TIDMSAE
RNS Number : 6888N
SIMEC Atlantis Energy Limited
27 September 2023
27 September 2023
SIMEC ATLANTIS ENERGY LIMITED
("SAE", the "Company" and, together with its subsidiaries, the
"Group")
Interim results
SAE announces its unaudited interim results for the six months
ended 30 June 2023. A complete version of the interim results can
be found on the Company website
(www.saerenewables.com/investor-relations/company-documents).
Chairman's Statement
I am pleased to report a strong first half of 2023 for SIMEC
Atlantis Energy Limited ("SAE"), with SAE completing the sale of
its first battery energy storage system ("BESS") development
project at Uskmouth and delivering much improved financial
performance with a profit of GBP4.5million, a result both of the
development premium realised from the sale of this first BESS
development project as well as the significant restructuring of the
business undertaken in 2022.
SAE has built and continues to develop a strong pipeline of
projects on which it is actively executing with a clear focus on
delivering on our strategy to develop alternative energy
solutions.
Marine Energy
MeyGen Phase 1
The MeyGen Phase 1 array continues to operate successfully, with
three turbines in stable operations whilst the fourth is currently
undergoing preventative maintenance and upgrade works and will
return to operation next year.
The MeyGen operations team is doing an excellent job operating
and maintaining the MeyGen Phase 1 turbines and has developed
invaluable expertise and experience that is both enabling the
ongoing successful operation of MeyGen Phase 1 and which is being
brought to the development of MeyGen Phase 2.
Whilst MeyGen Phase 1 has had its challenges, the operating
track record and learnings that have been accumulated since the
commissioning of the MeyGen Phase 1 project have proven the
economic viability of tidal stream generation. I would particularly
like to thank the MeyGen funders, Scottish Enterprise and Crown
Estate Scotland, for their continued unwavering support and
patience, as well as the junior lenders, Engie and Morgan
Stanley.
MeyGen Phase 2
On 8 September 2023, we were delighted to announce that we had
secured a total of 22 MW over four Contracts for Difference
("CfDs") from the UK government in the AR5 allocation round for the
MeyGen site. This is in addition to the 28 MW CfD that we secured
in the AR4 allocation round for MeyGen in July 2022, providing an
aggregate of 50 MW of CfDs for the next phase of the MeyGen
project. The higher strike price of the CfDs awarded under AR5
compared with AR4, coupled with the economies of scale afforded by
the increase in the size of the project to 50 MW, provide a
significant boost to the project economics.
Work continues apace on the development of the MeyGen Phase 2
project, with financial close targeted for Q2 2025 and operation of
the 50 MW array commencing in 2027. Whilst MeyGen Phase 2 remains a
hugely challenging project, securing the revenue for 50 MW of
capacity is a huge step forwards and we will now turn our attention
to securing tidal turbine supply for 3MW turbines, consenting
variations to enable the larger turbines and financing for the
project.
Battery Energy Storage Systems
A key highlight for the first half of 2023 was the successful
execution of the lease agreement for the 230 MW BESS project with
Uskmouth Energy Storage Limited, a portfolio company of Quinbrook
Infrastructure Partners, in June 2023, following which in July 2023
we received the final GBP4.0 million instalment of the GBP10.0
million upfront premium. We are currently exploring options for
monetising the lease income from this project which could deliver
further cashflows to SAE in the short to medium term.
Since closing the sale of this project, we have turned our focus
to developing a pipeline of further BESS projects at Uskmouth and
are actively working on three new BESS projects at Uskmouth that
have the potential to deliver further significant value to
shareholders. We continue to work on the development of a
comprehensive plan for the redevelopment of the Uskmouth site into
a Sustainable Energy Park, in which these BESS projects will form a
key part.
We also continue work on a more than 200 MW BESS project at
MeyGen that could be connected as early as 2027.
The development of BESS projects is critical in support of the
growing dependence of electricity grids on weather dependent
renewable energy sources. With its existing grid connections, real
estate portfolio and experienced engineering and project
development teams, SAE is ideally placed to capitalise on this
opportunity.
