REG - EQTEC PLC - Final Results
05/05/2023 07:00
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RNS Number : 4892Y EQTEC PLC 05 May 2023
5 May 2023
EQTEC plc
("EQTEC", the "Company" or the "Group")
Audited results for the year ended 31 December 2022
EQTEC plc (AIM: EQT), a global technology innovator powering distributed,
decarbonised, new energy infrastructure through its waste-to-value solutions
for hydrogen, biofuels and energy generation announces its audited results for
the year ended 31 December 2022, with post-period progress.
Financial highlights
· Revenue and other operating income: €8.0 million (2021: €9.2
million)
· EBITDA loss before significant and non-recurring items: €4.9
million (2021: €3.8 million)
· Net assets: €37.1 million (31 December 2021: €43.4 million)
· Capital raise of £3.7 million (€4.2 million) through the placing
of new shares
· Two loan facilities secured: one for up to £10 million (€11.3
million) and the other for £2 million (€2.3 million)
The net loss including significant and non-recurring items was €10.5 million
(2021: €4.7 million), which included an investment impairment of €4.7
million in relation to the North Fork project in California.
Commercial and operational highlights
· Strong progress with Market Development Centres ("MDCs"):
· Italy MDC construction completed, and commissioning commenced.
· Croatia MDC funding identified for final construction and
recommissioning.
· France MDC acquired, and project buyer identified for sale of the
project.
· EQTEC France launched as wholly owned subsidiary, with strong
pipeline of projects particularly focused on renewable natural gas ("RNG") and
advanced biofuels.
· Contaminated plastics added to EQTEC feedstock library after
testing success, followed by collaboration agreement with French waste
management company toward future plants.
· EQTEC R&D facility at Université de Lorraine ("UL") upgraded
to support steam-oxygen gasification capabilities for testing of advanced
biofuel solutions.
· Deeside project (UK) completed initial FEED, Livadia project
(Greece) achieved 80% funding.
· North Fork project (USA) refinanced, and construction restarted;
Southport and Billingham projects (UK) restructured to reduce EQTEC
liabilities whilst maintaining rights to development fees due.
David Palumbo, CEO of EQTEC, commented:
"EQTEC in 2022 reaffirmed its business strategy, strengthened its growth
platform and toughened its resolve. Based on having one of the few
technologies of its kind with a proven track record, we focused our energies
on ensuring we can truly make our technology available, reliably and
consistently, for the several business models we support in the world of new
energy infrastructure.
We delivered focused, formative progress in three key areas of our business
strategy. First, we pushed ahead with three MDCs, as demonstration of EQTEC's
versatile syngas solutions in live, reference plants that deliver attractive
returns through a variety of business models. Second, we took further steps
in retaining our technology leadership, deploying upgraded R&D capability
for regular testing of solutions for advanced biofuels such as RNG, hydrogen,
liquid fuels such as sustainable aviation fuel (SAF) and for chemicals such as
ethanol or methanol. Third, we released the Company from untenable
liabilities in major projects and turned our attention to the Tier 1 and 2
leaders that will help us deploy our solutions through the world's best
funded, best managed projects.
Our target remains making EQTEC a leading licensor and innovator of technology
that delivers clean, baseload energy and biofuels solutions to the world's
leading Industrial and Utility companies and to Municipalities and
Agroindustry around the globe. To become that, we must be more than simply the
leading innovator for waste-to-value solutions; we must also be known for
deploying our technology through projects that consistently deliver on time,
to budget and for plants that deliver healthy returns on investment,
sustainably over their lifetimes."
Current trading and outlook
· France and Italy leading execution of EQTEC business strategy,
combining advanced capabilities, demonstration of EQTEC technology and
collaboration with top-tier partners:
· Mechanical and electrical completion of Italy MDC in 2022, followed by
achievement of full operations in March 2023 with handover to the operating
company expected imminently.
· Visits by prospective customers throughout 2022 and early 2023 to
Movialsa plant in Spain and now also to Italy MDC in Tuscany, with a full
slate of visits planned to Italy MDC in 2023.
