Q4 2023 Emeren Group Ltd Earnings Call
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Hello, Ladies and gentlemen, thank you for standing by for Amarin Group Limited's fourth quarter and full year 2023 earnings Conference call. Please note that we are recording today's conference call I will now turn the call over to Gary Dvorak.
Gary Dvorak: Managing director of the Blue shirt group. Please go ahead Mr. Dvorak.
Thank you operator, and Hello, everyone. Thank you for joining us today to discuss our fourth quarter and full year 2023 results. We released our shareholder letter after the market closed today and is available on our website at IR Dot Ameren Dot Com. We also provided a supplemental presentation that's posted on our IR.
Our website that we will reference during our prepared remarks on the call with me today are Mr. Human Liu Chief Executive Officer, Mr. Chen Chief Financial Officer.
Before we continue please turn to slide two let me remind you that remarks made during this call may include predictions estimates or other information that might be considered forward. Looking these forward looking statements represent Emerson group's current judgment for the future.
However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in Ameren group's filings with the SEC. Please do not place undue reliance on these forward looking statements, which reflect Ameren group opinions only as of the date of this call Amarin group is not obliged.
To update you on any revisions to these forward looking statements. In addition, please note that all financial numbers discussed in this call are unaudited also please note that unless otherwise stated all figures mentioned during the conference call are in U S dollars with that let me now turn the call over to humans.
You May go ahead.
Humans: Thank you Gary thank.
Thank you everyone for joining our call today.
I'll begin by providing an overview of our performance in Q4 and the full year of 2023.
Hello by the main achievements.
I'll then talk about our project pipeline.
Cobalt: After that cobalt deliver a comprehensive breakdown of our financial results for Q4, and our guidance for 2024.
We closed 2023 was a jewel for southern media revenue.
22, 2% gross margin and a $9 3 million net loss.
These results were below our full year guidance, primarily due to the delays in closing the sales of six projects in the U S and Europe.
Which are now expected to be pushed off to 2024.
Cobalt: Our Q4 results were further impacted by several onetime items, including a $4 1 million adjustment to the earn out of revenue and our 75 megawatt of projects important.
As well as a 5 million of write offs project cancellations and bad debt reserves.
Our projects continue to face delays due to a mix of rising interest rates affecting financing terms utility skill project delays.
Cobalt: From transmission capacity challenges and regulatory certainty in the U S at Europe.
This challenges underscore the need for that adaptability and not project financing strategies.
Portland, So early engagement with transmission and utility stakeholders and close monitoring of record drilling and development in the U S in Europe.
Despite these challenges we are focused on executing our core solar project development strategy, diversifying our global footprint and otherwise some our position as a leading global renewable energy company.
Cobalt: Turning to what we have achieved in Q4.
First.
We announced the sale of $53 six megawatt solar project portfolio in Hungary true.
True crime Austin Douglas renewables.
The portfolio includes six projects at various stages.
With four already operational as of today.
This will ensure contributes significantly to Hungary's photo will take capacity.
Rice with Amyris mission to your house solar energy infrastructure.
Oh, so we acquire and 86 megawatt solar portfolio in Spain.
Cobalt: Comprised of 13 utility scale projects.
These projects are expected to significantly contribute to our energy production capacity.
Cobalt: Hiring thousands of how households.
Housing our storage capabilities.
Further we achieved a significant milestone by setting a 703 megawatt battery energy storage system, our PSS project portfolio in Italy to matrix renewables.
Under the Debarment services agreement or TSA.
Which combined with the previous sale of the 260 might go out in Q2 amounted to a total of 963 megawatt the best projects.
With the majority of the portfolio, having an eight hour duration under the PSC structure, which matrix.
Humans marked a substantial otherwise towards a great portfolio target of one five gigawatt in the PSA partnership with matrix.
Finally, we expanded our energy star's portfolio in China.
Acquiring a pinpoint a megawatt hour energy storage portfolio.
