REG - Corre Energy B.V. - Half-year Report
20/09/2022 07:00
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RNS Number : 9290Z Corre Energy B.V. 20 September 2022
20 September 2022
Corre Energy B.V.
Half Year Report for the Six Months Ended 30 June 2022
Continuing progress in constantly improving market backdrop
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 2022.
Performance review and outlook
Keith McGrane, Group Chief Executive:
"Following our successful equity placing in June 2022, Corre Energy is well
capitalised to execute our current business plan and we are pleased with the
progress of the flagship project in the Netherlands and the Green Hydrogen Hub
in Denmark.
"Given the dynamic and growing nature of the energy storage market we remain
focused on delivery of the near-term projects and remain open to new
opportunities for growth. Corre Energy is well placed to capitalize on these
opportunities as we continue to deliver on our business strategy of developing
a network of LDES facilities across Europe and beyond.
Highlights:
· Several proposals received for ZW1 customer offtake from
investment grade entities
· Robust capital discipline; operating / development phase losses
(€5.8m) in line with expectations
· €15.6m cash following successful €10.9m equity raise in May
2022; good liquidity and headroom to meet current business plan priorities
· New markets: expanding cavern portfolio (Germany) and
preparations underway for entry into the US
· Outlook: EU and US recent policy announcements providing
tailwinds for large-scale, long duration electricity storage
Rapidly growing addressable market
· Corre Energy has the largest TYNDP pipeline of LDES projects in
Europe at a time when the market for LDES continues to accelerate driven by
the growing urgency for both energy security and renewable power. The latest
REPowerEU policy in response to the current energy crisis highlighted
electricity storage as a critical part of energy systems infrastructure. The
EU has advised member states to support the acceleration of permitting for
electricity storage projects.
· The total market size for LDES is set for significant structural
growth over the next decade and is forecast to reach 1.5 to 2.5 TW by 2040
from minimal amounts currently(1).
· Corre Energy is providing a grid-scale solution for critical
storage of renewable energy.
Corre Energy uniquely positioned
· Corre Energy has developed a unique pipeline of eleven TYNDP Long
Duration Energy Storage projects across Northern Europe, one of which has been
designated an EU Project of Common Interest (PCI).
· The company has developed a strong partner network which will
enable and support the build-out and operation of this pipeline including
cavern operators (Nobian), Front-end engineering & Design (FEED) with
Siemens Energy, funding providers (Infracapital and FIEE), grid operators
(TenneT and Energinet) and offtake partners.
· Corre Energy has built a highly experienced management team to
execute its business strategy. The team has extensive expertise across
multiple disciplines, including large scale infrastructure project delivery,
commercial offtake, corporate finance, project origination, EPC, O&M and
power system modelling.
Strong Balance Sheet
· With cash reserves of €15.6m at end of June 2022, the company
is well capitalized to execute its current business plan.
· The company operates a conservative project capitalisation
policy, with a stable balance sheet on working capital.
Operational Highlights
The company has continued to develop its pipeline across Northern Europe, in
particular its two main projects in the Netherlands (ZW1) and Denmark (GHH
DK). In addition, the equity raise in May of this year has supported the
expansion of Corre Energy's portfolio to include Germany and entry into North
America.
· Project ZW1, The Netherlands
o The process of agreeing an offtake agreement for ZW1 is now in its final
phase with the remaining high-quality, investment grade partners engaged in
this competitive process.
o We are diligently working through these negotiations to select the optimal
partner, in delivering a fully renewable LDES project, to best deliver on our
vision and strategy.
o We look forward to updating the market on the successful completion of
this significant milestone in the coming months.
o ZW1 land acquisitions are in the final phase and expected to conclude in
this financial year.
· In parallel we are reviewing successes from the ZW1 process and
applying those learnings to the upcoming customer offtake processes in GHH DK
and Germany.
· Project GHH Denmark
o Letter of Intent, signed on 30(th) August 2022, confirming that Gas
Storage Denmark (GSD) and Corre Energy will explore and negotiate with each
other the lease and/or use of a cavern in Lille Torup, with the objective to
reach a binding agreement.
· Germany
o MoU Signed 6(th) April 2022, setting out the principles for cavern option
agreements.
