Anaergia Reports Second Quarter 2022 Financial Results and Files Restated Financial Statements and MD&A
BURLINGTON, Ontario–(BUSINESS WIRE)–$ANRG #ANRG–Anaergia Inc. (“Anaergia” or the “Company”) (TSX: ANRG) today announced its financial results for the three- and six-month periods ended June 30, 2022 (“Q2 2022”), as well as the filing of its restated unaudited, condensed, consolidated interim financial statements for the three months ended March 31, 2022, its restated annual audited financial statements for the year ended December 31, 2021, each with relevant comparative periods, and the related management’s discussion and analysis (“MD&A”) for those periods (collectively, the “Restatements”). All financial results are reported in Canadian dollars unless otherwise stated.
“The change in the way we do our accounting mainly affects our historical results and does not impact our ongoing operations and future growth. The strong revenue results in the second quarter are a testament to this. However, project cost overruns have reduced the levels of our gross margin. We expect to continue our growth momentum and improve on our performance in the remaining half of the year.
“What is truly exciting are the fundamental shifts in Renewable Natural Gas (RNG) demand and increasing support for RNG by governments taking place globally, as evidenced by the recent passing of the Inflation Reduction Act in the USA,” said Anaergia’s Chairman and CEO, Andrew Benedek.
Q2 2022 Financial Results
Second Quarter financial highlights:
- Revenues for the second quarter jumped by 57%, to $42.2 million from $26.8 million restated for the prior year, and rose by 40%, to $77.8 million for the six-month period compared to $55.4 million restated for the same period in the prior year. The increase in the year-to-date was driven by capital sales projects under execution mainly in the Europe, Middle East and Africa (“EMEA”) market, specifically in Italy.
- Gross Profit increased to $8.0 million for the three-month period ended June 30, 2022, compared to $6.0 million restated for the same period the prior year. The gross profit percentage slipped to 19% in the second quarter of this year from 22% in the restated second quarter of the prior year owing to project cost overruns. For the six-month period, gross profit increased to $15.3 million from $13.7 million in the restated first half. The gross profit percentage declined to 20% from 25% in the restated six-month period in the prior year.
- Net income (loss) of -$19.6 million for the three-month period ended June 30, 2022 was largely driven by $14.3 million in losses from changes in fair value of derivatives (for example in the value of the option to refinance Rialto debt) and losses in equity-accounted investees. For the six-month period, $23.3 million of the -$36.0 million net loss was from these sources.
- Adjusted EBITDA1 of -$3.3 million for the three-month period ended June 30, 2022 was down from $0.2 million in the restated same period in the prior year. The decrease was attributable to lower gross margin and increased SG&A expenses as the company continues to position itself for future growth. For the six-month period, Adjusted EBITDA declined to -$5.6 million from $0.8 million in the prior year.
|
Three months ended: |
30-Jun-22 |
30-Jun-21 (Restated) |
% Change |
||
|
(In millions of Canadian dollars) |
|||||
|
Revenue |
42.2 |
26.8 |
57% |
||
|
Gross profit |
8.0 |
6.0 |
33% |
||
|
Gross profit % |
19% |
22% |
|||
|
Loss from operations |
(4.8) |
(2.0) |
|||
|
Net income (loss) |
(19.6) |
1.2 |
|||
|
Adjusted EBITDA1 |
(3.3) |
0.2 |
|
Six months ended: |
30-Jun-21 |
30-Jun-21 (Restated) |
% Change |
||
|
(In millions of Canadian dollars) |
|||||
|
Revenue |
77.8 |
55.4 |
40% |
||
|
Gross profit |
15.3 |
13.7 |
12% |
||
|
Gross profit % |
20% |
25% |
|||
|
Loss from operations |
(8.8) |
(4.6) |
|||
|
Net loss |
(36.0) |
(4.2) |
|||
|
Adjusted EBITDA1 |
(5.6) |
0.8 |
|
Statement of |
|||
|
Financial Position |
30-Jun-22 |
31-Dec-21 |
|
|
(In millions of Canadian dollars) |
|||
|
Total Assets |
762 |
693 |
|
|
Total Liabilities |
428 |
370 |
|
|
Equity |
334 |
323 |
For a more detailed discussion of Anaergia’s results for Q2 2022, please see the Company’s financial statements and management’s discussion and analysis for Q2 2022, which are available at https://www.anaergia.com/investor-relations and on the Company’s SEDAR page at www.sedar.com.
