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Vow Green Metals AS
Investor Presentation • Aug 26, 2022
3786_rns_2022-08-26_65689ccf-98cf-42c1-81f9-ace87dd0a3cd.pdf
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green metals
www.vowgreenmetals.com
1st half 2022
August 26, 2022 - Vow Green Metals
Revolutionising metallurgical industries by replacing fossil carbon with biocarbon made from forest and wood waste
CONTENT
Vow Green Metals AS ("VGM" and the "Company") will accelerate the green shift by producing biocarbon for the metallurgic industry and CO2-neutral gas for energy intensive industries.
1 Highlights 1H 2022
Main milestones
2 Key Financials and Financial review
Create shareholder value through renewable solutions
3 Operational review
Build, own and operate Biocarbon productions sites
4 Vow Green Metals
Recycle biomass into Biocarbon and CO2-neutral gas, to replace fossil reduction materials and energy
5 Environmental, social and governance
People, sustainability, and responsibility
6 Financial statements 1st half 2022
Fact and figures
1 –HIGHLIGHTS
First half year 2022
- Increased energy need from potential industry partners at the Follum location has given the opportunity to double the production capacity to 20,000 tonnes at the Follum plant. This enables significantly improved economies of scale at a marginally higher CAPEX cost. Exact location, layout and construction schedule will be communicated at a later stage.
- Signed Letter of Intent with Global producer of Non-Ferrous Metals with a potential of 50,000 tonnes of biocarbon production.
- European projects in discussion totalling 400,000 tonnes of biocarbon.
- Natural gas prices have increased dramatically in the period and Europe is facing an energy crisis. This has strengthened the markets pull for our pyrolysis gas even further as is now business critical for European Industry to have energy diversification and be more energy self-sufficient.
- The CO2 emission cost (EUA) has reached an all-time high level, currently at 98 Euro/ton and is expected by analyst to increase even further going forward.
| Unaudited Unaudited |
Audited | |||
|---|---|---|---|---|
| (Amounts in NOK) | 1H-2022 | 1H 2021 | 2021 | |
| EBITDA | (6,694,048) | (324,315) | (10,687,829) | |
| Profit for the period | (6,842,906) | (324,315) | (10,728,446) | |
| Total assets | 137,491,014 | 150,962,988 | 144,298,032 | |
| Total equity | 134,320,664 | 149,675,685 | 141,163,570 | |
| Equity % | 98% | 99% | 98% |
Key figures
Follum Update
Since Vow Green Metals on November 4, 2021, announced its plans to build Europe's largest BioCarbon production plant at Follum, other companies have signaled interest to becoming part of this larger industrial complex.
Most recently in March 2022, the JV between Billerud Korsnäs, a leading provider of sustainable packaging, and Viken Skog, a large cooperative in the Norwegian forest industry announced that they plan to establish a CTMP production plant at the site.
For Vow Green Metals this is an opportunity to double the production capacity of our biocarbon factory to match the potential increased demand from the Billerud Korsnäs and Viken Skog joint venture. This will significantly improve the economics of scale at a marginally higher CAPEX cost.
Further discussion with potential partners, studies, and analysis of what this could mean for the exact location, layout and construction schedule for Vow Green Metals' plant will start immediately. This may impact the overall project, but it will result in a more efficient plant which would be able to meet the potential increased demand.
2 – FINANCIAL REVIEW
Key Figures
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| (Amounts in NOK) | 1H-2022 | 1H 2021 | 2021 |
| Statement of income | |||
| EBITDA | (6,694,048) | (324,315) | (10,687,829) |
| Profit for the period | (6,842,906) | (324,315) | (10,728,446) |
| Balance sheet | |||
| Total non-current assets | 60,651,870 | 968,859 | 74,856,917 |
| Total current assets | 76,839,145 | 149,994,129 | 69,441,115 |
| Total assets | 137,491,014 | 150,962,988 | 144,298,032 |
| Total equity | 134,320,664 | 149,675,685 | 141,163,570 |
| Total non-current liabilities | 433,607 | - | 92,980 |
| Total current liabilities | 2,736,743 | 1,287,302 | 3,041,483 |
| Total equity and liabilities | 137,491,014 | 150,962,988 | 144,298,032 |
| Cashflow | |||
| Result before income income tax | (6,842,906) | (324,315) | (10,728,446) |
| Net cashflow from operating activities | 212,329 | 1,287,302 | 3,042,562 |
| Net cashflow from investing activities | (23,821,495) | (968,859) | (74,718,916) |
| Net cashflow from financing activities | 38,357,477 | 149,970,000 | 150,507,577 |
| Net change in cash and cash equivalents | 7,905,405 | 149,964,129 | 68,102,777 |
| Cash and cash equivalents at start of the period | 68,132,777 | 30,000 | 30,000 |
| Cash and cash equivalents at end of the period | 76,038,182 | 149,994,129 | 68,132,777 |
Financial review 1st half 2022
- Vow Green Metals recorded an Operating loss (EBITDA) for 1 st half 2022 of Nok 6,694,048. The Operating loss is related to employee- and other operating expenses related to the organisation and ongoing projects.
