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Independent Reviews for Venture Investors

TMG.V - On hold.

Thermal Energy Group (TMG.V) is a global supplier of proprietary, energy efficiency and emissions reduction solutions to the industrial and institutional sectors. TMG.V is a fully accredited professional engineering firm, and provides a unique mix of proprietary products along with process, energy, and environmental engineering expertise.

TMG.V's proprietary products include: GEM™ - Steam Traps, FLU-ACE® - heat recovery, HEATSPONGE – Indirect contact condensing heat recovery systems, and DRY-REX™ - Low temperature biomass drying systems.

Coverage was initiated March 2021 with a note issued November 2021. and August 2022. Below is an update.

News Releases

Sep. 7 - Commissioned for Innovative Energy and Carbon Emission Reduction Solution for European Meat Producer: Valued at about $800,000, this order covers all engineering, manufacturing, installation, and training for the system.

This leading meat producer operates 15 manufacturing plants in Europe to serve a portfolio of 22 brands that are active in over 43 countries globally. This project represents an innovative new application for our technology and is our second of its kind from this meat processing sector-specific heat source.

The project is expected to be completed and revenue earned within 9 months.

Sep. 13 - Follows GEM Steam Trap Site Conversion with Major Equipment Order from Leading Textile Manufacturer:

This order totals almost $350,000 and includes $40,000 for additional GEM Steam Traps specified on new equipment at the plant and has a payback of approximately 2 years. In total, Thermal Energy has received orders for over $900,000 in energy efficiency and carbon emission reduction solutions for this customer, across 7 sites.

As an industry leader for jersey wear apparel, this textile manufacturer operates several production sites in Africa and South Asia, exporting 60 million garments a year to Europe and the U.S. This major equipment order marks the first Sofame system designed, engineered, and sold independently by Thermal Energy since the acquisition of Sofame in July 2021. The project is expected to be completed and revenue earned within 9 months.

Sep. 20 - Starts Off the New Fiscal Year with Record GEM(TM) Order Intake: Received over $1.5 million GEMTM steam trap orders in the last few weeks. For the first three and half months of the fiscal year, GEMTM orders are more than double the amount received during the same period last year. All figures are shown in CAD.

The recent orders span several industries and sectors including food and beverage manufacture and processing, textile and pharmaceutical. A few larger orders of note are highlighted below. i) Follow up orders of approximately $400,000 from a Leading Textile Manufacturer for multiple sites across Africa and South Asia ii) ver $250,000 for a European Cereal Manufacturing Site. iii) Over $300,000 for a European Oil Refinery iv) Over $110,000 for a European Pharmaceutical Manufacturing Plant v) Over $480,000 for a large Gas Processing Plant in the Middle East

Sep. 28 - Announces Annual Financial Results: Backlog as of Sept 27 2022 ($10.3M)

Sep. 29 - Commissioned for Fourth Consecutive Turn-key Project by Global Nutrition Company:

This new FLU-ACE® heat recovery system will recover waste energy from the dryer burner exhaust. The scope of this order covers all engineering, manufacturing, installation, and training for the system, valued at over $1.4 million.

Sep. 30 - $2.8 million Turn-key Flu-Ace Heat Recovery and GEM Steam Trap Project for Premium Beer Producer:

With this order, the Company has secured energy efficiency projects with more than half of the world’s top ten brewers. Covering all engineering, manufacturing, installation and training,

The project is expected to be completed and revenue earned within 12 months.

Oct. 25 -Announces First Quarter Financial Results

Oct. 31 - $1.4 million Energy Efficiency and Carbon Emission Reduction Project with a Leading Cereal Manufacturer: commissioned by a leading cereal manufacturer to implement a $1.4 million Turn-key heat recovery and carbon emission reduction project. All figures are shown in CAD. Prior to this project, Thermal Energy had previously implemented GEMTM steam traps at this site and five other sites in North America for this customer. With this order, Thermal Energy will have delivered over $2.2 million in energy efficiency solutions to this customer.

Nov. 22 - Receives $2.5 Million Order for Multi-Site Carbon Reduction and Energy Efficiency Solution:

This order covers the engineering, supply and installation of GEM steam traps at 16 sites representing Thermal Energy’s largest GEM project to date. This project will deliver combined annual utility and water savings of over $650,000 annual CO2e reduction of 5,255 tonnes and save more than 10 million gallons of water per year.

Nov. 29 - Receives Additional $1.5 Million in Orders for Multi-Site Carbon Reduction and Energy Efficiency Solution: Received additional GEMTM orders totaling approximately $1.5 million from a leading snack manufacturer.

Just last week Thermal Energy announced $2.5 million in orders, from this customer for the supply and installation of GEMTM steam traps at 16 sites. The customer has now extended its multi-site GEMTM project to an additional 9 sites bringing the total project up to a combined 25 sites and $4 million.

The project is expected to be completed and revenue earned within nine months.

Nov. 30 - Announce the grant of stock options: Granted 1,875,000 options ($0.12 cents) to purchase common shares of the Company to officers of the Company as part of an overall remuneration and incentive program.

Dec. 12 - Announces Second RBT(R) Wastewater Heat Recovery System for a Leading Textile Manufacturer: Received a $330,000 order to deliver a second RBT® wastewater heat recovery system at a newbuild facility.

