Q4 2022 Key Milestones Achieved & Highlights:
Executed definitive agreement for $31 Million senior term loan facility with Roynat Capital (“Roynat”) and Export Development Canada ("EDC") providing funding for EverGen's core expansion projects and de-risks near-term growth.
Sea to Sky Soils executed multiple organic waste processing contracts, which provides for over 10,000 tonnes per year.
Completed commissioning of Phase I of GrowTEC RNG expansion
FVB RNG Expansion Project ~60% complete
Settled certain flood-related insurance claims and subsequently received $1.6 million of proceeds.
EverGen Infrastructure Corp. reported audited financial results as at and for the fourth quarter and year ended December 31, 2022, and filed its Annual Information Form. All amounts are in Canadian dollars unless otherwise stated and have been prepared in accordance with IFRS.
Financial Highlights
Cash and cash equivalents of $8.9 million as at December 31, 2022, compared to $19.6 million as at December 31, 2021, decreased due to $11.0 million of investments made into our expansion and development projects. The remaining cash and cash equivalents, combined with the $31 million term loan facility and expected future operating cash flows, fully funds EverGen’s core RNG expansion projects.
Revenues of $1.7 million and $7.5 million for Q4 and fiscal year 2022, respectively, decreased from $2.7 million and $9.6 million in Q4 and fiscal year 2021, relative to the fourth quarter of 2021 when there were increased volumes of organic waste at both of EverGen’s organic waste and composting facilities as a result of post-flood processing.
Net loss of $1.5 million and $4.1 million for Q4 and fiscal year 2022, respectively, increased from $1.1 million and $2.0 million in Q4 and fiscal year 2021. The increases are mainly due to a decrease in revenues, as described above, an increase in non-recurring flood-related direct operating costs and the absence of a contingent consideration gain, partially offset by a decrease in general and administrative expenses and the recognition of insurance proceeds.
Adjusted EBITDA of $0.3 million and $2.0 million for Q4 and fiscal year 2022, respectively. Adjusted EBITDA for Q4 2022 increased, compared to $nil in Q4 2021, primarily due to insurance proceeds recognized from previously incurred flood-related costs and a decrease in direct operating and general and administrative costs, partially offset by a decrease in revenue, as described above. Adjusted EBITDA for fiscal year 2022 decreased, compared to $2.8 million in fiscal year 2021, primarily due to a decrease in revenues, as described above, and an increase in non-recurring flood-related direct operating costs partially offset by a decrease in general and administrative costs and insurance proceeds recognized.
"It is an exciting time for EverGen as 2022 set a strong foundation for the company's success in 2023. We are pleased with the milestones we have achieved at our core RNG expansion projects, including execution of construction at our recently acquired GrowTEC facility, and progress across our BC portfolio including construction at FVB and securing of additional feedstock contracts at Sea to Sky Soils." said Chase Edgelow, CEO. "Additionally, the company's $31 million Senior Term Loan with Roynat and EDC de-risks and fully funds the growth of our core expansion projects and positions EverGen for a strong 2023."
Company Operational Highlights for Q4 2022
GrowTEC
In July 2022, EverGen completed the acquisition of a 67% interest in GrowTEC and subsequently entered into construction on the first phase of a core RNG expansion project in Alberta designed to produce ~80,000 gigajoules of RNG per year. Construction and commissioning on this project was completed by EverGen in Q1 2023. Following the production of RNG into FortisBC's network, which is expected during Q2 2023, the facility will then move into the second phase of the project, which is expected to produce a total of ~140,000 gigajoules of RNG per year.
Fraser Valley Biogas
Construction at the Fraser Valley Biogas core RNG expansion project commenced in Q3 2022, with the initial construction focused on an additional anaerobic digestor and improvements to the feedstock processing system, followed by replacement of the RNG upgrader in order to double the expected production capacity of the facility to ~160,000 gigajoules of RNG per year. As at December 31, 2022, EverGen has invested approximately $3 million into this project. Completion is scheduled for Q2 2023 for a total anticipated cost of $11-$12 million. Upon completion, EverGen will assess the need for investment into additional digestate storage for an anticipated cost of $2-$3 million, which if required would be constructed during 2024.
Financing
In January 2023, EverGen announced that it had signed a definitive agreement with its existing lender, Roynat and EDC for a $31 million syndicated senior term loan (the “Facility”). Roynat and EDC are each providing for 50% of the proceeds from the Facility. The Facility will be used to support the upgrade and construction of EverGen's RNG facilities and provides for $15 million for refinancing of existing debt and construction at Fraser Valley Biogas and $16 million at Pacific Coast Renewables.
Insurance
In December 2022, EverGen was successful in settling certain outstanding insurance claims relating to the flooding events in the Abbotsford and Sumas Prairie regions in late-2021. As at December 31, 2022, EverGen had $1.8 million of insurance proceeds recorded in accounts receivable, of which $1.5 million was received during the first quarter of 2023.
