CALGARY, AB, Aug. 13, 2026 /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, 2026.

SECOND QUARTER HIGHLIGHTS

• During the second quarter of 2026, the Corporation reported net income of $5.1 million, compared to net income of $13.0 million in the second quarter of 2025.
  
  
• Adjusted EBITDA⁽¹⁾ was a record $56.0 million during the second quarter of 2026, a $45.2 million increase over the $10.8 million generated in the same period of 2025.
  
  
• The renewable diesel & renewable hydrogen complete ("HDRD Complex") achieved record average daily throughput of 3,315 bbl/d during the second quarter of 2026, representing a 111% utilization rate, compared to 2,164 bbl/d, representing a 72% utilization rate from the second quarter of 2025.
  
  
• The Corporation successfully reduced net debt⁽²⁾ by $12.9 million to $193.3 million from December 31, 2025, achieving a debt to Adjusted EBITDA⁽¹⁾ ratio of 1.47x, supported by strong operational margins and disciplined capital allocation.
  
  
• On June 19, 2026, the Corporation executed a new initiative agreement (the "New Initiative Agreement") with the Government of British Columbia to provide additional BC LCFS Credits, further advancing its sustainable aviation fuel ("SAF") project toward a potential final investment decision ("FID").
  
  
• Increased full-year Adjusted EBITDA⁽¹⁾ guidance to $130.0 million to $140.0 million (from $100.0 million to $110.0 million). At the midpoint, this represents a 29% increase over the midpoint of the prior guidance, reflecting reflecting strong operational performance year-to-date and a constructive outlook for margins for the balance of the year.

SUBSEQUENT EVENT

• On July 7, 2026, the Corporation and Natural Resources Canada executed a contribution agreement (the "Contribution Agreement") for the Biofuel Production Incentive ("BPI"). This represented the final administrative requirement following the conditional approval received on March 30, 2026. The Contribution Agreement secures total funding in line with the full annual production capacity of the HDRD Complex.
  
  
• The Corporation has secured gross margin for 2027 by hedging approximately 20% of forecasted renewable diesel sales and associated feedstock purchases to mitigate commodity price volatility.

Selected financial and operating information are outlined below and should be read in conjunction with the Corporation's condensed interim consolidated financial statements and related MD&A for the three and six months ended June 30, 2026, 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

OUTLOOK AND CORPORATE UPDATE

Financial performance review

For the three months ended June 30, 2026, the Corporation reported net income of $5.1 million compared to $13.0 million, for the same period in 2025. The decrease was primarily driven by non-cash changes in derivative contracts, non-cash warrant liability revaluations, and the recognition of deferred income tax expense. These impacts were partially offset by higher throughput at the HDRD Complex, which drove increased sales volume, alongside improved realized pricing, the recognition of the BPI, and higher contributions from equity investments.

Tidewater Renewables generated record Adjusted EBITDA⁽¹⁾of $56.0 million for the three months ended June 30, 2026, compared to $10.8 million generated during the same period in 2025. This increase was driven by strong facility throughput at the HDRD Complex, which led to a significant increase in production and sales volumes. The Corporation benefited from higher realized margins on these volumes and the recognition of the BPI.

Canadian regulatory developments

As previously disclosed in the Corporation's MD&A for the year ended December 31, 2025, and the three months ended March 31, 2026, Tidewater Renewables formally submitted its application for the BPI in January 2026 and received conditional approval on March 30, 2026.

The Corporation is pleased to report that subsequent to the quarter-end, on July 7, 2026, Tidewater Renewables successfully executed the Contribution Agreement. With this final milestone achieved, total available funds under the program are confirmed to be in line with HDRD Complex's total annual production capacity.

Management anticipates receiving both the first and second quarter program payments in the third quarter of 2026, with subsequent BPI contributions expected to be received quarterly in arrears, providing a consistent and meaningful boost to the HDRD Complex's economics, liquidity, and overall profitability throughout the duration of the program's incentive window.

Hedging program

To further protect the Corporation's financial position, management has continued its proactive hedging program. As previously disclosed, the Corporation has approximately 50% renewable diesel (and attached emission credit) sales and associated feedstock purchases hedged for the balance of 2026.

