CHARLOTTE, NC / ACCESSWIRE / April 19, 2018 / Blue Sphere Corporation (BLSP) (the “Company”, “Blue Sphere”, “we”, “our” or “us”), an international Independent Power Producer (IPP) in the clean energy and waste-to-energy markets, announces its financial results for the year ending December 31, 2017 and provided a general business update.
Key Year End Highlights:
- Total Combined Revenues for the twelve-month period ending December 31, 2017 increased to $17.4 million, as compared to $12.8 million for the twelve-month period ending December 31, 2016.
- Operating Expenses for the twelve-month period ending December 31, 2017 decreased to $6.2 million, as compared to $7.5 million for the twelve-month period ending December 31, 2016.
- Cash and Cash Equivalents for the twelve-month period ending December 31, 2017 increased to $1.1 million, as compared to $0.4 thousand for the twelve-month period ending December 31, 2016.
- Stockholders’ Equity for the twelve-month period ending December 31, 2017 increased to $-1.4 million, as compared to $-2.2 million for the twelve-month period ending December 31, 2016.
- Enterprise Value for the twelve-month period ending December 31, 2017 increased to $48.0 million, as compared to $33.9 million for the twelve-month period ending December 31, 2016.
Shlomi Palas, Chief Executive Officer of Blue Sphere, commented, “We are very encouraged with the operational progress that Blue Sphere has made during 2017 and in 2018 we will be very focused on managing our asset portfolio to produce the highest level of efficiencies and cash flows. We will also continue to focus on acquisitions and developments that will add to our growing portfolio of assets.”
“In the short term, we are also looking forward to beginning construction on our flagship project in Holland, currently the largest anaerobic digester under development in Europe. As previously disclosed, we signed an offtake agreement with GasTerra B.V., a major gas wholesaler based in the Netherlands, to purchase the biogas from this facility once completed. We anticipate the value of the off-take to be approximately €55 million (approximately USD $65.7 million) during the initial twelve-year term. This follows the award of a grant for the sale of up to 234,466.589 MWh per year, for a maximum total value equal to €151,934,350 (approximately USD $178.8 million) paid over twelve years from the date the Netherlands Facility begins production. We anticipate that the financial close for this project will take place sometime in May 2018 and the first phase of construction will begin at this site shortly thereafter. The Company is also looking forward to completing another acquisition in Italy. As previously announced, in June, 2017, the Company entered into a Share Purchase Agreement Energyeco S.r.l, relating to the purchase of 100% of the share capital of ENERGYECO S.r.l, which owns and operates a 1 MW plant for the production of electricity from vegetable oil, located in Cantù, Italy.”
“Looking ahead we remain extremely encouraged by the outlook for the business and believe we have built a business model that can deliver strong revenue streams and cash flows over the long-term. The waste-to-energy industry is projected to grow to $53 billion by 2026 from about $29 billion in 2016. Europe represents nearly half of the total market revenues and it is projected that global waste volumes will double by 2025 to over 6 million tons of waste per day. By 2100, global waste generation may hit 11 million tons per day as stated in a 2016 report by the World Energy Council. Blue Sphere strongly believes in the future of this industry and is currently developing sixteen projects around the world that we expect will generate a combined output of approximately 60MW of power.”
Total Combined Revenues for the twelve-month period ending December 31, 2017 increased to $17.4 million, as compared to $12.8 million for the twelve-month period ending December 31, 2016. The increase is attributable to the consolidation of the four operating facilities in Italy (SPVs) by our wholly-owned subsidiary, Bluesphere Pavia as well as the increase in revenue from these four facilities, the revenues generated by our Futuris Papia S.p.A. facility in Udine, Italy which was acquired in September of 2017, the development fee in the amount of $563 thousand which was received during the third quarter of 2017 due to the commercial completion of the biogas facility Blue Sphere developed in Johnston, Rhode Island and the Equity Income from Nonconsolidated Affiliates.
