(via TheNewswire)
“Our financial results for the nine months ended
FINANCIAL HIGHLIGHTS
Proportional revenue for Q3 2021 was
$5.5 million , a$215,000 or 4% increase from$5.3 million in Q3 2020.Net income increased by
$102,000 to$1.5 million in Q3 2021, compared to$1.4 million in Q3 2020.Adjusted EBITDA for Q3 2021 was
$2.1 million compared to$2.0 million in Q3 2020, a$100,000 increase.Working capital was
$4.2 million atSeptember 30, 2021 , compared to$3.5 million atDecember 31, 2020 , and$2.4 million atJune 30, 2021 , representing increases of 20% and 78% respectively.Proportional cash, which includes our share of cash held in joint ventures, at
September 30, 2021 was$7.7 million , compared to$5.2 million atDecember 31, 2020 , and$5.0 million atJune 30, 2021 , representing increases of 47% and 54% respectively.
OPERATIONAL SERVICES HIGHLIGHTS
Our operational services consist of the operation of water treatment plants, which generate recurring revenues for the Company from two main sources: sales of recovered metals and water treatment fees.
Revenues from Sales of Recovered Metals
The Company operates four water treatment plants that generate revenues from the sale of recovered metals, three plants from the JCC-BQE Joint Venture (“JCC-BQE”) and one plant from the MWT-BQE Joint Venture (“MWT-BQE”).
JCC-BQE Joint Venture
Our 50/50 joint venture with partner Jiangxi Copper Company (“JCC”) operates water treatment plants at
(in ’000s) | 3 months
ended | 9 months
ended | ||
2021 | 2020 | 2021 | 2020 | |
Water treated (cubic metres) | 7,949 | 8,631 | 18,075 | 16,901 |
Copper recovered (pounds) | 1,128 | 1,476 | 2,594 | 2,642 |
During Q3 2021, all three plants met or exceeded mechanical availability and process performance. The volume of water treated and the mass of copper recovered decreased by 8% and 24% respectively over the same period in 2020. Fluctuations in rainfall changes the water flowing into the treatment plants and alters the copper leaching from waste rock, leading to a higher or lower copper concentrations in the plant feed. Changes in water volume and feed grade are largely the result of environmental conditions beyond the control of the joint venture and will fluctuate from period to period.
MWT-BQE Joint Venture
Our 20% share of MWT-BQE is with our 80% partner
(in ’000s) | 3 months
ended | 9 months
ended | ||
2021 | 2020 | 2021 | 2020 | |
Zinc recovered (pounds) | 185 | 167 | 774 | 886 |
Copper recovered (pounds) | 38 | 44 | 192 | 144 |
During Q3 2021, the mass of zinc recovered increased by 11% and the mass of copper recovered decreased by 14% compared to the same period in 2020. The smelter periodically operated their production lines with ores from different sources which led to varying concentrations of zinc and copper in the feed composition and a fluctuation in the volume of wastewater treated by the plant. The joint venture has no control in the composition and volume of the feed that flows into the plant.
Revenues from Water Treatment Fees
The Company is contracted to operate and provide technical support for water treatment plants that generate recurring revenues in the form of water treatment and operations support fees. The Company earns water treatment fees at the four plants operated by
In
For our operations in
(in ’000s cubic metres) | 3 months
ended | 9 months
ended | ||
2021 | 2020 | 2021 | 2020 | |
Glencore water treatment plants | 1,628 | 1,081 | 1,773 | 1,175 |
MWT-BQE water treatment plant | 139 | 126 | 481 | 458 |
Zhongkuang SART plant | - | - | 48 | - |
Zhaojin SART plant | 76 | - | 184 | - |
TECHNICAL SERVICES HIGHLIGHTS
BQE Water’s technical expertise and IP are applicable globally across broad areas of water management. The highlights of technical services provided to clients and technical innovation projects during Q3 2021 are summarized below.
Commercial Deployment of Selen-IX™ and Direct Selenium Electro-Reduction (ERC) Technology
Continued to support detailed engineering for a second large scale Selex-IX™ plant to be installed at a mine in the US.
Continued to provide engineering services for the first commercial scale direct selenium ERC plant at a mine in the US.
Completed first fills (anodes and resin) and initiated pre-commissioning activities at the first Selen-IX™ plant, outside of the mining industry, at an ash pond in the US.
Cyanide Management and Recovery using SART and Electro-oxidation
Initiated preliminary technical assessment for SART at a new mine in
Mexico .Initiated preliminary technical assessment for SART integration at a
Carbon in leach (CIL) circuit inCanada .Initiated cyanide destruction test program to expand an existing operation in
Canada .Completed lab scale testing of cyanide recovery from thiocyanate using leach solution from an existing gold plant in Central America.
