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Pryme N.V. — Interim / Quarterly Report 2021
Nov 24, 2021
8192_rns_2021-11-24_ccec9139-4aa5-405b-9851-a8486486c5c6.pdf
Interim / Quarterly Report
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BUSINESS OVERVIEW: ACHIEVEMENTS IN Q3 2021
Construction update
Our first industrial scale pilot plant is under construction at the PlantOne facility in the port of Rotterdam. It will have an annual plastic intake capacity of 40,000 tonnes.
In the third quarter steady progress was made on planning, contracting and construction of the plant. Most commitments for the construction are now locked in contractually and the detailed design is frozen. The design includes additional flexibility to facilitate process improvements that will benefit future plant designs.
Civil works started in August and the foundations are now ready for installation of the steel structure, which is due in December. Equipment installation is planned for Q1 22 and start of commissioning will start as expected in Q2 22, with start of production in 2H 22.
Contracts on utilities and connections outside battery limits are currently being negotiated.
Strategic Agreements
Pryme was excited to sign a strategic cooperation and offtake agreement with Shell Chemicals Europe in August. This was the result of four years of constructive dialogue between parties.
The strategic cooperation agreement outlines the common strategic aim to foster development of the value chain. Although non-exclusive, the agreement recognizes the role of Shell promoting the development of our concept through a commitment for a significant part of the volume of our first plant.
The agreement also defines the path towards supply from the projected future plant in the Rotterdam area. This phase 2 plant would start production in 2025 with a plastic intake capacity of 450'000 tonnes p/a, thus producing about 340'000 tonnes p/a of pyrolysis oil.
The offtake agreement defines pricing and logistical arrangements for the supply of pyrolysis oil from our first plant.
These Shell agreements provide an important validation of our business case towards the plastic waste industry.
We also confirm significant interest for our pyrolysis oil from across the petrochemical industry, and during the third quarter several discussions with potential offtakers have been initiated and/or further matured.
The aim is to develop additional partnerships, which will form the foundations for permit applications in multiple European locations that we aim to submit in the future.
Plastic Feedstock
On the plastic feedstock side, Pryme has been in discussions with multiple longterm suppliers of plastic feedstock over the course of Q3. The LOI in force is being further matured and several new NDA's have been signed.
The aim is to develop deep ties with the waste and recycling industry across Europe, as they play a key role in developing this value chain.
Pryme is targeting feedstock that would typically be destined for incineration or even landfill, and therefore is well positioned as complimentary to the mechanical recycling industry.
In conjunction with the waste and recycling industry, we are currently defining a generic Pryme specification from which our chemical recycling plants will be able to produce pyrolysis oil at acceptable quality levels to the offtakers.
Lab scale plant – University of Ghent
To make continuous improvements to our processes and to proactively research the chemical link between different sources of feedstock and pyrolysis oil output, Pryme has decided to build its own R&D facility.
During Q3 preparations were made for the facility, which will be located at the premises of the University of Ghent, a leading knowledge center on pyrolysis and petrochemical processes. Equipment has been ordered and the lab is planned to be up and running in Q1 2022.
The testing of specific batches of plastic feedstock and projected quality of pyrolysis oil is expected to provide useful insights. These will inform decisions relating to operations of the pilot plant.
Together with the University of Ghent, other academic institutions, and several industrial partners (including a petrochemical major as well as a provider of renewable energy) we have submitted an EU Horizon application for subsidies to support a four-year development project to achieve a fully electrified process to make plastics circular through chemical recycling.
Organization
During Q3 two important additions to the management team started their work at Pryme:
Sander Schiereck started as plant manager and Joeri Dieltjens commenced as rollout manager. Both bring valuable experience from the petrochemical industry. Getting these resources on board during the time of construction and early deployment of our technology is key to us, as it allows for building an in-house knowledge base.
For the management of our future R&D program a suitable candidate has committed to start in February 2022. Based in Ghent the candidate will be responsible for the development of our technology road map.
The company has contracted Pascal Spiekerman to take responsibility for SHEQ related affairs. Pascal will develop and implement a framework that will ensure compliance with all relevant procedures and regulations and industry standard health and safety practices.
Next steps
The focus remains on the timely construction and successful startup of the first plant. Apart from construction, this also implies getting the operational teams in place, as well as organizing numerous logistical challenges to get the plant ready. Once production starts, we expect to verify our industrial processes. Such proof of concept will then clear the way for the rollout phase of our company.
In parallel, we are finalizing the blueprint for our future modular and scalable plant design, which will be used for the submission over several permit applications across Europe.
