Tidewater Renewables generated strong Adjusted EBITDA(1) of$12.7 million and net income of$17.5 million during the first quarter of 2022. Net cash provided by operating activities totaled$19.3 million for the first quarter of 2022, with distributable cash flow(1) of$7.9 million .- The Corporation has reached several important milestones on its 3,000 bbl/d Renewable Diesel & Renewable Hydrogen Complex ("
HDRD Complex ") with significant construction set to take place during the summer months of 2022.Tidewater Renewables expects production of Renewable Diesel in the first quarter of 2023. - During the three months ended
March 31, 2022 , the Corporation was awarded$5.4 million of British Columbia Low Carbon Fuel Standard ("BC LCFS") credits for achieving construction milestones on itsHDRD Complex . As atMarch 31, 2022 , the Corporation has forward agreements, with investment-grade counterparties, to sell 150,000 BC LCFS credits at an average price of$434 per credit. The forward agreement proceeds of$65.1 million significantly reduces the Corporation's credit price exposure under the executed Part 3 Agreement with the Government ofBritish Columbia . The Corporation continues to realize higher credit prices than the originally budgeted$375 per credit. - Subsequent to
March 31, 2022 , the Corporation announced its investment in two strategic partnerships withRimrock RNG Inc. and theRimrock Cattle Company Ltd. aimed to advance theCorporation's Renewable Natural Gas ("RNG") business and secure long-term feedstock supply for both its RNG and renewable fuels businesses. The investment includes the planned construction of the Corporation's first RNG facility which is expected to be backstopped by 10 to 20 year offtake agreements with an investment grade counterparty and opportunity for additional RNG facilities in the future. The partnerships also provide a long-term feedstock supply for the RNG projects as well as access to significant volumes of beef tallow that would meet approximately half the feedstock requirements of theHDRD Complex .Tidewater Renewables continues to see material government support for various future renewable fuel initiatives. - The Corporation is pleased with the outperformance in its base business and expects continued Adjusted EBITDA(1) growth with 2022 Adjusted EBITDA expected to be in the range of
$50 -$55 million .Tidewater Renewables remains confident in its ability to deliver annualized Adjusted EBITDA(1) of$140 –$150 million upon the commissioning of theHDRD Complex in 2023.
(1) | Adjusted EBITDA, distributable cash flow, net debt and run rate EBITDA used throughout this press release are non-GAAP financial measures or ratios. See the "Non-GAAP and Other Financial Measures" in this press release and the Corporations MD&A for information on each non-GAAP financial measure or ratio. |
Selected financial and operating information are outlined below and should be read with the Corporation's condensed interim consolidated financial statements and related MD&A for the three months ended
Financial Highlights
(in thousands of Canadian dollars except per share information) | Three months ended | |
Revenue | $ | 17,250 |
Net income | $ | 17,514 |
Net income per share – basic and diluted | $ | 0.50 |
Adjusted EBITDA (1) | $ | 12,737 |
Net cash provided by operating activities | $ | 19,285 |
Distributable cash flow (1) | $ | 7,916 |
Distributable cash flow per common share – basic and diluted (1) | $ | 0.23 |
Total common shares outstanding (000s) | 34,712 | |
Total assets | $ | 788,795 |
Net debt (1) | $ | 66,415 |
Notes: | |
(1) | See "Non-GAAP and Other Financial Measures" in the Corporation's press release and MD&A. |
The Corporation remains hedged on approximately 50% and 30% of the
In conjunction with the earnings release, investors will have the opportunity to listen to
To access the conference call by telephone, dial 416-764-8659 (local / international participant dial in) or 1-888-664-6392 (North American toll free participant dial in). A question and answer session for analysts will follow management's presentation.
A live audio webcast of the conference call will be available by following this link: https://produceredition.webcasts.com/starthere.jsp?ei=1538826&tp_key=9e9600923d will also be archived there for 90 days.
For those accessing the call via Cision's investor website, we suggest logging in at least 15 minutes prior to the start of the live event. For those dialing in, participants should ask to be joined into the
Throughout this press release and in other materials disclosed by the Corporation,
The non-GAAP financial measures used by the Corporation are Adjusted EBITDA and distributable cash flow.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA is calculated as income (or loss) before finance costs, taxes, depreciation, share-based compensation, unrealized gains/losses on derivative contracts, non-cash items, transaction costs, lease payments under IFRS 16 Leases and other items considered non-recurring in nature.
