REG - EQTEC PLC - Interim Results
26/09/2024 07:15
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RNS Number : 7784F EQTEC PLC 26 September 2024
26 September 2024
EQTEC plc
("EQTEC", the "Company" or the "Group")
Interim results for the six months ended 30 June 2024
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 is pleased to announce its
unaudited, interim results for the six months ended 30 June 2024 ("H1 2024"),
with post-period progress.
Financial highlights
· Revenue: €1.45 million (H1 2023: €0.145 million), a 10x
increase from previous year.
· Gross profit €0.826 million (H1 2023: €0.036 million)
· Gross margin improvement to 50%+ ((FY 2023: 15%) a 3x increase
from previous year, underpinned by a shift toward high-margin IP-rich services
and a departure from high-risk development activities.
· EBITDA loss: €1.60 million (H1 2023: €1.92 million) a 17%
reduction from previous year.
· Capital raise of £0.85 million (€1.0 million) through the
placing of new shares, and refinance of loan facility.
· Post-period payroll costs reduction of c.14% executed through
operational and organisational transitions.
· Post-period, £1.1 million (€1.3 million) equity investment
raised in September through the placing of new shares and £2.0 million
received in full settlement of the LOGIK legal claim.
The net loss, including significant non-recurring items amounting to €1m,
was €3.19 million (H1 2023: €2.42 million), including €1.55 million of
debt servicing and other financing costs the majority of which were one off
and non-recurring.
The Company expects to sustain improvement to gross margin for the whole of
2024 compared to 2023, as a result of its focus on improving rates, cost
management, and delivery excellence.
Commercial and operational highlights, including post-period end
· Revenue focus shifted and diversified successfully in line with
strategic intent
o Consistent, month-on-month revenues for entirety of H1 2024
o 51% of H1 2024 revenues from design engineering services (FY 2023: 77%)
o 24% of H1 2024 revenues from equipment sales (FY 2023: 0%)
o 25% of H1 2024 revenues from operations and maintenance services to built
plants, creating the base for recurring revenues (FY 2023: 0%)
o No revenues from development services in H1 2024 (FY 2023: 23%) as the
Company fully exited capital-intensive development activities.
· Solid progress with client project delivery toward future
equipment and services orders
o Equipment delivered, integrated and commissioning underway at client plant
in Greece
o Grande-Combe front-end engineering design ("FEED") complete with client Idex
finalising business case toward financial close
o Gardanne pre-FEED and some FEED work completed with further funding sought
from public funds to complete FEED
o Simonpietri Enterprises Limited ("SEL") Hawaii project pre-FEED work
completed in period, with notice to proceed for FEED obtained post period
(September 2024)
o Feasibility completed on second Hawaii RNG project with a capacity of 8
tonnes per hour ("tph"), with EQTEC selected as core technology supplier after
period end (July 2024)
o Proposal made for second project with SEL for RNG application with a
capacity of 20 tph post period end (August 2024)
o Combined potential design engineering services for new RNG Projects in
Hawaii for revenues of c. €2 million within a projected delivery schedule of
5 months, if both projects secure the expected funding.
· Innovation and partners
o Successful results tests for liquid fuels applications, driving commercial
progress into the liquid fuel sector, under the 50/50 joint venture with
partner CompactGTL.
o Completion of preliminary engineering including selection of Zeton as
designer and fabricator of modular gas-to-liquid capability at University of
Lorraine (France) R&D facility
o Successful biochar and ashes tests at R&D centre at University of
Zaragoza (Spain)
· Stabilisation of Italia MDC reference plant
o Funding of €2.9 million received from Banca del Fucino
o Appointment of Operations Manager to manage on-site team
o Recruitment and hiring of full team to operate and maintain plant
o Assessment and engagement of competitive suppliers and prospective biochar
buyers
o Acquisition of property housing plant and storage, increasing total value of
asset
· Strategic transition enabled by further funding
o Logik settlement reached in April 2024, followed by receipt of £2 million
full payment post period end in September 2024
o £0.25 million drawn down from loan facility in May, £0.85 million equity
investment raised in May, through the placing of new shares and, post-period,
£1.1 million equity investment raised in September through the placing of new
shares
o Lead operations role transitioned from UK to Spain, with Murli Bhamidipati
joining Barcelona-based engineering team as Operations Director in October
o Brian Cole appointed as non-executive director, in September making the
composition of the Board of Directors two executive directors and three
non-executive directors following Jeffrey Vander Linden stepping down at the
end of the month
Ian Pearson, Chairman of EQTEC, commented:
"Not since I have been involved with EQTEC have we witnessed consistent,
steady revenues from our high-value engineering services, equipment supply and
plant support services; nor have we been able to achieve margins commensurate
with our high-value, world-leading capabilities. The external market forces
driving the global shift towards sustainable energy and the circular economy
continue to present significant opportunities for EQTEC. The growing demand
for solutions that address both waste management and clean energy generation
is creating a unique space for us to apply our proprietary technology and
engineering expertise. As we position ourselves to meet these demands, the
Management Team has made important strides in rebasing the Company, including
refining our business model to focus on high-margin, IP-rich services and
strategic partnerships. These efforts, combined with the ongoing operational
and organisational transition, leave us well-placed to take full advantage of
the opportunities in front of us and drive long-term value creation."
David Palumbo, CEO of EQTEC, commented:
"Our performance in H1 2024 compared to H1 2023 demonstrates the impact of our
strategic re-focus. Revenue has increased tenfold for the period, and gross
profit has significantly improved, which is a direct result of our shift
towards high-margin, IP-rich services and away from high-risk,
capital-intensive development activities. While we have made considerable
progress in stabilising our operations and delivering consistent results, much
work remains to be done as we continue to rebuild value for our shareholders.
We are operating in a competitive sector where many companies are still in the
early stages of validating their technology without any real commercial
application. In contrast, EQTEC's technology is already commercially tested
and delivering real-world solutions across multiple geographies. As we scale
our business, our priority remains to strengthen our foundations, drive
revenue growth, and maintain our leadership in the clean energy sector."