· North America
o Corre Energy B.V has established a team in North America which aims to
build out a network of LDES storage opportunities in the rapidly growing US
storage market which benefits from the Biden administration's increased focus
on the development of renewable energy, of which storage plays a central role
in the value chain.
Policy
· EU policy is clear that electricity storage is in the overriding
public interest, providing strong tailwinds
· US policy is clear that renewable energy and the associated
storage is a focus of the Biden administration *
For further information please visit https://corre.energy/
(https://corre.energy/) or contact:
Corre Energy B.V.
Stephanie Casey, Head of Investor Relations (stephanie.casey@corre.energy +44 7587 748402
(mailto:stephanie.casey@corre.energy) )
Davy (Euronext Growth Listing Sponsor)
Barry Dixon, Head of Decarbonization Finance (barry.dixon@davy.ie +353 87 689 9195
(mailto:barry.dixon@davy.ie) )
Murray PR (Financial PR and IR)
Pat Walsh, Managing Director (pwalsh@murraygroup.ie + 353 1 498 0300
(mailto:pwalsh@murraygroup.ie) )
ABOUT CORRE ENERGY
Corre Energy B.V. is a leader in the origination, development, construction,
operation, and commercialisation of LDES projects, technologies and products
that accelerate the transition to net zero and enhance security and
flexibility of energy systems.
CAES technology has over 50 years of successful operation. A proven grid-scale
energy storage solution which integrates the green Hydrogen (GH2) value chain:
a co-location of air and hydrogen storage caverns with electrolysers provides
a low-cost, carbon-neutral storage solution.
The symbiosis of GH2 and CAES: provides balancing into electricity market.
Our projects are scalable by adding new caverns and increasing existing cavern
capacity across European jurisdictions.
Corre energy is targeting the large and growing market for renewable energy
storage in Europe and globally. This market provides multiple potential
revenue streams from combining compressed air storage with green hydrogen.
We have first mover advantage with our EU designated pipeline and tier-1
project partners including Infracapital (M&G) as financing partner for our
ZW1 flagship project.
Other customers and partners include Siemens, Nobian, LDES Council, EASE and
DEEP.KBB, and we have the support of the European Clean Hydrogen alliance.
We have a highly experienced management team and a pipeline of TYNDP 11
projects across northern Europe.
In June 2021 Corre Energy B.V. entered into an equity linked funding agreement
with FIEE. Under the terms of this agreement the Company has drawn down €3m
in June 2021 and €8m in October 2021, with a further €4m (or €9m at the
sole discretion of FIEE) payable at commercial close of the ZW1 project.
On 23 September 2021 the Company completed its IPO, issuing 12,018,846 new
shares at €1 per share. The company completed a follow-on equity raise of
€10.9m in June 2022 at a price per share of €1.85. The current market cap
of the company based on a closing share price of €2.22 on September 19(th)
is €151m.
Contents
Contents (#_Toc112421039)
Interim consolidated statement of comprehensive income (#_Toc112421040)
Interim consolidated balance sheet (#_Toc112421041)
Interim consolidated statement of changes in equity (#_Toc112421042)
Interim consolidated statement of cash flows (#_Toc112421043)
Accounting policies (#_Toc112421044)
Notes to the interim condensed consolidated financial statements
(#_Toc112421045)
Interim consolidated statement of comprehensive income
For the period ended 30 June
Note 2022 2021
€'000 €'000
Revenue 1 - 5
Other operating income 2 208 903
Expenses
Employee expenses 3 (2,877) (1,048)
Project costs 4 (151) (10)
Other Administrative expenses 5 (2,991) (1,702)
Operating result (5,811) (1,852)
Finance expense 6 (12,565) (18)
Result before tax (18,376) (1,870)
Tax 7 1,781 1,217
Loss for the period (16,595) (653)
Other comprehensive income
Foreign currency translation on consolidation 45 (2)
Total comprehensive income (16,550) (655)
Interim consolidated balance sheet
Note Jun-22 Dec-21
€'000 €'000
Assets
Non-current assets
Intangible fixed assets 8 618 618
Tangible fixed assets 9 8,789 5,261
Lease right of use assets 111 99
Deferred tax assets 7 5,360 3,641
Total non-current assets 14,878 9,619
Current assets
Cash 10 15,607 13,375
Receivables, prepayments and accrued income 11 3,883 2,582
Total current assets 19,490 15,957
Total assets 34,368 25,576
Equity
Share capital 14 306 279
Share premium 14 21,645 11,501
Retained earnings (19,846) (3,250)
Foreign currency translation 41 (4)
Total equity 2,146 8,526
Liabilities
