Pinnacle Renewable Energy's revenue for 1Q 2020 totaled $109.7 million, an increase of 22.4% compared to $89.6 million for 1Q 2019. The company reported a net loss of $4.1 million in 1Q 2020, compared to a net loss of $7 million in 1Q 2019.
Adjusted gross margin was $9 million, or 8.2% of revenue in Q1 2020, compared to $10.4 million, or 11.6% of revenue in Q1 2019.
Adjusted EBITDA totaled $4 million in 1Q 2020, compared to $7.1 million in 1Q 2019. The decrease is attributable to higher production costs due to increased sales volume, the sale of external finished pellet inventory and costs incurred to manage the impact of the CN Rail disruptions and higher port charges due to blockades. This was partially offset by the impact of business interruption amounts recoverable.
"With little foresight on how and when the COVID-19 pandemic will come to an end, Management and the Board made the difficult but prudent decision to reduce the dividend during this period," said Rob McCurdy, CEO of Pinnacle. "We have not seen a change in demand for industrial wood pellets and have strength with our long-term take-or-pay contracts supporting the company, however the lumber industry, particularly in B.C., is under pressure as the economy continues under stress, and this in turn will impact our fibre supply and increase our costs."
Pinnacle Renewable Energy is a growing industrial wood pellet manufacturer and distributor and the third largest producer in the world. The company produces sustainable fuel for renewable electricity generation in the form of industrial wood pellets.
