Viridis Energy reports strong year

By Anna Simet | April 01, 2015

For Viridis Energy, 2014 was a foundation year during which the company laid the groundwork to position itself for growth anticipated over the coming years.

That’s according to Viridis Energy CEO Christopher Robertson, who began the company’s Q4 2014 financial earnings call by highlighting a 400-plus percent increase in Viridis Merchants in 2014, primarily due to increased U.S. Northeast sales. “Our strategy to expand and aggregate will be cornerstone of our 2015 business plan,” he said. “We continue to see significant upside in the industry, most importantly, in Viridis.”

Viridis reported a strong year, with revenues of $8.3 million during the three-month period ended Dec. 31, an increase of $2.2 million or 36 percent from $6.1 million for the comparable period in 2013, and total 2014 revenue of $28.2 million, an increase of $14.3 million or 103 percent over 2013.

The increase in revenues in 2014 was primarily attributed to sales from the company’s subsidiary, Scotia Atlantic Biomass Ltd., which operated for four months in 2013. Scotia generated $9.3 million of additional revenue in 2014.

At the same time, production challenges at Scotia Atlantic were related to a net loss attributable to shareholders of the company—$600,000, or 4 cents per basic share for Q4 2014. “Although we were very disappointed by this, the rest of the business performed well,” Robertson said. “We have a plan in place to turn this operation around…Despite this significant setback, we’re pleased in the topline growth in the company. Year over year, we doubled revenue in 2014.”

Robertson also highlighted Viridis’s breakeven EBITDA on a run-rate basis by year end, which he referred to as milestone. “Q4 was a strong quarter and sets foundation of year ahead,” he said. “Demand for premium pellets in North America remained high, and has allowed us to realize the benefit for low Canadian dollar. We sold 43 percent of our premium pellet into the U.S. in Q4, and over 30 percent for full year 2014. “

Two cold winters in a row and a general shortage in the U.S. Northeast had a positive impact on Q4 2014, Robertson said, and that impact will flow into 2015 as well. For the overseas industrial market, he said Viridis shipped another vessel to Europe in Q4, at higher prices than the previous ship.

After discussing a three-step plan to address production challenges experienced at Scotia Atlantic in 2014, which includes coinciding maintenance shutdowns with spring break road closures, building up and purchasing fiber supply at lower costs and restarting the plant as a 24/5 operation, Robertson said Viridis expects the plant to be profitable and right-sized at 80,000 tons per year, and in a position to ramp up to full production levels (120,000 to 150,000 metric tons) if fiber costs remain low.

Chief Financial Officer Michelle Rebiere further discussed the company’s financial results, stating that over 140,000 tons of wood pellets were sold in 2014, compared to 83,000 in the previous year, and the average cost per ton rose from $167 in 2013 to $200 per ton in 2014.