by the Dominican government to develop, operate and manage airports in the Dominican Republic, which in 2008 was acquired by Advent International. He is the President of the Caribbean region of the French Trade Councils, “Conseillers du Commerce Exterieur” and the President for the Americas of the Forum Francophone des Affaires (FFA). He is also decorated with the Ordre national du Mérite by the President of the French Republic. Joan is a graduate from the École des Hautes Études Commerciales de Paris (HEC).
Marcel Cassard joined Deutsche Bank in 1997 where he is now a member of the Global Markets Executive Committee and Global Head of Fixed Income and Economics Research. Marcel also heads the Bank’s Global Macro Strategy Group, which advises the Board and clients on broad market risks and global economic and financial developments. Previously, Marcel spent five years at the International Monetary Fund. Previous to that, he was an Economist at the Council of Economics Advisers in the Executive Office of the U.S. President. Marcel holds a PhD in Economics from Columbia University.
Mr. Stelios Zavvos
Stelios Zavvos is the Founder and CEO of Zeus Capital Management, a private equity group. With over 35 years of corporate, finance and real estate experience, Stelios is also the Founder and CEO of Continental American Capital, an investment group that focused on real estate investment and financing in the USA. He has served as a Member of the Board of Directors of the NASDAQ listed Star Bulk Carriers Corp, serving on the Board’s Audit Committee. He has also held executive positions in blue-chip companies such as Citibank, Johnson & Johnson and Procter & Gamble. SteliosZavvos holds an MBA from Harvard Business School and an MSc in Civil Engineering.