TIDEWATER RENEWABLES LTD. ANNOUNCES THIRD QUARTER 2025 RESULTS
TIDEWATER RENEWABLES LTD. ANNOUNCES THIRD QUARTER 2025 RESULTS |
| [13-November-2025] |
CALGARY, AB, Nov. 13, 2025 /CNW/ - Tidewater Renewables Ltd. ("Tidewater Renewables" or the "Corporation") (TSX: LCFS) is pleased to announce that it has filed its condensed interim consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2025.
THIRD-QUARTER HIGHLIGHTS
SUBSEQUENT EVENTS
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 and nine months ended September 30, 2025, which are available under the Corporation's profile on SEDAR+ at www.sedarplus.ca and on its website at www.tidewater-renewables.com. Financial Highlights
OUTLOOK AND CORPORATE UPDATE Regulatory developments On September 5, 2025, the Government of Canada announced its intention to introduce a $370 million Biofuels Production Incentive program, aimed at strengthening the domestic production of biodiesel and renewable diesel. This proposed time-limited incentive is expected to provide per-litre financial support for qualifying Canadian producers from January 2026 through December 2027, with eligibility for up to 300 million litres per facility. Tidewater Renewables welcomes this announcement as a positive development for the Canadian renewable fuels sector. The Corporation's HDRD Complex is anticipated to produce between 150 million and 170 million litres annually during the 2026 to 2027 period, positioning Tidewater Renewables to be a beneficiary of the program once implemented. The anticipated support is expected to enhance the HDRD Complex's economics, strengthen the Corporation's liquidity position, and contribute to improved profitability during the incentive window. In addition, the Government of Canada announced its intention to propose targeted amendments to the Clean Fuel Regulations and to collaborate with provinces and territories to create a more complementary framework. Management believes these developments reflect the continued commitment of the Government of Canada to fostering a competitive and resilient low-carbon fuels industry in Canada. The Corporation applauds this renewed focus on Canadian biofuels and agricultural stakeholders, including canola growers, which are key partners in our renewable diesel supply chain. Government support to strengthen the competitiveness of Canadian biofuel producers is acknowledged, particularly in light of what management views as unfair trade practices in other jurisdictions. Tidewater Renewables remains committed to leading the energy transition and delivering long-term value for shareholders while supporting Canada's low-carbon future. Continued commercial momentum Tidewater Renewables has sustained its commercial momentum. Following the resumption of operations at the HDRD Complex on October 29, 2025, the Corporation significantly increased its contracted offtakes, now comprising 100% of forecasted renewable diesel production for the remainder of 2025 compared to 70% of forecasted production for the second half of 2025 as disclosed in the second quarter. The Corporation anticipates this strong commercial momentum to continue into 2026, with over 80% of forecasted renewable diesel production for 2026 expected to be directed toward renewable diesel sales inclusive of associated emission credits, supporting further growth in contracted volumes and market presence. This meaningful progress reflects strong and growing demand for Canadian-produced renewable fuels. The majority of these contracts are structured with U.S. import parity pricing benchmarks, aligning pricing with prevailing market values and supporting enhanced margin realization. Remaining volumes are expected to be sold into the spot market, where current pricing remains favorable and presents further upside potential. SAF development update Tidewater Renewables continues to advance its proposed 6,500 bbl/d SAF project in British Columbia. Front-end engineering design work was completed during the second quarter of 2025. In September, the Corporation executed an amendment to its existing initiative agreement with the Government of British Columbia, providing for additional BC LCFS Credits. These additional credits are intended to help fund ongoing optimization work as the Corporation works toward a potential final investment decision, currently targeted for 2026. The Corporation expects to receive emission credits, in connection with completing the first of three milestones outlined in the amended initiative agreement, in the fourth quarter of 2025, with the remaining credits expected to be received in the first half of 2026. While Tidewater Renewables remains optimistic about the project's potential, the decision to proceed with the SAF project is contingent upon the execution of long-term offtake agreements, and provincial and federal government support to facilitate obtaining committed financing. HDRD Complex During the third quarter of 2025, the HDRD Complex achieved an average utilization rate of 2,011 bbl/d, or 67% of design capacity. This compares to 2,849 bbl/d, or 95% of design capacity, during the same period in the prior year. During the nine months ended September 30, 2025, the HDRD Complex achieved an average utilization rate of 2,137 bbl/d, or 71% of design capacity, compared to 2,630 bbl/d, or 88% of design capacity, during the same period in 2024. Excluding the impact of the scheduled turnaround, the HDRD Complex achieved an average utilization rate of approximately 