Thermal Energy stepping up R&D after projects delayed in wake of COVID-19

Thermal Energy

With COVID-19 restrictions wreaking havoc with scheduled client visits and delaying planned projects, Ottawa-based Thermal Energy International says it is stepping up its R&D efforts and launching new employee training programs in an effort to make itself more competitive in a post-pandemic world.

The firm ​– which develops energy-efficiency solutions to reduce large industrial customers’ heating bills ​– said Wednesday that despite nearly doubling its revenues in the third quarter, it’s now in a “period of uncertainty” as businesses around the world grapple with the COVID-19 crisis.

“While most of our clients are essential businesses and continue to operate, travel restrictions, social distancing and other mitigation measures are having an impact on order backlog and revenue,” CEO William Crossland said in a statement announcing the company’s latest quarterly earnings.

“Thermal Energy prides itself on providing a tailored, best-in-class product and service which often relies on detailed site surveys and facility visits. Therefore, during a time when such visits are restricted, our business activity has slowed and many of the projects have been delayed.”

Thermal Energy says its order backlog fell to $3.4 million at the end of the third quarter from $10.6 million a year ago. The company said projects for a multinational agricultural products manufacturer, a U.S. dairy group and a leading European brewer have all been halted due to the pandemic. 

In addition, a meat processing company cancelled a $738,000 order, although Thermal Energy says it’s continuing to work with the company to “develop alternative projects.”

Crossland said the firm is using the slowdown in business activity to launch new initiatives aimed at boosting its “longer-term productivity and profitability,” including company-wide skills training programs, technology upgrades and new R&D projects. Thermal Energy is also implementing new systems designed to make working remotely more efficient. 

“By enhancing in this way, we are not only responding to the current circumstances, but also preparing for an altered state of business in the future,” Crossland said.

Thermal Energy (TSX-V:TMG) reported revenues of $5.8 million for the three-month period ending Feb. 29, up 87 per cent from a year earlier. The firm booked a net profit of $430,000 in the third quarter, a significant turnaround from an $889,000 loss in the same period in 2019.

The company’s shares were up one cent to eight cents in late afternoon trading on the TSX Venture Exchange.