Verde AgriTech Ltd. VNPKF

Verde is at the forefront of carbon capture

[sdhaka]

The fertilizer industry is rebounding after a Q3 dip, with global demand picking up. #Potash prices are on the rise, signaling a promising 2024.

 

Verde AgriTech (TSX: NPK / OTC: VNPKF) is at the forefront of carbon capture through Enhanced Rock Weathering, potentially earning $15M annually from carbon credits.

 

Verde is leading sustainable innovation, initiating field studies to assess the potential of its carbon capture project. A third-party study suggests each tonne of Verde's products could extract 120 kg of carbon dioxide through Enhanced Rock Weathering (ERW), a process accelerating the natural weathering of rocks to sequester carbon.

 

Key Highlight:

 

Verde's existing facilities can generate up to 300 Kt of carbon credits annually, equating to a remarkable US$15M in potential revenue. Ongoing discussions with various parties for the sale of carbon credits underscore the company's commitment to sustainability.

 

Q3 posed challenges, with revenue down 66% YoY due to lower product sales (43% YoY drop) and declining prices (40% YoY). Fertilizer demand faced headwinds in the first nine months due to sluggish global GDP growth, elevated interest rates, and volatile fertilizer prices.

 

- Encouraging Signs: Despite challenges, there's a positive note as fertilizer prices stabilize. Potash prices in Brazil, though down 45% YoY, show a promising 5% QoQ increase to $343/t, hinting at potential recovery in 2024.

 

Read the full report here: https://www.researchfrc.com/verde-agritech-ltd-tsx-npk-otc-vnpkf-initiating-field-studies-for-carbon-capture-fertilizer-prices-stabilizing/

 

*FRC provides issuer paid coverage.

*Past performance is not indicative of future results.

[rudinm]

Well lets see how long it will take to take sales up to 1.5 million tons andif they get anthing on carbon crdit done in 2024....

[Benedictus]

Brazilian potash was down to $290/t last week, which is a cycle low. This just pressures Verde's margins that much more at a time when they can ill afford it.  The issue with the carbon credits is Cris announced in July that the company was in "advanced negotiations" to sell them only to walk everything back a few months later. So, the market rightfully gives zero valuation

[rudinm]

well said , I stay with it as well for the next 3.5 years and see how it goes. I think the worsed it discounted.....So i am not to worried but it will take time i guess

[Benedictus]

Whether the worst is discounted is highly debatable from what we know right now. We have no evidence of an operational turnaround. We have no evidence of near or even medium term carbon credit monetization. We have ample evidence of onerous debt and interest rates forcing the CFO to adjust the liability mix to provide much needed near term liquidity as they encounter hemorrhaging margins and bad

[rudinm]

well the stock is down about 90% and at 1.03 $ low i think yes it has discounted the worsed but it soes not mean it will go up but just trades for some time around 1--2 $ ...

[Benedictus]

If they cannot get back to positive cash flow by Q3 this year I expect the sp to go well below $1, perhaps all the way to .60c. Even a financing cannot be ruled out by that point if things have not improved. 

[rudinm]

It may well be but stocks are discounting future earnings and is a sentiment indicator. Sentiments are bad and earning look bleak and bad..so i would say time to accoumulate..but i have my position already ...

[Benedictus]

Yes, agreed the risk/reward opportunity could be compelling for new investors but the risk side should not be so easily dismissed until the company can offer proof that they can spark sales growth and repair the margins. I already have my position and would consider adding if lower level supports get tested but I'm very curious to hear the specifics of their ERW initiative from Lucas's