BQE: Wrapping Up Another Record Year
What you need to know:• BQE reported Q4 and 2024 financial results that were slightly behind our expectations but solid, nevertheless.
• Q4 proportional revenue came in at $5.8M (+6% YoY) and adjusted EBITDA came in at ($0.0M) vs. our estimate of $1.0M.
• 2024 proportional revenue was $24.8M (+9% YoY) and adjusted EBITDA was $5.6M (23% margin, +20% YoY.)
• Management provided an insightful update on its operations as it sets up for another record year in 2025.
Yesterday after market close, BQE Water (BQE:TSXV, BTQNF:OTC) reported Q4 and 2024 financials that slightly missed our estimates but still represented another year of steady growth, posting 9% revenue growth and 20% EBITDA growth. We expect growth to accelerate in 2025 with continued margin expansion as BQE’s value proposition becomes increasingly important and new mining projects are developed in the current environment. We are maintaining our BUY rating and $80.00/share target price on BQE Water.
Key Highlights
• Q4 prop. revenue came in at $5.8M (+6% YoY) vs. our estimate of $6.0M. 2024 prop. revenue was $24.8M (+9% YoY), comprising of operations services revenue of $10.5M (+27% YoY, 42% of revenue), technical services revenue of $6.7M (-32% YoY), and BQE’s share of JV revenue of $7.6M (+66% YoY).
• Gross margin for the quarter of 40% vs. our expectation of 49% and 55% in Q4/23. 2024 gross margin came in at 49% vs. our estimate of 51%.
• Adjusted EBITDA in Q4 of breakeven vs. our estimate of $1.0M and $0.5M in Q4/23. Full-year adjusted EBITDA came in at $5.6M, representing a 23% EBITDA margin and +20% YoY growth.
• BQE’s share of JV net income was $2.5M for the year (compared to $0.4M last year) and ($0.6M) for the quarter (similar to Q4/23).
• Net income of $1.2M in Q4 vs. our estimate of $0.5M as BQE benefitted from an income tax recovery. Full-year net income was $4.8M or $3.78/share compared to our estimate of $4.3M or $3.36/share and $2.7M or $2.12/share in 2023.
• BQE ended the quarter with $11.8M in cash and $1.9M in debt.
BQE Water is engaged in the acquisition and development of processes to treat metal-laden, sulphate-rich waste water streams for acid neutralization and metal recovery. The principal operations of Co. are to build process plants and earn revenues from recovered metals, treatment fees, plant sales and process licenses.
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