REG - Accsys Technologies - Accsys Trading Update

Accsys TechnologiesAnnouncement

12/09/2022 07:00

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RNS Number : 0210Z  Accsys Technologies PLC  12 September 2022

AIM: AXS

Euronext Amsterdam: AXS

12 September 2022

 

Accsys Technologies PLC

("Accsys", the "Group" or the "Company")

 

Trading Update

Accsys, the fast-growing and eco-friendly company that combines chemistry and
technology to create high performance, sustainable wood building products,
provides the following update regarding recent trading and the status of its
strategic growth projects further to its last update on 30 June 2022.

Recent trading

Continuing strong demand and stable Accoya(®) wood revenue for the first five
months of the 2023 financial year (1 April 2022 to 31 August 2022):

·      Accoya(®) wood revenue of approximately €39m, broadly flat on
the prior year, with higher average sales prices offsetting the impact of
lower volumes.

·      Volumes limited by production capacity with Accoya(®) sales
volumes of approximately 18,803m(3), down around 24% year on year due to the
previously reported shutdown at the Arnhem plant in April/May 2022 around the
extended completion and commissioning of R4.

·      The introduction of an Energy Price Premium to sales prices from
May 2022 continues to help the Group manage the cost impact of volatile and
elevated gas prices in Europe on its acetic anhydride raw material at Arnhem.

·      Customer demand for Accoya(®) remains strong and in excess of
production capacity.

Accoya, Arnhem: Fourth reactor expansion (R4)

·      The first Accoya(®) commercial batch from R4 has now been
processed and the reactor is transitioning across to our operational team.

·      The required remedial work to the defective equipment at R4
reported on 30 June 2022 and the remaining commissioning process have been
successfully completed to schedule.

·      Production will gradually ramp-up including utilisation of the
new stacker and wood handling equipment installed as part of the R4 project.

·      Costs for the R4 remedial work remain in-line with the 30 June
update.

·      The R4 expansion increases the plant's current annual production
capacity by 33% to 80,000m(3). Accsys continues to expect to increase the R4
production levels to full capacity within two years.

·      We expect the additional capacity to help address the pent-up
demand for Accoya(®) and our strong customer order book.

Tricoya, Hull: New plant construction

·      Accsys and its consortium partners in Tricoya(®) UK Limited
(TUK) are building the world's first Tricoya(®) plant in Hull.

·      On 30 June 2022, Accsys reported that while construction was
largely complete and commissioning was underway, continued construction
challenges were being experienced and that rework of certain areas of the
plant had been identified, both resulting in the target commercial operational
date to be delayed. In addition, given these delays, we reported that the
consortium's total project capital cost would be between €94-103m.

·      Since then, TUK has reduced the level of activity on site in
order to reduce costs while still progressing key construction and
commissioning lines, validating the remaining work (time and cost) to complete
the construction and bring the plant in to commercial operation.

·      TUK is also assessing the potential impact of higher gas prices
on the plant's profitability, noting the continuing volatility in European gas
markets.

·      We now consider it unlikely that commercial operation of Hull
will occur before the end of calendar year 2022. In addition, it is likely
that the project costs will be higher than our previous estimate.

·      We have continued discussion with our consortium partners
regarding the consortium's funding options for the additional costs, but no
agreement has been reached to date.

·      Accsys has agreed a further bridging loan facility of up to
€8m, to enable TUK to continue progressing the activities noted above whilst
funding discussions are ongoing.  The bridging loan facility is uncommitted,
and all TUK loan utilisation requests require Accsys approval.

·      At this stage the Accsys Board is continuing to examine and
evaluate the full range of options available to it in relation to the Hull
plant and a further update will be provided in due course.

Accoya, USA: New plant construction

·      There has been continued good progress in the construction phase
of the US JV with Eastman Chemical Corporation to build an Accoya(®) plant at
Kingsport, Tennessee.

