26
September 2024
SIMEC Atlantis Energy
Limited
("SAE
Renewables", "SAE" or the "Company")
Interim
results
SAE announces its unaudited interim
results for the six months ended 30 June 2024. A complete version
of the interim results can be found on the Company website
(www.saerenewables.com/investor-relations/company-documents).
Key
Highlights
· SAE
received £7.0 million from the land sale contract with EL
(Uskmouth) Ltd
· SAE
acquired 100% ownership of the AW1 120MW/240MWh Battery Energy
Storage System ("BESS") project
· SAE
submitted a planning application for Section 36 consent for the 300MW/1.2GWh "Mey BESS" project in
the North of Scotland.
· The
consolidated cash position of the Group as at 30 June 2024 was £7.7
million (as at 30 June 2023: £2.3 million)
· The
Group reported revenues of £12.1 million for the six months ended
30 June 2024 compared to revenues of £12.4m for the same period in
2023
· The
loss before tax of £6.0 million for the six-month period to 30 June
2024 (H1 2023: profit £4.5 million) was largely a result of the
profit on the land sale contract with EL (Uskmouth) Ltd having been
recognised in 2023 whilst the revenue from the sale was realised
during 2024.
Chairman's Statement
At the Annual General Meeting in
July this year, SIMEC Atlantis Energy Limited ("SAE" or the
Company") launched its new strategy - Building a Sustainable Future
to 2035. This strategy set out the Company's plans for becoming a
leading independent power producer ("IPP"), leveraging on our
development, construction and operational teams' experience as an
IPP in tidal stream at MeyGen and operations and maintenance at
Uskmouth Power Station, to develop, build, own and operate Battery
Energy Storage System ("BESS") projects and continue with the build
out of the MeyGen project.
I'm very pleased to report that we
have continued to make good progress in all these areas. During the
past three years, we have been working with several organisations
to help position SAE as one of the country's leading BESS and tidal
stream developers, owners and operators. This huge piece of
work has seen us reimagine and reinvent the Uskmouth power station
and MeyGen sites with a vision to deliver world leading integrated
renewable energy generation and storage facilities.
I am also pleased to report a strong
financial start to 2024. We continue to receive revenues from our
first BESS project at Uskmouth and the MeyGen Phase 1 tidal array
continues to break records with its predictable power generation.
MeyGen has now generated 68GWh, 65% of global tidal stream
generation and more than 80% of UK tidal stream generation,
reinforcing MeyGen's position as the world leader in this
technology. We are on schedule to redeploy the fourth MeyGen
turbine in Q4-24 bringing the array up to its full 6MW
capacity.
Projects Updates
Battery Energy Storage
As a significant landowner at
Uskmouth, SAE continues to benefit from the competitive advantages
that its strategic location provides. The site benefits from the
existing grid and logistical infrastructure located on the site,
the continuing support that the local planning authorities are
providing for the redevelopment of a brownfield site well
established for energy facilities, and the expertise of the local
operations and maintenance team we retained from the power
station.
The first project, which we
developed and divested, continues to deliver as the construction of
a 230MW BESS project continues apace, with the receipt of £7.0
million in the first half of this year from the land sale contract
with EL (Uskmouth) Ltd. As the construction of this project reaches
its conclusion, SAE will be due the final £2.9 million of payments
between now and the end of Q1-25. This project has an option to
expand its capacity by a further 120MW which, if this option is
exercised, would trigger a further development premium under the
agreements with Uskmouth Energy Storage Limited, (the now owner of
the project), and further land overage payments to SAE under
agreements with EL (Uskmouth) Ltd.
Excellent progress is being made
towards achieving financial close of the next BESS project at
Uskmouth, a 120MW/240MWh BESS project known as Afon Wysg 1 ("AW1")
located on the site of the Uskmouth cooling towers. In January
2024, we announced a major milestone as AW1 was granted planning
consent after which we immediately commissioned the demolition of
cooling towers, clearing the site in preparation for construction.
In August 2024, we announced taking full ownership of the
project from the legacy developer alongside completion of the
demolition works programme and provided an update on our
procurement and financing programme. We are progressing well
towards sourcing the project finance for construction of the
project, estimated at £65.0 million, alongside finalising the
equipment supply and construction agreements. The AW1 project's
target grid connection date is October 2026 and once fully
operational is expected to generate annual revenues of £12.0
million.
