May 17, 2017 - Hamilton, Ont.-based BIOX is working to complete upgrades to its Sombra, Ont., biodiesel facility this year and looking to transition from an expansion focus to operating its assets and strengthening its balance sheet, the company CEO said in its second quarter report.
By Maria Church
“Our assets are strategically located in growing biodiesel markets where we can cost-effectively deliver product and compliance directly to the obligated parties,” said Alan Rickard, CEO of BIOX.
“The Houston facility is the only bio-based diesel facility located within the Houston terminal, which is one of the largest petroleum distribution sites in North America. Our Hamilton facility, and once commissioned our Sombra facility is expected to, produce bio-based diesel with the lowest carbon intensity in the province. Lower carbon intensity fuels provide an advantage to obligated parties in meeting their mandates under the Ontario Greener Diesel program. With the lapse of the U.S. Blender Tax Credit at the end of calendar 2016 we are now operating within a more challenging commercial environment. As we work to complete the upgrades to and commissioning of the Sombra facility this year we look to transition from our expansion focus to operating our assets and strengthening our balance sheet,” he said.
The company reported sales of $14,206,000 in Q2 2017, and a net loss was $5,126,000. BIOX sold 13.1 million litres of biodiesel in Q2 2017, compared to 20.4 million litres in the corresponding period in fiscal 2016. The company says the changes in sales and volume sold are primarily due to lower sales of third-party product. BIOX sold less than 0.1 million litres of third-party product in both the Q1 2017 and YTD periods, compared to 5.3 million litres and 10.8 million litres of third-party product sales in the corresponding periods last year.
Last year BIOX acquired two biodiesel facilities, one in Sombra and another in Houston. The Houston facility is currently in operation. The Sombra facility is expected to be in production in the next couple of months.
“Management believes the Ontario market will play an increasingly important role in its distribution network. The implementation of the Greener Diesel program in Ontario mandates increasing blend rates and a move toward lower carbon intensity fuels in 2017. The greenhouse gas (GHG) reduction aspects of the Ontario Greener Diesel mandate are an important differentiator for BIOX. Bio-based diesel produced by BIOX at the Hamilton facility has the lowest carbon intensity in the province, reducing GHG emissions by more than 100% when compared to petroleum diesel. The Sombra facility, once upgraded to handle lower carbon intensity feedstocks, will produce at a comparable GHG emission efficiency to the bio-diesel produced by BIOX at its Hamilton facility,” the company’s report states.