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RNS Number : 8315M Corre Energy B.V. 19 September 2023
19 September 2023
This announcement is released by Corre Energy B.V. and contains inside
information for the purposes of Article 7 of the Market Abuse Regulation (EU)
596/2014 ("EU MAR") and is disclosed in accordance with the company's
obligations under Article 17 of EU MAR.
Corre Energy B.V.
(the "Company")
Half Year Report for the Six Months Ended 30 June 2023
Growth strategy buoyed by project wins and market demand
Corre Energy B.V. (EURONEXT: CORRE) (the "Company"), a leader in the
development and operation of long duration energy storage ("LDES") projects
and solutions for the renewable power industry, is pleased to announce its
half year results for the period ended 30 June 2023.
Half Year Highlights
· Option signed on four caverns in Epe, Germany to enable 500+MW of
generating capacity across three projects
· Land and grid signed in Denmark for GHH project and commercial
close target maintained for H2 2023
· Commercial close criteria reached in the Netherlands for ZW1
project as progress continues
· Exclusivity agreement signed in West Texas in July providing an
option to acquire a 280MW compressed air energy storage (CAES) project
· Strong EU and North American policy tailwinds as industry
embraces Long Duration Energy Storage (LDES)
· Robust capital discipline maintained as operating loss of
€(6.4m) reflects investment phase and is in line with expectations
· In addition to the €8.9m equity raise completed in February,
the Company has secured a further €10m of funding through a successful
subscription agreement, loan arrangement and FIEE drawdown to help expand and
develop the pipeline of opportunities in Corre Energy's rapidly-increasing
addressable market
· Liquidity and headroom in place to meet current planned
priorities as portfolio-level funding process is progressing well with
targeted completion planned by year-end
Keith McGrane, CEO of Corre Energy, commented:
"The first half saw the solid delivery of commercial milestones in our
existing portfolio, successful funding to match our ongoing development plans
and strong progress in expanding our portfolio. We have doubled the size of
our European capacity with a landmark agreement in Germany and secured an
exclusive option agreement to acquire our first North American project subject
to completion of due diligence. At the same time, we reached commercial close
of our Dutch project and are on track for commercial close in Denmark later
this year.
"The political landscape and policy environment continues to underpin our
business model and growth plans. As the current market for European offshore
wind is showing, Long Duration Energy Storage (LDES) is a key enabler of the
integration of large-scale renewable energy. Reflecting increased demand from
the offtake market for our storage solution and to support the expansion of
our development pipeline, we have successfully agreed a further €10m of
funding. This additional funding underpins the fast-growth nature of our
business as we continue to expand and ensures we are funded at a corporate and
project level."
Portfolio: Development milestones and adding new projects
The Company has continued to develop our pipeline across Europe with existing
projects in the Netherlands and Denmark as well as expansion into Germany and
the USA.
· ZW1 and ZW2, The Netherlands
o Having achieved a landmark offtake agreement with Dutch utility Eneco,
part of the Mitsubishi Group, for ZW1 in late 2022, the project successfully
achieved commercial close in H1 2023, as per our programme and as previously
defined
o We are now working with our partners and key stakeholders towards the
achievement of financial close (FC) whilst interest in our ZW2 project is
gaining new momentum with several market parties
o Meanwhile, updated independent revenue analysis maintains previously
estimated IRRs from the ZW1 project and points to upside taking into account
increases in renewables' targets combined with general price trends in
wholesale electricity markets
· GHH, Denmark
o In H1 2023 we successfully signed the land option agreement and reserved
grid connection
o Cavern option discussions are well advanced with state-owned Gas Storage
Denmark and local/national stakeholder engagement is progressing well
o Focus remains on grid connection activity, permitting and design as we
continue to be on track for commercial close in H2 2023, as previously guided
· Epe1, Epe2 and Epe3, Germany
o In H1 2023, we signed a land and cavern option agreement with Solvay, a
multinational chemical company, to secure up to four caverns across three
projects in one German location with a total potential generating capacity of