- Expenses for salary, social security tax, and pension amounted to Nok 5.4 million, of which Nok 1.9 of employee expenses was capitalized under assets under construction.
- Other operating expenses for the period amounted to Nok 3.2 million and comprises of legal and audit fees, as well as other administrative expenses and shared services with Vow ASA.
- Net loss after Net financial items as of 30 June 2022 was Nok 6,842,906.
- Total non-current assets as of 30 June 2022 was Nok 60,651,870 and consist of the ordering of Process equipment for the Follum plant, offset by drawdown under the Enova grant.
- NOK 38,472,510 of the Enova grant was drawn of total grant NOK 80,737,000 million.
- Total assets were Nok 137,491,014 with a cash position of Nok 76,038,182.
- Total equity of Nok 134,320,664 (Equity ratio of 97.7%).
- Total equity and liabilities as of 30 June 2022 was Nok 137,491,014.
3 – OPERATIONAL REVIEW
We have several on-going projects with international industrial partners for building largescale biocarbon and bioenergy plants. In total for our project pipeline we currently have 400,000 tonnes of production of biocarbon of which we have ongoing concept studies. Additionally we have delivered a concept study for the production of raw material for 300,000 tons of biofuel production.
Relevant for the industry is large scale facilities which can address relevant volumes of biocarbon and bioenergy, as well as providing stable energy which is business critical for their operations. Our projects are large scale, from 25,000-50,000+ ton biocarbon annual production and an energy production of 150 – 300 GWh of pyrolysis gas.
We are working with a wide range of industries, including companies from the forest industry, metal industry and process industry. The companies which we are in dialogue with are highlighting the advantage of partnering up with Vow Green Metals, as we have the understanding of the biocarbon market, knowledge on the technology and products, our process integration expertise, and our approach to the projects.
Outlook
We are working with projects totaling 400,000 tonnes of biocarbon and is building an industry with relevant volumes to supply the Metallurgic industry in their comprehensive decarbonization programs. An example of this is Elkem which has biocarbon as one of their main sustainability strategies. Their goal is to increase the share of biocarbon in their production to 50% by 2030.
In addition, we have experienced a steady increase in the demand from the industry at large for our CO2-neutral gas. Stable energy supply is business critical for energy-intensive industry and our facilities will give a local energy source and increase their ability to be selfsufficient. Natural gas prices have increased dramatically, and we provide a competitive alternative to fossil fuels as well as a diversified source.
Vow Green Metals has a market leader ambition, and we are targeting to build large-scale industrial projects internationally.
Risk and uncertainties
Vow Green Metals is subject to several risks, both operational and financial. For a further description of the risk factors, please see an overview in the annual report for 2021.
This first half of 2022 we have been facing uncertainty around the location of the Follum site based on the results of the geological analysis proving the first location unfit for our production facilities. The need for a new location and replanning of plant concept based on the change of location have led to delays in our plan for Follum.
Vow Green Metals does not have any operations in Russia or Ukraine, however development relating to Russia's invasion of Ukraine could adversely affect global and regional economic conditions and trigger volatility in the prices of energy.
These effects may indirectly affect Vow Green Metals's operations. Although society have rebound from Covid-19 in almost all markets and travel restrictions have eased, there will be a certain risk related to Covid-19 and the market situation until we have seen a more prolonged period of normal operations
The European energy crisis is an opportunity for Vow Green Metals plans for internationalization. However in some regions this may affect the price of feedstock.
4 – VOW GREEN METALS
Vow Green Metals AS will accelerate the green shift by producing advanced biocarbon for the metallurgical industry and CO2 neutral gas for energy intensive industries.
The company was incorporated on 14.01.2021 and registered as a legal entity on 15.02.2021, demerged from Vow ASA on 09.07.2021 and subsequently listed on Euronext Growth on 12.07.2021.
