Solazyme highlights algal oil facilities in 2014 results

By Katie Fletcher | March 04, 2015

Solazyme Inc. released its 2014 quarter four and full-year results on Feb. 26, reporting that although 2014 was a challenging year, the company is excited about the opportunities in the coming year. Solazyme made progress towards commercialization and production goals by commencing operations at both the Clinton and Galva, Iowa, and Solazyme Bunge Oils Moema, Brazil, facilities, according to Jonathon Wolfson, CEO of the company. “We ended 2014 by demonstrating fully integrated operations at Moema and are confident that we will turn the corner to consistent and reliable operations as well,” he said.

Total revenue generated during the fourth quarter was $14.5 million, an increase of 29 percent, from the reported $11.3 million during the comparable period in 2013. Fourth quarter GAAP net loss was $44.9 million in comparison to a net loss of $33.3 million in quarter four 2013. On a non-GAAP basis the net loss was $35.5 million for the last reported quarter of 2014 compared to a net loss of $27.4 million during the same period in the prior year.

Total revenue for 2014 was $60.4 million, an increase of over 50 percent from $39.8 million in 2013. Within that total, product revenue was up 87 percent versus the prior year. Tyler Painter, chief financial officer of Solazyme, said the year’s revenue growth reflects the expansion of the Algenist product line, shipments from Clinton/Galva and Peoria of Encapso and AlgaVia branded products, as well as delivery against all of the joint development milestones of Solazyme’s partners. “We are well positioned financially to accelerate the commercialization of our products in 2015,” he said.

Full-year ended Dec. 31 GAAP net loss was $162.1 million, up from $116.4 million net loss in the prior year. The net loss on a non-GAAP basis was $133.4 million for 2014 and $88.6 million in 2013. The cash balance at the end of 2014 was $207 million.

The joint venture with Bunge Global Innovation LLC resulted in a successful year, now with the Moema facility demonstrating integrated operations from input sugar to crude oil since December. Upstream, the facility is performing well producing greater than 1,200 metric tons of dried biomass in December. Downstream, the oil extraction is working, but requires optimization. Also, intermittency of power and steam continues to impact operations. The goal of the company in 2015 is to reach consistent, fully integrated operations and ramp up production volumes.

In regards to the Clinton and Galva algal oil facilities, commercial production has begun and successfully produced five unique products during the course of 2014. The company is continuing the approach of limiting production at the facilities to higher value products over 2015. Production at these facilities is expected to ramp up to a nameplate capacity of 20,000 metric tons per year within 10 to 16 months, with targeted potential expansion to 100,000 metric tons annually in subsequent years. This follows the company’s quarter three results, when Peter Licari, Solazyme chief technology officer, said the company had produced more than 1,000 metric tons of product at the Clinton/Galva plants in each of the two previous quarters.

Solazyme made progress in many of its branded products. Encapso is a biodegradable, encapsulated oil for use as a lubricant in drilling fluids that the company introduced in 2014. The product has now been deployed at 37 commercial wells, and results confirm that Encapso delivered operational improvements, such as reduction in torque, increases in drilling speed and reductions in non-productive time. The company estimates more than $100,000 in savings per well were observed in North Dakota.

A few partner developments Solazyme mentioned during the year included deliveries under a 10,000-metric-ton supply agreement and extension of the joint development agreement (JDA) with Unilever. The company expanded the JDA and established terms for a five-year supply agreement for up to 10,000 metric tons annually with AkzoNobel, and also partnered with Versalis to commercialize Encapso.

Solazyme assesses that revenue growth excluding SB oils JV will be greater than 15 percent year-over-year. It is expected that cash operating expense will decrease by more than or around $18 million year-over-year. Solazyme’s capex and SB oils equity contributions are estimated to decrease 50 percent year-over-year, or in the range of $20 to $30 million. Wolfson stated on the earnings call that the company has “great technology, products and partners, and though there is hard work in front of us, we are excited about our opportunities and the year ahead."