Non-current liabilities
Long-term loans 12 24,017 11,646
Long-term lease liability 12 90 79
Long-term payables to participating interests 12 1,845 1,845
Total non-current liabilities 25,952 13,570
Current liabilities
Trade creditors 13 2,838 823
Payables to participating interests 13 1,405 1,123
Other current liabilities 13 2,027 1,534
Total current liabilities 6,270 3,480
Total liabilities 32,222 17,050
Total equity and liabilities 34,368 25,576
Interim consolidated statement of changes in equity
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
For the period ended 30 June 2021
Share capital Share premium Retained earnings Foreign currency translation Total
€'000 €'000 €'000 €'000 €'000
Incorporation on 1 March 2021 0 - - - 0
Capital contribution - 742 - - 742
Issue of share capital 225 10 - - 235
Business combinations - - 664 - 664
Loss for the period - - (654) - (654)
Other comprehensive income - - - (2) (2)
At 30 June 2021 225 752 10 (2) 985
Interim consolidated statement of cash flows
For the period ended 30 June
2022 2021
€'000 €'000
Cash flow from operating activities
Operating result (5,811) (1,852)
Add back depreciation 21 1
Increase in Receivables, prepayments and accrued income (991) (620)
Increase in Trade creditors 2,015 1,794
Increase/(Decrease) in Other Payables 662 (1,155)
Net tax (paid)/received (135) 164
Total cash flow from operating activities (4,239) (1,668)
Cash flow from investment activities
Investments in Tangible fixed assets (3,538) (1,158)
Investments in Intangible fixed assets - (618)
New consolidations - 538
Total cash flow from investment activities (3,538) (1,238)
Cash flow from financing activities
Inflows from Capital Increases 10,170 0
Proceeds/(Repayment) of Borrowings (104) 5,096
Interest Paid (8) (1)
Total cash flow from investment activities 10,058 5,095
Effect of changes in foreign exchange rates (49) (18)
Total cash flow 2,232 2,171
Cash at start of period 13,375 0
Cash at end of period 15,607 2,171
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 2022. 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 developed in the Netherlands and
Denmark, with others in the pipeline.
These consolidated financial statements were authorised for issue in
accordance with a resolution of the Directors on 19 September 2022.
2 Statement of compliance
The interim condensed consolidated financial statements for the six months
ended 30 June 2022 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
2021.
The principal accounting policies are summarised below and have been applied
consistently throughout the year, unless stated otherwise.
3 New standards, interpretations and amendments adopted by the Group
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 2021. 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 2022, but do not have an impact
on the interim condensed consolidated financial statements of the Group.
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 achieve milestones to
unlock liquidity to allow the business to continue to trade until it becomes
cash generative in itself. The management of the Group has made an assessment
of the Group's ability to continue as a going concern and is satisfied that
the Group has sufficient resources to continue into the foreseeable future,
and not less than 12 months from the end of the reporting period. The
Directors acknowledge the statement made by the management of the Group on the
company going concern. 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.
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
2021. There has been no material change to these areas during the six months
ended 30 June 2021.
7 Significant events in the reporting period
7.1 Issue of share capital
On 8 June 2022 the Company issued a further 5,880,498 shares at €1.85 per
share, increasing share capital by €26,462 and share premium by
€10,143,696 after accounting for costs incremental to the placing.
7.2 Incorporation of USA subsidiaries
In April 2022 the Company incorporated two new companies registered in the
state of Delaware in the USA. Corre Energy US Development Company LLC is fully
owned and controlled by Corre Energy US LLC, which in turn is fully owned and
controlled by Corre Energy B.V.
At the time of publishing these interim condensed consolidated financial
statements no capital contribution has been made, nor have any other financial
transactions occurred.
Notes to the interim condensed consolidated financial statements
1 Revenue
2022 2021
€'000 €'000
Revenue from related parties - 5
Total Revenue - 5
In the comparative period the Group earned revenue from related parties for IT and administrative services.