· Acquisition of France MDC in July 2022, followed by engagement of
prospective buyer, confirmation of planning, feedstock and offtake
arrangements; project sale expected in H1 2023.
· Launch into the contaminated plastic waste treatment business in France
with French partner SEPS in March 2022, following completion of successful
contaminated plastic waste trials.
· Following a competitive tender win, EQTEC and French utility partner
Idex awarded in March 2023 a waste-to-RNG project built on demonstrated
R&D capabilities.
· Collaboration agreement in April 2023 between EQTEC and Poseidon LNG
Hub, a sister company of Belleli Group and consortium including Linde, Wood,
Alfa Laval and Chemprod.
· Built on collaboration agreement with major players, pipeline in Italy
for at least four waste-to-RNG and waste-to-hydrogen solutions, also building
on global partnership with Wood.
· Major UK, France and Ireland projects demonstrate EQTEC scale
capability with target business models and top-tier customers:
· Reconfiguration of near-premise Industrial business model at Deeside,
Flintshire, UK for a more cost-effective, dual-technology facility deploying
Anaergia, Inc. anaerobic digestion technology and EQTEC syngas technology for
power offtake by neighbouring Toyota Motor Company engine production plant;
initial FEED completed by global EPC Black & Veatch.
· Updated financial modelling and development strategy for Billingham
project, for an advanced facility that can support surrounding, large-scale
Industrial offtakers in Teesside, with Petrofac appointed as the FEED partner
and prospective EPC; engagement with neighbouring CF Fertilisers and other
local players for purchase of advanced biofuels.
· Progress toward acquisition of project at decommissioned, large-scale
coal-fired power station at Gardanne, France, secured in Q1 2023; EQTEC
leading feasibility work for an early-stage design of a clean, syngas-based
production of RNG or other, advanced biofuels in support of Industrial and/or
Municipal offtake customers.
· Engagement underway toward Ireland-based projects in support of power,
RNG or ethanol production to support Ireland's IT services industry,
de-carbonise the national grid and create autonomous, sustainable alternatives
to traditional energy solutions.
· Appointed top-tier investment bank to approach large corporates in the
growing market for large-scale, new energy infrastructure such as RNG,
hydrogen and liquid fuels with a mandate to identify strategic investors at
individual project, project portfolio and/or Group levels.
· Continued commitment to innovation and applied R&D:
· Expansion of variable feedstock capabilities, including successful
tests of plastics and polymers contaminated with fossil fuels and other
chemicals that cannot be burned or put into landfill, and successful testing
of high-humidity RDF (refuse-derived fuel).
· Expansion of R&D capabilities for advanced offtake applications
such as RNG, hydrogen, liquid biofuels, ethanol, methanol and other chemicals,
through upgrade of R&D facility at the University of Lorraine to
accommodate steam-oxygen gasification technology.
· Active engagement of Wood VESTA technology for hydrogen or for RNG at
multiple project opportunities, starting with Southport project in UK, with
other opportunities in France, Italy.
· Collaboration agreement with CompactGTL for development of liquid
biofuels through EQTEC syngas technology and CompactGTL gas-to-liquids
technology, at UK pilot plant.
· Ireland project opportunity for development of integrated
syngas-to-ethanol capability with new technology partner to be announced.
· Focus Plan in response to tighter market conditions, for
prioritised, strategic execution:
· Portfolio prioritisation with focus on completion and live operation of
MDCs in Italy, Croatia and France, followed by development of scale
capabilities at large facilities in UK, France and Italy.
· Exited liabilities of €18 million+ through renegotiation of
agreements at all three UK projects: Deeside, Billingham, Southport.
· Focus on core capabilities, bringing on top-tier development, project
management, FEED and EPC partners to support EQTEC's design, engineering and
technology integration.
