Despite trading on the ASX as a microcap, renewable energy company MPower (ASX: MPR) continues to execute a solid pipeline of construction contracts, today announcing the $4 million contract with Astronergy to build a 5MW solar farm in South Australia.
The contract will see MPower execute the engineering, procurement and construction of the solar farm but the majority of this should come with ease for MPower which last year commissioned two other 5MW solar farms in the State, at Mannum and Port Pirie.
““Working with a blue chip company like Astronergy on these solar farm projects is very exciting and is directly in line with our stated strategy of pursuing solar farm projects of this size with asset owners,” said MPower CEO, Nathan Wise.
“MPower has developed an enviable capability in the successful delivery of 5MW solar farms and continues to strengthen its order book in the growing renewable energy sector.”
With the changing nature of energy in Australia where there is a functional trend towards renewable sources of energy, MPower has recently undertaken a corporate realignment strategy to focus on projects like 5MW solar farms where they’re existing knowledge is key to increasing the yield of their contracts.
By doing so, the Company has transitioned away from legacy projects which have caused complications and will outsource the maintenance of them to focus on their key growth areas.
This commitment had been highlighted by the divestment of non-core assets which included the sale of their emergency lighting business in February for $5.6 million.
Whilst South Australia presents as the logical target market for MPower’s solar solution projects due to their weak energy infrastructure, the Company has also built sizable power systems in Queensland and New South Wales over the past few years.
For the half ending 31 December, 2019, MPower delivered a net loss of $1.8m but this was impacted by one-off legacy project termination costs. With their divestment of non-core assets, the company will take a hit to recurring revenue but is well positioned to capitalise on their renewable energy strategy going forward, especially for a company trading on the ASX with a market cap of just $1.5m.