Emeren Group Ltd

Hello, ladies and gentlemen. Thank you for standing by for Emory Group Limited fourth quarter 2024 earnings conference call. Please note that we are recording today's conference call. To ask a question during a session, you need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I will turn a call over to 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 the fourth quarter and full year 2024 results. We released our shareholder letter after the market closed today, and it's available on our website at ir.emrin.com. We also provided a supplemental presentation that's posted on our IR website that we will reference during our prepared remarks. On the call with me today are Mr. Yumin Liu, Chief Executive Officer, Mr. Ke Chen, Chief Financial Officer, and Mr. Enrico Bocci, Executive Vice President of Europe. Yumin and Ke will provide an overview of our business performance and financial results, followed by a Q&A session, during which Enrico will also be available to answer questions. 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 Emory 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 Emory Group's filings of the SEC. Please do not place undue reliance on these forward-looking statements, which reflect Emory Group's opinions only as the date of this call. Emory Group is not obliged to update you on any revisions to these forward-looking statements. In addition, please note that all financial numbers discussed on 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 Mr. Yumin Liu. Yumin, go ahead.

Thank you, Gary, and thank you everyone for joining today. Let me start with a brief overview of our Q4 and full year results before discussing our business outlook and key financial catalysts. After that, Ke will take you through a detailed breakdown of our financial performance and 2025 guidance. 2024 was a year of resonance and disciplined execution. and strategic growth for Ameren. Despite currency halvings and project sale delays, we successfully monetized renewable energy assets, expanded our energy storage footprint, and generated positive free cash flow in Q4. Our IPP and DSA segments provided high margins and stable cash flows, while strategic project monetization strengthen our financial position. For the full year, we generated $92.1 million in revenue and $24.1 million in gross profit with a 26% gross margin. We reported an operating loss of $0.5 million, while non-cash and unrealized foreign exchange loss resulted in a $12.5 million net loss attributed to Emerald Group. However, operating cash flow improved significantly towards breakeven, reaching negative 4.2 million compared to negative 23.4 million a year ago. And adjusted EBITDA rose to 6.9 million, demonstrating disciplined financial execution. Turning to Q4 specifically, we maintained strong financial discipline and cash flow generation, delivering $34.6 million in revenue and $4.8 million in gross profit, with a solid 14% gross margin. While foreign exchange losses due to U.S. dollar strength impacted net income, our operating loss improved by 35% year-over-year in Q4, reflecting strong cost control. We also generated over $5 million in free cash flow in Q4, reinforcing our strong liquidity position. Our capital line model and early stage monetization strategy continue to support financial strengths. We ended the year with $50 million in cash, up 40% sequentially, positioning us well for growth in 2025. With a strong pipeline, expanding energy storage initiatives, and discipline execution, we are positioned to scale profitably and drive long-term shareholder value. Turning to our key milestones in Q4, we successfully closed several strategic transactions, further solidifying our leadership in renewable energy monetization and energy storage across Europe, the US, and China. In Europe, We successfully completed the COD sale of our 17 megawatt solar product portfolio in Poland with 50 megawatt under a PPA, reinforcing our strong foothold in the region. We also expanded our energy storage footprint in Italy, executing a 462 megawatt DSA for battery energy storage system with Appinja, further strengthening our leadership in the growing energy storage market. Additionally, we finalized the sale of 65 megawatt of solar projects in Germany to China through a mixed DSA slash SPA structure, underscoring the strengths of our development partnerships. In the United States, we made further progress in distributed generation by closing the COD sale of our 2.8 megawatt community solar project to Altus Power, demonstrating our ability to capture opportunities in the U.S. community solar market. Meanwhile, in China, we advanced our energy storage strategy with the successful commissioning of 18 megawatt-hour of fast projects, which are now fully integrated into Hualien Power International's virtual power plant platform. This integration enhances great stability and further strengthens our presence in China's evolving energy storage sector. These achievements highlight our ability to execute across multiple regions, efficiently monetize projects, and expand our renewable energy portfolio while reinforcing contracted cash flow generation. Now turning to our core business segments. Our high margin DSA model remains a key driver of stable revenue and early stage project monetization. In 2024, we recognized 19 million in DSA revenue, primarily from Italy and Germany. As of year end, we had DSA contracts with nine partners covering 40 projects totaling over 2.8 gigawatts. with approximately $84 million in contracted revenue expected to be realized over the next two to three years, as well as more than $100 million in uncontracted revenue currently under negotiation. Meanwhile, our IPP segment played a crucial role in supporting stable cash flow, contributing 31% of the total revenue and 64% of the total gross profit. In Q4, we optimized our portfolio across Europe and China while further advancing energy storage integration to enhance long-term profitability. Complementing these efforts, our solar development business continued to generate strong monetization opportunities. In 2024, we successfully monetized about 200 megawatts of solar PV projects across Germany, France, Spain, Holland, China, and the US, alongside 1.3 gigawatt of batch projects. These achievements reinforce the strengths of our capital light development model and our ability to efficiently recycle capital for future growth. Looking ahead, we remain very confident in our ability to execute our growth strategy and drive profitability in 2025. While project sales timing delays impacted Q4 revenue recognition, these projects remain on track to close in the first half of 2025, reinforcing near-term revenue visibility. Key drivers for our 2025 financial outlook include our strong contracted revenue base provide a solid foundation for future growth. We have 84 million contracted DSA revenue with an additional 100 million under negotiation, strengthening long-term cash flow visibility and revenue stability. Overall, with 75% of our DSA pipeline concentrated in Europe, we are positioned to capitalize on demand growth across key markets. Building on this momentum, our high-margin DSA and IPP businesses continue to generate strong gross margin and predictable cash flows, supporting sustainable and profitable expenses. Additionally, our robust monetization pipeline positions us well to capitalize on growing market demand. With approximately 4.3 gigawatts advanced storage pipeline and 2.4 gigawatts of solar PV projects, we have a clean pass clear paths for long-term growth in key regions. Further strengthening our outlook, the opening of China merchant power market in 2025 presents a significant opportunity. Our best assets are statistically positioned to capture new revenue streams through energy arbitrage, reinforcing our leadership in energy storage and grid services. With that, Let me turn the call over to our CFO, Ke Chen, to provide a more detailed breakdown of our financial performance and 2025 guidance.