What we do
In our industrial sized plants, we will use wood waste and other biomass waste streams as feedstock to create biocarbon and CO2-neutral gas through pyrolysis.
In many metallurgic industries, when producing raw metals, carbon is a necessary reduction agent to convert metal ores to metal. Vow Green Metals will be producing biocarbon with the purpose to replace fossil carbon to reduce CO2 emissions.
Vow Green Metals see strong market drivers for our products. There is a pull for a more circular economy, and we see an industry pushing for decarbonization. Necessary policies and regulations are already in place and more of them are being implemented through the EU Taxonomy. The European Green Deal and Fit for 55 is set in place and this is supporting our products. During 2Q 2022 the European Union strengthened these drivers even more with their RePower EU initiative. Essentially RePower EU is accelerating the transition to renewable energy, thus further increasing the demand for our energy products.
Feedstock
A large share of wood waste is not recycled today but instead incinerated or sent to landfills. This is a big challenge as millions of tons of wood waste in Europe is under-utilized and not contributing to the circular economy. Our solution is to recycle wood waste through pyrolysis and create advanced Biocarbon materials and CO2-neutral gas which can replace fossil products used by the industry in Europe.
BioCarbon
Fossil coal is the primary source of carbon in the metallurgical industry today. Carbon is an essential part of the chemical process to make metals.
The metallurgical industry needs carbon to be able to produce metals with their current production methods. The only source of carbon for this is today fossil carbon, which Vow Green Metals aim to replace. The metallurgical industry today accounts for almost 10% of global CO2 emissions. Hence, introducing Biocarbon as a reduction agent instead of fossil coal will be a critical step for the metallurgical industry to reach net zero emissions. Our Biocarbon can replace fossil metallurgical coal, without any conversion cost.
In sum, Biocarbon is currently the only feasible solution for many metallurgical companies to reach net-zero emissions as they rely on a chemical process that cannot be electrified or switch to green hydrogen.
CO2-neutral gas
The industry in Europe is using more than 1,000 TWh natural gas annually. Some industries can electrify their energy consumption, but for most this will require significant investments in new equipment and increased capacity in the electrical grid.
CO2-neutral pyrolysis gas will be a better and quicker way for industries to phase out natural gas because it has shorter lead times, can use current infrastructure and is scalable.
Economical and regulative drivers
Today, European metal producers is consuming 56 million tons of fossil carbon in their production. This causes process emissions from metallurgical production that is difficult to reduce. Materials other than carbon cannot be used in many of these processes, and therefore biocarbon is a particularly important solution for this industry to decarbonize. In Norway, this usage of fossil carbon accounts for more than five percent of the country's CO2 emissions.
In order to meet the EU's ambitious goal to reduce its greenhouse emissions with 55% by 2030 and become carbon neutral by 2050, it is vital that we direct investments towards sustainable projects and activities. To achieve this, clear definitions of what is sustainable is needed. Therefore, the EU is currently creating a common classification system for sustainable economic activities called the EU taxonomy.
The transition to a circular economy is part of the EU Taxonomy. A circular economy implies that businesses ensure the retention of value after a product has been used, for example through refurbishing, remanufacture or recycling. To improve recycling rates, the recovery and valorization of biomass waste is critical. Here, pyrolysis is mentioned by scientists as an important technology to build a new industry of material recycling plants.
Companies producing and handling waste will be impacted by the EU taxonomy. In dialogue with waste handling companies, they highlight the importance of having good waste distribution alternatives. With stricter requirements, waste producers and handlers need to have strong partnerships with companies able to recycle their waste, in contrast to current partners which mainly dispose waste by incineration or on landfills. Therefore, a partnership with us can be a competitive advantage as we can secure offtake of wood waste, a large share of which is currently not possible to recycle.
The cost of CO2 emissions is increasing. In 2005, the EU launched the world's first large greenhouse gas (GHG) emission trading scheme, the EU Emission Trading System (EU ETS). Already in 2008, the installations regulated by the EU ETS were collectively responsible for
40% of EU's GHG emissions. Today, many sectors are covered by EU ETS, including electricity and heat generation, production of metal, pulp, paper, chemicals, and other energy intensive industries.
In the recent years, we have seen a sharp increase in ETS prices. In response, analysts have increased their 2030-estimates year over year. In 2020, the expectation was that 2030 prices would be below 90 EUR/ton, a price that was exceeded already in the following year. Analysts' estimates from January 2022 are a CO2 cost of 113-169 EUR/ton in 2030.
