Otovo looking forward to profitability after record Q3

Rooftop solar array. Source: Otovo.

Norway-based home solar installation marketplace Otovo ASA said on Thursday that its IFRS-reported margins experienced a substantial improvement in the third quarter and that the company is currently working toward profitability.

Otovo disclosed a 35% year-on-year rise in revenues, driven by an increase in installations thanks to shortened waiting times and higher ticket sizes, whilst the six markets Otovo set foot into during 2022 made even higher contributions. Nevertheless, the company posted a wider operating loss for the quarter because of larger losses in those same new markets.

The table below gives more information about Otovo’s financial performance in July-September 2023.

Figures in NOK million	Q3 2023	Q3 2022	YTD 2023	YTD 2022
Revenue	235.4	174.5	817.1	436.7
Gross profit	49.5	34.2	163.6	80.8
Operating profit (loss)	(93.5)	(82.6)	(290.4)	(224.5)
Profit (loss) after tax	(120.6)	(79)	(264.7)	(215.3)

The company said that IFRS reporting margins were up by 1.5 percentage points to 21%. It added it plans to reach profitability through a combination of sales volume growth, operational cost improvements, and the monetisation of its euro-denominated assets.

In order to finance the expected growth, Otovo is considering a capital hike with advice from Pareto Securities, DNB Markets, and Bryan, Garnier & Co. According to the company, its largest shareholders have expressed strong interest in supporting such a transaction.

During the quarter, Otovo installed 33% more systems, or 2,629 to be precise, compared to a year earlier. Unit sales, though, fell by 24% to 2,073.

“We remain very hopeful regarding the market forces at play, with hardware costs at unprecedented lows and installation expenses continuing to decline, improving the business case for consumers. This, combined with several European governments’ expected subsidy packages to encourage consumers’ return to solar, makes the outlook for further improvement during the winter much stronger than it has been in several quarters. Otovo is setting itself up to take the maximum advantage of this,” said Otovo’s founder and CEO, Andreas Thorsheim.

Earlier in October, the firm unveiled the completion of a first-of-a-kind transaction involving a portfolio of solar rooftop leasing subscriptions in Norway and Sweden.

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