Renewable Energy Co. Revises FY Forecast Upwards

Revolve Renewable Power Corp. (TSXV:REVV; OTCQB:REVVF) announced it has revised its previously announced forecast for FY2024 upwards.

Last September, the company had provided guidance predicting revenue to increase to US$5 million with a breakeven EBITDA for the financial year ending June 30, 2024.

"As a result of an improved operating environment," Revolve said it had increased its revenue forecast for that fiscal year to US$6 million and its EBITDA forecast to US$1.5 million.

Revolve was formed 12 years ago to capitalize on the growing global demand for renewable power. It develops utility-scale wind, solar, and battery storage projects in the US, Canada, and Mexico. Its second division, Revolve Renewable Business Solutions, installs and operates sub-20MW "behind the meter" distributed generation (or "DG") assets.

The company's portfolio includes 11 MW (net) of operating assets under long-term power purchase agreements across Canada and Mexico covering wind, solar, battery storage, and hydro generation; a 3MW CHP project and a 450 kWp rooftop solar project that are both under construction and expected to be operational later this year; and a diverse portfolio of utility-scale development projects across the U.S., Canada, and Mexico that have a combined capacity of over 3,000MWs; as well as a 140 MW+ distributed generation portfolio that is under development.

Revolve has developed and sold over 1,550MW of projects so far. Going forward, Revolve said it is targeting 5,000 MW of utility-scale projects under development and is rapidly growing its portfolio of revenue-generating DG assets in parallel.

Co. Completes Acquisition of WindRiver

Earlier this month, Revolve announced its financial results for the three- and nine-month periods ending March 31, 2024.

Total revenues for the three months ending March 31, 2024, were US$337,439, primarily generated from electricity production by the operational DG portfolio and the Box Springs Wind project, which became part of Revolve following the acquisition of WindRiver Power Corp. 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. The increase was driven by the milestone payment received in August 2023 from the sale of the Parker Solar and 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 that quarter, Revolve completed the acquisition of WindRiver, a Canadian-based renewable energy operator and developer, enhancing its portfolio with additional hydro and wind projects.

The Catalyst: 'Cleaner and More Sustainable' Energy Options                 

Electricity generation in the renewable energy market is projected to amount to more than 7.3 billion KWh in 2024, and is expected to grow at a compound annual growth rate (CAGR) of 3.88% between 2024 and 2028, according to research by Statista.

"The energy market is expected to continue growing, with increasing demand for energy worldwide as populations grow and economies develop," the report said. "However, the mix of energy sources is expected to shift towards cleaner and more sustainable options, with renewable energy sources like solar, wind, and hydropower projected to continue growing rapidly. Fossil fuels are expected to gradually decline in importance."

Renewable energy growth will be driven by falling costs of technologies, increasing demand, supportive policies and regulations, and improvements in energy storage and grid integration technologies, Statista analysts wrote.

"In addition, the COVID-19 pandemic has accelerated the shift towards renewable energy, as governments and businesses have recognized the importance of building resilient and sustainable energy systems," they noted. "The Russia-Ukraine war has brought to light the precarious and exposed reliance on certain energy sources, such as gas and oil, ultimately necessitating a significant diversification of countries' energy portfolios in the long term. Overall, the outlook for the renewable energy market is positive, and the sector is expected to continue to play an increasingly important role in meeting global energy demand while reducing greenhouse gas emissions."

According to a report in May by the International Energy Agency, speeding the move to clean energy technologies like Revolve's will also improve the affordability of energy overall.

"In many cases, clean energy technologies are already more cost-competitive over their lifespans than those reliant on conventional fuels like coal, natural gas, and oil," the report noted. "Solar PV and wind are the cheapest options for new generation."

The U.S. government announced the framework to invest US$555 billion in clean energy programs, which is expected to be a big opportunity for companies in this space.

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$17.65 million with 63.04 million shares outstanding and 38.08 million free-floating. It trades in a 52-week range of CA$0.50 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. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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