Looking ahead to 2027, subsequent to June 30, 2026, the Corporation has extended this strategy by securing further hedges for approximately 20% of anticipated 2027 renewable diesel (and attached emission credit) sales and associated feedstock purchases, at significantly improved fixed prices relative to the 2026 hedges. By utilizing these derivative instruments, the Corporation has locked in gross margin on a portion of production, effectively reducing exposure to commodity pricing volatility and ensuring more predictable cash flows.

SAF development update

Tidewater Renewables continues to advance its proposed 6,500 bbl/d SAF project in British Columbia. Optimization work on the project has now been completed, which was partially funded by the emission credits received under the previously disclosed September 2025 amended initiative agreement.

On June 19, 2026, the Corporation executed a New Initiative Agreement with the Government of British Columbia, providing for additional BC LCFS Credits. These new BC LCFS credits are intended to support advancing critical pre-FID activities of the proposed facility and mitigate execution risk. Consequently, the pre-FID activities are expected to represent the main focus of Tidewater Renewables' growth capital expenditures for the remainder of 2026, helping the Corporation advance toward a potential FID, currently targeted for the fourth quarter of 2026. These pre-FID activities are expected to allow Tidewater Renewables to preserve project schedule certainty, maintain vendor and fabrication capacity availability, mature engineering deliverables, support regulatory advancement and position the project for efficient execution following the potential FID approval. The Corporation expects to receive emission credits in connection with completing the first of two milestones outlined in the New Initiative Agreement in the third quarter of 2026, with the remaining credits expected to be received in the fourth quarter of 2026.

While Tidewater Renewables remains optimistic about the SAF project's potential, the decision to proceed with the SAF project remains contingent upon the execution of long-term offtake agreements, and provincial and federal government regulatory support to facilitate obtaining committed financing.

2026 guidance update

During the second quarter of 2026, the Corporation continued to navigate the market dynamics resulting from ongoing geopolitical tensions in the Middle East. The persistent volatility and elevated renewable diesel benchmarks have sustained an extremely constructive margin environment for the HDRD Complex, as realized pricing continued to outpace feedstock input costs. Additionally, as previously disclosed, the U.S. Environmental Protection Agency finalized the Renewable Volume Obligations regulatory framework on March 27, 2026. This framework underpinned the intrinsic value of D4 RINs and broader market tightness during the second quarter, reinforcing the U.S. import parity benchmark pricing utilized in a significant portion of Tidewater Renewables' offtake agreements.

Reflecting these favourable market conditions combined with the Corporation's strong operational execution, Tidewater Renewables is updating its full-year 2026 Adjusted EBITDA⁽¹⁾ guidance to $130.0 million to $140.0 million (from $100.0 million to $110.0 million). All other operational metrics, including sales volumes and 2026 capital expenditure targets, remain unchanged as the Corporation continues to prioritize debt reduction and operational optimization.

HDRD Complex

The HDRD Complex is Canada's first standalone renewable diesel facility and is located adjacent to Tidewater Midstream and Infrastructure Ltd.'s PGR. The HDRD Complex is designed to process 3,000 bbl/d of renewable feedstock and utilizes renewable hydrogen to reduce the CI of the renewable fuel it produces.

During the second quarter of 2026, the HDRD Complex achieved an average utilization rate of 3,315 bbl/d, or 111% of design capacity. This compares to 2,164 bbl/d, or 72% of design capacity, during the same period in the prior year. The higher throughput reflects robust facility reliability and targeted facility debottlenecking initiatives, which collectively enabled the HDRD Complex to consistently operate above nameplate capacity. Utilization in the prior year comparative period was adversely impacted by a minor fire incident on April 1, 2025, severe weather related rail logistics challenges and softer Canadian renewable diesel demand.

CONFERENCE CALL

In conjunction with the earnings release, investors will have the opportunity to listen to Tidewater Renewables' senior management review its first quarter 2026 results via a joint conference call with its controlling shareholder, Tidewater Midstream and Infrastructure Ltd., on Thursday, August 13, 2026 at 10:00 am MDT (12:00 pm EDT). A question and answer session for analysts will follow management's presentation.

To join the conference call without operator assistance, please register here approximately 5 minutes in advance to receive an automated call-back when the session begins. Alternatively, you can dial 888-510-2154 (toll-free in North America) or 437-900-0527 to reach a live operator who will place you into the call.

