REG - SIMEC AtlantisEnergy - Interim Results (unaudited)
30/09/2020 07:00
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RNS Number : 5156A SIMEC Atlantis Energy Limited 30 September 2020
INTERIM RESULTS (UNAUDITED)
30 September 2020
SIMEC ATLANTIS ENERGY LIMITED
("Atlantis", the "Company" or the "Group")
Interim Results (unaudited)
SIMEC Atlantis Energy Limited, the global developer, owner and operator of
sustainable energy projects is pleased to announce its unaudited Interim
Results for the six months ended 30 June 2020.
Trading Statement
The first six months of 2020 have seen significant global economic and social
challenges as a result of the COVID-19 pandemic. Despite these challenges, we
have maintained a high level of activity across each of our business units and
we continue to see encouraging progress on all key projects notwithstanding
all of the logistical and workplace challenges COVID-19 social distancing
restrictions present. In particular, we note the major technical, planning
and commercial milestones that have been achieved recently on the Uskmouth
power station conversion project in Wales, our recent entry into the NPA Fuels
joint venture with the N+P Group, the performance from the MeyGen project in
Scotland and the recent over-subscribed equity placement in August 2020.
Financial summary
The overall loss before tax of £6.1 million for the six months ended 30 June
2020 was almost half of the loss of £11.8 million reported for the same
period in 2019. This improvement is largely attributable to strong revenue
contributions generated by the Atlantis tidal turbine and engineering services
division, together with good performance from the MeyGen project in Scotland.
Six months of revenue contributions from GHR added to the improved
performance relative to 2019. Overall, costs were in line with expectations
with significant contractors' costs being incurred in delivery of the subsea
hub project and the AR500 turbine for Japan, as well as the ongoing Uskmouth
operational costs.
Depreciation, as expected, has remained stable and is being driven by Uskmouth
and MeyGen.
Finance costs in the current period are materially in line with the same
period last year and also included five months of the £3.79 million Abundance
bond raise, which closed in February 2020.
The unaudited consolidated cash position of the Atlantis Group at 30 June 2020
was £9.8 million.
Tim Cornelius, Chief Executive of Atlantis, commented:
The impact of COVID-19 on our business, society and personal lives cannot be
underestimated and we have all had to find new ways to work and to live. I am
immensely proud of all the team at Atlantis who have ensured that during these
unprecedented times we have continued to make material progress on our
important portfolio of projects, where we connect carbon cutting projects with
industries looking to ensure that they can reduce their carbon intensity and
be at the forefront of the green agenda.
Each of our business units, being tidal energy, hydro power and power station
conversions, have delivered exceptional performance under challenging
conditions.
The full Interim Report will be available to download from the Company's
website today.
www.simecatlantis.com
Enquiries:
Investec Bank PLC +44 (0) 20 7597 5970
Jeremy Ellis
Sara Hale
Ben Griffiths
SIMEC Atlantis Energy Limited +44 (0) 7739 832 446
Sean Parsons, Director of External Affairs
Notes to Editors
SIMEC Atlantis Energy
Atlantis is a global developer, owner and operator of sustainable energy
projects with a diverse portfolio in various stages of development. This
includes a 77 per cent. stake in the world's largest tidal stream power
project, MeyGen, 100 per cent. of the 220MW Uskmouth Power Station conversion
project and 100 per cent. of Green Highland Renewables, a leading developer of
mini-hydro projects.
https://www.simecatlantis.com/ (https://www.simecatlantis.com/)
SIMEC Atlantis Energy Limited
Registration Number: 200517551R
Consolidated Interim Financial Statements
(unaudited)
For the six months ended 30 June 2020
Trading Update Statement
The first six months of 2020 have seen significant global economic and social
challenges as a result of the COVID-19 pandemic. Here at Atlantis we have
maintained activity across each of our business units and we continue to see
encouraging progress despite the logistical and workplace challenges COVID-19
social distancing restrictions present. In particular, we note the continued
progress of the Uskmouth power station conversion project in Wales with major
technical, planning and commercial milestones having been successfully
achieved, the entry into the NPA Fuels joint venture with the N+P Group, and
the resulting over-subscribed equity placement in August 2020.
