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Universal mCloud eyeing bigger things ahead as AI group inks significant Chinese wind-farm deal

Snapshot

Customer's assets are hooked up via the Internet of Things to the company's real-time data platform, where experts can monitor and analyze trends

Universal mCloud Corp -

Quick facts: mCloud Technologies Corp

Price: 0.44 CAD

TSX-V:MCLD
Market: TSX-V
Market Cap: $69 m
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  • Transforming energy asset management using real-time data
  • Developing Artificial Intelligence and Internet of Things technology
  • Improving revenue growth

What Universal mCloud does:

Universal mCloud Corp (CVE:MCLD) (OTCMKT:MCLDF) operates in the burgeoning world of artificial intelligence (AI) and the Internet of Things (IoT).

According to the company, its technology is curbing energy waste, maximizing energy production, and getting the most out of critical energy infrastructure all over the globe. Via its Assetcare solution, the firm provides clients with software to monitor and analyze the health of their equipment/assets.

These assets include things like an HVAC (heating, ventilation, and air conditioning unit) or a wind turbine. The asset is hooked up via IoT to the company's real-time data platform, where experts can monitor and analyze trends, meaning it can be kept running well and for less cost.

The firm currently operates in the smart buildings, wind energy and oil and gas segments. The company supports more than 100 blue-chip customers and over 28,000 assets, which are connected all around the globe.

How it is doing:

This year has been dominated by a major acquisition for the group - namely that of Fulcrum Automation Technologies Ltd and Autopro Automation Consultants Ltd in a C$40 million, which transformed mCloud into a major technology provider in the weighty oil and gas sector.

The firm said the acquisition would add C$35 million to its 2019 revenue and mean it could help oil and gas providers all over the world use AI and analytics to tap into large volumes of data in the cloud at a fraction of current IT costs.

Workers in the sector (for example at rigs or refineries) could receive real-time instructions as they work through procedures, while the technology also has work order-management capability.

In July, the company closed the final tranche of a previously announced debenture financing, raising almost C$23.5 million to expand the business internationally.

And in August it entered into a C$13 million credit facility with Integrated Private Debt Fund VI LP as part of a debt refinancing. The loan has a term of seven years at an interest rate of 6.85% per annum and Universal mCloud said it would make blended monthly payments.

On August 19, the company announced a significant deal to provide performance analytics to one of the biggest wind-farm operators in China - Longyuan Construction Investment (Chengde) Wind Power Co Ltd.

The firm will initially assess and optimize the performance of pitch systems (the angle of the blades when revolving) and batteries for 35 wind turbines, but the firm said it expects it to be the start of a multi-phase relationship with Longyuan.

Last week, for the quarter ended June 30 this year, the company  reported organic revenue grew 36% to C$3 million, compared to C$2.2 million in the first quarter of this fiscal year, as the firm said it was entering a new phase of growth.

Research and development costs were C$1.2 million, while the net loss narrowed to C$1.7 million compared to a loss of C$2.6 million in the second quarter of 2018.

Inflexion points:

  • More AssetCare contracts signed
  • Further expansion in China and beyond

What the boss says:

Dave Weinerth, president of Universal mCloud's Smart Energy and Capital unit recently told Proactive how the Longyuan Construction Investment was a big deal for the group.

"It really is a demonstration project that will allow us to show them what Assetcare can do to improve the performance, of initially 35 wind turbines, but hopefully the start of something much deeper. This certainly is a referential deal and for us in China, it's a strategic, geographic place for us and we're just getting started. So to showcase here, to get a referential windfarm under our belt, will have a ripple affect across the world, we expect.

"And as we get in beyond performance analytics and the blade inspection, into operation and maintenance software tools it really will allow us to display the whole value chain that we're approaching through wind."

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