2 Other operating income
2022 2021
€'000 €'000
NZIP income 174 -
Rental income 34
CINEA grant income - 903
Total Other operating income 208 903
In 2022 Corre Energy Ltd received €174,000 from the UK Government's
Department for Business, Energy & Industrial Strategy (BEIS) for its work
on Phase 1 of the Longer Duration Energy Storage Demonstration Programme, part
of the Net Zero Innovation Portfolio (NZIP).
The Group received rental income for office space provided to Gibson Watts
Limited, a company controlled by Darren Green, a Director.
In December 2019 Corre Energy Storage B.V. was awarded a grant by the European
Innovation and Networks Executive Agency (now the European Climate,
Infrastructure and Environment Agency, CINEA) for development of its
Zuidwending 1 project. Under this agreement a prefinancing amount of
€1,774,000 was received in March 2020, and in March 2022 a claim for a final
payment of €1,726,000 was submitted to CINEA.
The portion of the grant that relates to expenses incurred has been recognised
in the statement of comprehensive income in 2021 resulting in accrued income
in the balance sheet. The remainder of the grant relates to Cavern
construction costs, which have been capitalised on the balance sheet. This has
not been accrued, and when received the amount will be deferred on the balance
sheet and will be recognised over the life of the asset when construction is
completed.
3 Employee expenses
2022 2021
€'000 €'000
Salaries (2,509) (1,076)
Pension costs (54) (6)
Social security costs (262) (67)
Other benefits (66) (1)
Capitalised staff costs 122 132
Staff costs (2,769) (1,018)
Non-executive director pay (45) (30)
Contractor costs (43) -
Other employee expenses (20) -
(2,877) (1,048)
Capitalised staff costs represent the value of staff costs capitalised to
caverns under construction as part of the Zuidwending 1 project.
The average number of full-time equivalent employees during the period is
broken down below.
2022 2021
Corre Energy Storage B.V. 1 1
Corre Energy ApS 3 -
Corre Energy Ltd 25 8
Corre Energy Storage Limited 6 4
Total 35 13
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.
4 Project costs
2022 2021
€'000 €'000
Commercial development (72) (10)
Planning and permitting (39) -
Engineering design, surface and caverns (35) -
Project legals (5) -
Total (151) (10)
Project costs represent amounts spent on projects that are not yet capitalisable due to the project's stage of development, primarily the Green Hydrogen Hub in Denmark.
5 Other administrative expenses
2022 2021
€'000 €'000
Management fees (1,472) -
Legal & professional costs (737) (1,504)
Travel costs (295) (41)
Office costs (154) (5)
Marketing & Communications costs (103) (27)
Insurance Costs (96) (5)
IT costs (92) (32)
Other operating expenses (42) (88)
(2,991) (1,702)
Management fees are paid to Corre Energy Group Holdings C.V., the Company's
immediate parent company.
6 Finance expense
2022 2021
€'000 €'000
Interest and similar expenses (644) (1)
Option revaluation (11,827) -
Foreign exchange losses (94) (17)
(12,565) (18)
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.
7 Corporation tax
7.1 Income tax recognised in statement of comprehensive income
2022 2021
€'000 €'000
Current tax charge (4) -
Deferred tax income 1,785 1,217
1,781 1,217
7.2 Taxes receivable and payable
Jun-22 Dec-21
€'000 €'000
Non-current receivables:
- Deferred tax asset 5,360 3,641
Current receivables:
- VAT receivable 466 222
- Deferred tax asset 82 16
548 238
Current payables:
- Corporate tax payable 8 4
- VAT payable 27 -
- Payroll tax payable 165 84
200 88
8 Intangible fixed assets
The movement in intangible fixed assets is as follows:
Cavern options
€'000
Cost and Net book value
At 1 March 2021 -
Additions 618
At 31 December 2021 and 30 June 2022 618
Cavern options represent the cost of entering into a contract with Nouryon
Salt B.V., which forms part of the Nobian group (hereafter referred to as
Nobian), to develop caverns for the purpose of the energy storage business in
the Netherlands and Denmark. These contracts are exclusive, preventing the
Group or Nobian from entering into discussions concerning CAES projects in the
Netherlands or Denmark with any other party.
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.
