Canada, Calgary
Canadian compressed natural gas (CNG) and hydrogen cylinder manufacturer, Dynetek Industries has reported year end results, showing an impressive 53% increase on 2005 turnover, up from $CA26.7 million to $CA35.9 million. Despite setbacks with raw material supplies in the first three quarters, the company made up lost ground in the last quarter, with a 93% increase in turnover for the last quarter.
Christian Rasche, President and Chief Executive Officer, noted that the increase in fourth quarter revenues reflects shipments which were deferred from the second and third quarters due to delivery delays in raw materials. As noted in Dynetek's second quarter 2006 report, heavy rains and flooding shut down the manufacturing plant of a key raw material supplier and prevented it from delivering for a period of time. Although Dynetek has worked closely with the supplier to overcome past delivery issues, many shipments by Dynetek of cylinders and systems were delayed from the second and third quarters into the fourth quarter.
Normally Dynetek ships its products by sea at low cost. In order to maintain market relationships and customer needs, Dynetek incurred unexpected airfreight costs of approximately $1.3 million and additional labour and overtime costs of approximately $0.2 million in order to fill European orders by year end. Dynetek continued to airfreight its products overseas until mid February 2007, at which time it resumed shipping by sea at lower cost.
"2006 was a tremendous year for cylinders and system sales for Dynetek," commented Mr. Rasche. "In Europe we experienced a 54% increase in our CNG cylinder and system sales from one year ago. Our Canadian operation also saw a 53% increase in cylinder and system sales."
"We were frustrated in 2006 with our raw material supply and the difficulties it caused in our ability to deliver to our customers," said Mr. Rasche. "Without the additional airfreight expense and labour costs, Dynetek would have been profitable."
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