over 500MW
o Cavern construction is already underway and the first two caverns are due
to be handed over from Solvay to Corre Energy in 2027
o Engagement by our regional team has commenced with stakeholders, while the
determination of the German government towards the full transition to
renewables and its link to energy production and transmission capacity creates
a compelling market need for large scale energy storage projects
· West Texas, USA
o Having established a presence in North America in 2022, potential projects
were quickly targeted and in July 2023 an exclusivity agreement was signed in
West Texas providing the option to acquire a 280MW CAES project
o Confirmatory diligence has been taking place and a funding solution to
fulfil the acquisition subject to satisfactory due diligence is being arranged
Market: Growing demand for LDES
· As we further scale our portfolio, governments and the broader
energy industry are embracing our CAES solution to help accelerate the
transition to renewables and secure energy supplies
· Our key EU and North American markets are creating strong
regulatory environments for nations and states to deliver on clean energy
targets
· In Europe, nine nations signed a declaration in April, aiming to
jointly produce at least 120GW of offshore wind energy by 2030
· The vast majority of new renewables will need LDES and CAES
offers energy firms a compelling integration solution
Outlook: Acceleration of growth plans
· Corre Energy continues to hold and grow the largest pipeline of
LDES projects in Europe
· We have end-to-end delivery capability operating at 26GWh with
proven equipment solution provided by Siemens
· Our existing portfolio is focused on reaching key commercial
milestones ahead of final investment decision
· We are also actively seeking future projects in our core markets
of Europe and North America to further drive our international pipeline of
infrastructure grade assets
· Supporting this growth, we continue to cement and expand our
relationships with key partners, across technology, land and cavern formation,
energy producers and energy providers
· Finally, we continue to build and invest in a highly experienced
and motivated team to work with our partners and supply chain to deliver on
our strategic growth plans
Funding: additional €10m secured ahead of further portfolio funding
Corre Energy has agreed a combined total of €10m of new funding to support
the build-out of an additional pipeline of development opportunities across
Europe and North America and to deliver key project milestones on these
projects. The combined funding comprises:
· A subscription agreement of €4m raised by way of a private
placement with a private investor, comprising 1,142,857 ordinary shares at
€3.50 per share ("the Subscription Shares"), adding to the oversubscribed
capital raising in February 2023. Application will be made to Euronext Dublin
for the Subscription Shares to be admitted to trading on Euronext Growth
("Admission") and it is expected that Admission will become effective, and
trading will commence on 22 September. The Subscription Shares, when issued,
will be fully paid and will rank pari passu in all respects with the existing
issued shares. After Admission, the total number of shares in issue will be
71,603,999
· Final agreement with Italian Energy Efficiency Fund II, an
investment fund of FIEE SGR, enables the planned transfer of €4m to the
Company
· A three-year loan received totalling €2m from Corre Energy
Group Holdings C.V., the Company's majority shareholder. This loan is for a
3-year term with rolled up interest at market standard terms for
infrastructure investment. The loan was used to finance the initial
consideration for the Epe projects announced on 13 June 2023.
To support our wider development plans, the Company continues to make good
progress with its portfolio-level funding process with a continued target to
confirm the selected solution during Q4 2023.
For further information please visit https://corre.energy/
(https://corre.energy/) or contact:
Corre Energy B.V. +31 50 799 5060
IR@corre.energy (mailto:IR@corre.energy)
Davy (Euronext Growth Listing Sponsor) +353 87 689 9195
Barry Dixon, Head of Decarbonization
Niall Gilchrist, Corporate Broking
Barry Murphy, Corporate Finance
Aoife Foley, Corporate Finance
Murray PR (Financial PR and IR) + 353 87 226 9345
Pat Walsh, Managing Director
ABOUT CORRE ENERGY: Corre Energy designs, develops, constructs, and operates
utility-scale Long Duration Energy Storage (LDES) projects in Europe and North
America. Through our project development activities, Corre Energy is working
to accelerate the energy transition to net zero, while enhancing the security
and flexibility of large-scale energy systems.
