Evogene Ltd. Price & Performance (EVGN)

Furthermore, our G and A expenses decreased by 36% compared to last year and 28% compared to last quarter, mainly due to lower consulting costs as well as restructuring expenses incurred last year. Overall, as a result, our adjusted EBITDA EBITDA increased to $1,000,000 [indiscernible] up from $382,000 last year [indiscernible] Our net loss for Q3 twenty twenty four was also improved by 57% compared to last year.

The increased EBITDA as mentioned was offset by an increase in depreciation and finance costs both related to the completion of Fraser Valley Biogas RNG expansion late last year Summarizing the quarter, in Q3 2024 Fraser Valley Biogas continued to ramp up production and step closer towards the design capacity of the facility. We were also able to apply downward pressure on certain of our operating costs and we expect to continue to see certain cost reductions as we finalize our 2025 insurance premiums and reduce utility costs through equipment optimizations. I'll now hand the presentation over to Misha to provide some additional updates.

Thanks a lot, Sean.

Been another solid quarter, which we're looking forward to build on as we close out the year. There's definitely still a lot of work to do as we remain focused on achieving nameplate capacity at Fraser Valley Biogas and continuing to advance our 3 major development projects. Going to be a catalyst rich end to the year and it all begins with operational success at at Fraser Valley. Where we've built up a world class facility, which has demonstrated the ability to exceed nameplate capacity when fully ramped. We're also consolidating the feedstock market in the region where favorable supply and demand demand dynamics remain in place and remain in our favor. As we close out the year, we expect to hit record levels of production as we work towards exceeding nameplate capacity in 2025. With Fraser Valley on track, we're advancing our made significant headway at GrowTech. As you can see here, we've re scoped Phase 2 to increase capacity from 70,000 100,000 Gigajoules annually and achieve more favorable economics and mitigate the pipeline constrained risk on the line. With the recently announced $2,000,000 ACT grant, we expect to achieve FID the end of the year. We're also approaching FID at the Pacific Coast Renewables Facility, as we've submitted all of our regulatory filings and anticipate a positive result given our positive relationships with all the regulatory authorities.

Completed preliminary design work and the project remains fully funded with a robust feedstock story. We'll be providing a detailed a full detailed update on the development of the project by the end of the year as we approach FID there. Our process at Project Radius continues to to progress as we've now narrowed it down to 2 potential funding parties. There are a lot of greenfield projects that are struggling to get financed in this current and current environment. And the fact that we have managed to attract 2 active bidders at the table speaks to the quality of the project. As we've worked through the process, we've received the consistent feedback that this is the best greenfield RNG project in Canada, and we have full confidence that our process will be successful. So what does this mean for the broader picture at EverGen? With Fraser Valley Biogas continuing to perform and development progressing across our projects, we remain fully funded to achieve $13,000,000 of EBITDA Concurrently, we're advancing our greenfield projects as well as several other pipeline projects the works, which we hope to be able to discuss in the short term. We've really hunkered down and focused on our core operations over the last 12 months are now emerging stronger with a view to bringing in new projects and contributing to the upside.

Our goal is to bring 2 to 3 projects to FID on an annual basis and we remain on track to achieve that. There have certainly been some headwinds in the space fundamentals remain strong and acquisition opportunities will emerge. Our track record of delivering brownfield and greenfield projects in Canada, will be in a strong position to continue to grow and emerge as Thanks EverGen for your support. We'll now open it up to any questions.

Thanks, Misha. First question, with respect to RNG production and organic tonnage can you explain the decrease quarter over quarter from last quarter this quarter despite Fraser Valley ramping up?

Yes, sure. So for the RNG production, that was the decrease quarter over quarter was mainly related to our GrowTech facility. Q3 is usually a tough time at that facility with line [indiscernible] issues regarding nominations. The versus the amount of gas that was produced. So had had that not been an issue, we would have we would have had about the same overall production compared to last quarter. And we expect to be able to catch that up in Q4. Regarding organics, that was a it's a timing issue. We some of the contracts that we have we're sharing in some of those organics with with other with other processes. And we're also, we're working through a contract at our Cedar Sky operating facility which we hope to be able to provide some more updates on shortly.

Thanks, Sean. Next question, with respect to weather and seasonality, did that affect production [indiscernible] production is trending in Q4 so far?

