Annual / Quarterly Financial Statement • Feb 28, 2023
Annual / Quarterly Financial Statement
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Quantafuel ASA
Consolidated financial statements
Quantafuel ASA
- Delayed positive cash flow from operations resulting in need of a financing solution by mid-Q2 2023 for funding of current operations and future projects
- MK II FEED for 80 kta plant in Dubai close to completion. Current CapEx estimates shows a significant increase versus initial guidance, but FID expected in Q2 is maintained.
- Four operational lines in Skive heated with self-produced gas, volumes increasing continuously
- Planning permission granted for 100 kta plant in Sunderland
- Construction of ReSource Denmark plant is progressing on plan
- Quantafuel and Geminor established the JV Polynate to focus on the waste plastics market and supply of feedstock to Quantafuel's plants
Per 31st December 2022, Quantafuel ASA had a cash position of NOK 121.7 million (excl cash deposited in the JV ReSource Denmark). Due to the constraints on the Group's liquidity position, from operating plants still not generating positive cash flow, and the near-term financing commitments to the Esbjerg sorting plant project, the Group is in urgent need of new financing and will require this to be in place by no later than mid Q2 2023. The equity needed to realise the remaining parts of the Esbjerg project, the Dubai project and the upcoming pipeline of projects is estimated at approximately USD 70 million.
The Dubai MK II FEED in cooperation with Dubal Holding and BASF is in its final phase, and our preferred EPC partner Saipem, together with Quantafuel's project team, are currently focusing on value engineering to optimize CapEx for both the Dubai plant as well as MK II in general. The current indications show a CapEx estimate at USD 200 - 250 million, but the ongoing work to optimize cost in combination with expected offtake price for the oil is believed to confirm an attractive financial return bringing the prospect through an FID. All partners are confident that the end result will be a plant defining a new standard within chemical plastic recycling.
This past year, Quantafuel has maintained its position as one of the frontrunners driving the implementation of chemical plastic recycling in the circular economy. The demand for chemically recycled products is strong, and we continuously experience high interest in our technology offerings, future plants, and recycled products.
It has been a challenging, as well as a rewarding, quarter. We have executed a strategic review in preparation of the roll-out of the next generation Plastic-to-Liquid (PtL) plants, referred to as MK II, and the feedback we have received from several involved parties has been positive and encouraging, supporting what we've been saying all along: We are a global leader within chemical recycling of plastic waste.
We have continued to reach new milestones at Skive. All four lines are now operational and all lines are primarily heated by self-produced gas (also referred to as NCG or noncondensable gas). The plant is currently targeting to have three lines in continuous operation, while the fourth is undergoing inspection and cleaning before entering into a stand-by state ready to take over when one of the other operating lines needs inspection. Produced volumes are increasing on a monthly basis, but a delayed positive cash flow is causing an increased cash constraint on the company.
In February 2023, we reached a major milestone in the UK when our planning application for a PtL plant in Sunderland was granted without any objections and with full support from Sunderland Council. In addition, we are moving ahead with additional sites in the UK and have entered into meaningful discussions with feedstock suppliers.
The strategic review process announced on 12th October 2022 to finance the roll-out of the next generation Plastic-to-Liquid Plants is coming to a close. The Management and the
Board of Directors have conducted a thorough review process looking into various options in order to secure short- and long-term liquidity and future development of the company. An announcement on the matter is expected soon.
Quantafuel has an objective of zero harm to people, the environment, as well as assets. HSE is a non-negotiable priority in Quantafuel's operations.
Quantafuel recorded two Lost Time Injuries (LTI) in Q4; one related to chemical exposure (as reported in the Q3 report), and the other related to an ankle strain. The employees were back at work shortly after the incidents and report full recovery. Apart from these two LTI's, there were no other reportable safety incidents, neither any accidental releases to the environment during the quarter and up until completion of this report.
