UGE International Ltd. (TSXV: UGE) (OTCQB: UGEIF) (the "Company" or "UGE"), a leader in the commercial and community solar sector, reports its financial results for the quarter ended June 30, 2022. UGE reports all amounts in US dollars.
In Q2 2022, UGE continued to grow its business of developing, building, financing, owning, and operating community and commercial solar facilities.
Key business and financial highlights for Q2 2022 included:
Project development backlog increased to 195MW as of June 30, 2022 and sits at 202MW as of the date of this release. In total the Company had 381MW of projects in development as of June 30, 2022, which has since increased to 391MW.
Operating assets increased to 2.1MW as two sites reached the end of construction. A third site was mechanically complete on June 30 and is currently awaiting equipment from the utility to commence commercial operation which should occur within Q3. One 1MW site reached Notice to Proceed (NTP) in Q2, with other projects expected to reach that milestone within Q3.
Energy generation revenue grew 56% quarter over quarter to $81K with 81% gross margins; this was on an installed base of 1.4MW and 0.9MW throughout Q2 of 2022 and 2021 respectively.
Engineering and consulting services revenue had a threefold increase to $106K, while EPC revenue declined 19%, in line with the Company's strategy to move away from this line of business.
Cash used in operations was $1.30 MM. A net loss of $1.44 MM, or $0.04 per share, was realized as the Company invests in developing its project portfolio towards its 100MW goal by the end of 2024. In the prior year, the Company realized a net loss of $0.80MM; the primary reason for the increased loss was due to the growth of the team as the Company expands.
The Company closed a $25M project debt and tax equity financing with Twain Financial during the quarter as well as a CAD$2.9M project development green bond. Subsequent to quarter-end, the Company closed additional green bond funding for gross proceeds of CAD$2.23 MM.
Subsequent to the quarter end, the U.S. Senate and House passed the Inflation Reduction Act (IRA), which is expected to be signed into law by President Biden this week. The IRA is the largest climate bill in history and provides substantial long-term support to the solar and energy storage industry, headlined by a 10-year extension to the Investment Tax Credit ("ITC") at a base rate of 30%. The ITC can be as high as 60% in certain situations and has been extended to cover interconnection upgrade costs and standalone energy storage projects, both to UGE's benefit.
"It continues to be an exciting time for UGE and our industry," said UGE's CEO, Nick Blitterswyk. "In Q2 we reached key milestones for project development and deployment and closed our largest project financing facility to date as our portfolio starts to meaningfully scale. We were also excited by the passage of the IRA, which meaningfully bolsters the long-term profile of our industry. We will further cover its benefits in our webinar."
Full financial results and Management's Discussion and Analysis are posted to SEDAR (www.sedar.com) as well as on the Company's website.
Online Webinar Details
UGE's CEO Nick Blitterswyk and CFO Stephanie Bird will host a webinar to provide further analysis of the financial results and to answer investor questions following the presentation. Interested parties can register for the webinar at ugei.com/register.
Date: Tuesday August 16, 2022
Time: 10:00am EDT
UGE develops, builds, finances, owns, and operates commercial and community solar projects in the US and strategic markets abroad. Our distributed energy solutions deliver cheaper, cleaner energy to businesses and consumers with no upfront cost. With over 500MW of global experience, we work daily to power a more sustainable world. Visit us at www.ugei.com.
For more information, contact UGE at:
+1 917 720 5685
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond the control of the Company. Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Readers are cautioned that the assumptions used in the preparation of such information, including project backlog, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The forward-looking information involves material assumptions and known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such assumptions, risks and uncertainties include, without limitation, those associated with loss of markets, expected sales, future revenue recognition, the ability to secure appropriate sites, the effect of global and regional economic conditions, equipment supply and pricing, changes in electricity prices, delays and over runs in construction, delays in or inability to obtain permits, changes in laws and regulations and changes in how they are interpreted and enforced, changes in tax policies and incentive programs, the lack of qualified personnel or management, fluctuations in foreign exchange or interest rates, demand for the Company's services, and availability of capital and funding. The forward-looking information is made as of the date of this news release and the Company assumes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law.
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