Strengthened financial position and increased production pace
In the third quarter of 2024, Cinis Fertilizer delivered its first shipload of potassium sulfate to customer Van Iperen International, who in turn resold it to growers in approximately 25 countries worldwide. After the end of the quarter, another shipload has been delivered to Van Iperen International. Cinis has also issued senior secured dark green bonds of SEK 550 million and refinanced all previous debt.
July - September 2024
- Net sales amounted to SEK 15.4 million (-)
- Operating profit/loss amounted to SEK -27.1 million (-8.0)
- Profit/loss after financial items amounted to SEK -33.7 million (-8.1)
- Earnings per share, before and after dilution, amounted to SEK -0.46 (-0.11)
- Cash flow from operating activities after changes in working capital amounted to SEK -41.9 million (11.0)
Significant events during the quarter
- A first truckload of potassium sulfate was sent to the customer Van Iperen International.
- After Northvolt's delays, the company has chosen to revise the timetable for the planned production facility in Skellefteå. The company assesses that Northvolt's non-delivery of sodium sulfate will entail additional costs of approximately SEK 25 million in 2024
- Cinis signed an agreement with Ragn-Sells which means that the company is paid to handle and upcycle sodium sulfate
- Cinis sent off the first shipload of potassium sulfate, which was re-sold to growers in approximately 25 countries, across the world
January - September 2024
- Net sales amounted to SEK 15.4 million (-)
- Operating profit/loss amounted to SEK -61.3 million (-22.1)
- Profit/loss after financial items amounted to SEK -70.2 million (-21.3)
- Earnings per share, before and after dilution, amounted to SEK -0.97 SEK (-0.29)
- Cash flow from operating activities after changes in working capital amounted to SEK -87.4 million (30.6)
Significant events after the quarter
- Cinis delivered another shipload of potassium sulfate and achieves a positive cash flow from operating activities in October
- Extraordinary general meeting in Cinis Fertilizer was held on October 31
- Cinis established a green finance framework and successfully issued senior secured dark green bonds amounting to SEK 550 million. The funds will be used to refinance existing debt, as well as general corporate purposes, including an increased buffer
CEO's comment
strengthened financial position and increased production pace
About two years ago, we listed Cinis Fertilizer on the Nasdaq First North Growth Market and raised capital to finance the construction of a modern and energy-efficient production plant for potassium sulfate. Today, our mineral fertilizer, produced in Köpmanholmen outside Örnsköldsvik, is in the hands of growers in around 25 countries and on all continents. I am incredibly proud of everyone who was involved and contributed to making this a reality in such a short time.
It is a unique achievement and I know of few, if any, industrial establishments that have maintained the same high pace from project start to production. Of course, the journey has not been without challenges, neither during construction nor the ramp-up phase, but as soon as I lift my gaze, I am reminded of how much we have achieved in a short time.
We have now delivered another shipload of potassium sulfate and the external analyzes of this second cargo are unambiguous - Cinis' production maintains a very high quality that exceeds the market's requirements for water-soluble potassium sulfate, among other things through a high nutritional content of potassium and a high purity.
The collaboration we entered into with the recycling company Ragn-Sells during the quarter means that we get paid to receive our input sodium sulfate. The fact that we have turned a cost for sodium sulfate into revenue is a clear proof that we are solving a real waste problem and creating value at several levels. We know that many industries have sodium sulfate as a residual product and for those who do not have permission to discharge the sodium sulfate into the sea or waterways, the only option left is to pay to send it to a landfill with a waste company. We see an increasing demand from the market to find a disposal for sodium sulphate which today goes to landfill. Through our collaboration with Ragn-Sells, we enable these landfill residues to be upgraded to recycled materials and ultimately refined into potassium sulfate. The agreement is relatively small in terms of volume, but a central first step in the work to increase the proportion of residual currents into the production process after Northvolt's non-appearing volumes. Although our business is not dependent on either Northvolt or the use of residual currents to achieve profitability or meet the sustainability requirements of end customers, this type of agreement improves both our profitability and circularity. This is also in line with our long-term strategy to expand the inflow of raw materials from new industries, which we expect to be able to do further in 2025.
In November, we took an important step to simplify our financing structure and successfully issued senior secured green bonds in the amount of SEK 550 million. The net proceeds will be used to refinance existing debt but also to fund general corporate purposes, including investments in accordance with our new green framework. In conjunction with the bond process, S&P Global Ratings conducted an independent review of our green framework and we are pleased to be rated dark green, the highest rating for a sustainable investment. The bonds also mean that we strengthen our cash position and buffer ahead of the final phase of our ramp-up.
Even if the sentiment around the green industrial investments in Sweden are somewhat cautious at the moment, in reality we see a great deal of interest in our circular offer globally. Large industrial investments are being made in Europe as well as the USA and Asia, where our offer fits in very well with the new industries that are emerging. Ascend Element's battery material production facility in Kentucky, USA is just one of those projects. With Ascend's planned production start in early 2025, we look forward to being able to start the establishment of our next potassium sulfate production facility in the latter part of 2025. With lessons learned from the past two years, we will of course continue to follow Ascend's progress and ramp-up in the coming months, bolstered by our proven ability to quickly build a production facility. We continue to see very good conditions for our establishment in the USA with the new administration. We experience great support for what we do locally and at the state level. In addition to that, there are strong driving forces to increase domestic production and ensure an increased degree of self-sufficiency, where mineral fertilizers can play an important role.
In Örnsköldsvik, the plan continues to step by step increase the production rate and delivery volumes, as well as reach full production rate at the beginning of 2025. We are planning to send two more shiploads before the end of the year, but have recently been informed that the port of Köpmanholmen expects extraordinary traffic during December and January due to several large calls with wind turbine parts. If these ships are delayed on their routes or in their unloading, it may affect our ability to invoice and deliver everything we produce during the fourth quarter on this side of the turn of the year, and an extra ship will then instead leave port in January. However, with refinanced loans, a strengthened cash position and the first positive cash flows, we feel confident and continue to work towards our goals.
Jakob Liedberg, CEO
For full report, please see attached file.
For more information, please contact:
Jakob Liedberg, CEO
jakob@cinis-fertilizer.com
+46 768 58 12 86
Charlotte Becker, IR and Communications Director
charlotte@cinis-fertilizer.com
+46 730 37 07 07
Henrik Andersson, CFO
henrik@cinis-fertilizer.com
+46 705 70 87 53
This information is such information that Cinis Fertilizer is obliged to make public pursuant to the EU's Market Abuse Regulation. This report has been prepared with a Swedish and an English version. In the event of any discrepancies between the two, the Swedish version applies. This information was published, through the agency of the contact persons above, on November 28, 2024, at 08:00 a.m. CET.
About Cinis Fertilizer
Cinis Fertilizer is a Swedish green-tech company producing an environmentally friendly mineral fertilizer, potassium sulphate (SOP), by recycling waste products from battery manufacturing and recycling, as well as the pulp industry and other industries. The patent protected technology will use half as much energy as today's production methods and the result is a fertilizer with low carbon footprint, a unique and circular contribution enabling sustainable agriculture. FNCA Sweden AB is Certified Adviser. For further information please visit: www.cinis-fertilizer.com.