This acquisition comprised of six energy storage power stations in Georgia, One province.
Else's amarin its position in the China energy storage market.
We plan to generate returns through energy arbitrage and participation in virtual power plants scenarios.
Leveraging the facilities connected to.
<unk>, one Repowering internationals V P P platform.
This strategic move aligns with our global storage expansion and the girl in the P. P market in China.
We acknowledge the results over the past two years have been unsatisfactory antibody fully accept responsibility for not meeting your investors expectations.
To address this.
We have been working and direct them in service agreement.
Structured to recognize revenue I receive payments from early stage projects in Italy in the past year and half.
This TSA model is not being implemented in more markets, including several countries in Europe and the U S.
This strategic move allows us to capitalize more effectively.
Cobalt: Our early stage project portfolio.
Compared to the traditional model of the revenue recognition and payment collection at the notice to proceed or NTP stage.
DSA enables us to better manage our returns our risk throughout the development process optimizing the timing of the project completions and bolster cash flow.
We also implemented strategic cost control initiatives throughout all regions aimed at enhancing efficiency and optimizing resource allocation.
These measures include workforce reductions didn't management policies and halting certain greenfield developments to concentrate our efforts and resources on the western existing product portfolios.
This shift aims to reduce overhead associated with new Greenfield exploration and allocate personnel more effectively to projects with higher likelihood of success in.
The improved profitability and shorter development cycles.
In addition in.
February 2024, we announced that our board of directors approved an accelerated stock repurchase ASR program of up to 10 minutes. This accelerated stock repurchase program underscores board's commitment to our shareholders and confidence in the company its future growth.
With our expertise in solar project development strong industry network.
Cobalt: Solid balance sheet, we are making.
Significant progress towards becoming an industry, leading global solar starts developer.
Our strategic focus remains on maintaining a lean cost structure and achieving sustainable profitability.
It is in our extensive otherwise stage project pipeline.
Looking forward to 2024 and beyond.
We remain well positioned in the world's fastest growing solar markets that are benefiting from increasing demand for clean energy a supportive government policies in technology trends.
The solar industry is experiencing strong tailwind for you.
And by the global commitment to renewable energy and sustainable sustainability.
Governments and corporations worldwide are setting ambitious targets for reducing carbon Mrs, which in turn fuels significant demand for solar energy solutions.
One of the most exciting developments in the renewable energy sector is a booming demand for solar power to support artificial intelligence AI all prices.
As AI technologies become increasingly integrated into our daily lives and business operations, the substantial energy needed to power. This at one systems is evident.
Solar energy and battery storage with Derek scalability, and decreasing cost profile are becoming a reliable source of power for this high tech applications.
Further driving demand in the sector.
Moreover, we are witnessing a surge in overall electricity it starts demand.
The electrification of transportation.
The operation of electric vehicles, and the increasing need for energy storage solutions are amplifying this demand.
We have strong demand for solar energy storage projects globally, we enter 2024 with around 3.1 gigawatt of high quality or the one stage project pipeline.
We anticipate monetizing approximately 400 to 450 megawatts in 'twenty 'twenty four.
Furthermore, we accumulated a proxy mainly five gigawatt independent storage project pipeline with four to eight hour duration in the planet, which equals to <unk> 22, 40 gigawatt hours at the end of 2023.
We expect to begin accelerating monetization this portfolio in 2024.
We expect 2020 for full year revenue to be in the range of 150 to 160 minutes.
We expect gross margin to be approximately 30% and net income to be at least 26 million.
Approximately eight points $5 per a b S.
We anticipate our 'twenty 'twenty four I P. P revenue to be between $24 million to $26 million and gross margin to be approximately 50%.
We expect gross profit contributed by TSA globally to be at least $6 million.
For the first half of 'twenty 'twenty four we expect revenue to be in the range of 15 million to <unk> 5 million.
Expect gross margin to be approximately 30%.