The European Commission adopted the new circular economy action plan (CEAP) in March 2020. It is a key building block of the European Green Deal, Europe's agenda for sustainable growth. The EU's transition to a circular economy is a prerequisite to achieve the EU's 2050 climate neutrality target and to halt biodiversity loss.
The objectives of the new circular economy action plan are to make sustainable products the norm in the EU, focusing on sectors where the potential for circularity is high, including packaging, construction, buildings and food. These are areas where Vow Green Metals can contribute, making Biocarbon and CO2-neutral gas from biomass waste.
Our production will increase circularity according to the cascading principle and therefore secure the supply of feedstock. This is because biomass for recycling is preferred over incineration by the EU and waste handlers. In turn, this will also create a stable energy supply to our energy customers and stable biocarbon supply to our material customers.
Current value chain
Most wood waste are incinerated today
Valorizing waste
Vow Green Metals will create new materials from waste which currently is incinerated
5 – ENVIRONMENTAL, SOCIAL AND GOVERNANCE
While developing a profitable biocarbon process, Vow Green Metals promotes responsible business practices with respect to both the environment, people, and society. This means that the company will work systematically on issues as EHS (environment, health, and safety), non-discrimination, human and labour rights, anti-corruption, responsible sourcing, and responsible marketing practices. Vow Green Metals shall respect fundamental human rights as described in international human rights conventions such as the UN Convention on Human Rights and the labour rights conventions of the International Labour Organization (ILO). To promote responsible business practices throughout the value chain, Vow Green Metals is facilitating good dialogue with its stakeholders.
Accelerating the green shift
Vow Green Metals enables industry to undergo a significant green restructuring to achieve CO2 neutrality by 2050. By replacing fossil carbon with biocarbon and CO2 neutral gas made from forest and wood waste, Vow Green Metals is accelerating the green shift and combatting climate change.
The United Nations' Sustainable Developments Goals (SDGs) are a global call of action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. Vow Green Metals works to meet several of these goals and puts special emphasis on the following goals:
SDG 7 Affordable and clean energy
We are enabling industry to replace fossil fuels with CO2 neutral gas and provide clean energy for the industry.
We will provide energy supply to local consumers, enabling the consumers to be energy self- sufficient.
SDG 9 Industry, innovation, and infrastructure
As a pioneer and an industrial processing company, we offer industrial production of biocarbon which plays a crucial role in the ongoing decarbonizing of metallurgical industry and the green transition.
SDG 12 Responsible consumption and production
With our environmentally friendly production of biocarbon and CO2 neutral gas, we add value to the biomass life cycle, and thus we are enhancing circular economy.
SDG 13 Climate action
We decarbonize industry through production of biocarbon that can be used as a CO2 neutral reduction agent in metallurgical industry. In addition, our CO2 neutral gas can be used as energy and replace fossil fuels.
Health and safety
In first half of 2022, absence due to illness, due to covid-19, was 1.6 per cent.
Vow Green Metals' operations with its new plant at Follum and further biocarbon business are committed to follow strict health and safety standards.
Diversity and equal opportunities
Vow Green Metals is working to prevent discrimination and to ensure equal opportunities for its employees regardless of gender, age, ethnicity, religion, belief, disability, pregnancy, maternity leave, care responsibility, sexual orientation, gender identity, gender expression, or combinations of these grounds.
Gender and age composition
As of 30 June 2022, the company had 8¹ employees, of which 3 women.
| EMPLOYEES PER 30.06.22 | Female | Male | Total |
|---|---|---|---|
| > 30 | 0 | 1 | 1 |
| 30-50 | 2 | 2 | 4 |
| > 50 | 1 | 2¹ | 3 |
| Total | 3 | 5 | 8 |
¹ Include a > 50 in a 20 per cent position.
The Board of Vow green Metals consist of five persons, og which three are women.
