VANCOUVER, Nov. 12, 2019 - Pinnacle Renewable Energy ("Pinnacle" or the "Company") (TSX: PL) today announced its financial results for the quarter ended September 27, 2019 ("Q3 2019").
Q3 2019 Highlights
- Revenue increased 5.6% to $92.6 million, compared to $87.6 million of revenue in Q3 2018;
- Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA")¹ totaled $14.3 million, $0.2 million lower compared to $14.5 million in Q3 2018;
- Excluding the impact of the implementation of IFRS 162 and the incident at the Company's Entwistle facility, Q3 2019 Adjusted EBITDA¹ was $10.3 million;
- Achieved annual run-rate production of 125,000 MT of industrial wood pellets at the Smithers Facility as expected;
- Secured a new long-term, take-or-pay off-take contract in Japan with Mitsubishi Corporation for 110,000 to 120,000 metric tons per annum ("MTPA") of industrial wood pellets beginning in 2021; and
- Entered an agreement with Tolko Industries Ltd. to build a new industrial wood pellet production facility in High Level, Alberta with production capacity of 170,000 to 200,000 MTPA and commenced construction.
Subsequent to Q3 2019 Highlights
- Entered into a new long-term, take-or-pay off-take contract with Mitsui & Co. Ltd. ("Mitsui"), for 100,000 MTPA of industrial wood pellets to Mitsui beginning in 2023, to be used by a biomass power generation plant in Japan; and
- The dryer at the Entwistle Facility successfully restarted early in November as expected.
"The third quarter of 2019 was a challenging period as a number of our B.C. fibre suppliers curtailed operations, resulting in a transition to an increased use of harvest residuals in our production process, driving higher costs," said Rob McCurdy, CEO of Pinnacle. "Our team continues to actively focus on reducing costs and improving the operating efficiencies of our B.C. facilities, as well as transitioning of our fibre procurement strategy by leveraging more harvest residuals, developing enhanced processing strategies, and working with First Nations and the B.C. government to diversify our fibre suppliers. While we are laser-focused on fibre management and processing in B.C. we are also encouraged by the ongoing development and diversification of the business with the re-start of the Entwistle facility, recently announced contracts in Japan, and the construction of the High Level facility in Alberta."
Q3 2019 Financial Results
Revenue for Q3 2019 totaled $92.6 million, an increase of 5.6% compared to $87.6 million for the 13-week period ended September 28, 2018 ("Q3 2018"). The increase was primarily attributable to higher selling price per MT and a higher proportion of cost, insurance and freight contracts. Higher volumes of pellets from Pinnacle's Smithers and Aliceville facilities in Q3 2019 compared to Q3 2018 when there were no sales from these facilities was offset by lower production volumes at the B.C. facilities due to the impacts from the ongoing sawmill curtailments.
Source: Pinnacle Renewable Energy