Danimer says Q2 23 results ‘consistent with expectations’

Croskrey

PHA producer Danimer Scientific, Inc. made progress during the second quarter of 2023 in a number of areas, said chairman and CEO, Stephen E. Croskrey. The company moved into the next phase of the financing process with the Department of Energy. and has launched various iniatives aimed at diversifying its portfolio of customers and end-use applications.

“We are very pleased, after more than three years of careful development work on three new end-use applications, to now have commercialised protective films, shrink wrap and produce bags.,” said Croskrey. “We are also excited to play a key role in the rapid commercial launch of compostable coffee-pods.” This latter development is potentially very significant, as the EU is considering legislation that would mandate the use of compostable materials for these products, he added.

Other commercial initiatives include new straw and cutlery programmes for customers in the quick service restaurant space, and the development of aqueous and extruded coatings for paper cups and for thermoformed cup lids.

Danimer’s revenues grew to $12.9 million in the second quarter of 2023 versus $12.7 million in the same period in 2022. The company posted first quarter 2023 revenues of $11.9 million. Growth was entirely attributable to product revenue, which was $12.2 million in the second quarter as compared to $11.6 million in the same period of last year, driven by stronger sales of PHA-based polymers, which rose 10% compared to prior year and 69% sequentially, partially offset by a modest decline in PLA-based resin sales.

A not unexpected decline in service revenue from $1.1 million in the second quarter of last year to $0.7 million for the same period in 2023 was seen, due to the successful completion of development work for certain customers, that has now progressed to commercialisation. Gross profit was $(6.6) million compared to $(2.2) million in the second quarter of 2022. Adjusted gross profit was compared to. Adjusted gross profit dropped from $(0.5) million in the second quarter of 2022 to $(1.6) million, mainly because of the increased fixed production costs associated with greater capacity.Net loss for the second quarter was $(39.2) million compared with $(30.4) million in the prior year period.

Adjusted EBITDA in the second quarter of 2023 improved to $(10.2) million as compared to $(12.9) million in the second quarter of 2022, an improvement reflecting the impact of the expense control measures implemented across many areas of the business.

Danimer remains confident about its competitive position and growth outlook. The company said that its second quarter and first half results have been ‘consistent with its expectations’, yet added the caveat that ‘given a possible shift in the timing of certain significant new program awards and associated first shipment delays’, a bias toward the ‘low end of its previously communicated range for 2023 full-year Adjusted EBITDA of $(23) million to $(31) million is prudent’.

In a separate release, the company also announced the acceptance of its Part II Application by the U.S. Department of Energy (DOE) under the Title XVII Loan Guarantee.Title XVII authorises the Secretary of Energy to make loan guarantees for projects that ‘avoid, reduce, utilise, or sequester air pollutants or anthropogenic emissions of greenhouse gases’ and ‘employ new or significantly improved technologies as compared to commercial technologies in service in the United States.’Danimer has now been invited into the confirmatory due diligence and term sheet negotiation process that, upon successful completion could lead to funding from the U.S. Department of the Treasury’s Federal Financing for construction of its greenfield manufacturing facility in Bainbridge, Georgia.

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