| Board of Directors | Female | Male | Total |
|---|---|---|---|
| 30-50 | 2 | 2 | |
| > 50 | 1 | 2 | 3 |
| Total | 3 | 2 | 5 |
6 – FINANCIALS 1 ST HALF 2022
Profit and loss
| Unaudited | Unaudited | Audited | ||
|---|---|---|---|---|
| (Amounts in NOK) | Note | 1H 2022 | 1H 2021 | 2021 |
| Employee expenses | 2 | -3,474,294 | -318,443 | -3,786,473 |
| Other operating expenses | 3 | -3,219,754 | -5,872 | -6,901,356 |
| EBITDA | -6,694,048 | -324,315 | -10,687,829 | |
| Depreciation | -131,870 | - | -36,316 | |
| EBIT | -6,825,918 | -324,315 | -10,724,145 | |
| Interest cost | -130 | - | -2,308 | |
| Interest expenses - leasing | -10,363 | - | -1,993 | |
| Other net financial cost | -6,494 | - | 0 | |
| Net financial items | -16,988 | - | -4,301 | |
| Profit before tax | -6,842,906 | -324,315 | -10,728,446 | |
| Income tax expenses | - | - | - | |
| Profit for the period | -6,842,906 | -324,315 | -10,728,446 | |
| STATEMENT OF OTHER COMPREHENSIVE INCOME | ||||
| (Amounts in NOK) | ||||
| Profit for the period | -6,842,906 | -324,315 | -10,728,446 | |
| Other comprehensive income | - | - | - | |
| Total other comprehensive income, net of tax | - | - | - | |
Total comprehensive income for the year -6,842,906 -324,315 -10,728,446
Balance sheet
| Unaudited | Unaudited | Audited | ||
|---|---|---|---|---|
| (Amounts in NOK) | Note | 30-06-22 | 30-06-21 | 31-12-21 |
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment | 8 | 66,681 | 0 | 0 |
| Intangible assets | 9 | 2,182,749 | 968,859 | 968,859 |
| Assets under construction | 1 0 | 57,808,990 | 0 | 73,750,057 |
| Right-of-use assets | 593,450 | 0 | 138,001 | |
| Total non-current assets | 60,651,870 | 968,859 | 74,856,917 | |
| Current assets | ||||
| Other receivables | 800,963 | 0 | 1,308,338 | |
| Cash and cash equivalents | 4 | 76,038,182 149,994,129 | 68,132,777 | |
| Total current assets | 76,839,145 149,994,129 | 69,441,115 | ||
| Total assets | 137,491,014 150,962,988 144,298,032 | |||
| EQUITY AND LIABILITIES | ||||
| Equity | ||||
| Share capital | 5 | 1,071,809 | 326,087 | 1,071,809 |
| Share premium | 149,487,322 149,673,913 149,487,322 | |||
| Other reserves | 1,332,885 | 0 | 1,332,885 | |
| Retained earnings | -17,571,352 | -324,315 | -10,728,446 | |
| Total equity | 134,320,664 149,675,685 141,163,570 | |||
| Liabilities | ||||
| Non-current liabilities | ||||
| Non-current lease liabilities | 433,607 | 0 | 92,980 | |
| Total non-current liabilities | 433,607 | 0 | 92,980 | |
| Current liabilities | ||||
| Trade creditors | 284,306 | 0 | 1,412,413 | |
| Payables to associates | 6 | 968,859 | 1,287,302 | 968,859 |
| Public duties payable | 7 | 877,075 | 0 | 458,828 |
| Current lease liabilities | 181,960 | 0 | 59,783 | |
| Other current liabilities | 7 | 424,543 | 0 | 141,600 |
| Total current liabilities | 2,736,743 | 1,287,302 | 3,041,483 | |
| Total liabilities | 3,170,350 | 1,287,302 | 3,134,463 | |
| Total equity and liabilities | 137,491,014 150,962,988 144,298,032 | |||
Lysaker, Norway, 26 August 2022 The Board of Directors and CEO Vow Green Metals AS
Narve Reiten Chairman
Elise Must Board member
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Line Tønnessen Board member
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Carl Rembert Hartmann Board member
____________________
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Kari Stine Tærum Board member
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Cecilie Jonassen CEO
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CASHFLOW STATEMENT
| Unaudited | Unaudited | Audited | ||
|---|---|---|---|---|
| (Amounts in NOK) | Note | 1H 2022 | 1H 2021 | 2021 |
| Cash flow from operating activities | ||||
| Result before income tax | -6,842,906 | -324,315 | -10,728,446 | |
| Adjustments: | ||||
| Depreciation | 131,870 | - | 36,316 | |
| Valuation outstanding options | - | - | 1,332,885 | |
| Changes in other receivables | 507,376 | - | -1,308,338 | |
| Change in current liabilities | -426,917 | 1,287,302 | 2,981,700 | |
| Net cash flow from operating activities | -6,630,577 | 962,988 | -7,685,884 | |
| Cash flow from investing activities | ||||
| Investments in tangible assets | 8 | -76,163 | - | - |
