CALGARY, AB, Aug. 15, 2024 /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 six months ended June 30, 2024. SECOND QUARTER HIGHLIGHTS Net income attributable to shareholders was $4.9 million during the second quarter of 2024, compared to net income of $2.7 million in Q2 2023. During the second quarter of 2024, Tidewater Renewables generated record Adjusted EBITDA(1) of $29.6 million, an increase of 17% from the previous quarter. Net cash provided by operating activities totaled $32.5 million and the Corporation generated record distributable cash flow(1) of $20.3 million in the second quarter of 2024. Tidewater Renewables' second quarter 2024 results were driven by the improvements in throughput and reliability at the Renewable Diesel & Renewable Hydrogen Complex ("HDRD"). During the second quarter of 2024, the HDRD Complex averaged daily throughput of 2,925 bbl/d, representing a 98% utilization rate. During the second quarter of 2024, Tidewater Renewables continued to make meaningful progress on the front-end engineering design ("FEED") of its proposed 6,500 bbl/d sustainable aviation fuel ("SAF") project. The SAF project remains subject to a final investment decision which is expected in 2025. ____________________________________ (1) Non-GAAP financial measure. See the "Non-GAAP and Other Financial Measures" in this press release and the Corporation's MD&A for information on each non-GAAP financial measure or ratio. SUBSEQUENT EVENTS The Special Committees and Board of Directors of both Tidewater Renewables and Tidewater Midstream ("the Parties") have approved entering into a related party purchase and sale agreement, whereby Tidewater Midstream will acquire from Tidewater Renewables its canola co-processing infrastructure, the fluid catalytic cracking co-‎processing infrastructure, working interests in various other Prince George refinery units, and a natural gas storage facility co-located at Tidewater Midstream's Brazeau River Complex. Consideration for this related party transaction will consist of a cash payment by Tidewater Midstream of $129.7 million, and a commitment to purchase a minimum of $80.7 million for BC LCFS credits, as they are produced by Tidewater Renewables, over the next nine months, if the HDRD Complex continues to operate at over 90% utilization (the "Proposed Transaction"). The Proposed Transaction is expected to close during the third quarter of 2024, pending regulatory and lender approvals. The Corporation will use the net proceeds from the Proposed Transaction to repay amounts on its Senior Credit Facility, which will provide an immediate improvement to Tidewater Renewables' liquidity issues and leverage profile and a reduction to cash interest costs going forward.  On August 14, 2024, the Corporation entered into a definitive purchase and sale agreement for the sale its used cooking oil feedstock assets for $10.5 million, subject to certain adjustments prior to and following the closing of the transaction. The sale is expected to close in September, 2024. Net proceeds of this transaction will be used to repay outstanding debt balances. 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 six months ended June 30, 2024, 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 Three months ended June 30, Six months ended June 30, (in thousands of Canadian dollars except per share information) 2024 2023 2024 2023 Revenue $ 147,238 $ 13,163 $ 258,477 $ 33,059 Net income (loss) attributable to shareholders $ 4,935 $ 2,654 $ 12,655 $ (18,823) Net income (loss) attributable to shareholders   per share – basic $ 0.14 $ 0.08 $ 0.36 $ (0.54) Net income (loss) attributable to shareholders   per share –diluted $ 0.14 $ 0.07 $ 0.35 $ (0.54) Adjusted EBITDA (1) $ 29,570 $ 8,067 $ 54,840 $ 20,702 Net cash provided by (used in) operating   activities $ 32,494 $ (7,348) $ 72,952 $ 4,101 Distributable cash flow (1) $ 20,326 $ (7,877) $ 33,107 $ (2,604) Distributable cash flow per share – basic (1) $ 0.58 $ (0.23) $ 0.95 $ (0.07) Distributable cash flow per share – diluted (1) $ 0.56 $ (0.22) $ 0.91 $ (0.07) Total common shares outstanding (000s) 38,868 34,724 38,868 34,724 Total assets $ 1,073,881 $ 1,032,896 $ 1,073,881 $ 1,032,896 Net debt (1) $ 316,387 $ 293,088 $ 316,387 $ 293,088 (1)  Refer to "Non-GAAP and Other Financial Measures". OUTLOOK AND CORPORATE UPDATE  Tidewater Renewables' primary focus continues to be on maintaining a high and consistent utilization rate at the HDRD Complex. The Corporation expects the HDRD Complex to exceed an average 2024 throughput of 2,550 bbl/d, inclusive of the 2,522 bbl/d of throughput in the first half of 2024. During 2024, the Corporation also expects to optimize the HDRD Complex's operating costs and progress the engineering design on its announced SAF project. In line with its objectives, Tidewater Renewables expects to execute a restrained 2024 capital program significantly offset by government funding. The Corporation's 2024 maintenance capital expenditures are expected to be approximately $4.4 million. RELATED PARTY ASSET SALES AND FORWARD CREDIT SALES During the first and second quarters of 2024, Tidewater Renewables forward sold BC LCFS credits at an average price of approximately $450 per credit to various counterparties. Towards the end of the second quarter of 2024, when the Corporation approached numerous counterparties to contract BC LCFS credit sales for the third quarter of 2024, it was unable to secure any bids. BC LCFS credit sales prices for July 2024 transactions, reported by the Government of British Columbia in August 2024, confirmed that only two BC LCFS credit sales transactions occurred at an average price of $207 per credit. This sharp decline in BC LCFS credit prices is believed to be a function of large volumes of subsidized US renewable diesel physically moving out of the oversupplied US renewable fuel market and into the higher value BC market. Aggravating the situation is, in management's view, overlapping US and Canadian low carbon fuel policies which allow US renewable diesel producers to take advantage of US and state compliance credits, which are generated at the point of production, then import their volumes to Canada and generate BC LCFS emission credits at the point of sale. In the long-term, the Corporation believes that the combination of supply demand fundamentals forcing the shut-in of high-cost US renewable fuel production, tightening California LCFS compliance obligations, and tightening BC LCFS compliance obligations is expected to ease the pressure on BC LCFS credit prices. In addition, cold weather diesel specifications are expected to limit physical imports of renewable diesel in the fourth quarter of 2024 and first quarter of 2025. However, the current market situation has created a liquidity issue for the Corporation. Tidewater Renewables relies heavily on revenue generated from environmental attributes such as the BC LCFS and CFR credits. The Corporation has approached the BC Government to discuss potential changes the government could make to the BC LCFS credit market in an attempt to improve liquidity and pricing stability for BC LCFS capital and operating emission credits. As the Corporation had no forward sales contracted for BC LCFS credits expected to be generated from renewable diesel sales during the third quarter of 2024, management has been evaluating alternative liquidity sources for the Corporation, including the Proposed Transaction, while the sector awaits a longer-term solution. In connection with the Proposed Transaction, the Corporation's Board of Directors established an independent special committee (the "Renewables ...