Verde highlights carbon capture potential for 2024
January 31, 2024
Verde AgriTech Ltd (TSX: “NPK”) (the “Company”) announced its preliminary and unaudited results for the period ending December 31, 2023 (“FY 2023”). The Company also announced its 2024 guidance, targeting sales of 800,000 tons of its multinutrient potassium products, BAKS® and K Forte®, sold internationally as Super Greensand® (the “Product”), and a carbon dioxide removal (“CDR”) potential of 38,300 tons of CO2.[1] The yearly revenue from Product sales in 2024 is targeted at C$62.9 million, with an EBITDA of C$12.2 million, and C$0.5 million net profit. FY 2024 financial targets do not include any potential revenue from the sale of carbon credits.
Verde’s financial results for the period ending December 31, 2023, are being examined by its auditors. In the interim, the Company offers an estimation of its FY 2023 results (non-audited), as follows:[2],[3]
- Sales: 427,750 tons of Product
- CDR potential: 17,680 tons of CO2[4]
- Revenue from sales range: C$37.5 million – C$38.5 million
- EBITDA[5] range: C$1.5 million – C$2.5 million
- Net loss range: C$5.0 million – C$6.0 million
“Despite our high expectations for the second half of the year, following the appointment of a new commercial leadership, the results in Q4 were the most disappointing of the year”, commented Verde’s Founder, President & CEO Cristiano Veloso.
The unaudited preliminary financial results in this press release are based on information available to the Company as of the date of this release and is subject to revision upon finalizing the audit of the Company’s annual consolidated financial statements for the fiscal year ending December 31, 2023. The unaudited preliminary financial results in this press release have been prepared by and its management on a reasonable basis, reflecting their best estimates and judgments.
2024 Guidance
“We are currently engaged in multiple discussions with potential partners for our carbon removal project and with prospective buyers of carbon credits. The successful conclusion of these negotiations could result in a substantial adjustment to our production and financial projection for 2024. By operating at full capacity, with an annual production of 3 million tons, we could potentially generate up to 300 thousand tons of CDRs per year. We are working hard to meet our targets, with the expectation of improving these figures as the year progresses,” continued Mr. Veloso.
Verde’s guidance for 2024 is detailed in the table below:
| Key Metrics | FY 2024 Guidance Range[6] | |||
| Sales target (tons of Product) | 700,000 | – | 800,000 | |
| CDR potential (tons of CO2)[7] | 33,513 | – | 38,300 | |
| Revenue from sales (C$ million) | 55.0 | – | 62.9 | |
| EBITDA (C$ million)[8],[9] | 8.9 | – | 12.2 | |
| Net profit / (loss) (C$ million) | (1.4) | – | 0.5 | |
As previously announced, Verde has held back any hurried sale of carbon credits in favor of a long-term strategy that will reflect the higher value of the permanent carbon removal potentially performed by its Products.[10]
The 2024 guidance is underpinned by the following assumptions:
- Average Brazilian Real (“R$”) to Canadian dollar exchange rate: C$1.00 = R$3.70.
- Average Brazilian Real (“R$”) to US dollar exchange rate: US$1.00 = R$4.88.
- Trade Receivables average of 100 days.
- Average KCl CFR Brazil price of US$295, with an overall discount rate of 10%, resulting in a final price of US$265.
- Product sale mix: BAKS sales are 8% of the total.
- Crude oil Brent price: US$80.00.
- Selic Rate: reduction from 11.75% in December 2023 to 9.25% in December 2024.
- Sales Incoterms: 82% CIF and 18% FOB.
- Sales channels: 65% direct sales and 35% indirect sales.
- Weighted average freight cost per ton: $47.
Verde’s 2024 sales target represents a potential 87% growth Year-on-Year (“YoY”), compared to 2023.