Finally, we expect our operating cash flow to be positive throughout the full year of 2024, our cash balance to exceed 100 million at the end of 2024.
Now, let me turn the call over to our CFO, Carl Chen to discuss our financial performance and guidance it's cool.
Thank you Amy.
And then everyone again for joining us on the call today.
Our revenue of 44, meaning increased 74% year over year from Q4 2022.
215% sequentially from Q3 to one of the industry.
Carl Chen: Revenue was lower than our guidance.
Primarily due to delays in closing the sale so six projects in the U S and Europe.
Which are now expected to close in the first half of 2024.
Gross profit was three 3 million compared to $5 7 million in Q3 main street.
6 million in Q4 2022.
Gross margin was seven 6% compared to 48% in Q3 tons of history, and a 20 straight points, 3% in Q4 2022.
The gross margin was lower than expected primarily attributed to higher mix of EPC project revenue as well as it appears to be mentioned project delays.
Operating expenses were $9 5 million learn.
$9 6 million in Q3 <unk> Street.
And hired a $7 2 million in Q4 2022.
Our Q4 operating expenses were impacted by five meaning of write offs of projects cancellations and bad debt reserves.
Partially offset by savings from our cost reduction initiatives.
Net loss attributed to Ameren.
Ltd's common shareholder was $8 1 million.
Compared to net loss of $9 4 million in Q3 to illustrate and let loss of $1 7 million.
In Q4 2022.
Carl Chen: Diluted net loss attributed to Ameren copay OTT, how much shareholder per I guess was 15.
Compared to diluted net loss of <unk> 17 in Q3, 800 straight and diluted net loss of <unk>.
In Q4 2022.
Turning to our cash flow cash provided by operating activity was $2 9 million.
Cash provided by investing activities was seven meeting.
And the cash used in financing activity was $7 9 million.
Cash and cash equivalents at the end of Q4, 'twenty to illustrate where 70.
Our 2 million compared to $59 2 million in Q3 2023.
So we still have a very strong balance sheet.
Net asset value and a V is it possibly $5 91 per ads.
Our debt to asset ratio at the end of Q4 tons Ministry was nine 4% compared to nine 9% in Q3 2000 and industry.
Carl Chen: In terms of our share buyback program.
We purchased approximately $3 four meeting.
Yes.
During the quarter and plan to continue to execute on the share buyback program, which has a possibility to $7 6 million remaining in the authorization.
In addition in February of 'twenty 'twenty four.
Carl Chen: It allows that our board of directors approved.
Accelerate the stock repurchase.
Istar program of up to $10 million.
Which we have repurchased.
Approximately $2 8 million as of <unk>.
Carl Chen: 27 2024.
This underscore our commitment to shareholder value.
And our optimism about our future.
Thanks.
Moving to our guidance.
We expect 284 full year revenue to be in the range of $150 million to $1 6 million.
We expect gross margin to be approximately 30%.
And the net income to be at least $26 million or.
Approximately 50 cents per ads.
We anticipate our 2020 for IPP revenue to be between 24 to 26 million and the gross margin to be approximately 50%.
We also expect gross corporate culture by DSA globally to be at least $6 million.
Carl Chen: For the first half 'twenty four we expect revenue to be in the range of 50 to 55 million.
We expect gross margin to be approximately 30%.
Finally, we expect our operating cash flow to be positive throughout the full year of 2024.
And the cash balance to be.
To exceed 100 meeting at the end of 'twenty 'twenty four.
Yeah.
With that let's open up the call for any questions.
Operator, Please go ahead.
Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
One moment for questions.
Our first question comes from Philip Shen with Roth Gum Cam you May proceed.
Philip Shen: Hey, guys. Thanks for taking my question.
Hey wanted to talk about.
Good.
2020 for guidance.
You guys missed last year.
And you're making adjustments to hit your goals for this year one of them is the development service agreement.
Can you give us a little more color on how that works I know, you're trying to collect revenue and payments earlier, but.
Right.
