Zenith Energy Ltd. (“Zenith” or the “Company”) published its unaudited preliminary consolidated financial results for the financial year ended March 31, 2026, on June 1, 2026.
We share our thoughts on the report below:
- Significant profit increase supported by solar portfolio valuation
- Stable revenues from Italian energy operations
- Solar pipeline expanded to 183.5 MWp post-period
- ICSID final hearing completed
- Uranium portfolio spin-out formalized
Summary
The financial year ended March 31, 2026, represents a period of substantial strategic advancement across all three of Zenith’s value pillars. The solar platform has been scaled from under 100 MWp to over 180 MWp in less than 12 months, independently valued at EUR 54.7m, and is now approaching its first construction milestone. The ICSID arbitration has reached the post-hearing phase, whereby Analyst Group estimate a probability of 68% for a favorable outcome where the evidentiary record strengthened by recent developments. The uranium portfolio has been structured for independent development through Reveille Resources, preserving optionality while simplifying Zenith’s corporate narrative. While the Company’s current cash position reflects the significant capital deployed toward solar acquisitions during the period, post-period financings and the planned divestment of 50 MWp of solar assets provide a credible pathway to strengthened liquidity over the coming quarters.
Taken together, the combination of a near-term ICSID decision, the commencement of solar construction, the planned asset divestments, and the progression of the Reveille listing provides Zenith with an concentrated set of value catalysts over the next 6-12 months, establishing a strong foundation for potential value realization across the Company’s investment case.
Substantial Profit Growth Reflects Value Creation Across the Solar Platform
Zenith’s profit increased significantly to CAD 8,073t, equivalent to approximately NOK 64.3m (FY2025: CAD 1,089t), a result positively impacted by the recognition of a CAD 29,529t gain in connection with the independent valuation of the solar development portfolio. This valuation, which assigned a total value of EUR 54.7m to the 173.5 MWp pipeline as of March 31, 2026, represents a near-doubling from the EUR 27.5m valuation established in December 2025. In Analyst Group’s view, this recognition provides a concrete and independently validated benchmark for the value embedded in the solar platform and reflects the significant development progress achieved during the period.
Revenue from the Italian energy operations increased modestly to CAD 2,334t (FY2025: CAD 2,147t), reflecting higher electricity volumes (12,121 MWh vs. 11,321 MWh) partially offset by marginally lower gas volumes (178,778 mcf vs. 185,080 mcf). However, production costs declined to CAD 1,437t (FY2025: CAD 1,701t), resulting in a gross profit of CAD 514t (FY2025: CAD 80t), which confirms the continued profitability of the Italian energy operations at the operating level.
General and administrative expenses increased to CAD 14,189t (FY2025: CAD 6,478t), of which CAD 12,267t relates to non-recurring items. The most significant component is arbitration costs of CAD 7,935t (FY2025: CAD 4,598t), reflecting the anticipated escalation of legal expenditure as both the ICSID and ICC-2 proceedings entered critical phases. In Analyst Group’s view, this increase is well justified given the advanced phase of the arbitration proceedings and the potential magnitude of a favorable outcome. Listing costs associated with the admission to Spotlight Stock Market and share-based payments account for the majority of the remaining non-recurring increase. Excluding non-recurring items and foreign exchange effects, the underlying cost base remains broadly stable.
Finance expenses amounted to CAD 8,122t (FY2025: CAD 8,370t), reflecting interest costs on the Company’s bond program and loan facilities. Cash and cash equivalents stood at CAD 2,067t at year-end (FY2025: CAD 3,199t), a decrease primarily attributable to the significant capital deployed toward solar acquisitions during the period. Post-period financings completed in April 2026, raising approximately GBP 3.08m in equity alongside a GBP 2m convertible loan facility, provide additional working capital and financial visibility into the second half of 2026. In addition, the Company announced in May 2026 the sale of the ZEN-260 drilling rig for total gross consideration of approximately USD 4.3m, materially above previously disclosed indicative offers of approximately USD 2m, with proceeds earmarked for the continued development of the Italian solar portfolio.
Solar Platform Enters a New Phase as Pipeline Approaches 200 MWp
The financial year marked a transformational period for Zenith’s solar strategy. From a significantly smaller base at the start of the financial year, the Company executed a sustained cadence of milestone-contingent acquisitions across Puglia, Piedmont, Lazio, and Liguria, expanding the pipeline to 173.5 MWp by March 31, 2026, and further to 183.5 MWp through post-period acquisitions. The Company is now within approximately 16.5 MWp of its stated 200 MWp target, which Analyst Group expects to be surpassed before the end of the first half of 2026, at which point a new growth objective is expected to be communicated.
