All amounts in Canadian dollars unless otherwise stated
VANCOUVER, BC / ACCESSWIRE / May 2, 2024 / RE Royalties Ltd. (TSXV:RE)(OTCQX:RROYF) ("RE Royalties" or the "Company"), a global leader in renewable energy royalty-based financing, is pleased to announce the financial results for the year ended December 31, 2023 ("FY2023"). For further information on these results please see the Company's Consolidated Financial Statements and Management's Discussion and Analysis for FY2023, filed on SEDAR+ at www.sedarplus.com.
Key financial highlights for FY2023 include:
- Revenue and income, including the share of income from the Company's investment in OCEP for FY2023, of $9,806,000, an increase of $5,061,000 or 107% over the prior year. The increase was attributable to an increase in the number of investments during the year and a full year of revenues recognized on investments made in the prior year.
- Gross profit, including changes in fair value of financial assets and share of income in OCEP, for FY2023, of $9,521,000, an increase of $5,108,000 or 116% over the prior year.
- Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")1 for FY2023, of $2,234,000, an increase of $224,000 or 11% over the prior year. The increase was attributable to an increase in the number of investments during the year and a full year of revenues recognized on investments made in the prior year, offset by provision for expected credit losses.
- Net loss after income tax for FY2023, of $1,811,000, compared to a net loss of $434,000 in the prior year. The increase in net loss was primarily attributable to higher finance expenses from the Company's Series 3 Green Bond issuance, a provision for expected credit losses and share-based payments recognized during the year.
- Cash and cash equivalents of $14,439,932 as of December 31, 2023.
Key business highlights for FY2023 include:
- In October 2023, the Company announced it entered into a loan agreement and a royalty agreement with Revolve Renewable Power Corp. ("Revolve") to support Revolve's acquisition of a portfolio of two operational run-of-river hydro projects in British Columbia, and one operational wind project in Alberta with a combined gross capacity of 23 MW (the "Operational Projects"). The Operational Projects receive revenue from Power Purchase Agreements ("PPAs") with BC Hydro and the City of Medicine Hat, for the hydro projects and the wind project, respectively. The Operational Projects have PPAs with remaining terms ranging from 32-35 years for the hydro projects and 11 years for the wind project. The Loan will have a term of 36 months and bear interest at the rate of 12% per annum, compounded monthly, and payable semi-annually. The Company will receive a structuring fee of 1.0% on the Loan value at closing, and a gross revenue royalty of 0.5% on the Operating Projects during the term of the Loan, growing to a gross revenue royalty of 1.0% upon repayment of the Loan for the remaining life of the PPAs. This transaction was closed in February 2024.
- In August 2023, the Company entered into a loan agreement and a royalty agreement with Butler Corporation SpA ("CleanLight"), a Chilean technology company and manufacturer of mobile solar-battery systems including solar lighting towers and solar-hybrid battery generators. The Company provided a US$3.0 million secured loan to finance CleanLight's expansion into other countries in Latin America. The CleanLight Loan has a two-year term, and bears interest of 12% per annum. The Company also acquired a gross revenue royalty of 5% for a period of 10 years, for US$200,000. The royalty rate will reduce to 3% after certain revenue milestones are met.
- In May 2023, the Company acquired a royalty on 100MW of output from a wind project located in Alberta, Canada ("Alberta Wind Project") for $940,000 Canadian dollars. The Alberta Wind Project is owned by a major independent power producer with a power purchase agreement with a large corporate off taker. The Company will receive average annual royalty payments of approximately $132,000 per year, payable monthly for a period of 12 years.
- In February 2023, the Company acquired a gross revenue royalty on the 27 MWdc (20 MWac) Jackson Center Solar Project Phase 2 from Teichos Energy LLC ("Teichos"). The Company provided a US$1.8 million letter of credit on behalf of Teichos to meet their interconnection requirements. Teichos sold the Jackson Center Solar Project Phase 1 and 2, and subsequently repaid the outstanding loan and repurchased the royalty for US$1.15 million in May 2023.
