Viridis Energy 'well positioned for breakout year'

Canadian wood pellet manufacturer Viridis Energy Inc. released its Q1 financial results, reporting that despite a six-week trucking strike and extreme weather, both of which impacted the company’s plants in British Columbia and Nova Scotia, the company increased revenue by 143 percent from Q1 2013.

Milestones at the company’s two plants included shipping of its first large cargo of wood pellets to Europe from its 120,000 metric-ton-per-year Nova Scotia facility, and the arranging of a second transaction by wholly owned dealer subsidiary Viridis Merchants.

Viridis CEO Christopher Robertson said the two events were two significant revenue developments.  “Had it not been for the abnormally hostile winter and a rare trucking strike, we would have posted a record quarter as well,” Robertson said. “The disruption in shipping alone impacted our quarterly results by approximately $700,000 in delayed revenues.”

Also contributing to balance sheet improvements since year-end 2013 were a $3.25 million secured loan facilities agreement with the Royal Bank of Canada, proceeds of which were used to repay the $3.3 million loan owed by Viridis’ Okanagan Pellet Company subsidiary to Cornwall Investments LLC, as well as a $250,000 line of credit;  Cornwall Investments LLC exercised 25 million of its Viridis common share purchase warrants at a price of $0.15 per share, generating proceeds of $3.75 million to Viridis; and Viridis’ wholly owned subsidiary, Scotia Atlantic Biomass Company Ltd., was awarded a Capital Investment Incentive of up to $517,520 by the Nova Scotia government, which will be used to purchase new capital equipment to increase production performance at the Scotia plant.

Robertson also commented that, as discussed at year-end, Viridis is well positioned for a breakout year in 2014. “Our OPC plant is operating at full capacity and Scotia Atlantic Biomass is gaining meaningful progress toward achieving full operating capacity,” he said. “Additionally, both Viridis Merchants transactions have begun contributing to revenues. Consequently, we anticipate 2014 revenues will fall in a range between $30 million and $35 million, exiting the year at a profitable run-rate.”

Viridis reported revenues for the three months ended March 31 of approximately $5.6 million, compared to $2.3 million for the same period of the previous year, and $6.1 million in the fourth quarter of 2013. The year-over-year improvement predominately reflects the continued ramp-up of production from the company’s plant in Nova Scotia, and revenue from Viridis Merchant initial transaction, according to the report. The decline in revenues from the fourth quarter was attributed to the impact of the strike by third-party freight operators, which has since been resolved, and prevented the company’s Okanagan plant from delivering product during a six-week period in the first quarter.