Monday 26 September 2016 01:59 PM
Energy Mad warns sales may drop as Australian carbon credits get cheaper
By Sophie Boot
Sept. 26 (BusinessDesk) - Energy Mad has warned lower prices for carbon dioxide offsetting certificates in Australia mean its sales volumes are likely to drop.
Most of the energy efficient light-bulb maker's business is selling LED bulbs to Australian state government energy efficiency schemes, including the Victorian Energy Efficiency Target (VEET) scheme, where certificates representing carbon dioxide savings are issued and can be traded. Today, Energy Mad said the market price of the certificates had fallen to A$14 per certificate from A$30.
"While the board expects the price of the VEET scheme certificates to recover, the timing of such a recovery is impossible to predict," said director of marketing and co-founder Chris Mardon, who left the company's board in March to focus on its Australian operation. "As VEET scheme certificates are a key driver of Energy Mad’s sales, a drop of this size is likely to negatively affect Energy Mad’s sales volumes, though by how much is uncertain at this stage. Further announcements will be made as the effect of the price drop becomes apparent."
Sales in Australia in the previous financial year were $6.2 million, compared to New Zealand sales of $2.2 million. The Christchurch-based company posted an operating loss of $895,000 for its full year 2016 as it restructured its business to focus across the Tasman. That loss was significantly less than the $2.9 million recorded in 2015.
The shares last traded at 5.4 cents and have gained 35 percent this year.