Summary of Results
The profit before tax of GBP4.5 million for the six months ended
30 June 2023 compares to a loss of GBP8.6 million reported for the
same period in 2022. The profit reported in this period arises from
the recognition of the GBP10 million development premium received
from Uskmouth Energy Storage Ltd as revenue, following the signing
of the Uskmouth land lease agreement on 20 June 2023. The Group
continues to see the benefits of the restructure it completed in
2022 with lower employee and depreciation costs compared to the
same period last year. Whilst the results were adversely affected
by tidal turbine repair and maintenance costs at MeyGen, these were
also lower than the same period last year.
The GBP4.0 million balance of the development premium described
above was received in July 2023. The initial GBP6.0 million was
received in 2022 as a loan and was recognised as income on the
signing of the Uskmouth land lease in June 2023.
Finance costs in the period are materially in line with the same
period last year.
The unaudited consolidated cash position of the Group as at 30
June 2023 was GBP1.5 million (30 June 2022: GBP3.4 million).
Included in cash and cash equivalents in the statement of financial
position are encumbered deposits of GBP0.8 million (30 June 2022:
GBP0.8 million).
Duncan Black
Chairman
Condensed consolidated statement of profit and loss and
other comprehensive income
For the six months ended 30 June 2023
Group
Six months ended
30 June 30 June
Note 2023 2022
GBP'000 GBP'000
Revenue 12,440 1,266
Other gains and losses 507 2,167
Employee benefits expense (938) (1,323)
Subcontractor costs (2,422) (3,067)
Depreciation and amortisation (1,623) (4,037)
Other operating expenses (1,230) (1,675)
---------- -----------
Total expenses (6,213) (10,102)
Results from operating activities 6,734 (6,669)
Finance costs (2,258) (1,933)
Profit/(loss) before tax 4,476 (8,602)
Tax (charge)/ credit - (1)
Profit/(loss) for the period 4,476 (8,603)
Other comprehensive income:
Items that are or may be reclassified
subsequently to profit or loss
Exchange differences on translation
of foreign operations 43 16
---------- -----------
Total comprehensive income for
the period 4,519 (8,587)
========== ===========
Profit/(loss) attributable
to:
Owners of the Group 5,228 (7,859)
Non-controlling interests (752) (744)
---------- -----------
Total comprehensive income/(loss)
attributable to:
Owners of the Group 5,271 (7,843)
Non-controlling interests (752) (744)
---------- -----------
Profit/(loss) per share (basic
and diluted) (pence) 5 0.68 (1.09)
========== ===========
Condensed consolidated statement of financial position
As at 30 June 2023
Group
30 June 31 December
2022 2022
GBP'000 GBP'000
Assets
Property, plant and equipment 72,842 74,455
Intangible assets 1,465 1,465
Right-of-use assets 1,489 1,331
Investment in joint venture 133 133
Non-current assets 75,929 77,384
------------- --------------
Trade and other receivables 6,928 3,584
Cash and cash equivalents 2,282 3,701
Current assets 9,210 7,285
------------- --------------
Total assets 85,139 84,669
============= ==============
Liabilities
Trade and other payables (6,768) (6,573)
Lease liabilities (296) (296)
Loans and borrowings (12,876) (15,895)
Current liabilities (19,940) (22,764)
------------- --------------
Lease liabilities (1,166) (1,000)
Provisions (12,688) (12,581)
Loans and borrowings (40,345) (41,890)
Deferred tax liabilities (752) (752)
------------- --------------
Non-current liabilities (54,951) (56,223)
------------- --------------
Total liabilities (74,891) (78,987)
------------- --------------
Net assets 10,248 5,682
============= ==============
Equity
Share capital 201,496 201,496
Capital reserve 12,665 12,665
Translation reserve 7,101 7,058
Share option reserve 419 420
Accumulated losses (211,009) (216,285)
Total equity attributable to owners
of the Company 10,672 5,354
Non-controlling interests (424) 328
------------- --------------
Total equity 10,248 5,682
============= ==============
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2023
Attributable to owners of the Company
------------------------------------------------------------
Share Non-
Share Capital Translation option Accumulated controlling
capital reserve reserve reserve losses Total interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
At 1 January 2022 201,496 12,665 7,121 576 (206,910) 14,948 1,739 16,687
-------------------- ------- ------- ----------- ------- ----------- ------- ----------- -------
Total comprehensive
