Sheffield Green posts 67.1% drop in 1HFY2024 earnings of US$486,793 on lower revenue, listing expenses

The company has declared an interim dividend of 0.5 cents per share.

Renewable energy human resource provider, Sheffield Green, has announced earnings of US$486,793 ($655,946) for the 1HFY2024 ended Dec 31, 2023, marking a 67.1% drop y-o-y from the 1HFY2023’s US$1.49 million.

1HFY2024 earnings per share (EPS) stood at 0.29 cents on a basic and diluted basis, which is down from the previous earnings per share of 91 cents.

During the period, the offshore wind industry grappled with macro and sector-specific challenges, such as supply chain disruptions, inflationary cost pressures, and rising interest rates, which have exerted considerable pressure and led to project cancellations and delays.

Sheffield Green’s 1HFY2024 revenue fell by 0.2% y-o-y to US$9.18 million as it saw a US$0.17 million revenue decline in its human resource segment that was partially helped by a S$0.15 million revenue increase in its ancillary services segment.

Although gross profit increased to US$2.88 million for the period from the previous US$2.26 million, administrative expenses increased 243.8% to US$2.57 million in 1HFY2024, mainly due to a one-off listing expense of US$1.19 million, leading profit for the 1HFY2024 to come in at US$557,600, down 62.6% y-o-y.

Excluding the one-off listing expense and the effect of a US$0.19 million foreign exchange gain, Sheffield Green’s adjusted profit from continuing operations for the period would have remained at US$1.55 million in 1HFY2024 compared to US$1.48 million in 1HFY2023.

The company has recommended an interim dividend of 0.5 cents per share for the period.

CEO Bryan Kee says: “As we reflect on 1HFY2024, it’s clear that the offshore wind industry has been navigating stormy seas. From supply chain disruptions to challenging macroeconomic conditions, we’ve faced challenges that impacted our revenue growth in this financial period. Yet, it’s during these times that Sheffield Green’s resilience shone brightest. As we move forward, there’s a light at the end of the tunnel. The challenges that tested our resolve are easing, setting the stage for a period of stabilisation and growth. Looking ahead, we remain committed to furthering our mission of powering sustainable energy solutions.”

Despite short-term hiccups in certain offshore wind projects because of macro uncertainties, the company is certain there are still many ongoing global offshore wind project tenders within the industry.

For instance, Danish wind turbine manufacturer, Vestas, has recently invested in a new turbine assembly facility and blade factory in Szczecin, Poland, which is projected to generate more than 1700 jobs for the offshore wind industry by 2026.

Additionally, Polish power company, PGE Group, and Danish energy company, Ørsted, have signed another agreement for the supply of foundations for the Baltica 2 offshore wind farm project, which is expected to create thousands of jobs and new development opportunities for numerous branches of Poland’s industry for the coming decades.

Sheffield Green is particularly excited about its offshore wind prospects in Poland, following the establishment of its Poland office in November last year. Presently, the company looks set to onboard two new clients in this region by the end of February, aiming to ride on the positive momentum in Poland by mobilising an operational manager who will be fully based in the country to ensure that service quality to new and future clients remains at the highest standards.

On the industry’s Asian front, the government of Taiwan has set a target to generate 20% of the country's electricity using renewable energy, focusing on offshore wind power, launching the four-year wind power promotion plan and two-year solar PV promotion plan to achieve this goal.

Once the target is reached in 2025, the government plans to develop an additional 1 gigawatt (GW) of capacity annually until 2035 in the offshore wind fields of Taiwan, with investments of TWD$1 trillion ($42.9 billion) and an expected creation of 20,000 new jobs, split between wind and solar power projects, with an estimated 1,000 megawatt (MW) of capacity anticipated to be online and constructed by 2024.

In relation to this, Sheffield Green is establishing a training centre in Taiwan to cultivate a skilled workforce to meet client demands and industry standards. The training given to its first batch of instructors is on schedule, with completion of the full training programme expected by March. The training centre’s location has also been finalised in Chiayi County, with operations targeted to begin in June.

Regarding its other geographical expansion plans, the set-up of its office in Boston, USA, has been re-targeted to the second half of the calendar year, while Japan remains a challenging market due to cultural differences. Nonetheless, Sheffield Green remains steadfast in building its presence in Japan over the coming years.

As at 3.15 pm, shares in Sheffield Green are trading at 0.4 cents higher or 2.04% up at 20 Singapore cents on Feb 15.

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