Anaergia’s financial results for Q3 2024 reflect progress in the transition of its business model. Further to the Company’s adoption of a capital-light business model, Anaergia reported substantial improvements in Adjusted EBITDA, while at the same time reporting lower revenues as compared to the prior year.
Further to the closing of the third and final tranche of the $40.8 million equity investment by Marny Investissement SA ("Marny"), and after considering the improvements in the pipeline of opportunities, the future cash-flow projections, and the current cash position, management has determined that the conditions that had previously led to the doubt regarding the Company’s ability to continue as a going concern have now been mitigated.
"Our recent marketing and capital sales successes reflect continuing progress in the Company’s new, more focused approach," said Assaf Onn, Chief Executive Officer of Anaergia. "We view these developments during the quarter as confirmation that Anaergia is now heading in the right direction," added Mr. Onn.
Q3 2024 financial highlights:
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Revenues decreased 15%, or $4.9 million, to $29.0 million compared to the same period in Fiscal 2023 (Q3 2023: $34.0 million). The decrease was mainly due to Italian Capital Sales projects being completed, some projects facing customer delays and delays in the timing of new project signings.
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Net loss of $15.6 million was reduced by 49%, or $15.0 million, compared to the same period in Fiscal 2023 (Q3 2023: net loss of $30.6 million). The decrease is mainly due to reduced selling, general, and administrative expenses, and reduced impairments and other losses in Q3 2024 as compared to Q3 2023.
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Adjusted EBITDA1 loss declined 42%, with an improvement of $4.7 million, to an Adjusted EBITDA loss of $6.4 million compared to the same period in Fiscal 2023 (Q3 2023: Adjusted EBITDA loss of $11.1 million). The decrease was driven by reduced selling, general, and administrative expenses.
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Cash increased from $22.1 million, at December 31, 2023 to $40.2 million, at September 30, 2024. The significant increase of $18.1 million or 82% in the Company’s cash position reflects the above-mentioned Strategic Investment by Marny.
| Three months ended: | 30-Sep-24 | 30-Sep-23
(Restated) | % Change |
| (In millions of Canadian dollars) | | | |
| | | | |
| Revenue | 29.0 | 34.0 | -15% |
| Gross profit | 6.0 | 7.3 | -18% |
| Gross profit % | 20.7% | 21.6% | |
| Loss from operations | (10.9) | (13.3) | +18% |
| Net loss | (15.6) | (30.6) | +49% |
| Adjusted EBITDA1 | (6.4) | (11.1) | +42% |
| Nine months ended: | 30-Sep-24 | 30-Sep-23
Restated | % Change |
| (In millions of Canadian dollars) | | | |
| | | | |
| Revenue | 77.6 | 113.8 | -32% |
| Gross profit | 16.6 | 16.2 | +2% |
| Gross profit % | 21.4% | 14.2% | |
| Loss from operations | (32.8) | (49.9) | +34% |
| Net loss | (40.4) | (158.0) | +74% |
| Adjusted EBITDA1 | (20.6) | (27.2) | +24% |
| Statement of | | |
| Financial Position | 30-Sep-24 | 31-Dec-23 |
| (In millions of Canadian dollars) | | |
| | | |
| Total Assets | 240.3 | 278.7 |
| Total Liabilities | 172.5 | 205.1 |
| Equity | 67.8 | 73.6 |
For a more detailed discussion of Anaergia’s results for Q3 2024, please see the Company’s financial statements for Q3 2024 and related MD&A, which are available at and on the Company’s SEDAR+ page at www.sedarplus.ca.
Other Change in Senior Leadership
The Company also formally announced today the hire of Scott Hodgdon as General Counsel. Mr. Hodgdon brings to the role over 20 years of extensive legal experience with securities, governance and transactions. Having served on the staff of the U.S. Securities and Exchange Commission and having worked at prominent international law firms before assignments with several publicly traded companies, Mr. Hodgdon has a strong record of executing complex transactions and providing strategic guidance. He holds a Bachelor of Arts degree from the College of William and Mary, a Master of Arts degree from Johns Hopkins University, a Master of Business Administration degree from Babson College and Juris Doctor degree from the University of Virginia School of Law.
The hiring of a new General Counsel followed a professional search process within a transition plan agreed upon by the Company with the previous General Counsel, Thor Erickson, who continues to provide support on an interim basis as Senior Counsel to ensure a smooth handover.
"Thor assembled a robust legal team with his skilled leadership, which will maintain momentum with Scott now at the helm. With Scott on board, Anaergia will remain well positioned to capitalize on our opportunities," said Assaf Onn, Chief Executive Officer of Anaergia. "I am grateful to Thor for his assistance with this transition, and on behalf of the Anaergia community I want to thank him for his significant contributions and for helping the company prepare for future growth," added Mr. Onn.
