BioAmber reports progress with Sarnia plant in Q2 results
BioAmber Inc. has released second quarter financial results, reporting that the company’s biobased succinic acid plant in Sarnia, Ontario, is progressing on budget and is expected to be complete in early 2015.
During a call to discuss the company’s quarterly results, Jean-Francois Huc, CEO of BioAmber, noted the pace of construction on the Sarnia plant picked up considerably during the past quarter. We now average close to 100 workers onsite each day, he said. According to Huc, the warehouse is now complete, while the office building is nearly completion. Regarding the production facility, Huc said BioAmber has completed more than 85 percent of the detailed engineering to date. The remaining work consists of some piping, electrical and instrumentation work, he continued, along with some equipment setting.
According to Huc, the detailed design of the plant has been broken down into 90 different engineering work packages for bid execution, and 86 or those 90 packages have been issued. In addition, three of the remaining four packages have been sent out for bid, and include minor packages, such as site paving. Huc indicated 78 pieces of equipment have been delivered to date, and another 28 pieces are expected in the coming weeks.
Since BioAmber’s first quarter earnings call, Huc said the company has added six employees to the commissioning and startup team, has set up classrooms in Sarnia, and is engaged in operator training. “We’ve made good progress with respect to drafting our standard operating procedures for the plant, safety training, the maintenance plan, and it’s supporting IT system,” he said. “For the coming quarter, our focus will be on training operators on the control logic of the plant, setting up procurement and supply chains processes that support plant operation, continue work on the maintenance plan and IT system, and finalize the quality control lab procedures.”
According to information released by BioAmber, the company secured an additional CDN$27 million in non-dilutive financing for the Sarnia project during the second quarter, including a CDN$7 million grant and a CDN$20 million commercial loan. Subsequent to the quarter, a 15-year take-or-pay agreement was signed with Vinmar for 10,000 tons per year from Sarnia and 200,000 tons per year from two additional succinic acid plants following their financing, construction and commissioning. Also subsequent to the quarter, a common share offering was completed that raised an additional $35.8 million in net proceeds.
Revenue for the second quarter was $415,000, down from $1.03 million during the same quarter of last year. The decrease was principally due to sales to two customers during the second quarter of 2013 that will not recur until the Sarnia plant comes online. Sales increased by 18 percent when compared to the first quarter of the year. Gross loss for the quarter was $1.84 million, compared to a gross loss of $383,000 for the same three-month period of last year. The company recorded a net loss attributable to shareholders of $14.1 million, or 75 cents per share, compared to a net loss of $7.2 million, or 47 cents per share, for the same period of 2013.