| Investments in intangible assets | 9 | -1,213,890 | -968,859 | -968,859 |
| Investments in assets under construction | 1 0 | -22,531,442 | - | -73,750,057 |
| Net cash flow from investing activities | -23,821,495 | -968,859 | -74,718,916 | |
| Cash flow from financing activities | ||||
| Share capital reduction | - | -30,000 | -30,000 | |
| Share capital increase | - | 150,000,000 150,000,000 | ||
| Proceeds from issuing stock | - | - | 559,131 | |
| Leasing obligations | -115,033 | - | -21,555 | |
| Proceeds from Enova Grant | 1 0 | 38,472,510 | - | - |
| Net cash flow from financing activities | 38,357,477 149,970,000 150,507,577 | |||
| Net change in cash and cash equivalents | 7,905,405 149,964,129 | 68,102,777 | ||
| Cash and cash equivalents at start of period | 68,132,777 | 30,000 | 30,000 | |
| Cash and cash equivalents at end of period | 76,038,182 149,994,129 | 68,132,777 | ||
| Non-restricted cash | 75,449,790 149,994,129 | 67,689,321 | ||
| Restricted cash | 588,392 | - | 443,456 | |
| Cash and cash equivalents at end of period | 76,038,182 149,994,129 | 68,132,777 |
STATEMENT OF CHANGES IN EQUITY
30.06.2022
| Share | Share | Other | Retained | Total | |
|---|---|---|---|---|---|
| (Amounts in NOK) | capital | premium | reserves | earnings | equity |
| Equity at 31.12.2021 | 1,071,809 | 149,487,322 | 1,332,885 | -10,728,446 | 141,163,570 |
| Profit for the period | - | - | - | -6,842,906 | -6,842,906 |
| Equity at 30.06.2022 | 1,071,809 | 149,487,322 | 1,332,885 | -17,571,352 | 134,320,664 |
30.06.2021
| Share | Share | Other | Retained | Total | |
|---|---|---|---|---|---|
| (Amounts in NOK) | capital | premium | reserves | earnings | equity |
| Equity at 14.01.21 | 30,000 | - | - | - | 30,000 |
| Profit for the period | - | - | - | -324,315 | -324,315 |
| Share capital reduction | -30,000 | - | - | - | -30,000 |
| Share capital increase | 323,054 | 149,117,815 | - | - | 149,440,869 |
| Stock options | 3,033 | 556,098 | - | - | 559,131 |
| Equity at 30.06.2021 | 326,087 | 149,673,913 | - | -324,315 | 149,675,685 |
31-12-21
| Share | Share | Other | Retained | Total | |
|---|---|---|---|---|---|
| (Amounts in NOK) | capital | premium | reserves | earnings | equity |
| Equity at 14.01.21 | 30,000 | - | - | - | 30,000 |
| Profit for the period | - | - | - | -10,728,446 | -10,728,446 |
| Share capital reduction | -30,000 | - | - | - | -30,000 |
| Share capital increase | 1,068,776 | 148,931,224 | - | - | 150,000,000 |
| Stock options exersised* | 3,033 | 556,098 | - | - | 559,131 |
| Stock options | - | - | 1,332,885 | - | 1,332,885 |
| Equity at 31.12.2021 | 1,071,809 | 149,487,322 | 1,332,885 | -10,728,446 | 141,163,570 |
* Stock options were exercised in October 2021 in connection with employee stock option program.
NOTES
1 – Summary of significant Accounting Principles
Vow Green Metals AS was incorporated on 14 January 2021.
The financial statements have been prepared in accordance with the Norwegian accounting law and regulations for simplified international financial reporting standards (IFRS). This generally implies that recognition and measurement are aligned with international accounting principles (IFRS), while presentation and disclosures are in accordance with the Norwegian accounting act and good accounting practice.
Vow Green Metals was demerged from the parent company Vow ASA on 09.07.2021 in a subsequent listing on Euronext Growth on 12.07.2021. The board of Vow Green Metals appointment Cecilie Jonassen and Lars Mårdalen, as chief executive officer (CEO) and Chief Financial Officer (CFO) respectively of the new company. The appointments were important steps for the demerger and separate listing of the company.
Government grants
Government grants are recognised when it is reasonably certain that the company will meet the conditions stipulated for the grants and that the grants will be received. Operating grants are recognised systematically during the grant period. Grants are deducted from the cost which the grant is meant to cover. Investment grants are capitalised and recognised systematically over the asset's useful life. Investment grants are recognised either as deferred income or as a deduction of the asset's carrying amount.