Power Station Conversion
The Uskmouth conversion project started the year in March with successful
commercial fuel pellet production and milling trials and followed this up in
May with the launch of the project pre-application planning consultation. The
most significant technical achievement of 2020 was announced in June in
relation to the large scale fuel combustion tests which took place in
Nagasaki, Japan. These tests were successfully completed by Mitsubishi Power
Systems and results exceeded combustion performance expectations. In August,
we announced entry into a fuel supply joint venture with the N+P Group to
supply fuel to Uskmouth and other future conversion projects. This joint
venture is expected to improve the security of Uskmouth's fuel supply whilst
providing access to additional revenues from the sale of fuel and the gate
fees chargeable for receipt of the input waste materials at the fuel
production plants. In order to optimise revenues generated by power sales
from Uskmouth we have also announced that we are working with data centre
development specialist TechRE to evaluate opportunities to sell output via
private wire networks to data centre customers. Finally, we recently updated
the market on our relationship with South Korean infrastructure investor Hana
Financial Investment Co, with whom we are seeking to secure debt and equity
bridge financing for the conversion of the first 110MW of capacity at
Uskmouth.
Marine Energy
The 6MW first phase of the MeyGen project has now exported more than 33GWh to
the grid, enough to charge more than 750,000 standard electric vehicles.
Whilst the three Andritz turbines have been performing well, the Atlantis
AR1500 turbine requires further repair and maintenance following its
redeployment in August. We expect the AR1500 to be reinstated and fully
operational by the end of December 2020. The variable pitch upgrade is
expected to deliver a 4% increase in annual revenue with no increase in the
turbine's operating cost. The August operations included the completion of
the installation of MeyGen's new subsea hub, which was provided by Atlantis
under a £2.4m delivery contract supported by a grant from the Saltire Tidal
Energy Challenge Fund. This subsea hub is a key enabler for cost reductions
in future tidal arrays as it is designed to allow for the connection of
multiple turbines offshore.
Atlantis is in the final stages of construction and testing for an AR500
turbine system to be delivered to Japan for our client Kyuden Mirai Energy
("KME") in Q4 2020. The turbine will be deployed in the Straits of Naru,
within the southern Japanese Goto island chain. It is intended that this would
be the first phase of a larger testing programme at the site, subject to
initial performance.
Hydro Energy
The Atlantis group's hydro division, SIMEC GHR Ltd ("GHR"), has continued to
develop its operations and maintenance business and currently provides
services to over 45 separate hydroelectric schemes throughout Scotland. New
clients are being added and additional resources are being deployed to ensure
that the service levels are of the highest standard. GHR's project management
division is actively involved in the construction of 4 new hydro schemes and,
although COVID-19 closed these sites for a short while, construction is now
progressing well towards the required commissioning dates.
Equity Placement
On 6 August 2020, the Company announced the launch of a fundraising comprising
a placing by way of an accelerated bookbuild process by Investec and Arden and
an offer for subscription by PrimaryBid, each at a price of 12 pence per share
(together, the "Fundraising"). The placing raised gross proceeds of £6.5
million through the issue of 54,166,666 new ordinary shares and the PrimaryBid
offer raised £1 million through the issue of 8,333,333 new ordinary shares.
In aggregate, therefore, the Fundraising raised gross proceeds of
approximately £7.5 million and resulted in the issue of 62,499,999 new
Ordinary Shares at 12 pence per share. The proceeds are being used to fund
the Company's working capital requirements and in connection with the proposed
investment by the Company in NPA Fuels Limited.
Summary of Results
The overall loss before tax of £6.1 million for the six months ended 30 June
2020 was almost half of the loss of £11.8 million reported for the same
period in 2019. This improvement is largely attributable to strong revenue
contributions generated by the tidal turbines and engineering services
division, together with good performance from the MeyGen project in Scotland.
Six months of revenue contributions from GHR added to the improved
performance relative to 2019. Overall, costs were in line with expectations
with significant contractors' costs being incurred in delivery of the subsea
hub project and the AR500 turbine for Japan, as well as the ongoing Uskmouth
operational costs.
