28th Jun 2019 13:21
(Alliance News) - SIMEC Atlantis Energy Ltd said Friday its annual loss widened as costs surged in a "breakthrough year", whilst it also secured further funds from SIMEC Energy.
In 2018, pretax loss widened to GBP24.2 million from GBP11.1 million the year prior. Revenue increased to GBP2.2 million from GBP301,000 the year before.
Profit performance was hurt by a sharp rise in costs, led by acquisition and depreciation & amortisation charges.
"In many ways, 2018 was a breakthrough year for SIMEC Atlantis," Chief Executive Officer Tim Cornelius said. "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 gigawatt hours of predictable and sustainable energy to the grid. In June, we completed the acquisition of the 220 megawatt 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% waste derived fuel at Uskmouth; and we are expanding MeyGen with Phase 1B (Project Stroma) through the installation of two additional turbines", Cornelius added.
In a separate announcement Friday, SIMEC Atlantis announced it agreed terms to release SIMEC Energy form its asset sale deal.
In November, SIMEC Atlantis agreed to buy the Green Highland Renewables portfolio from SIMEC Energy for GBP124.7 million. As part of this, it planned to benefit from a GBP24 million capital expenditure facility as well as a GBP2 million revolving credit facility.
Tuesday last week, however, SIMEC Atlantis decided that an "alternative transaction structure" with regards to the GHR purchase would be in the interests of shareholders "after assessing the financing options available". Consequently, SIMEC Atlantis "will not be proceeding with the acquisition of GHR as previously envisaged".
On Friday, SIMEC Atlantis explained it had now agreed to release SIMEC Energy from its sale following a GBP5.0 million cash payment. These funds will be used to delivery its flagship 220 megawatts Uskmouth waste-to-energy conversion project.
SIMEC Energy has also agreed to make a GBP2.0 million interest-free loan to SIMEC Atlantis.
SIMEC Atlantis, however, confirmed it is still "considering an alternative transaction structure" for the Green Highland Renewables acquisition.
"Although not the original intention, this is an excellent outcome for Atlantis," Cornelius added. "We will end up with more near-term cash to deploy on key development projects which are intended to deliver the largest possible returns for investors."
"The cash injections SIMEC is making validates its commitment to building a world leading project development company with the Atlantis management team and we are very appreciative of its continued financial, commercial and supply chain support," Cornelius continued. "We are now in an even stronger financial position and look forward to building a portfolio of scale, starting with the flagship Uskmouth conversion project, one of the largest waste-to-energy projects in Europe."
Shares in SIMEC Atlantis were 7.3% lower at 16.00 pence in London on Friday.
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