Swedish recycling company Renewcell reported some lacklustre financials for Q3 as its flow of product continues to underperform amid lower than expected demand.
Net sales for the three months to September came in at 84.4 million krona, a short drop from the 84.8 million krona it reported in the quarter prior.
While the company's operating profit amounted to 50.5 million krona, falling from 59.3 million krona, its net loss came in at 94.5 million krona, hindering its chances of breaking even by the end of the year.
The disappointing results confirmed what Renewcell had already anticipated back in its guidance update during October, when it stated that it was experiencing a slower than expected flow of its Circulose pulp fibre throughout the value chain.
While interest had been seen among fibre producers, the company’s acting CEO, Magnus Håkansson, who had been appointed to the position in early October, said that certain off-take agreements had not yet transpired into orders due to delayed production.
In a release, Håkansson noted that while Circulose has been implemented into a series of development projects for a number of global brands – namely that of H&M and Inditex, among others – there was a need for the product to be implemented into main collections on a larger scale to secure commercial production opportunities.
Håkansson added: “The interest in sustainable fashion continues to grow and more and more brands are setting clear circularity related targets for their businesses.
“But it takes intent, resources and efforts both from the fibre producers and at the same time from the leading brands, to continue the work of co-developing the specifications as well as investing in sample production for the product to be fully available where the purchasing decisions are taken.”
He concluded that Renewcell would continue to keep control over cash flow during this period while it sets its sights on ramping up sales and securing demand from brands and fibre producers.