Contents
Contents (#_Toc145345850) (#_Toc145345850)
Interim consolidated statement of comprehensive income (#_Toc145345851)
(#_Toc145345851)
Interim consolidated balance sheet (#_Toc145345852) (#_Toc145345852)
Interim consolidated statement of changes in equity (#_Toc145345853)
(#_Toc145345853)
Interim consolidated statement of cash flows (#_Toc145345854) (#_Toc145345854)
Accounting policies (#_Toc145345855) (#_Toc145345855)
Notes to the interim condensed consolidated financial statements
(#_Toc145345856) (#_Toc145345856)
Interim consolidated statement of comprehensive income
For the period ended 30 June
Note 2023 2022
€'000 €'000
Other operating income 1 6 208
Expenses
Employee expenses 2 (3,445) (2,933)
Project costs 3 (238) (151)
Other Administrative expenses 4 (2,772) (2,935)
Operating result (6,449) (5,811)
Finance expense 5 (4,978) (12,565)
Result before tax (11,427) (18,376)
Corporation tax 6 1,516 1,781
Loss after tax (9,911) (16,595)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign exchange differences on translation of foreign operations (49) 45
Total comprehensive income (9,960) (16,550)
Interim consolidated balance sheet
Note Jun-23 Dec-22
€'000 €'000
Assets
Non-current assets
Intangible fixed assets 7 4,710 618
Tangible fixed assets 8 15,978 12,012
Lease right of use assets 389 517
Deferred tax assets 6 9,224 7,704
Other non-current assets 9 148 -
Total non-current assets 30,449 20,851
Current assets
Cash 10 1,866 3,432
Receivables, prepayments and accrued income 11 11,908 9,678
Total current assets 13,774 13,110
Total assets 44,223 33,961
Equity
Share capital 14 317 306
Share premium 14 29,973 21,560
Retained earnings (43,137) (33,467)
Foreign currency translation 21 70
Total equity (12,826) (11,531)
Liabilities
Non-current liabilities
Long-term loans 12 36,211 31,559
Long-term lease liability 12 184 294
Long-term payables to participating interests 12 1,845 1,845
Total non-current liabilities 38,240 33,698
Current liabilities
Trade creditors 13 2,865 1,044
Payables to participating interests 13 9,077 7,293
Other current liabilities 13 6,867 3,457
Total current liabilities 18,809 11,794
Total liabilities 57,049 45,492
Total equity and liabilities 44,223 33,961
Interim consolidated statement of changes in equity
For the period ended 30 June 2023
Share capital Share premium Retained earnings Foreign currency translation Total
€'000 €'000 €'000 €'000 €'000
At 1 January 2023 306 21,560 (33,467) 70 (11,532)
Issue of share capital 12 8,955 - - 8,966
Share issue transaction costs - (541) - - (541)
Loss for the period - - (9,911) - (9,911)
Other comprehensive income - - - (49) (49)
Long-term incentive plan - - 241 - 241
At 30 June 2023 317 29,973 (43,137) 21 (12,826)
For the period ended 30 June 2022
Share capital Share premium Retained earnings Foreign currency translation Total
€'000 €'000 €'000 €'000 €'000
At 1 January 2022 279 11,501 (3,250) (4) 8,526
Issue of share capital 26 10,144 - - 10,171
Loss for the period - - (16,595) - (16,595)
Other comprehensive income - - - 45 44
At 30 June 2022 306 21,645 (19,846) 41 2,146
Interim consolidated statement of cash flows
For the period ended 30 June
2023 2022
€'000 €'000
Cash flow from operating activities
Operating result (6,449) (5,811)
Depreciation 99 21
(Increase)/Decrease in Receivables, prepayments and accrued income (2,157) (3,060)
Increase/(Decrease) in Trade creditors 1,821 2,176
Increase/(Decrease) in Other payables 5,269 2,573
Long-term incentive plan 241 -
Taxes paid (5) (135)
Total cash flow from operating activities (1,181) (4,236)
Cash flow from investment activities
Investments in Tangible fixed assets (3,979) (3,538)
Investments in Intangible fixed assets (4,092) -
Investments in Other non-current assets (148)
Total cash flow from investment activities (8,219) (3,538)
Cash flow from financing activities
Inflows from Capital Increases 8,425 10,170
Proceeds/(Repayment) of Borrowings (529) (104)
Interest Paid (45) (8)
Interest Received 22 -
Total cash flow from investment activities 7,873 10,058
Effect of changes in foreign exchange rates (39) (52)
Total cash flow (1,566) 2,232
Cash at start of period 3,432 13,375
Cash at end of period 1,866 15,607
Accounting policies
1 Corporate information
The Directors present the interim condensed consolidated financial statements
of Corre Energy B.V. (the Company) and its subsidiaries (collectively, the
Group) for the six months ended 30 June 2023. The Company was incorporated in
the Netherlands on 1 March 2021, and is registered as a private company with
limited liability under the Chamber of Commerce number 82068046, with its
legal address and principal place of business in Groningen, the Netherlands.
The Company is engaged in the development and construction of energy storage
facilities with projects currently being pursued in the Netherlands, Denmark,
Germany and the USA.
These consolidated financial statements were authorised for issue in
accordance with a resolution of the Directors on 13 September 2023.
