BURLINGTON, Ontario--(BUSINESS WIRE)--Anaergia Inc. ("Anaergia", the "Company", "us", or "our") (TSX: ANRG) today announced its financial results for the three- and six-month periods ended June 30, 2024 ("Q2 2024"), 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.
Key Take-Aways from Q2 2024 Financial Results
Anaergia's financial results for Q2 2024 reflect the ongoing transition in its business model. Largely as a result of the Company's efforts to shift to a capital-light business model, Anaergia reported improved gross profit margins and also an improvement in Adjusted EBITDA, while at the same time reporting a notable reduction in revenues for Q2 2024, as compared to the results for the same quarter in the prior year.
As further discussed in the MD&A, Anaergia is continuing to focus its efforts on improving margins, reducing expenses, and conserving cash. Anaergia plans to continue leveraging its proven technologies to increase sales and optimize value extraction.
"These financial results show progress in the Company's transition to its capital-light business model," said Assaf Onn, Chief Executive Officer of Anaergia. "We view these results as evidence that Anaergia is heading in the right direction," added Mr. Onn.
Financial Results for Q2 2024
Q2 2024 financial highlights:
- Revenues decreased by 45%, or $18.9 million, to $23.6 million in Q2 2024, as compared to Q2 2023. The decrease was driven mainly due to Italian Capital Sales projects being completed, some projects incurring customer delays, and delays in new project signing.
- Gross profit margin percent increased to 17.6% in Q2 2024 from 9.0% in Q2 2023, or a 96% increase. The increase was mainly driven by management's decision to pursue more lucrative and higher margin Capital Sales and Service contracts, which is part of our capital-light strategy.
- Net loss of $13.4 million improved by 89%, or $104.1 million, compared to Q2 2023. The improvement is mainly due to a loss in the prior year deconsolidation of Rialto Bioenergy Facility, LLC ("RBF") transaction of $35.7 million and due to expected credit losses on loans receivable of $59.4 million with WTE Holding S.r.L., our former joint venture. Neither of these transactions in the prior year was recurring in nature.
- Adjusted EBITDA1 loss in Q2 2024 improved by 59%, or by $11.6 million, compared to the negative Adjusted EBITDA reported in Q2 2023. This positive variance was driven by an improvement in our operations mostly related to gross margin increase and significant reductions in SG&A expenses. SG&A for Q2 2024 was lower by $10.7 million, compared to Q2 2023. The decrease in Q2 2024 was mainly due to higher expected credit losses on trade receivables and contract assets, pre-petition RBF costs, as well as other small one-time charges or provisions incurred in Q2 2023.
Three months ended: | 30-Jun-24 | 30-Jun-23 (Restated) | % Change |
(In millions of Canadian dollars, except %) | |||
Revenue | 23.6 | 42.5 | -45% |
Gross profit | 4.1 | 3.8 | +8% |
Gross profit % | 18% | 9% | |
Loss from operations | (11.7) | (25.8) | +55% |
Net loss | (13.4) | (117.5) | +89% |
Adjusted EBITDA1 | (8.0) | (19.6) | +59% |
Six months ended: | 30-Jun-24 | 30-Jun-23 (Restated) | % Change |
(In millions of Canadian dollars except %) | |||
Revenue | 48.6 | 79.9 | -39% |
Gross profit | 10.6 | 8.9 | +19% |
Gross profit % | 22% | 11% | |
Loss from operations | (21.9) | (36.5) | +40% |
Net loss | (24.8) | (125.9) | +80% |
Adjusted EBITDA1 | (14.1) | (16.8) | +16% |
Statement of | ||||
Financial Position | 30-Jun-24 | 31-Dec-23 | ||
(In millions of Canadian dollars) | ||||
Total Assets | 250.7 | 278.7 | ||
Total Liabilities | 181.2 | 205.1 | ||
Equity | 69.5 | 73.6 |
For a more detailed discussion of Anaergia's results for Q2 2024, please see the Company's financial statements for Q2 2024 and related MD&A, which are available at the Company's SEDAR+ page at www.sedarplus.ca.
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, gain or loss on equity method adjustment, 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.
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 year ended December 31, 2023.
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-Jun-24 | 30-Jun-23 (Restated) |
(In thousands of Canadian dollars) | ||
Net income (loss) | (13,356) | (117,523) |
Finance costs (income), net | 1,614 | (956) |
Depreciation and amortization | 1,628 | 1,650 |
Income tax recovery | (486) | (5,408) |
EBITDA1 | (10,600) | (122,237) |
RBF - Non controlling interest -EBITDA | - | 767 |
Share based compensation expense | 594 | 423 |
Loss on RBF embedded derivative | - | 2,847 |
Adjustment to equity-accounted investees | 2,431 | 889 |
Loss on deconsolidation of RBF | - | 35,663 |
Expected credit loss on loans receivable from related parties | - | 59,373 |
Asset Impairment loss | 1,083 | 3,391 |
Other (gains) losses, net2 | (1,597) | 652 |
ERP customization and configuration costs3 | - | 192 |
Foreign exchange (gain) loss | (271) | (1,563) |
Severance Costs5 | 376 | - |
Adjusted EBITDA1 | (7,984) | (19,603) |
Six months ended: | 30-Jun-24 | 30-Jun-23 (Restated) |
(In thousands of Canadian dollars) | ||
Net income (loss) | (24,837) | (125,923) |
Finance costs (income), net | 2,649 | (1,229) |
Depreciation and amortization | 2,729 | 3,355 |
Income tax recovery | (503) | (4,582) |
EBITDA1 | (19,962) | (128,379) |
RBF - Non controlling interest -EBITDA | - | 1,544 |
Share based compensation expense | 1,183 | 751 |
Loss on RBF embedded derivative | - | 7,953 |
Adjustment to equity-accounted investees | 2,909 | 1,724 |
Loss on deconsolidation of RBF | - | 35,663 |
Expected credit loss on loans receivable from related parties | - | 59,373 |
Asset impairment loss | 1,083 | 3,391 |
Provision for customer claim | - | 1,002 |
Other (gains) losses, net2 | (1,277) | 957 |
ERP customization and configuration costs3 | - | 377 |
RIBF income tax credit transaction cost4 | 2,416 | - |
Foreign exchange (gain) loss | (816) | (1,157) |
Severance costs5 | 376 | - |
Adjusted EBITDA1 | (14,088) | (16,801) |
__________________________
1 Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures"
2 The other gains (losses) are included as other gains and losses on our statement of operations less the ERP customization and configuration costs included in (3) below.
3 ERP customization and configuration costs are costs that are included in other gains and losses on our statement of operations.
4 The RIBF (Rhode Island Bioenergy Facility) income tax credits transaction costs represent one-time costs that are included in SG&A on our statement of operations.
5 Severance costs are costs paid to the former Chief Executive Officer due to the transition of new ownership under Marny Investissement SA and due to a new management team.
Contacts
For media and/or investor relations please contact: IR@Anaergia.com