The company remains committed to ensuring a safe working environment and excellent HSE performance. There is a continuous proactive effort, commitment and focus on prevention of HSE incidents. Operators, employees, and subcontractors undergo mandatory HSE training, as well as other required certification to ensure a safe and healthy working environment.
Quantafuel's move into the next phase of its strategy is made possible by our secondgeneration (MK II) process built on all of Skive's well-proven principles and learnings. The FEED study for Dubai is expected to result in the first MK II plant that will be built at a scale of 80,000 tons of waste plastics feed. Key learnings from Skive drive improvements in three core areas; namely simplification, redundancy and operability. These improvements will result in plants with higher throughput and lower operating cost per ton of product produced. The MK II concept is modular and scalable and can easily be adapted to the specifics of different sites.
We are making good progress in the UK. In February 2023, our planning application for a PtL plant in Sunderland was granted. The plant will be able to process more than 100,000 tonnes of low value plastic waste in a sorting step preceding the PtL plant. Construction is expected to get underway later this year, with the plant starting operations in 2025.
We are also progressing with additional sites in the UK with a focus on continued discussions with feedstock suppliers driven by the removal of planning risk in Sunderland.
It is, however, the Dubai project that is currently taking pole position in our PtL portfolio. The front-end engineering design (FEED) study between Saipem and Quantafuel for the consortium in cooperation with DUBAL Holding and BASF will be completed during Q1 and the final investment decision is expected in Q2. As mentioned above, the focus is now on value engineering to optimize CapEx for both the Dubai plant as well as MK II in general. The latest indications of USD 200-250 million, based on executed FEED work incorporating latest development and market conditions, show a CapEx estimate significantly higher than the initially guided level. Given that we are in dialogue with several interested parties regarding offtake of the oil at required price levels there is confidence in reaching a CapEx level required for bringing the prospect through FID with an attractive plant economics. All partners are confident that the end result will be a plant defining a new standard within
plastic recycling. The drivers for the CapEx increase compared with the original generic 100 kta plant are a more robust design, including all the experience and learnings from Skive operations to safeguard uptime and capacity, inflation, and increased material cost globally. We expect that there will be cost benefits from the modularized approach for future plants.
After announcing the agreement that allows Saipem to globally market PtL plants under Quantafuel's technology license in August 2022, we have experienced significant interest from major petrochemical corporations and energy majors. The cooperation with a leading global EPC player has elevated Quantafuel to a different level in the eyes of these companies. Our core strategy remains building, owning and operating PtL plants through ownership in dedicated JV's. The agreement with Saipem will provide additional income streams over time from licensing.
Another new approach we took up in the second half of 2022 is the previously discussed project portfolio development in the UK with CBRE. This will add a "capital light"-approach to Quantafuel's business model as we can reduce our ownership share and equity contribution in a project, in return for a high external financing share. Quantafuel will gain a share of the ownership as part of the developer's fee and through sweat equity from the IP and competence we bring to the projects.
Skive's uptime and production stability keeps improving and continuous cost saving initiatives are making an impact.
The focus this quarter has been to continuously run three lines in parallel, with the fourth line on cold stand-by and ready for heating when one of the operating lines has shown signals indicating a need for inspection and cleaning. Going forward, when sub-systems have proven robustness, the expectation is that the interval between these inspection and cleaning stops is reduced to a level where four lines can continuously operate in parallel.
We continue to see good improvements in Skive; In January 2023, we increased our intake of plastic by 32 % over the month of December. A total of 1,436 production hours resulted in 548 tonnes of plastic processed in January.
We have optimised the energy use and cost of operation with the use of self-produced gas, also referred to as NCG or non-condensable gas, to heat all four lines in normal operation.
The improved volume output moves us in the direction of a positive cash flow for a full month. However, the continued unfavourable cost effect on our P&L, driven by high energy and feedstock prices, raises the bar on plant performance required for positive cash flow, but we are getting closer to this target month by month.
