Base Carbon Inc.(BCBN), a leading Canadian financier in global voluntary carbon markets, has unveiled its Q2 2023 financial results. The announcement led to a +30% bump in the company’s share price, driven by a remarkable net income of $104.1 million.
The results mark a key transition for Base Carbon. The company has moved from a development stage to generating free cash flow.
Base Carbon generates revenue by providing upfront capital to carbon projects.
Here’s a detailed look at their two major projects and financial highlights.
Vietnam Household Devices Project
In 2022, Base Carbon committed to funding the production and distribution of 850,000 fuel-efficient cookstoves and 364,000 water purifiers for rural families in Vietnam. As of June 30, 2023, payments of $18.9 million were made, covering 91% of the Vietnam Project’s capital.
The project’s first Verified Carbon Units (VCUs) were issued in Q2 2023. More issuances are planned every six months for the next 10 years.
Rwanda Cookstoves Project
In January 2022, Base Carbon inked an agreement to distribute 250,000 cookstoves in Rwanda. The project is now fully funded, with payments totaling $8.825 million.
The cookstoves have been delivered, and the first carbon credits are expected in late 2023.
Base Carbon’s CEO, Michael Costa, expressed excitement about Base’s progress:
“Monetizing the Vietnam Project’s first carbon credits is pivotal. We’ve transitioned to generating free cash flow. We’ll focus on redeploying cashflows into our project pipeline. Several announcements are coming soon.”
Second-Quarter 2023 Financial Highlights
- Cash and Equivalents: Base Carbon ended the quarter with $9.96 million in cash and cash equivalents, a $1.4 million increase compared to Q1 2023.
- Vietnam Project: The first tranches of 1,116,221 Verified Carbon Units (VCUs) were issued and delivered, leading to a full contractual settlement of $6.4 million. The realized net gain was $1.95 million.
- Net Income: The company reported a second-quarter net income of $104.1 million, representing $0.85 in earnings per share.
- Share Purchase: Base Carbon purchased 3,046,700 common shares for cancellation and may purchase up to an additional 7,974,471 common shares during the next 12 months.
- Vietnam Project Completion: The Vietnam Project capital deployment is now 91% complete, with remaining capital expenditures anticipated to be fully deployed by year-end 2024.
The full New Release can be found here.