EverGen Infrastructure Corp (TSX-V:EVGN) told investors it is fully funded to advance its core renewable natural gas (RNG) expansion projects after ending 2022 with cash and cash equivalents of $8.9 million and a $31 million term loan facility.
Reporting financial results for the fourth quarter and year ended December 31, 2022, the company said it expected future operating cash flows will also help fund its projects.
EverGen revealed it invested $11 million in its expansion and development projects in 2022, reducing its cash position from $19.6 million at the end of 2021.
In January 2023, the company announced a definitive agreement with its existing lender, Roynat and EDC for a $31 million syndicated senior term loan. The facility will be used to support the upgrade and construction of its RNG facilities and provides $15 million for the refinancing of existing debt and construction at Fraser Valley Biogas and $16 million at Pacific Coast Renewables.
"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,” CEO Chase Edgelow said in a statement.
The company reported revenues of $1.7 million and $7.5 million for 4Q and full-year 2022, respectively, down from $2.7 million and $9.6 million in the comparative periods in 2021 when there were increased volumes of organic waste at both of its organic waste and composting facilities as a result of post-flood processing.
Its net loss increased to $1.5 million and $4.1 million for 4Q and full-year 2022, respectively, from $1.1 million and $2 million previously, mainly due to the decrease in revenues, an increase in non-recurring flood-related direct operating costs and the absence of a contingent consideration gain. The losses were partially offset by a decrease in general and administrative expenses and the recognition of insurance proceeds, the company said.
Operational highlights
- 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 approximately 80,000 gigajoules of RNG per year. Construction and commissioning on this project were completed by EverGen in 1Q 2023.
- Fraser Valley Biogas
- Construction at the Fraser Valley Biogas core RNG expansion project commenced in 3Q 2022, with the initial construction focused on an additional anaerobic digestor and improvements to the feedstock processing system, followed by the replacement of the RNG upgrader to double the expected production capacity of the facility to approximately 160,000 gigajoules of RNG per year.
- 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 of 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.
"It is an exciting time for EverGen as 2022 set a strong foundation for the company's success in 2023,” EverGen CEO Chase Edgelow said in a statement. “We are pleased with the milestones we have achieved at our core RNG expansion projects, including the 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."
EverGen said it will hold a results and corporate update conference call at 12.30pm Eastern Time today, April 13, hosted by Edgelow.
Investors can access the call by joining this Zoom link.
Contact the author at stephen.gunnion@proactiveinvestors.com