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Anaergia Reports Fourth Quarter and Fiscal 2023 Financial Results

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BURLINGTON, Ontario–(BUSINESS WIRE)–Anaergia Inc. (Anaergia, the Company, we, us or our) (TSX: ANRG), a company that offers integrated waste-to-value solutions to reduce greenhouse gases (GHGs) by cost-effectively turning organic waste into renewable (RNG), fertilizer, and water, today announced its financial results for the three-month and the twelve-month periods ended December 31, 2023. All financial results are reported in Canadian dollars unless otherwise stated.

While there was a delay in the delivery of the financial statements, largely resulting from accounting and financial reporting impacts associated with the restructuring activities and transformation of the Company, we are encouraged to report that 2023 was a year of transition as our strategic review process is positively impacting the Company, noted Assaf Onn, CEO of Anaergia. Recent key developments, include the closings of the first two tranches of a previously announced three-tranche strategic investment in Anaergia by Marny Investissement SA., Mr. Onn added.

Fiscal 2023 Financial Results

Financial highlights:

  • Revenue for the fourth quarter of 2023 was $33.4 million, which is lower than revenue of $41.0 million reported for the same period in the previous year. For the year ended December 31, 2023 (Fiscal 2023), revenue decreased 9.2%, or $14.9 million, to $147.0 million compared to revenues in 2022. The decrease was driven mainly by lower Capital Sales revenue in the third quarter of 2023 due to a combination of some projects nearing completion, some projects facing customer and vendor delays, and delays in new project signings.
  • Gross profit of $3.5 million for the fourth quarter of 2023 increased by 84.4% compared to results in the prior year. The increase was due to the impact of newer contracts with higher margins in North America. Gross profit of $19.7 million for Fiscal 2023, decreased 26.1% compared to $26.7 million in gross profit in the prior year.
  • Net loss for the fourth quarter of 2023 was $34.1 million, compared to a net loss of $41.3 million for the same period in the previous year. The net loss for Fiscal 2023, increased to $192.8 million when compared to a net loss of $79.0 million for the prior year. The increase was mainly due to a loss related to the deconsolidation of the Rialto Bioenergy Facility (RBF) during the second quarter of 2023, estimated credit loss expenses taken during Fiscal 2023 (which included a loss on certain inter-company loans in the second quarter of 2023 that were determined to be no longer recoverable and subsequently sold to Arjun Infrastructure Partners in the third quarter of 2023 as part of the on-going strategic review), a single event where a letter of credit related to a terminated operation and maintenance contract was drawn, and a larger loss from operations due to increased selling and general administrative expenses.
  • Adjusted EBITDA1 for the fourth quarter of 2023 was ($7.7) million an improvement from adjusted EBITDA of ($18.9) million in the fourth quarter of the previous year. Adjusted EBITDA decreased to ($34.9) million for Fiscal 2023, from ($26.2) million in the prior year. The decrease for the year was due to a decline in gross profit and to increased operating expenses.

Three months ended:

31-Dec-23

31-Dec-22

(In thousands of Canadian dollars)

 

 

 

 

 

Revenue

33,408

41,025

Gross profit

3,494

1,895

Gross profit %

10.5%

4.6%

Loss from operations

(35,931)

(24,704)

Net loss

(34,058)

(41,303)

Adjusted EBITDA

(7,713)

(18,895)

Twelve months ended:

31-Dec-23

31-Dec-22

(In thousands of Canadian dollars)

 

 

 

 

 

Revenue

147,225

162,101

Gross profit

19,729

26,684

Gross profit %

13.4%

16.5%

Loss from operations

(85,802)

(36,839)

Net loss

(192,791)

(79,000)

Adjusted EBITDA

(34,914)

(26,188)

Statement of Financial Position:

31-Dec-23

31-Dec-22

(In thousands of Canadian dollars)

 

 

 

 

 

Total Assets

278,667

931,775

Total Liabilities

205,077

595,730

Equity

73,590

336,045

For a more detailed discussion of Anaergia’s results for the three-month and twelve-month periods ended December 31, 2023, 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.sedarplus.ca.

