STT Env
iro Corp. (TSXV: STT) is an environmental engineering company that provides cost-effective solutions to its industrial clients by improving environmental outcome or minimizing the impact on the environment in each of its businesses. Although the energy sector has been underperforming, STT’s financial position remains strong as it currently has about $6.5 million ($0.14 a share) in cash and has virtually eliminated its long-term debt.
Samus Prasla | Green Investing and Sustainability Writer | March 15, 2016: Mining is conducted to extract key raw materials, which are used to manufacture any given product. These raw materials are also consumed by companies that manufacture green technologies. What sustainability means to the mining industry is maximizing profits while minimizing the environmental impact. STT Enviro Corp. (TSXV: STT) is an environmental engineering company that provides cost-effective solutions to its industrial clients by improving environmental outcome or minimizing the impact on the environment in each of its businesses.
STT Enviro creates a system that helps its customers reduce their carbon footprint. These systems are provided to the construction, power, mining and oil and gas sectors in North and South America. The Company’s core competency is the design and integration of high quality, cost effective, custom engineered systems and in a few cases, installation of these systems.
STT Enviro’s operations are divided amongst two groups: STT Enviro Corp Systems and Solutions, and STT Enviro Corp Tanks and Industrial. The Systems and Solutions division provides environmental systems to neutralize pollutants generated during the ore and oil recovery process. It also provides aftermarket services that include system retrofits, components, optimization of chemical use. The Tanks and Industrial division, meanwhile, supplies bolted storage tanks that have environmental advantages, especially for the oil sands.
Currently, STT Enviro Corp has a market cap of about $9.4 million. In its recent Q3/2015 financial and operating results, STT saw its revenue surge 33% to $7.9 million. Its net profit for the period, though, fell 69% to $98,478, due primarily to cost overrun on a large project in the Tanks and Industrial division. Consequently, it has affected the Q3’s overall gross margin, resulting 19.6% as compared with average gross margin of 23.4% for the first two quarters of the fiscal year. In order to avoid the impact of project cost escalations in the future, the Company has implemented project control processes.
STT is still in a position to maintain its significant backlog of $22 million despite weak conditions in oil and gas sector. During Q3/2015, the Company added $3.9 million in new order to its sales backlog. STT Enviro’s Tanks and Industrial division, meanwhile, is attracting new clients from oil and gas industry given that the Company’s bolted tanks are 25% less expensive and last longer than traditional field-welded tanks.
Although the energy sector has been underperforming, STT’s financial position remains strong as it currently has about $6.5 million ($0.14 a share) in cash and has virtually eliminated its long-term debt. STT’s stock price, meanwhile, is languishing near a 52-week low of $0.20.
STT Enviro Corp. is a component company of the benchmark-beating Ubika Sustainability 20 index (See the other top-performing stocks here).