income for the
period
Loss for the period - - - - (7,859) (7,859) (744) (8,603)
Other comprehensive
income - - 16 - - 16 - 16
-------------------- ------- ------- ----------- ------- ----------- ------- ----------- -------
Total comprehensive
income for the
period - - 16 - (7,859) (7,843) (744) (8,587)
Transactions with
owners
Contributions and
distributions
-------------------- ------- ------- ----------- ------- ----------- ------- ----------- -------
Issue of share - -
capital - - - - - -
Recognition of
share-based
payments - - - 53 - 53 - 53
Transfer between
reserves - - - (250) 250 - - -
Total transactions
with owners - - - (198) 250 53 - 53
------- ------- ----------- ------- ----------- ------- ----------- -------
At 30 June 2022 201,496 12,665 7,137 379 (214,519) 7,158 995 8,153
-------------------- ------- ------- ----------- ------- ----------- ------- ----------- -------
Total comprehensive
income for the
period
Loss for the period - - - - (1,790) (1,790) (667) (2,457)
Other comprehensive
loss - - (79) - - (79) - (79)
-------------------- ------- ------- ----------- ------- ----------- ------- ----------- -------
Total comprehensive
income for the
period - - (79) - (1,790) (1,869) (667) (2,536)
Transactions with
owners
Contributions and
distributions
-------------------- ------- ------- ----------- ------- ----------- ------- ----------- -------
Issue of share
capital
net of issue costs - - - - - - - -
Recognition of
share-based
payments - - - 65 - 65 - 65
Transfer between
reserves - - - (24) 24 - - -
-------------------- ------- ------- ----------- ------- ----------- ------- ----------- -------
Total transactions
with owners - - - 41 24 65 - 65
------- ------- ----------- ------- ----------- ------- ----------- -------
At 31 December 2022 201,496 12,665 7,058 420 (216,285) 5,354 328 5,682
Total comprehensive
income for the
period
Profit/(Loss) for
the
period - - - - 5,228 5,228 (752) 4,476
Other comprehensive
income - - 43 - - 43 - 43
-------------------- ------- ------- ----------- ------- ----------- ------- ----------- -------
Total comprehensive
income for the
period - - 43 - 5,228 5,271 (752) 4,519
Transactions with
owners
Contributions and
distributions
-------------------- ------- ------- ----------- ------- ----------- ------- ----------- -------
Issue of share - -
capital
net of issue costs - - - - - -
Recognition of
share-based
payments - - - 47 - 47 - 47
Transfer between
reserves - - - (48) 48 - - -
-------------------- ------- ------- ----------- ------- ----------- ------- ----------- -------
Total transactions
with owners - - - (1) 48 47 - 47
------- ------- ----------- ------- ----------- ------- ----------- -------
At 30 June 2023 201,496 12,665 7,101 419 (211,009) 10,672 (424) 10,248
------- ------- ----------- ------- ----------- ------- ----------- -------
Condensed consolidated statement of cash flows
For the six months ended 30 June 2023
Group
Six months ended
30 June 30 June
2023 2022
GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) before tax for the
period 4,476 (8,602)
Adjustments for:
Grant income - (31)
Depreciation of property, plant and
equipment 1,623 4,018
Amortisation of intangible asset - 19
Interest income (31) (10)
Finance costs 2,258 1,933
Share-based payments 47 53
Provision movement - (84)
Net foreign exchange (83) 103
Operating cash flows before movements
in working capital 8,290 (2,601)
Movement in trade and other receivables (3,344) (301)
Movement in trade and other payables 195 (354)
Interest received 31 -
Net cash used in operating activities 5,172 (3,256)
------------- -------------
Cash flows from investing activities
Purchase of property, plant and equipment - -
Loan to joint venture - (24)
Proceeds from disposal of scrap - 1,155
Net cash used in investing activities - 1,131
------------- -------------
Cash flows from financing activities
Proceeds from grants received - 31
Proceeds from borrowings - 2,500
Repayment of borrowings (6,000) -
Deposits (pledged) / released (13) (1)
Payment of lease liabilities (44) (31)
Interest paid (571) -
Net cash from financing activities (6,628) 2,499
------------- -------------
Net (decrease)/increase in cash
and cash balances (1,456) 375
Cash and cash equivalents at beginning
of period 2,929 3,004
Effect of foreign exchange on cash
held in currency 24 (4)
Cash and cash equivalents at end
of period 1,497 3,375
============= =============
Included in cash and cash equivalents in the statements of
financial position is GBP0.8 million (2022: GBP0.8 million) of
encumbered deposits.