The development of several
additional BESS projects at Uskmouth and in Scotland is being
progressed at pace this year. We believe that we are very well
placed to take advantage of improved grid connection dates next
year once National Grid completes the implementation of its
connections reform process. This process changes the historic
outdated queue system to a system which is in essence "first ready
first connect". Noting that SAE already has land rights for all of
our projects, we have a significant competitive advantage in this
new connections methodology which is accelerating projects with
land rights and where planning applications have been submitted.
Hence our focus is to progress all our projects to "Ready to Build"
status, and I am very pleased to provide the following progress
updates across the portfolio of our BESS development
projects:
· In
June 2024, SAE submitted its application for Section 36 consent for
the 300MW/1.2GWh "Mey BESS" project in the North of Scotland. This
year the project secured the necessary land rights and received an
increased offer for grid capacity to 287MW alongside amending
its grid connection to be suitable for BESS.
· SAE
continues to progress a further 250MW project on the Uskmouth site
and recently submitted a screening opinion request to Newport City
Council. This project is known as "AW2".
· In
December 2023, we announced that SAE had secured an additional
349MW of grid capacity at our Uskmouth site. This project will be
known as "AW3". This project may receive an earlier grid
connection date as the grid connections reform process reaches its
conclusions.
· Several additional BESS opportunities have been identified by
the management team. Whilst discussions are still at an early
stage, they provide the opportunity for us to grow our portfolio
further and we look forward to providing further details on these
projects as they are progressed.
Tidal Stream
MeyGen Phase 1
The MeyGen Phase 1 array continues
to operate successfully, with three turbines in stable operations
whilst the fourth is currently completing preventative maintenance
and upgrade works and is expected to return to operation in Q4-24.
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
applied to the development of MeyGen Phase 2.
MeyGen Phase 2
I was delighted by the result of the
recent AR6 auction in which SAE was successful in securing an
additional 9MW of UK Government Contract for Difference ("CFD") at
£172/MWh, bringing the total CFD's won by the MeyGen Phase 2
project in AR4, 5 and 6 to 59MW. Along with generation from the
existing array, MeyGen is best positioned to deliver this
technology at scale to the UK.
We continue to develop the MeyGen
Phase 2 project with our partners and are pleased to continue to
receive support from all Scottish government departments. I would
particularly like to thank the MeyGen funders, Scottish Enterprise
and Crown Estate Scotland, for their continued unwavering support,
as well as the junior lenders, Engie and Morgan Stanley
................................
Summary of Results
The Group reported revenues of £12.1
million for the six months ended 30 June 2024 compared to revenues
of £12.4m for the same period in 2023. Revenues available to the
Group, which excludes ring-fenced revenue earned by the MeyGen
tidal array, were £10.1 million compared to revenues of £10.3m for
the comparative period in 2023.
In March 2024, the completion
milestone in the land sale contract with EL (Uskmouth) Ltd was
completed triggering the recognition of £9.9 million of revenue in
the reporting period. The Group received £7.0 million of this total
amount during the reporting period.
At the same time, the income
statement reported a £9.9 million cost relating to the transfer of
land inventory being the profit that was recognised on the land
sale contract with EL (Uskmouth) Ltd in the 2023 Annual
Report.
In the comparative period last year,
the Group recognised revenues of £10.0 million from the sale of
development rights to the 230MW Battery Energy Storage System to
Uskmouth Energy Storage Ltd.
Revenues generated from the sale of
electricity from the MeyGen Phase 1 tidal array remained steady at
£1.9 million (H1 2023, £2.1 million).
Operating costs reduced to £4.5
million (H1 2023: £4.6 million). Costs associated with running the
MeyGen array halved to £1.5 million (H1 2023: £3.0 million) in the
latest six-month period following the completion of major turbine
repair and maintenance in the first half of 2023 which have not
been repeated to the same extent for the current period. Offsetting
this reduction were higher employee costs of £1.9m (H1 2023: £1.0
million) reflecting the investment in all of SAE's employees and
reward for their delivering the strong financial performance of the
Group during 2023 and to 30 June 2024. Higher operating expenses of
£1.0 million (H1 2023: £0.5 million) due to increased development
expenditure on specific BESS projects also contributed to the
increase in operating costs.
