Public Companies

Powering The Solar Revolution – $UGE

According to a recent article in the Wall Street Journal by Russell Gold, renewable energy is outpacing investment in electricity from coal, natural gas, and nuclear power mainly because of the costs of producing solar and wind power have come down significantly in recent years. “In 2016, the latest year for which data is available, about $297 billion was spent on renewables—more than twice the $143 billion spent on new nuclear, coal, gas and fuel oil power plants, according to the IEA. The Paris-based organization projects renewables will make up 56% of net generating capacity added through 2025.”  The article goes on to say that, “About 17% of the country’s electricity last year came from renewable sources, including wind, solar and hydroelectric dams, according to federal data. The government said that just under half of large-scale power generation added was renewable last year.”  One company riding that momentum is UGE International Ltd. (TSXV:UGE) (OTCQB:UGEIF)

UGE International is a global renewable energy company, focused on providing commercial and industrial clients with energy solutions that deliver cheaper, more reliable, and more sustainable electricity.  

They began as an energy solutions company, packaging together renewable energy technologies to solve the needs of commercial and industrial clients.  They developed expertise in solar, battery storage, and the financing of renewable energy projects which they leveraged to deploy energy systems for their clients with the goal of providing them immediate economic benefit through cheaper energy costs.  

On February 22nd, 2016, they acquired UGE Canada Ltd, which strengthened their market position in Canada and added significant additional solar engineering and deployment experience.  On September 6th, 2016, they divested UGE Holdings Ltd. and it’s subsidiaries, which represented wind energy operations that they had identified as non-core to their strategic plan.  On April 3rd, 2017, they purchased substantially all the assets of Carmanah Solar Power Corp., further strengthening their ability to grow in Canada and globally.

Today, UGE provides turnkey solutions to clients across their key markets: the Northeast United States, Canada, and the Philippines.  Their focus is on leveraging the low cost of distributed solar energy to provide their clients – organizations from around the world – more affordable energy.

News release summary for the past 6 months:

  • December 6th, 2017 – announced a new contract to engineer and build a 198 kW DC rooftop solar system for an elementary school in Farmington, Minnesota.  This was the company’s fourth project for the Farmington Public School District.  At the time of the news release, UGE was completing construction on 600 kW and 108 kW DC projects, and had also energized a 715 kW DC system all for the school district
  • December 12th, 2017 – announced they had secured new contracts for 14 solar projects across Ontario school properties.  The announcement said the 14 have an installed capacity of approximately 3 MW and the contract value for all sites would be in excess of $3,000,000 CAD
  • December 13th, 2017 – announced a total of 450,000 stock options were granted to its four independent directors in accordance with the company’s Stock Option Plan.
  • January 23rd, 2018 – announced it had secured contracts with two separate private schools in the Philippines to design and build solar rooftop installations.
  • March 13th, 2018 – announced fiscal year 2017 financial results.  The highlights included 261% growth in 2017 as revenue from continuing operations increased to $20,934,836 from $5,807,119 the previous year.  For the three month period ending December 31st, 2017, the Company had the highest adjusted EBITDA in its history of $237,784 showing progress towards sustainable profitability.  The Company also highlighted the acquisition of net assets from CSPC on April 3rd, 2017 which added additional scale in both the U.S. and Canadian markets.  
  • May 4th, 2018 – announced the completion of two large solar portfolios, consisting of 28 sites throughout Ontario, adding another 10 MW DC to Canada’s installed solar PV capacity.  
  • May 15th, 2018 – reported their financial results for the three months ended March 31st, 2018.  The highlights included a 10% growth to $6.1 million USD from the same period the previous year driven by consistent progress on a large project in Peterborough as well as strong growth in the Philippines.  They also reported a negative adjusted EBITDA of $69,000 USD compared with a negative of $183,000 USD in the same period of the prior year.  UGE also reported a backlog of $41.2 million USD with new projects totalling $11.3 million USD within the quarter.
  • June 6th, 2018 – announced that subscriber enrolment is complete for the 100 kilowatt Carroll Street Community Solar Farm in Brooklyn.  The project is among the first rooftop community solar projects in New York City.  UGE is providing the engineering, design, and installation of the solar system and the project is the first of several under development by the partners involved in the project.
  • June 14th, 2018 – announced that they have been contracted to provide engineering services on two independent solar portfolios totalling 1.85 MW.  One portfolio is located across eight properties in Nigeria and includes ground mounted, rooftop, and container mounted solar systems, primarily for schools and hospitals.  This marks the Company’s first time doing business in Nigeria.  Separately, they announced they had been contracted as the owner’s engineer for a portfolio of ground mounted projects in Maryland.  In the same release, the Company also announced they had closed a private placement offering totalling 1,225,000 units from a single investor at a price of $0.35 per Unit for gross proceeds of $437,500.  

UGE has many things working in their favour in 2018 including: a $41.2 million backlog which includes $16.4 million of contracted projects and $24.8 million of committed projects, a 10% year over year growth rate in revenue in the first quarter of 2018 compared to 2017, and a sound management team executing towards their vision of $100 million USD in revenue and $10 million USD in EBITDA by 2020.  See Thru Equity has also recently initiated coverage of UGE International.  According to the investor presentation on their website, UGE’s directors and officers hold 53.5% of the outstanding shares, leaving approximately 20 million shares free trading.  UGE’s shares have a 52 week high of $0.72 CAD, a 52 week low of $0.21 CAD, and closed out last week trading at $0.375 CAD.  We look forward to tracking their progress in 2018 and beyond.

 

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