TIDMEQT
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: EUR8.0 million (2021: EUR9.2 million)
-- EBITDA loss before significant and non-recurring items:
EUR4.9 million (2021: EUR3.8 million)
-- Net assets: EUR37.1 million (31 December 2021: EUR43.4 million)
-- Capital raise of GBP3.7 million (EUR4.2 million) through the placing of new shares
-- Two loan facilities secured: one for up to GBP10 million
(EUR11.3 million) and the other for GBP2 million (EUR2.3
million)
The net loss including significant and non-recurring items was
EUR10.5 million (2021: EUR4.7 million), which included an
investment impairment of EUR4.7 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 EUR18 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/
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
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
EUR EUR
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 23 (326,501) (250,378)
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
EUR per share EUR 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
EUR EUR
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 EUR EUR
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 EUR EUR
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
Equity
attributable
to owners
Share Accumulated of the Non-controlling
Capital Share premium Other reserves deficit company interests Total
EUR EUR EUR EUR EUR EUR EUR
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
EUR EUR
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
David Palumbo / Nauman Babar +44 20 3883 7009
Strand Hanson - Nomad & Financial
Adviser
James Harris / Richard Johnson +44 20 7409 3494
Panmure Gordon - Broker
John Prior / Hugh Rich +44 20 7886 2500
Instinctif - Media & investor relations EQTEC@instinctif.com
enquiries +44 791 717 8920 / +44 788
Guy Scarborough / Tim Field 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
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