Financing costs increased to £0.9
million (H1 2023: £0.6 million) primarily due to a higher discount
rate applied to the Uskmouth decommissioning provision creating a
non-cash adjustment of £0.3 million. Interest payable to
bondholders during the six- month period remained unchanged at £0.6
million.
The loss before tax of £6.0 million
for the six-month period to 30 June 2024 (H1 2023: profit £4.5
million) is largely a result of the profit on the land sale
contract with EL (Uskmouth) Ltd having been recognised in 2023
despite the revenues from the sale being realised during 2024. The
Group has improved its liquidity position as £7.0 million of
revenue from the land sale contract with EL (Uskmouth) Ltd was
received during the reporting period, in line with
forecast.
Business Segment Reporting
The Group expanded its Business
Segment Reporting in the 2023 Annual Report to include the Battery
Storage segment. During the reporting period, the Battery Storage
segment reported EBITDA of £9.2 million arising primarily from the
completion of the land sale contract with EL (Uskmouth)
Ltd.
The Tidal Stream segment, previously
named Power Generation, reported EBITDA of £0.4 million following a
significant reduction in turbine maintenance costs. The Tidal
Stream segment's financial results are materially impacted by the
interest expense on the MeyGen project debt, which is predominantly
non-recourse to the Company.
The Project Development segment
represents development expenditures incurred on specific BESS
projects.
The Corporate segment represents the
costs associated with running an AIM listed and Singapore
incorporated group and employee costs not allocable to another
business segment and were in line with forecast.
|
Business Segment Analysis
|
June 2024
|
|
|
Battery
Storage
|
Tidal
Stream
|
Project
Dev't
|
Corporate
|
Total
|
|
|
£'
000
|
£'
000
|
£'
000
|
£'
000
|
£'
000
|
|
Revenues
|
10,167
|
1,882
|
0
|
43
|
12,092
|
|
Operating costs
|
(963)
|
(1,445)
|
(682)
|
(1,357)
|
(4,447)
|
|
EBITDA
|
9,204
|
437
|
(682)
|
(1,314)
|
7,645
|
|
|
|
|
|
|
|
|
Depreciation and
amortisation
|
0
|
(956)
|
0
|
(78)
|
(1,034)
|
|
Results from operating activities
|
9,204
|
(519)
|
(682)
|
(1,392)
|
6,611
|
|
|
|
|
|
|
|
|
Decommissioning Discount
unwind
|
(218)
|
(34)
|
0
|
0
|
(252)
|
|
Interest expense
|
0
|
(1,632)
|
0
|
(795)
|
(2,427)
|
|
Exceptionals*
|
(9,900)
|
|
|
|
(9,900)
|
|
Reportable segment profit/(loss) before tax
|
(914)
|
(2,185)
|
(682)
|
(2,187)
|
(5,968)
|
*Transfer of land inventory on
recognition of sale
The unaudited consolidated cash
position of the Group as at 30 June 2024 was £7.7 million (as at 30
June 2023: £2.3 million). Included in cash and cash equivalents in
the statement of financial position are encumbered deposits of £0.7
million (as at 30 June 2023: £0.8 million).
