TORONTO, March 28, 2024 (GLOBE NEWSWIRE) -- Carbon Streaming Corporation (Cboe
CA: NETZ) (OTCQB: OFSTF) (FSE: M2Q) ("Carbon Streaming" or the "Company") today
reported its financial results for the fiscal year ended December 31, 2023. All
figures are expressed in United States dollars, unless otherwise indicated. The
Company will host a live audio call at 11:00 a.m. ET on Thursday, March
28, 2024.
Carbon Streaming Founder and CEO Justin Cochrane stated: "In 2023, Carbon
Streaming was able to improve its operating cash flow through the successful
implementation of ongoing reductions in operating costs. As of December 2023, we
have achieved savings of over $7.5 million for the fiscal year when compared to
the previous 12-month period, and we expect to continue targeting additional
cost saving opportunities in the future." Mr. Cochrane continued: "As we look
towards 2024, the Company remains committed to protecting our robust, debt-free
balance sheet and exploring strategic opportunities, while executing on sales
and supporting our project partners."
Annual Highlights
* Ended the year with $51.4 million in cash and no corporate debt.
* The Company initiated a corporate restructuring plan, which remains ongoing,
focused on personnel reductions, optimizing its cash position, and
protecting its balance sheet, resulting in a $7.5 million reduction in
operating expenses for the fiscal year compared to the prior twelve month
period and a $1.8 million restructuring charge.
* Recognized net loss of $35.5 million for the year (compared to net income of
$2.4 million for the six month period ended December 31, 2022).
* Adjusted net loss of $7.6 million for the year (compared to an adjusted net
loss of $11.1 million for the six month period ended December 31, 2022) (see
the "Non-IFRS Measures" section of this news release).
* Operating loss of $45.0 million for the year (compared to an operating loss
of $6.3 million for the six month period ended December 31, 2022).
* Paid $9.1 million in upfront deposits for carbon credit streaming and
royalty agreements.
Quarterly Highlights
* Recognized net loss of $26.1 million for the quarter (compared to net income
of $2.4 million in Q4 2022).
* Adjusted net loss of $2.2 million for the quarter (compared to an adjusted
net loss of $5.7 million in Q4 2022) (see the "Non-IFRS Measures" section of
this news release).
* Operating loss of $26.8 million for the quarter (compared to an operating
loss of $1.0 million in Q4 2022).
* Paid $2.1 million in upfront deposits for carbon credit streaming and
royalty agreements.
Financial Highlights Summary
Six month
Three months Three months period
(Dollar figures ended ended Year ended ended Year ended
expressed in December December December December June
USD thousands) 31, 2023 31, 2022 31, 2023 31, 2022 30, 2022
-------------------------------------------------------------------------------
Carbon credit
streaming
agreements
Revaluation of
carbon credit
streaming and
royalty
agreements $ (23,952 ) $ 4,800 $ (32,897 ) $ 4,800 $ -
Settlements
from carbon
credit
streaming and
royalty
agreements(1) - - 55 - -
-------------------------------------------------------------------------------
Purchased
carbon credits
Revenue from
sale of
purchased
carbon credits $ 841 $ 1,059 $ 1,166 $ 1,086 $ 147
Number of
purchased
carbon credits
sold (carbon
credits)(2) 205,723 122,995 256,458 125,159 25,162
Average
realized price
per purchased
carbon credit
sold ($/carbon
credit) 4.09 8.61 4.55 8.68 5.84
Cost per
purchased
carbon credit
sold ($/carbon
credit) 4.53 5.00 4.62 5.00 5.00
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Other financial
highlights
Other operating
expenses 2,691 6,221 12,035 11,539 17,638
Operating loss (26,784 ) (976 ) (45,002 ) (6,278 ) (17,617 )
Net (loss)
income (26,092 ) 4,765 (35,501 ) 2,355 (12,900 )
(Loss) earnings
per share
(Basic)
($/share) (0.55 ) 0.10 (0.75 ) 0.05 (0.34 )
(Loss) earnings
per share
(Diluted)
($/share) (0.55 ) 0.10 (0.75 ) 0.05 (0.34 )
Adjusted net
loss(3) (2,225 ) (5,727 ) (7,586 ) (11,055 ) (17,617 )
Adjusted net
loss per share
(Basic and
Diluted)
($/share)(3) (0.05 ) (0.12 ) (0.16 ) (0.24 ) (0.47 )
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Statement of
financial
position
Cash(4) 51,416 70,345 51,416 70,345 93,238
Carbon credit
streaming and
royalty
agreements(4) 60,122 83,998 60,122 83,998 65,681
Total assets(4) 117,111 158,489 117,111 158,489 163,467
Non-current
liabilities(4) 1,083 2,068 1,083 2,068 399
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1. Relates to the net cash proceeds generated from the Company's carbon credit
streaming and royalty agreements.