Other Significant Developments

Strategic Investment by Marny Investissement SA

On December 18, 2023, the Company announced a $40.8 million equity investment by Marny Investissement SA (Marny) by way of an arm’s-length, multi-tranche, non-brokered private placement (the Strategic Investment).

Marny, through Marny Holdco Inc. (Marny Holdco), agreed to subscribe for an aggregate of 102,000,000 units of the Company (Units) at a price of $0.40 per Unit with each Unit consisting of one subordinate voting share of the Company (Subordinate Voting Shares) and 1/5 of one Subordinate Voting Share purchase warrant of the Company (each a Warrant). Each Warrant will entitle Marny Holdco to purchase one additional Subordinate Voting Share at an exercise price of $0.80 for a period of three years following the closing of the first tranche. The Unit subscription price of $0.40 represented a 57% premium to the 10-day volume weighted average price of the Subordinate Voting Shares on the Toronto Stock Exchange (TSX) as of December 15, 2023.

On February 2, 2024, the Company announced that the first tranche of the Strategic Investment had closed with the issuance of 31,250,000 Units for gross proceeds of $12.5 million.

On April 1, 2024, the Company announced that the second tranche of the Strategic Investment had closed with the issuance of 34,000,000 Units for gross proceeds of $13.6 million.

The closing of the third tranche is anticipated to follow the lifting of the FFCTO (as defined below).

Failure-to-File Cease Trade Order

On April 8, 2024, the Ontario Securities Commission issued a failure to file cease trade order (the FFCTO) against the Company due to its failure to file the continuous disclosure materials required by National Instrument 51-102 “ Continuous Disclosure Obligations for Fiscal 2023. The FFCTO prohibits the trading by any person of any securities of the Company in Canada, including trades in the Subordinate Voting Shares made through the TSX. The FFCTO is not expected to be lifted until after the Company’s continuous disclosure materials for the interim period ended March 31, 2024 (the Interim Filings) are filed. The Company is working diligently to complete the Interim Filings and expects to be in a position to file such on or about July 6, 2024. The Interim Filings were due May 15, 2024.

Senior Leadership Change

The Company is announcing the resignation of its Chief Financial Officer, Andrew Spence, immediately following the First Quarter Interim Filing. Mr. Spence’s decision was based strictly on personal reasons and was not the result of any dispute or disagreement with the management or Board of Directors regarding policy, accounting matters or management practices.

Concurrently, Anaergia is appointing Gregory Wolf, CPA, MST, as its Interim Chief Financial Officer. Mr. Wolf brings over 25 years in executive leadership to the role, with extensive experience in financial management, strategic planning and operational oversight. With a proven track record in global operations, international accounting, audit, and corporate tax he has successfully led financial transformations and guided companies through complex transactions. Mr. Wolf holds a Bachelor of Science in Accountancy and a Masters in Taxation from Northern Illinois University, as well as a CPA certification from the University of Illinois.

In the meantime, Anaergia will commence an executive search for a new Chief Financial Officer. Mr. Spence will assist with Mr. Wolf’s transition and thereafter will be available in a limited advisory capacity to support a seamless transition process.

Non- International Financial Reporting Standards (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, including Adjusted EBITDA and EBITDA 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 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 measures. Management believes such measures are useful as they 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 of non-IFRS measures 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 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, 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), 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.

EBITDA is defined as net income before finance costs, taxes and depreciation and amortization.

About Anaergia

Anaergia was created to eliminate a major source of GHGs by cost effectively turning organic waste into RNG, fertilizer and water through the use of proprietary technologies. With a track record of delivering innovative projects, Anaergia is uniquely positioned to provide solutions to today’s most pressing resource recovery challenges using a broad portfolio of proven technologies and multiple project delivery methods. Anaergia is one of the world’s only companies with a proprietary portfolio of end-to-end solutions that integrate solid waste processing as well as wastewater treatment with organics recovery, high efficiency anaerobic digestion, RNG production and recovery of fertilizer and water from organic residuals. The combination of these technologies enhances carbon-negative biogas, clean water and natural fertilizer production, utilizes a minimized footprint and lowers waste and wastewater treatment costs and GHG emissions.