Annual report
The full, 2022 annual report, which addresses all the points above and which
details full, financial results and other performance outcomes for the
Company, may be found on the Company's website at
https://eqtec.com/investing-in-eqtec/ (https://eqtec.com/investing-in-eqtec/)
Additionally, the full2022 annual report for the Company is available at the
following hyperlink:
http://www.rns-pdf.londonstockexchange.com/rns/4892Y_1-2023-5-4.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/4892Y_1-2023-5-4.pdf)
The principal financial tables, extracted from the Annual Report, are set out
below:
Consolidated statement of profit or loss for the financial year ended 31
December 2022
Notes 2022 2021
€ €
Revenue 8 7,970,072 9,171,764
Cost of sales (7,002,314) (7,541,354)
Gross profit 967,758 1,630,410
Operating income/(expenses)
Administrative expenses (5,742,563) (4,190,592)
Other income 9 33,645 -
Impairment costs 14 (2,752) (5,498)
Other (gains)/losses 12 10,088 (1,418,860)
Employee share-based compensation 10 (340,257) (205,648)
Foreign currency gains 156,835 348,885
Operating loss (4,917,246) (3,841,303)
Share of results from equity accounted investments 21 (52,059) (24,188)
Gains from sales to equity accounted investments deferred 21 (28,378) (211,478)
Loss/(gain) arising from loss of control of subsidiaries (489) 9,957
Change in fair value of financial investments (326,501) (250,378)
23
Finance income 11 316,805 134,069
Finance costs 11 (589,618) (517,108)
Significant and non-recurring transactions:
Impairment of equity-accounted investment 15 (4,712,490) -
Loss on disposal of tangible asset 15 (154,205) -
Loss before taxation 14 (10,464,181) (4,700,429)
Income tax 16 (60,934) -
LOSS FOR THE FINANCIAL YEAR (10,525,115) (4,700,429)
Loss attributable to:
Owners of the Company (10,525,104) (4,700,497)
Non-controlling interest (11) 68
(10,525,115) (4,700,429)
2022 2021
€ per share € per share
Basic loss per share:
From continuing operations 17 (0.001) (0.001)
From continuing and discontinued operations 17 (0.001) (0.001)
Diluted loss per share:
From continuing operations 17 (0.001) (0.001)
From continuing and discontinued operations 17 (0.001) (0.001)
Consolidated statement of comprehensive income for the financial year ended 31
December 2022
2022 2021
€ €
Loss for the financial year (10,525,115) (4,700,429)
Other comprehensive (loss)/income
Items that may be reclassified
subsequently to profit or loss
Exchange differences arising on re-translation
of foreign operations (478,066) 238,715
Other comprehensive (loss)/income for the year (478,066) 238,715
Total comprehensive loss for the financial year (11,003,181) (4,461,714)
Attributable to:
Owners of the company (11,128,847) (4,301,511)
Non-controlling interests 125,666 (160,203)
(11,003,181) (4,461,714)
Consolidated statement of financial position at 31 December 2022
Notes 2022 2021
ASSETS € €
Non-current assets
Property, plant and equipment 18 133,053 446,861
Intangible assets 19 17,578,231 17,702,833
Investments accounted for using the equity method 21 7,619,514 8,074,184
Financial assets 22 3,728,434 4,050,030
Other financial investments 23 171,186 506,976
Total non-current assets 29,230,418 30,780,884
Current assets
Development assets 25 6,033,543 3,455,496
Loan receivable from project development undertakings 25 5,446,087 3,000,469
Trade and other receivables 26 7,221,046 6,876,747
Cash and cash equivalents 27 1,693,116 6,446,217
Total current assets 20,393,792 19,778,929
Total assets 49,624,210 50,559,813
EQUITY AND LIABILITIES € €
Equity
Share capital 28 26,799,584 25,977,130
Share premium 28 87,203,372 83,610,562
Other reserves 28 2,694,125 2,353,868
Accumulated deficit (77,305,919) (66,177,072)
Equity attributable to the owners of the company 39,391,162 45,764,488
Non-controlling interests 29 (2,258,523) (2,384,189)
Total equity 37,132,639 43,380,299