2 Statement of compliance
The interim condensed consolidated financial statements for the six months
ended 30 June 2023 have been prepared in accordance with IAS 34 Interim
Financial Reporting. They do not include all the information and disclosure
required in the annual financial statements, and should be read in conjunction
with the Group's annual consolidated financial statements as at 31 December
2022.
The principal accounting policies are summarised below and have been applied
consistently throughout the period, unless stated otherwise.
3 New standards, interpretations and amendments adopted by the Group
With the exception of the new share-based payments accounting policy described
below, the accounting policies adopted in the preparation of the interim
condensed consolidated financial statements are consistent with those followed
in the preparation of the Group's annual consolidated financial statements for
the year ended 31 December 2022. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet effective.
Several amendments apply for the first time in 2023, but do not have an impact
on the interim condensed consolidated financial statements of the Group.
3.1 Share-based payments
Equity-settled share-based payments to employees and others providing similar
services are measured at the fair value of the equity instruments at the grant
date. The fair value excludes the effect of non-market-based vesting
conditions. Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in note 16.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Group's estimate of the number of equity instruments that will
eventually vest. At each reporting date, the Group revises its estimate of the
number of equity instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of the
original estimates, if any, is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding
adjustment to reserves.
4 Going concern
The business is at an early stage of development, and as such requires future
funding to continue its activities. The Group has been successful to date in
raising the required funding and has a clear plan to allow the business to
continue to trade until it becomes cash generative. Management has made an
assessment of the Group's ability to continue as a going concern and is
satisfied that the Group has, or has plans to mobilise, sufficient resources
to continue into the foreseeable future. Therefore these interim condensed
consolidated financial statements have been prepared on the going concern
basis.
5 Basis of preparation
The interim condensed consolidated financial statements have been prepared on
the historical cost basis. Historical cost is generally based on the fair
value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date, regardless of whether that price is directly observable
or estimated using another valuation technique. In estimating the fair value
of an asset or a liability, the Group takes into account the characteristics
of the asset or liability if market participants would take those
characteristics into account when pricing the asset or liability at the
measurement date. Fair value for measurement and/or disclosure purposes in
these financial statements is determined on such a basis, except for
share-based payment transactions that are within the scope of IFRS 2
Share-based Payment and leasing transactions that are within the scope of IFRS
16 Leases.
For financial reporting purposes, fair value measurements are categorised into
Level 1, 2 or 3 based on the degree to which the inputs to the fair value
measurements are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as follows:
· Level 1 inputs are quoted prices (unadjusted) in active markets
for identical assets or liabilities that the entity can access at the
measurement date;
· Level 2 inputs are inputs, other than quoted prices included
within Level 1, that are observable for the asset or liability, either
directly or indirectly; and
· Level 3 inputs are unobservable inputs for the asset or
liability.
6 Significant judgements and estimates
The preparation of the interim condensed consolidated financial statements
requires the Group to make estimates and judgements that affect the reported
amounts of assets and liabilities at the balance sheet date, and the reported
loss for the period.
The areas that involve significant estimates and judgements are described in
the Group's consolidated financial statements for the year ended 31 December
2022. There has been no material change to these areas during the six months
ended 30 June 2023.
7 Significant events in the reporting period
7.1 Issue of share capital
On 22 February 2023 the Company issued 2,561,798 shares at €3.50 per share,
increasing share capital by €11,528 and share premium by €8,413,859 after
accounting for costs incremental to the placing.
7.2 Incorporation of Germany subsidiary
In March 2023 the Company acquired a company registered in Germany, which was
renamed Corre Energy Germany GmbH following the transfer. The Company acquired
100% of the share capital for €29,000.
Notes to the interim condensed consolidated financial statements
1 Other operating income
2023 2022
€'000 €'000
NZIP income - 174
Rental income 6 34
Total Other operating income 6 208
The Group received rental income for office space provided to Gibson Watts
Limited, a company controlled by Darren Green, a Director.
2 Employee expenses
2023 2022
€'000 €'000
Salaries 3,244 2,261
Pension costs 157 54
Social security costs 270 262
LTIP costs 241 -
Other benefits 68 66
Capitalised staff costs (706) (122)
Staff costs 3,274 2,521
Management Fees 65 348
Contractor costs 78 43
Other employee expenses 28 21
Employee expenses 3,445 2,933
Capitalised staff costs represent the value of staff costs capitalised to
caverns under construction as part of the Zuidwending 1 and Green Hydrogen Hub
projects.
