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Highlights

  • Kelso’s FY2024 revenue decreased slightly, but gross profit increased due to effective expense management.
  • Despite challenges in tank car demand, the company remains focused on future growth and profitability.
  • Strategic initiatives in FY2025 will focus on cost discipline and positioning for anticipated market demand.

Kelso Technologies Inc. (TSX: KLS) has released its audited consolidated financial statements and Management Discussion and Analysis (MD&A) for the year ended December 31, 2024.

For the fiscal year 2024, Kelso reported a modest 2% decrease in revenue, totaling USD10.68 million compared to USD10.82 million in the previous year. Despite this decline, the company successfully increased its gross profit to USD4.69 million from USD4.58 million in FY2023. This improvement in gross profit was largely attributed to Kelso’s ability to maintain production efficiency and implement effective expense reduction strategies, leading to a gross profit margin of 44%, which exceeds industry averages.

However, the company incurred a significant one-time loss of USD4.6 million in FY2024 due to expenses and write-offs associated with inventory adjustments and the carrying value of its KXI HD system. These challenges were compounded by persistent weakness in tank car demand, which continued to impact the company’s financial performance.

Looking ahead to FY25, Kelso anticipates flat to slightly positive sales growth, ranging from 0% to 5% compared to FY2024. The company's primary focus for the year will be on maintaining cost discipline as it prepares for the projected increase in new tank car builds beginning in 2026/2027. By positioning itself for future demand, Kelso aims to optimize profitability and ensure long-term sustainability.

Additionally, Kelso appointed Frank Busch as Chief Executive Officer, marking an important leadership transition. The company’s management continues to focus on increasing shareholder value by reducing expenses tied to the KXI HD system while exploring strategic partnerships and joint ventures to unlock the technology’s full potential.