So yes, as I touched on, we didn't we didn't experience any seasonality issues for RNG production at Fraser Valley Biogas. That The seasonality had an impact on growth and we expect that that to be fully addressed as part of, FID and Phase 2 of the project.

Thanks, Sean.

In the previous quarter, EverGen had guided for PC FID towards the end of the 3rd quarter. Can we comment on timing for this?

Yes.

So last quarter, the guidance was based on assumptions that we were going to get regulatory approvals back by a certain time. We've kind of taken a conservative approach to FID wanting to ensure that we've got all of our regulatory approvals lined up. We've sort of been in constant communication with the 3 major regulatory authorities here being the City of Abbotts Abbotsford, the Minister of Environment and the Agricultural Land Commission. They've all come back you know, verbally telling us that they support the project. So there's just been some back and forth in terms of information flow and making sure that they have all the information they need in order to make to grant their approvals. So we expect that to come in, but we It's just Obviously, taking longer than we would have liked.

Thanks, Misha.

The next question with respect to Pacific Coast Renewables, there any additional hurdles to begin construction after securing full regulatory approval? [indiscernible] receiving full regulatory approval, we will have the full green light to begin construction. We've selected our technology We've got the project fully scoped out. Offtake agreement obviously in place. So we expect it to be or we don't expect any hurdles following regulatory approvals.

Thanks, Misha.

With respect to the 2025 run rate EBITDA of 7,000,000 dollars Can we provide some commentary around that? Is that expected to be achieved towards the end of the year?

So that would be that a run rate that would more be an exit for the year. Obviously, that's taking into account Fraser Valley of operating at its design capacity as well as starting to see part of as the Phase 2 expansion there. And then factoring in some of the contracts I touched on regarding our Sea to Sky soils operations and and stabilizing operations at Pacific Coast Renewables.

Thanks, John. For the next question, more broadly, the EverGen platform, can you elaborate on the expected cost improvements on a going forward basis?

Yeah, sure. So we received as most of the participants are probably aware a few years ago, we were impacted by flooding events at our sites in the Fraser Valley, both Fraser Valley Biogas and Pacific Coast Renewables. As a result of those claims that's impacted our insurance premiums for the past [indiscernible] And we just received news that our insurance premiums are [indiscernible] because we're now past that negative claims history and we're also at a size we're able to attract, a large insurers, which comes at a discounted rate. [indiscernible] to improve the optimization of some of the equipment at Fraser Valley Biogas and that may include swapping out certain [indiscernible] efficient equipment, which would again reduce our our utility costs and we would be able to provide further information on that as we reach FID with at Rotating.

Thanks, Sean. For the next question, with respect to timing of construction, can we provide some commentary around Pacific Coast Renewables Gro Tech Phase 2 [indiscernible] Yeah. So, for Pacific Coast Renewables, that that would be a 12 12 to 18 month construction. As far as capital requirements associated with that build, As we said, it remains fully funded with [indiscernible] lined up as well as with the grant and the debt facility available for that facility. And Grow Tech Phase 2 that given the limited scope essentially we're just increasing the size, upgrading capacity at the and installing a depackager as well as some other upgrades. We anticipate that build out will take about 6 to 9 months. With again being in a position to say that it's fully funded. Based on, based on the grant received and the revised scope Project Radius, once we've achieved NTP that will be about an 18 month build out from there. Thanks, Misha. Next question Previously, there was commentary on $7,000,000 run rate EBITDA at the end of this year. Can we comment on the shift in timing with respect to that?

Yes. I mean, a big there's 2 real reasons to that. 1 is the ramp up at Fraser Valley. As I touched on before, the $7,000,000 includes, Fraser Valley operating as full design capacity, which we're still, we're still working towards. We're operating at around 75%, 80% of that capacity at the moment. So there's still some upside there and that incremental revenue comes with almost 0 additional costs. So that's there's significant upside in EBITDA there. The other pieces that is kind of included in this question is BroTeq. So GrowTech has been after operating it for just over a year now, It's we've encountered some issues regarding the pipeline capacity at at, working with our utility provider, ATCO. So for phase 2, we're working with them to be able to expand that pipe capacity and inject more gas. It's primarily during the summer months, but there's a very limited room on that pipeline during during the summer months. And as a result, that's why we're saying now with very little capital injection for GrowTech Phase 2, We expect to be able to boost the production there [indiscernible] Great. Thanks, Sean. That concludes our 2024 Third Quarter Earnings Presentation that very much EverGen for tuning in, and enjoy the rest of your day.