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Thermal Energy inks biggest engineering deal in firm’s history after Q2 revenues soar

February 12, 2025

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Thermal Energy International has landed the largest engineering services contract in its history, just weeks after announcing it generated record revenues in its most recent quarter. The Ottawa company, which specializes in products that capture and recycle energy from boiler plants and steam operations, said this week it signed a $500,000 deal with one of the world’s largest pharmaceutical firms to provide “detailed engineering services” for a potential heat recovery project at one of the drug company's sites. “We are excited to have received such a significant engineering order from another world-leading pharmaceutical company,” Thermal Energy CEO William Crossland said in a statement. “The engineering to be done under this contract is much more extensive than the level we would provide under one of our project development agreements or PDAs. In fact, we signed a PDA with this company approximately a year ago and based on the outcome of the PDA the client has retained us to complete the full detailed engineering for the project.” Rather than being a fixed-price agreement for the total project, the contract allows for the customer to approve the project in stages. Crossland said that also makes it a “lower-risk option” for Thermal Energy because firm pricing for the total project won’t be provided until the detailed engineering services are completed. The new contract signing comes just a couple of weeks after Thermal Energy reported record revenues for the second quarter of its 2025 fiscal year. The company said revenues for the three-month period ending Nov. 30, 2024 were $8.7 million, a 22 per cent increase from the previous year. Thermal Energy said the jump was mainly due to an increase in sales of its turn-key heat recovery projects. Thermal Energy’s net income was $28,000 for the quarter, down from $486,000 a year earlier. The company said the drop was mainly due to a decrease in gross profit of more than $600,000 as a result of a “change in product mix” and increased R&D expenses, which were offset by decreased operating and income tax expenses. "Our turn-key heat recovery business drove record-high revenue for both the quarter and the trailing twelve months ("TTM") ended November 30, 2024," Crossland said in January, adding it marked back-to-back quarters of record revenues for Thermal Energy. "While we remained profitable, the change in product mix, together with the significant investments we have been making to grow the business, reduced our profitability." Crossland noted the company has “invested heavily” in its operations over the past two years, including opening a new, larger production facility in the United Kingdom and hiring 18 new employees. “These investments have added about $2.3 million to annual costs but, as expected, we have yet to see most of the corresponding benefits,” Crossland added. Thermal Energy had an order backlog of $17.9 million at the end of January, up from $12.9 million two months earlier. “Given the relative size of our typical heat recovery turn-key projects, order intake has always been lumpy but our pipeline and the value of projects in paid development with customers remains as strong as ever,” Crossland said. Thermal Energy stock was up one cent to 16 cents in late-afternoon trading on the TSX Venture Exchange.