Water Consulting Services – Management, Treatability, Permitting Assistance, Toxicity Mitigation
On-site technical support for water treatment plant operations at the
Hope Bay project in Nunavut.Preliminary engineering for a new non-biological ammonia removal system in Northern Ontario.
On-site technical support and optimization of a non-biological ammonia removal plant in Ontario.
Water treatment design for permitting in BC.
Water treatment design for a new gold mine in Central America.
Completed a review of water quality and chronic toxicity data for an existing mine in Qubec.
COMMENTARY AND OUTLOOK
Q3 2021 was a strong quarter as we delivered year-over-year improvements in Proportional Revenue, Adjusted EBITDA, and net income for both the quarter itself and the first nine months of the fiscal year. Total revenues under GAAP for the first nine months in 2021 were 19% lower than in 2020. However, this was not due to a lack of project activity but rather due to a change in the nature of our activities. In the prior year, there were several projects in advanced stages of development that triggered significantly larger technical services contracts in the areas of plant engineering and pilot demonstration. This year, many new projects were in earlier stages of development with lower contract values, such as lab testing and consultation. As projects advance through the pipeline, we typically see increase in revenue from the same projects and expect this trend to continue. The fact that our revenue sources are diversified can at times help smooth out project revenue fluctuations. Specifically, in Q3 2021, a 24% decrease in technical services revenues was more than offset by a 41% increase in revenues from operations contracts, largely from the sale of metals recovered from our joint ventures that are benefiting from strong copper prices.
There were several major developments during Q3 2021 that are expected to generate positive results and growth opportunities for
Our overall outlook for the remainder of 2021 and 2022 is positive. We expect to complete commissioning and begin operating two new water treatment plants in the US in the next six months, adding additional streams of recurring revenues to our financial results. The Company has maintained a strong balance sheet while continuing to grow working capital. However, we continue to caution our shareholders with respect to geopolitical uncertainties which may affect our global business and/or interrupt the global economic recovery from the downturn caused by COVID-19.
SELECTED FINANCIAL INFORMATION
For a complete set of Financial Statements and MD&A, please go to www.bqewater.com.
(in $’000 except for per share amounts) | 3 months
ended | 9 months
ended | ||
2021 | 2020 | 2021 | 2020 | |
$ | $ | $ | $ | |
Revenues | 2,773 | 2,738 | 4,941 | 6,088 |
Operating expenses | (1,088) | (1,381) | (2,540) | (3,497) |
Operating margin | 1,685 | 1,357 | 2,401 | 2,591 |
Share of income from joint ventures | 700 | 785 | 2,304 | 1,038 |
General and administration expenses | (427) | (342) | (1,287) | (1,209) |
Sales and development expenses | (273) | (153) | (1,104) | (622) |
Share-based payment expenses | (19) | (113) | (292) | (280) |
Depreciation | (37) | (33) | (111) | (105) |
Income from operations and joint ventures | 1,629 | 1,501 | 1,911 | 1,413 |
Other income (expenses), net | 34 | (58) | (45) | (38) |
Bad debt recovery | - | - | 95 | - |
Income tax expense | (118) | - | (130) | (5) |
Net income for the period |
1,545 |
1,443 |
1,831 |
1,370 |
Net earnings per share (basic) | 1.25 | 1.18 | 1.49 | 1.13 |
Net earnings per share (diluted) | 1.23 | 1.17 | 1.46 | 1.12 |
Proportional Revenues1 | 5,502 | 5,287 | 11,227 | 10,412 |
Adjusted EBITDA1 | 2,139 | 2,039 | 3,344 | 2,540 |
at | at | |||
2021 | 2020 | |||
Working capital | 4,241 | 3,543 | ||
Total assets | 13,237 | 10,464 | ||
Total non-current liabilities | 697 | 821 | ||
Shareholders’ equity | 10,333 | 8,088 | ||
Proportional cash1 | 7,709 | 5,241 |
Notes:
Non-GAAP measures
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain information contained herein may not be based on historical fact and therefore constitutes "forward-looking information" under applicable Canadian securities legislation. This includes without limitation statements containing the words "plan", "expect", "project", "estimate", "intend", "believe", "anticipate", "may", "will" and other similar words or expressions. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks, uncertainties and other factors that may cause actual events or results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the Company’s dependence on key personnel and contracts, uncertainty with respect to the profitability of the Company’s technologies, competition, technology risk, the Company’s ability to protect its intellectual property and proprietary information, fluctuations in commodity prices, currency risk, environmental regulation and the Company’s ability to manage growth and other factors described in the Company’s filings with the Canadian securities regulators atwww.sedar.com(including without limitation the factors described in the section entitled "Risks and Uncertainties" in the Company's MD&A for the year ended
For further information please contact:
Suite 250 – 900 Howe Street Vancouver BC Canada V6Z 2M4
dkratochvil@bqewater.com
hwong@bqewater.com
604-685-1243 or 1-800-537-3073
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