Sustainable Energy Reports Financial Results
Sustainable Energy Technologies Ltd. reported its financial and operating results for the quarter ended December 31, 2006. Product sales revenues for the quarter ending December 31, 2006 were $321,300. While less than anticipated, the shortfall was, according to the company, made up during January and February of this year, and total sales for the 4-month period ending February 28, 2007 are approximately $1 million.
"This is an important turning point for Sustainable Energy," said Michael Carten, President & CEO of the company. "Since November we have sold and delivered more than 2 megawatts of grid-tie inverters in Spain. This is more grid-tie inverters than were sold in all of Canada last year. We are gaining market share because of the superior thermal performance of the SUNERGY product in hot weather markets. Unlike most other outdoor products, which can only operate at full power for a limited period of time when outside temperatures are rising, the SUNERGY operates at full power all day long at temperatures in excess of 50°. This is a critical advantage in Spain and other southern European markets which are heavily oriented towards outdoor commercial projects. Spain is currently the fastest growing major solar market in the world, and we are well positioned not only to expand our share of this market, but to develop other hot weather markets such as Italy and Greece."
The operating loss (before interest depreciation and taxes) for the quarter was $783,791 – up from $485,256 for the previous year. The increased loss reflects aggressive marketing and promotional pricing as part of the company’s market entry strategy. It also reflects the amortization of higher cost component inventory acquired during the commercialization process and higher one-time transportation costs during production startup. With current European market pricing for inverters in the SUNERGY power rating, the company is expecting to realize industry standard product margins going forward. The company claims that it is also meeting its cost reduction targets for higher volume production and expects to further reduce costs through design changes for the European industrial and commercial markets.
Sustainable Energy also completed prototype testing of a 2.0 – 2.5kW inverter, which will operate solar PV and wind power systems on a stand alone basis, or in combination with batteries as part of a grid-interactive back up power application. The first product application will be for a next-generation residential scale wind turbine being manufactured by Japan’s Zephyr Corp., and the company is completing field trials of the inverter and wind turbine at the University of Calgary. Under a recently announced agreement with Zephyr the company has acquired the right to distribute a bundle consisting of the inverter and turbine to the Canadian market.