A third point of focus concerns long term feedstock arrangements, which we aim to further develop over the next 6 months.
FINANCIAL STATEMENTS
| BALANCE SHEET | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 31.12.20 | 31.03.21 | 30.06.21 | 30.09.21 | ||||||
| Assets | |||||||||
| Fixed Assets | |||||||||
| Intangible fixed assets | |||||||||
| Development costs | € | 2'290'674 | € | 2'290'674 | € | 2'290'674 | € | 2'290'674 | |
| Tangible fixed assets | |||||||||
| Machinery | € | 8'729'086 | € | 11'646'775 | € | 14'407'587 | € | 16'480'255 | |
| Other fixed assets | € | 2'500 | € | 5'836 | € | 14'269 | € | 22'929 | |
| Financial fixed assets | € | 37'303 | € | 37'303 | € | 42'194 | € | 44'894 | |
| Total fixed assets | € | 11'059'563 | € | 13'980'588 | € | 16'754'724 | € | 18'838'752 | |
| Current assets | |||||||||
| Receivables | € | 1'105'942 | € | 1'091'528 | € | 1'231'125 | € | 1'265'816 | |
| Cash & cash equivalents | € | 154 | € | 19'683'092 | € | 15'932'694 | € | 14'321'640 | |
| Total Assets | € | 12'165'659 | € | 34'755'209 | € | 33'918'543 | € | 34'426'208 | |
| Equity & Liabilities | |||||||||
| Equity | € | 6'469'699 | € | 28'902'635 | € | 28'360'469 | € | 27'710'930 | |
| Long Term liabilities | |||||||||
| Accruals and deferred income | € | 4'991'511 | € | 4'991'511 | € | 4'991'511 | € | 4'991'511 | |
| Current liabilities | |||||||||
| Trade payables | € | 585'297 | € | 733'759 | € | 473'879 | € | 1'613'139 | |
| Other liabilities | € | 119'152 | € | 127'304 | € | 92'684 | € | 110'628 | |
| € | 12'165'659 | € | 34'755'209 | € | 33'918'543 | € | 34'426'208 |
The financial figures included in this report are unaudited except for the FY 2020 figures
PROFIT & LOSS STATEMENT
| 31.12.20 | Q1 | Q2 | Q3 | YTD 2021 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Operating revenue | € | - | € | - | € | - | € | - | € | - |
| Cost of Sales | € | - | € | - | € | - | € | - | € | - |
| Gross Margin | € | - | € | - | € | - | € | - | € | - |
| Operating expenses | ||||||||||
| Wages & Salaries | € | 11'778 € | 3'000 € | 2'700 € | 16'472 € | 22'172 | ||||
| Oher expenses employee benefits | € | 212'500 € | 157'302 € | 219'866 € | 228'076 € | 605'244 | ||||
| Housing expenses | € | 89'311 € | 42'557 € | 50'411 € | 64'027 € | 156'995 | ||||
| Audit & Accounting | € | 117'344 € | 23'109 € | 29'339 € | 13'552 € | 66'000 | ||||
| Legal advisory | € | 81'922 € | 25'744 € | 149'893 € | 22'633 € | 198'270 | ||||
| Insurances | € | 62'295 € | - | € | - | € | 30'482 € | 30'483 | ||
| Other operating expenses | € | 12'562 € | 12'333 € | 56'467 € | 200'962 € | 269'761 | ||||
| Total opering expenses | € | 587'712 € | 264'045 € | 508'676 € | 576'204 € | 1'348'925 | ||||
| Depreciation | € | - | € | 67 € | 170 € | 1'493 € | 1'731 | |||
| Operating result | € | -587'712 € | -264'112 € | -508'846 € | -577'697 € | -1'350'656 | ||||
| Financial income / (expense) | € | 1'846 € | -11'792 € | -19'993 € | -17'699 € | -49'483 | ||||
| EBIT | € | -585'866 € | -275'904 € | -528'839 € | -595'396 € | -1'400'139 |
The financial figures included in this report are unaudited except for the FY 2020 figures
| CASHFLOW STATEMENT | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 31.12.20 | Q1 | Q2 | Q3 | YTD 2021 | ||||||
| Cash flow from operating activities | ||||||||||
| Operating result | € | -587'712 € | -264'112 € | -508'846 € | -577'697 € | -1'350'655 | ||||
| Adjustments for | ||||||||||
| Depreciation | € | - | € | 67 € | 170 € | 1'493 € | 1'730 | |||
| Changes in working capital | ||||||||||
| Movements accounts receivable | € | 331'229 € | 14'414 € | -139'596 € | -34'692 € | -159'874 | ||||
| Movements in other payables | € | 155'131 € | 156'614 € | -294'500 € | 1'157'204 € | 1'019'318 | ||||
| Total cash flows from operations | € | -101'352 € | -93'017 € | -942'772 € | 546'308 € | -489'481 | ||||
| Financial income | € | 1'846 € | -11'792 € | -19'993 € | -17'699 € | -49'484 | ||||
| Total cash flow from operating activities | € | -99'506 € | -104'809 € | -962'765 € | 528'609 € | -538'965 | ||||
| Cash flow from investment activities | ||||||||||