Advertisement
The Company plans to release its audited financial statements and related notes for FY 2023 on March 29, 2024, after the close of trading on the Toronto Stock Exchange. These results will be available to the public on SEDAR+ (www.sedarplus.ca/) and the Company’s website (www.investor.verde.ag/). The Company will issue a news wire alert when earnings materials are publicly available.
Verde will host a conference call on Tuesday, April 02, 2024, at 10:00 am Eastern Time, to discuss Q4 and FY 2023 results and provide an update. The questions must be submitted in advance through the following link: https://bit.ly/Questions_Q4-FY2023
Subscribe using the following link and receive the conference details by email: https://bit.ly/Q4-FY2023_ResultsPresentation
[1] 1 ton of Long-Term Net CO2 Removal (CDR) is equivalent to 1 carbon credit.
[2] Average Brazilian Real (“R$”) to Canadian dollar exchange rate: C$1.00 = R$3.70.
[3] The financial results for FY 2023 do not include the revenue from potential sales of carbon credits.
[4] Out of the total sales in FY 2023, 268,907 tons were sold in compliance with our Monitoring, Verification, and Report (“MRV”) Protocol, qualifying them as potential carbon credits. This volume has the potential to capture up to 32,198 tons of CO2 from the atmosphere via Enhanced Rock Weathering (“ERW”), with a net CDR potential of 17,680 tons of CO2.
[5] Before non-cash events.
Advertisement
[6] FY 2024 financial guidance does not include any potential revenue from the sale of carbon credits.
[7] Out of the total sales targeted for FY 2024, 455,000 – 520,000 tons are expected to be sold in compliance with our MRV Protocol, qualifying them as potential carbon credits. This volume has the potential to capture 54,600 – 62,400 tons of CO2 from the atmosphere via ERW, with a net CDR potential of 33,513 – 38,300 tons of CO2.
[8] Before non-cash events.
[9] Non GAAP measure.
[10] For further information, please see “Verde appoints Vice President of Corporate Development”.
[11] Learn more about our technologies: https://verde.docsend.com/view/yvthnpuv8jx6g4r9
[12] See the release at: https://investor.verde.ag/verde-starts-ramp-up-of-plant-2s-second-stage-to-reach-production-of-2-4mtpy/
[13] As per the National Instrument 43-101 Standards of Disclosure for Mineral Projects within Canada (“NI 43 -101”), filed on SEDAR in 2017. See the Pre-Feasibility Study at: https://investor.verde.ag/wp-content/uploads/2021/01/NI-43-101-Pre-Feasibility-Technical-Report-Cerrado-Verde-Project.pdf
[14] Source: Brazilian Fertilizer Mixers Association (from “Associação Misturadores de Adubo do Brasil“, in Portuguese).
[15] Source: Brazilian Comex Stat, available at: http://comexstat.mdic.gov.br/en/geral
Related Stories
BKV Corporation and Comstock Resources, Inc. announced an exclusive, non-binding agreement for BKV to develop carbon capture, utilization and sequestration projects at two of Comstock’s natural gas processing facilities in its Western Haynesville operating area.
As the CCUS industry faces ongoing uncertainty, with economic challenges and evolving regulatory landscapes, one thing remains clear: The drive for scalable decarbonization is unwavering.
Carbon Direct, in collaboration with Microsoft, announced the release of new criteria for high-quality marine carbon dioxide removal (mCDR), setting a higher standard for social impact, monitoring, durability, and environmental integrity in the rapidly evolving mCDR space.
EFM and Meta have finalized a groundbreaking long-term contract for the delivery of 676,000 nature-based carbon removal credits through 2035. The deal will support the transition of 68,000 acres of forestland to climate-smart management on Washington’s Olympic Peninsula, with the goal of removing more than one million tons of carbon emissions over the next decade.
RHI Magnesita, MCi Carbon, the Austrian Institute of Technology, and the University of Technology Sydney will receive funding for the CCUPScale project, for which Newcastle based cleantech startup MCi Carbon will receive AUD $3.29m.
Upcoming Events