2 – Employee expense
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| (Amounts in NOK) | 1H 2022 | 1H 2021 | 2021 |
| Salaries | 4,402,492 | 290,000 | 2,069,646 |
| Social security tax | 634,376 | 21,316 | 373,772 |
| Pension cost | 306,401 | 6,761 | 6,761 |
| Other benefits | 10,050 | 366 | 1,336,294 |
| Total employee expenses | 5,353,319 | 318,443 | 3,786,473 |
| Employee expenses capitalised to assets under construction | -1,879,025 | - | - |
| Total costs recognised as employee expenses | 3,474,294 | 318,443 | 3,786,473 |
3 – Other operating expenses
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| (Amounts in NOK) | 1H 2022 | 1H 2021 | 2021 |
| Legal | 187,775 | - | 1,026,192 |
| Audit Fees | 198,669 | - | 109,700 |
| IPO Fees | - | - | 2,995,112 |
| Consultant fees | 1,097,833 | - | 1,916,982 |
| Other expenses | 1,735,477 | 5,872 | 853,369 |
| Total other operating expenses | 3,219,754 | 5,872 | 6,901,356 |
4 – Cash and cash equivalents
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| (Amounts in NOK) | 1H 2022 | 1H 2021 | 2021 |
| Bank deposits | 75,449,790 | 149,994,129 | 67,689,321 |
| Restricted cash1 ) | 588,392 | - | 443,456 |
| Total cash and cash equivalents | 76,038,182 | 149,994,129 | 68,132,777 |
1) Restricted cash comprise of withheld taxes from employees salaries.
5 – SHARE CAPITAL
| Unaudited | |
|---|---|
| 1H 2022 | |
| Number of outstanding shares at 31 December 2021 | 164,893,759 |
| Share capital reduction | - |
| Share capital increase | - |
| Number of outstanding shares at 30 June 2022 | 164,893,759 |
| Nominal value NOK per share at 30 June 2022 | 0.0065 |
| Share capital NOK at 30 June 2022 | 1,071,809 |
| Unaudited | |
| 1H 2021 | |
| Number of outstanding shares at 14 January | 300 |
| Share capital reduction | -300 |
| Share capital increase | 50,167,224 |
| Number of outstanding shares at 30 June 2021 | 50,167,224 |
| Nominal value NOK per share at 31 December 2021 | 0.0065 |
| Share capital NOK at 31 December 2021 | 326,087 |
| Audited | |
| 2021 | |
| Number of outstanding shares at 14 January 2021 | 300 |
| Share capital reduction | -300 |
| Share capital increase | 50,167,224 |
| Share capital increase - demerger | 114,259,870 |
| Share capital increase - employee stock options | 466,665 |
| Number of outstanding shares at 31 December 2021 | 164,893,759 |
| Nominal value NOK per share at 31 December 2021 | 0.0065 |
| Share capital NOK at 31 December 2021 | 1,071,809 |
6 – TRANSACTIONS WITH ASSOSIATES
| Unaudited | Unaudited | Audited | ||
|---|---|---|---|---|
| (Amounts in NOK) | 1H 2022 | 1H 2021 | 2021 | |
| Liabilities | ||||
| Vow ASA | Intangible assets | 968,859 | 1,287,302 | 968,859 |
| Total payables to associates | 968,859 | 1,287,302 | 968,859 |
Vow Green Metals AS have entered into a service agreement with Scanship AS, which is the subsidiary of its largest shareholder, Vow ASA. The servise comprise accounting, IT and administration services. In H1 2022, the company purchased services for NOK 133 982. In addition, Scanship AS re-invoices Vow Green Metals AS quarterly for shared office space at Lysaker Torg 12. The cost re-invoiced for H1 2022 is NOK 486 914.
7 – PUBLIC DUTIES PAYABLE AND OTHER CURRENT LIABILITIES
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| (Amounts in NOK) | 1H 2022 | 1H 2021 | 2021 |
| Public duties payable | |||
| Employee witholding tax | 588,392 | 0 | 190,096 |
| Social security tax | 288,683 | 0 | 268,732 |
| Total public duties payable | 877,075 | 0 | 458,828 |
| Other current liabilities | |||
| Allocated holiday pay | 394,543 | 0 | 141,600 |
| Other current liabilities | 394,543 | 0 | 141,600 |
8 – PROPERTY, PLANT AND EQUIPMENT
| (Amounts in NOK) | Office, furniture and equipment |
|---|---|
| Cost: | |
| At 31 December 2021 | - |
| Additions | 76,163 |
| At 30 June 2022 | 76,163 |
| Depreciation and impairment: | |
| At 1 January 2021 | - |
| Depreciation this year | (9,482) |
| At 31 December 2021 | (9,482) |
| Carrying amount at 30 June 2022 | 66,681 |
| Useful life | 3 years |
| Depreciation method | Linear |
9 – INTANGIBLE ASSETS
The company has acquired the value of the development cost for the new planned biocarbon plant at Follum. Depreciation will start once the Follum plant is starting production.
