Hamilton, Ontario-based biodiesel producer and distributor BIOX Corporation announced decreased sales figures in their Q3 earnings report Tuesday, citing the expiry of the U.S. biodiesel tax incentive as a key element in these losses while announcing increased biodiesel production in its Canadian facilities and contracted production total in its US-based facility.
BIOX, which owns and operates nameplate biodiesel production plants in Texas and Ontario, posted sales of just over CAD 19 million during the third quarter of 2017, a 52pc decrease from the prior year. In addition to lost revenue from ceased U.S. biodiesel tax incentives, the massive decrease in sales of third-party product also factored heavily into depressed Q3 earnings. YoY, BIOX sold 4.3mn gals of biodiesel in Q3 2017, compared to 2.4mn gals during the third quarter of 2016.
Production of methyl esters at BIOX’s Hamilton facility rose 2.5pc from Q3 2016 to Q3 2017, which BIOX attributed to strong Ontario-based demand due to the province’s Greener Diesel Regulation. In 2017, the law requires that 4pc of the total volume of all diesel fuel distributed, used, and/or sold in Ontario must be bio-based, and that this bio-base must lower greenhouse gas emissions by 70pc compared to standard petroleum diesel. On the other hand, the company’s Houston-based “WEBB” facility, commissioned earlier this year in a 50-50 joint venture with Boston-based advanced biofuels supplier World Energy, experienced a slow-down in Q3 output. Biodiesel production at the WEBB facility shrunk 38pc from Q2 to Q3, with BIOX attributing uncertainty in the US market to tighter margins and indecision on the 2018 Renewable Volume Obligation.
BIOX also announced this July that the company intends to go private, with BIOX encouraging its shareholders to vote in favor of allowing FP Resources Limited and CFFI Ventures Inc. to purchase all outstanding common shares in BIOX. A special meeting of BIOX shareholders is scheduled for 7 September to iron out the proceedings, and previously scheduled upgrades to the company’s Sombra facility will not be completed until after the vote.