9 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 1 March 2021 - - - -
Acquired through business combination 3,159 - - 3,159
Additions 2,065 3 39 2,107
At 31 December 2021 5,224 3 39 5,266
Additions 3,520 - 17 3,537
At 30 June 2022 8,744 3 56 8,803
Accumulated depreciation
At 1 March 2021 - - - -
Acquired through business combination - - - -
Charge for the period - (1) (4) (5)
At 31 December 2021 - (1) (4) (5)
Charge for the period - (0) (9) (9)
At 30 June 2022 - (1) (13) (14)
Net book value at 31 December 2021 5,224 2 35 5,261
Net book value at 30 June 2022 8,744 2 43 8,789
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.
10 Cash
Jun-22 Dec-21
€'000 €'000
Cash 15,607 13,375
15,607 13,375
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-22 Dec-21
€'000 €'000
Accrued grant income 164 164
Receivables from participating interests 2,360 1,466
Receivables from other related parties 56 16
Prepayments 755 698
Taxes receivable 548 238
3,883 2,582
See note 7 for information on items included in taxes receivable and note 16
for information on items included in receivables from participating interests
and receivables from other related parties.
Prepayments includes €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-22 Dec-21
€'000 €'000
IEEF II loan 24,017 11,553
N.V. NOM loan - 93
Long-term loans 24,017 11,646
Long-term lease liability 90 79
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 N.V. NOM loan
In August 2021 Corre Energy Storage B.V. drew down €360,000 on a loan
facility from N.V. NOM, Investerings- en Ontwikkelingsmaatschappij voor
Noord-Nederland. Interest of €11,000 was subsequently capitalised into the
loan value. The loan is repayable in eight quarterly instalments beginning on
30 September 2021, with interest payable at 3% per annum, hence at 30 June
2022 there is no remaining long-term element.
12.3 Long-term payables to participating interests
Loans from 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.
12.4 Fair value
The Directors consider that the fair value of the N.V. NOM loan and the
non-current lease liability are not materially different to their carrying
amounts, 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
unobservable inputs, including own credit risk.
Jun-22 Dec-21
€'000 €'000
IEEF II loan 26,477 15,839
Long-term payables to participating interests 1,526 1,590
13 Current liabilities
Amounts falling due within one year:
Jun-22 Dec-21
€'000 €'000
Third party creditors 2,510 765
Payables to related parties 328 58
Trade creditors 2,838 823
Corre Energy Group Holdings C.V. 1,405 1,123
Payables to participating interests 1,405 1,123
Long-term debt due within 12 months 186 186
Taxes payable 200 88
Accruals and other liabilities to third parties 1,641 642
Accruals and other liabilities to related parties - 618
Other current liabilities 2,027 1,534
For further information on payables to related parties, payables to
participating interests and accruals and other liabilities to related parties
see note 16.
Long-term debt due within 12 months represents the portion of the N.V. NOM
loan that is repayable within one year. See note 12 for further information on
the N.V. NOM loan.
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 March 2021 100 0.1000 10 -
Capital contribution 742,110
Capital conversion 2,300 0.0045 10 742,110
Issued share capital 49,997,700 0.0045 224,990 10,004
Initial public offering (IPO) 12,018,846 0.0045 54,085 11,964,761
IPO transaction costs - 1,215,548
At 31 December 2021 62,018,846 0.0045 279,085 11,501,327
Share issue 5,880,498 0.0045 26,462 10,852,459
Share issue transaction costs - 708,764
At June 2022 67,899,344 0.0045 305,547 21,645,022
On 1 March 2021 the Company was incorporated with an initial issued share
capital of 100 ordinary shares of €0.10, which were issued to Corre Energy
Partnership SCSp.
On 29 March 2021 the Company acquired 100% of the share capital of Corre
Energy Storage B.V. as a contribution with an attributed value of €742,110.
On 7 May 2021:
· Corre Energy Partnership SCSp transferred the 100 ordinary shares
to Corre Energy Group Holdings C.V. by means of a deed of transfer of shares;
· The Company executed a deed of amendment to its Articles of
Association to divide the issued share capital of 100 ordinary shares of
€0.10 each into 2,300 ordinary shares of €0.0045 each; and
· The Company issued a further 49,997,700 ordinary shares with a
nominal value of €0.0045 each to Corre Energy Group Holdings C.V., which
settled these by payment of €234,994, the additional €10,004 above the
nominal value being accounted for as share premium.