2. The Company holds an inventory of carbon credits, which were acquired
separate and apart from carbon credits delivered under the Company's carbon
credit streaming agreements.
3. "Adjusted net loss", including per share amounts, is a non-IFRS financial
performance measure that is used in this news release. This measure does not
have any standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other issuers. For more information about
this measure, why it is used by the Company, and a reconciliation to the
most directly comparable measure under IFRS, see the "Non-IFRS Measures"
section of the Company's Management's Discussion & Analysis ("MD&A").
4. Cash, carbon credit streaming and royalty agreements, total assets and non-
current liabilities are presented as at the relevant tabular reporting date.
Portfolio Updates: Year ended December 31, 2023
New investments and portfolio restructuring
Magdalena Bay Blue Carbon Stream: In July 2023, the Company amended the terms of
the Magdalena Bay Blue Carbon Stream. Under the amended terms of the stream, the
Company will receive the greater of 300,000 carbon credits or 30% of carbon
credits generated by the project on an annual basis, an increase from the
previous terms (which were the greater of 200,000 carbon credits or 20% of the
carbon credits generated by the project on an annual basis). This also resulted
in a $3.0 million increase in upfront deposit payments to be made as the project
achieves certain development milestones.
Waverly Biochar Stream and Waverly Biochar Royalty: In July 2023, the Company
amended the terms of the Waverly Biochar Stream, resulting in a $1.6 million
increase in the upfront deposit amount and a lower ongoing delivery payment.
Additionally, the Company also entered into the Waverly Biochar Royalty pursuant
to which Carbon Streaming will receive a revenue royalty on volume of biochar
sold from the project over its 25-year life. Following the amendment, the
Company announced an agreement to provide Microsoft with carbon credits from the
Waverly Biochar Stream of up to 10,000 carbon credits per year.
Nalgonda Rice Farming Stream: In July 2023, the Company amended the terms of the
Nalgonda Rice Farming Stream, resulting in a $0.8 million decrease in the
upfront deposit amount and a higher ongoing delivery payment. Additionally, in
September 2023, the project completed its submission of the first validation
report for the Nalgonda Rice Farming methane avoidance grouped project to Verra.
Sheep Creek Reforestation Stream: In May 2023, the Company and Mast
Reforestation SPV I, LLC ("Mast") signed a pipeline agreement and a stream
agreement for the Sheep Creek Reforestation Project, the first stream under the
pipeline agreement. During the year, the Company made total upfront deposit
payments of $1.4 million. The Company will make additional upfront deposit
payments of up to $2.4 million as the Sheep Creek Reforestation Project achieves
site preparation, planting, and issuance milestones.
Feather River Reforestation Stream: In September 2023, the Company and Mast
entered into a stream agreement for the Feather River Reforestation project, the
second stream under the pipeline agreement. During the year, the Company made
total upfront deposit payments of $0.3 million. The Company will make additional
upfront deposit payments of up to $0.4 million as the Feather River
Reforestation project achieves site preparation, planting, and issuance
milestones.
Key portfolio milestones
Cerrado Biome Stream: The final approval of the project was confirmed in
December 2022, and the Company received its first issuance of 316,781 carbon
credits in early 2023. With the first issuance, the Company made an upfront
deposit payment of $66.0 thousand to the project partner for reaching this
milestone. Sales of carbon credits from the project continue, with the Company
generating net cash flows from the stream during the year.
Community Carbon Stream: For the year ended December 31, 2023, Carbon Streaming
made upfront deposit payments totaling $4.7 million to Community Carbon, as it
reached various milestones for the portfolio of projects, including device
deployment target for its Uganda cookstoves project. The Company received first
carbon credits from the Ugandan cookstoves project, the Ugandan water
purification project and the Tanzania cookstove project during the year.
Strategy
Carbon Streaming is focused on executing its sales strategy through the
marketing and selling of carbon credits and continuing to acquire select
additional streams and royalties to diversify and complement its portfolio of
projects.
