According to a report published in GreenBuildingNews, energy-efficient technologies globally earned $36.3 billion in 2013. The report, citing BCC Research, noted that spending on energy-efficient technologies reached $41 billion in 2014.
BCC Research estimates that the market for energy-efficient technologies will grow at a CAGR of 8% between 2014 and 2019. The fastest growing region is expected to be Asia. BCC Research expects the region to see a CAGR of 9.8% and to reach $26.2 billion in energy-efficient technologies in five years.
The second-largest market for energy-efficient technologies is North America, which is expected to grow at a CAGR of 7.9%. Robert Eckard, Energy Analyst at BCC Research, noted that North American markets appear to be entering a moderate to strong growth phase for commercial building construction, which is helping to drive markets in that region.
The outlook for energy-efficient technologies or green-tech as it is known augurs well for one of Canada’s oldest companies in this space, Carmanah Technologies Corp. (TSX:CMH). The Victoria, British Columbia-based company is engaged in the business of developing and distributing renewable technologies, including solar-power light-emitting diode (LED) lighting, and solar powered systems and equipment.
Carmanah Technologies will be in focus in the coming week as it prepares to release its financial results for the third quarter of 2016. In the second quarter, the company’s signals segment unit posted revenue of $10 million U.S. The company’s illumination unit, which supplies and installs solar panels for street lighting, has installed more than 70,000 solar panels across 65 different countries.
In the second quarter, the unit generated revenue of $1.3 million. Carmanah’s power unit installs both on-grid and off-grid power solutions for customers. Up until the second quarter of 2016, the unit generated 35% of the total company revenues, however, Carmanah has recently announced plans to sell the unit.
Carmanah is looking to sell the power unit because of the weak margins it offers. At 20%, gross margins in the power unit were half of those seen in the company’s signals and illumination divisions. The company plans to use the proceeds from the sale of the power unit to further expand its high-margin core businesses. It mainly plans to focus on the signals segment division.
For the third quarter, though, the signals division could see a drop in revenue. Some of this weakness is expected to be offset by revenue from the illumination unit. As mentioned, with Q3 numbers coming out in less than a week, shares of CMH have already seen considerable weakness as they trade near their 52-week lows.
Could it be that the weaker upcoming revenues are already baked into the stock, or will the revenues surprise to the upside causing a bullish rally? Investors will find out soon enough.
