The stock price of CBD Energy Ltd (NASDAQ:CBDE) surged more than 9% to $3.09 per share after the company announced that its Australian energy efficiency subsidiary, Parmac obtained a $1.7 million installation and maintenance contracts in Melbourne.
Details of the contracts
According to CBD Energy Ltd. (NASDAQ:CBDE), Parmac will start the project on September. It is expected to finish the project on December this year. Under the agreement, Parmac will earn from ongoing operation and maintenance fees.
Linton Coombs, general manager of Parmac said the contracts provide a compelling example of how CBD Energy Ltd (NASDAQ:CBDE) and its subsidiaries can offer energy efficient solutions for building owners and managers.
On the other hand, Gerry McGowan, the executive chairman of CBD Energy Ltd (NASDAQ:CBDE) said Parmac’s contracts, ongoing service and maintenance fees represent recurring revenue streams associated with large-scale installations.
He said, “As CBDE builds scale in North America, Europe and Asia, we believe our earnings and associated cash-flows will increasingly reflect the company’s recurring revenue base.”
CBD Energy international diversification
McGowan added that the international diversification strategy of CBD Energy Ltd (NASDAQ:CBDE) should enhance and stabilize its earnings. According to him,
“As recently seen here in Australia, national energy policies are the subject of intense debate and can and do change over time. However, our presence in several countries should insulate CBD Energy from country-specific policy risks.”
CBD Energy acquires stake EEG
CBD Energy Ltd (NASDAQ:CBDE) recently entered an agreement to acquire 30% equity interest in Environmental Engineering Group Thailand (EEG). Under the agreement, CBD Energy would grant EEG a sub-license to use the Westinghouse Solar brand in Thailand.
The management of CBD Energy Ltd (NASDAQ:CBDE) believed “Thailand represents an incredible opportunity to capitalize on the rapidly developing market with growing power needs, and blends well with projects we have under development in North America, Europe, UK and Australia.”
CBD Energy Ltd (NASDAQ:CBDE) is a diversified renewable energy company established in 1989. It is one of the leaders in solar installations worldwide.