In executing its sales strategy, over the long term and on a company-wide basis,
the Company continues to expect to retain on average 15% to 25% of cash flows
(with stream-specific retention varying) generated from the sale of the carbon
credits acquired from its carbon credit streaming agreements, subject to
fluctuation based on the realized price from carbon credit sales and the
specific terms of the stream agreements. Through an ongoing delivery payment
under the terms of a stream agreement, a project partner is typically entitled
to receive the balance of the net proceeds from the sale of carbon credits
(i.e., on average 75% to 85%).
Outlook
In 2023, Carbon Streaming began repositioning itself for long-term success and
sustainable shareholder value creation as the voluntary carbon market faced
headwinds. In response, the Company initiated a corporate restructuring in
2023. The focus of the restructuring has been, and will continue to be, on cash
flow optimization through the reduction of operating expenses and a reassessment
of our existing streams and royalties in light of the evolving voluntary carbon
market. To date, the steps taken by the Company have resulted in significant
reductions to ongoing operating expenses and amendments to stream agreements.
For example, the Company's other operating expenses have decreased by $7.5
million for the fiscal year ended December 31, 2023 when compared to the
previous twelve-month period. Additionally, in 2023, the Company amended the
terms of the Nalgonda Rice Farming Stream, Waverly Biochar Stream and Magdalena
Bay Blue Carbon Stream, and amended the terms of the Sheep Creek Reforestation
Stream in early 2024. The Company will continue to look for opportunities for
cash flow optimization and will provide additional details as more initiatives
are put in place.
Carbon Streaming also aims to continue growing and diversifying its portfolio
with leading project developers and to be a partner of choice for buyers seeking
to support high-integrity carbon projects. Voluntary carbon markets have the
potential to mobilize finance to address the gaps in funding for climate
projects and act as a complementary tool to other climate action activities.
Carbon Streaming believes that its strategy will position the Company as an
industry leader who will be a go-to source of carbon credits in the voluntary
market.
2023 Results Conference Call Details
The Company's management team will host an interactive audio call on Thursday,
March 28, 2024, at 11:00 a.m. ET to provide a brief company update. Participants
may join by dialing +1 416-764-8658 or toll free from North America at
+1 888-886-7786. An audio replay of the conference call will be available on the
Company website (https://www.carbonstreaming.com/news-media/#events) until
11:59 p.m. ET on April 28, 2024.
About Carbon Streaming
Carbon Streaming (https://www.carbonstreaming.com/) aims to accelerate a net-
zero future. We pioneered the use of streaming transactions, a proven and
flexible funding model, to scale high-integrity carbon credit projects to
advance global climate action and additional United Nations Sustainable
Development Goals. This approach aligns our strategic interests with those of
project partners to create long-term relationships built on a shared commitment
to sustainability and accountability and positions us as a trusted source for
buyers seeking high-quality carbon credits.
The Company's focus is on projects that have a positive impact on the
environment, local communities, and biodiversity, in addition to their carbon
reduction or removal potential. The Company has carbon credit streams and
royalties related to over 20 projects around the world, including high-integrity
removal, reduction and avoidance projects from nature-based, agricultural,
engineered and community-based methodologies.
To receive corporate updates via e-mail, please subscribe here
(https://www.carbonstreaming.com/#sign-up).
ON BEHALF OF THE COMPANY:
Justin Cochrane, President & Chief Executive Officer
Tel: 647.846.7765
info@carbonstreaming.com (mailto:info@carbonstreaming.com)
www.carbonstreaming.com (https://www.carbonstreaming.com/)
Investor Relations
investors@carbonstreaming.com (mailto:investors@carbonstreaming.com)
Media
media@carbonstreaming.com (mailto:media@carbonstreaming.com)
Performance Measures
Average realized price per purchased carbon credit sold
Management uses the "average realized price per purchased carbon credit sold"
performance measure to better understand the price realized in each reporting
period for carbon credit sales. Average realized price per purchased carbon
credit sold is calculated by dividing the Company's revenue from sale of
purchased carbon credits by the quantity of purchased carbon credits sold.
Average realized price per purchased carbon credit sold does not incorporate
proceeds from the sale of carbon credits delivered under the Company's carbon
credit streaming agreements, and only incorporates revenue from the sale of
purchased carbon credits.
