Replenish Nutrients Holding Corp (CSE:ERTH, OTC:VVIVF, FRA:7KE) told investors that it is moving toward full-scale production of granulated and pelletized fertilizer, with the company targeting the fourth quarter of 2026 to reach planned capacity at its Beiseker and Beiseker Hutterite colony facilities.
The company reported second quarter 2026 results on Friday, highlighting a shift away from blended fertilizer toward higher-margin granulated and pellet products.
Granulated fertilizer sales increased by more than 1,200 metric tonnes during the quarter and by more than 1,600 metric tonnes for the first six months of the year compared with the corresponding periods in 2025.
Revenue decreased by $0.5 million for both the three and six months ended June 30 compared with the same periods last year. Replenish attributed the decline primarily to lower blended fertilizer sales, which were partially offset by increased granulated fertilizer sales and higher power revenue. The company had previously guided that blended fertilizer sales would decline as it transitioned toward commercializing granulated and pellet fertilizer.
Higher power revenue reflected increased average power pool pricing compared with the prior-year periods.
Gross profit decreased by $0.3 million and $0.6 million for the three and six months, respectively. The company attributed the declines to the transition toward full-scale granulated and pellet fertilizer operations at the Beiseker and Beiseker Hutterite colony facilities, as well as additional ramp-up costs. Higher gross profit from the power segment, driven by stronger average power pool pricing relative to natural gas costs, partially offset the decline.
Net loss increased by $0.3 million for the quarter and $0.9 million for the six-month period compared with the prior year. Replenish attributed the higher losses primarily to lower gross profit margins, higher finance costs and a non-cash unrealized loss on financial assets.
Cash used in operating activities decreased by $0.9 million for the three months but increased by $0.1 million for the six months compared with the prior year. The quarterly improvement was attributed to higher cash generated from changes in working capital, while the six-month increase in cash usage was primarily due to lower operating margins, partially offset by increased cash from changes in working capital.
Replenish said that its gross profit margin before other direct costs remained below its 25% to 35% target in the second quarter as initial commissioning expenses were spread across production and sales volumes below full capacity.
At Beiseker, commissioning of the granulation facility is in its final stages, with the company preparing for 24-hour production runs and hiring additional plant operators. Replenish expects the facility to reach its planned capacity of 2,000 metric tonnes per month in the fourth quarter.
The company has also increased planned pellet production at its Beiseker Hutterite colony facility to approximately 1,600 metric tonnes per month, up from a previous forecast of 1,000 metric tonnes, following the addition of a second pelletizer. Initial production and sales are expected to begin in the fourth quarter.
Replenish also reported progress on its licensing agreements with Farmers Union and MJ Ag, with both partners reaching additional construction and commissioning milestones. Initial commissioning production is expected in the fourth quarter, with annualized production capacities of 50,000 metric tonnes and 10,000 metric tonnes, respectively, targeted by year-end.
"We are deliberately shifting our production mix toward higher-margin granulated and pelletized fertilizer," Replenish CEO Neil Wiens said in a statement.
He added that the company believes the production ramp, licensing agreements and recent financing position Replenish to scale production and improve margins through the remainder of 2026 and into 2027.
Subsequent to the quarter, Replenish closed a $15 million strategic financing with SRC Agrominerals. The company wrote that the financing will provide working capital for its owned and licensed facilities and is expected to support a 150,000-metric-tonne expansion of pellet fertilizer production at Beiseker.
“Combined with the continued momentum on our Farmers Union and MJ Ag licensing agreements and the $15 million financing with SRC Agrominerals we announced subsequent to quarter end, we believe Replenish is well positioned to scale production, improve margins, and strengthen our balance sheet as we move through the back half of 2026 and into 2027,” Wiens concluded.