Long-term Incentive Plan (LTIP) costs are described in note 16.
The average number of full-time equivalent employees during the period is
broken down below.
2023 2022
Corre Energy Storage B.V. - 1
Corre Energy Ltd 19 25
Corre Energy Storage Limited 5 6
Corre Energy ApS 6 3
Corre Energy Germany GmbH 1 -
Corre Energy US Development Company LLC 1 -
Total 32 35
The Group operates defined contribution pension schemes, and as such the
commitment to the participating employees consists of paying any outstanding
contribution. Participation in the pension scheme is optional, employees are
automatically enrolled but can choose to opt out.
3 Project costs
2023 2022
€'000 €'000
Commercial Development 1 72
Planning and Permitting - 39
Engineering Design, Surface and Caverns 74 35
Project Management 43 -
Project Legals 120 5
238 151
Project costs represent amounts spent on projects that are not yet capitalisable due to the project's stage of development, primarily the Epe 1 project in Germany.
4 Other administrative expenses
Management charge is paid to Corre Energy Group Holdings C.V., the Company's
immediate parent company.
5 Finance expense
2023 2022
€'000 €'000
Interest and similar expenses 421 644
Option revaluation 4,567 11,827
Foreign exchange losses (10) 94
4,978 12,565
The option revaluation charge relates to the equity linked funding agreement
with Italian Energy Efficiency Fund II (IEEF II). See note 12 for further
information on the agreement. The charge is due to an increase in the value of
the option, due primarily to an increase in the underlying share price.
6 Corporation tax
6.1 Income tax recognised in statement of comprehensive income
2023 2022
€'000 €'000
Current tax charge (38) (4)
Deferred tax income 1,554 1,785
1,516 1,781
6.2 Taxes receivable and payable
Jun-23 Dec-22
€'000 €'000
Non-current receivables:
- Deferred tax asset 9,224 7,704
Current receivables:
- VAT receivable 454 382
454 382
Current payables:
- Corporate tax payable 5 1
- Payroll tax payable 306 238
311 239
7 Intangible fixed assets
The movement in intangible fixed assets is as follows:
Cavern options Project acquisition option Total
€'000 €'000 €'000
Cost and Net book value
At 1 January 2022 and 31 December 2022 618 - 618
Additions 4,000 92 4,092
At 30 June 2023 4,618 92 4,710
Cavern options represent the cost of entering into contracts to develop
caverns for the purpose of energy storage. These are held as intangible assets
until such time as a project reaches a capitalisable stage of development, at
which point these are transferred to tangible assets as caverns under
construction. Cavern options are not in use, therefore they are not amortised.
The Project acquisition option represents the cost to secure an exclusive
option to acquire a further compressed air energy storage (CAES) project in
Texas, USA.
8 Tangible fixed assets
The movement in tangible fixed assets is as follows:
Caverns under construction Furniture IT equipment Total
€'000 €'000 €'000 €'000
Cost
At 31 December 2021 5,224 3 39 5,266
Additions 6,738 - 33 6,771
At 31 December 2022 11,962 3 72 12,037
Additions 3,977 - 2 3,979
At 30 June 2023 15,939 3 74 16,016
Accumulated depreciation
At 31 December 2021 - 0 5 5
Charge for the period - 1 19 20
At 31 December 2022 - 1 24 25
Charge for the period - 1 12 13
At 30 June 2023 - 2 36 38
Net book value at 31 December 2022 11,962 2 48 12,012
Net book value at 30 June 2023 15,939 1 38 15,978
Caverns under construction comprises costs that are directly attributable to
development or construction of caverns for use in the energy storage business.
These are not depreciated but are reviewed for indicators of impairment at
each reporting date.
9 Other non-current assets
Jun-23 Dec-22
€'000 €'000
Land acquisition option 148 -
148 -
The land acquisition option represents the cost of an option to acquire land
to be used for the Green Hydrogen Hub project in Denmark.
10 Cash
Jun-23 Dec-22
€'000 €'000
Cash 1,866 3,432
1,866 3,432
All cash is held in on demand facilities and is at free disposal. The Group
has no current account credit facilities with its banks.
11 Receivables, prepayments and accrued income
Amounts falling due within one year:
Jun-23 Dec-22
€'000 €'000
Receivables from participating interests 10,523 8,363
Receivables from other related parties 17 12
Prepayments 914 921
Taxes receivable 454 382
11,908 9,678
See note 6 for information on items included in taxes receivable and note 17
for information on items included in receivables from participating interests
and receivables from other related parties.