The RBT® system captures heat from wastewater and uses it to heat incoming water which is expected to produce savings of approximately $349,000 per year, less than a one-year payback.

Dec. 14 - Announces Multisite GEM(TM) Project with Global Brewer: Received a $500,000 multisite GEMTM project order from a global brewer. All figures are shown in CAD. Following the successful implementation of GEMTM steam traps at two of the customer’s North American sites, the customer proceeded with a $500,000 rollout of GEMTM to cover a portion of failed mechanical traps at 15 further sites across Europe and North America.

Jan. 9 - Ken Harden as New Vice President of Sales for North America: effective January 2, 2023

Jan. 10 - Announces Record Order Intake for the First Six Months of Fiscal 2023: for the six months ending November 30th, 2022. The Company uses the term ‘order intake’ to refer to the total value of purchase orders received by the Company in a given period. All figures are in Canadian dollars.

As of the close of the second quarter, order intake for the year-to-date period stood at $18.1 million, exceeding order intake at the same point in each of the previous five fiscal years of the Company by at least 90%. These results come from a wide variety of orders of varying size and value, and from both Custom Equipment and Turn-key Projects.

Turn-key projects require a significant amount of engineering development before a project order is received, so are often preceded by a paid Project Development Agreement (“PDA”) as a precursor to the full Turn-key Project order. The number of PDA orders received in the first half of fiscal 2023 is double that of the same period last year.

Jan. 31 - Announces Second Quarter Financial Results

Feb. 7 - Provides Half-Year Business Update: i) Last Twelve Months ("LTM") Total Order Intake has bounced back and now exceeds pre-pandemic highs; ii) Custom Equipment orders continue to break records, with a growth of over 300% when comparing Q2 YTD over the past 5 years; iii) The number of paid Turn-key Project Development Agreements (PDA) signed, is at the highest level in the Company's history

Apr. 17 - Retains Investor Relations Firm: Retained MBC Capital Markets Advisors ("MBC"); $7,000/monthly.

Apr. 25 - Reports Strongest Quarter in More than Two Years: Received $2.3 million in new orders subsequent to the February 28, 2023, quarter-end bringing the current order backlog to $18.5 million as of April 20, 2023. A list and description of recent order highlights is available on page 16 of the Management's Discussion and Analysis filed today.

May 9 - To Deliver Fifth Turn-Key Project for Global Nutrition Company: The project is expected to be completed and revenue earned within 9 months. This order valued at approximately $1.1 million succeeds the order announced in September 2022, making this the fifth Turn-key energy efficiency and carbon emission reduction solution since 2019.

May 16 - $1.8 Million Multisite GEM Order for Consumer Goods Company: This order covers a combination of partial and full site GEM conversions for five of its sites across Europe, North America, and South America.

The project is expected to be completed and revenue earned within nine months.

July 11 - Record Order Intake in Fiscal Year Ended May 31, 2023: The Company received orders totaling $27.3 million during the twelve-month period, which was up 133% year-over-year. Our record order intake in fiscal 2023 underscores our customers’ confidence in Thermal Energy’s expertise and ability to deliver impactful results.


In the last year, TMG.V's valuation reached as high as $0.14 cents and as low as $0.075 cents.


Overall, YTD 2023, Revenue are up, Net losses are lower while Backlog tripled and Cash nearly doubled..

While the results compare to YTD FY 2022 are impressive, the company is still a ways off FY2020 and FY2019 results.

Hence, the positioning in the release: ""Fiscal 2023 is on course to be a strong turnaround year for Thermal Energy."

Thermal Energy reported to have recently received record order intake (up 133% to $27.5M):

"The Company received 25 signed project development agreements ("PDA") in fiscal 2023 (including seven in the fourth quarter) compared to ten signed PDAs in the prior fiscal year. The combined value of the signed PDAs received in fiscal 2023 was 365% higher than the combined total of the PDAs received in fiscal 2022.

While there is no guarantee that signed PDAs will result in completed turn-key projects, the Company considers PDAs to be a key metric in assessing the strength of its business development pipeline."

Despite a favorable outlook, TMG.V's main challenge remains: the time it takes for it to converts orders to the bottom line. It clearly seems that there are capacity limitations to execute probably on the client's side but perhaps also on TMG.V's side. In essence, the time it takes for revenue to show up on the bottom line is impeding growth.

Also, innovation seems on the low side at Thermal Energy, new products have not been introduced recently.

In short

TMG.V's current valuation is a reflection of its earning results. Overall, TMG.V is finally capitalizing on its value proposition around carbon emission reduction and growing its backlog. However, its unclear as to when this backlog will materialize in revenue, Even if a turnaround year is in the horizon, one needs to question capacity.

The Company defines its Order Backlog as the value of projects for which purchase orders have been received, but that have not yet been fully reflected as revenue in the Company’s published financial statements.

Can Thermal Energy grow exponentially in the near term? We think not, Organic growth continues to be relatively low compared to FY2020. And there is no reported improvement in the time required for revenue to show up on the bottom line. In addition, growth via acquisition does not appear to have materialized to date.

As mentioned by TMG.V;s CEO, (see 19.30 minutes); Turn Key Project are impacted by a long sales and revenue cycle. And there is no guarantee that that signed PDA will results in revenue.

As such, we will put coverage of the company on hold.

DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.


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