Current trading and outlook
The Company is building on its H1 2024 momentum to drive its transition toward
being a technology licensor and innovator, shifting the focus of its efforts
toward revenue generation, driving client collaboration and supporting clients
in progressing their projects. This includes building the foundations for
innovation at its R&D centre to support work on advanced syngas chemical
applications such as synthetic fuels.
The Company is making good progress with a number of reference plants that it
can use for prospective client visits, for R&D in a live, commercial-scale
environment and for engineering on-site training and development:
· At the Italia MDC in Gallina, Tuscany, the plant has already
accommodated a number of client visits, including visits in the first half of
2024 for prospective clients looking to build plants with EQTEC technology at
their core. In September, the plant also had a visit from a local delegation
of representatives led by the newly elected mayor of Castiglione d'Orcia.
Based on this and the successful passage of tests by the provincial
environmental protection agency, the plant is gaining positive visibility and
credibility in the local community, making it a champion of clean waste
disposal and energy generation in one of Italy's places of natural beauty.
· In Greece, the Company supported clients with the commissioning
of its plant built on EQTEC technology, following replacement of components
damaged in flooding that hit the region.
· In North Fork, California, USA, the Company made another visit to
the plant to carry out an on-site inspection of the full facility, following a
focused effort by the various contractors on site to complete construction of
the plant and work toward commissioning. The plant has experienced a range
of delays throughout 2023 and early 2024 as various parties working on the
project changed. The Company has been informed that final construction work is
now progressing well, and that commissioning is expected to start in Q4 2024.
· In Belišće, Croatia, the Company completed a design
reconfiguration of the project to address the local industry requirement of
eliminating unrecyclable plastic waste and provide energy to the neighbouring
plants. This reconfiguration achieves a much stronger financial performance
of the project making it more attractive to funders in the current
environment. The project is awaiting receipt of its waste management permit
and the signing of binding term sheets for the waste supply and offtake by
local blue-chip industrial players. Ongoing discussions with both equity and
debt funders are progressing and the Company expects to re-start construction
on site in early 2025.
Other client projects have faced delays as a result of their broader business
contexts:
· The Company completed FEED work for the Grande-Combe project in
Villers-sous-Montrond, Doubs, France and has been working closely with project
owner Idex to finalise the business case for the heat offtake, in support of
financial close. Additionally, Idex awaits approval of the building permit,
which it has said it expects by the end of 2024. The Company has an
expectation the project will proceed from early 2025.
· Other projects in France, including Gardanne, Limoges and others
focused on the application of EQTEC technology for the production of renewable
natural gas ("RNG") have been paused by their various owners in light of the
delay by the French government in releasing tariffs for RNG, with these
companies preferring to wait for the formalisation of the tariff before
further investing in project development. EQTEC is hopeful the government will
proceed with this action soon, as it expects to be in a favourable position to
support a number of RNG projects in France.
· The Blue Mountain Electric Company project in Wilseyville,
California, USA, is still awaiting financial close in light of ongoing
negotiations between project developer Phoenix Biomass Energy Inc. and the
United States Department of Agriculture ("USDA") over finalising requirements
for the USDA loan guarantee program. The Company has partially completed
pre-FEED work on the project and looks forward starting FEED as soon as it
receives a notice to proceed.
A number of other projects and opportunities have progressed as the Company
partners with new developers and other engineering companies:
· The Company completed FEL 2 (pre-FEED) work on a project in
Kapolei, Hawaii for SEL. The planned EQTEC gasification system will convert
construction and demolition debris, landscaping waste, and invasive plant
biomass from landscape restoration and wildfire prevention projects, into
biochar and electricity for organic fertilizer production. The Company has
received from SEL, in September, notice to proceed toward start of FEL 3
(FEED) work for a value of €380,000 and an expected delivery program of 4
months.
Additionally, the Company submitted to SEL a proposal for a second project
that would result in a waste-to-RNG facility with a capacity of 20 tph. The
FEL3 (FEED) proposal is for the amount of c. €1.0 million with a delivery
programme of 5 months.
· Also, in Hawaii, USA, the Company completed feasibility work on a
project that would convert 8 tph tonnes of waste into RNG. On the back of the
feasibility, the developer has selected EQTEC as the core technology provider
and a FEL3 (FEED) proposal has been made to the client for the amount of c.
€1.0 million with a delivery programme of 5 months.
· Based on the Company's collaboration agreement formalised at the
end of 2023 with development, project management and engineering company
Tresca Energía S.A. ("Tresca") of Spain, the partners have progressed
discussions toward a first project that would convert approximately 7 tph of
biomass into RNG. The Company has been informed that Tresca has secured the
development capital and expects to starts design and engineering work in Q4
2024.
Business strategy and organisational changes
The Company's business strategy emphasises: (1) continuously developing and
leveraging its IP-rich engineering and innovation capabilities; (2) de-risking
its portfolio by occupying a narrow segment of the value chain, collaborating
with the world's best value chain partners; and (3) driving higher margins
through licensing its IP for use by owner-operators, deploying its engineering
and design capabilities to get its IP deployed into more places, for the
best-suited business models.
Financial performance over the first half of 2024 improved relative to
previous periods as the Company realised benefits from its strategic shift
away from the development of high-risk, legacy projects and toward focusing as
a pure-play technology provider on pre-funded, risk-mitigated projects owned
and driven by credible infrastructure owners and investors. The Company views
its H1 2024 financial performance as indicative of its future commercial
potential, as it refocuses most of its business development and engineering
efforts on steady, reliable revenues from higher-probability client projects.
To support the Company's next stage of growth, the Board has implemented a
number of operational and organisational transitions to advance its strategy
for growth. First, as announced on 9 August 2024 and 16 September 2024, it has
moved operational leadership from London to Barcelona, appointing Murli
Bhamidipati as Operations Director for EQTEC Iberia SLU. Amongst Mr
Bhamidipati's primary objectives is organising and managing the engineering
team for growth and scale. As a consequence, Chief Technical Officer (CTO) Dr.
