Pinnacle: Pellet production up 11% in Q4
February 25, 2021
BY Erin Voegele
Pinnacle Renewable Energy Inc. on Feb. 24 released fourth quarter financial results, reporting that pellet production was up when compared to the same period of 2019 despite operational issues experienced at several of its facilities.
Pinnacle, which is the process of being acquired by U.K.-based Drax Group plc, produced 489,000 metric tons of wood pellets during the final quarter of last year, up 11 percent when compared to fourth quarter of 2019, but down 17 percent when compared to the third quarter of year. Shipments totaled 526,000 metric tons, up 24 percent from the fourth quarter of 2019, but down 12 percent when compared to the third quarter of 2020. A total of 39,000 metric tons of third-party pellets were purchased during the fourth quarter, compared with 16,000 metric tons during the same period of 2019 and 15,000 metric tons during the third quarter of 2020.
Production at Pinnacle’s wood pellet plant in Houston, British Columbia, was suspended on Nov. 25 due to a fire-related incident in the dryer area of the facility. Production resumed on Dec. 10, but on a reduced basis. The incident reduced production at the facility by approximately 16,000 metric tons for the quarter.
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Pinnacle also noted that operating and reliability issues at its Aliceville, Alabama, facility reduced production by 20,000 metric tons during the fourth quarter. The company said several unplanned shutdowns occurred related to mechanical and electrical failures and to the reinforcement of safety standards.
Operating disruptions were also experienced at Pinnacles pellet plants in Lavington, British Columbia, and Armstrong, British Columbia. Those disruptions were caused by congestion at the Fibreco terminal in North Vancouver and reduced production by 5,000 metric tons. Pinnacle also noted that approximately 9,000 metric tons of production was lost during the quarter due to railroad service disruptions unrelated to the Fibreco matter.
Pinnacle also reported that construction of its pellet plant in High Level, Alberta, was completed during the fourth quarter, with the facility manufacturing 8,000 metric tons of pellets during the three-month period.
Construction is ongoing at the 360,000-metric-ton-per-year pellet plant in Demopolis, Alabama, with initial production expected to begin in the second quarter of this year.
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Pinnacle reported that sawmill residues accounted for 77 percent of the company’s feedstock during the fourth quarter, down from 84 percent during the third quarter. The drop was related to reduced sawmill operating rates in the last two weeks of the quarter and a decision by the company to utilize a higher level of fiber inventory as feedstock during the quarter. Overall, fiber costs were up 3 percent.
Pinnacle reported $116.9 million in revenue for the fourth quarter, up 27.8 percent when compared to the same period of 2019. Net loss was $2.5 million, compared to $3.1 million in the fourth quarter of 2019.
Revenue for the full year was at $490.5 million, up 29.8 percent from 2019. Net loss for 2020 was $3.9 million, compared to a net loss of $100 million.
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