Prepayments includes €383,000 (2022: €383,000) of legal and advisory costs
incremental to obtaining a loan facility with Infracapital, described more
fully in the Group's annual report & accounts. When the loan is drawn
these costs will be recognised over the life of the loan using the effective
interest rate method.
The Directors consider that the carrying amount of receivables, prepayments
and accrued income approximates their fair value.
12 Non-current liabilities
Jun-23 Dec-22
€'000 €'000
IEEF II loan 35,908 30,942
CINEA grant payable 303 617
Long-term loans 36,211 31,559
Long-term lease liability 184 294
Long-term payables to participating interests 1,845 1,845
12.1 IEEF II loan
In June 2021 Corre Energy B.V. entered an equity linked funding agreement with
IEEF II. Under the terms of this agreement the Company has drawn down €3m in
June 2021 and €8m in October 2021, with a further €4m up to €9m (at the
sole discretion of IEEF II) payable at commercial close of the Zuidwending 1
project.
No interest shall accrue and be paid on the principal amount of the funding
outstanding, unless Corre Energy B.V. is in breach of certain obligations
under the equity linked funding agreement, in which case interest is payable
at 10%. The principal amount and any accrued interest shall be repaid no later
than the funding end date of 30 June 2028.
IEEF II has the option to convert the instruments to shares in Corre Energy
B.V. at €1 per share at any point from 12 months after a tranche has paid
out to 30 June 2028.
If the Company pays a dividend IEEF II is entitled to receive the same amount
per 'share' as if the amount paid by IEEF II under the equity linked funding
agreement had been converted to shares at that point in time.
During the period the value of the conversion option has increased due
primarily to an increase in the underlying share price.
12.2 Long-term payables to participating interests
Long-term payables to participating interests represents amounts payable to
Corre Energy Partnership SCSp under the following facilities:
· On 28 March 2021, Corre Energy Partnership SCSp provided Corre
Energy Storage B.V. with an interest free shareholder loan in the amount of
€1,800,000. At the balance sheet date €1,600,000 was outstanding. The loan
has a term of five years and is repayable in full at the end of the term or as
the parties may otherwise agree.
· On 19 April 2021 Corre Energy Partnership SCSp provided the
Company with an interest free shareholder loan in the amount of €500,000. At
the balance sheet date €245,000 was outstanding. The latest date for full
repayment of this loan is 30 April 2026 unless otherwise agreed by the
parties.
12.3 Fair value
The Directors consider that the fair value of the non-current lease liability
is not materially different to its carrying amount, since the interest payable
is close to current market rates and the values are relatively low.
In accordance with our accounting policies, the embedded derivative in the
IEEF II loan is held at fair value, and the host loan is held at amortised
cost. The below table compares the fair value of the whole instrument with its
carrying value. The fair value of long-term payables to participating
interests is also presented.
Both are classified as Level 3 in the fair value hierarchy due to the use of Jun-23 Dec-22
unobservable inputs, including own credit risk.
€'000 €'000
IEEF II loan 37,650 32,729
Long-term payables to participating interests 1,540 1,517
13 Current liabilities
Amounts falling due within one year:
Jun-23 Dec-22
€'000 €'000
Third party creditors 2,863 1,016
Payables to related parties 2 28
Trade creditors 2,865 1,044
Corre Energy Group Holdings C.V. 8,927 7,172
Corre Energy General Partner B.V. 150 121
Payables to participating interests 9,077 7,293
Long-term debt due within 12 months 675 780
Taxes payable 311 239
Deferred income 482 482
Accruals and other liabilities to third parties 5,375 1,932
Accruals and other liabilities to related parties 24 23
Other current liabilities 6,867 3,457
For further information on payables to related parties, payables to
participating interests and accruals and other liabilities to related parties
see note 17.
The Directors consider that the carrying amount of current liabilities
approximates their fair value.
14 Called up share capital
The below table shows the movements in allotted, called up and fully paid
ordinary shares of Corre Energy B.V.:
Number Nominal value Share capital Share premium
€ € €
At 1 January 2022 62,018,846 0.0045 279,085 11,501,327
Issued share capital 5,880,498 0.0045 26,462 10,852,459
Share issue transaction costs - - - (794,240)
At 31 December 2022 67,899,344 0.0045 305,547 21,559,546
Issued share capital 2,561,798 0.0045 11,528 8,954,765
Share issue transaction costs - - - (540,906)
At 30 June 2023 70,461,142 0.0090 317,075 29,973,405
On 8 June 2022 the Company issued 5,880,498 shares at €1.85 per share.
