Tidewater Renewables (LCFS) Q4 2024 earnings summary

Executive summary

• Regulatory engagement led to amendments in B.C.'s Low Carbon Fuels Act, increasing renewable diesel content requirements and mandating Canadian production, supporting a more level playing field for domestic producers.

• A trade remedy complaint against U.S. renewable diesel imports resulted in a formal investigation, with expected duties of CAD 0.50–0.80 per liter to be imposed from June 2025, providing market stability.

• HDRD Complex achieved 89% utilization in Q4 2024, with throughput at 2,677 bbl/day and full-year average at 2,643 bbl/day, producing over 170 million liters of renewable diesel since November 2023.

• Sale of interest in Rimrock Renewables Partnership for up to CAD 7.8 million improved cash flow and avoided future capital outlays.

• Reported a Q4 2024 net loss of $3.4M, a significant improvement from a $12.7M loss in Q4 2023, mainly due to unrealized derivative gains and joint venture income.

Financial highlights

• Q4 2024 adjusted EBITDA was CAD 6 million, down 44% year-over-year and 56% sequentially, mainly due to asset sales and contract terminations.

• Full-year 2024 adjusted EBITDA reached CAD 74.5 million, a 62% increase from 2023, driven by the first full year of HDRD operations and increased BC LCFS Credit sales.

• Q4 2024 revenue was $76.4M, up from $40.4M in Q4 2023; full-year 2024 revenue reached $426.5M, up from $97.7M in 2023.

• Net debt at year-end 2024 was $195.9M, down from $346.6M at year-end 2023.

• Distributable cash flow per share (basic) was $(0.22) in Q4 2024 and $0.84 for the full year.

Outlook and guidance

• Regulatory changes and anticipated trade duties are expected to improve profitability and restore results to levels seen in the first half of 2024.

• Guidance for 2025 will be considered after Q1 results, with expectations of high utilization rates and improved market conditions.

• Management anticipates a final investment decision on the proposed 6,500 bbl/d SAF project in H2 2025.

• Ongoing engagement with federal and provincial governments to improve emissions credit market liquidity and stability.

• Provisional duties on U.S. renewable diesel imports expected by June 2025, with potential final duties by September 2025.