2,920 bbl/d, or 97% of design capacity, during the third quarter of 2025, reflecting strong operational performance in July and August and materially higher utilization compared to the first half of 2025. The decrease in utilization during the three and nine month periods ended September 30, 2025 was primarily due to planned turnaround activities carried out in September 2025. The turnaround was originally expected to last approximately three weeks but was extended by an additional two weeks due to greater than anticipated fouling in the hydrodeoxygenation reactor beds. Despite the delay, the turnaround was completed safely, with operations resuming on October 14, 2025. Shortly after operations resumed, an equipment anomaly was identified which required the HDRD Complex to take an unplanned outage. The issue was temporarily repaired, resulting in a delay of approximately two weeks, and operations resumed on October 29, 2025. A ramp-up period followed the restart, during which utilization improved steadily, supported by a disciplined ramp-up process and strong operational oversight. With the temporary repair in place, current utilization rates have stabilized at approximately 2,330 bbl/d. The affected component is being rebuilt and is expected to be installed during a seven-day outage before year end 2025. In addition, utilization during the nine-months ended September 30, 2025 was impacted by the previously disclosed minor fire incident that occurred on April 1, 2025, at the main renewable diesel process unit within the HDRD Complex. The incident was promptly contained, with the affected area safely isolated and stabilized. Operations resumed on April 14, 2025, and utilization improved in the weeks that followed as part of a safe and controlled restart. Tidewater Renewables expects the HDRD Complex to achieve an average throughput of between 1,900 to 2,000 bbl/d for the full year 2025, lower than the previous guidance of between 2,200 to 2,400 bbl/day, as a result of the extended turnaround and the unplanned outage that followed in October 2025. Capital Program Despite the extended turnaround, and unplanned outage, Tidewater Renewables' remains on track to achieve its full year maintenance capital guidance of approximately $8.0 million to $10.0 million, primarily related to the planned turnaround activities at the HDRD Complex during the third quarter of 2025. CONFERENCE CALL In conjunction with the earnings release, investors will have the opportunity to listen to Tidewater Renewables' senior management review its third quarter 2025 results via a joint conference call with its controlling shareholder, Tidewater Midstream and Infrastructure Ltd., on Thursday, November 13, 2025 at 10:00 am MDT (12:00 pm EDT). A question and answer session for analysts will follow management's presentation. To join the conference call without operator assistance, please register here approximately 5 minutes in advance to receive an automated call-back when the session begins. Alternatively, you can dial 888-510-2154 (toll-free in North America) or 437-900-0527 to reach a live operator who will place you into the call. 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 Tidewater Renewables Ltd. earnings call. A live audio webcast of the conference call will be available here, and archived for 90 days. ABOUT TIDEWATER RENEWABLES Tidewater Renewables is an energy transition company. The Corporation is focused on the production of low carbon fuels, primarily renewable diesel. The Corporation was created in response to the growing demand for renewable fuels in North America and to capitalize on its potential to efficiently turn a wide variety of renewable feedstocks (such as tallow, used cooking oil, distillers corn oil, soybean oil, canola oil and other biomasses) into low carbon fuels. Tidewater Renewables' objective is to become a leading Canadian renewable fuel producer. The Corporation is pursuing this objective through the ownership, development, and operation of clean fuels projects and related infrastructure, that utilize existing proven technologies. Additional information relating to Tidewater Renewables is available on SEDAR+ at www.sedarplus.ca and at www.tidewater-renewables.com. NON-GAAP AND OTHER FINANCIAL MEASURES Throughout this press release and in other materials disclosed by the Corporation, Tidewater Renewables uses a number of non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures when assessing its results and measuring overall performance. The intent of non-GAAP measures and non-GAAP ratios is to provide additional useful information to investors and analysts. These non-GAAP financial measures and ratios do not have standardized meanings prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other entities. As such, these measures should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with GAAP. Except as otherwise indicated, these non-GAAP financial measures and ratios will be calculated and disclosed on a consistent basis from period to period. Specific adjusting items may only be relevant in certain periods. For more information with respect to the Corporation's non-GAAP measures, non-GAAP ratios, capital management measures and supplementary financial measures see the "Non-GAAP and Other Financial Measures" section of Tidewater Renewables' MD&A which is available on SEDAR+ at www.sedarplus.ca. 