Yoel S. Alemán Méndez will focus entirely on growing the Company's
innovation capabilities and on driving engineering excellence so that the
Company can deliver best-in-class solutions based on EQTEC's unique
technology. Finally, the Company is rationalising its staffing outside of
Barcelona to focus on the development of the business around its technology
innovation and engineering and to reduce costs where possible. The Company
will work more closely with partners to deliver into various projects and
markets.
Changes to the Board of Directors
In line with the transition of operations leadership to Barcelona, Jeffrey
Vander Linden will resign from the Board of Directors (the "Board") on 29
September 2024, as announced on 9 August 2024. Additionally, as announced on
18 September 2024, the Company has appointed Brian Cole to the Board as a
non-executive Director. These two changes will leave the total number of
directors on the Board at five.
The principal, unaudited, condensed and consolidated financial statements for
the six months ended 30 June 2024 are set out below:
EQTEC plc
Unaudited condensed consolidated statement of profit or loss
for the six months ended 30 June 2024
Notes 6 months ended 6 months ended
30 June 2024 30 June 2023
(Restated)
€ €
Revenue 6 1,449,324 145,293
Cost of sales (623,670) (109,528)
Gross profit 825,654 35,765
Operating income/(expenses)
Administrative expenses (2,329,461) (2,122,832)
Reversal of impairment of project costs 36,920 -
Impairment of other receivables (37,995) -
Other income 11,238 52,914
Other losses/(gains) 7 (1,897) 182,833
Foreign currency losses (140,933) (68,897)
Operating loss (1,636,474) (1,920,217)
Share of loss from equity accounted investments (53,478) (102,996)
Gain/(loss) on revaluation of equity accounted investment - 16,726
Change in fair value of investments - (6,822)
Finance income 51,566 39,451
Finance costs 8 (1,547,344) (449,300)
Loss before taxation 6 (3,185,730) (2,423,158)
Income tax 9 (8,173) -
Loss for the period from continuing operations (3,193,903) (2,423,158)
Loss for the period from discontinued operations 19 - (1,448)
LOSS FOR THE FINANCIAL PERIOD (3,193,903) (2,424,606)
Loss/(Profit) attributable to:
Owners of the company (3,193,885) (2,424,594)
Non-controlling interest (18) (12)
(3,193,903) (2,424,606)
6 months ended 6 months ended
30 June 2024 30 June 2023
(Restated)
€ per share € per share
Basic loss per share:
From continuing operations 10 (0.0163) (0.0231)
From discontinued operations - (0.0000)
Total basic loss per share 10 (0.0163) (0.0231)
Diluted loss per share:
From continuing operations 10 (0.0163)
From discontinued operations - (0.0000)
Total diluted loss per share 10 (0.0163) (0.0231)
EQTEC plc
Unaudited condensed consolidated statement of other comprehensive income
for the six months ended 30 June 2024
6 months ended 6 months ended
30 June 2024 30 June 2023
€ €
Loss for the financial period (3,193,903) (2,424,606)
Other comprehensive income/(loss)
Items that may be reclassified
subsequently to profit or loss
Exchange differences arising on retranslation
of foreign operations 52,005 229,958
52,005 229,958
Total comprehensive loss for the financial period (3,141,898) (2,194,648)
Attributable to:
Owners of the company (3,085,838) (2,126,160)
Non-controlling interests (56,060) (68,488)
(3,141,898) (2,194,648)
EQTEC plc
Unaudited condensed consolidated statement of financial position
At 30 June 2024
Notes 30 June 2024 31 December 2023
ASSETS € €
Non-current assets
Property, plant and equipment 11 508,618 615,634
Intangible assets 12 12,114,741 12,177,408
Investments accounted for using the equity method 13 6,852,174 6,832,388
Other financial investments 6,715 6,715
Total non-current assets 19,482,248 19,632,145
Current assets
Development costs 14 479,914 613,516
Loans receivable from project development - 2,066,099
Trade and other receivables 15 9,270,797 7,044,217
Cash and bank balances 646,293 262,019
Total current assets 10,397,004 9,985,851
Total assets 29,879,252 29,617,996
-
EQTEC plc
Unaudited condensed consolidated statement of financial position
At 30 June 2024 - continued
Notes 30 June 2024 31 December 2023
EQUITY AND LIABILITIES € €
Equity
Share capital 16 33,259,098 32,497,848
Share premium 89,357,300 88,916,950
Other reserves 2,694,125 2,694,125
Accumulated deficit (103,674,003) (100,588,165)
Equity attributable to the owners of the company 21,636,520 23,520,758
Non-controlling interests (2,361,992) (2,305,932)
Total equity 19,274,528 21,214,826
Non-current liabilities
Borrowings 17 6,524,362 2,457,984
Lease liabilities 18 297,340 400,518
Total non-current liabilities 6,821,702 2,858,502
Current liabilities
Trade and other payables 3,345,966 2,853,641
Borrowings 17 228,638 2,488,229
Lease liabilities 18 208,418 202,798
Total current liabilities 3,783,022 5,544,668
Total equity and liabilities 29,879,252 29,617,996
EQTEC plc
Unaudited condensed consolidated statement of changes in equity
for the six months ended 30 June 2024 and the six months ended 30 June 2023
Share Equity attributable to owners of the company Non-controlling interests
Capital Share premium Accumulated deficit Total
Other reserves
€ € € € € € €
Balance at 1 January 2023 26,799,584 87,203,372 2,694,125 (77,305,919) 39,391,162 (2,258,523) 37,132,639
Issue of ordinary shares 1,596,560
2,399,413 - - 3,995,973 - 3,995,973
Issue of ordinary shares in lieu of debt 510,215
621,674 - - 1,131,889 - 1,131,889
Share issue costs -
(418,012) - - (418,012) - (418,012)
Transactions with owners 2,106,775
2,603,075 - - 4,709,850 - 4,709,850
Loss for the financial period - - (12) (2,424,606)
- (2,424,594) (2,424,594)
Unrealised foreign exchange gains/(losses) - - - 298,434 298,434 (68,476) 229,958