Philip Shen: Leverage do you have to to allow that to happen.
Describe the structure.
Versus what you guys had been doing before so just give us a little color on what youre doing differently. Thanks.
Okay. Thank you Phil so very good question.
Philip Shen: TSA has been a form of structure in Italy market. When we acquired the company call Ameren by up to a year and a half ago.
And we had in the structure of the Italian operation above seven to eight different psa's.
And those DSA partnerships are allowing us to provide early stage project portfolios to the buyers based on the milestones.
And the changes throughout the company is not only we execute continuously in Italy, those Steve on the milestones based out.
Development milestone based assays for example announced the almost a gigawatt of the BSA partnership its matrix.
Philip Shen: But also we are implementing same TSA strategy through.
The old reasons, including other countries in Europe and U S.
So our pricing our execution of the USA has three big benefits to the company number one the PSA will allow us to recognize revenue for early stage projects based on milestones of so called in our company company structure, we have tier zero to tier four.
Please note that the one spend of the peers label received a milestone payments from the TSA partners those are non refundable pay.
Payments and we can recognize the revenue and profit immediately based on the achievement of the milestones and the second is novel balance our cash reserve as we will have received a cash based on the milestones. So the the cash situation will be significantly improved in.
The company. The third we can also very well balance our risk profile as we are now sharing the development risk with the buyer art DSA ponder.
So the Oh do we are creating a very good situation. Many parties are interested in partnering with us all the devices under the GSA structure, but we do know that the.
To get to the BMS situation, we are offering a very favorable price and the Psa structure.
Compared to the final NTP sale.
Okay. So.
Either way and one more point is we just guided that we will have minimum of $6 million of gross profit from the TSA is that $6 million is under the current DSA structure, we have quite several DSA partnerships under negotiation.
So that's why we say minimum $6 million will be foreseen in that from the TSA is in 'twenty 'twenty four.
Alright, So you mean for you to get these benefits.
Philip Shen: That means your customer needs to get something as well. So I think I just heard you say that.
Alright, you charge them at.
Philip Shen: Discount relative to what they would get.
And so they don't have to pay as much bye.
Paying you guys earlier can you talk about what that discount.
It's 5% 15%.
Or greater.
That's a very very good question that from market to market. This discount will be different but in general the buyer or a PSA partner is benefiting from the DSA in two things one is they are locking into the projects through.
The DSA.
Are they guaranteed they will have a portfolio that can work out at NTP Slash art RTP states.
Second is they are also managing their risk profile, while we are leveraging our risk profile with them together, but they are also based on the milestone payments managing the risk profile there.
The third is talking about the discount in price instead of pain and the one time lump sum at the final NTP sale now they are paying in milestones.
So they will get a discount.
Pretty good discount as Ics, but more importantly, I would balance the two things together one is that discount price, but also another one is a lock into a practical follow you.
Especially in a set us market.
Not used it to find a quality projects in the market and now the gross companies, especially the companies who are so eager to go into a market.
We like those TSA structure so much.
Okay. So do you expect to make other DSA announcements in the coming quarters.
Yes, absolutely.
In fact last month's just announced another.
Actually you already this month, then you, but you just announced another partnership I don't think independent storage portfolio with glimmer, one of the largest private investor at Union, Italy.
And Marshall Com, what's the magnitude sorry, whats the magnitude of the typical DSA partnership that you can imagine I mean are we talking about 100 megawatts are we talking about 500 megawatts or gigawatt level. Thanks.
It's always a way.
Have a big target for example, with matrix when we started USA they've been over a year ago, we were.
Setting a target of one five gigawatt.
Of your independent storage portfolio and now we are reaching about one gigawatt.
So the the team is confident that we will put more than 500 megawatts into the matrix DSA structure in the next several months.
And same thing with Glen mode. The target is a lot bigger than the ones. We work out and the team is working actively to close more deals under the GSA structure with <unk> in the next few weeks.