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 calculated as income (or loss) before finance costs, taxes, depreciation, share-based compensation, unrealized gains and losses on derivative contracts, transaction costs, and other items considered non-recurring in nature, plus the Corporation's proportionate share of Adjusted EBITDA in its equity investments. Adjusted EBITDA is used by management to set objectives, make operating and capital investment decisions, monitor debt covenants and assess performance. Tidewater Renewables also believes Adjusted EBITDA is a measure widely used by securities analysts, investors, lending institutions and others to evaluate the financial performance of the Corporation. From time to time, the Corporation issues guidance on this key measure. As a result, Adjusted EBITDA is presented as a relevant measure in this press release and the MD&A to assist analysts and readers in assessing 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 (loss) income, net cash provided by operating activities or other measures of financial results determined in accordance with GAAP as an indicator of the Corporation's performance and may not be comparable to companies with similar calculations. The following table reconciles net loss, the nearest GAAP measure, to Adjusted EBITDA:
Distributable Cash Flow Distributable cash flow is calculated as net cash provided by (used in) operating activities before changes in non-cash working capital plus 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 Tidewater Renewables' ongoing operations. 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. The following table reconciles net cash provided by (used in) operating activities, the nearest GAAP measure, to distributable cash flow:
Growth capital expenditures will generally be funded from net cash provided by operating activities, sales of capital emission credits and proceeds from additional debt or equity, as required. Non-GAAP Financial Ratios The Corporation uses the following non-GAAP financial ratios to present aspects of its financial performance or financial position. Distributable cash flow per common share (basic and diluted) Distributable cash flow per common share is calculated as distributable cash flow, a non-GAAP financial measure, over the weighted average number of common shares outstanding for the period. 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.
Capital Management Measures Net Debt 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. Net debt is defined as amounts owing under the senior credit facility and second lien credit facility, less cash. Net debt excludes working capital, lease liabilities and derivative contracts as the Corporation monitors its capital structure based on net debt to Adjusted EBITDA. The following table reconciles net debt:
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. Maintenance Capital 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. Forward-Looking Information 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 Tidewater Renewables based on future economic conditions and courses of action. All statements other than statements of historical fact may be forward-looking statements. Such forward-looking statements are often, but not always, identified by the use of any words such as "seek", "anticipate", "budget", "plan", "continue", "forecast", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "will likely result", "are expected to", "will continue", "is anticipated", "believes", "estimated", "intends", "plans", "projection", "outlook" and similar expressions. These statements involve known and unknown risks, assumptions, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. In particular, this press release contains forward-looking statements pertaining to, but not limited to, the following:
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:
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 Canadian Securities regulatory Administrators available under the Corporation's profile on SEDAR+ at www.sedarplus.ca. 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. Tidewater Renewables does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable securities law. All forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Further information about factors affecting forward-looking statements and management's assumptions and analysis thereof is available in the Corporation's most recent annual information form and other filings made by the Corporation with Canadian provincial securities commissions available under the Corporation's profile on SEDAR+ at www.sedarplus.ca. The financial outlook information contained in this press release is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Additionally, the financial outlook information contained in this press release is subject to the risk factors described above in respect of forward-looking information generally as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this press release. Accordingly, readers are cautioned that the financial outlook information contained in this press release should not be used for purposes other than for which it is disclosed herein. The financial outlook information contained in this press release was approved by management as of the date hereof and was provided for the purpose of providing further information about Tidewater Renewables' current expectations and plans for the future. SOURCE Tidewater Renewables Ltd. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: Toronto:LCFS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