Depreciation, as expected, has remained stable and is being driven by Uskmouth
and MeyGen.
Finance costs in the current period are materially in line with the same
period last year and also included five months of the £3.79 million Abundance
bond raise, which closed in February 2020.
The unaudited consolidated cash position of the Atlantis Group at 30 June 2020
was £9.8 million.
Condensed consolidated statement of profit and loss and
other comprehensive income
For the six months ended 30 June 2020
Group
Six months ended
Note 30 June 30 June
2020 2019
£'000 £'000
Revenue 7,935 1,974
Other gains and losses 154 76
Employee benefits expense (3,203) (3,125)
Subcontractor costs (2,251) (1,739)
Depreciation and amortisation (5,318) (5,219)
Acquisition costs - (980)
Other operating expenses (1,534) (1,651)
Total expenses (12,306) (12,714)
Results from operating activities (4,217) (10,664)
Finance costs (1,959) (1,749)
Loss before tax (6,176) (12,413)
69 581
Tax credit
Loss for the period (6,107) (11,832)
Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations 4 -
Total comprehensive income for the period (6,103) (11,832)
Loss attributable to:
Owners of the Group (5,868) (11,436)
Non-controlling interests (239) (396)
Total comprehensive income attributable to:
Owners of the Group (5,864) (11,436)
Non-controlling interests (239) (396)
Loss per share (basic and diluted) (pence) 5 (0.01) (0.03)
Condensed consolidated statement of financial position
As at 30 June 2020
Group
30 June 31 December 2019
2020
£'000 £'000
Assets
Property, plant and equipment 134,069 136,315
Intangible assets 16,253 17,058
Right-of-use assets 1,296 1,436
Investment in joint venture 47 47
Non-current assets 151,665 154,856
Trade and other receivables 2,420 7,830
Inventory 861 864
Cash and cash equivalents 9,819 4,521
Current assets 13,100 13,215
Total assets 164,765 168,071
Liabilities
Trade and other payables 11,195 9,449
Lease liabilities 192 276
Provisions 118 120
Loans and borrowings 3,625 4,559
Current liabilities 15,130 14,404
Loans and borrowings 42,782 40,662
Lease liabilities 981 1,091
Provisions 14,669 14,539
Deferred tax liabilities 3,275 3,344
Non-current liabilities 61,707 59,636
Total liabilities 76,837 74,040
Net assets 87,928 94,031
Equity
Share capital 188,018 188,018
Capital reserve 12,665 12,665
Translation reserve 7,083 7,079
Share option reserve 740 740
Accumulated losses (126,654) (120,786)
Total equity attributable to owners of the Company 81,852 87,716
Non-controlling interests 6,076 6,315
Total equity 87,928 94,031
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2020
Attributable to owners of the Company
Share Capital Translation reserve Share Accumulated losses Total Non- Total
reserve
controlling interest
capital option
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Group
At 1 January 2019 178,218 12,665 7,073 3,224 (88,479) 112,701 6,862 119,563
Total comprehensive income for the period
Loss for the period - - - - (11,436) (11,436) (396) (11,832)
Other comprehensive income - - (1) - - (1) - (1)
Total comprehensive income for the period - - (1) - (11,436) (11,437) (396) (11,833)
Transactions with owners
Contributions and distributions
Issue of share capital 9,800 - - - - 9,800 - 9,800
Recognition of share-based payments - - - 36 - 36 - 36
Transfer between reserves - - - (799) 799 - - -
Total transactions with owners 9,800 - - (763) 799 9,836 - 9,836
At 30 June 2019 188,018 12,665 7,072 2,461 (99,116) 111,100 6,466 117,566
Total comprehensive income for the period
Loss for the period - - - - (23,436) (23,436) (151) (23,587)
Other comprehensive income - - 7 - - 7 - 7
Total comprehensive income for the period - - 7 - (23,436) (23,429) (151) (23,580)
Transactions with owners
Contributions and distributions
Recognition of share-based payments - - - 45 - 45 - 45
Transfer between reserves - - - (1,766) 1,766 - - -
Total transactions with owners - - - (1,721) 1,766 45 - 45
At 31 December 2019 188,018 12,665 7,079 740 (120,786) 87,716 6,315 94,031
Total comprehensive income for the period
Loss for the period - - - - (5,868) (5,868) (239) (6,107)