- In April 2023, the Company completed the offering of its Series-3 Green Bonds and issued a total of 16,423 Canadian dollar denominated Green Bonds for aggregate gross proceeds of $16,423,000 and 1,242 United States dollar denominated Green Bonds for aggregate gross proceeds of US$1,242,000. The Series-3 Green Bonds will have a maturity date of January 30, 2028, and bear interest at a rate of 9% per annum, payable quarterly.
"Fiscal 2023 was a major milestone year for the Company. Revenue and income continued to demonstrate strong year over year growth. While net income was negatively affected by a provision for expected credit loss, our overall investment portfolio continues to remain stable despite a heightened level of uncertainty and volatility in the capital markets and economy. The collateral underpinning these investments are strong and our clients have shown the ability to deliver cash flow as expected. Our portfolio continues to generate stable, predictable, and recurring cash flows, and with our existing cash on hand, we expect to take advantage of certain near-term opportunities currently under due diligence, and to keep growing our financial performance over the coming quarters" said Bernard Tan, CEO.
Conference Call on Friday, May 3, 2024
Management will be hosting a fourth quarter conference call and live webcast to discuss its fourth quarter 2023 results. After opening remarks by management there will be a question-and-answer session open to analysts and investors. Questions can be submitted in advance to Melanee Henderson, Investor Relations (melaneehenderson@reroyalties.com).
You can register for the webcast as follows:
Date: Friday, May 3, 2024
Time: 1:00pm PT (4:00pm ET)
Teams Link: Join the meeting here
Meeting ID: 247 947 733 438
Passcode: bfiCc9
Or call in (audio only): +1 778-725-6875
Phone Conference ID: 337 204 297#
1Non-GAAP Performance Measures
This document contains presentation of Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") as a non-GAAP financial measure. This measure may differ from similar measures used by, and may not be comparable to such measures as reported by, other companies. The Company believes that EBITDA is commonly used by certain investors, in conjunction with conventional IFRS measures, to enhance their understanding of the Company's performance. These measures have been derived from the Company's financial statements and applied on a consistent basis. Non-GAAP measures are intended to provide additional information, not to replace IFRS measures, and do not have a standard definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Further information on the composition and usefulness of each non-GAAP financial measure, including reconciliation to their most directly comparable IFRS measures, is included in the non-GAAP financial measures section of our MD&A, which are available on Sedar or on the Company's website.
About RE Royalties Ltd.
RE Royalties Ltd. acquires revenue-based royalties from renewable energy facilities and technologies by providing a non-dilutive financing solution to privately held and publicly traded companies in the renewable energy sector. RE Royalties is the first to apply this proven business model to the renewable energy sector. The Company currently owns over 100 royalties on solar, wind, hydro, battery storage, energy efficiency and renewable natural gas projects in Canada, United States, Mexico and Chile. The Company's business objectives are to provide shareholders with a strong growing yield, robust capital protection, high rate of growth through re-investment and a sustainable investment focus.
For further information, please contact:
Investor and Media Contact:
Melanee Henderson, Investor Relations
T: (778) 373-6731 TF 800-667-2114
E: melaneehenderson@reroyalties.com
Talia Beckett, Vice President of Communications and Sustainability
T: (778) 374‐2000
E: taliabeckett@reroyalties.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange), nor any other regulatory body or securities exchange platform, accepts responsibility for the adequacy or accuracy of this release.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction, nor shall there be any offer or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been approved or disapproved by any regulatory authority nor has any such authority passed upon the accuracy or adequacy of the short form base shelf prospectus or the prospectus supplement. The offer and sale of the securities has not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to United States persons absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.
Forward Looking Statements
This news release includes forward-looking information and forward-looking statements (collectively, "forward-looking information") with respect to the Company and within the meaning of Canadian securities laws. Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. This information represents predictions and actual events or results may differ materially. Forward-looking information may relate to the Company's future outlook and anticipated events or results and may include statements regarding the Company's financial results, future financial position, expected growth of cash flows, business strategy, budgets, projected costs, projected capital expenditures, taxes, plans, objectives, industry trends and growth opportunities including financing. The reader is referred to the Company's most recent filings on SEDAR as well as other information filed with the OTC Markets for a more complete discussion of all applicable risk factors and their potential effects, copies of which may be accessed through the Company's profile page at www.sedar.com.
SOURCE: RE Royalties Ltd.
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