Polar Power Lands Trial Order for 50 Propane DC Generators from Major Southeast Asian Telecom
POLA is trading near its 52-week low of $1.23 (0.0% above the low) on light trading volume (0.1× avg).
Summary
Polar Power received a trial order for 50 propane-fueled DC generators from a major Southeast Asian telecom operator, the first phase of a potential five-year program covering about 2,500 sites, with discussions begun on a next phase of 200 generators. The generators, priced from $19,000 to $27,000 each, use Toyota 1KS prime power engines and will power off-grid and bad-grid cell sites, using approximately 40% less fuel than diesel AC generators without solar and demonstrating fuel savings of 59% and higher when paired with solar. Polar purchased approximately 2,000 Toyota 1KS engines for potential volume growth, and using this inventory may support improved margins as volumes ramp, after the company previously wrote down approximately $4 million of usable engine inventory. The potential five-year opportunity is up to approximately $60 million, with annual fuel savings for 2,500 sites ranging from $11 million to $28 million and annual maintenance savings ranging from $3 million to $12 million. The order is small relative to the company's financial distress, but it represents a potential entry into a new market and could signal future demand. This is a new commercial development for a company that reported a 62% revenue decline and a going concern warning in its latest 10-Q, faces a reverse split vote on October 14, and is in default with Pinnacle Bank, so any revenue opportunity is material. Watch for conversion of the trial order into a larger purchase.
Updated with an SEC 8-K filing · What changed
Updates
· SEC 8-K — Polar Power's 8-K attaches the press release; the trial order is the first phase of a potential five-year program covering about 2,500 sites, with discussions begun on a next phase of 200 generators.
- Fuel Savings — Uses approximately 40% less fuel than diesel AC generators without solar; paired with solar, savings are 59% and higher. Annual fuel savings for 2,500 sites ranges from $11M to $28M.
- Maintenance Savings — Oil change interval is approximately 4,500 hours versus 250 hours for diesel AC gensets. Annual maintenance saving for 2,500 sites ranges from $3M to $12M.
- Engine Inventory — Polar purchased approximately 2,000 Toyota 1KS engines for potential volume growth. Using this inventory may support improved margins as volumes ramp.
- LPG Distributor — A major local LPG distributor expects to receive a contract to fuel each site for 6 years. Its participation was essential to the program success.
- Other details
- Polar's DC generator combines Supra™ system controls and a high-efficiency permanent magnet alternator with Toyota 1KS prime power engines.
All 21 details
- Generators will power off-grid and bad-grid cell sites.
- DC Generator price ranges from $19,000 to $27,000 each.
- Generators use Toyota 1KS prime power engines.
- System uses approximately 40% less fuel than diesel AC generators without solar.
- Paired with solar, fuel savings demonstrated at 59% and higher.
- Oil change interval is approximately 4,500 hours, versus 250 hours for standard diesel AC gensets.
- Polar purchased approximately 2,000 Toyota 1KS engines for potential volume growth.
- Company previously wrote down approximately $4 million of usable engine inventory.
- Using this inventory may support improved margins as volumes ramp.
- Large inventory of Toyota 1KS engines should help facilitate rapid delivery.
- Diesel cost per site ranges from $960 to $2,400 per month, not including 15-25% theft.
- Net fuel savings at 40% is $384 to $960 a month per site.
- Annual fuel savings for 2,500 sites ranges from $11M to $28M.
- Diesel AC generator requires 18 to 36 service trips/year.
- Polar DC generator requires maximum 2 service visits/year.
- Maintaining a Polar DC generator costs $600 per year running 24/7.
- Assuming a deployment of 2,500 sites, the annual maintenance saving ranges from $3M to $12M with Polar DC generator.
- A major local LPG distributor expects to receive a contract from its customer to fuel each site for 6 years.
- The participation of a major LPG distributor was essential to the program success.
- Polar's DC generator combines Supra™ system controls and a high-efficiency permanent magnet alternator with Toyota 1KS prime power engines.
- Diesel AC generator maintenance costs $100 to $150 per site visit, totaling $1,800 to $5,400 per year per site.
At the time of this announcement, POLA was trading at $1.23 on NASDAQ in the Energy & Transportation sector, with a market capitalization of approximately $5.4M. The 52-week trading range was $1.23 to $5.75. This news item was assessed with positive market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.