Growth has a price for the young Quebec company Taiga Motor Corporation, which continues to draw on its reserves and seeks additional financing in order to have the means to build more electric snowmobiles and personal watercraft.
Posted at 2:06 p.m.
Without specifying the amount it wanted to obtain, the company confirmed its efforts on Monday, presenting its results for the second quarter ended June 30, where it remained in the red despite growing sales.
“It is certain that not obtaining the financing can have consequences, but currently, I am satisfied with the progress that we have made to date,” explained to The Press Taiga’s Chief Financial Officer, Eric Bussières, with President and CEO Samuel Bruneau, during a telephone interview.
In the wake of the update and quarterly results, the company’s stock dropped 4.07%, or 21 cents, to trade at $4.95 on Monday afternoon on the Toronto Stock Exchange.
Since it is not in debt, the manufacturer of electric recreational vehicles favors the option of a line of credit. Could a share issue, which would have a dilutive effect for shareholders, occur? A chief financial officer “never answers no to this kind of question,” said Mr. Bussières, when questioned.
Pivotal year
The year is busy for Taiga, founded in 2015 and which assembles its products at its plant located in the Montreal borough of LaSalle. The company delivered its first snowmobiles last March and did the same last month with respect to personal watercraft. It is counting on a major production plant project valued at 125 million on the Shawinigan side.
Taiga burns between 15 and 20 million per quarter and had 52 million in the bank at the end of the second quarter. It will be able to obtain 50 million in loans from Investissement Québec (30 million), the federal government (10 million) and Shawinigan (10 million) for its new complex.
PHOTO FÉLIX RIOUX, PROVIDED BY TAIGA MOTORS
In addition to personal watercraft, Taiga also builds electric snowmobiles.
“Its current financial resources will be insufficient for its expenses for the next 12 months,” said Cameron Doerksen of National Bank Financial in a note. The company is looking for a line of credit, but there is a risk that more capital will be needed. »
The analyst nevertheless expects Taiga to be able to obtain the necessary sums.
Late deliveries
Like almost all manufacturing companies, supply chain disruptions give Taiga headaches. With “a bit” of delay in watercraft deliveries because “essential components” were not delivered when expected, production will be staggered through the fourth quarter, which begins in October. The first units were delivered last July.
“The challenges are more on plastic components and other parts,” said Mr. Bruneau. We have observed longer delays with our suppliers. We had already made significant efforts to secure everything that revolved around electronic modules and chips. »
As of June 30, Taiga had registered 3,054 pre-orders, which represents an increase of 30% compared to the level of December 31. It delivered 21 snowmobiles in the second quarter for a total of 28 units since the beginning of the year.
In the second quarter, Taiga lost 11.1 million, or 35 cents per share, compared to 4.5 million, or $2.99 per share, in the same period last year. His turnover was around $400,000. A year ago, Taiga had not generated any revenue. Mr. Doerksen expected the company’s revenue to reach $368,000.
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- 3500
- Taiga expects to make between 2500 and 3500 deliveries next year by increasing its production.
Taiga