The following table reconciles net income, the nearest GAAP measure, to Adjusted EBITDA:
(in thousands of Canadian dollars) | Three months ended | ||
Net income | $ | 17,514 | |
Deferred income tax expense | 6,443 | ||
Depreciation | 4,688 | ||
Finance costs | 774 | ||
Share-based compensation | 450 | ||
Unrealized gain on derivative contracts | (17,185) | ||
Transaction costs | 53 | ||
Adjusted EBITDA | $ | 12,737 |
Distributable Cash Flow
Distributable cash flow is a non-GAAP measure. Management believes distributable cash flow is a useful metric for investors when assessing the amount of cash flow generated from normal operations. These cash flows are relevant to the Corporation's ability to internally fund growth projects, alter its capital structure, or distribute returns to shareholders. Distributable cash flow is calculated as net cash provided by operating activities before changes in non-cash working capital plus cash distributions from investments, transaction costs, non-recurring expenses, and after any expenditures that use cash from operations. Changes in non-cash working capital are excluded from the determination of distributable cash flow because they are primarily the result of seasonal fluctuations or other temporary changes and are generally funded with short-term debt or cash flows from operating activities. Deducted from distributable cash flow are maintenance capital expenditures, including turnarounds, as they are ongoing recurring expenditures which are funded from operating cash flows. Transaction costs are added back as they vary significantly quarter to quarter based on the Corporation's acquisition and disposition activity. It also excludes non-recurring transactions that do not reflect
The following table reconciles net cash provided by operating activities, the nearest GAAP measure, to distributable cash flow:
(in thousands of Canadian dollars) | Three months ended | ||
Net cash provided by operating activities | $ | 19,285 | |
Add (deduct): | |||
Changes in non-cash working capital | (6,660) | ||
Transaction costs | 53 | ||
Interest and financing charges | (556) | ||
Payment of lease liabilities | (1,471) | ||
Maintenance capital | (2,735) | ||
Distributable cash flow | $ | 7,916 |
Distributable Cash Flow Per Common Share
(in thousands of Canadian dollars except per share information) | Three months ended | ||
Distributable cash flow | $ | 7,916 | |
Distributable cash flow per common share – basic | $ | 0.23 |
Net Debt
Net debt is defined as bank debt, less cash. Net debt is used by the Corporation to monitor its capital structure and financing requirements. It is also used as a measure of the Corporation's overall financial strength.
The following table reconciles net debt:
(in thousands of Canadian dollars) | ||
Senior credit facility | $ | 70,000 |
Cash | (3,585) | |
Net debt | $ | 66,415 |
"Run Rate EBITDA" is a non-GAAP financial measure and is defined as the expected EBITDA to be generated by
Certain statements contained in this press release constitute forward-looking statements and forward-looking information (collectively referred to herein as, "forward-looking statements") within the meaning of applicable Canadian securities laws. Such forward-looking statements relate to future events, conditions or future financial performance of
In particular, this press release contains forward-looking statements pertaining to, but not limited to, the following: the expected financial performance of the Corporation's proposed capital projects and assets following the commencement of operations, including underlying assumptions; estimates of EBITDA and Run Rate EBITDA; guidance with respect to forecasted consolidated Adjusted EBITDA and expected growth related thereto; the Corporation's business plans and strategies, including the underlying existing assets and capital projects, and the success and timing of the projects and related milestones and capital costs; the Corporation's operational and financial performance, including expectations regarding generating revenue, revenues and operating expenses; the ability to leverage existing infrastructure and engineering expertise of Tidewater Midstream regarding development of the Corporation's projects and product offerings; anticipated revenue from future sales of BC LCFS Credits; the ability of the Corporation to progress its feedstock strategy; the future price and volatility of commodities; the future pricing of BC LCFS Credits and credits issued pursuant to the CFS ("CFS Credits"); the expected Adjusted EBITDA to the Corporation from the
Although the forward-looking statements contained in this press release are based upon assumptions which management of the Corporation believes to be reasonable, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this press release, the Corporation has made assumptions regarding, but not limited to:
The Corporation's actual results could differ materially from those anticipated in the forward-looking statements, as a result of numerous known and unknown risks and uncertainties and other factors including, but not limited to: changes in supply and demand for low carbon products; general economic, political, market and business conditions, including fluctuations in interest rates, foreign exchange rates, inflation, stock market volatility and supply/demand trends; risks of health epidemics, pandemics and similar outbreaks, including COVID-19, which may have sustained material adverse effects on the Corporation's business, financial position, results of operations and/or cash flows; risks and liabilities inherent in the operations related to renewable energy production and storage infrastructure assets, including the lack of operating history and risks associated with forecasting future performance; competition for, among other things, third-party capital and acquisitions of additional assets; risks related to the environment and changing environmental laws in relation to the operations conducted with the Renewable Assets; the other risks set forth in the Corporation's most recent annual information form available under the Corporation's profile on SEDAR at www.sedar.com.
The foregoing lists are not exhaustive. Additional information on these and other factors which could affect the Corporation's operations or financial results are included in the Corporation's most recent AIF and in other documents on file with the
To the extent any forward-looking statement in this press release constitutes "future-oriented financial information" or "financial outlooks" within the meaning of applicable Canadian securities laws, such information is being provided to demonstrate the anticipated Run Rate EBITDA of certain of the Required Assets and the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such future-oriented financial information and financial outlooks. Future-oriented financial information and financial outlooks, as with forward-looking statements generally, are, without limitation, based on the assumptions and subject to the risks set out above. The Corporation's actual financial position and results of operations may differ materially from management's current expectations and, as a result, the Corporation's revenue and expenses may differ materially from the revenue and expenses profiles provided in this press release. Such information is presented for illustrative purposes only and may not be an indication of the Corporation's actual financial position or results of operations.
The Corporation's actual results' performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Corporation will derive therefrom. Readers are therefore cautioned that the foregoing list of important factors is not exhaustive, and they should not unduly rely on the forward-looking statements included in this press release.
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