Cadiz Shares on Upswing

Cadiz Shares on Upswing
Storage tanks on the Cadiz Ranch, located in the Mojave Desert.

Cadiz Inc. narrowed its net loss last year and increased revenue by more than 100%.

The company’s share price closed at $4.08 on April 27, a 59% increase since the start of the year, when the stock closed at $2.57, and an increase in value of 113% over the 52-week period. 

Courtney Degener, head of investor relations for Cadiz, said that two recent announcements have helped the share price. 

Cadiz announced on April 6 that it had completed construction of three additional wells on its Cadiz Ranch property, bringing its annual capacity to 36,000 acre-feet of water per year. 

With the new wells online, the Cadiz Ranch project – located in eastern San Bernardino County about 90 miles east of Barstow – will have sufficient capacity to deliver the full volume of the company’s Northern Pipeline, or 25,000 acre-feet per year, and also continue to support current agricultural operations at the Cadiz Ranch, the company said. 

That day, the stock price jumped 52 cents. The stock closed at $4.20 on April 6. 

The second announcement referenced by Degener came on April 14: the nomination of Maria Jelescu Dreyfus to Cadiz’s board of directors. 

Dreyfus has more than 20 years of strategy and financial experience, including 15 years at Goldman Sachs. Dreyfus was the founder and chief executive of Ardinall Investment Management, an independent investment firm based in New York City focused on emerging companies in the clean energy market.

That day, the stock declined by nine cents, closing at $4.91 on a trading volume just shy of 500,000. 

The wellfield milestone and new board nomination build on the regular communications Cadiz has had with its shareholders over the last several months, including its February investor newsletter, Degener said. 

“I think you are seeing investor confidence in the achievement of regular milestones and the role we can play in addressing California’s infrastructure challenges,” she said. 

The company stated in its annual report, which was released on March 30, a net loss of $24.8 million for the full year, compared with a net loss of $31 million in the previous year.  Revenue increased by 166% from the prior year to $1.5 million. That revenue was primarily related to rental income from the company’s agricultural leases and its alfalfa crop harvest, the company reported. 

“We believe that our water supply, storage, pipeline conveyance and treatment solutions will provide a significant source of future cash flow for the business and our stockholders,” the report added. 

But, the company continued, there are certain risks to developing its property and the water assets it contains.

 These include the company’s ability to obtain all necessary regulatory approvals and permits, litigation by environmental or other groups, unforeseen technical difficulties, general market conditions for agricultural and water supplies, and the time needed to generate significant operating revenues from such programs after operations commence. 

“Our development activities require governmental approvals and permits,” the company said. “If such permits were to be denied or granted subject to unfavorable conditions or restrictions, our ability to successfully implement our development programs as planned would be adversely impacted and could delay returns on our investments in the development of our assets.” 

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