Restated Financial Statements and MD&A
The Restatements are a result of previously announced discussions with KPMG LLP, the Company’s external auditor, regarding its previously audited interpretation of certain technical accounting standards mainly relating to the recognition of capital sales and related Build Own Operate (“BOO”) project costs for three of the Company’s U.S. BOO projects. The Company determined that the impact of the resulting changes to the Company’s accounting policies was material to previously issued financial statements and that restatements were necessary as previously disclosed. The Company has restated its unaudited, condensed, consolidated interim financial statements for the three months ended March 31, 2022, its annual audited financial statements for the year ended December 31, 2021, each with relevant comparative periods, and the related management’s discussion and analysis for those periods.
Fiscal 2022 and Fiscal 2023 Guidance Update
Notwithstanding the announced changes in accounting policies, there is no change to the previously disclosed guidance for Fiscal 2022 and Fiscal 2023. Please refer to “Financial Outlook” in the restated management’s discussion and analysis for the three months ended June 30, 2022.
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”.
1“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
A conference call to review the Company’s financial results will take place at 11:00 a.m. (ET) on Tuesday, August 16, 2022. It will be hosted by Chairman and Chief Executive Officer, Andrew Benedek, Chief Operating Officer, Yaniv Scherson, and Chief Financial Officer, Hani Kaissi. 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 to receive your personal event-joining details at the following pre-registration link:
- Conference Call Pre-registration: https://ige.netroadshow.com/registration/q4inc/11094/q2-anaergia-conference-call-and-webcast-2022/. You will receive your access details via email.
To listen to the webcast live:
The webcast will be archived and will be 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.
Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the Company’s current expectations regarding future events, including statements relating to the ability of our technologies and projects to address about two-thirds of all point source methane emissions and our business plans, growth strategies and ESG initiatives. Forward-looking information is based on a number of assumptions and 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 March 28, 2022 for the fiscal year ended December 31, 2021. 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-Jun-22 |
30-Jun-21 (Restated) |
|
|
(In thousands of Canadian dollars) |
|||
|
Net income |
(19,653) |
1,207 |
|
|
Finance costs |
142 |
(463) |
|
|
Depreciation and amortization |
895 |
748 |
|
|
Income tax expense |
325 |
810 |
|
|
EBITDA |
(18,291) |
2,302 |
|
|
Share-based compensation expense |
340 |
206 |
|
|
Change in fair value of equity investment |
– |
– |
|
|
(Gain) on RBF embedded derivative |
12,742 |
(4,511) |
|
|
Gain on warrant forfeitures |
– |
(615) |
|
|
Stock warrant valuation loss |
– |
(243) |
|
|
Share of loss in equity accounted investees |
1,584 |
1,030 |
|
|
Other (gains) losses |
(32) |
831 |
|
|
ERP customization and configuration costs |
246 |
169 |
|
|
Costs related to the Offering |
– |
1,064 |
|
|
Foreign exchange (gain) loss |
107 |
(63) |
|
|
Adjusted EBITDA |
(3,304) |
170 |
|
|
|
|
|
|
|
|
|
|
|
Six months ended: |
30-Jun-22 |
30-Jun-21 (Restated) |
|
|
(In thousands of Canadian dollars) |
|||
|
Net loss |
(36,043) |
(4,168) |
|
|
Finance costs |
7 |
(361) |
|
|
Depreciation and amortization |
1,803 |
1,517 |
|
|
Income tax expense |
3,550 |
268 |
|
|
EBITDA |
(30,683) |
(2,744) |
|
|
Share-based compensation expense |
581 |
298 |
|
|
Change in fair value of equity investment |
– |
– |
|
|
(Gain) on RBF embedded derivative |
19,807 |
(3,207) |
|
|
Gain on warrant forfeitures |
– |
(615) |
|
|
Stock warrant valuation loss |
– |
914 |
|
|
Share of loss in equity accounted investees |
3,465 |
1,849 |
|
|
Other (gain)s losses |
(8) |
585 |
|
|
ERP customization and configuration costs |
587 |
574 |
|
|
Costs related to the Offering |
263 |
3,085 |
|
|
Foreign exchange (gain) loss |
395 |
103 |
|
|
Adjusted EBITDA |
(5,593) |
842 |
|
|
|
|
|
|
|
|
|
|
For further information please see: www.anaergia.com
Source: Anaergia Inc.
Contacts
For media relations please contact: Melissa Bailey, Director, Marketing & Corporate Communications, Melissa.Bailey@Anaergia.com
For investor relations please contact: IR@Anaergia.com
