Headquartered in Ottawa and with offices in in the U.K., Italy, U.S., and China, Thermal Energy has become a global provider of proven energy efficiency and emission reduction solutions to the industrial and institutional markets.
With governments around the world focusing on and committing to reduce carbon emissions, most people immediately think of renewable power sources such as wind or solar as solutions. However, as we look to stave off the disasters of climate change, there is a more cost-effective way to meet the growing global demand for energy while also reducing emissions. The solution is energy efficiency, and it is not only the cheapest and easiest solution to implement, it is also an enormous market opportunity. According to the International Energy Agency, of the $68 trillion expected to be invested in the energy sector worldwide from now to 2040, 32%, or $21.8 trillion, is expected to be earmarked for end-use energy efficiency.
One Canadian company that is capitalizing on this huge market opportunity, is Thermal Energy International Inc. Headquartered in Ottawa and with offices in in the U.K., Italy, U.S., and China, Thermal Energy has become a global provider of proven energy efficiency and emission reduction solutions to the industrial and institutional markets. Their two main products are FLU-ACE heat recovery systems and GEM steam traps. They also have a super-efficient cogeneration solution that is able to achieve up to 93% energy conversion and utilization efficiency – a marked improvement over the typical cogeneration plant.
The company saves their customers money and improves their bottom lines by reducing their fuel use and carbon emissions. Their products have an excellent track record of longevity, proven reliability and performance and have been shown to provide: significant energy savings; improved water efficiency; reduced greenhouse gas emissions; and lower maintenance costs. Moreover, Thermal Energy’s products are effective in a wide range of industries, including food and beverage, pulp and paper, pharmaceutical, chemical, hospitals, mining and resources, construction, and more.
Although the Company markets its products throughout the world, the majority of sales are from within North America and Europe, due to the proximity to the Company’s bases. While this continues to be the key focus, the Company also continues to look for new distributors in regions deemed to have potential.
So is this a profitable business for Thermal Energy to be in? Despite some ups and downs in their financial performance over the years, the company’s revenues have grown at close to 18 per cent on a compounded annual basis since 2009. In January, the company reported its financial results for the first half of its fiscal 2017 year, including revenue of approximately $5.2 million and its highest half year gross profit on record. While the first half of the fiscal year is typically the company’s weaker half, EBITDAS improved $606 thousand to $289 thousand, and net income improved $522 thousand to $95 thousand.
Thermal Energy has a multifaceted growth strategy, which includes increasing its penetration in key markets; expanding into secondary markets; cross-selling; developing corporate accounts; and introducing new complementary products or services.
The company’s current focus is on the key markets of North America, Europe and the Middle East. Despite significant growth over the last few years, Thermal Energy’s penetration in these markets remains low and therefore, significant opportunity still exists. The company plans to continue growing its sales and distribution capabilities in these markets while at the same time begin to build its business in other energy-intensive markets around the world.
Similarly, there is still significant opportunities for the company to capitalize on when it comes to repeat business from its existing customers. The company has sold its proprietary and proven products to hundreds of companies and, including approximately 50 large companies in the pharmaceutical, food and beverage, pulp and paper, chemical and petrochemical sectors across the globe. So far the Company has only partially penetrated about 100 of the more than 2,000 global sites of these companies. Thermal Energy has executed a corporate-wide global roll-out of its product with two of these companies and is currently working with additional companies with the goal of executing similar corporate roll-outs.
Thermal Energy International’s common shares are listed on the Toronto Venture Exchange under the symbol “TMG”. The company is expected to report its financial results for its third quarter ended February 28, 2017 by the end of April.