The Montreal manufacturer of 100% electric snowmobiles and personal watercraft Taiga is revising its production forecasts for 2023 downwards and continues to seek to replenish its coffers.
Two weeks after announcing the $40 million in financing, management said Thursday that it is currently seeking other sources of capital for its working capital needs.
“While the company has been successful in raising funds in the past and believes it will be able to raise sufficient funds in the future and eventually achieve profitability and positive cash flow, obtaining Additional funds depend on many factors beyond the Company’s control and there can be no assurance that it will be able to do so in the future. »
Taiga announced two weeks ago that Investissement Québec and the firm Northern Private Capital-its main shareholder-had agreed to provide a total of 40 million in a private financing of convertible debentures bearing interest at the annual rate of 10 %.
Taiga now expects to deliver between 1,700 and 1,900 vehicles this year compared to the previously communicated target of producing between 2,500 and 3,500.
This revision of expectations suggests that the supply chain remains under pressure and that the company is having trouble increasing the production rate.
The co-founder and big boss, Samuel Bruneau, stressed in a conference call with analysts that production would begin to increase during the months of April, May and June, but that the bulk of production for the year will be achieved in the second half of 2023.
It was not possible to speak with him on Thursday because he was away, the company said.
Investors were right to anticipate a reduction in production forecasts given that one of the two analysts officially interested in the activities of Taiga had said last week to expect this eventuality. National Bank Financial analyst Cameron Doerksen said he now expects Taiga to deliver 1,360 recreational vehicles in 2023.
Taiga, which plans to open a factory in Shawinigan, still believed last fall that a gradual acceleration of the production rate at its facilities in the borough of LaSalle, in Montreal, would allow it to achieve its objectives.
Like others, the company’s supply chain has been under pressure over the past year due in particular to difficulties in obtaining certain materials and components. The efficiency of manufacturing processes needed to be optimized while investing in production capacity.
Taiga produced a total of 133 vehicles last year. The sale of 104 vehicles generated a turnover of 3.2 million dollars in 2022. The net loss reached 60 million in 2022, while it was 100 million in 2021.
Taiga has previously mentioned planning to begin construction of a plant in Shawinigan this year so that it can begin manufacturing there next year. This project aims to substantially improve the production capacity of the company.
Taiga’s stock, which hit a new low this week in the markets, gained 1% on Thursday to close at $1.71 on the Toronto Stock Exchange.