Crown Capital Partners Announces Financial Results for Q4 & Full Year 2024
CALGARY, AB, March 31, 2025 /CNW/ - Crown Capital Partners Inc. ("Crown" or the "Corporation") (TSX:CRWN) today announced its financial results for the three and twelve months ended December 31, 2024. Crown's complete financial statements and management's discussion and analysis are available on SEDAR at www.sedarplus.ca.
2024 Financial & Operating Overview
Crown recognized a net loss of $(29.4) million ($5.26 loss per basic share) in 2024 compared to a net loss of $(12.2) million ($2.16 loss per basic share) in 2023. The net loss in 2024 is inclusive of aggregate impairment charges of $9.4 million (2023 - $6.1 million) in respect of real estate property ($7.0 million), distributed power equipment ($2.2 million), and telecom inventory of ($0.2 million), as well as Crown's share of losses from investments in associates of $(15.6) million (2023, share of earnings of $3.0 million).
Adjusted EBITDA1 was $5.1 million in 2024 compared to $3.8 million in 2023 due primarily to improved earnings from the Distribution Services, Real Estate and Corporate and Other segments, partially offset by decreased earnings from the Network Services, Specialty Finance and Distributed Power segments.
Distribution services revenue was $36.9 million in 2024 compared to $34.4 million in 2023, an increase of 7.3%. This segment reported net income before income taxes of $1.6 million (2023, net loss before income taxes $(3.6) million) and Adjusted EBITDA of $3.1 million (2023 - $(1.6) million), with the year-over-year improvement attributable to the impact of operational efficiencies implemented throughout 2023 and 2024 and to increased capacity utilization across the warehouses. Capacity utilization was 62% at December 31, 2024, compared with 62% at September 30, 2024, 58% at June 30, 2024, 52% at March 31, 2024 and 42% at December 31, 2023.
Network services revenue was $26.2 million in 2024 compared to $26.9 million in 2023, a decrease of 2.8% due to a year-over-year revenue decline from WireIE, which experienced a continued runoff of customer contracts, that more than offset a year-over-year increase in revenues from Galaxy in respect of non-recurring hardware sales and modest increases from Community Network Partners in respect of revenues from the project in Brooks, Alberta and the Ontario Connects: Accelerated High-Speed Internet Program (the "Ontario Connects Program"). This segment reported a net loss before income taxes of $(2.6) million (2023, $(0.6) million) and Adjusted EBITDA of $1.9 million (2023 - $2.4 million) with the decrease attributable to lower margin sales from a government sector contract in Galaxy.
Real Estate segment revenue was $5.2 million in 2024 compared to $4.0 million in 2023, an increase of 29.5% year-over-year due to increases in fees from property and development contracts. This segment recorded a net loss before income taxes of $(6.4) million, inclusive of $7.0 million of non-cash impairments (2023, net income before income taxes of $0.2 million and $nil, respectively) and Adjusted EBITDA of $1.1 million (2023 - $0.6 million).
Distributed Power revenue was $2.0 million in 2024 compared to $2.4 million in 2023, a decrease of 17.1% due to the reclassification of certain power assets as assets held for sale at the end of 2023 and to the consolidation of the Wilson Creek assets, resulting in the elimination of intercompany lease interest revenue, partially offset by related revenues from merchant power customers. In addition to softer power prices in the Alberta market, merchant power revenues were lower than expected in 2024 due to the delayed repair of engine coolers, which reduced both available output and runtimes during the year. This segment reported a net loss before income taxes of $(1.4) million, inclusive of non-cash impairments of $2.2 million (2023, $(2.0) million and $6.1 million, respectively) and Adjusted EBITDA of $0.1 million (2023 - $0.7 million).
The Specialty Finance segment recorded net loss before income taxes of $(11.7) million (2023, net income before income taxes $2.6 million), representing Crown's share of (losses) earnings of Crown Partners Fund, and Adjusted EBITDA of $0.2 million (2023 - $3.0 million), representing income distributions received from Crown Partners Fund. The year-over-year decrease is due primarily to the recognition of a realized loss in respect of the sale of a loan investment carried at fair value through profit and loss in 2024.
Total equity at year-end decreased to $8.7 million from $38.2 million at the end of 2023 due to a net loss attributable to shareholders of $(29.4) million, which was driven primarily by Crown's share of the loss of investments in associates of $(15.6) million and impairments of property and equipment under development. Total equity per share decreased to $1.53 per basic share from $6.84 per basic share as at December 31, 2023.