The independent valuation of EUR 54.7m for the 173.5 MWp portfolio provides a comprehensive assessment covering all development stages from land acquisition through to RtB and operational value. On a per-MWp basis, the valuation differentiates between permitting-phase assets (EUR 300,000/MWp), RtB assets (EUR 500,000/MWp), and operational assets (EUR 1,300,000/MWp), illustrating the significant value uplift possible as projects progress through the development cycle. The Company has communicated its intention to divest 50 MWp of assets between now and March 2027, comprising approximately 20 MWp of operational assets (valued at circa EUR 26m) and 30 MWp of RtB assets (valued at circa EUR 15m), for a combined total of approximately EUR 41m. If executed, this divestment program would generate substantial liquidity while allowing Zenith to retain a portfolio of at least 123.5 MWp for progression into production.
Construction of the initial 7 MWp Puglia UCP is scheduled to commence in July 2026, with total project costs of approximately EUR 3.87m financed 85% externally, limiting Zenith’s equity contribution to approximately EUR 580,500. The UCP is expected to generate approximately EUR 1.48m in gross annual revenue and carries an estimated operational sale value of EUR 9.1m (EUR 1.3m/MWp), providing a concrete benchmark for the broader portfolio’s monetization potential.
ICSID Arbitration Enters Post-Hearing Phase as Evidentiary Record Strengthens
The ICSID final hearing was held April 20-24, 2026, marking the conclusion of the evidentiary phase of the USD 572.65m arbitration against the Republic of Tunisia under the UK-Tunisia Bilateral Investment Treaty. In the lead-up to the hearing, several developments strengthened the qualitative position of the claimants. The Republic of Tunisia formally recognized in writing that EPT holds ownership of the Robbana and El Bibane concessions and confirmed that approximately 3,987 barrels of crude oil produced from these concessions are fully owned by EPT. The Company also disclosed extensive vandalism and theft at Robbana, rendering the site non-operational for at least one year and requiring a significant rehabilitation program.
In Analyst Group’s assessment, Tunisia’s formal concession on the ownership question, combined with the documented destruction of infrastructure at the same concession, presents a compelling factual record for the claimants.
Analyst Group has estimated a 68% probability of a favorable outcome in the ICSID arbitration based on precedent and the legal circumstances of the case. Based on available precedent, Analyst Group expects a decision from the tribunal within 6-12 months following the conclusion of the hearing phase, although certain ICSID proceedings have historically extended to up to 24 months. The Company has assembled a legal team of considerable depth and seniority for the proceedings, including Mr. Charles Michel, former President of the European Council (2019-2024) and former Prime Minister of Belgium (2014-2019), alongside leading international arbitration practitioners, which in Analyst Group’s view underscores the significance the Company attaches to this proceeding.
The ICC-2 annulment application, filed by CNAOG before the Swiss Federal Supreme Court, remains pending. Tunisia failed to engage substantively with the application within the prescribed deadline and instead filed a jurisdictional challenge, which Analyst Group views as unlikely to find traction. The ICC-1 award of USD 9.7m in favor of EPZ (December 2024) remains unpaid.
Uranium Portfolio Positioned for Independent Development Through Reveille Resources
On April 30, 2026, Zenith formalized plans to spin out FEI, the special purpose vehicle holding the Val Vedello and Novazza uranium exploration permits, into Reveille Resources Limited, a newly incorporated entity targeting listing on the Aquis Growth Market. Zenith and Ajax Resources have each committed GBP 200,000 for a 25% stake, with Zenith to be further reimbursed GBP 350,000 in Reveille shares at IPO price for costs incurred. The Company has also submitted the Novazza Environmental Impact Assessment to MASE, with a decision expected within approximately six months, while the Val Vedello EIA submission has been extended to July 15, 2026.
In Analyst Group’s view, the spin-out creates a dedicated vehicle where the uranium assets can be valued on terms more directly comparable to junior mining peers, while preserving Zenith shareholders’ exposure through the Company’s intended position as Reveille’s largest shareholder. Val Vedello and Novazza constitute Italy’s only known uranium deposits, and the regulatory environment is increasingly supportive, with Italy having adopted the EU Critical Raw Materials Act into domestic law in June 2025.
