The 3m deal, our revenues and my understanding how EQT earns money ...18 Sep 2021 15:06
I think, some pi are here with wrong or different expectations how e.g. EQT will reach their predicted revenue and about the value of e.g. the billingham spv.
Re the 3m price for 54,54%:
Until now, the spv is a nearly empty hull with an idea, some permissions and a project. It is not worth the 170m some people talk about, it doesn't own the land and hasn't paid for the land, yet. And even if: the there would be a corresponding loan on the other side, so the land would not add value. Getting 3m in such an early stage should be ok. Specially if the agreement ensures that we are the partner of choice as follows.
Our gain is not to build and own the plant. Our plan is to sell our spvs in early stages to someone else who builds and owns the plant, as long as we provide
- IP
- Technology
- O&M
That is where we make our money. We live from installing and operating such plants, not from owning them. Best things to happen are projects like the Shannon plant, where we don't even need to initiate an own spv.
Holding a small part of a plant is ok to keep some insight, but not more. If aquisition is cheap, like e.g. for the refurbished plants, it is even ok to hold a bigger part. But I don't want millions of our cash locked in the ownership of power plants, then providing a profit of let's say 10% per year. One of my bigger fears e.g. is to have additional millions locked in North Fork to get it online, even if it means we own another 10% or 20%.
I want exponential growth with some better leverage and not an interest of 10% p.a.
People are always talking about revenue and targets. Where do the mourners think the revenues come from? From sales of power, gate fees, biochar? Not really. They come mainly from the points mentioned above: IP, Tech Sales, SPV sales, O&M. Besides the fact that we sell parts of our spvs, there is a simple fact, hardly anybody understands: Our spvs are our main customers.
By the way: For this year, we already have known revenues of more than five million Euros (€1,750,000 from the italian plant and £3,000,000 from the Kibo agreement).
That's the way we generate revenue.
And I am confident that we'll see more such revenue before the end of the year, even enough to reach the predictions.
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