Learnings, testing and development are a priority at Skive to continue our optimisation work and maximise practical experience with regards to our MKII investment. This is a balancing act between targeting to operate Skive as an independent profitable plant while at the same time needing to test and develop new improvements related to the benefit of future plants.
The limitation in available feedstock is still restricting the full utilisation of the plant, and actions are in place to improve the sourcing of feedstock.
Kristiansund's target feedstock is hard plastics, complementary to the soft plastics that are
the feedstock to Skive and other future PtL plants, and although the Kristiansund plant has unique processing capabilities with high tolerance to mixed and contaminated feedstock, the process of building up a stable, high-performing supply chain is still ongoing. We are confident that the establishment of Polynate will be important in resolving this limitation, together with enhanced co-operation with local stakeholders.
Despite uncertainties in the secondary plastics market due to softening demand for mechanically recycled plastics throughout Europe, Quantafuel Kristiansund has managed to maintain favourable offtake agreements.
The construction of ReSource in Esbjerg, a game-changer for the plastic waste market in Denmark and the country's largest plastic sorting facility, is well under way. The CapEx estimate for the project has increased approximately 10% due to increased safety level of the plant and general market terms such as cost inflation and raw material prices.
The sorting facility that will be capable of sorting up to 160,000 tonnes of mixed plastic waste annually into recyclable fractions, is expected to be commissioned at the end of 2023. In strong cooperation with ReSource's project team, Rambøll manages the overall engineering and follow-up, whereas contractor Jorton is the project's main entrepreneur and Eggersmann is the supplier of waste sorting treatment equipment.
When operational, the facility will employ close to 50 full-time employees. The next phase of the Esbjerg project will include a large-scale PtL plant based on Quantafuel's MK II concept.
In December 2022, a feedstock agreement for the annual supply of at least 20,000 tonnes of household plastic waste from Finnish service company Lassila & Tikanoja (L&T) was secured for ReSource Denmark. The agreement has a duration of two years, with a possible extension. For ReSource, the financial terms of the multi-year contract are in accordance with the company's expectations.
The macroeconomic trend remains supportive for Quantafuel's growth plans. Industrial and retail demand for recycled products is strong. We were pleased to report in Q3 that the cost of our feedstock into Skive is receding and this development continues. In addition, we have agreed a revised long-term pricing mechanism with our offtaker BASF.
The L&T agreement with ReSource Denmark, as mentioned above, will aim to supply Skive with sorted household plastics as of next year with a significantly reduced cost compared to current market terms.
In December 2022, Quantafuel and Geminor established the company Polynate – Circular Plastic Solutions, which aims to take a leading trading position in the value chain for plastic waste recycling in the Nordics and the UK. Ralf Schöpwinkel, with 25 years of industry experience in Geminor, was appointed CEO. While developing into a general focused market player in waste plastics, Polynate's main focus will be on supplying the feedstock needed to Quantafuel's facilities in Kristiansund, Skive and its planned PtL facilities in Denmark and the UK, as well as secure offtake of sorted plastic products. Polynate will also supply plastic waste to ReSource, Quantafuel's joint venture with Eurazeo and Denmark's largest plastic sorting facility in Esbjerg, which will be ready to receive waste from late 2023/early 2024.
By 2025, the EU and EEA target to recycle 50% of their plastic packaging waste. To reach this goal European countries will have to substantially increase collection and recycling of plastic packaging waste. For a large fraction of the plastic packaging, Quantafuel's PtL process is a very attractive route to recycling. During 2022, Quantafuel has recycled several different "difficult to recycle" plastic waste feedstocks from public and private actors in the Nordics. This demonstrates that Quantafuel's PtL process is a feasible option for recycling of mixed plastic feedstocks with high yields into products that can then be processed further into virgin quality products.
Quantafuel continues to improve transparency in the waste sector. Third party certification by ISCC+ and RedCert2 guarantees circular and sustainable production. Our production facilities are digitally integrated. In collaboration with Cognite, we have set up a sustainability dashboard giving us real-time measurement of key factors like energy use, CO2 emissions and water use. These factors are reported back to Quantafuel's customers in a "Bill of Sustainability", which provides them with a proof of recycling and feedback on the quality of the waste.