Total comprehensive loss for the financial period - - - (2,126,160) (2,126,160) (68,488) (2,194,648)
28,906,359 89,806,447 (79,432,079) 41,974,852 (2,327,011) 39,647,841
Balance at 30 June 2023 2,694,125
Balance at 1 January 2024 32,497,848 88,916,950 (100,588,165) 23,520,758 (2,305,932) 21,214,826
2,694,125
Issue of ordinary shares 608,875
397,298 - - 1,006,173 - 1,006,173
Issue of ordinary shares in lieu of debt 152,375
122,019 - - 274,394 - 274,394
Share issue costs -
(78,967) - - (78,967) - (78,967)
Transactions with owners 761,250
440,350 - - 1,201,600 - 1,201,600
Loss for the financial period - - (18) (3,193,903)
- (3,193,885) (3,193,885)
Unrealised foreign exchange gains/(losses) - - - 108,047 108,047 52,005
(56,042)
Total comprehensive loss for the financial period - - - (3,085,838) (3,085,838) (56,060) (3,141,898)
Balance at 30 June 2024 33,259,098 89,357,300 (103,674,003) 21,636,520 (2,361,992) 19,274,528
2,694,125
EQTEC plc
Unaudited condensed consolidated statement of cash flows
for the six months ended 30 June 2024
Notes 6 months ended 6 months ended
30 June 2024 30 June 2023
(Restated)
Cash flows from operating activities € €
Loss for the financial period (3,185,730) (2,423,158)
Adjustments for:
Depreciation of property, plant and equipment 110,861 92,823
Amortisation of intangible assets 62,666 62,301
Impairment of other receivables 37,995 -
Share of loss from equity accounted investments 53,478 102,996
(Gain)/loss on revaluation of equity accounted investment - (16,726)
Change in fair value of investments - 6,822
(Gain)/(loss) on debt for equity swap 1,897 (182,833)
Unrealised foreign exchange movements (171,273) 332,389
Operating cash flows before working capital changes (3,090,106) (2,025,386)
(Increase)/decrease in:
Development costs (112,335) (1,105,162)
Trade and other receivables 140,216 102,061
Increase/(decrease) in Trade and other payables 1,004,752 (652,009)
(2,057,473) (3,680,496)
Income taxes (paid)/repaid (14,363) 22,746
Finance income (51,566) (39,451)
Finance costs 1,547,344 449,300
Cash used in operating activities - continuing operations (576,058) (3,247,901)
Cash used in operating activities - discontinued operations 19 - (1,448)
Net cash used in operating activities (576,058) (3,249,349)
Cash flows from investing activities
Additions to property, plant and equipment - (7,482)
Additions to other investments - (5,665)
Investment in associate undertakings (117) -
Loans advanced to equity accounted investments (35,660) (225,250)
Loans repaid by equity accounted investments 14,080 33,200
Other advances to equity accounted investments (168,137) (2,000)
Cash used in investing activities - continuing operations (189,834) (207,197)
Cash used in investing activities - discontinued operations 19 - -
Net cash used in investing activities (189,834) (207,197)
Cash flows from financing activities
Proceeds from borrowings and lease liabilities 416,607 906,540
Repayment of borrowings and lease liabilities (144,596) (2,006,943)
Proceeds from issue of ordinary shares 1,006,173 4,051,609
Share issue costs (58,988) (247,173)
Loan issue costs (67,866) (9,097)
Interest paid (2,982) (2,101)
Cash generated from financing activities - continuing operations 1,148,348 2,692,835
Cash generated from financing activities - discontinued operations
19 - -
Net cash generated from financing activities 1,148,348 2,692,835
Net (decrease)/ increase in cash and cash equivalents 382,456 (763,711)
Cash and cash equivalents at the beginning of the financial period * 113,838 1,693,116
Cash and cash equivalents at the end of the financial period * 496,294 929,405
* Cash and cash equivalents includes bank overdrafts that are repayable on
demand and form an integral part of the Group's cash management.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
1. GENERAL INFORMATION
The unaudited interim condensed consolidated financial statements of EQTEC plc
("the Company") and its subsidiaries ("the Group") for the six months ended 30
June 2024 were authorised for issue in accordance with a resolution of the
directors on 23 September 2024.
EQTEC plc ("the Company") is a company domiciled in Ireland. The Company's
registered office is at Building 1000, City Gate, Mahon, Cork T12 W7CV,
Ireland. The Company is quoted on the London Stock Exchange's Alternative
Investment Market (AIM: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.
The Group is a technology provider to clients in the Utility, Industrial and
Waste Management sectors with its own, proprietary and patented technology for
clean production of synthesis gas (syngas), a fossil fuel alternative that
will increasingly contribute to production of the world's baseload energy and
biofuels. Syngas plants utilising EQTEC technology are fuelled by waste from
industrial, municipal, agricultural, forestry and other sources. Syngas can be
used either as a direct replacement for natural gas or as an intermediate fuel
for generation of a range of final fuels including hydrogen, renewable natural
gas (RNG), liquid biofuels, thermal energy, electrical power and chemicals
such as methanol or ethanol.
EQTEC designs, develops and supplies core technology to syngas production
plants in Europe and the USA, with highly efficient equipment that is modular
and scalable from 1MW to 30MW and beyond. EQTEC's versatile solutions convert
at least 60 types of feedstock, including biomass wastes, industrial wastes
and municipal solid waste, with no hazardous or toxic emissions.
In future, EQTEC intends to augment its services and equipment revenues with
recurring revenues from licensing of its technology to syngas plant owners,
providing value-added services including maintenance, upgrades and data-based
services over the lifetime of each plant.