Non-current liabilities
Borrowings 30 1,064,598 -
Lease liabilities 31 - 56,855
Total non-current liabilities 1,064,598 56,855
Current liabilities
Trade and other payables 32 6,264,404 6,921,806
Borrowings 30 5,106,038 -
Lease liabilities 31 56,531 200,853
Total current liabilities 11,426,973 7,122,659
Total equity and liabilities 49,624,210 50,559,813
The financial statements were approved by the Board of Directors on 5 May 2023
and signed on its behalf by:
Ian Pearson
David Palumbo
Non-Executive
Chairman
Chief Executive Officer
05 May 2023
05 May 2023
Consolidated statement of changes in equity for the financial year ended 31
December 2022
Share Other reserves Accumulated deficit Equity attributable to owners of the company Non-controlling interests
Capital Share premium Total
€ € € € € € €
Balance at 1 January 2021 24,355,545 62,896,521 2,148,220 (61,875,561) 27,524,725 (2,223,986) 25,300,739
Issue of ordinary shares in EQTEC plc (Note 28) 1,402.324 18,206,268 - - 19,608,592 - 19,608,592
Conversion of debt into equity (Notes 28) 167,728 3,285,013 - - 3,452,741 - 3,452,741
Issued in acquisition of financial asset (Note 28) 51,533 693,628 - - 745,161 - 745,161
Share issue costs (Note 28) - (1,470,868) - - (1,470,868) - (1,470,868)
Employee share-based compensation (Notes 10) - - 205,648 - 205,648 - 205,648
Transactions with owners 1,621,585 20,714,041 205,648 - 22,541,274 - 22,541,274
Loss for the financial year - - - (4,700,497) (4,700,497) 68 (4,700,429)
Unrealised foreign exchange losses - - - 398,986 398,986 (160,271) 238,715
Total comprehensive loss for the financial year - - - (4,301,511) (4,301,511) (160,203) (4,461,714)
Balance at 31 December 2021 25,977,130 83,610,562 2,353,868 (66,177,072) 45,764,488 (2,384,189) 43,380,299
Issue of ordinary shares in EQTEC plc (Note 28) 769,697 3,717,379 - - 4,487,076 - 4,487,076
Conversion of debt into equity (Note 28) 52,757 237,672 - - 290,429 - 290,429
Share issue costs (Note 28) - (362,241) - - (362,241) - (362,241)
Employee share-based compensation (Note 10) - - 340,257 - 340,257 - 340,257
Transactions with owners 822,454 3,592,810 340,257 - 4,755,521 - 4,755,521
Loss for the financial year - - - (10,525,104) (10,525,104) (11) (10,525,115)
Unrealised foreign exchange losses - - - (603,743) (603,743) 125,677 (478,066)
Total comprehensive loss for the financial year - - - (11,128,847) (11,128,847) 125,666 (11,003,181)
Balance at 31 December 2022 26,799,584 87,203,372 2,694,125 (77,305,919) 39,391,162 (2,258,523) 37,132,639
Consolidated statement of cash flows for the financial year ended 31 December
2022
Notes 2022 2021
€ €
Cash flows from operating activities
Loss for the financial year before income tax (10,464,181) (4,700,429)
Adjustments for:
Depreciation of property, plant and equipment 18 239,233 156,520
Amortisation of intangible assets 19 124,602 72,685
Loss on disposal of tangible assets 15 154,205 -
Impairment of equity-accounted investments 15 4,712,490 -
Employee share-based compensation 10 340,257 205,648
Impairment of development assets 25 2,752 -
Share of loss of equity accounted investments 21 52,059 24,188
Gains from sales to equity accounted investments deferred 21 28,378 211,478
Loss/(gain) on loss of control of subsidiary 20 489 (9,957)
Change in fair value of financial investments 23 326,501 250,378
(Gain)/loss on debt for equity swap 12 (10,088) 1,418,860
Unrealised foreign exchange movements (319,440) 103,234
Operating cash flows before working capital changes (4,812,743) (2,267,395)
Increase in:
Development assets (2,578,047) (3,144,600)
Trade and other receivables (2,837,708) (5,946,010)
(Decrease)/increase in Trade and other payables (274,938) 3,432,256
Net cash used in operating activities - continuing operations (10,503,436) (7,925,749)
Finance income 11 (316,805) (134,069)
Finance costs 11 589,618 517,108
