Anaergia Reports Q3 2021 Financial Results

Posted: Nov 11, 2021
by Bioenterprise

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BURLINGTON, Ontario–(BUSINESS WIRE)–$ANRG #ANRG–Anaergia Inc. (“Anaergia” or the “Company“) (TSX: ANRG), an integrated waste-to-value platform created to eliminate greenhouse gases by cost-effectively turning organic waste into renewable natural gas, fertilizer, and water, today announced financial results for the three-month period ended September 30, 2021. All financial results are reported in Canadian dollars unless otherwise stated.

“The financial results we are reporting today for Anaergia’s third quarter show lower revenues, but higher gross profit as compared to the same quarter in 2020. This is largely attributable to the impact of a large-revenue, but low-margin, capital sale that affected results in the prior year. As a result, the third quarter of last year was the highest revenue quarter of the year. Typically, our fourth quarter is usually the highest revenue quarter of the year, and this will likely be the case in 2021,” noted Anaergia’s Chairman and CEO, Andrew Benedek. “Furthermore, while our Revenue Backlog[1] rose to $3.5 billion from $3.2 billion at the end of the second quarter, two new orders that we had anticipated in the third quarter have closed in this quarter, which bodes well for revenue growth and rising profitability in future periods.

“Growth is particularly strong in western Europe, where we added a large build, own and operate (BOO) project in Denmark. We also added projects in Italy and in the US. We continue to see many opportunities in Italy, and as such we are working to put in place significant new project-level financing for the Italian market,” concluded Dr. Benedek.

Q3 2021 Financial Results

Third Quarter financial highlights:

  • Revenues for the third quarter fell to $33.8 million from $42.5 million in the prior year, but increased to $103.4 million for the nine-month period compared to $88.1 million in the same period in the prior year. The increase for the year-to-date was driven by activity in both the Europe, Middle East and Africa (EMEA) and the North American markets. Specifically, government regulations and incentives in Europe and North America are driving the development of new facilities in efforts to divert greater amounts of organic waste from landfills and produce increasing quantities of renewable natural gas in each of these markets.
  • Gross Profit increased to $8.5 million for the three-month period ended September 30, 2021, compared to $8.1 million for the same period the prior year. The increase in the gross profit percentage to 25% in the third quarter of this year from 19% in the third quarter of the prior year was driven by the completion of a large-revenue, but low-margin, capital sale in the prior quarter.
  • Adjusted EBITDA1 of $1.2 million for the three-month period ended September 30, 2021 was lower than the $1.5 million in the same period the prior year. The decrease was attributable to increased SG&A expenses as the Company positions itself for future growth. For the nine-month period, Adjusted EBITDA rose to $5.1 million from $1.5 million in the prior year.

Three months ended:

 

30-Sep-21

 

30-Sep-20

 

% Change

(In millions of Canadian dollars)

     
       

Revenue

 

33.8

 

42.5

 

-20%

Gross profit

 

8.5

 

8.1

 

6%

Gross profit %

 

25%

 

19%

 

Income (loss) from operations

 

(3.9)

 

0.0

 

Net income (loss)

 

0.0

 

0.0

 

Adjusted EBITDA1

 

1.2

 

1.5

 

Nine months ended:

 

30-Sep-21

 

30-Sep-20

 

% Change

(In millions of Canadian dollars)

     
       

Revenue

 

103.4

 

88.1

 

17%

Gross profit

 

25.3

 

18.6

 

36%

Gross profit %

 

24%

 

21%

 

Loss from operations

 

(5.5)

 

(1.8)

 

Net loss

 

(1.6)

 

(15.3)

 

Adjusted EBITDA1

 

5.1

 

1.5

 

Statement of

   

Financial Position

 

30-Sep-21

 

31-Dec-20

(In millions of Canadian dollars)

   
     

Total Assets

 

654.4

 

452.2

Total Liabilities

 

310.1

 

326.4

Equity

 

344.3

 

125.8

For a more detailed discussion of Anaergia’s third quarter 2021 results, please see the Company’s financial statements and management’s discussion & analysis, which are available at https://www.anaergia.com/investor-relations and on the Company’s SEDAR page at www.sedar.com.

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 issuers.

Definitions and reconciliations of non-IFRS measures to the relevant reported measures can be found in our MD&A. Such reconciliations can also be found in this press release 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 and operate (“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.

Revenue Backlog” is defined as the balance of unrecognized, undiscounted, consolidated revenues from signed contracts in our Capital Sales and Services segments and from our BOO assets that are operational, under construction or financially closed over their remaining useful life. We have conservatively modelled for only 20 years of revenue out of the useful life of the BOO assets.

Conference Call and Webcast

A conference call to review the Company’s results for the second quarter of 2021 will take place at 11:30 a.m. (ET) on Thursday, November 11, 2021, hosted by 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 our 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:

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.

For further information please see: www.anaergia.com

Forward-Looking Statements

This news release may contain forward-looking information within the meaning of applicable securities legislation, which reflects the Company’s current expectations regarding future events. 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 supplemented PREP prospectus dated June 18, 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-Sep-21

 

30-Sep-20

(In thousands of Canadian dollars)

 

Net income

193

 

753

Finance costs

(863)

 

816

Depreciation and amortization

855

 

769

Income tax expense (benefit)

(1,617)

 

56

EBITDA

(1,432)

 

2,394

   

Share-based compensation expense

107

 

123

Net gain on Fibracast deconsolidation

(2,346)

 

Gain on RBF embedded derivative

(306)

 

(4,628)

Stock warrant valuation loss

 

1,138

Share of loss in equity accounted investees

780

 

1,720

Provision for customer claim

3,473

 

Other (gains) losses

(341)

 

127

ERP customization and configuration costs

922

 

226

Costs related to the Offering

1,247

 

Foreign exchange (gain) loss

(919)

 

431

Adjusted EBITDA

1,185

 

1,531

 

 

 

 

 

 

 

 

Nine months ended:

30-Sep-21

 

30-Sep-20

(In thousands of Canadian dollars)

 

Net loss

(1,591)

 

(15,271)

Finance costs

(1,224)

 

2,470

Depreciation and amortization

2,372

 

1,478

Income tax expense (benefit)

(703)

 

4,323

EBITDA

(1,146)

 

(7,000)

   

Share-based compensation expense

405

 

537

Net gain on Fibracast deconsolidation

(2,346)

 

Gain on RBF embedded derivative

(3,513)

 

(3,112)

Gain on warrant forfeitures

(615)

 

Stock warrant valuation loss

914

 

1,744

Share of loss in equity accounted investees

2,629

 

2,941

Provision for customer claim

3,473

 

Other losses

244

 

579

ERP customization and configuration costs

1,496

 

1,300

Costs related to the Offering

4,332

 

Foreign exchange (gain) loss

(816)

 

4,522

Adjusted EBITDA

5,057

 

1,511

 

 

 

 

 

 

 

 

__________________________

1 See “Non-IFRS Measures.”

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