- Xebec Adsorption (TSXV:XBC) has reported the impact of the coronavirus on the company’s global operations
- The company’s facilities in China and Italy have both suffered setbacks, but the Canadian operations remain unaffected
- In spite of COVID-19, Xebec continues to have a strong balance sheet
- The company has also taken steps to ensure staff and customers are safe
- Xebec’s share price is up 3.81 per cent, trading at C$2.18 per share
Clean energy company, Xebec Adsorption (TSXV:XBC), has reported the impact of the COVID-19 outbreak on its global operations.
Xebec is based in Montreal, Quebec, and has operating facilities in China and Italy. China and Italy are currently the top two countries that have been most affected by the coronavirus.
Recently, the company’s manufacturing operations in Shanghai were closed for two weeks because of the Chinese New Year holiday. However, the spread of COVID-19 coincided with the holiday, shutting down Xebec’s operations for an additional three weeks.
During this time, the rest of Xebec worked remotely to continue designs of various customer contracts. Since then, the Shanghai facility has reopened and is once more fully operational.
The Chinese operations may experience a moderate dip in 2020’s first quarter revenue and earnings.
The recent mandated lockdown of Italy has impacted the company’s operations in Lombardy. As a result of the transportation shutdown, Xebec is now seeing delays from suppliers in Northern Italy.
The company currently has two ongoing projects in Italy under construction, in Sicily and Genova. The lockdown has halted work on both those projects, which will not restart until April 3 at the earliest.
Xebec’s Italian operations may experience moderate impacts for the first two quarters of 2020. However, the company does not expect that the delays will have a significant impact on full year numbers.
Back home in Quebec, Xebec’s operations have not yet felt the effects of the coronavirus, and are operating close to capacity. The company’s schedule for North American deliveries has not changed. Xebec has announced a number of recent contracts in North America, and is working on a multitude of shipments for that market.
In spite of COVID-19 disruptions, the company has maintained a strong balance sheet, which includes over C$20 million of cash in hand.
Xebec President and CEO, Kurt Sorschak, commented on the company’s response to the ongoing crisis.
“Over the last ten weeks, we have increased our inventory and work in progress levels to withstand certain supply chain disruptions and continue our Blainville operations to the best possible extent.
“We have taken reasonable steps to protect not only our employees, suppliers, and customers, but also safeguard our ability to deliver financial results that will protect the expectations of our shareholders,” he said.
Xebec Adsorption (XBC) is currently up 3.81 per cent to $2.18 per share, as of 3:05pm EST.