Clearford Water Systems should see $90 million in revenue by the end of 2017, CEO Kevin Loiselle told shareholders at the company’s annual meeting in Ottawa Thursday.
Mr. Loiselle gave much of the credit to Clearford One, the wastewater collection and treatment system the company launched last April after more than 10 years of development and investment.
The system, Mr. Loiselle said, delivers with capital costs 40 per cent less than other systems and operating costs that come in 20 per cent less than the competition.
“The cost and performance advantages of Clearford One allowed the company to contract with Signina Capital AG of Zurich for $100 million of project funding,” Mr. Loiselle said.
This money is installing the system in various Ontario municipalities that have signed 20- or 30-year contracts with Clearford. The municipalities own the system once the contract expires.
Mr. Loiselle said the pay-for-performance model has been well-received so far.
“The first contract now under discussion would result in project implementation revenue to Clearford of about $20 million and annual revenue of about $400,000 per year for operation of the system for 30 years, escalated with inflation,” he said, adding revenue from this contract alone is expected to surpass the entire company’s revenue over the last five years.
“The company expects the full $100-million project funding facility to be committed by mid-2016 and converted to $90 million in Clearford revenue earned through project delivery by the end of 2017 subject to the Ontario permitting process,” Mr. Loiselle said.
Other investors are now interested, he said, meaning the program could be expanded throughout Ontario and beyond.
The company’s acquisition of UV Pure Technologies, which closed last December, has also paid off for Clearford, Mr. Loiselle said.
UV Pure, which manufactures and sells ultraviolet water purification systems, earned revenues of $2.8 million in 2014 and has seen revenue jump 22 per cent in the first quarter of this year.
Mr. Loiselle also announced Clearford has been selected to provide water treatment services for a small village in India, marking the company’s entry into a lucrative market.
“The value of Clearford One in rural villages in India that have low water supply will become quickly apparent on the completion of this system, which is expected to be fully operational before the end of this year,” he said.