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, 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 statements in this press release include, among other things, statements relating to financial condition and results of operations; statements regarding the Company’s ongoing strategic review; statements regarding the anticipated closing of the third tranche of the Strategic Investment; statements regarding the lifting of the FFCTO; statements regarding the filing of the Interim Filings; and statements regarding the appointment of an interim Chief Financial Officer.

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. Certain assumptions in respect of our ability to execute on our expansion plans; our ability to obtain or maintain existing financing on acceptable terms; that the third tranche of the Strategic Investment will close once the FFCTO is lifted; our ability to file the Interim Filings within the specified timeline; our ability to employ an interim Chief Financial Officer; and our ability of realizing the anticipated benefits of such are material factors underlying forward-looking information and management’s expectations.

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 Measures

Three months ended:

31-Dec-23

31-Dec-22

(In thousands of Canadian dollars)

 

 

Net loss

(34,058)

(41,303)

Finance income (cost)

826

1,054

Depreciation and amortization

1,287

904

Income tax (benefit) expense

(2,126)

8,611

EBITDA

(34,071)

(30,734)

 

 

 

RBF non-controlling interest

(647)

Share-based compensation expense

595

508

(Gain) loss on RBF embedded derivative

(2,324)

Change in fair value of equity investment

656

Loss on sale of Anaergia ITA, B.V.

Fibracast Ltd. impairment

1,503

Remeasurement of previously held interest in Bioener, S.p.A.

92

Share of loss in equity accounted investees

765

581

Loss on control of the RBF

(4,056)

Expected credit loss on loans receivable from related parties

Impairment loss

26,336

Provision for customer claim

4,760

Remeasurement of debt

3,164

Other (gains) losses

1,066

4,852

ERP customization and configuration costs

262

Costs related to previous offerings

22

Foreign exchange (gain) loss

149

(87)

Adjusted EBITDA

(7,713)

(18,895)

Twelve months ended:

31-Dec-23

31-Dec-22

(In thousands of Canadian dollars)

 

 

Net income (loss)

(192,791)

(79,000)

Finance income (cost)

3,333

1,289

Depreciation and amortization

6,069

3,740

Income tax (benefit) expense

(8,606)

14,523

EBITDA

(191,995)

(59,448)

 

 

 

RBF non-controlling interest

1,544

(647)

Share-based compensation expense

1,941

1,335

(Gain) loss on RBF embedded derivative

7,953

16,676

Change in fair value of equity investment

656

Loss on sale of Anaergia ITA, B.V.

(665)

Fibracast Ltd. impairment

8,151

Remeasurement of previously held interest in Bioener, S.p.A.

(3,272)

Share of loss in equity accounted investees

6,726

5,204

Loss on control of the RBF

35,663

Expected credit loss on loans receivable from related parties

60,236

Impairment loss

29,727

Provision for customer claim

1,002

4,760

Remeasurement of debt

3,164

Other (gains) losses

4,586

4,388

ERP customization and configuration costs

542

1,178

Costs related to previous offerings

285

Foreign exchange (gain) loss

(325)

(467)

Adjusted EBITDA

(34,914)

(26,188)

_______
1 Adjusted EBITDA is a non-IFRS measure.

For media and/or investor relations please contact: IR@Anaergia.com

Source: Anaergia Inc.

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Citi maintains Neutral on Terex shares, cites ESG business purchase

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On Monday, Terex Corporation (NYSE:) maintained its Neutral rating with a steady stock price target of $60.00, as announced by Citi. Terex disclosed it has signed an agreement to purchase Dover’s Environmental Solutions Group (ESG) business, which includes refuse vehicles and compaction equipment.

The deal is valued at $2 billion in gross terms, with a net purchase price of approximately $1.725 billion after accounting for the present value of roughly $275 million in tax benefits.

