Viridis Energy posts solid third quarter results
November 19, 2014, Vancouver, B.C. – Viridis Energy is reporting strong third quarter financial results thanks to solid production levels at its Scotia Atlantic pellet plant in Nova Scotia.
November 19, 2014 By Canadian Biomass
November 19, 2014, Vancouver, B.C. – Viridis Energy is
reporting strong third quarter financial results thanks to solid production
levels at its Scotia Atlantic pellet plant in Nova Scotia.
Revenues increased to $7.6 million for the quarter ended
September 30, 2014, an increase of $4.6 million or 151% from $3.0 million for
the comparative quarter last year. For the nine months ended September 30, 2014
revenues were $19.9 million, an increase of $12.1 million or 155% compared to
$7.8 million for the same nine-month period last year.
Third quarter 2014 revenues also represents sequential
quarterly growth of approximately $1 million or 14% over the second quarter
The increase in revenues for the three and nine-months ended
September 30, 2014 is primarily attributable to sales from the Scotia Atlantic
facility, which only operated one month of the comparative periods last year.
This represented additional revenue of $2.7 million and $8.4 million for the
quarter and nine-months ended September 30, 2014, respectively. In addition,
Viridis Merchants, the Company’s alternative energy aggregation and trading
service, recognized an increase in revenue of $1.3 million and $2.8 million for
the quarter and nine-month periods ended September 30, 2014.
The Company generated a gross profit of $0.02 million during
the three-month period and $1.2 million for the nine month period ended
September 30, 2014. This compares to gross profit of $0.6 million and $1.4
million, respectively, for the comparable periods last year. The decrease in
gross profit for the 2014 periods is primarily attributable to an inventory
adjustment of $0.6 million recorded at Scotia Atlantic. Additionally, we conducted
an extended summer maintenance period during which extensive winterization and
other enhancements were implemented, to improve margins in future periods. This
maintenance period temporarily impeded production, where fixed costs represent
a significant portion of the cost of sales.
Gross profit generated by Okanagan Pellet Company and
Viridis Merchants were consistent during the three and nine-month periods in
2014, generating gross profit percentages of approximately 19% and 9%,
respectively. On a non-IFRS basis, excluding depreciation, gross profit was
$0.3 million for the period ended September 30, 2014, compared to $0.7 million
to the same period last year. For the nine month period ended September 30,
2014, gross profit excluding depreciation was $2.1 million compared to $1.8
million for the same period in 2013.
“Clearly the decisions we made at Scotia in regards to
inventory adjustments and the summer maintenance period had an adverse effect on
the current quarter, but were necessary to ensure positive results in
subsequent quarters. Despite these non-recurring items, we have seen some
positive trends emerge. I am very pleased that the company has achieved
positive operating cash flow for the first time,” commented Christopher
Robertson, Viridis’ CEO. “We have a very strong sales backlog for fourth
quarter, over $10 million, and we are on track to finish the year at between
$28 million and $30 million in revenue in 2014.”
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