Strong backlog of contracted projects set the stage for continued growth in 2023
TORONTO and KNOXVILLE, Tenn., May 29, 2023 (GLOBE NEWSWIRE) -- Solar Alliance Energy Inc. (‘Solar Alliance’ or the ‘Company’) (TSX-V: SOLR), a leading solar energy solutions provider focused on the commercial and utility solar sectors, announces it has filed its unaudited financial results for the three months ended March 31, 2023. The Company’s Financial Statements and related Management’s Discussion and Analysis are available under the Company’s profile at www.sedar.com.
“Solar Alliance delivered 47% year-over-year quarterly growth during the first quarter of 2023,” said CEO Myke Clark. “This impressive level of growth occurred during what is generally a slower quarter for solar installations and sets the stage for a strong 2023. We have a backlog of contracted projects exceeding $3 million dollars that we expect to convert into revenue during 2023, in addition to other projects in our sales pipeline that we are pursuing, supporting our favourable outlook for the balance of the year.”
“Our purposeful transition to larger commercial and utility projects is generating strong revenue growth and a substantial backlog of projects under contract. Combined with the Letter of Intent we signed recently to acquire a growing and profitable Western Canadian solar company, announced on May 18, 2023, we believe the prospects for 2023 are very compelling for Solar Alliance and our shareholders,” concluded Clark.
Financial highlights
- Revenue for the three months ended March 31, 2023, was $974,577 an increase of 47% from $663,269 in the same period in 2022 as the company continued to increase both the number and the size of projects in its construction pipeline.
- Cost of sales of $1,239,775 (Q1 2022: $531,567) resulting in a gross profit for the three months ended March 31, 2023, of -$265,198 (Q1, 2022: $131,702). The negative gross margin was the result of increased project costs related to supply chain issues in 2022 and to costs incurred on projects that will be completed in subsequent quarters. The Company is confident the supply chain issues have been resolved and expects the negative margin to be a one-time occurrence.
- Net loss for the quarter of $1,421,387, an increase from a net loss of $970,160 in the comparable prior year period, as the Company continued to make investments in its growing team and project portfolio. The Company is confident the current team size will allow for continued revenue growth without significant additional overhead, resulting in improving margins.
- Cash used in in operating activities was $79,304 (Q1 2022: $927,620).
- Cash balance of $394,293 and restricted cash balance of $470,948, as of March 31, 2023.
- Balance sheet includes non-current assets of $1,916,575, comprised primarily of the two Company-owned New York solar projects.
- Contracted project backlog of approximately $3,100,000, as of May 29, 2023, with the entirety of the backlog expected to be converted into revenue in 2023.
Business highlights
First two Company-owned solar projects energized. On January 3, 2023, the Company announced it has completed the construction of the Company’s first two solar projects in New York, and both are now in operation. VC1, a 298-kilowatt (“kW”) project located in the Village of Cazenovia, and US1, a 389-kW project located in the Village of Union Springs, have both received permission to operate and are now generating clean, renewable electricity under long-term power purchase agreements with the local communities.
$1.8 million contract signed for project in Tennessee. On February 13, 2023, the Company announced it has signed a contract for the design, engineering, and construction of an 872-kilowatt (‘kW”) commercial solar project for a manufacturing company in Tennessee. The project, with a $1.8 million capital cost, is scheduled to begin construction in Q2 2023 with completion targeted by October 2023.
Solar Alliance signs Letter of Intent to acquire Canadian solar company. Subsequent to the end of Q1, 2023, the Company announced on May 18, 2023, that it had entered into an arm’s length Letter of Intent dated May 16, 2023, to acquire a growing, profitable Canadian solar company (the “Target”) in a predominantly share-based transaction (the “Transaction”). The Target is a growing commercial and utility solar company based in Alberta with more than 33 MW of commercial and utility solar projects installed. Closing of the Proposed Transaction remains subject to a number of conditions, including satisfactory completion of due diligence, the execution of a binding definitive agreement, shareholder approval and the approval of the TSX Venture Exchange. Due diligence is continuing on the Transaction.
Myke Clark, CEO
About Solar Alliance Energy Inc. (www.solaralliance.com)
Solar Alliance is an energy solutions provider focused on the commercial, utility and community solar sectors. Our experienced team of solar professionals reduces or eliminates customers' vulnerability to rising energy costs, offers an environmentally friendly source of electricity generation, and provides affordable, turnkey clean energy solutions. Solar Alliance’s strategy is to build, own and operate our own solar assets while also generating stable revenue through the sale and installation of solar projects to commercial and utility customers. The Company currently owns two operating solar projects in New York and actively pursuing opportunities to grow its ownership pipeline. The technical and operational synergies from this combined business model supports sustained growth across the solar project value chain from design, engineering, installation, ownership and operations/maintenance.
Statements in this news release, other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, constitute Forward-looking statements. The words “would”, “will”, “expected” and “estimated” or other similar words and phrases are intended to identify forward-looking information. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of activity, performance or achievements to be materially different than those expressed or implied by such forward-looking information. Such factors include but are not limited to: satisfactory due diligence, the ability to settle the definitive agreement, obtain the approval of the TSX Venture Exchange and complete the Transaction on the terms as announced or at all; uncertainties related to the ability to raise sufficient capital; changes in economic conditions or financial markets; litigation, legislative or other judicial, regulatory, legislative and political competitive developments; technological or operational difficulties; the ability to maintain revenue growth; the ability to execute on the Company’s strategies; the ability to complete the Company’s current and backlog of solar projects; the ability to grow the Company’s market share; the high growth US solar industry; the ability to convert the backlog of projects into revenue; the expected timing of the construction and completion of the 872 KW Tennessee solar project; the targeting of larger customers; the ability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to the effects of COVID-19 on the construction sector, capital market conditions, restriction on labour and international travel and supply chains; potential corporate growth opportunities and the ability to execute on the key objectives in 2023. Consequently, actual results may vary materially from those described in the forward-looking statements.
“Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.”
