Viridis Energy reports positive growth
May 27, 2015 – Viridis Energy Inc. reported its financial results for its first quarter ended March 31, 2015. Revenues increased to $8.8 million during the three-month period ended March 31, 2015, an increase of $3.1 million or 55 per cent from $5.6 million for the comparable period in 2014. The Company’s first quarter 2015 revenue also represents the fifth quarter of sequential growth, increasing approximately $450,000 or five per cent over the fourth quarter 2014.
The increase in revenue during the first quarter of the current year over the prior year period is primarily attributable to an increase of $3.1 million in recorded sales from Viridis Merchants, which includes intercompany sales of $1.1 million from Okanagan Pellet Company. Viridis Merchants has experienced growth in its sales to the U.S. northeast market. Scotia Atlantic Biomass also experienced an increase in sales of $1.2 million or 57 per cent over the comparable quarter in 2014.
“Five sequential quarters of revenue growth, supported by an appreciable increase in Viridis Merchants business, is confirmation of our aggregation strategy implemented a year ago,” said Christopher Robertson, chief executive officer. “Clearly, the growth in demand for wood pellets in the residential heating market, coupled with the quality of our premium pellets, are positioning Viridis to benefit from this fast developing trend.”
The Company’s gross profit improved to $6,000 for the three-month period ended March 31, 2015 from a loss of $237,000 for the comparable period in 2014. The improvement in gross margin is primarily the result of the increased contribution from Viridis Merchants, the strengthening of the U.S. dollar and increased production at the Scotia facility.
Operating expenses were virtually flat at $1.1 million for the three month period ended March 31, 2015 and $1.1 million for the comparable period last year. Operating expenses as a percentage of revenues decreased to 12.9 per cent for the first quarter of 2015 from 19.8 per cent for the comparable period last year.
“Scotia’s losses continued to have a significant impact on the Company’s results during the current year first quarter, prior to the implementation of the right-sizing strategy previously announced,” said Robertson. “As part of this plan, we have analyzed the fiber availability by region and have determined that there is adequately priced fiber to operate the plant profitably at this reduced level. We will continue to analyze fiber costs and make adjustments to production as needed, during the second half of 2015, to ensure that we achieve sufficient margins to generate cash flow.”