IEG revenue jumps 70%, but profit falls as project costs bite

Innovative Energy Group’s (IEG) revenue rose 70 per cent in its latest quarter as Jamaican homeowners bought more solar power systems, but the renewable energy company’s profit fell as the cost of preparing larger projects outran the sales growth.

IEG reported revenue of $87.5 million for the quarter ended August 31, up from $51.6 million a year earlier. Net profit fell to $3.5 million from $4.7 million.

Executive Chairman Nigel Davy said the disruption from Hurricane Melissa has increased customer interest in partially or fully supplying their own power. “Coming out of Melissa, the only hesitance to go solar was evaporated,” he told the Financial Gleaner. “We saw a huge uptick in residential clients needing solutions.”

Gross margins were reduced to 55 per cent from 65 per cent a year earlier. The company attributed the squeeze to procurement and mobilisation work on projects yet to enter construction — money spent now against revenue it cannot book until execution milestones are met.

Residential work, historically a sideline to commercial contracts, accounted for more than a quarter of sales. “I would say residential accounts for, in that particular quarter, something north of 25 per cent of our revenue,” Davy said.

The company carries a pipeline of projects it values at about $900 million. Davy said several government-related contracts have been secured and that a project covered by a letter of intent is in final contract review. “That particular client will yield close to $300 million in revenue out of that $900 million,” he said.

IEG is also preparing to bid in Jamaica’s next utility-scale renewable tender. Davy said the company will target supplying 100 megawatts (MW) of the planned 300-MW on offer for public bidding.

“What we have done, I can tell you, we have secured three different sites for that,” he said.

The demand IEG is capturing has a structural source as well as a storm. Melissa made landfall in western Jamaica on October 28, 2025 as a Category 5 hurricane, cutting power to most of the island.

neville.graham@gleanerjm.com