EverGen Infrastructure Corp (TSX-V:EVGN) has reported financial results for the three-month period and year ended December 31, 2021, showing growth in revenue and adjusted EBITDA in a transformational year for the company.
Overall during 2021, EverGen generated $9.6 million of revenues and $2.8 million of adjusted EBITDA, in line with budgeted expectations.
As of December 31, 2021, EverGen had cash and cash equivalents of $19.6 million, restricted cash of $2.7 million, and a working capital surplus of $20.9 million. Following the initial public offering in August 2021, EverGen said it has maintained its strong cash position, placing it with a unique opportunity to execute on existing and future expansion projects.
EverGen was successful in raising $34.1 million in net proceeds from the completion of various financing initiatives in 2021, including the initial public offering in August 2021, which demonstrated the flexibility and diversification of the company's capital structure, putting it in a good position to execute on growth opportunities.
READ: EverGen Infrastructure signs LOI to acquire 67% interest in renewable natural gas facility in Alberta
During the fourth quarter of 2021, the British Columbia Utilities Commission (BCUC) approved a 20-year RNG offtake agreement with FortisBC Energy Inc for the company's anaerobic digester expansion project at its NZWA composting and organic processing facility.
In 2021, EverGen laid the foundation for growth and positioned the company to be a leader in the RNG infrastructure space in 2022 and beyond. A recently announced letter of intent to acquire a 67% interest in GrowTec, an Alberta-based biogas facility, is a cornerstone project in a new jurisdiction for EverGen and demonstrates the company's ability to participate in the consolidation and growth of the RNG industry.
EverGen said it intends to pursue similar opportunities within its core markets and across the country, investing in truly sustainable operations that contribute to carbon-negative energy production and positively impacting climate change initiatives.
In the fourth quarter of 2021, Evergen's operations were impacted by flooding in the Abbotsford and Sumas Prairie regions. Net income (loss) and adjusted EBITDA were impacted by downtime and increased costs, while revenue increased over the previous quarter due to higher volumes of incoming organic feedstock primarily related to post-flood processing.
EverGen's Fraser Valley Biogas (FVB) facility was temporarily shut down on November 15, 2021, as a result of the flooding events. Today, the company said its operations have successfully recovered from the impact of the floods, including bringing the FVB facility back online on March 2, 2022.
To date in 2022, EverGen has recovered more than $1.7 million of insurance proceeds, which represents a progress payment relating to lost revenues and additional expenses incurred from the flooding events. The company said it expects to recover further proceeds throughout 2022 as it incurred additional flood-related expenses. This results in a deferral of positive adjusted EBITDA that would have otherwise been recognized in the fourth quarter of 2021, it added.
EverGen said it remains positioned to deliver strong shareholder returns in 2022 and beyond with many competitive advantages, including the following:
- Established Platform - First Mover in Canada: In a short time frame, EverGen has uniquely assembled a strong cornerstone asset base that provides opportunity for expansion and synergies. The RNG infrastructure platform forms the foundation for the EverGen team to leverage expertise and partnerships to expand across Canada, aggregate the fragmented market and deliver accretive returns
- Scaled-up Management Team: With a growing project pipeline and abundant acquisition opportunities, EverGen has further strengthened its management team, attracting talent from across the RNG and waste management industries which underpins the team to continue to scale the business
- Rapidly Expanding Project Pipeline: The RNG industry in Canada is ripe for consolidation, evident in the recently announced letter of intent to acquire a 67% interest in GrowTec in Alberta. The management team is seeing increasing deal flow and is evaluating a number of projects across the country in key markets including BC, Alberta, Ontario and Quebec that are expected to reveal additional opportunities in 2022
- Diversified Access to Capital: EverGen remains in a strong cash position and is disciplined with its approach to capital allocation. The operating projects provide the financial flexibility to internally finance growth projects and expansion opportunities with project level financing options, and a number of strategic investors have expressed interest and can be utilized for accretive growth
EverGen, Canada's Renewable Natural Gas Infrastructure Platform, is combating climate change and helping communities contribute to a sustainable future, starting on the West Coast.
The company is an established independent renewable energy producer which acquires, develops, builds, owns and operates a portfolio of Renewable Natural Gas, waste to energy, and related infrastructure projects. EverGen is focused on British Columbia, with continued growth expected across other regions in North America.
Contact the author at jon.hopkins@proactiveinvestors.com