Rising revenue, profitability and growing margins appear to have provided a strong start to the new fiscal year for QuestAir Technologies.
Reporting strong financial and operational results for the first quarter of fiscal 2009, ended 31st December 2008, QuestAir revealed a number of highlights for the period.
A developer and supplier of proprietary gas purification systems for several large international markets, QuestAir enjoyed the first profitable quarter in the company’s history.
Net income totalled $692,951 for the quarter (all amounts in Canadian dollars), compared to a loss of $2.390m in the same period in fiscal 2008. Higher revenue and margins, lower operating costs, and foreign exchange gains all contributed to this significant improvement in earnings.
Revenue rose to $3.511m for the quarter, an increase of just over $1.943m or 124% when compared to the same period in fiscal 2008. Revenues from both gas purification systems and engineering service contracts increased substantially, compared to the same period in fiscal 2008.
When revealing its results recently, the company noted how it had continued to build on its success in new markets, making further inroads with key orders and supplying pressure swing adsorption (PSA) systems for a variety of applications.
Andrew Hall, President and CEO of QuestAir, said of the resounding results, $quot;Our strategic focus on growing our business in the biogas upgrading market and maintaining prudent cash management policies have led to a successful first quarter ended December 2008, with rising revenues, our first ever quarterly profit and enhanced margins.”
$quot;We are very pleased with QuestAir's performance, and the strong financial results in the first quarter of fiscal 2009 will favourably impact our financial results for the full fiscal year.$quot;
Furthermore, looking ahead to the remainder of fiscal 2009 and Hall noted that in December 2008 QuestAir forecast that revenues in fiscal 2009 would be in the range of $10-12m and that cash used in operations & capital expenditures would be in the range of $4-5m.
Describing the outlook ahead, he said, $quot;Assuming that exchange rates remain at current levels for the remainder of fiscal 2009, we expect that our revenue for fiscal 2009 will be at the high end of the $10m to $12m range.$quot;
$quot;Similarly, our cash usage was much lower than expected in the first quarter of the fiscal year due to cost containment and strong foreign exchange gains. If current exchange rates continue for the balance of fiscal 2009, we expect that cash used in operations and capital requirements will be in the range of $3m to $4m for the full fiscal year.$quot;
Declining hydrogen demand
As with most companies and individuals there appears to be a challenging economic environment ahead, while in addition, demand for hydrogen has declined in recent months as the spreading global recession has impacted hydrogen-consuming industries.
A number of potential hydrogen generation and hydrogen recovery projects have been delayed or cancelled, particularly in Asia. This has reduced QuestAir's pipeline of prospective new hydrogen PSA orders over the balance of this fiscal year, noted Hall.