PyroGenesis Canada Inc (CVE:PYR) (OTCMKTS:PYRNF) is expecting to turn a profit in 2019 after securing a number of contracts that will generate significant revenues for the high-tech plasma manufacturer.
In 2018, the Montreal-based company positioned its commercial business lines for growth by strategically partnering with multi-billion-dollar organizations such as the US Navy, a major Japanese trading house and global metallurgical company Aubert & Duval.
“It became readily apparent to management that partnering with the right entity could significantly accelerate commercialization in each of its new business lines,” the company said in a statement. “This, however, would come with a cost in 2018."
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In order to succeed, PyroGenesis said it had to dedicate significant resources to demonstrating the value proposition, and capabilities, to these entities, and assets which should have been dedicated to sales now had to be deployed to developing these relationships.
This not only impacted revenues, but it also increased costs of non-paying projects.
According to PyroGenesis CEO Peter Pascali, the company is close to securing contracts that would bring in over C$30 million in revenues over the next 18 months, in addition to the existing backlog of contracts worth nearly $8 million.
The company posted its 2018 financials on Tuesday evening showing revenues of $5 million, down from approximately $7 million in 2017.
The decrease was a result of PyroGenesis’s strategy to pursue strategic partnerships at the expense of revenues, said CEO Pascali in a statement.
“If 2018 was the year in which the company successfully positioned itself with unique and strategic partnerships, geared to effectively accelerate commercialization, then 2019 is the year that bears the fruit of that strategy,” Pascali said. “We strongly recommend that these financials be viewed in this context.”
The company recorded a net loss of $7.8 million for the year, compared to a loss of $6.2 million in 2017.
On a corporate level, the company has spun out its additive manufacturing capabilities to better utilize investor funds interested in the additive space alone.
PyroGenesis is also contemplating a listing on a more senior exchange.
PyroGenesis designs, develops, manufactures and commercializes plasma products such as atomized metal powders, plasma waste-to-energy systems and plasma torch products for high-value industries such as military, mining and 3D printing.
Shares of PyroGenesis were trading at C$0.65 on Wednesday morning in Toronto and US$0.50 south of the border.
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