EQTEC PLC (AIM:EQT) CEO David Palumbo and newly appointed Operations Director Murli Bhamidipati joined Proactive's Stephen Gunnion to discuss the company’s recent successes and the road ahead.
In the interview, Palumbo highlighted how EQTEC’s move away from capital-intensive projects toward a service-oriented model has created more predictable and recurring revenue streams.
Meanwhile, Bhamidipati underscored the importance of aligning operations with the company’s strategic goals and ensuring the resources are in place to meet growing demand, positioning EQTEC to capitalise on its strong project pipeline.
Proactive: David, EQTEC has reported a substantial turnaround in the first half of 2024, with a 10x increase in revenue and improved profit margins. What were the key factors driving this success?
David Palumbo: Hi, Stephen, and thank you for your question. The key driver for our growth has been our strategic shift towards high-margin services. We've transitioned from capital-intensive development activities to focusing on high-margin, IP-rich services like design, proprietary engineering, and operational services. This shift allows us to generate predictable, recurring monthly revenues. We’re now out of the capital-heavy projects that often delayed revenue recognition, and instead, we’ve built a more diverse, service-based business model. This includes design, engineering, equipment sales, and operational maintenance, which are laying a strong foundation for long-term recurring income.
We've also made substantial improvements in operational efficiency and cost control, driven in part by the relocation of our operations to Barcelona under Murli’s leadership. This has enabled us to be more nimble and responsive to project needs, improving our overall financial performance.
Proactive: Murli, while the company has shown strong results, you’ve mentioned that there’s still work to be done. What are the main challenges and opportunities as EQTEC continues its transformation?
Murli Bhamidipati: Thanks, Stephen. One of the main challenges is ensuring that our operations are fully aligned with the strategic goals David mentioned. My focus is on making sure our engineering team—the largest in this space—has the right resources and capacity to deliver on our project pipeline. We’re working with 60 different waste feedstocks, which brings a lot of innovation to the table, and my job is to ensure we can scale efficiently to meet this growing demand.
The key opportunity lies in scaling our operations without running into resource shortages. With our project pipeline growing, we need to ensure we have the operational capability to match that growth. It’s a balancing act between innovation, execution, and keeping profitability at the forefront of everything we do.
Proactive: Murli, how do you see your role in contributing to EQTEC’s operational efficiency as the company continues its transformation?
Murli Bhamidipati: My role is to ensure we strike a balance between consistent revenue generation and delivering on larger, more profitable projects. We’re focusing on achieving operational breakeven and profitability as quickly as possible. Previously, the company may have had a different focus, but now it’s clear: we must execute with operational precision to meet these priorities. We are scaling to deliver both on our recurring engineering revenues and on what I call the “lumpy” or larger projects, which can drive significant profitability.
Proactive: David, you’ve also appointed a new non-executive director, Brian Cole. What value does he bring to EQTEC’s board at this stage?
David Palumbo: We’re very excited to have Brian Cole join the board. He brings deep, sector-specific expertise, especially in project development and energy technology, which adds a strategic dimension we didn’t have before. He has a long track record in energy project development and can provide invaluable insight into which projects we should prioritize. His expertise in commercializing and scaling new technologies is also critical as we look to accelerate growth in areas like public funding for large-scale projects. For example, he was instrumental in securing over €500 million in EU funding for the Celtic Interconnector, and we’re confident his experience will help us explore similar opportunities for our own projects.
Proactive: David, EQTEC recently achieved promising results with steam oxygen gasification technology. Could you elaborate on how these results validate your technology and what the next steps are?
David Palumbo: Absolutely, Stephen. These recent tests are a huge validation for our proprietary gasification technology. The tests reinforced the precision of our computational kinetic model, which is central to our ability to produce high-quality syngas for applications like biofuels, hydrogen, and synthetic fuels. Our next steps include scaling this technology through a joint venture with CompactGTL, where we’re developing a pilot plant that can produce Syncrude from waste materials. This project could become a massive standalone business, as we aim to be the first to deliver a fully integrated waste-to-liquid fuel solution. Additionally, we’re engaging with infrastructure investors, particularly in oil and gas, to bring these solutions to market at scale.