SIMEC ATLANTIS ENERGY LIMITED
(“Atlantis”, the “Company” or the “Group”)
Preliminary Results Announcement
28 June 2019
SIMEC Atlantis Energy Limited, the global developer, owner and operator of sustainable energy projects with a diversified portfolio of more than 1,000 megawatts in various stages of development, is pleased to announce its preliminary results for the year ended 31 December 2018.
- The consolidated Group cash position at 31 December 2018 was £9.3 million (2017: £5.6 million), including £2.4 million held in MeyGen Limited (2017: £3.8 million).
- The MeyGen project generated revenues of £2.1 million.
- Overall Group losses for the year were £24.0 million (2017: £10.6 million). The increase in the year on year loss of £13.4 million reflects the significant changes in the Group in the period. Increased depreciation expense of £5 million and finance costs of £1.5 million are the result of MeyGen becoming operational in April and the acquisition of SUP in June. SUP acquisition costs and financial results also contributed to the increased loss.
- Group total equity at 31 December 2018 of £119.6 million (2017: £60.2 million).
- In May 2018, Atlantis raised £5.0 million, before expenses, through a five year bond with a coupon of 8 per cent, maturing in 2023. In June 2018, Atlantis raised a further £20.0 million before expenses from new and existing shareholders. Funds raised continue to be used for incremental project development activities across the Atlantis portfolio and to secure opportunities for portfolio growth as well as working capital funding for the enlarged Group.
- Atlantis completed the sale of its stake in its Canadian joint venture in December 2018. The cash transaction returned C$0.4 million to the Company.
- April 2018 saw the flagship MeyGen Phase 1A tidal energy project enter its fully operational phase, with all four turbines successfully installed and delivering power to the grid, resulting in revenue generation. The array has generated over 17 GWh of sustainable energy to date and has exported more electricity to grid than any other tidal project.
- In June 2018, the Company acquired the entire issued share capital of SIMEC Uskmouth Power Limited (“SUP”) from SIMEC UK Energy Holdings Limited (“SIMEC”), a member of the GFG Alliance.
- Consideration for the purchase was the issuance by the Company of new shares to SIMEC, such that immediately following the issuance of such shares, SIMEC became a 49.99 per cent shareholder of the Company and Group.
- Post-acquisition, Atlantis have commenced the world’s first full conversion of a power station from coal to 100 per cent waste derived fuel, which will export 220MW of reliable baseload power to the grid on completion.
- In November 2018, the Environmental Planning and Permitting (“EPP”) contract and the Front-End Engineering and Design (“FEED”) contracts were both awarded. The FEED is expected to take approximately 12 months to complete from commencement.
- Heads of Terms were signed in November 2018 to sell a 25 per cent shareholding in the SUP conversion project for £32.9 million in cash to leading UK infrastructure fund manager Equitix. The transaction is anticipated to complete post FEED.
- The Company agreed terms in November 2018 for its collaboration with Development Agency for Normandy (AD Normandie Développement), the regional agency for economic development in Normandy and regional investment fund Normandie Participations, for the purpose of developing a phased large-scale tidal power project in the Raz Blanchard, Normandy, France, as well as fostering the marine industry and local supply chain in the region more generally.
- Atlantis announced in December 2018, that it had signed a €1 million grant agreement with the European Executive Agency for Small and Medium-sized Enterprises via the European Maritime and Fisheries Fund and its Sustainable Blue Economy call for proposals. The grant will provide Atlantis and its supply chain partner, Asturfeito SAU, €1 million in grant funding to support its tidal turbine development programme.
POST YEAR END HIGHLIGHTS
- Atlantis announced in October 2018, that it had advanced plans to enhance the existing 6MW MeyGen array with the addition of two of the Company’s new tidal turbines. When installed, these new Atlantis turbines, which are capable of generating up to 2MW using more powerful generators and larger rotor diameters, will use a new subsea connection hub and share a single export cable. These innovations will significantly reduce project infrastructure costs by removing the requirement for a dedicated export cable for each turbine and should also result in reduced installation costs.
- In January 2019, Ian Wakelin joined the Board as an independent non-Executive Director and Chairman of the Audit Committee. Ian was previously Chief Executive Officer of Biffa plc, one of the UK’s largest waste management businesses, and led the IPO of the business in 2016.
- In February 2019 Atlantis announced that it had awarded a contract to subsea engineering specialists ETA for the manufacture and delivery of the world’s most advanced subsea tidal turbine connection system which will underpin the MeyGen extension activities known as Project Stroma.
- In March 2019, Atlantis raised over £5 million, before expenses, through an equity fundraising to secure funding for the acquisition of GHR. As a result of the revised transaction the net proceeds will be used for the Company’s general corporate purposes.
- In May 2019, Atlantis announced that its turbine and engineering services division will enter into a Technology Partnership and Preferred Supplier Agreement (“TPPSA”) with GE Energy Power Conversion UK Ltd (“GE”), a global leader in power conversion, to deliver the world’s largest single rotor tidal turbine, the AR2000.
Tim Cornelius, Chief Executive of Atlantis, commented:
“In many ways, 2018 was a breakthrough year for SIMEC Atlantis. In April, Phase 1A of our flagship MeyGen tidal energy project entered its fully operational phase helping us to grow revenues and, with all four turbines successfully installed, has now delivered over 17 GWh of predictable and sustainable energy to the grid. In June, we completed the acquisition of the 220MW Uskmouth power station.
Our ambition is to grow quickly to become the leading independent generator of sustainable energy in the UK and we are making significant steps towards achieving that goal: we have commenced work on the world’s first conversion of a coal power station to 100 per cent waste derived fuel at Uskmouth; and we are expanding MeyGen with Phase 1B (Project Stroma) through the installation of two additional turbines.
Our sustainable energy projects are not just good business, they are making a meaningful contribution towards tackling some of the biggest issues facing society today: climate change and the war on plastics.”