2. BASIS OF PREPARATION
The unaudited interim condensed consolidated
financial statements are for the six months ended 30 June 2024 and are
presented in Euro, which is the functional currency of the parent company.
They have been prepared on a going concern basis in accordance with
International Accounting Standard (IAS) 34 Interim Financial Reporting.
The annual financial statements of the group are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the EU. The
condensed set of financial statements has been prepared applying the
accounting policies and presentation that were applied in the preparation of
the Company's published consolidated financial statements for the financial
year ended 31 December 2023, except for the adoption of new standards
effective as of 1 January 2024. The Group has not early adopted any other
standard, interpretation or amendment that has been issued but is not yet
effective.
The financial information contained in this interim statement, which is
unaudited, does not constitute statutory accounts as defined by the Companies
Act, 2014. The interim condensed consolidated financial statements do not
include all the information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's financial
statements for the financial year ended 31 December 2023. The financial
statements of the Group for the financial year ended 31 December 2023 were
prepared in accordance with IFRSs as adopted by the European Union and can be
found on the Group's website at www.eqtec.com (http://www.eqtec.com) .
The financial information for the six months ended 30 June 2024 and the
comparative financial information for the six months ended 30 June 2023 have
not been audited or reviewed by the Company's auditors pursuant to guidance
issued by the Auditing Practices Board. The comparative figures for the
financial year ended 31 December 2023 are not the Group's statutory accounts
for that financial year. Those accounts have been reported on by the Company's
auditor and will be delivered to the Company's Registration Office in due
course. The audit report on those statutory accounts was unqualified.
The Group incurred a loss on continuing operations of €3,193,903 (1H 2023:
€2,423,158) during the six-month period ended 30 June 2024 and had net
current assets of €6,613,982 (31 December 2023: €4,441,183) and net assets
of €19,274,528 (31 December 2023: €21,214,826) at 30 June 2024.
Going concern
The unaudited interim financial statements have been prepared on the going
concern basis, which assumes that the Company will have sufficient funds
available to enable it to continue to trade for the foreseeable future.
The directors have carried out an evaluation of financial forecasts,
sensitised to reflect a rational judgement of the level of inherent risk. The
forecasts which Management have prepared covering the next 12 months include
certain assumptions with regard to cost and overhead reductions and the timing
and amount of any funds generated from sales of the Group's technology. The
forecasts indicate that during this period the Group will have sufficient
funds to continue with its activities for a period of at least 12 months from
the date of signing these unaudited interim financial statements.
After undertaking the assessments and considering the level of inherent risk,
the Directors have a reasonable expectation that the Group has adequate
resources to continue to operate for the foreseeable future and for these
reasons they continue to adopt the going concern basis in preparing the
unaudited interim financial statements. The financial statements do not
include any adjustments that would arise if the Group were unable to continue
as a going concern.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
3. BASIS OF CONSOLIDATION
The unaudited interim condensed consolidated financial statements include the
financial statements of the Group and all subsidiaries. The financial period
ends of all entities in the Group are coterminous.
4. MATERIAL ACCOUNTING POLICIES
The material accounting policies used in preparing the unaudited interim
condensed consolidated financial information are consistent with those
disclosed in the Annual Report and Accounts of EQTEC plc for the financial
year ended 31 December 2023, except for the adoption of new standards and
interpretations and revisions of existing standards as of 1 January 2024 noted
below:
New/revised standards and interpretations adopted in 2024
The following amendments to existing standards and interpretations were
effective in the period to 30 June 2024, but were either not applicable or did
not have any material effect on the Group:
· Amendments to IAS 1 Classification of Liabilities as Current or
Non-current;
· Amendments to IAS 1 Non-current Liabilities with Covenants;
· Amendments to IFRS 16 Lease Liability in a Sale and Leaseback;
· Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements;
and
· Amendments to IAS 21 Lack of Exchangeability.
The directors do not expect the adoption of the above amendments and
interpretations to have a material effect on the interim condensed financial
statements in the period of initial application.
5. ESTIMATES
The preparation of the interim condensed consolidated financial statements
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of certain assets,
liabilities, revenues and expenses together with disclosure of contingent
assets and liabilities. Estimates and underlying assumptions are reviewed on
an on-going basis. Revisions of accounting estimates are recognised in the
period in which the estimate is revised.
The judgements, estimations and assumptions applied in the interim financial
statements, including the key sources of estimation uncertainty, were the same
as those applied in the Group's last annual financial statements for the
financial year ended 31 December 2023.
6. SEGMENT INFORMATION
Information reported to the chief operating decision maker for the purposes of
resource allocation and assessment of segment performance focuses on the
products and services sold to customers. The Group's reportable segments under
IFRS 8 Operating Segments are as follows:
Technology Sales: Being the sale of Gasification Technology and associated
Engineering and Design Services;
The chief operating decision maker is the Chief Executive Officer. Information
regarding the Group's current reportable segment is presented below. The
following is an analysis of the Group's revenue and results from continuing
operations by reportable segment:
Segment Revenue Segment Profit/(Loss)
6 months ended 6 months ended
30 June 2024 30 June 2023 30 June 2024 30 June 2023
(Restated)
€ € € €
Technology Sales 1,449,324 145,293 (22,533) (780,147)
Total from continuing operations
1,449,324 145,293 (22,533) (780,147)
Central administration costs and directors' salaries (1,481,274) (1,306,920)
Reversal of impairment of project costs 36,920 -
Impairment of other receivables (37,995) -
Other income 11,238 52,914
Other gains and losses (1,897) 182,833
Foreign currency losses (140,933) (68,897)
Share of loss of equity accounted investments (53,478) (102,996)
Gain/(loss) on revaluation of equity accounted investment - 16,726
Change in fair value of investments - (6,822)
Finance income 51,566 39,451
Finance costs (1,547,344) (449,300)
Loss before taxation (continuing operations) (3,185,730) (2,423,158)
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
6. SEGMENT INFORMATION - continued
Revenue reported above represents revenue generated from associated
undertakings and external customers. Inter-segment sales for the financial
period amounted to €Nil (2023: €Nil). Included in revenues in the
Technology Sales Segment are revenues of €517,061 (2023: €Nil) which arose
from sales to associate undertakings, joint ventures and unconsolidated
structured entities of EQTEC plc.