Non-IFRS Measures
This press release makes reference to certain non-International Financial Reporting Standards ("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 Build-Own-Operate 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, significant one-time provisions, foreign exchange gains or losses, restructuring costs, Enterprise Resource Planning ("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) and acquisition costs.
"EBITDA" is defined as net income before finance costs, taxes and depreciation and amortization.
See "Reconciliation of Non-IFRS Measures" below for a reconciliation of the foregoing non-IFRS measures to their most directly comparable measures calculated in accordance with IFRS.
Conference Call and Webcast Details
A conference call to review the Company’s financial results will take place at 10:00 a.m. (ET) on Thursday, November 14, 2024. 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 in the call, please sign up using the following pre-registration link to receive details on how to access the conference call:
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 Statements
This press release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information may relate to future plans, expectations and intentions, results, levels of activity, performance, goals or achievements, other future events or developments and may include, without limitation, information regarding our financial position, business strategy, growth strategy, budgets, operations, financial results, taxes, plans and objectives. Particularly, information regarding our future results, performance, achievements, prospects or opportunities or the markets in which we operate is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "may", "will", "would", "should", "could", "expects", "plans", "intends", "estimate", "believes", "likely", "potential", "continue", or "future" or the negative or other variations of these words or other comparable words or phrases. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances.
Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that we considered appropriate and reasonable as of the date such statements were made. It is also subject to known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the risk factors described in the Company’s annual information form and management’s discussion and analysis for the three and nine months ended September 30, 2023 and 2024.
The purpose of the forward-looking statements in this press release is to provide the reader with a description of management’s current expectations regarding the Company’s financial performance and may not be appropriate for other purposes. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information, which speaks only to opinions, estimates and assumptions as of the date made. Furthermore, unless otherwise stated, the forward-looking statements contained in this press release are made as of the date of this press release, and we have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Reconciliation of Non-IFRS Financial Measures
| Three months ended: | 30-Sep-24 | 30-Sep-23 |
| (In thousands of Canadian dollars) | | |
| Net income (loss) | (15,611) | (30,568) |
| Finance costs, net | 875 | 3,736 |
| Depreciation and amortization | 1,369 | 1,427 |
| Income tax (expense) recovery | 45 | (1,898) |
| EBITDA | (13,322) | (27,303) |
| | | |
| Rialto Bioenergy Facility, LLC – Non controlling interest -EBITDA | - | - |
| Share-based compensation expense | 2,625 | 595 |
| Loss on Rialto Bioenergy Facility, LLC embedded derivative | - | - |
| (Gain) on disposal of ITA | - | (665) |
| Fibracast Ltd. impairment | 4,397 | 6,648 |
| Asset impairment loss | 504 | - |
| Loss related to equity-accounted investees | - | 4,237 |
| Loss on control of Rialto Bioenergy Facility, LLC | - | (1,502) |
| Expected credit loss on loans receivable from related parties | - | 863 |
| Provision for customer claim | - | - |
| Other (gains) losses | (837) | 5,139 |
| ERP customization and configuration costs | - | 165 |
| Rhode Island Bioenergy Facility LLC income tax credit transaction cost | - | - |
| Foreign exchange (gain) loss | 204 | 683 |
| Severance cost | - | - |
| Adjusted EBITDA | (6,429) | (11,140) |
| | | |
| Nine months ended: | 30-Sep-24 | 30-Sep-23
(Restated) |
| (In thousands of Canadian dollars) | | |
| Net income (loss) | (40,448) | (157,993) |
| Finance costs, net | 3,524 | 2,507 |
| Depreciation and amortization | 4,034 | 4,782 |
| Income tax (expense) recovery | (458) | (6,480) |
| EBITDA | (33,348) | (157,184) |
| | | |
| Rialto Bioenergy Facility, LLC – Non controlling interest -EBITDA | - | 1,544 |
| Share-based compensation expense | 3,808 | 1,346 |
| Loss on Rialto Bioenergy Facility, LLC embedded derivative | - | 7,953 |
| (Gain) loss on disposal of ITA | - | 54,444 |
| Fibracast Ltd. impairment | 6,244 | 6,648 |
| Asset impairment loss | 1,587 | 3,391 |
| Losses related to equity-accounted investees | 1,062 | 5,961 |
| Loss on control of Rialto Bioenergy Facility, LLC | - | 35,663 |
| Expected credit loss on loans receivable from related parties | - | 5,127 |
| Provision for customer claim | - | 1,002 |
| Other (gains) losses | (2,114) | 6,836 |
| ERP customization and configuration costs | - | 542 |
| Rhode Island Bioenergy Facility LLC income tax credit transaction cost | 2,416 | - |
| Foreign exchange (gain) loss | (612) | (474) |
| Severance costs | 376 | - |
| Adjusted EBITDA | (20,581) | (27,201) |
| ______________________________ |
| 1 | | See "Non-IFRS Measures". |
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Contacts
For media and/or investor relations: IR@Anaergia.com