Incremental costs directly attributable to the share issue that otherwise
would have been avoided have been accounted for as a deduction from equity.
On 22 February 2023 the Company issued a further 2,561,798 shares at €3.50
per share. Incremental costs directly attributable to the share issue that
otherwise would have been avoided have been accounted for as a deduction from
equity.
As documented more fully in note 12, the Company has entered into an equity
linked funding arrangement with IEEF II. Under the terms of this agreement
IEEF II may provide up to €20m of funding, and has the option to convert the
funding to shares in Corre Energy B.V. at €1 per share. If the Company pays
a dividend IEEF II is entitled to receive the same amount per 'share' as if
the amount paid by IEEF II under the equity linked funding agreement had been
converted to shares at that point in time.
As documented more fully in note 16, the Company has granted 520,000 share
options during the six months ended 30 June 2023. 345,000 of the shares vest
in two years and 145,000 of the shares vest in three years, both of which have
a future service condition as part of the Long-term Incentive Plan (LTIP). A
further 30,000 shares vest in two years and have no future service condition.
15 Earnings per share
Earnings per share for the six months ended 30 June 2023 (2022: six months
ended 30 June 2022) are as follows:
2023 2022
€ cents € cents
Basic (14.2) (26.4)
Diluted (5.8) (5.6)
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings 2023 2022
€'000 €'000
Earnings for the purpose of basic earnings per share
- Net loss attributable to owners of the Company (9,911) (16,594)
Effect of dilutive potential ordinary shares:
- Finance costs of equity linked funding agreement 4,967 12,463
- Finance costs of LTIP 241 -
Earnings for the purpose of diluted earnings per share (4,703) (4,131)
Number of shares 2023 2022
Number Number
Weighted average number of ordinary shares for basic earnings per share 69,711,002 62,770,243
Effect of dilutive potential ordinary shares:
- Equity linked funding agreement/LTIP 11,398,177 11,000,000
Weighted average number of ordinary shares for diluted earnings per share 81,109,179 73,770,243
The equity linked funding agreement with IEEF II, which is described in more
detail in note 12, gives rise to potential ordinary shares. These have been
included in the determination of diluted earnings per share but not basic
earnings per share.
The share options granted to employees under the Long-term Incentive Plan
(LTIP), which is described in more detail in note 16, give rise to potential
ordinary shares. These have been included in the determination of diluted
earnings per share but not basic earnings per share.
16 Share-based payments
During the period The Company created a share option plan for employees of the
Group and Corre Energy General Partner B.V., a participating interest. This is
referred to as the Long-term Incentive Plan (LTIP).
Each employee share option converts into one ordinary share of the Company on
exercise at an exercise price of €0.0045, equal to the nominal value of a
share. There is no cash settlement of the options, and the options carry
neither rights to dividends nor voting rights. Options vest over either two
years or three years and may be exercised at any time from the date of vesting
to the date of their expiry.
The share options outstanding during the period may be summarised as follows:
2023 2022
Number of share options Weighted average exercise price Number of share options Weighted average exercise price
€ €
Outstanding at 1 January - - - -
Granted during the period 520,000 0.0045 - -
Outstanding at 30 June 520,000 0.0045 - -
Exercisable at 30 June - - - -
The fair values at grant date were estimated using a Black-Scholes model,
taking into account the terms and conditions upon which the options were
granted. Projected future dividend yields were assumed to be 0% and the
volatility inputs to the models were calculated by means of a historical
estimate based on the company's traded share price due to the unavailability
of any traded options from which implied volatilities could be derived.
Information about each tranche including inputs to the Black-Scholes model and
the resulting fair values are shown in the table below.
Issue date Number of options granted Share price Vesting conditions Vesting date Exercise period end date Volatility Fair value
€ €'000
03/02/2023 270,000 3.40 Two years' service 03/02/2025 03/02/2033 50.65% 916
03/02/2023 75,000 3.40 Two years' service 03/02/2025 03/02/2030 50.65% 254
27/02/2023 125,000 3.80 Three years' service 27/02/2026 27/02/2033 50.86% 474
27/02/2023 20,000 3.80 Three years' service 27/02/2026 27/02/2030 50.86% 76
22/03/2023 30,000 3.46 None 22/03/2026 22/03/2033 50.01% 104
For the six months ended 30 June 2023, the Group incurred €241,000 of
share-based payment expense. Of this, €235,000 was recognised in the
Statement of comprehensive income, and the remaining €6,000 was capitalised
as part of Caverns under construction.