On 23 September 2021 the Company completed its initial public offering (IPO),
issuing 12,018,846 new shares at €1 per share. Incremental costs directly
attributable to the IPO that otherwise would have been avoided have been
accounted for as a deduction from equity.
On 8 June 2022 the Company issued a further 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.
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.
15 Earnings per share
Earnings per share for the six months ended 30 June 2022 (2021: four months
ended 30 June 2021) are as follows:
2022 2021
€ cents € cents
Basic -26.4 -2.9
Diluted -5.6 -2.9
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings
2022 2021
€'000 €'000
Earnings for the purpose of basic earnings per share
- Net loss attributable to owners of the Company (16,595) (653)
Effect of dilutive potential ordinary shares:
- Finance costs of equity linked funding agreement 12,463 -
Earnings for the purpose of diluted earnings per share (4,132) (653)
Number of shares
2022 2021
Number Number
Weighted average number of ordinary shares for basic earnings per share 62,770,243 22,728,527
Effect of dilutive potential ordinary shares:
- Equity linked funding agreement 11,000,000 74,380
Weighted average number of ordinary shares for diluted earnings per share 73,770,243 22,802,907
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.
16 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.
16.1 Remuneration of key management personnel
The Group's key management personnel are considered to be the Executive
Directors, Chief Financial Officer, Chief Development Officer, Chief Strategy
Officer, Group Operations Director 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.
2022 2021
€'000 €'000
Short-term employee benefits 580 241
Post-employment benefits 8 1
Termination benefits 36 -
Remuneration via group companies 265 78
Remuneration via management companies 145 244
1,034 564
16.2 Other transactions with related parties
The following other transactions occurred with related parties:
2022 2021
€'000 €'000
Sales
Sales to entities controlled by key management personnel 34 5
Purchases
Reimbursement of expenses 28 -
Purchases of services from participating interests 2,245 -
Purchases of services from other entities controlled by key management 109 495
personnel
Capital purchase from other entity controlled by key management personnel - 618
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;
· IT services; and
· Use of office space.
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 the following services from Procorre UK Ltd and Gibson
Watts Limited, which are controlled by Darren Green, a Director:
· Recruitment services;
· Consultancy and management services;
· Administrative and other support;
· Marketing and social media services; and
· Use of office space.
16.3 Balances with related parties
At the end of the period the following balances were outstanding with related
parties:
2022 2021
€'000 €'000
Current receivables:
- Receivables from key management personnel 1 -
- Participating interests 2,360 1,466
- Companies controlled by key management personnel 56 16
Current payables:
- Payables to key management personnel - 30
- Payables to companies controlled by key management personnel 328 28
- Payables to participating interests 1,405 1,123
- Accruals and other liabilities to companies controlled by key management - 618
personnel
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 16.2. No interest is payable on this amount and
there is no repayment schedule.
Payables to companies controlled by key management personnel represents the
remaining amount due to Corre Energy Limited, a company registered in Malta
and controlled by Darren Green, a Director, for the purchase of cavern options
agreed in 2021. The amount due is being settled based on a monthly repayment
schedule, the balance will be fully paid by the end of 2022.
Loans from participating interests represents amounts payable to Corre Energy
Partnership SCSp as described in note 12.
17 Commitments
Refer to the 2021 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 2021.
17.1 Capital commitments
Capital expenditure that has been contracted but not provided for in the
financial statements amounts to €280,000 (31 December 2021: €428,000), in
respect of caverns under construction.
17.2 Lease commitments
The undiscounted commitment for lease payments for vehicles recognised as a
lease liability on the balance sheet at 30 June 2022 is €62,000 (31 December
2021: €146,000).
In addition to this the Group has contractual commitments of €129,000 (31
December 2021: €136,000) for short-term leases of office space, all payable
in 2022.
18 Events after the reporting period
The Directors have considered 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.
Note*
H.R.5376 - Inflation Reduction Act of 2022
https://www.congress.gov/bill/117th-congress/house-bill/5376/text
H.R.3684 - Infrastructure Investment and Jobs Act
https://www.congress.gov/bill/117th-congress/house-bill/3684/text
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