Earnings call transcript Q3 2023

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Loop Industries [Second] Quarter 2023 Corporate Update Call.

During today's presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be opened for questions. recorded this XX, after conference yesterday, XX, being press and market is [October accompanying release call XXXX]. conference today, XXXX], [October the close This was issued

Daniel Loop I'd Relations. like statements. read to over Chief is a Communications, conference now today the Kevin call O’Dowd, VP, our Executive On Officer, to Solomita, turn disclaimer Kevin Investor forward-looking Industries to about

Kevin O’Dowd

Thank you, operator.

laws. let will meaning and get affect started, plans, me forward-looking securities include of results operating statements we that current meeting Company's financial remind the to Before today's industry relate position. the forward-looking within the things, may among These statements you future and trends other that events expectations,

expectations. risks future may Such and statements and uncertainties and include from activities these results differ materially

related annual press in report Form Relations Form report are or available Additional uncertainties and XX-Q the at statements from and the filed Factors sec.gov Risk quarterly yesterday, of concerning is Investor on latest Statements yesterday's in these section our with department. release. documents on Forward-Looking our Copies and risks these XX-K, our of contained information SEC

please At ahead. this to turn Daniel, Solomita, Chief the like Executive Officer time, Loop Industries. over to of call I'd Daniel go

Daniel Solomita

QX earnings the Kevin. everyone. to gone I'll last Welcome Thanks, headlines quarter. just start the Hi, with of in call. our main down has what

we're more plus looking since dilution, main there land. hand. Bécancour The significantly. the – were a people of cost raising years First, has exploded, the two and us, on land value and that years cash capital of value lot land us the was for is decision. bought a our The was was and land sale land that reduction in that value enough That's global decision, a business And of through has so business to this the that of behind any the than without over get just the solid for land just in the selling Bécancour. gives and initiative three in that that really motivation increased of experiencing. increased current the XXX% the land, us selling really solid It's slowdown that had having we

the We're with the other be is for Canadian and waste. Quebec It's plastic in Canada for land to looked important already other of and and eliminating of us. Quebec continuing important The engaged able government. to goals Quebec Canada. the project really for an government still Canadian It's their Quebec outside to We've available of important Loop. be and to get project XXXX parts for

So of plenty land that than there's cheaper much Bécancour. we land available had at the that's

the environment ready so to macro project. that And we'll begin when be improves,

very future we're project our to for So that it's important still develop. us, projects for it still definitely a cards the in and going

it's macroeconomic least we success. highest focus uncertain us build for and that the make of on the the have important are these sure do amount do ones With that to that the and of times, projects risk amount that we

Global SK that us the very a our with petrochemical at large Chemical working company leads what resources. that's projects SK Chemical. with And partners to Global we're is deep

We've project it's hand-in-hand. Our like that a not new been Korea while. a SK going just It's we're Ulsan, on for in quite South starting. project working has been with

Ulsan a stake when ownership equity Teams XX% owner basis SK execute project partnership and we a daily together on Loop in became working are our to from the announced SK XXXX. since Loop in on –

projects we and working have So that the working companies together really closely multiple on. SK we're have with been

us, the Really this having hugely some customers, our project one on break Asia important for important year in in the is First foothold project for to being Ulsan, in especially scheduled that Korea is of in that XXXX. South fiber ground side.

chains supply for fiber of industry. all and the polyester textile clothing So the

So important for us. that's a really area

brings of all the a of operation they the wealth plant. do Obviously, SKGC in experience. of

building one experienced on team. have an operations they We're of the sites. their So plant existing petrochemical

built So the of We're available. lot ecoengineering, petrochemical together the the the their facilities. they but a and SKEE, is on SK world, they knowledge of with plants contractor, division have the all large already site They of who in of only working infrastructure the in-house have and very building engineering for these a huge EPC organization. this experience around on wealth not construction

for the projects. of services So construction and they'll be the providing all engineering

also majority which is feedstock and an the all operator. is also of together they're Loop. in the on obviously the said important SKGC charge for of Loop the provides working projects, the experienced of customers. I SKGC SKGC very capital for sourcing.

have in works brings that we SKGC the Loop projects mainly for local the global customers. and customers other on So

So it's partnership both between companies. a tremendous really

These execute of the because a risk least are projects that really ones are having the such easiest are of amount to as SKGC. the partner

Loop environment for execute And decision be on out of there, we projects it's so and in best to macro these least think easiest the with the the the times on. economic uncertain executing to more amount and risk

the have in the mean, Asia I of interest There's projects world. well. as in of parts plenty pipeline. tons other We of technology for the

