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Alternus Energy Inc

Alternus Energy shining through with diverse portfolio of photovoltaic solar parks across Europe

Snapshot

The parks connect directly to national power grids on long-term, fixed price government supply contracts, providing very predictable income

Solar panels

Quick facts: Alternus Energy Inc

Price: $0.28

Market: OTCMKTS
Market Cap: $37.2 m
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  • Owns and operates a diverse portfolio of photovoltaic (PV) solar parks across Europe
  • Currently has 10 megawatts (MW) of ground and rooftop parks in operation in Italy, together with 10 MW of rooftop parks in Germany
  • Recently also expanded into the Netherlands, acquiring 11.75 MW Rilland solar power plant
  • Expects to finish 2019 with over 100MW of installed power, a five times increase from 2018

What Alternus energy does:

Alternus Energy Inc (OTCMKTS:ALTN) is an international green energy producer that owns and operates a diverse portfolio of photovoltaic (PV) solar parks across Europe.

The parks connect directly to national power grids on long-term, fixed price government supply contracts, providing very predictable and measurable income streams over the long term.

The company – previously known as Power Clouds Inc. - currently has 10 megawatts (MW) of ground and rooftop parks in operation in Italy, together with 10MW of rooftop parks in Germany, and has also expanded into the Netherlands.

Having exited energy trading operations in Romania, it is also exploring projects in other European countries for continued growth.

How is it doing:

At the start of 2019, Alternus completed the previously announced acquisition of three Italian solar PV parks from Liquid Sun for €3.65 million (approximately $4.25 million).

The three parks represented a total of 2.24MW of installed power located in the Budrio and Anagni regions of Italy. They had been operating for nearly 5 years, and bring in approximately €600k (approximately $700k) additional annual revenues to the company with over 85% operating margins.

Alternus continued its Italian expansion in May, with the acquisition of another seven operating PV plants in the southern European country.

In aggregate, the acquired plants had a total installed capacity of 5.1 MWs, bringing the company’s total European installed capacity at that date to 29.1 MWs of owned solar projects.

The 5.1 MW of parks were generating annual revenues in excess of $1.5 million at over 85% gross margins, and Alternus said it expected to increase the annual production of the parks by about 20% after some identified remedial work which would then increase both annual revenues and gross margins by the same percentage.

In July, the company agreed to pay €10.5 million ($11.76 million) for Zonepark Rilland BV and its 11.75 megawatt Rilland solar power plant in the Netherlands.

The company said Rilland is an attractive buy as it enjoys a 15-year government counterparty feed-in-tariff contract at fixed sales prices, and a power purchase agreement with a local energy operator.

The combined contracts provide “long-term predictable” positive cash flows, the group added, and as the park is operational it will be immediately revenue and income accretive to Alternus Energy as soon as the deal closes. 

Aside from the PV parks acquisitions, in June, Alternus also signed a Master Operations and Maintenance (O&M) agreement with BayWa r.e, leading global renewable energy developer, service supplier, wholesaler and energy solutions provider.

Under the agreement BayWa will provide 24/7 monitoring, preventative maintenance and quality inspections for all Alternus solar projects in Germany, Italy, Romania, and Netherlands.

BayWa r.e. – a subsidiary of Germany’s BayWa AG, a €16 billion business established for over 90 years - has operations throughout Europe, North America and Asia-Pacific, and are strategically investing in new and emerging markets.

On the financials front, in August Alternus reported second-quarter results which showed a jump in revenue after adjustments for the cessation of the group’s energy trading activities in Romania.

Second quarter 2019 revenue was $934,000, down 4% on the same period in 2018 although, after adjusting for the costs associated with closing the lower margin arm in Romania, revenue increased by 38% year over year.

Alternus’ gross margins jumped 83%, up from 48% a year earlier, and  second quarter net Income increased to $2.3 million, compared to a loss of $0.1 million in the prior year.

At the end of June, Alternus closed a €8,628,000 ($9,749,640) financing from Eiffel Energy Transition Fund SLP.

The funding was channeled into refinancing a portion of existing higher cost debt the group was used to buy the solar power projects in Italy.

The funds will reduce annual interest costs for the projects once the Eiffel funds are repaid by October 2019.

Inflexion Points:

Alternus expects to finish 2019 with over 100MW of installed power, a five times increase from 2018 that will deliver $300 million in contracted revenue backlog over 15 to 20 years.

The company is targeting the addition of 40 megawatts to 60 megawatts in new projects in Germany, which is its biggest market, 15 megawatts in Italy, and 24 megawatts in the Netherlands.

It also believes it can aggregate to 200 megawatts over the next three years based on current activities.

What the boss says:

Reporting second quarter results in August, Vincent Browne, Alternus Energy’s chief executive officer, president and chairman, commented: “Q2 was another solid quarter for the business in both short term and long term achievements.”

“Our pipeline of additional opportunities remains robust as we push towards our goal of exiting 2019 with over 100 MWs of owned energy assets,” he added.

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