Alright, so this should smooth out your revenue and cash generation over time. So that's good shifting gears to a new topic.
First in the U S recently.
Approved in order 2023.
Which.
Could have.
Meaningful positive impact to the U S pipeline.
Not just for you, but for your U S pipelines in general.
Weeding out a lot of.
Projects that do not yet have site control.
In addition to penalizing.
Developed actually penalizing in the <unk>.
Don't complete studies on time.
Unfortunately, our tears to group studies together.
Was wondering if you can comment on how you expect FERC order 2023.
Impact your U S pipeline could you lose some of your pipeline because you don't have site control or do you have site control on all your.
Pipeline assets and do.
Do you expect this to actually speed things up for you. Thanks.
This is a very good point that the pharma company our company, we embrace RV loved this FERC rule.
The <unk> for two reasons, one is not many companies.
<unk> developers.
Our healthy balance sheet.
As we mentioned, we do have a strong balance sheet.
Implementing our debarment strategy the.
The second is.
Our company does have a very tight control on the tier system, we are working well.
But use a very tight controlled tier system too bad you the progress of our projects.
And we implemented the tier systems throughout the whole reasons in the U S and Europe.
And.
Wade do not count any deal, but he's up a site control even under the tier zero.
And Peter Zero is a typical pre already states deal not really in our three gigawatts all the west states yet.
Okay. So what do you feel so good one they always see this new policy coming up at.
That will eliminate bands of unqualified.
Competitors.
Which who can't use that irrational.
Sophie to compete in the market.
I always see it as a good things is coming up.
None: That's great Okay.
Last one.
Just want to add.
When we listen to our pipeline in the U S advanced pipeline almost one five gigawatts.
Our tier one bulk so we are very good pipeline here.
Very good to hear last question and then I'll pass it on AI and data centers are driving a lot of demand you highlighted that in your prepared remarks.
Can you share what percentage of your U S pipeline is going to serve.
In the form of PPA you have relationship with.
AI or data center end market or customer thanks.
We put a strategy internally evaluating the data centers and <unk>.
Data Center Spa.
And looking at the possibilities to building up our selecting sites for solar is specialty storage assets around the data center need.
Okay.
I do not have a.
Our story to present at this time, but we are actively working on those very possible stories to support the AI operation in the future, especially we talk about the hybrid deals, which can provide the quality and reliable power supply to those AI all prices and that's the.
None: That can become.
And become a big driver for our growth monthly slack new deals into our development pipeline.
Okay. Thank you, both and I'll pass it on.
Phil Thank you.
Thank you.
One moment for questions.
None: Our next question comes from Donovan Schafer with Northland Capital markets. You May proceed.
Hey, guys. Thanks for taking the questions. So first I wanted to ask for.
For the revenue range that you gave in the first half of 2024.
If we just I wanted to talk just strictly about kind of non IPP revenue.
Would you kind of estimate IPP dry van maybe back that out or some things. So when we talk about.
The first half of 2020 for revenue and again, the non <unk> part of that how much of that is expected to come from the delayed projects that were supposed to happen be monetized in the second half of this year.
Okay. Let me answer first and then pass to occur for details number one is as I mentioned, we have six projects delays for the closing from 'twenty three 'twenty four and most of them will be pushed into first half or maybe I'm looking at one deal may be pushed to the second half.
None: Okay, but I will say the revenues in the first half.
Other than the IPP and the TSA those are considered DSA in IPP, a consistent revenue basis instead of.
Pending all certain one closing of the sale, but the other I will say at least three or four closings expected, mostly it will be in Q2.
This year.
<unk> into this revenue.
Yes, Oliver about six to 8 million.
None: Prompt delay or Paul.
Q4, 'twenty to 'twenty three.
Okay, Alright thats helpful.
And then.
Another question is are you guys still planning on filing.
10-K.
None: Yes for.
For 2023, Okay.
What's the timing on that.
Is it a deadline at the end of this month or given your small cap and you're converting them from being a foreign filer to 10-K, you have until either this month or is it till the end of April.