For those accessing the call via Cision's investor website, we suggest logging in at least 15 minutes prior to the start of the live event. For those dialing in, participants should ask to be joined into the Tidewater Renewables earnings call.

A live audio webcast of the conference call will be available here, and archived for 90 days. 

ABOUT TIDEWATER RENEWABLES

Tidewater Renewables is an energy transition company. The Corporation is focused on the production of low carbon fuels, primarily renewable diesel. The Corporation was created in response to the growing demand for renewable fuels in North America and to capitalize on its potential to efficiently turn a wide variety of renewable feedstocks (such as canola oil, tallow, used cooking oil, distillers corn oil, soybean oil, and other biomasses) into low carbon fuels. Tidewater Renewables' objective is to become a leading Canadian renewable fuel producer. The Corporation is pursuing this objective through the ownership, development, and operation of clean fuels projects and related infrastructure that utilize existing proven technologies. Additional information relating to Tidewater Renewables is available on SEDAR+ at www.sedarplus.ca and at www.tidewater-renewables.com.

NON-GAAP AND OTHER FINANCIAL MEASURES

Throughout this press release and in other materials disclosed by the Corporation, Tidewater Renewables uses a number of non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures when assessing its results and measuring overall performance. The intent of non-GAAP measures and non-GAAP ratios is to provide additional useful information to investors and analysts. These non-GAAP measures and non-GAAP ratios do not have standardized meanings prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other entities. As such, these measures should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with GAAP. Except as otherwise indicated, these non-GAAP financial measures and non-GAAP ratios will be calculated and disclosed on a consistent basis from period to period. Specific adjusting items may only be relevant in certain periods. For more information with respect to the Corporation's non-GAAP measures, non-GAAP ratios, capital management measures and supplementary financial measures see the "Non-GAAP and Other Financial Measures" section of Tidewater Renewables' MD&A which is available on SEDAR+ at www.sedarplus.ca.

Non-GAAP Financial Measures

The non-GAAP financial measures used by the Corporation are Adjusted EBITDA and distributable cash flow.

Adjusted EBITDA

Adjusted EBITDA is calculated as income (or loss) before finance costs, taxes, depreciation, share-based compensation, unrealized gains and losses on derivative contracts, transaction costs, and other items considered non-recurring in nature, plus the Corporation's proportionate share of Adjusted EBITDA in its equity Investment.

Adjusted EBITDA is used by management to set objectives, make operating and capital investment decisions, monitor debt covenants and assess performance. Tidewater Renewables also believes Adjusted EBITDA is a measure widely used by securities analysts, investors, lending institutions and others to evaluate the financial performance of the Corporation. From time to time, the Corporation issues guidance on this key measure. As a result, Adjusted EBITDA is presented as a relevant measure in this press release to assist analysts and readers in assessing the performance of the Corporation as seen from management's perspective. Investors should be cautioned that Adjusted EBITDA should not be construed as an alternative to net (loss) income, net cash provided by operating activities or other measures of financial results determined in accordance with GAAP as an indicator of the Corporation's performance and may not be comparable to companies with similar calculations.

The following table reconciles net income, the nearest GAAP measure, to Adjusted EBITDA:

Distributable Cash Flow

Distributable cash flow is calculated as net cash provided by (used in) operating activities before changes in non-cash working capital plus transaction costs, non-recurring expenses, and after any expenditures that use cash from operations. Changes in non-cash working capital are excluded from the determination of distributable cash flow because they are primarily the result of seasonal fluctuations or other temporary changes, and are generally funded with short-term debt or cash flows from operating activities. Maintenance capital expenditures, including turnarounds, are deducted from distributable cash flow as they are ongoing recurring expenditures which are funded from operating cash flows. Transaction costs are added back as they vary significantly quarter to quarter based on the Corporation's acquisition and disposition activity. Distributable cash flow also excludes non-recurring transactions that do not reflect Tidewater Renewables' ongoing operations.

Management believes distributable cash flow is a useful metric for investors when assessing the amount of cash flow generated from the Corporation's normal operations. These cash flows are relevant to the Corporation's ability to internally fund growth projects, alter its capital structure, or distribute returns to shareholders.

The following table reconciles net cash provided by (used in) operating activities, the nearest GAAP measure, to distributable cash flow:

Non-GAAP Financial Ratios

The Corporation uses the following non-GAAP financial ratios to present aspects of its financial performance or financial position.