Segment profit or loss represents the profit or loss earned by each segment
without allocation of central administration costs and directors' salaries,
other operating income, share of losses of jointly controlled entities,
investment revenue and finance costs. This is the measure reported to the
chief operating decision maker for the purposes of resource allocation and
assessment of segment performance.
Other segment information: Depreciation and amortisation Additions to non-current assets
6 months ended 6 months ended
30 June 2024 30 June 2023 30 June 2024 30 June 2023
€ € € €
Technology sales 55,863 57,429 - 496,612
Head Office 117,664 97,695 - -
173,527 155,124 - 496,612
The Group operates in four principal geographical areas: Republic of Ireland
(country of domicile), the European Union, United States and the United
Kingdom. The Group's revenue from continuing operations from external
customers and information about its non-current assets* by geographical
location are detailed below:
Revenue from Associates and External Customers Non-current assets*
6 months ended 6 months
ended As at As at
30 June 2024 30 June 2023 30 June 2024 31 December 2023
€ € € €
Republic of Ireland - - - -
European Union 1,248,323 145,293 2,489,329 2,607,493
United States 165,501 - - -
United Kingdom 35,500 - 134,030 185,549
1,449,324 145,293 2,623,359 2,793,042
*Non-current assets excluding goodwill, financial instruments, deferred tax
and investment in jointly controlled entities and associates.
The management information provided to the chief operating decision maker does
not include an analysis by reportable segment of assets and liabilities and
accordingly no analysis by reportable segment of total assets or total
liabilities is disclosed.
7. OTHER GAINS AND LOSSES 6 months ended 6 months ended
30 June 2024 30 June 2023
€ €
(Loss)/gain on debt for equity swap (1,897) 182,833
During the financial period, the Group extinguished some of its borrowings by
issuing equity instruments. In accordance with IFRIC 19 Extinguishing
Financial Liabilities with Equity Instruments, the loss recognised on these
transactions was €1,897 (H1 2023: gain of €182,833).
8. FINANCE COSTS
During the 6-month period ended 30 June 2024, the Group announced a
refinancing of its existing secured loan facility. As a result of this
refinancing, finance costs of €1,009,169 were crystallised and capitalised
as part of the new refinanced facility. These finance costs have been
recognised in the period ended 30 June 2024.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
9. IINCOME TAX 6 months ended 6 months ended
30 June 2024 30 June 2023
€ €
Income tax expense comprises:
Current tax expense - -
Deferred tax credit - -
Adjustment for prior financial periods 8,173 -
Tax expense 8,173 -
An income tax charge does not arise for the six months ended 30 June 2024 or
30 June 2023 as the effective tax rate applicable to expected total annual
earnings is Nil as the Group has sufficient tax losses coming forward to
offset against any taxable profits. A deferred tax asset as not been
recognised for the losses coming forward.
10. LOSS PER SHARE 6 months ended 6 months ended
30 June 2024 30 June 2023
(Restated)
Basic loss per share € per share € per share
From continuing operations (0.0163) (0.0231)
From discontinued operations - 0.0000
Total basic loss per share (0.0163) (0.0231)
Diluted loss per share
From continuing operations (0.0163) (0.0231)
From discontinued operations - 0.0000
Total diluted loss per share (0.0163) (0.0231)
The loss and weighted average number of ordinary shares used in the
calculation of the basic and diluted loss per share are as follows:
6 months ended 6 months ended
30 June 2024 30 June 2023
(Restated)
€ €
Loss for period attributable to equity holders of the parent (3,193,885) (2,424,594)
Loss for the period from discontinued operations used in the calculation of (1,448)
basic earnings per share from discontinued operations
-
Losses used in the calculation of basic loss per share from continuing
operations
(3,193,885) (2,423,146)
No. No.
(Restated)
Weighted average number of ordinary shares for
the purposes of basic loss per share 196,306,565 104,746,823
Weighted average number of ordinary shares for
the purposes of diluted loss per share 196,306,565 104,746,823
Dilutive and anti-dilutive potential ordinary shares
The following potential ordinary shares were excluded in the diluted earnings
per share calculation as they were anti-dilutive.
30 June 2024 30 June 2023
(Restated)
Share warrants in issue 55,450,910 20,538,468
Share options in issue 673,045 673,045
Convertible loans 572,825,165 2,766,983
LTIP Share options in issue 2,116,937 3,747,799
Total anti-dilutive shares 631,066,057 27,726,295
Events after the balance sheet date
177,163,874 ordinary shares were issued after the period end. If these shares
were in issue prior to 30 June 2024, they would have affected the calculation
of the weighted average number of shares in issue for the purposes of
calculating both the basic loss per share and diluted loss per share by
29,527,312.
Retrospective Adjustments
The comparative earnings per share
figures have been restated to reflect:
(1) The disposal of a subsidiary in 2023, leading to a restatement of
comparative figures to reflect discontinued operations (see Notes 34 and 35);
and
(2) The capital reorganisation that took
place in December 2023, leading to a decrease in the number of ordinary shares
outstanding.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
11. PROPERTY, PLANT AND EQUIPMENT
During the six-month period ended 30 June 2024, the Group acquired property,
plant and equipment to the value of €Nil financed by new leases (H1 2023 -
€489,130) and €Nil financed by cash. (H1 2023: €7,482).