| Purchase of tangible fixed assets | € | -471'873 € | -2'921'092 € | -2'769'415 € | -2'082'821 € | -7'773'328 | ||||
| Purchase of financial fixed assets | € | -138 € | - | € | -4'891 € | -2'700 € | -7'591 | |||
| Total cash flow from investment activities | € | -472'011 € | -2'921'092 € | -2'774'306 € | -2'085'521 € | -7'780'919 | ||||
| Cash flow from financing activities | ||||||||||
| Public placement | € | - | € | 24'820'419 € | -5'000 € | 5'000 € | 24'820'419 | |||
| Expenses relating to public placement | € | - | € | -2'111'579 € | -8'327 € | -59'143 € | -2'179'049 | |||
| Total cash flow from financing activities | € | - | € | 22'708'840 € | -13'327 € | -54'143 € | 22'641'370 | |||
| Total cash flow | € | -571'517 € | 19'682'939 € | -3'750'398 € | -1'611'055 € | 14'321'486 | ||||
| Cash and cash equivalents at the beginning of the period € | 571'671 € | 154 € | - | € | - | € | 154 | |||
| Total cash flow in the period | € | -571'517 € | 19'682'939 € | -3'750'398 € | -1'611'055 € | 14'321'486 | ||||
| Cash and cash equivalents at the end of the period | € | 154 € | 19'683'092 € | -3'750'397 € | -1'611'055 € | 14'321'640 |
The financial figures included in this report are unaudited except for the FY 2020 figures
CASHFLOW OUTLOOK
| Cash flow outlook for the next 12 months | Sources of cash | |||||
|---|---|---|---|---|---|---|
| Cash balance at 30/9/2021 | € | 14'321'640 | ||||
| Proceeds from asset backed financing | € | 8'200'000 | ||||
| Grants | € | 400'000 | ||||
| Remaining Capex | € | 18'093'740 | ||||
| Estimated Operational Results until 30.09.2022 | € | 3'920'123 | ||||
| € | 22'921'640 € | 22'013'863 | ||||
| Balance at 30.09.2022 | € | 907'777 |
Note on cash flow outlook:
The forward-looking statements contained in this Cash Flow forecast, including assumptions, opinions and views of the Company, are based upon various assumptions, including without limitation, management's judgement, data contained in the Company's records and other data and projections available from third party sources. Although the Company believes that these assumptions were reasonable when made, the statements provided in this Cash Flow forecast are solely opinions and forecasts that are uncertain and subject to risks, contingencies and other important factors which are difficult or impossible to predict and are beyond its control.
Statement by the Supervisory Board and the Management Board
The Supervisory Board and the Management Board have today considered and approved the Business Review report of Pryme B.V. (collectively "the Group") for the period January 1, 2021 up to September 30, 2021.
We confirm, to the best of our knowledge, that the financial information contained in the Business Review for the period January 1, 2021 to September 30, 2021 has been prepared in accordance with Dutch accounting principles and gives a true and fair view of Pryme BV and its Group companies' assets, liabilities, financial position and profit or loss as a whole.
We also confirm, to the best of our knowledge, that the Business Review includes a fair review of important events that have occurred during the third quarter of the financial year 2021 and their impact on the condensed set of consolidated financial statements is reflected adequately.
About Pryme | www.pryme-cleantech.com
Pryme BV is an innovative cleantech company focused on converting plastic waste into valuable products through chemical recycling on an industrial scale. Its efficient and scalable technology is based on a proven pyrolysis process that has been further developed and enhanced with proprietary characteristics. The company is currently building its first plant in the port of Rotterdam with an initial annual intake of 40,000 mt, which will start production in 2022.
Pryme's ambition is to contribute to a low-carbon, circular plastic economy and to realize the enormous rollout potential of its technology through the development of a broad portfolio of owned-operated plants with strategic partners.
The company is listed on the Oslo Euronext Growth Exchange.