After a second quarter that saw its revenues plummet nearly 40 per cent year-over-year, Ottawa cleantech firm Thermal Energy International says sales of its heat recovery systems are picking up steam as customers resume projects that were put on hold earlier in the pandemic.
In its latest financial statements filed Tuesday, Thermal Energy (TSX-V:TMG) reported revenues of $5 million for the three-month period ending Sept. 30, 2020, down from $7.8 million a year earlier as COVID-19 wreaked havoc with the global economy.
Despite the steep drop in sales, the company still managed to boost its net profit to $580,000 from $385,000. Thermal Energy said it benefited from $212,000 in federal wage subsidies and cut its expenses by nearly $280,000 year-over-year in the wake of COVID-related restrictions that curtailed travel and other business development activities.
Thermal tallied $7.8 million in revenues in the first and second quarters combined, down from $12.8 million a year earlier, while its net profit fell from $626,000 to $362,000.
“Like many companies, COVID-19 has had an impact on our operations and revenues, most notably in the fourth quarter of last year and the first quarter of this year, when many existing projects were temporarily placed on hold and there was a reduction in the level of new opportunities that could be progressed without access to customer sites,” CEO William Crossland said in a statement.
Surge in new orders
But Crossland said the firm is seeing a surge in new orders as the economy starts to show signs of recovery.
“In the second quarter, with the easing of travel restrictions, and sites reopening with social distancing and other mitigation measures in place, we were able to resume delivery of many of the projects that had been put on hold, as well as commence delivery of some of the recently received new orders,” he noted.
While its order backlog of $5.5 million at the end of Q2 was down from $8.2 million a year earlier, Thermal said its volume of new orders in the second quarter more than doubled last year’s total for the same period.
The firm has inked several significant deals in the past few months, including a $1.5-million agreement with a European health-care provider, an $840,000 order from a major food products company and a $770,000 contract with a Canadian hospital.
“While COVID-19 cases have increased again in all our key markets, this time our customers seem more determined to ensure business and projects continue as usual,” the company said.
Thermal Energy’s shares closed the day up more than 50 per cent at 20.5 cents on the TSX Venture Exchange.