12. INTANGIBLE ASSETS
Included are the following amounts relating to goodwill in intangible assets:
30 June 2024 31 December 2023
Cost € €
At start and at end of the financial period 16,710,497 1
6
,
7
1
0
,
4
9
7
Accumulated impairment losses
At start of the financial period 6,710,497 1
,
4
2
7
,
0
3
8
Impairment losses - 5
,
2
8
3
,
4
5
9
At end of the financial period 6,710,497 6,710,497
Carrying value
At start and at end of the financial period 10,000,000 1
0
,
0
0
0
,
0
0
0
13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investments accounted for using the equity method are made up as follows:
30 June 2024 31 December 2023
€ €
Investment in associate undertakings 3,477,820 3,474,359
Investment in joint ventures 3,374,354 3,358,029
6,852,174 6,832,388
The carrying amount of equity-accounted investments has changed as follows in
the six months to June 2024:
Associate Joint
Undertakings Ventures
6 months ended 6 months ended
30 June 2024 30 June 2024
€ €
Beginning of the period 3,474,359 3,358,029
Loans advanced in period - 35,660
Loans repaid in period - (14,080)
Interest accrued on loans in period 51,566 -
Share of loss on equity-accounted investments in period (48,105) (5,372)
Investment in joint venture - 117
3,477,820 3,374,354
14. DEVELOPMENT ASSETS
30 June 2024 31 December 2023
€ €
Costs associated with project development 479,914 613,516
The Group uses its expertise in engineering, project management, permitting,
planning and financing to develop waste to value projects. Once the projects
reach a certain level of maturity, third party investors are allowed invest in
the project SPV. The Group charges a premium to the project SPV for the
development services over and above the costs incurred in developing the
project.
Costs associated with project development, including loans advanced to project
undertakings (together "Total Project Costs") comprise expenses associated
with engineering, project management, permitting, planning, financing and
other services, incurred in furthering the development of a project towards
financial close. Total Project Costs set out above represent the cost of
delivery of project development services and are transferred to cost of sales
when the project SPV is invoiced by the Group for project development work.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
15. TRADE AND OTHER RECEIVABLES
Included in trade and other receivables is an amount of €2,360,947 (31
December 2023: €Nil) receivable in respect of the legal settlement agreement
announced on 3 April 2024 of claims made against Logik Developments Limited
and its wholly owned subsidiary, Logik WTE Limited amounting to £2,000,000.
The Group received these settlement funds on 4 September 2024.
16. EQUITY
During the 6-month period ended 30 June 2024, 2,106,774,908 shares of €0.01
each (6 months ended 30 June 2023: 2,106,774,908 shares of €0.001 each) were
issued as follows:
Amounts of shares 6 months ended 6 months ended
30 June 2024 30 June 2023
Ordinary Shares of €0.001 each issued and fully paid
- Beginning of the period - 9,421,479,112
- Issued in lieu of borrowings and settlement of payables - 510,214,535
- Share issue for cash - public and private placement - 1,596,560,373
Total Ordinary shares of €0.001 each authorised, issued and fully paid at
the end of the period
- 11,528,254,020
Ordinary Shares of €0.01 each issued and fully paid
- Beginning of the period 181,485,890 -
- Issued in lieu of borrowings and settlement of payables 15,237,530 -
- Share issue for cash - public and private placement 60,887,491 -
Total Ordinary shares of €0.01 each authorised, issued and fully paid at the
end of the period
257,610,911 -
On 17 December 2023, a capital re-organisation took place whereby (1) each
existing ordinary share of €0.001 each was sub-divided into 10 ordinary
shares of €0.0001 each; (2) every 1,000 sub-divided shares of €0.0001 each
was consolidated into 10 ordinary shares of €0.01 each; and (3) 9 out of
every 10 ordinary shares of €0.01 each was re-designated into 9 deferred "C"
ordinary shares of €0.01 each.
17. BORROWINGS
During the six months ended 30 June 2024,
the following occurred in relation to debt securities:
Secured Loan Facility
During May 2024, the Company announced that it had secured a refinancing of
its existing secured lending facility. The new funding replaces the previous
funding with a non-convertible secured term loan facility with no scheduled
repayments until 21 May 2026. The outstanding debt will only reduce
proportionally to future capital inflows prior to the 24-month maturity date.
Unsecured Convertible Loan Facility
During May 2024, the Company announced a further drawdown of £260,638 on the
unsecured convertible loan facility which was set up in November 2023.
On 4 September 2024, after the balance sheet date, certain lenders under the
unsecured convertible loan facility were automatically deemed to have issued a
conversion notice at a conversion price equal to the Issue Price in respect of
their respective outstanding loan balances. Accordingly, a total amount of
£522,000 (principal and interest) was converted into 52,200,000 new Ordinary
Shares at a price of 1 pence per new Ordinary Share.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
18. LEASES
Lease liabilities are presented in the statement of financial position as
follows:
30 June 2024 31 December 2023
€ €
Current 208,418 202,798
Non-current 297,340 400,518
505,758 603,316
The Group has a lease for its offices in Iberia, Spain and London, United
Kingdom. The lease liabilities are secured by the related underlying asset.
Further minimum lease payments at 30 June 2024 were as follows:
Minimum lease payments due
Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years After 5 years Total
€ € € € € € €
30 June 2024
Lease payments 220,740 128,683 105,600 74,800 - - 529,823
Finance charges (12,322) (6,982) (3,878) (883) - - (24,065)
Net Present Values 208,418 121,701 101,722 73,917 - - 505,758
31 December 2023
Lease payments 218,124 184,420 105,600 105,600 22,000 - 635,744
Finance charges (15,326) (9,270) (5,391) (2,343) (98) - (32,428)
Net Present Values 202,798 175,150 100,209 103,257 21,902 - 603,316
19. DISCONTINUED OPERATIONS
On 12 July 2023, the Group disposed of 95% of its interest in Grande-Combe
SAS, retaining 5% which has been transferred to other investments. The
combined results of the discontinued operations included in the loss for the
financial period is set out below:
6 months ended 6 months ended
30 June 2024 30 June 2023
€ €
Revenue - -
Cost of sales - -
Gross profit - -
Administrative expenses - (1,448)
Finance costs and income - -
Loss from discontinued operations before tax - (1,448)
Taxation - -
Loss for the financial period from discontinued operations (attributable to
owners of the Company)
- (1,448)
Cash flows generated by Grande-Combe SAS for the financial years under review
were as follows:
6 months ended 6 months ended
30 June 2024 30 June 2023
€ €
Operating activities - (1,448)
Investing activities - -
Financing activities - -
Net cash flows used in discontinued operations - (1,448)
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
20. RELATED PARTY TRANSACTIONS
The Group's related parties include Altair Group Investment Limited
("Altair"), the associate and joint venture companies, unconsolidated
structured entities and key management.