Other comprehensive income - - 4 - - 4 - 4
Total comprehensive income for the period - - 4 - (5,868) (5,864) (239) (6,103)
Transactions with owners
Contributions and distributions
Issue of share capital - - - - - - - -
Recognition of share-based payments - - - - - - - -
Transfer between reserves - - - - - - - -
Total transactions with owners - - - - - - - -
At 30 June 2020 188,018 12,665 7,083 740 (126,654) 81,852 6,076 87,928
Condensed consolidated statement of cash flows
For the six months ended 30 June 2020
Group
Six months ended
30 June 30 June
2020 2019
£'000 £'000
Cash flows from operating activities
Loss before tax for the period (6,176) (12,413)
Adjustments for:
Grant income (71)
Depreciation of property, plant and equipment 4,497 4,454
Amortisation of intangible asset 821 765
Interest income (18) (7)
Finance costs 1,959 1,749
Share-based payments - 36
Provision movement - (1,054)
Net foreign exchange (23) 3
Operating cash flows before movements in working capital 989 (6,467)
Movement in trade and other receivables 1,376 857
Movement in trade and other payables 1,625 (1,946)
Net cash used in operating activities 3,990 (7,556)
Cash flows from investing activities
Purchase of property, plant and equipment (3,514) (751)
Acquisition of subsidiary, net of cash acquired - -
Net cash used in investing activities (3,514) (751)
Cash flows from financing activities
Proceeds from grants received 1,509 -
Proceeds from issue of shares (1) 4,000 5,030
Costs related to fund raising - (260)
Proceeds from borrowings 1,056 -
Repayment of borrowings (961) (65)
Deposits (pledged) / released (492) (1)
Payment of lease liabilities (235) (204)
Interest paid (547) (394)
Net cash from financing activities 4,330 4,106
Net increase / (decrease) in cash and cash balances 4,806 (4,201)
Cash and cash equivalents at beginning of period 3,602 8,351
Cash and cash equivalents at end of period 8,408 4,150
Included in cash and cash equivalents in the statements of financial position
is £1.4 million (2019: £0.9 million) of encumbered deposits.
(1) Shares were issued as part of March 2019 share placing. Cash received
from SIMEC in 2020.
Notes to the Consolidated Interim Financial Statements
The condensed consolidated statement of financial position of SIMEC Atlantis
Energy Limited (the "Company") and its subsidiaries (the "Group") as at 30
June 2020, the condensed consolidated statement of profit or loss and other
comprehensive income, the condensed consolidated statement of changes in
equity and the condensed consolidated statement of cash flows for the Group
for the six-month period then ended and certain explanatory notes (the
"Consolidated Interim Financial Statements"), were approved by the Board of
Directors for issue on 29 September 2020
These notes form an integral part of the Consolidated Interim Financial
Statements.
The Consolidated Interim Financial Statements do not comprise statutory
accounts of the Group within the meaning in the provisions of the Singapore
Companies Act, Chapter 50. The Group's statutory accounts for the year ended
31 December 2019 were prepared in accordance with Singapore Financial
Reporting Standards (International) (SFRS(I)) and International Financial
Reporting Standards (IFRS). SFRS(I)s are issued by the Accounting Standards
Council Singapore, which comprise standards and interpretations that are
equivalent to IFRS issued by the International Accounting Standards Board. All
references to SFRS(I)s and IFRSs are subsequently referred to as IFRS in these
financial statements unless otherwise specified.
The Group's statutory accounts for the year ended 31 December 2019 were
approved by the Board of Directors on 11 August 2020 and have been reported by
the Group's auditors.
1 Domicile and activities
SIMEC Atlantis Energy Limited (the "Company") is a company incorporated in
Singapore. The Company's registered office address is c/o Level 4, 21 Merchant
Road, #04-01, Singapore 058267. The principal place of business is Edinburgh
Quay 2, 139 Fountainbridge, Edinburgh, EH3 9QG, United Kingdom.