Distributable cash flow per common share (basic and diluted)

Distributable cash flow per common share is calculated as distributable cash flow, a non-GAAP financial measure, over the weighted average number of common shares outstanding for the period.

Management believes that distributable cash flow per common share provides investors an indicator of funds generated from the business that could be allocated to each shareholder's equity position.

Capital Management Measures

Net Debt

Net debt is used by the Corporation to monitor its capital structure and financing requirements. It is also used as a measure of the Corporation's overall financial strength. Net debt is defined as amounts owing under the senior credit facility and second lien credit facility, less cash. Net debt excludes working capital, lease liabilities and derivative contracts as the Corporation monitors its capital structure based on net debt to Adjusted EBITDA.

The following table reconciles net debt:

Supplementary Financial Measures

Growth Capital

Growth capital expenditures are defined as expenditures which are recoverable, incrementally increase cash flow or the earning potential of assets, expand the capacity of current operations, or significantly extend the life of existing assets. This measure can be used by investors to assess the Corporation's discretionary capital spending.

Maintenance Capital

Maintenance capital expenditures are generally defined as expenditures that support and/or maintain the current capacity, cash flow or earning potential of existing assets without the characteristic benefits associated with growth capital expenditures. These expenditures include major inspections and overhaul costs that are required on a periodic basis. This measure can be used by investors to assess the Corporation's non-discretionary capital spending.

Forward-Looking Information

Certain statements contained in this press release constitute forward-looking statements and forward-looking information (collectively referred to herein as, "forward-looking statements") within the meaning of applicable Canadian securities laws. Such forward-looking statements relate to future events, conditions or future financial performance of Tidewater Renewables based on future economic conditions and courses of action. All statements other than statements of historical fact may be forward-looking statements. Such forward-looking statements are often, but not always, identified by the use of any words such as "seek", "anticipate", "budget", "plan", "continue", "forecast", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "will likely result", "are expected to", "will continue", "is anticipated", "believes", "estimated", "intends", "plans", "projection", "outlook" and similar expressions. These statements involve known and unknown risks, assumptions, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon.

In particular, this press release contains forward-looking statements pertaining to, but not limited to, the following:

• full-year 2026 Adjusted EBITDA, sales volume and capital expenditures guidance;
• the Corporation's priority of debt reduction and operational optimization;
• the receipt of additional BC LCFS Credits from the Government of British Columbia pursuant to the New Initiative Agreement, including the expected timing of such receipt and the anticipated use thereof to advance pre-FID activities and mitigate execution risk on the proposed SAF project;
• the development of the proposed SAF project, including the funding of optimization work, the expected timing of a final investment decision and the pursuit of long-term offtake agreements in relation thereto;
• the anticipated benefits of pre-FID activities on the proposed SAF project, including preserving project schedule certainty, maintaining vendor and fabrication capacity availability, maturing engineering deliverables, supporting regulatory advancement, and positioning the project for efficient execution following FID approval;
• the contingencies to the Corporation's decision to proceed with the SAF project, including the execution of long-term offtake agreements and the receipt of provincial and federal government support to facilitate obtaining committed financing;
• the continued interest of provincial and federal governments in supporting future SAF developments and other renewable fuel and renewable gas initiatives;
• management's focus on maximizing realized pricing;
• the use of cash flow for debt reduction;
• the expected effect of the BPI on the Corporation;
• managements expectations regarding the HDRD Complex; and
• the Corporation's objective to become a leading renewable fuel producer.

Although the forward-looking statements contained in this press release are based upon assumptions which management of the Corporation believes to be reasonable, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this press release, the Corporation has made assumptions regarding, but not limited to:

• Tidewater Renewables' ability to execute on its business plan;
• the timely receipt of all third party, governmental and regulatory approvals and consents sought by the Corporation;
• general economic and industry trends;
• operating assumptions relating to the Corporation's projects;
• expectations around level of output from the Corporation's projects, including assumptions relating to feedstock supply levels;
• the ownership and operation of Tidewater Renewables' business;
• regulatory risks;
• the expansion of production of renewable fuels by competitors;
• future commodity and renewable energy prices;
• sustained or growing demand for renewable fuels;
• the ability for the Corporation to successfully turn a wide variety of renewable feedstocks into low carbon fuels;
• the continued alignment of U.S. import parity benchmark pricing with the Corporation's revenue generation;
• the ability of the Corporation to successfully execute offtake agreements with respect to expected production;
• the effect of increasingly stringent CI reduction targets on obligated parties' operations and the emission credit market;
• the credit-worthiness of counterparties;
• the Corporation's future debt levels, financial stability, future debt reduction initiatives, and its ability to repay its debt when due;
• the Corporation's ability to continue to satisfy the terms and conditions of its credit facilities;
• the continued availability of the Corporation's credit facilities;
• the Corporation's ability to obtain additional debt and/or equity financing on satisfactory terms;
• the Corporation's ability to manage liquidity by working with its current capital providers and other sources and through the sale of emissions credits;
• the market, demand and pricing for emissions credits and renewable diesel;
• foreign currency, exchange, inflation and interest rate risks;
• the continued support of governments of various levels for current policy initiatives; and
• the other assumptions set forth in the Corporation's most recent annual information form available under the Corporation's profile on SEDAR+ at www.sedarplus.ca.

The Corporation's actual results could differ materially from those anticipated in the forward-looking statements, as a result of numerous known and unknown risks and uncertainties and other factors including, but not limited to:

• changes in supply and demand for, and the pricing of low carbon products and emissions credits;
• general economic, political, market and business conditions, including fluctuations in interest rates, foreign exchange rates, supply chain pressures, inflation, stock market volatility and supply/demand trends; 
• changes to U.S. and Canadian regulatory programs;
• risks and liabilities inherent in the operations related to renewable energy production and storage infrastructure assets, including the lack of operating history and risks associated with forecasting future performance;
• competition for, among other things, third-party capital, acquisition opportunities, requests for proposals, materials, equipment, labour and skilled personnel;
• risks related to the environment and changing environmental and regulations laws in relation to the operations conducted by the Corporation;
• actions by joint venture partners or other partners which hold interests in certain of the Corporation's assets;
• reliance on key relationships and agreements;
• losses of key customers;
• construction and engineering variables associated with capital projects, including the availability of contractors, engineering and construction services, accuracy of estimates and schedules, and the performance of contractors;
• effects of weather conditions (such severe weather or catastrophic events including, but not limited to, fires, floods, lightning, earthquakes, extreme cold weather, storms or explosions);
• reputational risks;
• the Corporation's reliance on key personnel;
• technology and security risks, including cybersecurity;
• potential losses stemming from any disruptions in production, including work stoppages or other labour difficulties, or disruptions in the transportation network on which the Corporation is reliant;
• technical and processing problems, including the availability of equipment and access to properties;  
• failure to realize the anticipated benefits of dispositions and capital projects; and
• the other risks set forth in the Corporation's most recent annual information form available under the Corporation's profile on SEDAR+ at www.sedarplus.ca.

The foregoing lists are not exhaustive. Additional information on these and other factors which could affect the Corporation's operations or financial results are set forth in the Corporation's most recent annual information form, its MD&A and in other documents on file with the Canadian Securities Administrators available under the Corporation's profile on SEDAR+ at www.sedarplus.ca.

Management of the Corporation has included the above summary of assumptions and risks related to forward-looking statements provided in this press release in order to provide holders of common shares in the capital of the Corporation with a more complete perspective on the Corporation's current and future operations and such information may not be appropriate for other purposes. The Corporation's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do occur, what benefits the Corporation will derive from them. Readers are therefore cautioned that the foregoing list of important factors is not exhaustive, and they should not unduly rely on the forward-looking statements included in this press release. Tidewater Renewables does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable securities law. All forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Further information about factors affecting forward-looking statements and management's assumptions and analysis thereof is available in the Corporation's most recent annual information form and other filings made by the Corporation with Canadian provincial securities commissions available under the Corporation's profile on SEDAR+ at www.sedarplus.ca.

The financial outlook information contained in this press release is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Additionally, the financial outlook information contained in this press release is subject to the risk factors described above in respect of forward-looking information generally as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this press release. Accordingly, readers are cautioned that the financial outlook information contained in this press release should not be used for purposes other than for which it is disclosed herein. The financial outlook information contained in this press release was approved by management as of the date hereof and was provided for the purpose of providing further information about the Corporation's expectations and plans for the future.

SOURCE Tidewater Renewables Ltd