Notes to the Consolidated Interim Financial Statements
The unaudited condensed consolidated statement of financial
position of SIMEC Atlantis Energy Limited (the "Company") and its
subsidiaries (the "Group") as at 30 June 2023, 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 the 26(th)
September 2023.
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 2022 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
2022 were approved by the Board of Directors on 25 July 2022.
1 Domicile and activities
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
26 Dublin Street, Edinburgh, EH3 6NN, United Kingdom.
The principal activity of the Group is to develop and operate as
a global sustainable energy provider. The Group holds equity
positions in the world's flagship tidal stream project, MeyGen, and
the Uskmouth power station site, that is being repurposed into a
Sustainable Energy Park initially housing battery energy storage
projects.
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 2022.
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 2022.
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 2022.
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
2022.
4 Going concern basis
In adopting the going concern basis for preparing the Interim
Financial Statements, the Board has considered the Group's business
activities, together with factors likely to affect its future
development, its performance and principal risks and uncertainties.
The Board has undertaken the assessment of the going concern
assumptions using financial forecasts for the period to 31 December
2024.
Management has prepared a forecast through to 31 December 2024
based on contractually committed revenues and costs, an estimate of
additional costs required and the income arising from development
projects that are expected to be delivered within the forecast
period.
The Directors' assessment of the appropriate use of the going
concern basis included the following factors:
-- Repayment of the Abundance bond principals falling due in
March 2024, June 2024 and September 2024. The Company may either
seek to repay the bonds, extend the repayment date of the bonds or
refinance the bonds with new debt.
-- Timing of the potential repayment of historical grant funding
of an amount of GBP3.4 million as reported in the consolidated
financial statements for the year ended 31 December 2022. The Board
are of the view that there are grounds for disputing any clawback
of this grant and
the Company has evidence to support this position.
The Board has identified significant factors that are of a
material amount as outlined above, and the Board has identified
sufficient evidence of success that includes achievable new sources
of revenue that mitigate against the existence of material
uncertainties about the Group's ability to continue as a going
concern. The evidence is summarised as follows:
-- Monetising the rental income from the first battery energy storage system lease at Uskmouth
-- Sale of a ready to build site for a 120MW battery energy
storage system at Uskmouth, with a targeted completion date in
2024.
Accordingly, the Board of Directors concluded that it is
appropriate to adopt the going concern basis of accounting in
preparing the Interim Financial Statements.
5 Other notes
In respect of the six months to 30 June 2023, the diluted
earnings per share is calculated on a profit attributable to owners
of the Company of GBP5.3 million on the weighted average of
722,812,335 ordinary shares (30 June 2022: loss of GBP7.9 million
and basic weighted average shares of 722,812,335). Share options
were excluded from the diluted weighted average number of ordinary
shares calculation as their effect would have been anti-dilutive.
No dividend has been declared (2022: nil).
6 Events after the reporting date
As announced on 8 September 2023, the Group secured a Contract
for Difference (CfD) allocation from the UK Government guaranteeing
GBP198/MWh for 15 years for 22MW of clean, predictable power from
the MeyGen site.
For further information, please contact:
SAE Renewables
Sean Parsons, Director of External
Affair +44 (0)7739 832 446
Strand Hanson Limited (Nominated
and Financial Adviser)
Richard Johnson
Rory Murphy
David Asquith +44 (0)20 7409 3494
Zeus Capital Limited (Broker)
Louisa Waddell
Simon Johnson +44 (0)20 3829 5000
Notes to Editors
SAE is a global developer, owner and operator of sustainable
energy projects. SAE owns the world's flagship tidal stream
project, MeyGen. SAE is also the owner of the Uskmouth Power
Station site that is being repurposed into a sustainable energy
park, initially housing one of the UK's largest battery energy
storage projects.
https://www.saerenewables.com/
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IR VQLBLXKLEBBD
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