Anaergia Reports Third Quarter 2023 Financial Results
BURLINGTON, Ontario, November 14, 2023--(BUSINESS WIRE)--Anaergia Inc. ("Anaergia" or the "Company") (TSX: ANRG) today announced its financial results for the three- and nine-month periods ended September 30, 2023 ("Q3 2023"), and the related management’s discussion and analysis ("MD&A") for the period. Certain highlights from these financial results and from the MD&A follow. All financial results are reported in Canadian dollars unless otherwise stated.
Notable Developments
Anaergia announced, on September 28, 2023, that its Rhode Island Bioenergy Facility ("RIBF") closed a US$20 million term loan with East West Bank, a California corporation, to finance the remaining construction and commissioning of the RIBF BOO project and working capital.
Anaergia announced, on September 13, 2023, that it had engaged Piper Sandler & Co. to assist the Company and its advisors with the Company’s previously announced strategic review. This process is continuing. As previously disclosed, the Company requires additional financing to fund its operations and continue to operate as a going concern. The Company cautions that there are no assurances that the evaluation of the potential options will result in the approval or completion of any specific transaction or outcome.
Anaergia announced, on August 17, 2023, that it had sold its equity interests in its subsidiary that owned the six Italian build-own-operate ("BOO") assets and approximately $55 million in inter-company loans (as previously written off by the Company) to Arjun Infrastructure Partners ("AIP"). This sale was in exchange for the termination of obligations relating to approximately $145 million in loan obligations owing to AIP, including with respect to a lender option for AIP to require Anaergia to purchase outstanding loans relating to any BOO projects for which senior debt financing was not secured by a set time. As a result of the foregoing, Anaergia received de minimis cash consideration.
Financial Results for Q3 2023
Q3 2023 financial highlights:
Revenues decreased 25%, or $11.1 million, to $34.0 million compared to the same period in Fiscal 2022 (Q3 2022: $45.0 million). The decrease was mainly due to European Capital Sales projects coming to completion, some projects facing customer delays and delays in new project signings.
Net loss of $30.6 million decreased 616%, or $26.3 million, compared to the same period in Fiscal 2022 (Q3 2022: net loss of $4.3 million). The decrease was mainly driven by an impairment loss recorded for Fibracast, losses in equity accounted investees, and finance costs related to increased lending activity.
Adjusted EBITDA1 declined 876%, or $10.2 million, to a loss of $11.3 million compared to the same period in Fiscal 2022 (Q3 2022: loss of $1.2 million). The decline was due to an increased loss from operations.
Three months ended: | 30-Sep-23 | 30-Sep-22 | % Change | |||
(In millions of Canadian dollars) | ||||||
Revenue | 34.0 | 45.0 | -25% | |||
Gross profit | 7.3 | 9.9 | -26% | |||
Gross profit % | 22% | 22% | ||||
Income (loss) from operations | (13.3) | (2.6) | ||||
Net loss | (30.6) | (4.3) | ||||
Adjusted EBITDA1 | (11.3) | (1.2) |
Nine months ended: | 30-Sep-23 | 30-Sep-22 | % Change | |||
(In millions of Canadian dollars) | ||||||
Revenue | 113.1 | 123.0 | -8% | |||
Gross profit | 14.3 | 25.1 | -43% | |||
Gross profit % | 13% | 20% | ||||
Loss from operations | (49.5) | (11.5) | ||||
Net loss | (161.6) | (37.1) | ||||
Adjusted EBITDA1 | (30.2) | (6.8) |
Statement of | ||||
Financial Position | 30-Sep-23 | 31-Dec-22 | ||
(In millions of Canadian dollars) | ||||
Total Assets | 324.9 | 935.1 | ||
Total Liabilities | 209.0 | 593.0 | ||
Equity | 115.9 | 342.1 |
For a more detailed discussion of Anaergia’s results for Q3 2023, please see the Company’s financial statements for Q3 2023 and related MD&A, which are available at and on the Company’s SEDAR+ page at www.sedarplus.ca.
Fiscal 2023 Guidance Not Reinstated
As previously disclosed, management will not be able to provide any updates regarding guidance, including projected revenue and Adjusted EBITDA, until the completion of the Company’s strategic review and a reassessment of assumptions related thereto.
Non-IFRS Measures
This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures to provide investors with supplemental measures. Management also uses non-IFRS measures internally in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our future debt service, capital expenditure and working capital requirements. Management believes these non-IFRS measures and industry metrics are important supplemental measures of operating performance because they eliminate items that have less bearing on operating performance and highlight trends in the core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management believes such measures allow for assessment of our operating performance and financial condition on a basis that is more consistent and comparable between reporting periods. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of public companies.
Definitions of non-IFRS measures and industry metrics used in this press release are provided below. A reconciliation of the non-IFRS measures used in this press release to the most comparable IFRS measure can be found below under "Reconciliation of Non-IFRS Measures".
"Adjusted EBITDA" is defined as net earnings before finance costs, taxes and depreciation and amortization adjusted for our normalized proportionate interest in our BOO assets and one-time or non-recurring items, stock-based compensation expense, asset impairment charges and write downs, gains and losses for equity-accounted investees, foreign exchange gains or losses, restructuring costs, ERP customization and configuration costs, litigation and other claims settlements, gains and losses resulting from changes in certain balance sheet valuations (such as derivatives and warrants), acquisition costs and costs related to our initial public offering, including estimated incremental auditing and professional services costs incurred in connection with our initial public offering. For further details, refer to "Reconciliation of Non-IFRS Measures" below.
