Renewable Energy Co. Reports Significant Revenue Growth, Strategic Acquisition Impact

Revolve Renewable Power Corp. (TSXV:REVV;OTCQB:REVVF) announced its financial results for the three and nine-month periods ended March 31, 2024.

Total revenues for the three months ending March 31, 2024, were US$337,439. This revenue was primarily generated from electricity production by the operational Distributed Generation (DG) portfolio and the Box Springs Wind project, which became part of Revolve following the acquisition of WindRiver Power Corporation in mid-February.

For the nine-month period ending March 31, 2024, total revenues were US$1,668,201, representing a 65% increase over the same period in FY2023. This increase was driven by the milestone payment received in August 2023 from the sale of the Parker Solar & Storage project, electricity generation sales from the operating DG portfolio and Box Springs Wind project, and asset management income from the Hunter Creek and Sakwi Creek Hydro projects.

The company reported renewable energy generation of 3,877,342 kWh for the three-month period and 4,822,522 kWh for the nine-month period ending March 31, 2024. During this quarter, Revolve completed the acquisition of WindRiver, a Canadian-based renewable energy operator and developer, enhancing its portfolio with additional hydro and wind projects. Despite the positive revenue growth, the company recorded a net loss of US$1,167,546 for the quarter, compared to a net profit of US$523,085 in the same period last year, and a net loss of US$667,027 for the nine-month period, compared to a net loss of US$235,972 for the same period last year. Cash on the balance sheet as of March 31, 2024, was US$1,295,455.

Renewable Energy's Renewable Future

According to Statista, the future of this sector is only looking bright. As they wrote on April 12, "Investment in the energy transition amounted to 1.1 trillion U.S. dollars in 2022, surpassing the investment in fossil fuels for the first time. Renewable energy technologies accounted for nearly half of that amount, reaching almost 500 billion U.S. dollars in 2022. Renewable investments have grown rapidly in the last years; however, it is estimated that they need to quadruple to limit the global temperature rise to 1.5 °C by 2050."

The future of the sector is bright, according to Statista, which wrote on April 12, "Renewable investments have grown rapidly in the last years; however, it is estimated that they need to quadruple to limit the global temperature rise to 1.5 °C by 2050."

These thoughts were boosted by the IEA's World Energy Investment 2023 report, which stated, "Clean energy investments have been boosted by a variety of factors. These include improved economics at a time of high and volatile fossil fuel prices; enhanced policy support through instruments like the U.S. Inflation Reduction Act and new initiatives in Europe, Japan, the People's Republic of China (hereafter "China"), and elsewhere; a strong alignment of climate and energy security goals, especially in import-dependent economies; and a focus on industrial strategy as countries seek to strengthen their footholds in the emerging clean energy economy."

Company Catalysts

Revolve Renewable Power Corp. is actively advancing several projects and initiatives to sustain and enhance its growth trajectory. As noted in its press release, the company's Distributed Generation (DG) assets under construction remain at 3.45 MW, with ongoing permitting work for a 3 MW Combined Heat and Power (CHP) project and installation work for a 450 kWp rooftop solar project in Mexico. The development of DG assets remains stable at approximately 140 MW, with efforts focused on converting this pipeline into signed power purchase agreements (PPAs).

Letters of intent have been signed for new DG projects with a combined capacity of 2.22 MW, although final decisions are pending.

Revolve's utility-scale projects are also progressing. The company is focusing on the 80 MWh/20 MW Vernal Battery Energy Storage System (BESS) and the 49.5 MW Primus Wind projects in the US. The Vernal BESS project secured an interconnection agreement in April 2024 and aims to reach ready-to-build status within the next 12 months.

Similarly, the Primus Wind project is expected to complete the interconnection process soon, with a targeted ready-to-build date within the next year. In Mexico, Revolve remains well-positioned with over 500 MW of wind projects in various stages of development, anticipating improving market conditions and increased interest in renewable PPAs from large corporations.

Furthermore, the company continues to explore new greenfield development projects in Canada and the U.S., aiming to expand its project pipeline by the end of FY2024. However, challenges such as limited transmission capacity and congested interconnection queues necessitate a selective approach to pursuing new opportunities. The strategic acquisition of WindRiver Power, coupled with ongoing development and expansion efforts, underscores Revolve's commitment to becoming a leading renewable independent power producer focused on long-term recurring revenue and cash flow. 

Expert Opinions

In a research note dated February 23, Shawn Severson, an analyst at Water Tower Research, highlighted the significance of Revolve Renewable Power Corp.'s acquisition of WindRiver Power Corporation.

A Canadian-based company, WindRiver owned, operated, and developed wind and hydro projects in British Columbia and Alberta. Severson emphasized, "This acquisition is a key milestone in Revolve's stated strategy of utilizing both a development strategy and acquiring operating assets." He further noted that the company is progressing toward becoming "a dedicated renewable independent power producer focused on long-term recurring revenue and cash flow."

Technical Analyst Clive Maund said the stock's technical condition had improved, indicating potential for a new uptrend with momentum indicators trending higher. 

The acquisition of WindRiver also brought Revolve significant assets, including the 15 MW Tahimi Creek hydro project (70% ownership) and the 75 MW Kinskuch Lake hydro project (87.5% ownership), both located in British Columbia.

These projects are at various development stages and are slated to be ready to build in the 2025-2026 time frame. With the addition of WindRiver's assets, Revolve now boasts more than 3 gigawatts of development projects across North America.

Severson pointed out Revolve's ambitious target, stating, "Revolve has set an ambitious goal to convert 40 MW per year over FY24 and FY25 from its distributed generation development portfolio into projects under construction or operational status."

Technical analyst Clive Maund provided additional insights into Revolve's market performance. In an article dated April 29, Maund discussed the company's stock trajectory, noting, "Revolve Renewable Power Corp. was the subject of an article on January 22, when it was thought that, following a clear breakout from a bullish Falling Wedge downtrend and a period of consolidation, it would continue higher." However, the stock price did not follow the expected upward trend, leading to the formation of a larger base pattern.

Maund explained the recent price movement, stating, "It is now clear that the price wanted to mark out a larger base pattern, which it has now done by dipping early this month to form a Double Bottom with its lows of late last October."

He added, "Since it is now still close to the second low of the Double Bottom shown on the 18-month chart below, this looks like another good point to buy or add to positions." He highlighted that although the stock had not seen significant gains recently, its technical condition had improved, indicating potential for a new uptrend with momentum indicators trending higher.

"The low early this month was marked by a prominent bull hammer, after which the price recovered off the second low of the Double Bottom on increased volume, which is bullish," Maund concluded.

Ownership and Share Structure

About 60% of the company is owned by insiders and management, Revolve said.

Top shareholders include Joseph O'Farrell with 13.21%, Roger Norwich with 12.15%, the CEO and Director Stephen Dalton with 6.01%, President and Director Omar Bojoquez with 4.82%, and Jonathan Clare with 1.84%, according to Reuters and the company.

The rest is retail.

Revolve has a market cap of CA$17.02 million with 63.04 million shares outstanding and 38.08 million free-floating. It trades in a 52-week range of CA$0.62 and CA$0.20.

Important Disclosures:

1. Revolve Renewable Power Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Revolve Renewable Power Corp.
3. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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