EuroSite Power Announces Third Quarter 2023 Financial and Operational Performance
Profit continues as revenues climb again
I am delighted that we are continuing to deliver profitability this year
DERBY, UK, November 14, 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 third quarter net profits of $169,332 and net profits for the nine months ending 30 September 2023 of $388,620. Not only is this the third back-to-back quarter in which the Company has reported a profit, but it is also significant that the profitability reported for the current period occurred in the quarter that most typically has lower energy generation due to higher seasonal temperatures. Overall, the Company’s profitability continues to be driven by higher revenues set against improved gross margin.
The third quarter saw revenues increase by 25.7%, from $1,238,092 in 2022 to $1,556,585 in the same period this year. For the first nine months of this year revenue grew to $5,387,715 from $4,139,122 in the same period last year, an increase of 30.2%. Gross margin also increased, from 26.9% in the third quarter of 2022 to 33.6% in the same quarter this year and from 29.8% in the first nine months of 2022 to 31.9% in the first nine months of 2023.
At a UK operating level, the Company’s profitable position also continued with net profits for the third quarter increasing 616% to £164,282 and for the nine months ending 30 September 2023 by 245% to £499,550.
“I am delighted that we are continuing to deliver profitability this year” said Dr Elias Samaras, Chief Executive Officer “Our goal was to deliver profits at the consolidated level this year, and we are now well on the way to achieving this.” he added. “Elsewhere we are also making good progress on launching our new Solar On-Site Utility Solution and so I look forward to 2024 with some optimism.”
Commenting on the quarter’s results, Paul Hamblyn, Chief Operating Officer and Managing Director of the UK operating company said “The third quarter is normally a difficult period for the Company as the summer weather normally reduces energy demand, however, this year the UK’s summer wasn’t so good and so demand grew. As this began to happen, we moved quickly to reschedule maintenance, and so we saw both enhanced generation and higher revenues for the quarter.”
Improved revenue, gross margin and profitability
Total revenue increased 25.7% from $1,238,092 in the third quarter of 2022 to $1,556,585 in the same period this year, while total revenues for the first nine months of 2023 increased 30.2% to $5,387,715 as compared to $4,139,122 in 2022.
Overall gross margin including depreciation in the third quarter 2023 increased to 33.6% from 26.9% in the same quarter last year, while gross margin excluding depreciation and impairment increased from 40.4% for Q3 2022 compared to 45.3% for Q3 2023.
Third quarter net profits were $169,332 in 2023 as compared to a net loss of $46,922 in the third quarter of 2022, an improvement of 461%.
Net profit for the first nine months of 2023 increased 735% to $388,620 as compared to a net loss of $61,154 in the same period last year.
Third quarter Non-GAAP adjusted EBITDA increased to $366,475 compared to $147,134 in the second quarter of 2022.
Non-GAAP adjusted EBITDA for the nine months to September 30, 2023 was $970,059, an increase of 69.7% as compared to the $571,567 reported for the same period last year.
Liquidity and cash position at September 30, 2023 improved to $ $2,883,548, up 56.8% on the cash held at September 30, 2022, primarily the result if the sale of the Company’s remaining interest in Blue Grid Gas & Power S.A.
Q3 2023 GAAP diluted net gain per share (EPS) was $0.0021, an improvement of 450% over the $0.0006 loss per share reported in Q3 2022
Total energy production increased by 27.4% to 9,804,036 kWh for the quarter ending September 30, 2023 as compared to 7,668,612 kWh for the same period in 2022. Overall, energy production is up 14.4% in 2023 compared to 2022, the result of continuing fleet reliability and an enhanced operational strategy.
Operational fleet capacity at September 30, 2023 was 46 systems at 43 sites totalling 5,810kWe, unchanged from the same quarter of 2022.
The Company completed replacement of the 100kW CHP system installed at the Roko health club in York in August 2023. This followed the renewal contract signed by the customer for its four UK sites earlier this year. The other three sites are conditional on both funding approval and various consents but are expected to be completed through the first quarter of 2024.
Construction of a new 100kW CHP solution for the Mercure St Helens Hotel is well underway and is due to complete during the fourth quarter. This will add to fleet size and help to further boost revenue generation as the Company enters the winter period.
Business and strategic development
The Company announced appointment of Matthew Brindle as its Sales Director during the third quarter. Matt has since joined on the Company on 2nd October and is responsible for developing and growing sales of the Company’s new Solar On-Site Utility Solution, part of the Company’s renewables division activity.
Following withdrawal of the project funding agreement provided by Attika Holding Limited, as announced last quarter management have been engaged in establishing a new funding relationship. Talks are progressing well, and management expect to be in a position to update investors in the coming months.
Following sale of the Company’s remaining shares in Cyprus based Annova Enterprises Company Limited (“Annova”), and ultimately its remaining interest in Blue Grid Gas & Power S.A., the Company has embarked on dissolving its Cypriot subsidiary, EuroSite Power Holdings Limited. Once completed the proceeds of the sale of Annova will be returned to the UK operating company.
Outlook and risks
Retail electricity and gas prices continue to remain high by historic standards in the UK market and so the Company continues to benefit from these high prices. Management considers that little will change in the short to medium term. In addition, long-term projections indicate prices are unlikely to reduce dramatically, although this and other energy price risks remain because of both the ongoing Ukraine war and conflict in the Middle East.
Inflation continues to impact both labor and material costs with continuing increases being seen across the supply chain. Management continue to work with suppliers to minimise these impacts
The interest rate environment has restricted the availability and price of project funding although Management hope that their ongoing talks with new funding partners may ease this position in months to come.
Parts shortages persist and so continue to extend downtime in the event of a unit failure. This continues to be a particular problem for those sites equipped with Tecogen product.
Overall, the Company continues to report that the outlook for 2023 appears good with increased revenue and gross profits.
Other risks remain in the form of the impact of reducing grid electricity carbon emissions on future sales, a shift in policy or regulation from the government relating to energy, unexpected equipment failures, economic and geopolitical issues.
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, 2022. 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
EuroSite Power Inc.
+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.