None: Youre right now is end of March.
Now end of April.
Which one is at the end of April or the end of March the deadline.
None: End of April is most likely as the now we are the first time, becoming the local fighter. So we need to work with the Auditor and also work on our old 10 countries. We covered in the project development and operation. So the most likely we will finish the filing of the 10-K and 10-Q in in April.
Okay.
That's helpful.
And then I wanted to ask about the $4 1 million dollar revenue adjustment in the earn out adjustment on the 75 megawatt projects.
None: Yeah.
I believe those projects are usually lower than.
Then like the rule of thumb of like $1 megawatt, it's probably more like 60 or maybe even more.
60, 70, 80 cents or what but.
If we assume a dollar a y.
Then yeah, then a $4 1 million dollar amount that becomes five percentage points.
A reduction in margin, but straight up five percentage points.
At 60, so that it becomes like a nine percentage point reduction in gross margins. So I'm curious if you guys can talk maybe about what it is that that caused that change.
Im thinking about it the right way why that revenue just why you didnt get that revenue.
And if those are projects you still would have taken on.
None: Or.
This makes them.
The economics, where you would not necessarily wanted to do these projects otherwise.
<unk>.
Construction of this 75 seven megawatt projects are in the normal normal.
Normal normal schedule.
And in fact about one third over by serve them has.
Already rich COPD, but.
This $4 $1 million write off is based on the earn out structure, which is which was designed based on the last especially last years suddenly price surge in the market.
And they were all way we are benefiting from the price difference from the <unk>.
Traditional PPA market compared to the <unk> priced.
More to market and we design the structure, we can share those additional revenue with the buyer.
But the one thing that did not happen is that the the surge.
Benefit either much some players, but our construction.
None: Not get too much similar comp.
Completion to enjoy such a to b.
Be recognized or not.
That is why the construction.
The finished projects will not enjoy that much of the earn out we booked and now we have to write it off.
You see I don't know if you understand my my explanation I think I, just think I understand yes, okay alright. Thank you guys.
Although it sounded like the rest of my questions offline.
Thank you.
Thank you.
One moment for questions.
Our next question comes from Amit Dayal with H C. Wainwright you May proceed.
Amit Dayal: Thank you good afternoon, everyone.
Okay. So human.
With respect to some of the regulatory uncertainties you highlighted in your press release you may.
Have faced in growing brands in the U S and Europe.
Do you have any examples of you know what some of these challenges were in.
With respect to your outlook in 2024.
Issues resolved.
How are you dealing with some of these terms as that may have been in place in <unk> III from a project execution perspective.
None: Yes, the <unk> resolved some issue are still pending I can't give you a couple of very typical examples one is as you can see our press release, we closed the deal 2009 megawatts in Spain setting.
Photo saw flat to last year.
And we expect to receive the approval by the end of last year, but do not promote in dotcom and weight.
Just on the carbon policy at that time, we expect the deal will be closed in Q1 this year, but unfortunately, the government just in Q1 announced a new policy with Steve the older administrative office of 14 months cycle to make approvals.
Okay. So now we expect the deal will be closed anytime from now till the end of the year, which is the end of the 14 months. That's why I mentioned earlier that one of the six deals.
It's supposed to close in 2023 will be most likely pushed into second half of this year.
I mean this deal that is.
29 megawatts closing in Spain.
The second one is that in Hungary.
After experiencing the long delays of the first projects portfolio 53 megawatts as we announced earlier.
Under a 52 megawatts in the sales process and afterward, the governmental Hungary issue a right of first refusal language by the local national asset management group.
It's hard for us to secure any foreign buyers to buy this portfolio.
So our solution is our local team is working with several local investors, which when they do this one we don't need to have government approvals, although we have to go through the national equity.
Asset management, our assay investment corporation for their lawful.
None: Right, Alright, first refusal situation, but the situation will be a lot straightforward.
So.
