Project delays dampen BluMetric’s sales as cleantech firm’s revenues fall 18% in Q3

BluMetric pipe

BluMetric Environmental’s revenues fell 18 per cent in the third quarter compared with a year earlier as delays hampered the rollout of projects in Northern Canada and longer sales cycles put a dent in income from military clients, the Ottawa firm said.

BluMetric reported revenues of $6.9 million for the three-month period ending June 30, down from $8.4 million the year before. 

The company booked a net loss of $729,000, a sharp reversal from net earnings of $318,000 in the same period in 2023, as operating expenses rose 25 per cent year-over-year to $1.9 million.

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BluMetric, which specializes in water and wastewater treatment, serves customers in the commercial and industrial, military, mining and government sectors in Canada and the United States. In 2021, the firm was named one of the top performers on the TSX Venture Exchange after its shares rose 300 per cent.

Revenues from the commercial and industrial channel declined nearly 20 per cent in the third quarter compared with a year earlier, while sales to military customers were down 25 per cent and income from government contracts dropped 19 per cent.

BluMetric did not specifically explain the decline in commercial and government revenues, but the company issued a news release saying it “faced obstacles in revenue generation due to schedule delays” that particularly affected its worksites in Canada’s North. 

The firm, which employs about 80 people in the Ottawa area, said the slowdown is expected to continue into the fourth quarter as a result of the recent wildfires that have engulfed much of the Northwest Territories.

Meanwhile, BluMetric said revenues from its military channel took a hit after several contracts from a year ago were completed and the “longer sales and procurement cycle required for new contracts in this market” meant there were fewer new deals to take their place.

The firm said it landed one significant new contract in the third quarter – a three-year, $11.7-million agreement with Rheinmetall Canada to develop and deliver small, self-contained water purification systems as part of a contract awarded by the Canadian Armed Forces, with final delivery expected by 2025.

BluMetric’s gross margin declined from 23 per cent in the third quarter of 2022 to 15 per cent last quarter, a drop it said was partly due to one-time costs arising from a custom wastewater treatment system to a mining client as well as “key investments into its employees and its corporate culture” that included an off-site leadership conference.

“Execution challenges on certain projects have influenced this quarter’s financial performance,” the company said, adding it is “actively addressing these challenges with the goal of restoring a gross margin that aligns with its historical levels.”

BluMetric’s shares have fallen five cents to 33 cents on the TSX Venture Exchange since the third-quarter financial results were released late last week. The firm’s stock is down about 38 per cent from its 52-week high of 53 cents per share set in January.

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