We have continued recycling surplus gas as the primary energy source in Skive, reducing CO2 emissions by displacing use of natural gas.
Quantafuel is a sustainable and environmentally friendly alternative to incineration, lowering CO2 emissions by up to two tonnes per tonne plastic recycled.
Quantafuel believes in exploring ideas through innovative projects, driving solutions for a more sustainable waste and energy market. Our R&D team is driving strategic initiatives to improve the chemical recycling technology portfolio, including maximum use of by-products. Over the past months, there have been positive developments regarding the early stage research done with NTNU in Trondheim. For one, the UK patent office has issued a positive opinion on the patentability of Quantafuel's application for our developmental technology that produces hydrogen and liquid fuels from plastics. On the other hand, the pilot plant for sustainable aviation fuel from biomass is close to completion and we expect to transfer it to Trondheim.
The total number of employees at the end of the fourth quarter was 106.
The Company and Group employees represent a wide diversity in specialisation, previous working experience, gender, age and cultural background. For Quantafuel, diversity is viewed as a source of advantage. Differences in background, culture and perspectives are important for the company, and today, a total of 19 nationalities are represented in Quantafuel Group among its employees.
Quantafuel facilitates equal opportunity for professional and personal development for all employees. Our ambition is to create and achieve a working environment where all employees can feel they are contributing and are heard. We continue to work towards our differences and similarities being a strength, with the ambition of creating and keeping an open, curious, and inclusive culture.
Quantafuel guided in the Q3 reporting that we expected positive operational cash flow from the plant in Skive within year-end 2022. Due to unplanned downtime above expectations, this did not materialise for any full month even if the trend has continued in the right direction. We are confident that this will happen in 2023 as we see the periods with stable production becoming more and more regular.
As described above, Kristiansund is still experiencing challenges in feedstock supply suitable for our mechanical recycling line and actions are in place to improve sourcing. Kristiansund is forecasting to achieve positive cash flow from around mid 2023. The Group has decided to impair the value of the share investment in Quantafuel Kristiansund by 39 MNOK based on a review of discounted future cash flows from the company. The impairment of the shares in Kristiansund is eliminated in the consolidation and does not give an impact in the P&L at Group level.
Based on our initial feasibility study for a 100kta plant (on a 100% basis), we have previously provided guidance with an estimated annual EBITDA contribution of approximately USD 50 million and with Capital expenditure of approximately USD 140 million. Our recently completed FEED study together with Saipem for which the Capex estimates are not finally conclusive, estimates a revised CapEx in the range of USD 200 – 250 million for an 80 kta MK II plant (100% basis). For the same plant size, the annual EBITDA contribution is expected maintained in the same range, i.e. approx. USD 50 million, due to higher expected offtake prices, providing attractive financial returns.
Based on equal scope and market conditions, we estimate a CapEx reduction from the first to the second MK II plant in the range 10-15% due to the modularized approach, and from the first to the third, and subsequent plants, in the range of 15-20%.
We continue to pursue growth through joint ventures and plant ownership in selected markets, as well as global licensing of technology.
The PPE value of Skive is NOK 436,1 million as per 31st December 2022. Quantafuel has conducted an impairment test of the Skive plant confirming our long-term positive view on the development. Key input for the valuation is Management's base case for the gradual improvement of the Skive plant economics reaching annual free cash flow of approximately NOK 90 million from 2026, with a weighted average cost of capital (WACC) of 12%.
The group have decided to impair the value of the 40% shareholding in Geminor Invest from a book value of NOK 184 million by NOK 52 million to a new book value of NOK 132 million. The new valuation represents a fair value of expected discounted future cashflows from the investment.
