Energy Recovery's strong Q2 performance reflects desalination demand
Energy Recovery has reported net income of $500,000 for the second quarter of 2016, up from a $3.3 million loss in the comparable period 2015, driven partly by "strengthening demand in global desalination markets."
This was on revenue of $13.2 million, up 26 per cent on 2015, in "one of the best second quarters in the company's history," said president and chief executive officer Joel Gay.
In the first half of 2016, the net loss was $1.5 million, down from $11.6 million in H1 2015, while revenue grew by 50 per cent to $24.5 million.
The company ascribed its improved performance to "strengthening demand in global desalination markets, a favourable shift in product mix, revenue associated with the Schlumberger exclusivity fee, and a reduction in operating expenses."
Revenues comprised $12 million from products and $1.3 million from license and development work in the second quarter, and $22 million from products with $2.5 million from license and development in the first half. The topline performance partly reflects amortisation of a fee paid by Schlumberger, a supplier of technology to the oil and gas industry, for exclusive use of Energy Recovery's VorTeq hydraulic fracturing system.
"Having only generated greater revenues once in a second quarter in the company's post-IPO history, our topline performance is a positive indicator of the full fiscal year prospects, especially as it relates to large scale capital projects within the desalination business," said Gay.
"As communicated at the onset of this year, through the execution of its long-term strategy, Energy Recovery will continue to protect its market share in desalination and further develop and gain traction in its emerging market segments with the singular objective of driving and sustaining long-term growth."