Tekna reports solid financial results for Q2 and half-year 2021
August 20, 2021
Tekna Holding AS, Sherbrooke, Quebec, Canada, reported a solid second quarter 2021, with revenues rising 95% to CAD $7.4 million (Q2 2020: $3.8 million), amid growth in recurring powder sales and a growing customer portfolio.
“Tekna extended positive revenue growth momentum into the second quarter, posting a 95% increase year-on-year, while materials revenue more than doubled in the period,” stated Luc Dionne, Tekna Holding’s recently-appointed CEO. “I am proud to say that we have already secured 88% of the company’s full-year revenue target. While we are exercising a reasonable level of prudence in our spending, Tekna’s focus remains on the top line, setting up the necessary infrastructure and resources to scale the Company and achieve its growth ambitions.”
Revenues for the second quarter reached CAD $7.4 million, an increase of CAD $3.6 million from Q2 2020. Both business segments – materials and systems – recorded substantial gains, over 100% and 75% respectively, compared to the second quarter 2020. This performance is attributable to the recovery of the markets following the COVID pandemic, the growth in recurring powder sales and the growing customer portfolio.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) for Q2 2021 stood at CAD $-1.1 million compared to CAD $-0.2 million in the same period last year, in line with what was forecast in the Q1 2021 report. In 2020, Tekna benefitted from a generous COVID support mechanism from the government, whilst, at the same, time cutting its costs in line with reduced activity levels.
Tekna announced two major new contracts in the period: a multi-year joint development agreement with leading Korean chemical company LG Chem to develop new materials that will improve the storage capacity and the cycle stability of lithium-ion batteries, and a three-year agreement for Additive Manufacturing titanium powder with Airbus. Subsequent to the quarter, Tekna announced a ten-year AM supply agreement with a leading EU jet engine & aerospace component OEM.
In May, Tekna announced that it had accepted an invitation from the National Center for Advanced Materials Performance to participate in a major aerospace qualification programme. Parts produced with Tekna’s powder material qualified under this programme will automatically pass the initial design phase and analysis by the FAA, US Department of Defense (DoD), and the National Aeronautics and Space Administration (NASA).
Tekna has launched a CAD $16 million investment programme to scale up capacity in all three powder business segments to deliver on accelerating growth. In addition, the company has approved the commissioning of a new AM powder atomiser in France, to meet growing demand generated from ImphyTek Powders, a Tekna and Aperam joint venture serving the aerospace, medical, and automotive industries.
“Looking ahead, all the market indicators we are monitoring are positive,” added Dionne. “The number of orders and the average order size of materials sold in the Additive Manufacturing segment are increasing, while new sales channels are opening-up in consumers electronics. The EV and 5G markets are booming, which is driving the demand for Tekna’s nano-size silicon and nickel powders. There could not be a more propitious time to be scaling up Tekna’s technology, which is one of very few that enables OEMs to differentiate themselves with superior products in their markets.”
“The favourable market conditions that we have observed in the first six months are expected to continue throughout the year, and Tekna’s ambition to grow 2020 materials revenues of CAD ~$13 million to a run-rate of CAD ~$22 million in 2021 is well within reach.”
