Release Date: May 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased by 15% year over year to $14.8 million, driven by the expanding Development Service Agreement (DSA) business.
- Gross profit more than doubled from the previous year, reaching $4 million with a gross margin of 27.2%.
- Operating expenses were reduced by over 50% through strategic cost control measures.
- The company secured significant DSA agreements for battery storage projects in Italy, enhancing its project pipeline.
- The IPP assets contributed to 38% of revenue with a gross margin of 44%, providing stable and predictable cash flows.
Negative Points
- Operating loss was approximately $0.7 million, although significantly reduced from the previous year.
- The company faced a $0.7 million write-off of canceled early-stage projects in the US due to a shift in focus.
- Unrealized foreign exchange loss of over $3.2 million contributed to the net loss.
- Net loss attributed to common shareholders was $4.4 million, compared to a net loss of $0.2 million in Q1 2023.
- Cash and cash equivalents decreased to $55.1 million from $70.2 million in Q4 2023, partly due to delayed payments from Polish projects.
Q & A Highlights
Q: Your guidance for Q1 and Q2 was lighter than expected. What do you think the monetization might be by quarter for the 450 megawatts planned for 2024?
A: We confirm our full-year revenue and gross margin guidance. We expect a ramp-up in the second half, with some projects currently under negotiation expected to be executed in Q3 and Q4.
Q: What are the reasons for the delays in project monetization? Are these issues similar in Europe and the US?
A: In the US, delays are due to interconnection, transmission queues, and other factors. In Europe, administrative delays, such as permit approvals in Spain, are causing delays. We expect these issues to be resolved in the second half.
Q: Can you provide more details on the Polish payment delays and their impact on Q1?
A: The delays were due to local government approvals for power plant connections. We expect payments to be settled in June and do not anticipate further delays.
Q: Are there any complications with module supply due to new tariffs in Washington?
A: We don't foresee significant impacts as we have secured modules for our small US projects. In Europe, we continue to see competitive pricing without additional tariffs.
Q: What explains the scale of early-stage opportunities in the Spanish market?
A: Spain remains a key focus market due to its potential. We have developed strong partnerships with local developers and are optimistic about growth, especially with new initiatives like battery storage.
Q: How much more cash are you willing to allocate towards share buybacks?
A: We have approximately $15 million left from the Board authorization for share buybacks.
Q: What happened to the gigawatt of advanced-stage battery storage projects in Spain?
A: We reclassified these projects to early-stage due to interconnection approval delays, reflecting a more conservative approach.
Q: What caused the reduction in early-stage solar projects in Germany?
A: We did not win bids for two projects, resulting in their removal from the pipeline. There was a small impairment, but it was minimal.
Q: Is there any risk of retaliation from the Chinese government affecting your operations?
A: We do not foresee any negative impacts. The solar market in China remains strong, and we are confident in our operations and partnerships.
Q: Are there any particular projects that make up the majority of expected revenues in the second half?
A: The Hungary project is a significant contributor, and we are confident it will be completed in the second half.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
