FIRST-QUARTER HIGHLIGHTS
- During the first quarter of 2024,
Tidewater Renewables generated record Adjusted EBITDA(1) of$25.3 million and net income attributable to shareholders of$7.7 million , inclusive of$8.1 million of realized losses on derivative contracts. Net cash provided by operating activities totaled$40.5 million and record distributable cash flow(1) of$12.8 million . Tidewater Renewables' first-quarter 2024 results were driven by the progressive improvements in throughput and reliability at the Renewable Diesel & Renewable Hydrogen ("HDRD Complex "). During the first quarter of 2024, theHDRD Complex averaged daily throughput of approximately 2,120 bbl/d, representing a 71% utilization rate. Initial operating results forApril 2024 show continued improvement, with a utilization rate of approximately 95%.Tidewater Renewables expects theHDRD Complex to exceed a full-year 2024 utilization rate of 85%, representing an average daily throughput of 2,550 bbl/d (previously 2,400 – 2,600 bbl/d).The HDRD Complex's operating performance was supported by robust demand for renewable fuels and record Canadian emissions credit pricing.- While meeting its customers' requests for renewable fuel blends,
Tidewater Renewables synergistically expanded Tidewater Midstream and Infrastructure Ltd. ("Tidewater Midstream") market access. During the first quarter of 2024, the Corporation blended approximately 9.8 million liters of its renewable diesel with 23.6 million liters of Tidewater Midstream's conventional diesel fuel, offering its customers a sustainable and resource-efficient solution for their ESG and energy needs. - During the first quarter of 2024,
Tidewater Renewables made significant progress on the front-end engineering design of its proposed 6,500 bbl/d sustainable aviation fuel ("SAF") project. This included integrating lessons learned from theHDRD Complex into the SAF project's design basis. During the first quarter of 2024, the Corporation received emissions credits for achieving its first milestone under an executed incentive agreement. These credits were sold to an investment-grade counterparty under a previously announced purchase commitment. The Corporation continues to progress commercial arrangements and is evaluating potential offtake agreements for the SAF project. The SAF project remains subject to a final investment decision, which is expected in 2025. - In the first quarter of 2024,
Tidewater Renewables met its financial covenants, repaid$27.7 million of debt under its Senior Credit Facility and significantly improved its liquidity.Tidewater Renewables is working collaboratively with its lenders to extend its Senior Credit Facility. - The Corporation is pleased to welcome Mr.
Todd Moser to its Board of Directors.Mr. Moser brings over 35 years of refining, biofuel and environmental experience toTidewater Renewables .Mr. Moser's previous roles include senior leadership positions at Petro-Canada, Maple Leaf Foods and most recently as President & CEO ofTerrapure Environmental .Mr. Moser also has extensive board experience including service with theCanadian Renewable Fuels Association and theNational Renderers Association .Mr. Moser has agreed to serve as an independent member on the Corporation's Audit Committee, Independence Committee, andGovernance, Compensation, Safety and Sustainability Committee . In conjunction with Mr. Moser's appointment, Jeremy Baines is relinquishing his temporary position on the Audit Committee. This ends the Corporation's reliance on Section 3.5 of National Instrument 52-110, following the resignation ofJohn Adams announced onApril 22, 2024 . The Corporation is pleased to have improved its governance ahead of its annual general meeting.
"I believe thatTidewater Renewables ' first-quarter performance highlights our focus on operational excellence and continuous improvement. During the first quarter of 2024, we stabilized the HDRD Complex's operations, expanded our commercial network and significantly improved our financial position. We are also proud of our renewable diesel, which offers Canadians a viable low-carbon alternative without the need for costly infrastructure replacement. I am confident that these hard-fought achievements and our feasible environmental solution will position Tidewater Renewables for success in the future." – Jeremy Baines, Chief Executive Officer
(1) | Adjusted EBITDA, distributable cash flow, distributable cash flow per share and net debt used throughout this news release are non-GAAP financial measures or ratios, capital management measures or supplementary financial measures. See the "Non-GAAP and Other Financial Measures" in this press release and the Corporation's 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 | |||
2024 | 2023 | |||
Revenue | $ | 111,239 | $ | 19,896 |
Net income (loss) attributable to shareholders | $ | 7,720 | $ | (21,477) |
Net income (loss) attributable to shareholders per share – basic | $ | 0.22 | $ | (0.62) |
Net income (loss) attributable to shareholders per share – diluted | $ | 0.21 | $ | (0.62) |
Adjusted EBITDA (1,2) | $ | 25,270 | $ | 12,635 |
Net cash provided by operating activities | $ | 40,458 | $ | 11,449 |
Distributable cash flow (1) | $ | 12,781 | $ | 5,273 |
Distributable cash flow per common share – basic (1) | $ | 0.37 | $ | 0.15 |
Distributable cash flow per common share – diluted (1) | $ | 0.35 | $ | 0.15 |
Total common shares outstanding (000s) | 34,819 | 34,721 | ||
Total assets | $ | 1,082,666 | $ | 1,024,265 |
Net debt (1) | $ | 306,874 | $ | 278,552 |
(1) Refer to "Non-GAAP and Other Financial Measures". (2) For the three months ended |
OUTLOOK AND CORPORATE UPDATE
In line with its objectives,
CONFERENCE CALL
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://app.webinar.net/7qvdLRXOEZ9 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
ABOUT
NON-GAAP AND OTHER FINANCIAL MEASURES
Throughout this press release and in other materials disclosed by the Corporation,
Non-GAAP Financial Measures
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 plus the Corporation's proportionate share of Adjusted EBITDA in its equity investment.
