Pinnacle sells record volume in 2018, nearly doubles Q4 revenue

In its Q4 2018 report, Pinnacle posted the following: 

• Q4 2018 revenue increased 42.2 per cent to $103.7 million, compared to $73.0 million in Q4 2017;
• Fiscal 2018 revenue increased 18.7 per cent to $347.4 million, compared to $292.7 million in Fiscal 2017:
• Q4 2018 Adjusted EBITDA totalled $13.8 million, compared to $12.8 million in Q4 2017; and
• Fiscal 2018 Adjusted EBITDA totalled $55.1 million, compared to $56.1 million in Fiscal 2017.

Fiscal 2018 operating highlights

• Sold a record volume of 1.6 million metric tons (MT) of industrial wood pellets;
• Secured six new long-term contracts with customers in Japan totaling $1.9 billion, including an additional contract in Q4 2018;
• Secured two new long-term contracts with CGN Daesan Power Co., Ltd. in South Korea totaling $1.0 billion, including an additional contract in Q4 2018;
• Grew contracted backlog to $5.9 billion at the end of Fiscal 2018, a 97 per cent increase compared to the end of Fiscal 2017, and extended the weighted average remaining life of Pinnacle’s portfolio off-take contracts to nine years;
• Entered into commercial production at its facility in Entwistle, Alberta;
• Commenced initial production at its new 70 percent owned production facility in Smithers, B.C.; and
• Acquired a 70 per cent stake in an industrial wood pellet production facility in Aliceville, Ala., marking its entry into the U.S. Southeast fibre basket and the formation of a new strategic partnership with The Westervelt Company.

“We grew and diversified our customer base with nearly $3 billion in new, long-term contracts in Japan and South Korea,” Rob McCurdy, CEO of Pinnacle, said in the report. “Our same-facility production volume increased three per cent in 2018, reflecting record performance at our Burns Lake and Lavington Facilities. However, our 2018 financial performance was negatively impacted by challenges commissioning the Entwistle Facility and rail service disruptions.”

Leroy Reitsma, COO of Pinnacle added, “We made strong progress in advancing our growth objectives in 2018, completing the construction of two new production facilities and acquiring the facility in Aliceville, which increases Pinnacle’s run-rate production capacity by more than 56 per cent. While the fire event that occurred on February 11, 2019 at our Entwistle facility is of concern to everyone at Pinnacle, we are working diligently to resolve this incident and resume production.”

Read the full report here.

RELATED: Update: Pinnacle investigates cause of dryer explosion and fire at Entwistle