BQE Water (BQE) Q2 2024 earnings summary

Executive summary

• Achieved year-over-year growth in recurring operation revenues in Canada, US, and share of revenue from Chinese joint ventures in Q2 2024.

• Technical services revenue declined in H1 2024 but is expected to recover as new large projects start in Q3 2024.

• Recurring revenue from plant operations increased 92% year-over-year due to new plants coming online.

Financial highlights

• Proportional and GAAP revenues in Q2 2024 were $6.1M and $3.4M, compared to $5.7M and $4.2M in Q2 2023.

• Gross margin decreased 21% to $1.6M in Q2 2024 from $2.0M in Q2 2023.

• Net income was $560K in Q2 2024, down 9% from $615K in Q2 2023.

• Adjusted EBITDA was $1.3M in Q2 2024, down 8% from $1.5M in Q2 2023.

• Net cash and cash equivalents stood at $7.8M at June 30, 2024, with working capital of $9.9M.

Outlook and guidance

• Anticipates a strong second half of 2024, with several large projects starting in Q3 expected to boost technical advisory services revenue.

• Full-year production from China joint venture expected to exceed 2023 levels.

• Longer-term growth drivers and risks remain unchanged from previous commentary.