PyroGenesis Canada Inc. (TSX:PYR) has posted second-quarter revenue of $5.8 million, driven by its main business offerings, and said its backlog of signed and/or awarded contracts stood at above $35.3 million.
The Montreal-based high-tech company which designs, manufactures and sells advanced plasma processes and sustainable solutions to reduce greenhouse gases said in addition to DROSRITE, PUREVAP and US Navy-related sales, torch-related sales contributed about $1.5 million to sales and biogas upgrading and pollution control solutions contributed $2.2 million during the quarter ended June 30, 2022.
Revenue for the six months of 2022 came in at $10.0 million, it added.
Significantly, gross margin for the 2Q was $2.5 million or 43% of revenue, compared to a gross margin of $4.9 million or 60% of revenue for Q2 2021.
The company said it incurred $804,564 in R&D costs on internal projects. PyroGenesis narrowed its adjusted EBITDA loss during the quarter to $10.7 million, compared with an adjusted EBITDA loss of $16.8 million.
In a statement accompanying the numbers, PyroGenesis CEO P. Peter Pascali said: “We have posted 2Q 2022 revenues of $5.8 million, our backlog remains above $35 million, a significant level and our pipeline continues to expand. Despite gross reported revenue continuing to be impacted by delayed client and contract decisions related to ongoing international and regional logistical and resourcing headwinds, our margins are at a level that puts us among industrial technology and manufacturing industry leaders.”
He added: “The 43% quarterly gross margin illustrates the combined strength of the company’s production process and the strategy and care taken with contract negotiations. Our trailing twelve-month (TTM) gross margin is a very healthy 32.4% despite the inclusion of the unusually low Q4 2021 gross margin of 18% that was seen as a result of the cost and resource synchronization process for Air Science Technologies acquisition (now Pyro Green-Gas).”
Pascali noted that both the quarter’s gross margin and the firm’s TTM are well above its contemporaries, including the high-profit industries it primarily serves such as the aluminum industry at 22.7%, iron and steel at 31.5%, and aerospace and defense at 22.8%.
“Concurrently, two of our flagship product lines, the NexGen plasma atomized metal powder system and our plasma torch system for iron ore pelletization furnaces, achieved long-anticipated milestones, placing both on the threshold of full commercialization and widespread adoption,” said Pascali.
“Even more exciting is the momentum around reducing greenhouse gas emissions and fossil fuel use in heavy industry which continues to grow like never before.”
In terms of outlook, PyroGenesis said as with much of the industrial technology and manufacturing sectors, it has felt the repercussions of macro-economic headwinds that have affected the planning, logistics, and spending of its customers and of its sales pipeline targets.
“What was anticipated to be a major growth first half, has adjusted to be more of a modest stage-setting for the second half of the year and into 2023,” said the company.
Meanwhile, investors can read about how PyroGenesis will spur organic growth here.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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