Duncan Black
Chairman
|
Condensed consolidated statement of cash
flows
For the six months
ended 30
June 2024
|
|
|
|
|
Group
|
|
|
|
|
Six months ended
|
|
|
|
|
30 June
|
30 June
|
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax for the
period
|
|
(5,968)
|
4,476
|
|
Adjustments for:
|
|
|
|
|
Depreciation of property, plant and
equipment
|
|
1,034
|
1,623
|
|
Amortisation of intangible
asset
|
|
|
-
|
|
Interest income
|
|
(63)
|
(31)
|
|
Finance costs
|
|
2,679
|
2,258
|
|
Share-based payments
|
|
117
|
47
|
|
Provision movement
|
|
|
-
|
|
Net foreign exchange
|
|
10
|
(83)
|
|
Operating cash flows before
movements in working capital
|
|
(2,191)
|
8,290
|
|
|
|
|
|
|
Movement in trade and other
receivables
|
|
(2,297)
|
(3,344)
|
|
Decrease in inventories
|
|
9,239
|
-
|
|
Movement in trade and other
payables
|
|
(411)
|
195
|
|
Interest received
|
|
63
|
31
|
|
Net
cash used in operating activities
|
|
4,403
|
5,172
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Repayment of borrowings
|
|
-
|
(6,000)
|
|
Deposits (pledged) /
released
|
|
(18)
|
(13)
|
|
Payment of lease
liabilities
|
|
(119)
|
(44)
|
|
Interest paid
|
|
(737)
|
(571)
|
|
Net
cash from financing activities
|
|
(874)
|
(6,628)
|
|
|
|
|
|
|
Net
(decrease)/increase in cash and cash balances
|
|
3,529
|
(1,456)
|
|
Cash and cash equivalents at
beginning of period
|
|
3,473
|
2,929
|
|
Effect of foreign exchange on cash
held in currency
|
|
1
|
24
|
|
Cash and cash equivalents at end of period
|
|
7,003
|
1,497
|
|
|
|
|
| |
Included in cash and cash
equivalents in the statements of financial position is £0.8 million
(2023: £0.8 million) of encumbered deposits.
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 2024,
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 25th September 2024.
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 2023
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 2023 were approved by the Board of
Directors on 24 June 2024.
1 Domicile and
activities
SIMEC Atlantis Energy Limited (the
"Company") is a company incorporated in Singapore. The address of
the Company's registered office is Level 4, 21 Merchant Road,
#04-01 Royal Merukh S.E.A, Singapore 058267. The principal place of
business is 26 Dublin Street, Edinburgh, EH3 6NN, United
Kingdom.
The principal activities of the
Group are being a developer, builder, owner and operator of
sustainable energy projects. The principal activities of the
Company are those of a holding company.
2 Material Accounting
Policies
Basis of preparation
The financial statements have been
prepared in accordance with Singapore Financial Reporting Standards
(International) ("SFRS(I)") and IFRS. SFRS(I)s are issued by
Accounting Standards Council Singapore, which comprise standards
and interpretations that are equivalent to IFRS issued by
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
2023.
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
2023.
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 2023.
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 2023.
4 Going concern
basis
In adopting the going concern basis
for preparing the Consolidated 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 2025. Management's
forecasts through to 31 December 2025 anticipate revenues from
trading will meet all of the working capital requirements of the
Group.
Management has prepared a forecast
through to 31 December 2025 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
risk factor:
· Timing
of the potential repayment of historical grant funding of an amount
of £3.8 million as reported in the consolidated financial
statements for the year ended 31 December 2023.
The Board has identified sufficient
evidence of success that includes achievable new sources of revenue
that mitigate against the risk of having to repay the grant
funding. These included:
·
Sale of a ready-to-build site for a 120MW battery
energy storage system at Uskmouth.
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 2024, the diluted earnings per share is calculated on a loss
attributable to owners of the Company of £5.4 million on the
weighted average of 722,812,335 ordinary shares (H1 2023: profit of
£5.3 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 (2023:
nil).
6 Events after the
reporting date
On 6 August 2024, SAE completed a
Share Purchase Agreement ("SPA") with Enso Green Holdings Limited
("EGHL"), a joint venture between Cero Generation Limited and Enso
Energy Limited, to purchase all the shares in a 120MW/240MWh BESS
project at its Uskmouth Sustainable Energy Park. SAE paid EGHL an
initial consideration of £0.3 million under the SPA, to acquire
100% ownership of the development vehicle, Enso Green Holdings E
Limited, the vehicle which EGHL used to develop the BESS project
and hold the grid connection, land option and planning application.
Under the SPA, when the project reaches financial close, SAE will
pay EGHL an additional amount of £3.9 million as deferred
consideration, in recognition of EGHL's contribution to the project
development to date.
On 2 September 2024, MeyGen plc
secured a Contract for Difference (CfD) in the sixth allocation
round for the MeyGen site. The CfD contract guarantees a price of
£172/MWh, for 15 years for 9MW of tidal generation.
- Ends -
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 Renewables is a global
developer, owner and operator of sustainable energy projects and as
a result is proud to have received the London Stock Exchange's
Green Economy Mark. 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/
