Energy: Did revenue at New Energy Solar really just fall by 99pc?
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New Energy Solar (ASX:NEW) has slashed full-year 2019 losses by 95 per cent — but so has it cut revenue by 99 per cent too.
Or so it would seem.
This company is a solar power plant investor, buying into projects that have long-term contracts to sell power.
This means it primarily invests in the US where it has 14 plants, rather than in Australia where the business and regulatory conditions for project development are becoming more challenging, and it has two plants.
The statutory results above reflect New Energy Solar’s classification as an investment entity under Australian Accounting Standards.
That means revenue — for accounting purposes — is made up of income received from its subsidiaries and movements in the fair value of said subsidiaries.
Statutory figures, which are different to net and underlying figures, came in at a $4.2m loss and revenue of $373,899, down from $80m and $86m respectively.
New Energy Solar says the full portfolio delivered underlying revenues of $US54.3m ($81.2m) — up 29 per cent from 2018, and EBITDA (earnings before interest, tax, depreciation and amortisation) of $US40.3m, which is 24 per cent higher than the prior year, of which the company got about two thirds.
At the end of 2019 all of the solar plants in New Energy Solar’s portfolio were operational and generating power.
Three were completed — Organ Church in North Carolina, Beryl in New South Wales and MS2 in California — and gross power generated came in at 1,012 gigawatt-hours (GWh) compared to 768 GWh in 2018.
“The potential of the business to provide attractive, risk-adjusted returns for investors is consistent with the investment proposition envisaged at listing, just on two years ago,” chief John Martin said.
“The growth in renewable energy globally is very encouraging and having most of our assets in the US, where the energy landscape is evolving quickly, provides a regular reminder of the opportunities available through the development of new technology, new expertise and new skills.”
MPower (ASX:MPR) has secured new banking facilities and sold its Australian and New Zealand solar and battery product distribution businesses for $4.6m. The new banking facilities include loans of $8m and $500,000. MPower is refocusing on renewable and conventional power projects where it has a track record.