Adjusted EBITDA is used by management to set objectives, make operating and capital investment decisions, monitor debt covenants and assess performance. The Corporation issues guidance on Adjusted EBITDA and believes that it is useful for analysts and investors to assess the performance of the Corporation as seen from management's perspective. Investors should be cautioned that Adjusted EBITDA should not be construed as an alternative to net income, net cash provided by operating activities or other measures of financial results determined in accordance with GAAP. Investors should also be cautioned that Adjusted EBITDA as used by the Corporation may not be comparable to financial measures used by other companies with similar calculations.
The following table reconciles net income (loss), the nearest GAAP measure, to Adjusted EBITDA:
Three months ended | |||||
(in thousands of Canadian dollars) | 2024 | 2023 | |||
Net income (loss) | $ | 7,720 | $ | (21,477) | |
Deferred income tax expense (recovery) | 2,284 | (7,662) | |||
Depreciation | 9,564 | 4,924 | |||
Finance costs and other | 9,351 | 5,407 | |||
Share-based compensation | 1,128 | 1,720 | |||
Unrealized loss (gain) on derivative contracts | (5,551) | 37,035 | |||
Gain on warrant liability revaluation | (485) | (7,250) | |||
Transaction costs | 5 | 80 | |||
Non-recurring transactions (1) | 1,515 | 337 | |||
Adjustment to share of profit from equity accounted investments (2) | (261) | (479) | |||
Adjusted EBITDA | $ | 25,270 | $ | 12,635 |
(1) | Non-recurring transactions for the three months ended |
(2) | For the three months ended |
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 the Corporation's 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. Maintenance capital expenditures, including turnarounds, are deducted from distributable cash flow 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. Distributable cash flow 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:
Three months ended | ||||
(in thousands of Canadian dollars) | 2024 | 2023 | ||
Net cash provided by operating activities | $ | 40,458 | $ | 11,449 |
Add (deduct): | ||||
Changes in non-cash working capital | (18,323) | (288) | ||
Transaction costs | 5 | 80 | ||
Non-recurring transactions | 1,515 | 337 | ||
Interest and financing charges | (8,803) | (3,004) | ||
Payment of lease liabilities | (1,739) | (1,613) | ||
Maintenance capital | (332) | (1,688) | ||
Distributable cash flow | $ | 12,781 | $ | 5,273 |
(1) | Non-recurring transactions for the three months ended |
Non-GAAP Financial Ratios
Distributable cash flow per common share (basic and diluted)
Distributable cash flow per common share is calculated as distributable cash flow over the weighted average number of common shares outstanding for the three months ended
Distributable cash flow is a non-GAAP financial measure. Management believes that distributable cash flow per common share provides investors an indicator of funds generated from the business that could be allocated to each shareholder's equity position.
Three months ended | ||||
(in thousands of Canadian dollars except per share information) | 2024 | 2023 | ||
Distributable cash flow | $ | 12,781 | $ | 5,273 |
Weighted average shares outstanding– basic | 34,777 | 34,720 | ||
Weighted average shares outstanding– diluted | 36,008 | 34,720 | ||
Distributable cash flow per share– basic | $ | 0.37 | $ | 0.15 |
Distributable cash flow per share– diluted | $ | 0.35 | $ | 0.15 |
Capital Management Measures
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 | $ | 144,000 | $ | 171,749 |
Term Debt | 175,000 | 175,000 | ||
Cash | (12,126) | (105) | ||
Net debt | $ | 306,874 | $ | 346,644 |
Supplementary Financial Measures
Growth Capital
Growth capital expenditures are defined as expenditures which are recoverable, incrementally increase cash flow or the earning potential of assets, expand the capacity of current operations, or significantly extend the life of existing assets. This measure can be used by investors to assess the Corporation's discretionary capital spending in light of the value that such spending brings to the Corporation.
Maintenance capital expenditures are generally defined as expenditures that support and/or maintain the current capacity/cash flow or earning potential of existing assets without the characteristic benefits associated with growth capital expenditures. These expenditures include major inspections and overhaul costs that are required on a periodic basis. This measure can be used by investors to assess the Corporation's non-discretionary capital spending.
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 capital projects and assets, including 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, supply chain pressures, 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, acquisition opportunities, requests for proposals, materials, equipment, labour and skilled personnel; risks related to the Corporation's ability to refinance its Senior Credit Facility and Term Debt Facility on acceptable terms; the risk that the Corporation's Senior Credit Facility and the applicable portions of the Term Debt Facility may not be renewed or extended beyond the
The foregoing lists are not exhaustive. Additional information on these and other factors which could affect the Corporation's operations or financial results are set forth in the Corporation's most recent annual information form, its MD&A and in other documents on file with the
Management of the Corporation has included the above summary of assumptions and risks related to forward-looking statements provided in this press release in order to provide holders of common shares in the capital of the Corporation with a more complete perspective on the Corporation's current and future operations and such information may not be appropriate for other purposes. 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 occur, what benefits the Corporation will derive from them. 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.
Financial Outlook
This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about expectations regarding financial results for 2024 which are subject to the same assumptions, risk factors, limitations and qualifications as set out under the heading "Forward-Looking Information". The actual financial results of the Corporation may vary from the amounts set out herein and such variation may be material. The Corporation and its management believe that the financial outlook has been prepared on a reasonable basis, reflecting management's best estimates and judgments and the FOFI contained in this press release was approved by management as of the date hereof. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, the Corporation undertakes no obligation to update such FOFI. FOFI contained in this press release was made as of the date hereof and was provided for the purpose of providing further information about the Corporation's anticipated future business operations on an annual basis. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein.
SOURCE
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