Conference Call and Webcast Details
A conference call to review the Company’s financial results will take place at 9:00 a.m. (ET) on Tuesday, November 14, 2023. It will be hosted by management of Anaergia. An accompanying slide presentation will be posted to the Investor Relations section of the Company’s website shortly before the call.
To participate on the call, please sign up using the following pre-registration link to receive details on how to access the conference call:
Conference Call Pre-registration:
https://www.netroadshow.com/events/login?show=0c3fc226&confId=55484
You will receive your access details via email.
To listen to the webcast live:
https://events.q4inc.com/attendee/918414157
The webcast will be archived and available in the Investor Relations section of our website following the call.
About Anaergia
Anaergia was created to eliminate a major source of greenhouse gases by cost effectively turning organic waste into renewable natural gas ("RNG"), fertilizer and water, using proprietary technologies. With a proven track record from delivering world-leading projects on four continents, Anaergia is uniquely positioned to provide end-to-end solutions for extracting organics from waste, implementing high efficiency anaerobic digestion, upgrading biogas, producing fertilizer and cleaning water. Our customers are in the municipal solid waste, municipal wastewater, agriculture, and food processing industries. In each of these markets Anaergia has built many successful plants including some of the largest in the world. Anaergia owns and operates some of the plants it builds, and it also operates plants that are owned by its customers.
For further information please see: www.anaergia.com
Forward-Looking Information
This press release contains forward-looking information within the meaning of applicable securities legislation, which reflects the Company’s current expectations regarding future events, including statements regarding its financial position, business strategy, growth strategy, milestones, budgets, operations, financial results, plans and objectives. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "may", "will", "could", "expects", "anticipates", "believes", "estimates", "likely", "potential", "continue", or "future" or the negative or other variations of these words or other comparable words or phrases.
Forward-looking information is based on a number of assumptions including, without limitation, the Company’s ability to meet its financing and liquidity requirements on a continuing basis; its ability to provide projected revenue and Adjusted EBITDA upon completion of the strategic review; statements regarding the Company’s ongoing strategic review; and its ability to continue as a going concern. The Company is subject to a number of risks and uncertainties, many of which are beyond the Company’s control. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the Company’s annual information form dated April 10, 2023 for the fiscal year ended December 31, 2022 and under "Risks and Uncertainties" in the MD&A. Actual results could differ materially from those projected herein. Anaergia does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.
Reconciliation of Non-IFRS Financial Measures
Three months ended: | 30-Sep-23 | 30-Sep-22 | ||
(In thousands of Canadian dollars) | ||||
Net income (loss) | (30,568) | (4,271) | ||
Finance income (cost) | 3,736 | 170 | ||
Depreciation and amortization | 1,427 | 884 | ||
Income tax expense | (1,898) | 2,362 | ||
EBITDA | (27,303) | (855) | ||
Rialto – Non controlling interest -EBITDA | - | - | ||
Share-based compensation expense | 595 | 246 | ||
(Gain) loss on RBF embedded derivative | - | (807) | ||
Gain on disposal of ITA | (665) | - | ||
Fibracast impairment | 6,648 | - | ||
Gain on control of Bioener | - | - | ||
Share of loss in equity accounted investees | 4,237 | 1,158 | ||
Loss on control of Rialto | 1,814 | - | ||
Expected credit loss on loans receivable from related parties | 863 | - | ||
Impairment loss | - | - | ||
Provision for customer claim | - | - | ||
Other (gains) losses | 1,635 | (456) | ||
ERP customization and configuration costs | 165 | 329 | ||
Costs related to the Offering | - | - | ||
Foreign exchange (gain) loss | 683 | (775) | ||
Adjusted EBITDA | (11,328) | (1,160) | ||
Nine months ended: | 30-Sep-23 | 30-Sep-22 | ||
(In thousands of Canadian dollars) | ||||
Net income (loss) | (161,610) | (37,058) | ||
Finance income (cost) | 2,585 | 177 | ||
Depreciation and amortization | 4,782 | 2,687 | ||
Income tax expense | (6,480) | 5,912 | ||
EBITDA | (160,723) | (28,282) | ||
Rialto – Non controlling interest -EBITDA | 1,544 | - | ||
Share-based compensation expense | 1,346 | 827 | ||
(Gain) loss on RBF embedded derivative | 7,953 | 19,000 | ||
Gain on disposal of ITA | (665) | - | ||
Fibracast impairment | 6,648 | - | ||
Gain on control of Bioener | - | (3,324) | ||
Share of loss in equity accounted investees | 5,961 | 4,624 | ||
Loss on control of Rialto | 39,719 | - | ||
Expected credit loss on loans receivable from related parties | 60,236 | - | ||
Impairment loss | 3,391 | - | ||
Provision for customer claim | 1,002 | - | ||
Other (gains) losses | 3,569 | (464) | ||
ERP customization and configuration costs | 542 | 916 | ||
Costs related to the Offering | - | 263 | ||
Foreign exchange (gain) loss | (719) | (380) | ||
Adjusted EBITDA | (30,197) | (6,820) |
_____________
1 See "Non-IFRS Measures".
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Contacts
For media and/or investor relations please contact: IR@Anaergia.com
