DERBY, UK, May 15, 2023 -- 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 $90,091 for the first quarter of 2023, representing 292% improvement on the net profit of $22,983 reported for the first quarter of 2022. Revenues also increased by 26% to $1,997,737 compared to the $1,588,338 reported in Q1 last year. This continues the improving trend seen through 2022.

Commenting on the Company’s results Dr Elias Samaras, Chief Executive Officer said, “After a successful year last year I am pleased to see the UK operation maintain this growth and meet our goal to deliver profits at the consolidated level”. He continued, “The consistency in the growth is reassuring and we will build on this foundation to grow new business”.

“Increasing revenues due to the volatility of the UK energy market has undoubtedly contributed to these results but there has also been a corresponding spark spread degradation which we have been able to manage with good cost control ” said Paul Hamblyn, Chief Operating Officer and Managing Director of the UK operating company. He added, “Q2 will see the UK Government support for businesses with their energy bills reduce but our analysis suggests that business energy costs will remain at levels above Q1 2022 for some time yet. Supply chain issues are still impacting the business but the additional action we have taken this quarter should start to reduce this problem in Q2”.   

HEADLINES
First quarter Net Profit, continued positive EBITDA and strong liquidity

• First quarter Net Profit of $90,091 in 2023 as compared to a Net Profit of $22,983 in quarter one of 2022, an improvement of 292%
• EBIT or the gain from operations for the first quarter 2023 increased 47% to $108,944 from a gain of $74,035 in Q1 of 2022
• First quarter EBITDA increased to $282,571, compared to $264,463 in the first quarter of 2022, an increase of 7%
• Q1 2023 net profits for the UK operating company were £157,220 ($190,984), up 98% from the net profit of £79,029 ($106,041) reported in Q1 2022
• Total revenue increased 26% to $1,997,737 for the first quarter of 2023 compared to $1,588,338 for the same period in 2022. This was primarily the result of increased customer utility tariffs
• Overall gross profit including depreciation for Q1 2023 increased to $564,885 compared to $490,303 for Q1 2022, a rise of 15%
• Overall gross margin including depreciation fell to 28.3% from 30.9% while gross margin excluding depreciation and impairment reduced to 36.9% for Q1 2023 compared to 42.8% for Q1 2022
• Liquidity and cash position at March 31, 2023 remained strong at $2,343,460, up 20% on the cash held at March 31, 2022
• Q1 2023 GAAP diluted net gain per share (EPS) was $0.0011, an improvement of 292% over the $0.0003 gain per share reported in Q1 2022

Operational performance

• Total energy production increased by 12.7% to 14,510,700 kWh for the quarter ending March 31, 2023 as compared 12,876,247 kWh for the same period in 2022.
• Operational fleet capacity at March 31, 2023 was 46 systems at 43 sites totalling 5,810kWe, unchanged from the same quarter of 2022.
• The Company has recruited a Parts Coordinator to manage the continuing issues with spare parts and to explore  alternative sources for parts. This individual will take up the role mid Q2.
• US equipment supplier Tecogen flew an engineer to the UK to assist the team to provide on the job training and impart his knowledge of running these units as they get older.    

Business and strategic development

• The Company signed its first order for roof mounted solar PV at Southdown Engineers for £32,256 and expects to complete the installation in Q2 2023. This contract was not won on the favoured OSU model but it is expected that these will follow in 2023
• 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. For operational reasons the Company has commenced replacement of the CHP at one of the Roko sites under the existing contract. Negotiations are also underway with other existing customers to extend current contracts.

Outlook and risks

• The Company reports that the supply of some spares for its fleet of CHP units are still subject to extended lead times and delays. This is particularly the case for parts sourced from the USA for the Inverde range of CHPs.
  Changes in the representation of Tedom in the UK have also impacted spares lead times however this is expected to settle down in Q2 as the new representative beds in.
• Parts shortages could result in extended downtime if a unit breaks down or when routine services are due. Further critical parts have been identified and the stockholding of these is being increased over time.
• Management have recognised the impact of the continuing issues with spares and have employed a Parts Coordinator to improve spares availability and to allows the service engineers more time to focus on the on-site service works.
• Overall the Company continues to report that the outlook for 2023 appears good with increased revenue and gross profits expected as underlying energy prices are not predicted to fall back to Q1 2022 levels for some time
• 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. The Company’s Green CHP offer is about to be relaunched with targeted marketing to key market segments
• Other risks remain in the form of the availability of project credit, the impact of reducing grid electricity carbon emissions on future sales, a shift in mood music from the government relating to energy policy or unexpected equipment failures

Future News Releases

News provided all financial results and news are only published on the Company’s website (http://investors.eurositepower.co.uk/news-releases). 

Anyone wishing to receive notice of a news release should subscribe to the email alerts service provided within the Company’s investors pages (http://investors.eurositepower.co.uk/email-alerts).

Alternative Reporting Standard

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.

On-Site Utility

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.

FORWARD-LOOKING STATEMENTS

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: Dr Elias Samaras - CEO t: +44 (0)800 028 8001 e: elias.samaras@eurositepower.co.uk