The net increase in revenues from the Bluesphere Pavia subsidiary was attributable to the increase in revenues from Agricerere, S.r.l. and Agrisorse, S.r.l. facilities, whereas, the Agrielektra. S.r.l. and Gefa, S.r.l. facilities saw a decrease in revenues. The decrease in revenue at these two facilities is attributable to the decrease in the electricity production as a result of the termination of the O&M agreement with its former plant operator. The Company has since replaced its operator for these facilities and the facilities are now operating a full capacity.
The Total Combined Revenues financial information for the twelve months ended December 31, 2017 and 2016 presents the condensed consolidated and combined statements of operations of the Company in an easy to understand format.
US GAAP accounting standards have required Blue Sphere to report the income of its wholly owned subsidiaries on a non-consolidated basis. US GAAP also required Blue Sphere report the income from Nonconsolidated Affiliates as Equity Earnings. We stopped applying the equity method because on July 18, 2017 we terminated the Framework EBITDA Guarantee Agreement between the SPVs and the former operator of these facilities and we regained a controlling influence over operating policies of the operating policies of the facilities.
Blue Sphere believes that these accounting standards do not provide the most representative description of the total revenues generated by the company and or its subsidiaries during the past twelve months. This is why you see a difference in the revenues of the company reported in the financial statements of the 10-K. If you review the MD&A section of the 10-K you will see a more defined presentation of the total combined revenues of the Company.
General and administrative expenses for the twelve-month period ended December 31, 2017 were $6.2 million as compared to $7.5 million for the twelve-month period ended December 31, 2016. The decrease in general and administrative expenses is mainly attributable to decrease in compensation expenses.
Equity Earnings in Nonconsolidated Affiliates for the twelve-month period ended December 31, 2017 was $8.1 million as compared to $6.0 million for the twelve-month period ended December 31, 2016. The increase is attributable to the commencement of the commercial operation of our North Carolina project, which commenced its commercial operations and began providing output to Duke Energy pursuant to a power purchase agreement on November 18, 2016, and commencement of the commercial operation of our Rhode Island project, which commenced its commercial operations and began providing output to National Grid Energy pursuant to a power purchase agreement on June 23, 2017. Until commencement of the commercial operations, we had not recorded our share of net earnings generated by the North Carolina and Rhode Island projects as equity earnings, but rather, had recorded them as deferred revenue in our current liabilities.
We incurred a net loss of $ 3.9 million for the year ended December 31, 2017, as compared to a net loss of $11.8 million for the year ended December 31, 2016. The increase in net loss is mainly attributed to an extinguishment of short-term loan of $2.1 million and extinguishment of a debenture in an amount of $1.3 million. The increase was mitigated by an increase in gross profit of $1.0 million.
About Blue Sphere Corporation
Blue Sphere Corporation is a diversified independent power producer that develops, owns, and operates clean-tech, biogas cogeneration and waste-to-energy facilities in the globally. The Company primarily converts organic waste into electricity, but also has the ability to generate heat, natural gas and organic byproducts through various technologies.
Blue Sphere facilities eliminate waste that would normally be disposed in landfills, reduce greenhouse gas emissions and protect water quality, helping to solve important global environmental issues. Blue Sphere is headquartered in Charlotte, North Carolina and has operations in the United States, Israel and Europe. For additional information about Blue Sphere Corporation, please visit the Company’s website: www.bluespherecorporate.com.
This press release contains certain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995), which are subject to risks and uncertainties and may change at any time. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors including, without limitation, (i) uncertainties regarding general economic and market conditions, (ii) uncertainties regarding changes in the clean tech sector, (iii) uncertainties regarding implementation of the Company’s business strategy, and (iv) other risk factors as outlined in the Company’s periodic reports, as filed with the U.S. Securities and Exchange Commission. As such, there is no assurance that the initiatives described in this press release will be successfully implemented or meet expectations. Forward-looking statements in this document speak only as of the date on which such statements were made, and we undertake no obligation to update any such statements that may become untrue because of subsequent events.
Crescendo Communications, LLC
SOURCE: Blue Sphere Corporation