COMPANY IMPROVING PERFORMANCE OF ITS HEAT PUMP BUSINESS Sydney -...

COMPANY IMPROVING PERFORMANCE OF ITS HEAT PUMP BUSINESS

Sydney - Wednesday - September 2: (RWE Aust Business News)

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OVERVIEW

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Wildly swinging results can be dangerous but if the reasons hold up, the company involved deserve closer scrutiny.

Quantum Energy Ltd (QTM) yesterday announced a net profit of $30.26 million for the year ended June 30, in contrast to a net loss of $7.7 million for 2008.

In the latest result, revenues rose 273 per cent to $106.08 million from $28.41 million.

Earnings per share was 2.97c, against a loss of 0.75c.

There were no dividends paid or proposed for the year.

Directors said the result reflected the improving performance of the heat pump business.

Problems associated with the medical business arising from the dispute with Philips Medical Systems were finally resolved in May.

As previously announced, Quantum was successful in retaining its agency with Philips through a court action, and recently won the appeal.

"Quantum continues to foresee a growing market in Australia, Asia and South Africa for its range of heat pump products, and expects to continue to increase revenues and profitability," directors said.

"The establishment of a manufacturing subsidiary in China in 2007 to manufacture heat pump equipment continues to enable Quantum to achieve cost savings and positioned the company to achieve further market penetration for product in Asia," they said.

The improved profit after tax attributable to members reflects the improving performance of the heat pump business.

Quantum continues to foresee a growing market in Australia, Asia and South Africa for its range of heat pump products and expects to continue to increase revenues and profitability.

Expenditure on health by government will continue to play an important role and will result in increasing prospects for the medical equipment and servicing sector of the group.

SHARE PRICE MOVEMENTS

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Shares of Quantum yesterday drifted down 0.5c to 32.5c. Rolling high for the year is 42c and low 6c. Earnings per share is 1.45c while price/earnings ratio is 22.41. The company has one billion shares on issue with a market cap of $330.9 million.

BACKGROUND

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Quantum Energy joined the Australian Stock Exchange list on October 13, 1994.

The company is Australia's leading manufacturer of advanced renewable solar energy hot water, pool and building heating products.

Quantum is based on innovation and the quest to harness renewable energy to produce sustainable hot water.

The University of Melbourne pioneered the development of heat pump technology for the production of hot water in the mid 1970s.

The technology has been progressively developed, and Quantum now produces hot water heaters, pool heaters as well as residential, commercial and industrial building heaters.

With over 30 years of on-going product development and using a patented heat pump design, the Quantum heat pump will significantly reduce energy costs compared with traditional methods.

A Quantum heat pump is a patented system whereby heat from the ambient air is absorbed by an environmentally friendly refrigerant in the evaporator.

This refrigerant gas is then compressed which causes the gas's temperature and pressure to be raised.

This hot gas is passed through tubes wrapped around the outside of the water tank as the condenser. Heat is then transferred from the tubes to the water inside the tank.

Once the heat from the compressed gas has been transferred to the water in the tank, the gas changes state.

This cooled gas then passes through an expansion device (TX valve) and back to the evaporator.

The cycle is then repeated until the water in the storage tank reaches the set temperature.

The Quantum heat pump's efficiency stems from the fact that only minimal electricity is required for the compressor, fan and digital display panel.

It works in temperatures from as low as -10 degrees Celsius up to 40 degrees both day and night, very efficiently, without the need for boosting.

The heat pump principle is simple and can be compared to a refrigerator, but in reverse. It extracts latent energy from the air and transfers it to the heating system.

This free energy from the environment is converted into useful heat to heat water.

In other words, free energy is being used from the environment that doesn't cost a cent, and at the same time reducing the carbon footprint.

Quantum's hot water systems utilise energy from rain, wind and sun and use up to 75 per cent less energy than traditional submersion water heaters.