Per 31st December 2022, Quantafuel ASA had a cash position of NOK 121.7 million and 191.8 million if including cash deposited with the joint venture ReSource Denmark. Due to the constraints on the Group's liquidity position, from operating plants still not generating positive cash flow, and the near-term financing commitments to the Esbjerg sorting plant project, the Group is in urgent need of new financing and will require this to be in place no later than by mid Q2 2023. In addition to initiatives to raise equity, the Group is also assessing the potential in selling off assets not critical to the future strategy of the Group.
The equity need to realise the remaining parts of the Esbjerg project, the Dubai project and the upcoming pipeline of projects is estimated at approx. USD 70 million. The assumed ownership for the upcoming projects is as follows; Esbjerg phase 1 (50%), Dubai (25%) and UK portfolio (20% via developer's fee and sweat equity). Subsequent projects are assumed financed through bonds and/or loans.
The Group appointed ABG Sundal Collier as an adviser in the strategic review process announced on 12th October 2022, in preparation of the roll-out of the next generation Plasticto-Liquid Plants. This process is about to conclude with Management and the Board of Directors having conducted a thorough review process looking into various options in order to secure short- and long-term liquidity and future development of the company. An announcement is expected soon.
The appointment of CBRE as the development funding agent to secure funds for all relevant costs associated with the construction of the Sunderland project and potentially a portfolio of UK projects, demonstrates the flexibility in raising funds at Group or project levels, as well as flexibility in ownership share, for the next stage of growth.
Day by day we are proving that we are in a good position to build a circular economy for plastics in Europe and beyond. The signals we receive from major corporations assessing and looking for partners to develop in this growing market is that Quantafuel is leading the way.
EU's Green Deal requiring 50% recycling by 2025 is an important accelerator for plastic recycling. Together with anticipated increased taxes on CO2 emissions, this will incentivise industrial companies to recycle more plastic waste as well as increase the demand for chemically recycled pyrolysis oil. For Quantafuel this means more business opportunities and continued technology development, for which we are building our organisation. Quantafuel is 100% committed to contributing towards solving the global waste problem, and our employees are proud of being part of a company that is acting now.
Quantafuel ASA Oslo, 28th February 2023
| Audited | ||||
|---|---|---|---|---|
| Quantafuel Financial Highlights | Q4 2022 | Q4 2021 | Full year 2022 | Full year 2021 |
| Unaudited figures in NOK if not stated otherwise | Group | Group | Group | Group |
| Operating revenue | 21 971 | 2 334 | 53 444 | 5 161 |
| Total Income | -26 161 | 2 367 | 4 051 | 9 115 |
| EBITDA | -102 882 | -61 234 | -290 809 | -166 824 |
| Profit (loss) | -88 701 | -73 044 | -304 280 | -3 883 |
| Total assets | 1 562 924 | 1 500 171 | 1 562 924 | 1 500 171 |
| Cash & Cash equivalents | 121 667 | 284 903 | 121 667 | 284 903 |
Operating revenue of NOK 22 million in Q4 2022 includes revenue from our plants in Skive (NOK 9.2 million) and Kristiansund (NOK 5.6 million) and revenue in ASA (NOK 7.1 million).
For the full year 2022 operating revenue of NOK 53.4 million consists of NOK 17.8 million relating to operation of Skive Plant, and NOK 16.8 million relating to operation of Kristiansund Plant. NOK 18.8 million relates to various projects in Quantafuel ASA. Reference is also made to the Skive operational results as included with the financial review of the financial position.
Included in total income is the Group's share of net loss in Geminor Invest AS and Resource Aps which is included in the Group accounts as equity-accounted investees. Adjusted for IFRS elements, the Geminor share of profit is included with NOK 5 million for Q4 2022, and for the full year 2022, the Group's share of net profit was NOK 12.4 million. For Q4 2022 there has been a write down of the Group value of shares in Geminor Invest AS of NOK 52.1 million, which gives a book value of NOK 132 million as of 31.12.2022.