17 Related party transactions
Balances and transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on consolidation and are
not disclosed in this note. Details of transactions between the Group and
other related parties are disclosed below.
17.1 Remuneration of key management personnel
The Group's key management personnel are considered to be the Executive
Directors and Non-Executive Directors. The remuneration of key management
personnel is set out below in aggregate for each of the categories specified
in IAS 24 Related Party Disclosures. Note that some key management personnel
were remunerated via management companies, and this is included here to
improve disclosure.
2023 2022
€'000 €'000
Short-term employee benefits - 107
Post-employment benefits - 4
Remuneration via group companies 153 141
Remuneration via management companies 55 145
208 396
17.2 Other transactions with related parties
The following other transactions occurred with related parties:
2023 2022
€'000 €'000
Income
Sales to entities controlled by key management personnel 6 34
Purchases
Reimbursement of expenses 55 28
Purchases of services from participating interests 1,507 2,245
Purchases of services from other entities controlled by key management 10 109
personnel
The Group received rental income for office space provided to Gibson Watts
Limited, a company controlled by Darren Green, a Director.
Purchases of services from participating interests represent the following
services acquired from the Company's parent, Corre Energy Group Holdings C.V.:
· Consultancy and management services;
· Recruitment services; and
· IT services
Corre Energy Group Holdings C.V. is the head office of the wider group and as
such incurs the majority of corporate costs, either on its own account or
through its general partner Corre Energy General Partner B.V.. Invoiced costs
relating to activities of the Group are recharged to Group companies at cost
with no mark-up. Staff costs relating to activities of the Group are recharged
with a small mark-up, appropriate to compensate Corre Energy Group Holdings
C.V. for its work performed.
The Group acquired recruitment services from Gibson Watts Limited, which is
controlled by Darren Green, a Director.
17.3 Balances with related parties
At the end of the period the following balances were outstanding with related
parties:
2023 2022
€'000 €'000
Current receivables:
- Participating interests 10,523 8,363
- Companies controlled by key management personnel 17 12
Current payables:
- Payables to companies controlled by key management personnel 2 28
- Payables to participating interests 9,077 7,293
- Accruals and other liabilities to key management personnel 20 72
Loans from related parties:
- Participating interests 1,845 1,845
Receivables from participating interests represents amounts due from Corre
Energy General Partner B.V. arising from short-term funding provided and
intercompany service agreements. Corre Energy General Partner B.V. is the
managing partner of Corre Energy Group Holdings C.V., the Company's immediate
parent. No interest is payable on this amount and there is no repayment
schedule.
Payables to participating interests represents amounts payable to Corre Energy
Group Holdings C.V., the Company's immediate parent, resulting from purchases
of services described in note 17.2. No interest is payable on this amount and
there is no repayment schedule.
Payables to companies controlled by key management personnel represents
amounts due to Gibson Watts Limited, a company controlled by Darren Green, a
Director, for recruitment services.
Loans from participating interests represents amounts payable to Corre Energy
Partnership SCSp as described in note 12.
18 Commitments
Refer to the 2022 Annual Report & Accounts of Corre Energy B.V. for full
details of commitments. See below for information on significant changes to
commitments since 31 December 2022.
18.1 Capital commitments
Capital expenditure that has been contracted but not provided for in the
financial statements amounts to €542,000 (31 December 2022: €280,000), in
respect of caverns under construction.
18.2 Lease commitments
The undiscounted commitment for lease payments recognised as a lease liability
on the balance sheet at 30 June 2023 is €179,000 (31 December 2022:
€207,000) for vehicles and €235,000 (31 December 2022: €344,000) for
office space.
In addition to this the Group has contractual commitments of €65,000 (31
December 2022: €123,000) for short-term leases of office space.
19 Events after the reporting period
On 9 August 2023 the Company entered into an agreement with its immediate
parent, Corre Energy Group Holdings C.V., for a loan facility of €2m. The
amount is repayable in full on 14 August 2026, including interest charged at
12.5% per annum. The Directors consider this to be at arm's length.
The Directors have considered this event and all other events that occurred
between the balance sheet date and the date of approval of these interim
condensed consolidated financial statements. They do not consider that any
events have occurred during this period that require a change to or additional
disclosure in the interim condensed consolidated financial statements.
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