? Other strategic sales: In January 2020, the sale of ?300,000 worth of equipment and spare parts to Mostos Vinos y Alcoholes S.A. ("Movialsa") was completed. As part of the contract, the Group is able to arrange visits to Movialsa's plant in Spain to showcase the Group's technology, which has been fully operational on the site for nearly a decade, to potential future stakeholders in the Group's projects. In August, the sale of Pluckanes Windfarm Limited took place for maximum net proceeds of up to ?383,503 (dependent on certain milestones relating to planning permission).
? Appointment of Chief Operating Officer: The Company hired Jeffrey Vander Linden as Operations Director to lead strategic and business planning and to drive operational and delivery excellence. Having worked with the Company as an advisor since July, Jeff joined the company in December as an Executive Director, COO and Board Member.
Financial highlights
? Revenue: For the period through to 31 December 2020, the Company recognised revenue of ?2.2 million (FY 2019: ?1.7 million).
? Loss for the financial year: For the period, the Group incurred losses of ?5.8 million (FY 2019: ?3.6 million), principally the result of recognition of share-based payment costs of ?1.8 million and an increase in administrative expenses over the period.
? Assets: The net assets of the Company increased to ?25.3 million at 31 December 2020 (31 December 2019: ?15.5 million).
? Placing: In July, the Company raised £10 million gross in an oversubscribed placing and PrimaryBid offer at 0.45 pence per share.
? Cash: The cash balances of the Company at 31 December 2020 stood at ?6.4 million (31 December 2019: ?0.5 million).
? Debt: Total debt repaid during the period amounted to ?1.4 million. Agreed a reprofiling of existing debt plus interest of ?2.6 million due to mature on 31 July 2020, with a new maturity on 30 June 2021. In December agreed new loan facility with Altair to fully repay existing debt with a new maturity on 31 December 2021 and a lower interest rate.
? Warrants: All executed from placings in 2019 and 2020, with the Company receiving ?1.5 million from the exercise of warrants during the period.
Post period highlights
· January 2021: Biomass gasification in Greece: Option Agreement to acquire a project for Nobilis Pro Energy S.A. ("Nobilis"). The second in a growing pipeline of opportunities pursued with ewerGy, the plant will apply EQTEC's advanced gasification to waste from olive mills and wineries at a 0.9 MWe gasification plant in Almyros, Greece. The project agreement is based on an MoU signed with Nobilis for more general development of biomass gasification plants based on EQTEC technology.
· February 2021: Long-term Incentive Plan. Adoption of the EQTEC All Employee Long-term Incentive Plan (the "LTIP") as a core part of the Company's new approach to business planning, performance management and employee incentives. The LTIP is designed to drive individual and team performance in line with Company performance, thereby creating value for shareholders while minimising cash outlay. All Company Executive Directors and employees are eligible to participate in the LTIP.
· March 2021: Collaboration Agreement with Toyota: The Company has agreed to collaborate to explore an innovative, circular and sustainable waste-to-energy solution for Toyota's engine manufacturing plant in Deeside. Subject to Financial Close, construction is expected to commence at Deeside in 2022.
· March 2021: Dismissal of patent infringement claim in USA: Aries Clean Energy LLC ("Aries") of Franklin, Tennessee, USA withdrew its patent infringement complaint, stipulating the action be dismissed 'with prejudice', forbidding Aries from filing another lawsuit on the same grounds and indicating EQTEC's continued right to produce, use, and sell technology without further harassment from Aries, either directly or through EQTEC customers.
Outlook
The Company is focused on the following objectives, all of which are supported by EQTEC advanced gasification technology innovation and engineering, the strength of partner relationships and ability to deliver sustainable waste-to-energy projects. The Company aims to build more advanced gasification plants in more markets with a greater, cleaner impact on local communities and greater returns for investors.
1. Biomass-to-Energy. The Company is pursuing multiple deals in Europe, predominantly in Greece, Croatia and other central and southern countries, as well as in the USA. It anticipates the closure in 2021 of five to eight deals with contract values to the Group totalling ?20-40 million.
2. RDF to Energy. The Company will apply its expertise with the capabilities of local teams to begin construction at the Billingham, Teesside, UK plant, a 25 MWe plant that will produce electricity and heat. The project is anticipated to have a contract value in excess of ?30 million to the Group, and to lead the way for the two more similarly-sized UK RDF facilities in 2022, in Deeside, Flintshire and Southport, Merseyside.
3. Biomass-to-Bioenergy. The Company intends to close the first of several potential deals for biomass-to-bioenergy plant construction in Ireland, with local partner Carbon Sole. Working with them and one or more methanation technology partners, EQTEC will pursue at least one deal in 2021, worth ?15 million to the Group, for production of biofuels and potentially other clean, bioenergy, with similar deals to follow in successive years.
4. Recommissioning EQTEC technology. Two plants are expected to be recovered for lack of technical integration capabilities. EQTEC will lead a consortium to acquire, repower, own and operate its technology in target markets in Italy, a 1.0 MWe plant for converting local, agricultural waste to electricity and heat. In Croatia, EQTEC will work with local partner Sense ESCO d.o.o. ("Sense ESCO") to recommission a 1.2 MWe plant transforming local forestry waste wood to provide electricity and heat. The two plants are both expected to be acquired in 2021, with the first acquisition nearing contract completion.
In 2021, revenues from both current and new projects and gradual growth from maintenance and consulting contracts are forecast to generate revenues of approximately ?15 million in 2021. These revenues, together with an expected contribution from EQTEC Capital, are forecast to generate positive EBITDA, making 2021 EQTEC's first year of profitability.
David Palumbo, CEO of EQTEC, commented: "2020 was a year in which we advanced and embedded our business strategy, significantly added to our pipeline, strengthened our management team, increased the depth and number of our partner relationships and expanded our platform for growth. In the first half of the year, we achieved financial close on two ground-breaking projects, each with an additional pipeline attached to them and we concentrated on maturing our relationships with our go-to-market partners. In the second half of the year, we built further discipline into our business operations and project execution capabilities, toward mitigating risks and accelerating delivery of business cases and measurable value.
"I look forward to our delivery of further growth and profitability in 2021 and beyond."
The 2020 Annual Report and Accounts will shortly be available on the Company's website at www.eqtec.com.
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