Anaergia Inc.
(ANRG-T) C$8.16
Q2/22 First Look
Event
Anaergia reported Q2/22 results.
Impact: POSITIVE
Accounting Policy Review: Anaergia's Q2/22 results feature updated accounting treatment for equipment sales from Anaergia's Capital Sales segment to its Build Own Operate (BOO) projects (full report), and the company has also restated full-year 2021 and Q1/22 results. 2021 revenues were reduced by $26.5 million (guidance: $25.0 million-$31.0 million) and the net loss increased by $6.2 million (guidance: $2.0 million-$7.0 million). Notably, our Q2/22 estimates are not directly comparable with actual results, in light of this change.
Q2/22 Results: Anaergia reported Q2/22 revenue and EBITDA of $42.2 million and loss of $3.9 million, compared with our estimates of $47.9 million and $1.2 million, respectively. Details in Exhibit 1.
No Guidance Revision: Anaergia did not make downward revisions to its previously disclosed revenue and EBITDA guidance, despite the accounting treatment changes noted above. This is a positive surprise relative to our expectations. Recall our 2023 EBITDA estimate of $86.6 million is at the low end of its $85.0 million-$105.0 million guidance range.
Rialto Update: Anaergia will start selling RNG in Q4/22, following the registration of the facility under the federal RIN and California LCFS programs. Feedstock ramp-up expectations are consistent with our forecasts, with the second and third OREXTM lines to commence operations in fall 2022 and early 2023, respectively.
Italy Extends Eligibility Deadline: RNG projects that commence operations before the end of 2023 qualify for the incentive program (2022 previously), reducing execution risk on four under-construction BOO projects in Italy slated for commissioning later this year.
Project-level Financing Update: Anaergia entered into a financing agreement for its Victorville, Charlotte, and Rhode Island facilities, including $21.0 million in preferred equity interests and a $25.0 million credit facility.
Conference Call/Webcast: 11:00 a.m. ET Webcast/Link.
TD View: With Q2/22 disclosures in the rearview mirror, we can turn our focus to what we expect will be several near-term operational catalysts, including the expected ramp up of volumes at Rialto and several Italian facilities. We believe that Anaergia possesses the most commercial-ready business model in our Clean Technology coverage universe and remains our top pick