The principal activity of the Group is to develop and operate as a global
sustainable energy provider. The Company is an inventor, developer, owner,
marketer and licensor of technology, intellectual property, trademarks,
products and services and an investment holding company.
2 Significant accounting policies
Basis of preparation
The Consolidated Interim Financial Statements have been prepared in accordance
with the AIM Rules for Companies and are therefore not required to comply with
International Accounting Standard 34 Interim Financial Reporting to maintain
compliance with IFRS. In all other respects, the financial statements are
drawn up in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
Selected explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in financial position
and performance of the Group since the last annual consolidated financial
statements as at and for the year ended 31 December 2019.
The Consolidated Interim Financial Statements, which do not include the full
disclosures of the type normally included in a complete set of financial
statements, are to be read in conjunction with the last issued consolidated
financial statements of the Group as at and for the year ended 31 December
2019.
Accounting policies
The accounting policies and method of computation used in the Consolidated
Interim Financial Statements are consistent with those applied in the last
issued consolidated financial statements of the Group for the year ended 31
December 2019.
3 Critical accounting judgements and key sources of estimation uncertainty
In preparing this set of Consolidated Interim Financial Statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the consolidated financial statements for the year ended 31
December 2019.
4 Going concern basis
The Group has prepared financial forecasts for a period beyond 30 September
2021, including sensitivity analysis. These forecasts, which take into account
the ongoing committed costs of the Group, demonstrate that the Company is able
to operate within its available cash and funding balances for a period beyond
30 September 2021. The forecasts indicate that the Group is projected to
operate within its available cash facilities for the forecast period although
mitigating action may be required to be taken in advance of periods when cash
and cash equivalents available for use are forecast to be limited.
While the Directors cannot envisage all possible circumstances that may impact
the Group in the future, the Directors believe that, taking account of the
forecasts, future plans and available cash resources, the Group will have
sufficient resources to support the Company to meet all ongoing working
capital and committed capital expenditure requirements as they fall due.
Further details on the going concern assessment are provided in the 31
December 2019 consolidated financial statements published on the 11(th) August
2020.
5 Other notes
(i) In respect of the six months to 30 June 2020, the diluted
earnings per share is calculated on a loss attributable to owners of the
Company of £5.8 million on the basic weighted average of 429,077,656 ordinary
shares (30 June 2019: loss of £11.8 million and basic weighted average shares
of 399,201,964). Share options were excluded from the diluted weighted average
number of ordinary shares calculations as their effect would have been
anti-dilutive. No dividends has been declared (2019: nil).
6 Events after the reporting date
On 11 August the Company raised £7.5 million, before expenses, through the
placing of 62,499,999 new ordinary shares at a placing price of 12 pence per
share.
COMPANY INFORMATION
NON-EXECUTIVE DIRECTORS AUDITOR
John Mitchell Neill Ernst & Young LLP
One Raffles Quay
Mark Edward Monckton Elborne
North Tower, Level 18
Singapore 048583
George Jay Hambro
Ian Raymond Wakelin
John Anthony Clifford Woodley
EXECUTIVE DIRECTORS REGISTRAR
Timothy James Cornelius Boardroom Corporate & Advisory Services Pte Ltd
Andrew Luke Dagley 50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
REGISTERED OFFICE AND DEPOSITARY
COMPANY NUMBER Link Market Services Trustees Limited
c/o Level 4, 21 Merchant Road, The Registry
#04-01 34 Beckenham Road
Singapore 058267 Beckenham BR3 4TU
Company Number: 200517551R
COMPANY SECRETARY GUERNSEY BRANCH REGISTER
Kelly Tock Mui Han Link Market Services (Guernsey) Limited
21 Merchant Road Mont Crevelt House
#04-01 Royal Merukh S.E.A Bulwer Avenue
Singapore 058267 St Sampson
Guernsey GY2 4LH
NOMINATED ADVISER AND BROKER
Investec Bank plc
30 Gresham Street
London
EC2V 7QP
WEBSITE
www.simecatlantis.com
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