Asia, obviously, SKGC. with

plan We have plants a the over with coming multiple build years. them to

Europe. We also have multiple projects in

parts we in the looking in project have projects we our same and have but the projects consortium France, also at of partners as in Europe other of other other world. with We well are

return the the are demand looking today's product. have on in there's So be risk with we for the on no to final easiest to projects amount But capital. technology which world, shortage for execute least at the or and the highest of of

I that's with at partners benefits so all our working have. where That's SKGC. And in see huge we

now. So the we call for open can up questions

Operator

of Please Capital. [Operator first comes Gerry your is ROTH question Instructions] Our you. from Sweeney Thank ahead. open. Gerry line go

Gerard Sweeney

morning, for Good my Thanks call. Daniel. taking

Daniel Solomita

Gerry. Hi,

Gerard Sweeney

these bunch that the a financing of that as the there's SK. could think, critical you scenarios, some I to looking maybe well I at steps go-forward determining those items? I understanding milestones. permitted the as project out I any next are secondarily, maybe steps what And of discuss and in a potentially things but of of the on of best an was maybe big basis are you're there see JV of maybe target can want hoping some resolution the sort know when timing get on you're maybe – or I and hitting timing other to maybe with steps? believe we flux, structure on

Daniel Solomita

Yes. Gerry. Thanks for the question,

we're So It's not them. things with and very been flux. are that SKGC with work structured organized working in

there's of So with venture of agreements. joint we final them. of something stages that the completing finalization That's theX are at all the

one of So it. part that's

final I said, SKEE, broader we've a construction. together Like then SK engaged And the the Inc., engineering and ecoengineering, which are our with working engineering the is teams already of company. on division

the construction and So SKEE all providing be facility. the of will engineering for

We're the in of scheduled facility on ground to QX XXXX. break

So of intentions. goal. has that media. Asian very about that's the in SKGC Most the and Korean project and been vocal is their the

So the at the Canadian Times the really it can Korea much, look like doesn't come and very U.S. that. through to media things or but you

very world vocal recycling Because and moving SKGC the the importance timing front agenda. of about they're largest seen the their in to company project and the really and be really So the sustainability the to wants as of this.

up final breaking and signing this the stages I QX of then in would ground say, of joint year. which at So we're venture, the

project. of for the Loop SKGC the for XX% equity provides far capital is SKGC for equity we're the as the positioning that discussing project. portion. XX% for As the of our we're needs the the in in that's providing the the And responsible financing, partnership. capital discussing portion capital our with that SKGC on Loop

Gerard Sweeney

Got is it. That it you. me. appreciate I it. for Thank

Daniel Solomita

Gerry. Thanks,

Operator

Quezada Raymond proceed. comes you. [Operator Thank James. of open. Instructions] David line next Our is your David, from question Please

David Quezada

around Good – happening thoughts how like comment your to been the just of up facility a ordered are on costs time are morning, project. or overall with the shaping Could And equipment lead my line still those shaping question first Thanks. kind any up expectations? of time you Daniel, relative able in and that everyone. expectations? on lines Ulsan whether not have for follow-up what's pieces long context with if are here, or to

Daniel Solomita

Thanks the from Nice question. hear to David. Yes. you. Thanks, for

So this over the time reactors reactors, ordered the Bécancour for Loop the two lead long to polymerization project had transferred be equipment, project. so that will

time shifted equipment, so those any can can standard they – go of they because long over pieces So to lead are be that just will of equipment our projects.

right far project, long time this break now, said, As I we're ground equipment scheduled to like XXXX. for as lead QX of in

time long So the needs lead order on the year. later be ordered during equipment to

in ordered So that line with to needs there's are expectations. Costs today. nothing be

first We been cost internally estimates approved. They've project. our already the for have

– in this of see we're built inflationary line. we've don't this environment. through So crazy all We

we and forward. of start Hopefully, foresee cooling hopefully changes any coming don't off zero forgo easing in supply facilities in to cost the up, reduction their little we as seeing – bit economy the the world's start chains some decision a we'll going policy. is So COVID see seeing cost with China's up

project great very the possible. a parties is this dedicated now to So and in and both soon motivated as right very built space project are as really get

David Quezada

to any then are any a for – feedstock? have place been there able of you for color is And Thanks for And agreements Daniel. if Excellent. so has sourced do you facility Excellent. that, feedstock far? on can on maybe provide are you in certain this of it volume

Daniel Solomita

Yes.

suppliers. testing a starting that's different been from been quite has the there's of bit we're So Loop feedstock Korea like feedstock

doing were of that we lot SKGC. work together with So a

waste feedstocks typical that we thing clothing the in be which trays. the waste industry, from big is polyester going our A of lot is polyester to fiber fiber PET the use a all there's PET Asia recycling mechanical So of supply process, finds chains. the from coming in

feedstock to going the Asian that's expansion. So important that's be a for

the do and really local them for joint qualification, it's feedstock. is SKGC in the able the responsible all source of the support the primarily role venture We to with to we all be of – but SKGC's feedstock. testing So