(Dollar Three Three Six month
figures months months period Year
expressed in ended ended Year ended ended ended
USD December December December December June
thousands) 31, 2023 31, 2022 31, 2023 31, 2022 30, 2022
-------------------------------------------------------------------------------
Revenue from
sale of
purchased
carbon
credits $ 841 $ 1,059 $ 1,166 $ 1,086 $ 147
Number of
purchased
carbon
credits sold
(carbon
credits) 205,723 122,995 256,458 125,159 25,162
-------------------------------------------------------------------------------
Average
realized
price per
purchased
carbon
credit sold
($/carbon
credit) $ 4.09 $ 8.61 $ 4.55 $ 8.68 $ 5.84
-------------------------------------------------------------------------------
Cost per purchased carbon credit sold
Management uses the "cost per purchased carbon credit sold" performance measure
to assess the Company's profitability in relation to the average realized price
per purchased carbon credit sold and believes that certain investors can use
this information to evaluate the Company's performance in comparison to other
carbon credit streaming companies. Cost per purchased carbon credit sold is
calculated by dividing the Company's cost of purchased carbon credits sold,
excluding inventory write-downs, by the quantity of purchased carbon credits
sold. Cost per purchased carbon credit sold does not incorporate ongoing
delivery payments from the sale of carbon credits delivered under the Company's
carbon credit streaming agreements, and only incorporates the cost of purchased
carbon credits sold.
(Dollar Three Six month
figures Three months months period Year
expressed in ended ended Year ended ended ended
USD December December December December June
thousands) 31, 2023 31, 2022 31, 2023 31, 2022 30, 2022
-------------------------------------------------------------------------------
Cost of
purchased
carbon
credits sold $ 982 $ 614 $ 1,236 $ 625 $ 126
Less:
Inventory
write-down (50 ) - (50 ) - -
-------------------------------------------------------------------------------
932 614 1,186 625 126
-------------------------------------------------------------------------------
Number of
purchased
carbon
credits sold
(carbon
credits)205,723 122,995 256,458 125,159 25,162
-------------------------------------------------------------------------------
Cost per
purchased
carbon
credit sold
($/carbon
credit) $ 4.53 $ 5.00 $ 4.62 $ 5.00 $ 5.00
-------------------------------------------------------------------------------
Non-IFRS Measures
Adjusted Net Loss and Adjusted Loss Per Share
The term "adjusted net loss" in this news release is not a standardized
financial measure under IFRS and therefore may not be comparable to similar
measures presented by other companies where similar terminology is used. These
non-IFRS measures should not be considered in isolation or as a substitute for
measures of performance, cash flows and financial position as prepared in
accordance with IFRS. Management believes that these non-IFRS measures, together
with performance measures and measures prepared in accordance with IFRS, provide
useful information to investors and shareholders in assessing the Company's
liquidity and overall performance.
Adjusted net loss is calculated as net and comprehensive (loss) income and
adjusted for the revaluation of carbon credit streaming and royalty agreements,
the revaluation of warrant liabilities, the revaluation of derivative
liabilities, the revaluation of the convertible note, impairment loss and the
corporate restructuring which the Company views as having a significant non-cash
or non-continuing impact on the Company's net and comprehensive (loss) income
calculation and per share amounts. Adjusted net loss is used by the Company to
monitor its results from operations for the period.