The net purchase price is approximately 9.6 times ESG’s projected 2024 EBITDA, with the multiple decreasing to around 8.4 times after factoring in the expected synergies of about $25 million. Terex anticipates the acquisition will be accretive to its adjusted earnings per share (EPS) by double digits in 2025. The acquisition is seen as beneficial, enhancing Terex’s business narrative and providing clear cost and revenue synergies.

Despite the premium paid over Terex’s current enterprise value to EBITDA multiple, the acquisition is considered potentially advantageous for Terex.

Success hinges on the company’s ability to realize the targeted synergies, the promised accretion to EPS, and ESG’s ability to deliver the forecasted mid-single-digit long-term compound annual growth rate (CAGR) with minimal business cyclicality. The transaction is slated for completion in the fourth quarter of 2024.

In other recent news, Terex Corporation has acquired Environmental Solutions Group (ESG) from Dover Corporation (NYSE:) in a deal valued at $2.0 billion, expanding its market reach. The acquisition, expected to close in the second half of 2024, will enhance Terex’s position in the waste and recycling sector. ESG’s integration will create a new Environmental Solutions segment within Terex, combining it with Terex’s existing Utilities business.

In other developments, Dover Corporation’s first-quarter earnings exceeded analyst estimates, with an adjusted EPS of $1.95, surpassing the expected $1.87. Revenue for the quarter also surpassed expectations, reaching $2.09 billion against the consensus estimate of $2.04 billion.

In analyst notes, Mizuho Securities has revised its outlook on Dover, raising its price target to $185 from the previous $180. The firm also revised its earnings per share estimates for Dover for 2024 and 2025, increasing them to $9.10 and $9.75, respectively. These recent developments indicate a positive outlook for Dover’s financial future.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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Israeli parliament votes to label UN relief agency a terror organisation

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JERUSALEM (Reuters) – The Israeli parliament gave preliminary approval on Monday to a bill that declares the main United Nations relief organization for Palestinians a terrorist organisation and proposes to sever relations with the body.

The vote against the United Nations Relief and Works Agency for Palestinian Refugees (UNRWA) is the latest step in a Israeli push against the agency, which Israeli leaders have accused of collaborating with the Islamist movement Hamas in Gaza.

The bill was approved in a first reading and will be returned to the foreign affairs and defence committee for further deliberation, the Knesset information service said.

The bill’s sponsor, Yulia Malinovsky, was quoted as describing UNRWA as a “fifth column within Israel”.

UNRWA provides education, health and aid to millions of Palestinians in Gaza, the West Bank, Jordan, Lebanon and Syria. It has long had tense relations with Israel but relations have deteriorated sharply since the start of the war in Gaza and Israel has called repeatedly for UNRWA to be disbanded.

“It’s another attempt in a wider campaign to dismantle the agency,” UNRWA spokesperson Juliette Touma said. “Such steps are unheard of in the history of the United Nations.”

Israel has said hundreds of UNRWA staff are members of terrorist groups, including Hamas and Islamic Jihad, but has yet to provide evidence to a U.N.-appointed review.

© Reuters. FILE PHOTO: A United Nations Relief and Works Agency (UNRWA) sign lies on the ground, amid the ongoing conflict in Gaza between Israel and the Palestinian Islamist group Hamas,  at the Kerem Shalom crossing in southern Israel, May 30, 2024. REUTERS/Amir Cohen/File Photo

Several donor countries halted funding to UNRWA following the Israeli accusations but many have since reversed the decision, including Britain which said last week it would resume funding.

Both Hamas and the Palestinian Authority condemned the Israeli vote, and Hussein Al-Sheikh, a senior ally of Palestinian President Mahmoud Abbas, called on the international community to resist attempts to dissolve the agency.