| Unaudited | |
|---|---|
| 1H 2022 | |
| (Amounts in NOK) | R&D |
| Cost: | |
| At 31 December 2021 | 968,859 |
| At 30 June 2022 | 968,859 |
| Carrying amount at 30 June 2022 | 968,859 |
| Unaudited | |
| 1H 2021 | |
| (Amounts in NOK) | |
| Cost: | |
| At 14 January 2021 | - |
| Additions | 968,859 |
| At 30 June 2021 | 968,859 |
| Carrying amount at 30 June 2021 | 968,859 |
| Audited | |
| 2021 | |
| (Amounts in NOK) | |
| Cost: | |
| At 14 January 2021 | - |
| Additions | 968,859 |
| At 31 December 2021 | 968,859 |
| Carrying amount at 31 December 2021 | 968,859 |
| Useful life | 10 years |
| Depreciation method | Linear |
| The technical and system solutions know-how developed in this R&D project was acquired from Vow ASA with effect from 1 April 2021. |
|
| Unaudited | |
| 1H 2022 | |
| (Amounts in NOK) | Computer software |
| Cost: | |
| At 31 December 2021 | |
| Additions | - 1,213,890 |
| At 30 June 2022 | 1,213,890 |
| Depreciation and impairment: | |
| At 1 January 2022 Depreciation this year |
- |
| At 30 June 2022 | - |
| - | |
| Useful life | 3 years |
| Depreciation method | Linear |
| Carrying amount at 30 June 2022 | 1,213,890 |
10 - ASSETS UNDER CONSTRUCTION
The company formally signed the contract for the process equipment for the Follum project. According to which Vow ASA will deliver process equipment and engineering support to Vow Green Metals' biocarbon plant at Follum in Norway. The contract is valued at NOK 215 million.
The company also formally signed the agreement with Lindum AS for the supply of feedstock for the Follum project. The related liability is limited to feedstock supplied.
Unaudited 1H 2022 (Amounts in NOK) Assets under construction Cost: At 31 December 2021 73,750,057 Additions 22,531,442 Enova Grant (38,472,510) At 30 June 2022 57,808,990
Carrying amount at 30 June 2022 57,808,990
Enova Grant
Enova has confirmed a government grant to support the company's project for industrial production of biocarbon for metallurgical industry at Follum. The grant is for 40 % of the total approved project cost, but limited to NOK 80.7 million. Grants will be paid in arrears based on agreed progress milestones in the project. 20% of the grant will be withheld until the final report has been submitted and approved by Enova. Grants of total NOK 38 472 510 has been received in June 2022.
| Audited | |
|---|---|
| 2021 | |
| (Amounts in NOK) | Assets under construction |
| Cost: | |
| At 14 January 2021 | - |
| Additions | 73,750,057 |
| At 31 December 2021 | 73,750,057 |
| Carrying amount at 31 December 2021 | 73,750,057 |
11 – RECENT EVENTS
Since Vow Green Metals on November 4, 2021, announced its plans to build Europe's largest BioCarbon production plant at Follum, other companies have signaled interest to becoming part of this larger industrial complex.
Most recently in March 2022, the JV between Billerud Korsnäs, a leading provider of sustainable packaging, and Viken Skog, a large cooperative in the Norwegian forest industry announced that they plan to establish a CTMP production plant at the site.
For Vow Green Metals this is an opportunity to double the production capacity of our biocarbon factory to match the potential increased demand from the Billerud Korsnäs and Viken Skog joint venture. This will significantly improve the economics of scale at a marginally higher CAPEX cost.
Further discussion with potential partners, studies, and analysis of what this could mean for the exact location, layout and construction schedule for Vow Green Metals' plant will start immediately. This may impact the overall project, but it will result in a more efficient plant which would be able to meet the potential increased demand.
Revolutionising metallurgical industries by replacing fossil carbon with biocarbon made from forest and wood waste.
www.vowgreenmetals.com