Although the process or the.
The buyers pool than limited, but our quality projects are really good in the market. So people are still fighting to get those deals as even in the local market from the local buyers.
So those are the two typical examples and similar things happening in other other places that the Italy.
The same thing.
None: Biosimilar I think the garmin.
G tube approvals delays.
But the.
In general I see that the older delays happen last year Lee.
None: The experience that we learned from it.
Now try to manage that in a more.
More timely to manage all of those processes.
So that is why we feel so confident to present the numbers we present today for the 2020 for guidance.
Got it thank you.
None: Last question from me.
With the balance sheet, we have right now you're at 113 million debt and.
70 million in cash.
What level of revenues on an annual basis with this type of balance sheet.
None: Can you.
Yes.
What level of revenues.
None: We are generating with this balance sheet.
If we execute.
Exceptionally well I know your guidance is for 150 to $1 60.
But give.
None: In a scenario, where everything goes well for you.
How much revenues can the company potentially generate.
Our balance sheet, yes.
None: Yes, Amit first of all let's look at our pipeline again, we have those three were strictly what advanced solar pipeline five gigawatt.
The storage pipeline and are we talking about monetize.
Every year 400 to 500 megawatts a year. So that's our target for 2024 that generated $150 million to $160 million.
None: Revenue going forward, our pipeline actually our focus mentioned, we've got folks on monetize this pipeline.
None: And going forward. This pipeline is maturing and we should monetize them all year over year. So we do expect.
Again, 20% to 30 apparent grows from here with this type of balance sheet.
And I think a couple of points on here.
Amit is that.
When he mentioned DSA, we also mentioned IPP.
In the future. We will also make those two numbers a parent or a transparent to all our investors that the as we said earlier our IPP.
<unk> property margin will be $24 million to $26 million.
And we expect our TSA contribution to the company will become more and more beyond 6 billion beyond 10 million and after we implemented the TSA strategy globally. This number will become the similar backbone to the company either in IPP.
None: The goal for our company as we try to use our limited cause 70 or $100 million to build up enough IPP. So to secure operating cash flow positive and full year of profitability.
From the production revenue.
And then CSA, we'll be adding on top of it.
Our core business of the debarment and flip.
And we understood that the we are guiding into the very healthy cycle at this time starting from 2024.
So is this DSC.
Yeah.
Amarin.
Creation or is this something that is happening across the industry norm.
None: Yes.
Well.
In fact, the starting from four years ago, when Collette and I joined the company, we do not have much cash in our reserve.
We started archea assay model.
None: In the in the new market, especially in Europe.
And now we have about two dozen different PSA model PSA partners in Europe, and about two thirds of them are the ones, we'd locked into the projects.
None: So that means they stood at usa's acquiring are locked into the project portfolios and late or the buyer pays the milestones based on the milestones to the small developers.
And one third of those TSA ponders, let it go the other way that is the one is that medicine with the matrix with Golden Monkey and Oh those are the ones we are supplying projects to the buyer.
So it is a critical pre pretty typical exercise in the market, especially in Europe.
Okay understood.
So that's all I guess I'll take my questions offline. Thank you so much.
Thank you Amit.
Thank you I'm not showing any further questions in the queue I'd like to turn the conference back to Mr. Lu for any closing.
Closing remarks.
Lu: Okay. Thank you operator in conclusion, the future of solar energy is extremely promising.
We are positioned to fully capitalize on the accelerating adoption of the solar technology across the globe.
Lu: With our exceptional expertise in developing and operating solar projects extensive network of industrial partnerships, a strong financial position.
We are making great strides towards our global our goal to become a top global renewable energy company we are.
Australia about the bright future of the solar energy and are excited to be at the forefront of this incredible transformation towards a more sustainable future.
Thank you again for joining the call you may now disconnect.
Thank you. This concludes the conference. Thank you for your participation you may now disconnect.
But Josh again.
Okay.
[music] okay.
Okay.
[music].