Transactions with Altair
During the six-month period ended 30 June 2024, Altair advanced €117,125 (H1
2023: €905,640) by way of borrowings and was repaid €Nil (H1 2023:
€1,707,919) with respect to these loans. Interest payable to Altair for the
six-month period ended 30 June 2024 amounted to €8,727 (H1 2023: €42,295).
Included in borrowings, net of amortisation costs, at 30 June 2024 is an
amount of €283,107 (31 December 2023: €152,643) due to Altair from the
Group
Transactions with associate undertakings and joint ventures
The following aggregated transactions were made with associate undertakings
and joint ventures in the six months ended 30 June 2024:
6 months ended 6 months ended
30 June 2024 30 June 2023
Loans to associated undertakings and joint ventures € €
Beginning of the financial period 6,278,269 5,174,551
Loans advanced in period 35,660 225,250
Loans repaid in period (14,080) (33,200)
Reclassified as equity - (254,470)
Interest accrued on loans in period 51,566 31,597
Exchange differences - 2,450
At end of the financial period 6,351,415 5,146,178
6 months ended 6 months ended
30 June 2024 30 June 2023
Sales of goods and services € €
Technology sales 215,990 -
Other income 6,128 52,913
Recharge of costs 1,147 -
30 June 2024 31 December 2023
Period-end balances € €
Included in trade receivables 4,649,188 4,701,946
Included in other receivables 70,004 31,482
Included in other payables 118 129,737
Transactions with unconsolidated structured
entities
During the 6-month period ended 30 June 2024, the Group generated sales of
€301,071 from Biogaz Gardanne SAS (6 months ended 30 June 2023: €Nil), an
unconsolidated structured entity. Included in trade and other receivables at
31 December 2023 is €1,108,444 receivable from Biogaz Gardanne SAS (31
December 2024: €807,373).
Transactions with key management
Key management of the Group are the members of EQTEC plc's board of directors.
There have been no non-remuneration transactions with key management in the
six months ended 30 June 2024. At 30 June 2024, directors' remuneration unpaid
amounted to €271,368 (31 December 2023: €66,568).
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
21. EVENTS AFTER THE BALANCE SHEET DATE
Receipt of funds under settlement agreement
On 4 September 2024, the Company received £2,000,000 from the proceeds of the
legal settlement agreement with Logik Developments Limited.
Share Placings
On 4 September 2024, the Company announced that it had raised, in aggregate,
£1.1 million before expenses by way of a £1 million placing and a
subscription of £100,000 to new and existing institutional and other
investors for, in aggregate, 110,000,000 new ordinary shares of €0.01 each
in the capital of the Company ("Ordinary Shares") (together, the "Fundraise
Shares") at a price of 1 pence per new Ordinary Share (the "Issue Price"). In
addition, on 9 September 2024, the Company raised £72,528 from existing
retail investors via the Winterflood Retail Access Platform ("WRAP") platform
at the Issue Price through the issue of a total of 7,252,815 new Ordinary
Shares
In addition, certain lenders under the unsecured convertible loan facility
were automatically deemed to have issued a conversion notice at a conversion
price equal to the Issue Price in respect of their respective outstanding loan
balances. Accordingly, a total amount of £522,000 (principal and interest)
was converted into 52,200,000 new Ordinary Shares at the Issue Price.
The Company further announced that it issued, in aggregate, 7,711,059 new
Ordinary Shares at the Issue Price to certain strategic service providers
providing business development and advisory services to the Group in
satisfaction of fees due to them.
22. APPROVAL OF FINANCIAL STATEMENTS
The condensed consolidated financial statements for the six months ended 30
June 2024, which comply with IAS 34, were approved by the Board of Directors
on 23 September 2024.
This announcement contains inside information as defined in Article 7 of the
EU Market Abuse Regulation No 596/2014, as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018, as
amended, and has been announced in accordance with the Company's obligations
under Article 17 of that Regulation.
ENQUIRIES
EQTEC plc +44 20 3883 7009
David Palumbo
Strand Hanson - Nomad & Financial Adviser +44 20 7409 3494
James Harris / Richard Johnson
Shard Capital Partners LLP - Broker +44 20 7186 9927
Damon Heath / Isabella Pierre
Fortified Securities - Broker +44 20 3411 7773
Guy Wheatley
Global Investment Strategy UK Ltd - Broker +44 20 7048 9045
Samantha Esqulant
About EQTEC
EQTEC is one of only a few circular economy technology providers able to
address the dual challenges of growing quantities of global waste and the
growing demand for energy and biofuels. EQTEC cleanly converts waste into a
range of valuable commodities that support new energy and industrial
infrastructure. With one of the world's most experienced thermochemical
conversion technology and engineering teams, EQTEC provides bespoke waste
management and new energy solutions through best-in-class innovation,
infrastructure engineering and value-added services for developers,
owner-operators and industrials.
EQTEC's end-to-end process solutions are in demand from around the world with
highly efficient equipment that is modular and scalable from three tonnes of
waste per hour. Its versatile solutions process dozens of varieties of
feedstock, including plastics, mixed municipal waste, industrial waste and
other non-recyclables, all with no hazardous or toxic emissions, producing a
wide range of valuable commodities including synthesis gas ("syngas")
electricity, heat and steam, synthetic natural gas, hydrogen, liquid fuels or
other chemicals.
The Company is quoted on the London Stock Exchange's Alternative Investment
Market (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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