Dive Brief:

• Canadian organics processing company Anaergia has struck an agreement with Sevana Bioenergy to operate the Rialto Bioenergy Facility in California. Anaergia originally outfitted the facility to process organics from Los Angeles residents, but was forced to sell it to Sevana in a bankruptcy auction in June after it struggled to secure a necessary level of organic waste feedstock.
• Anaergia will serve as the operations and maintenance contractor at Rialto for a 10-year contract period. That's in line with Anaergia’s “capital-light” strategy to focus on service contracts, a shift the company embarked on this year amid a leadership shake-up.
• The company also confirmed that its CEO Assaf Onn and CFO Gregory Wolf will remain in their positions permanently, rather than on an interim basis as announced in June. Scott Hodgdon began his role as general counsel on Nov. 13, according to the company’s earnings report.

Dive Insight:

All financial information is in Canadian dollars.

Anaergia is attempting to right the ship after its net loss more than doubled from 2022 to 2023. Last year, it sold off several owned digester projects in Europe, and it split off the Rialto Bioenergy Facility from its earnings earlier this year to sell it at auction. Outside investment firm Marny Investissement infused the company with cash, acquiring a majority stake and installing Onn as CEO in June.

Anaergia reported having $40.2 million in cash on hand in the third quarter, primarily due to the Marny investment. It also highlighted a series of newly secured contracts abroad and in the U.S., including organic waste digesters in Riverside, California, and in Michigan.

The company’s project pipeline, cash position and existing contracts make senior executives confident that Anaergia has exited the period during which there was “substantial doubt” about its ability to continue, Wolf said on the company’s third-quarter earnings call last week. 

“These results signal the progress we're making in transitioning Anaergia into a streamlined, margin-focused organization,” he said. 

While the company has worked to expand its book of business, it has also worked to reduce overhead costs. Net selling as well as general and administrative expenses were down 19.2% year over year, due in part to reduced sales and to a reduced headcount, Wolf said. 

Eyeing key markets for growth, the company opened an office in Japan to pursue business in Asia. It recently reported receiving a $25 million letter of award to build an organic-waste-to-biogas facility on Jeju Island in South Korea.

In the U.S. and Europe, two regions where Anaergia has long operated, incentive programs like the Inflation Reduction Act and REPowerEU are boosting business, executives said.

Chief Operating Officer Yaniv Scherson said California facilities serviced by Anaergia are seeing an increase in organic waste collected as part of the state’s SB 1383 diversion requirements, but growth remains sluggish.