Viridis produces pellets at Scotia plant, releases Q2 results

By Erin Voegele | September 05, 2013

British Columbia-based pellet producer Viridis Energy Inc. has announced its wholly owned subsidiary Scotia Atlantic Biomass Co. Ltd. has commenced operations and is producing wood pellets at its 120,000-ton-per-year plant in Middle Musquodoboit, Nova Scotia. The facility’s first shipment of pellets has been sold for delivery in December.

According to Viridis, three of the plant’s five pellet presses began operations in late August. All five are expected to be operational by the end of September. Viridis acquired the facility in February 2012. According to the company, a two-year European off-take agreement is in place for its production.

The company also recently released financial results for the second quarter of 2013, the three-month period ended June 30. Viridis reported revenue of $2.5 million for the quarter, up from $2.3 million the prior month and $2.4 million for the same three-month period of last year. Gross profit increased to $465,000 for the second quarter, up from $336,000 reported for the first quarter of the year and $186,000 during the second quarter of 2012. In the quarterly release, Viridis said the improvement in gross margin reflects increased production utilization and the further effects of cost efficiencies implemented in late 2012.

Loss from operations during the second quarter decreased to $365,000 from $561,000 the previous quarter. A $730,000 loss from operations was reported for the second quarter of last year. General and administrative and start-up costs associated with the Scotia Atlantic Biomass plant accounted for $250,738 for the second quarter of 2013 and $204,134 during the second quarter of last year. Excluding Scotia Atlantic Biomass costs, the company’s operating loss was $105,000 during the second quarter of this year.

"With Scotia back in operation, our bottom line will improve significantly over the next few quarters. Our consolidated production capacity is now 180,000 tonnes per year, and with efficiencies implemented over the last six months, we are seeing signs that, in addition to increasing plant utilization, we are testing projected production capacity limits,” said Christopher Robertson, chairman and CEO of Viridis in the release. "We project gross margins on our core residential and commercial wood pellet businesses to continue improving. We also expect our brokerage business to expand in coming months as more power plants convert to biomass fuel sources, especially in Europe where government subsidies and support schemes continue to focus on attracting investment for low carbon generation."