EverGen Infrastructure Corp V.EVGN

Ink Research

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Morning Report: Insiders betting on biogas 

March 29, 2022

Today we look at micro-cap EverGen Infrastructure (EVGN) which began trading on the TSX Venture with an IPO back on August 4th of last year. EverGen just barely missed out on our March Energy Top 30 list, coming in at 31st. EverGen is a renewable natural gas (RNG) infrastructure platform that captures biogas produced from decomposing organic waste from landfills, agricultural waste, and wastewater from treatment facilities to produce biomethane. It has three facilities in BC: in the Fraser Valley, Abbotsford, and Pemberton. According to EverGen, its projects are carbon-negative, removing more emissions than are created in the production process.

When it reported Q3 results on November 23rd, revenue came in at $1.9 million, down from $3.35 million in Q2 which EverGen attributes to seasonality in the demand for its services. Of note, company revenue as of Q3 consisted primarily of contracted organic waste disposal fees (66.2%) with the sale of organic compost and soils and RNG sales making up 12.6% and 19.0% respectively. In Q3, EverGen sold 23,854 gigajoules of RNG. Net income in the quarter was $0.49 per share, up from a loss of $0.18 in Q2. On March 7th, EverGen announced it had entered into a letter of intent to acquire a 67% interest in a GrowTEC biogas facility in Alberta for an initial cash consideration of $3.3 million and the issuance of 600,000 EverGen common shares. GrowTEC will have the right to nominate a director to the EverGen board when the transaction closes which is expected in the spring of this year. The stock is up 17.3% year-to-date and a pair of insiders bought modestly in early February. While the company is classified as an natural gas producer, its soils business also provides some potential exposure to agriculture.