REG - EQTEC PLC - UK Projects and Trading Update

EQTECAnnouncement

13/12/2021 07:00

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RNS Number : 3571V  EQTEC PLC  13 December 2021

13 December 2021

EQTEC plc

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

 

UK Projects and Trading Update

 

 

EQTEC plc (AIM: EQT), a world-leading technology innovation company enabling
the Net Zero Future through advanced solutions for hydrogen, biofuels, SNG and
other energy production, is pleased to provide the following UK Projects
update at the end of 2021.

 

Billingham Project update

 

The Billingham Project aims to install a 25 MWe waste gasification capability
built around EQTEC technology to transform 200,000 tonnes or more per year of
refused-derived fuel (RDF) from municipal solid waste into electricity,
thermal energy and/ or a range of other chemicals and fuels. In January 2021,
the Company confirmed it had secured planning consent for an improved scheme
with a lower environmental impact and better commercial outcome.

 

In recent months, the Company has been actively engaged with Tier 1 EPC
companies planning and costing for the front-end engineering design ("FEED")
work, which is intended to commence in early 2022.

 

Over the same period, developments in gas and power markets have created new
and compelling opportunities for offtake from the plant. As a result, the
Company has entered discussions with local, industrial offtake customers for
potential provision of a range of syngas-to-power, syngas-to-heat and
syngas-to-chemical applications.

 

As these discussions progress and FEED work commences, the Company anticipates
steady progress toward financial close in 2022.

 

Deeside Project update

 

The Deeside Project seeks to create a complete, local waste-to-energy solution
with a material recovery facility ("MRF"), a 2 MW anaerobic digestion ("AD")
facility built around Anaergia, Inc. ("Anaergia") technology and a 9.9 MWe
gasification facility built around EQTEC technology. The planned integrated
facilitiy will transform c.182,000 tonnes per year of municipal, commercial
and industrial waste into green electricity and other energy. Development of
the full project is being undertaken by the Company in partnership with Logik
Developments Limited ("Logik").

 

The Company announced in March 2021 that it had entered into a formal,
three-year Collaboration Framework Agreement ("CFA") with Toyota Motor
Manufacturing (UK) Limited ("Toyota") for exploration of an innovative,
circular and sustainable waste-to-energy solution for Toyota's engine
manufacturing plant in Deeside, including potential supply of biomethane gas
and green electricity as well as conversion of manufacturing waste and
reduction of the Toyota plant's carbon footprint.

 

In October, the Company confirmed that the resolution to grant planning
consent from the County Council for the advanced gasification facility was
secured, following prior approval of the site for the original plan of a
recycling and AD facility.

 

In December, the Company announced its intent with Logik to develop additional
waste-to-value infrastructure on the Deeside site. The Parties are currently
conducting additional feasibility studies for hydrogen and other biofuels to
enhance the existing sustainable RDF-to-energy work on the Deeside Project.

 

Both the Billingham Project and the Deeside Project are part of the portfolio
currently under review by a range of large-scale infrastructure investors and
owner-operators for potential funding, commercial operation or both. The
Company anticipates these discussions will progress to exclusivity and due
diligence in early 2022.

 

Billingham and Deeside financial close deferrals and impact on Company revenue

 

In response to the new opportunities for both projects-particularly for
offtake, the Company has elected to defer financial close for the Billingham
and Deeside Projects until 2022. The Company believes these opportunities
deserve further exploration and has focused its efforts on reviewing,
modelling and assessing them, toward expansion of even greater positive impact
for local communities and additional value for all stakeholders.

 

As a result of the deferrals, the Company will not invoice before the end of
2021 a total of c. €6 million in fees for development services on the two
projects, as it had previously expected to do. The Company expects to
recognise revenues from these fees in 2022 and remains confident of both
projects' reaching financial close in the same period.

 

However, and as previously announced, the Company continues to expect revenues
in 2021 from technology sales to several entities and projects, including
Agrigas of Larissa, Greece ("Agrigas"), the EQTEC Italia Market Development
Centre ("MDC") in Gallina, Toscana, Italy ("Italia MDC"), the Belišće,
Croatia MDC ("Croatia MDC"), the Karlovac, Croatia project ("Karlovac") and
the Livadia, Greece project ("Livadia 1"), as well as from development
services fees to the Croatia MDC, Karlovac, and Livadia 1.

 

With the deferral of financial close for its two largest projects, the Company
anticipates its total revenues for 2021 to be in the range of €8 - 10
million (2020: €2.2 million), representing strong growth. In line with these
deferrals, the Company currently forecasts an EBITDA loss (adjusted for
one-off share based payments) in the range of €2.5 - 3.5 million, prior to
closing additional projects that might fall into the current financial year.

 

David Palumbo, CEO of EQTEC, commented:

 

"2021 has been a transformative year for us and we will enter 2022 with a
stronger balance sheet position.  We delivered financial close on a number of
deals, most importantly on two Market Development Centres, both to be
operational in 2022 and to become showcases for our capabilities. We have
accelerated conversion of pipeline opportunities into well managed projects
and this sets us up for further, sustainable growth in 2022. On the one hand,
we are disappointed not to have closed on Billingham and Deeside this year,
but on the other, we believe these deals will develop into even more
compelling propositions for EQTEC, local communities and our stakeholders.
We are seeing growing interest in a wider range of applications for our syngas
capabilities and growing attention from larger investors and highly reputable
operators commited to the energy transition. I look forward to reporting
strong progress in 2022 as we further leverage our platform for growth and
scale in a rapidly evolving market."

 

More information

This announcement contains inside information as defined in Article 7 of the
EU Market Abuse Regulation No 596/2014 and has been announced in accordance
with the Company's obligations under Article 17 of that Regulation.

 

ENQUIRIES

 EQTEC plc                                                     +44 203 883 7009
 David Palumbo / Nauman Babar

 Strand Hanson - Nomad & Financial Adviser                     +44 20 7409 3494
 James Harris / James Dance

 Arden Partners - Joint Broker                                 +44 20 7614 5900
 Paul Shackleton (Corporate) / Simon Johnson (Sales)

 Canaccord Genuity - Joint Broker                              +44 20 7523 8000
 Henry Fitzgerald-O'Connor / James Asensio / Patrick Dolaghan

 Alma PR - Financial Media & Investor Relations                +44 20 3405 0205
 Josh Royston / Sam Modlin / Matthew Young                     EQTEC@almapr.co.uk (mailto:EQTEC@almapr.co.uk)

 BECG - General Media Enquiries                                +44 7554 014 188 / +44 7867 452 269
 Carrie Lowe / Tom Gosschalk                                   EQTEC@BECG.com (mailto:EQTEC@BECG.com)

 

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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