Cadiz Inc. progresses with water project, secures steel and investor

LOS ANGELES - Cadiz Inc. (NASDAQ: CDZI), a California-based water solutions company with a market capitalization of $238 million, has announced significant progress in its water supply and storage project, with strategic advancements made in the first quarter of 2025. The company’s stock, which has experienced significant volatility with a 44% decline year-to-date according to InvestingPro data, is working toward constructing pipelines by the end of 2026 and 2027 for water supply and storage, respectively, under the leadership of Chairman and CEO Susan Kennedy.

In a recent shareholder update, Cadiz outlined its primary objectives for the quarter, which included establishing new companies for project development and securing a lead project investor. Despite challenges such as post-election policy uncertainty and market volatility, the company has remained on target with its aggressive construction timeline. InvestingPro analysis reveals strong liquidity metrics, with a current ratio of 1.79 indicating the company’s ability to meet its short-term obligations.

Key achievements in Q1 included the purchase of 180 miles of steel pipe from the defunct Keystone XL project, which, due to its presence in the U.S., is not subject to the newly increased import tariffs on steel. This strategic acquisition positions Cadiz to mitigate potential project cost risks.

Additionally, Cadiz has adapted to the changing political landscape by delaying permit submissions until the new administration was in place. An emergency proclamation by President Trump to expedite permits for California water supply projects is expected to benefit Cadiz’s pipeline conversion plans.

The company also secured an investment tax credit for linear generation technology, which will cover up to 50% of the projected $120 million costs for generation equipment. This move is crucial for attracting project investors and managing power costs. While the company’s revenue showed impressive growth of 383% in the last twelve months, InvestingPro data indicates challenges ahead, with analysts not expecting profitability in the current year. Subscribers to InvestingPro can access 8 additional key insights about Cadiz’s financial health and growth prospects.

Cadiz confirmed a lead investor for the project finance company and is in the process of drafting agreements for syndication with other investors. The company completed a $20 million equity raise to cover capital costs and development expenses in 2025, with expectations of being reimbursed for these expenses at the close of project financing.

The Victor Valley Wastewater Reclamation Authority’s decision to form a Joint Powers Authority is anticipated to facilitate municipal debt access for construction financing. Cadiz also reported substantial growth in its ATEC segment, with increased market presence and a high win rate for bids on water treatment solutions, including a promising new PFAS filtration technology.

At Cadiz Ranch, preparations for the 2025 growing season are underway, along with infrastructure development for the water project. Interest from developers in locating hydrogen production and data center facilities at the ranch highlights the synergistic potential of co-locating these operations.

The company’s forward-looking statements reflect its expectations for project financing, development milestones, and the advantageous impact of regulatory and political developments. However, these statements are subject to a range of factors that could cause actual results to differ materially.

This article is based on a press release statement from Cadiz, Inc. According to InvestingPro data, analysts maintain a positive outlook on the company, with price targets ranging from $10 to $15 per share, suggesting potential upside from current levels. The company’s next earnings report is scheduled for May 9, 2025, which could provide further clarity on its operational progress and financial position.

In other recent news, Cadiz Inc. has announced a cash dividend for its Series A Cumulative Perpetual Preferred Stock, amounting to $550.00 per whole share, with distribution scheduled for April 15, 2025. Holders of depositary shares will receive a cash dividend of $0.55 per share. In a significant development, the company has secured up to $175 million through a Letter of Agreement with a publicly traded water infrastructure investor for the Mojave Groundwater Storage Company. This agreement is expected to provide a total equity capital of up to $401 million, facilitating the acquisition of assets and construction of the project’s facilities. Cadiz will contribute key assets to this initiative, including pipeline rights and a majority stake in the water storage rights. Roth/MKM has initiated coverage on Cadiz with a Buy rating and a $10.00 price target, highlighting the strategic importance of the Mojave Ground Water Bank & Supply system in addressing Southern California’s water challenges. The analysts noted the project’s potential to generate substantial cash flow, estimating a net present value of $1,006.9 million. These recent developments underscore Cadiz’s ongoing efforts to enhance its financial viability and tackle regional water supply issues.

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