David Quezada

customers. Ulsan you of or contracts in – then side closing maybe to around then break targeting? That's contracted? that volumes sales and you the to volumes Or on lining anticipate of facility on you prior things, the you like Is that do look of the together whatever And have kind you're and working Perfect. proportion you contract would from SK groundbreaking? have new would Okay. target a those great. guess, you to up And are terms happening I guys there of

Daniel Solomita

sold volume [indiscernible] to the of the capacities with or breaking ground look certain or reserved or always we No, of an contract type the customers facility. before some LOI in volume of have

customers definitely But we're which engage from from yes, starting focusing facility with customers. on in anywhere volumes – customers the can material Asian we to we're also ship on world. will be Korea some taking the So Asian the

into content said, polyester a their lot more And like companies recycling more them to because interesting are I their today, They way the their the and the into need the supply But fibers, need Asian into the is that. of products. fiber do clothing extremely recycled only in space chain, polyester fiber sustainability. for mechanical industry clothing

bottles water turning taking that into fibers. and So

fibers back obviously the to them. to into So fibers Loop's that of ability is that's get provide technology can and huge them, to something interest

there's sell to final be a only them able recycle also interest the there but waste their to generated not the facilities. to So at strong material that's

facility, to So have also quite fiber the all have work world the grade there's but then bottle we the few Asia in anticipate a needs that as with we well. around customers customers that from

we volume of ground. but majority the contracted anticipate would before having So do say, I breaking – already

David Quezada

for maybe Okay. one And could. if me, I Excellent. just more

you the with down comment of just are were reduce testing some I at could activities Or expenses doing point? in your most R&D you I R&D you for complete is consistent the mentioned think still undertake quarter, some plan rate. you to your for that projects? mostly on Are Your that which think to feedstock need Korea. in this – R&D burn the you or upcoming But you're

forward? you that to how expense expect wondering R&D going trend Just

Daniel Solomita

million cutting scale can that. year biggest production thing generate for but to customers X,XXX built the the and successful capacity facility The the done a Terrebonne, and cost a in hours able The roughly produce commercial showcase – supply never we've what the biggest the year, technology facility is reduced at from at was we've is capacity just the of to with cost So of production facility built reduction, in to is Terrebonne pounds our Terrebonne. our commercial tons we facility. volumes. X.X nameplate – in that been operation a in we be doing it's And profits, the

well. worked plant the So

technology. a partners to do out can Global come it can our the anybody and or companies built due due We scale and do or diligence full like on that customers Chemical, see diligence SK can

that's so completed. been And

the expense, running a four having So generate full are the operation, instead of by workers. big of mean shift, the of a volumes XX/X profit I very and you facility hours because night that's slowing reducing small. can't down, having too shifts

operations. it's really, reducing just so And hours of about the

existing upcoming events other we're material. brand on some we producing all with We're material honoring up. and owners, So had brand and have shoes, some other customer with still as of coming our owners well with we contracts

So we the have running the R&D operation that operations still expense know plant. the really is and at

keep that's able always test we'll to facility important as be the the open always That's part of So really to business. important. feedstocks an

So able other be that in part come world that the Korea qualify any to being needs any feedstocks of characterized. to or from

few do at the So lab a we then our tons facility it do and scale it first we in at time. at a production

the But be there. for So to you of to and able production facility together to keep need in kind this material open the customer. produce R&D expenses mix

in testing customers you mix because R&D So feedstock. with the we're

well blends today, producing all to is at think and out tons makes it keeps in cutting customer facility need us really there. a together. it trying be – people no the to and But better world running X,XXX is in – there full in So it's we get company Today the cost And this motivated. the an for measure. capacity – leaner important I it – live

bit been a So a I it's it's overall, think been success.

David Quezada

the Appreciate color. will Daniel. turn I over. Excellent. Thanks it

Operator

Daniel Q&A time, his concludes Thank to for call this you. remarks. to over back I'd At now the like turn this closing our session. Mr. Solomita

Daniel Solomita

operator. much, Thank you very

call. mind earnings execute that the are in is smart decision projects least two management's So the decisions. of I easiest on it smart QX has the obviously with and the had business over years, was to business our in XXX% Bécancour mind said, in I company the land concludes focusing really Like made the of my best course this on in amount a SKGC risk guess with with appreciated action. Selling really as

breaking XXXX So first come. really many excited then facility to more about ground our and on

So time. thank you your very for much

Operator

gentlemen, this and Ladies concludes call. today's

your now lines. may disconnect You

Loop Industries (LOOP) 13 Jan 232023 Q3 Earnings call transcript