Taxes paid (108,311) -
Net cash used in operating activities (10,338,934) (7,542,710)
Cash flows from investing activities
Addition to tangible assets 18 (79,199) -
Additions to intangible assets 19 - (1,000,000)
Payments on deposit on land 26 (586,421) -
Cash inflow from disposal of subsidiary 33 170,000 -
Loans advanced to project development undertakings 25 (773,034) (2,430,137)
Loans repaid by project development undertakings 25 100,000 -
Investment in equity accounted undertakings 21 (6,790) (978,825)
Loans advanced to equity accounted undertakings 21 (2,852,699) (3,746,984)
Loans repaid by equity accounted undertakings 21 40,018 -
Investment in related undertakings 22 (351,853) (697,635)
Other advances to equity accounted undertakings
(2,000) (27,508)
Net cash used in investing activities (4,341,978) (8,881,089)
Cash flows from financing activities
Proceeds from borrowings and lease liabilities 30 7,236,850 1,391,174
Repayment of borrowings and lease liabilities 30 (1,126,483) (3,031,724)
Loan issue costs 30 (334,557) -
Proceeds from issue of ordinary shares 28 4,430,069 19,420,222
Share issue costs 28 (274,784) (1,180,217)
Interest paid (3,284) (20)
Net cash generated from financing activities 9,927,811 16,599,435
Net (decrease)/increase in cash and cash equivalents (4,753,101) 175,636
Cash and cash equivalents at the beginning of the financial year 6,446,217 6,270,581
Cash and cash equivalents at the end of the financial year 27 1,693,116 6,446,217
ENQUIRIES
EQTEC plc +44 20 3883 7009
David Palumbo / Nauman Babar
Strand Hanson - Nomad & Financial Adviser +44 20 7409 3494
James Harris / Richard Johnson
Panmure Gordon - Broker +44 20 7886 2500
John Prior / Hugh Rich
Instinctif - Media & investor relations enquiries EQTEC@instinctif.com (mailto:EQTEC@instinctif.com)
Guy Scarborough / Tim Field +44 791 717 8920 / +44 788 788 4794
About EQTEC plc
As one of the world's most experienced gasification technology and engineering
companies, with a growing track record of delivering operational and
commercial success for transforming waste-to-energy through best-in-class
technology innovation, engineering and project development, EQTEC brings
together design innovation, project delivery discipline and solid commercial
experience to add momentum to the global energy transition. EQTEC's proven,
proprietary and patented technology is at the centre of clean energy
projects, sourcing local waste, championing local businesses, creating local
jobs and supporting the transition to localised, decentralised and resilient
energy systems.
EQTEC designs, supplies and builds advanced gasification facilities in the UK,
EU and US, with highly efficient equipment that is modular and scalable from
1MW to 30MW. EQTEC's versatile solutions process over 50 varieties of
feedstock, including forestry wood waste, vegetation and other agricultural
waste from farmers, industrial waste and sludge from factories and municipal
waste, all with no hazardous or toxic emissions. EQTEC's solutions produce a
pure, high-quality synthesis gas ("syngas") that can be used for the widest
range of applications, including the generation of electricity and heat,
production of synthetic natural gas (through methanation) or biofuels (through
Fischer-Tropsch, gas-to-liquid processing) and reforming of hydrogen.
EQTEC's technology integration capabilities enable the Group to lead
collaborative ecosystems of qualified partners and to build sustainable waste
reduction and green energy infrastructure around the world.
The Company is quoted on AIM (ticker: EQT) and the London Stock Exchange has
awarded EQTEC the Green Economy Mark, which recognises listed companies with
50% or more of revenues from environmental/green solutions.
Further information on the Company can be found at www.eqtec.com
(http://www.eqtec.com/)
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