Replenish Nutrients Holding Corp (CSE:ERTH, OTC:VVIVF) said demand for its regenerative fertilizer products remains robust during the second quarter, with purchases from existing and new customers.
It saw “modest” revenues, sales volumes, and margins for its blended fertilizer products during the quarter, largely due to final higher cost inventory carryover and the deferral of sales until the fall.
Replenish expects its revenues and gross margin percentages in the second half of the year to be higher than the comparable periods in 2023 leading to “solid overall results” for 2024.
It highlighted that granulated fertilizer produced at its Beiseker, Alberta, facility showed strong pricing and margins during Q2, highlighting the potential of an upgraded facility, which aims to produce 20,000 to 25,000 metric tonnes annually.
The company is shifting its focus from lower-margin blended fertilizer to higher-margin granulated fertilizer.
To fund the facility upgrade, the company plans to use a combination of internal cash flows, debt, and equity, with final financing expected soon.
Progress is also being made on the DeBolt project's ERA application, Replenish said.
The company is confident that increased granulated fertilizer production will significantly boost margins and cash flow in late 2024 and into 2025.
Revenue for the three months ended June 30 was $0.9 million, compared to $4.3 million in the year-ago quarter, with the decrease attributed to variability in seasonal demand from weather and the expected cycling of different nutrient requirements for various types of crops.
It posted a net loss of $1.3 million, compared to a net loss of $0.6 million for the same period last year.