The following table reconciles net and comprehensive (loss) income to adjusted
net loss:
Three
(Dollar Three months months Six month
figures ended ended Year ended period ended Year ended
expressed in December December December December June
USD thousands) 31, 2023 31, 2022 31, 2023 31, 2022 30, 2022
-------------------------------------------------------------------------------
Net (loss)
income and
comprehensive
(loss) income $ (26,092 ) $ 4,765 $ (35,501 ) $ 2,355 $ (12,900 )
Adjustment for
non-continuing
or non-cash
settled items:
Revaluation of
carbon credit
streaming and
royalty
agreements 23,952 (4,800 ) 32,897 (4,800 ) -
Revaluation of
warrant
liabilities (79 ) (6,458 ) (6,530 ) (9,376 ) (4,717 )
Revaluation of
derivative
liabilities - 766 (686 ) 766 -
Revaluation of
convertible
note - - (558 ) - -
Impairment
loss - - 1,044 - -
Corporate
restructuring (6 ) - 1,748 - -
-------------------------------------------------------------------------------
Adjusted net
loss (2,225 ) (5,727 ) (7,586 ) (11,055 ) (17,617 )
-------------------------------------------------------------------------------
(Loss)
earnings per
share (Basic)
($/share) (0.55 ) 0.10 (0.75 ) 0.05 (0.34 )
(Loss)
earnings
(loss) per
share
(Diluted)
($/share) (0.55 ) 0.10 (0.75 ) 0.05 (0.34 )
-------------------------------------------------------------------------------
Adjusted net
loss per share
(Basic and
Diluted)
($/share) (0.05 ) (0.12 ) (0.16 ) (0.24 ) (0.47 )
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Cautionary Statement Regarding Forward-Looking Information
This news release contains certain forward-looking statements and forward-
looking information (collectively, "forward-looking information") within the
meaning of applicable securities laws. All statements, other than statements of
historical fact, that address activities, events or developments that the
Company believes, expects or anticipates will or may occur in the future, are
forward-looking information, including, without limitation, statements regarding
the Company's strategic positing and generation of shareholder value; the
Company's expected restructuring strategies and expense reductions and savings
from operating cost reduction measures; statements with respect to cash flow
optimization; its sales strategy; supporting the Company's carbon streaming and
royalty partners; timing and the amount of future carbon credit generation and
emission reductions and removals from the Company's existing streaming and
royalty agreements; statements with respect to the projects in which the Company
has streaming and royalty agreements in place; statements with respect to the
Company's growth objectives; and statements with respect to execution of the
Company's portfolio and partnership strategy.
When used in this news release, words such as "estimates", "expects", "plans",
"anticipates", "will", "believes", "intends" "should", "could", "may" and other
similar terminology are intended to identify such forward-looking statements.
This forward-looking information is based on the current expectations or beliefs
of the Company based on information currently available to the Company. Forward-
looking information is subject to a number of risks and uncertainties that may
cause the actual results of the Company to differ materially from those
discussed in the forward-looking information, and even if such actual results
are realized or substantially realized, there can be no assurance that they will
have the expected consequences to, or effects on, the Company. They should not
be read as a guarantee of future performance or results, and will not
necessarily be an accurate indication of whether or not such results will be
achieved. Factors that could cause actual results or events to differ materially
from current expectations include, among other things: general economic, market
and business conditions and global financial conditions, including fluctuations
in interest rates, foreign exchange rates and stock market volatility;
volatility in prices of carbon credits and demand for carbon credits; change in
social or political views towards climate change, carbon credits and ESG
initiatives and subsequent changes in corporate or government policies or
regulations and associated changes in demand for carbon credits; limited
operating history for the Company's current strategy; risks arising from
competition and future acquisition activities; concentration risk; inaccurate
estimates of growth strategy; dependence upon key management; impact of
corporate restructurings; reputational risk; failure or timing delays for
projects to be registered, validated and ultimately developed and for emission
reductions or removals to be verified and carbon credits issued (and other risks
associated with carbon credits standards and registries); foreign operations and
political risks including actions by governmental authorities, including changes
in or to government regulation, taxation and carbon pricing initiatives;
uncertainties and ongoing market developments surrounding the validation and
verification requirements of the voluntary and/or compliance markets; due
diligence risks, including failure of third parties' reviews, reports and
projections to be accurate; dependence on project partners, operators and
owners, including failure by such counterparties to make payments or perform
their operational or other obligations to the Company in compliance with the
terms of contractual arrangements between the Company and such counterparties;
failure of projects to generate carbon credits, or natural disasters such as
flood or fire which could have a material adverse effect on the ability of any
project to generate carbon credits; volatility in the market price of the
Company's common shares or warrants; the effect that the issuance of additional
securities by the Company could have on the market price of the Company's common
shares or warrants; global health crises, such as pandemics and epidemics; and
the other risks disclosed under the heading "Risk Factors" and elsewhere in the
Company's Annual Information Form dated as of March 27, 2024 filed on SEDAR+ at
www.sedarplus.ca (http://www.sedarplus.ca).
Any forward-looking information speaks only as of the date of this news release.
Although the Company believes that the assumptions inherent in the forward-
looking information are reasonable, forward-looking information is not a
guarantee of future performance and accordingly undue reliance should not be put
on such statements due to the inherent uncertainty therein. Except as may be
required by applicable securities laws, the Company disclaims any intent or
obligation to update any forward-looking information, whether as a result of new
information, future events or results or otherwise.
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