·      Since June 2022, construction work has progressed with further
groundwork including concrete foundation work, underground utilities
preparation and the commencement of initial steelwork alongside detailed
engineering and procurement of key equipment.

·      We continue to anticipate a two-year construction timeline from
April 2022, with 43,000m(3) of capacity once fully operational and the wider
site has the potential for up to 8 reactors, or >160,000m3 capacity per
annum in total.

Ends

For further information, please contact:

 Accsys Technologies PLC                          +44 20 7421 4322 (tel:+44%2020%207421%204322)

Sarah Ogilvie, Investor Relations

                                                  ir@accsysplc.com (mailto:ir@accsysplc.com)
 Numis Securities (London)                        +44 (0) 20 7260 1000
 Oliver Hardy (NOMAD), Ben Stoop
 Investec Bank plc (London)                       +44 (0) 20 7597 5970
 Carlton Nelson, Alex Wright

                                                +31 20 344 2000
 ABN Amro (Amsterdam)
 Richard van Etten, Dennis van Helmond
 FTI Consulting (UK)                              +44 (0) 20 3727 1340

Matthew O'Keeffe, Alex Le May, Cally Billimore

                                                  Accsys@fticonsulting.com

 Off the Grid (The Netherlands)                   +31 681 734 236

Frank Neervoort, Yvonne Derske

 

Notes to editors:

 

Accsys (Accsys Technologies PLC) is a fast-growing business with a purpose:
changing wood to change the world. The company combines chemistry, technology
and ingenuity to make Accoya(®) wood and Tricoya(®) wood elements:  high
performance wood products that are extremely durable and stable, opening new
opportunities for the built environment and giving the world a choice to build
sustainably. Accsys transforms fast-growing, certified sustainable wood into
building materials with an up to 50-year warranty, locking carbon stored in
the wood into useful products for decades, with performance characteristics
that match or better those of non-renewable, resource-depleting and polluting
alternatives.  Accsys is listed on the London Stock Exchange AIM market and
on Euronext Amsterdam, under the symbols 'AXS'.  Visit www.accsysplc.com
(http://www.accsysplc.com)

Accoya(®) solid wood is sustainable, durable, and stable with exceptional
performance, finish and sustainability. Accsys' proprietary acetylation
process makes the wood more dimensionally stable and because it is no longer
easily digestible, extremely durable. It is one of very few building materials
to be Cradle to Cradle Certified™ at the Gold level, with a Platinum rating
for Material Health, confirming that no harmful or toxic additives or
chemicals are present to leach out into the environment. Primary applications
for Accoya(®) wood include windows, doors, cladding and decking, where the
combination of performance and sustainability benefits compete favorably
against hardwoods, plastics, metals and concrete. Visit www.accoya.com
(http://www.accoya.com)

Tricoya(®) acetylated wood elements are produced for use in the fabrication
of panel products such as medium density fibreboard (MDF). Panel products made
with Tricoya(®) wood elements are truly durable and stable enough for use
outdoors and in wet environments, unlocking new possibilities for design and
construction. They have been lauded as the first major innovation in the wood
composites industry in more than 30 years and bring the flexibility of
traditional panel products and sustainability benefits of wood to a whole new
range of applications. Visit www.tricoya.com (http://www.tricoya.com)

Any references in this announcement to agreements with Accsys shall mean
agreements with either Accsys or its subsidiary entities unless otherwise
specified. 'Accsys' and 'Accsys Technologies' are trading names of Titan Wood
Limited ("TWL"), a wholly-owned subsidiary of Accsys Technologies PLC.
Accoya(®), Tricoya(®) and the Trimarque Device are registered trademarks
owned by TWL, and may not be used or reproduced without written permission
from TWL, or in the case of the Tricoya(®) registered brand trademark, from
Tricoya Technologies Limited, a subsidiary of TWL with exclusive rights to
exploit the Tricoya(®) brand.

 

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