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Israel sends tanks back into Khan Younis area, 70 killed after new evacuation order

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By Nidal al-Mughrabi, Ari Rabinovitch and Hatem Khaled

CAIRO/JERUSALEM/GAZA (Reuters) -Israel sent tanks back into the greater Khan Younis area and at least 49 Palestinians were killed by Israeli fire, Gaza medics said on Monday, after ordering evacuations of some districts it said had been used for renewed attacks by militants.

The Palestinians were killed by tank salvoes in the town of Bani Suhaila and other towns fringing the eastern side of Khan Younis, with the area also bombarded by air, they said.

Residents of the densely built-up area of southern Gaza said the tanks advanced for more than two kilometres into Bani Suhaila, forcing residents to flee under fire.

“It is like doomsday,” one resident, who only identified himself as Abu Khaled, told Reuters via chat app. “People are fleeing under fire, many are dead and wounded on the roads.”

The Gaza health ministry said the dead included several women and children and that at least 186 other people had been injured by Israeli fire. The Gaza ministry does not distinguish between militants and civilians in its death tallies.

Around 400,000 people are living in the targeted areas and dozens of families have begun to leave their houses, Palestinian officials said, adding they were not given time to get out of harm’s way before the Israeli strikes began.

Some families fled on donkey carts, others on foot, carrying mattresses and other belongings.

The Palestinian Red Crescent Society said two of its clinics located in eastern Khan Younis had been knocked out of operation because of the new Israeli offensive.

At Khan Younis’ Nasser Hospital, some people stood outside the morgue to bid farewell to dead relatives.

“We are tired, we are tired in Gaza, every day our children are martyred, every day, every moment,” said Ahmed Sammour, who lost several relatives in bombings of eastern Khan Younis.

“No one told us to evacuate. They brought four floors crashing down on civilians… and the bodies they could reach, they brought to the refrigerator (morgue),” Sammour added.

There was no immediate Israeli comment on the strikes on the eastern side of Khan Younis, whose population initially fled their homes when Israeli tanks stormed in several months ago, before returning after they withdrew to rebuild their lives.

In nearby Deir Al-Balah, where hundreds of thousands of Palestinians are sheltering, an Israeli airstrike hit a tent used by local journalists inside Al-Aqsa Hospital, killing one of them and wounding two other people, the Hamas-run Gaza government media office said.

The new death raised the number of Palestinian journalists killed in the Israeli offensive to 163, it added.

EVACUATION ORDERS

Earlier on Monday, the Israeli military said it had issued new evacuation orders due to renewed Palestinian militant attacks, including rockets launched from the targeted areas in eastern Khan Younis. The orders did not include health institutions, Palestinians said.

The military said it was adjusting the boundaries of a designated humanitarian zone in coastal Al-Mawasi – to the west of Khan Younis – to keep the civilian population away from areas of combat with Hamas-led Palestinian militants.

The Gaza Civil Emergency Services said Israel’s new orders showed it had downsized the humanitarian-designated areas in southern and central areas, where 1.7 million people were sheltering, to 48 square km from 65 square km in the past.

The Palestinians, the United Nations and international relief agencies have said there is no safe place left in Gaza.

Health officials at Nasser Hospital in Khan Younis urged residents on Monday to donate blood because of the large number of casualties being rushed into the medical centre.

“A family, including children, were all torn to pieces while they were sleeping,” said one man who arrived at the hospital in an ambulance bearing the bodies.

Israel has vowed to eradicate Hamas after militants killed 1,200 people and took more than 250 hostages in a cross-border assault on Oct. 7, 2023, according to Israeli tallies.

© Reuters. A Palestinian woman sits on a wheelchair as she and others flee the eastern part of Khan Younis after they were ordered by Israeli army to evacuate their neighborhoods, amid Israel-Hamas conflict, in Khan Younis in the southern Gaza Strip July 22, 2024. REUTERS/Hatem Khaled

The death toll among Palestinians in Israel’s retaliatory offensive since then had reached at least 39,006 as of Monday, Gaza health authorities said.

A ceasefire effort led by Qatar and Egypt and backed by the U.S. has so far fallen short because of disagreements over terms between the combatants, who blame each other for the impasse.

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