During 2024, Crown made payments from operating cash flows to reduce the balance on its credit facility with Canadian Western Bank ("CWB Credit Facility") by $10.1 million. Effective December 18, 2024, the Corporation entered into a new senior secured corporate credit facility of $15.0 million ("Crown Credit Facility") with Sandton Capital Solutions Master Fund VI, LP, an investment fund managed by Sandton Capital Partners, the proceeds of which were used primarily to fully repay and terminate the CWB Credit Facility.
Effective October 18, 2024, Debentureholders approved amendments to the terms of the Debentures, including an extension of the maturity date from December 31, 2024 to December 31, 2026 and amendments to the interest rate from 10% to 11% effective as of October 25, 2024 and from 11% to 12% effective as of December 31, 2025. For additional details on the Debenture amendments, see Note 16 of Crown's audited consolidated financial statements for the years ended December 31, 2024 and 2023.
In 2024, Crown's subsidiary, Community Network Partners, received grant funding payments of $28.8 million for the completion of two sublots related to its fibre network under the Province of Ontario's Accelerated High-Speed Internet Program.
Q4 2024 Financial & Operating Overview
Crown recognized a net loss of $(10.9) million ($1.95 loss per basic share) compared with $(8.5) million ($1.52 loss per basic share) in Q4 2023. The net loss in Q4 2024 is inclusive of aggregate impairment charges of $9.4 million (2023 - $6.1 million) in respect of real estate property and distributed power equipment under development. For Q4 2024, Adjusted EBITDA was $1.0 million compared with $0.5 million in Q4 2023 period, with increased earnings from the Distribution Services segment more than offsetting reduced contributions from the Network Services, Specialty Finance, Distributed Power, Real Estate, and Corporate and Other segments.
Crown recognized net income before income taxes in respect of the Distribution Services segment of $1.9 million (2023, net loss before income taxes of $(1.2) million) and Adjusted EBITDA of $1.4 million (2023 - $(0.4) million). Distribution services revenue increased by 12.5% quarter-over-quarter and increased by 24.2% compared with Q4 2023 due primarily to increased capacity utilization at the Reno, Columbus and Calgary warehouses. The year-over-year increase in Adjusted EBITDA of the segment in Q4 2024 related primarily to improvements in operations achieved during 2023 and 2024.
Crown recognized a net loss before income taxes in respect of the Network Services segment of $(1.7) million (2023, $(0.7) million) and Adjusted EBITDA of $0.1 million (2023 - $0.5 million). Network services revenue in Q4 2024 increased by 22.0% year-over-year and decreased by 5.3% compared to Q3 2024, with the quarter-over-quarter decrease due primarily to the intercompany revenues eliminated upon consolidation of the Corporation's Network Services operations. Compared with the prior year period, the increase in revenues is due primarily to non-recurring hardware sales to a significant government sector customer.
Our share of losses from investments in associates was $(0.5) million, of which $(0.4) related to Inuknet, and which represents quarter-over-quarter decreases compared to Q3 2024 and Q4 2023, with both reductions due primarily to losses from Crown Partners Fund and Inuknet. Inuknet builds networks to provide connectivity to municipalities, regions, and Inuit communities in Nunavut.
Crown recognized a net loss before income taxes in respect of the Distributed Power segment of $(0.9) million (2023 - $(2.7) million), inclusive of aggregate impairment charges of $2.2 million (2023 - $6.1 million) recorded in respect of assets held for sale and equipment under development.
Q4 & FY2024 Financial Results Summary
Three Months Ended
Year Ended
FOR THE PERIODS ENDED DEC. 31 (THOUSANDS, EXCEPT PER SHARE AND NUMBER OF COMMON SHARES)
2024
2023
2024
2023
Revenue:
Distribution services revenue
$ 10,215
$ 8,223
$ 36,875
$ 34,377
Network services revenue
6,585
5,399
26,164
26,929
Fees and other income
1,439
1,818
6,700
5,866
Distributed power interest revenue
136
280
661
2,132
Merchant power revenue
359
180
1,301
247
Total revenue
18,734
15,900
71,701
69,551
Share of (losses) earnings from investments in associates
(516)
483
(15,648)
2,983
Loss attributable to Shareholders
(10,921)
(8,478)
(29,409)
(12,152)
Comprehensive loss attributable to Shareholders
(11,110)
(8,386)
(29,663)
(12,090)
Adjusted EBITDA1
1,007
503
5,091
3,758
Total assets
147,014
176,654
147,014
176,654
Total equity
8,565
38,228
8,565
38,228
Per share:
- Net loss to Shareholders - basic
$ (1.95)
$ (1.52)
$ (5.26)
$ (2.16)
- Net loss to Shareholders - diluted
(1.95)
(1.52)
(5.26)
(2.16)
