Gross Margin Improved Due to Better Revenue Mix
Lower Revenue Due to Closure of Low Margin Segment in Romania
Recent Addition of Assets not yet Reflected in Revenue
NEW YORK, May 23, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Alternus Energy Inc. (OTC: ALTN), a global renewable energy company, today announced its financial results for the quarter ended March 31, 2019.
Financial Highlights for the 3 Months Ended March 31, 2019:
- Revenue decreased by 15% to $0.37 million
- Gross Profit decreased slightly to $0.21 million, compared to $0.23 million
- Gross Margin improved to 58%, up from 54%
- Adjusted EBITDA loss was $0.148 million, compared to $0.00 million
- Operating loss increased by 42% to $0.48 million, compared to $0.34 million
- Net loss was $1.34 million, compared to a net loss of $0.39 million
Management discussion on the reported results:
- The decrease in revenues is primarily attributed to the cessation of low margin energy trading activities in Romania during Q4 2018. Energy trading accounted for approximately $0.14 million in Q1 2018. This was partially offset by first revenues achieved in Germany for the connected parks there.
- As at March 2019, ALTN owns 24MW’s of solar assets – 13MW’s of which are connected and revenue generating in the current quarter. The remaining 11MW’s are in Germany and will be connected over the coming months. Once connected, annual recurring revenues are expected to rise by approximately $0.85 million at an average of 90% gross margins.
- The Gross Margin percentage increased due to the change in revenue mix towards higher margins that are generated in Italian and German operations. This increase is expected to continue throughout 2019 to achieve total gross margins of 85%.
- The Company took the decision to recruit additional experienced executives and operational management in Q4 2018, and during Q1 2019 to enhance the Company’s execution capability and to underpin current and planned growth. These new positions resulted in additional SG&A costs of approximately $0.12 million in Q1 2019 compared to the same quarter in 2018. These additions should be sufficient to manage the planned growth in 2019 to reach over 100MW’s of owned assets by the end of the year.
- 90% of the increase in net loss relates to interest charges incurred to complete the recent Italian acquisitions that did not have matching revenues in the quarter. The higher cost short term acquisition funds used to complete the purchases are expected to be replaced with lower cost long-term debt in Q3 2019.
Vincent Browne, CEO, President and Chairman, commented, “The first quarter was largely in line with what we had expected, given the cessation of the loss-making energy trading activities in Romania and the delay in closing the recent acquisitions in Italy that were originally planned to complete in Q1. Had these acquisitions completed as planned we would have reported increased revenues and gross margins for the period. Now that we have completed the acquisition of 4MW of additional parks in Italy during Q2, we will have over $1 million of additional recurring annual revenues at 85% gross margins included going forward.
As I have said in the past, we do not operate our business on a quarter by quarter basis, but with long term shareholder value creation as a priority. We aim to maximize return for our shareholders by acquiring positive cash flowing assets with long term income streams at the lowest possible risk and we will continue to do that as we continue to invest in our infrastructure and additional solar parks to increase our installed power and income streams,” concluded Mr. Browne.
For additional information, please see the ‘Q1 2019 Financial Overview’ Supplementary Disclosure document and the complete Q1 2019 reports filed with OTC at: http://www.otcmarkets.com/stock/ALTN/filings
About Alternus Energy Inc.
Alternus Energy Inc. is a global renewable energy company that owns and operates Utility Scale Solar parks internationally. Each solar park generates clean energy every day that is sold to national power grids under long term, government counterparty, fixed price contracts. The Company currently has operational solar parks in Germany, Italy and Romania with contracts in place to add additional solar parks in the Netherlands. For further information please go to: www.AlternusEnergy.com
Forward Looking Statement This press release contains forward-looking statements. Words such as “expects”, “intends”, ”believes”, “goal” and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the OTC Markets Group. The actual results that the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.