Egm in the X-ray: Espe's renewable energies see revenues rise by 17 per cent

As far as growth by external lines is concerned, Espe intends to approach design and project management companies, as well as companies involved in permit development, in order to be able to propose new orders that already have a permit contract. Through partnerships, on the other hand, it will be possible to enter the US mini-wind market (distributing Espe-branded mini-wind turbines, but also producing components on site) and jointly develop a low-grade biomass-fuelled co-generator. For the time being, the co-generator of its own production can be fuelled with wood chips.

The year 2024 has started very well for Espe. Between March and May, the company obtained a total of five new orders, all relating to the construction of ground-mounted photovoltaic plants. Of these, two will be completed by 2024 and concern two plants in the provinces of Macerata and Sassari with a total capacity of 11 MWp (countervalue of approximately EUR 7.2 million) and one plant in the province of Bari with a capacity of 12 MWp (countervalue of EUR 6.1 million).

The other three orders will be completed by the first half of 2025. The most important one concerns the construction of 5 plants in Northern Italy with a total capacity of 36 MWp (countervalue of 17.8 million); then there is a 20.6 MWp plant in the province of Rome (countervalue of 11.3 million; this order is particularly significant as it is a long-standing customer that has been working with Espe for over 10 years) and a 9.2 MWp plant in the province of Matera (countervalue of 5 million). With this order, Espe's order portfolio until mid-2025 has reached a countervalue of 102 million and 98% of it refers to photovoltaic plants.

Consequently, the financial year 2024 also looks promising. Espe must now continue the optimisation of internal order management already started in 2023, also in order not to overburden the costs for services (external processing). As far as the financial means required for further development are concerned, in addition to those deriving from the IPO, a shareholder loan of EUR 1.8 million was obtained at the beginning of May from the reference shareholder Espe Tecnologie Srl, with a maximum term of five years at a fixed rate of 6%. This entails, in the case of full utilisation, annual interest of EUR 108,000 (not insignificant, given that the total net financial expenses in 2023 amounted to EUR 323,000). But if the company succeeds in further improving the cost structure, there should be no excessive impact on the net profit.

Currently, Espe's activities and technologies in the field of mini-wind turbines and biomass represent "opportunities", but far fewer than those related to photovoltaic plants. Moreover, in 2023, the expiry of incentive tariffs on small wind turbines and the delay in the application of technical regulations on biomasses have led to a collapse in revenues for Espe in the relevant business line (-76.3% to EUR 1.3 million).

But if it is true, as revealed by the recent Argos-Bcg study 'Climate Transition Barometer 2024', that Italian SMEs are the first in Europe to consider the reduction of CO2 emissions important (73% of the sample surveyed against percentages lower than 70% for France, Germany and Benelux), opportunities are not lacking. Also in the light of the recent approval of the Mimit-Def implementing decree that defines the operational areas of the National Transition 5.0 Plan with facilities for companies investing in activities aimed at reducing energy consumption to be completed by the end of 2025. In this case, rather than 'on the ground' photovoltaic plants, it would be a question of smaller roof-mounted plants than those of the large orders acquired by the beginning of 2024. However, Espe could also intercept part of these investments.

In this sense, Espe is facilitated by its specialisation in relatively small installations. The main national competitors are larger, and among them the only listed company is the Viterbo-based Comal, also at Euronext Growth Milan and with very brilliant 2023 results. But Comal's focus is on large-scale photovoltaic installations; smaller installations are mainly targeted for the sale of its proprietary 'Sun Hunter' product, a tracker that orients photovoltaic panels in the direction of the sun in order to maximise productivity.

The market seems to have grasped the development prospects of the Padua-based company. Placed at EUR 1 per share at the time of its IPO, it debuted with a jump of 50% and is now trading at values close to EUR 3. As is the case, however, with most of the companies on the Euronext Growth Milan, trading in the stock is limited by a very low free float of just under 18% of the share capital.