The share of loss for the period included for Resource is NOK 9.6 million.
EBITDA in Q4 2022 was NOK –102.9 million compared to NOK -61.2 million same period in 2021. This includes the write down of Geminor shares. For the full year 2022 EBITDA was NOK -290.8 million, compared to NOK -166.8 million same period last year. Salary costs in Q4 2022 was NOK 35.1 million and NOK 114.6 million for the full year 2022, compared to NOK 27.7 million in Q4 2021 and NOK 67.1 million for the full year 2021. For 2022 the number of employees is higher than 2021.
Other operating expenses in Q4 2022 was NOK 22.6 million compared to NOK 8.7 million in Q4 2021. For the full year 2022 other operating expenses was NOK 87.7 million compared to NOK 53.0 million for the full year 2021.
Loss for the period Q4 2022 was NOK 88.7 million.1
Loss for the full year 2022 was NOK 304.3 million
1 The Profit (loss) consists of EBITDA, depreciation, net financial items, and taxes.
| Audited | ||
|---|---|---|
| At 31 Dec 2022 | At 31 Dec 2021 | |
| Unaudited figures in NOK if not stated otherwise | Group | Group |
| Total non-current assets | 1 390 688 | 1 151 653 |
| Total current assets | 172 235 | 348 518 |
| Total assets | 1 562 924 | 1 500 171 |
| Total equity | 1 159 781 | 1 068 479 |
| Total non-current liabilities | 300 473 | 303 711 |
| Total current liabilities | 102 669 | 127 981 |
| Total equity and liabilities | 1 562 924 | 1 500 171 |
As per 31 December 2022 the Group`s equity was NOK 1,159.8 million. Cash and cash equivalents were NOK 121.7 million, of which NOK 2.1 million wasrestricted cash (employee tax advance account).
Total non-current assets at the end of the quarter were NOK 1,390.7 million due to an increase related to the Skive plant and Kristiansund plant and shareholder loan to Resource Denmark Aps. Included in non-current assets is the equity accounted investees, which from Q3 also includes Resource Denmark Aps (former Quantafuel Esbjerg Aps).
(Amounts in NOK thousands)
| Q1 2022 YTD | Q2 2022 YTD | Q3 2022 YTD | Q4 2022 YTD | |
|---|---|---|---|---|
| Revenue | 2 427 | 4 622 | 8 614 | 17 753 |
| Cost | 25 104 | 52 862 | 81 549 | 107 862 |
| EBITDA | -22 677 | -48 240 | -72 935 | -90 109 |
| Depreciation | 1 655 | 3 138 | 9 206 | 12 416 |
| EBIT | -24 332 | -51 378 | -82 141 | -102 525 |
| 31.12.2021 | 30.06.2022 | 30.09.2022 | 31.12.2022 | |
|---|---|---|---|---|
| Intangible Assets | 0 | 163 624 | 163 624 | 163 624 |
| PPE * | 604 885 | 447 721 | 452 598 | 436 287 |
* Please refer to note 2
| Full year | Full year | |||
|---|---|---|---|---|
| Q4 2022 | Q4 2021 | 2022 | 2021 | |
| Group | Group | Group | Group | |
| Audited | ||||
| Operating revenue | 21 971 | 2 334 | 53 444 | 5 161 |
| Share of net income in equity accounted investees |
-48 131 | 33 | -49 392 | 3 954 |
| Cost of goods sold | 18 967 | 27 189 | 92 504 | 55 854 |
| Salaries and personnel costs 4 |
35 125 | 27 741 | 114 612 | 67 133 |
| Depreciation and amortisation 2 |
10 387 | 9 826 | 54 152 | 20 061 |
| Other operating expenses | 22 629 | 8 670 | 87 744 | 52 951 |
| Operating profit (loss) | -113 269 | -71 060 | -344 961 | -186 885 |
| Finance income | 4 437 | 790 | 33 737 | 1 012 |
| Finance expense | 3 188 | 4 133 | 14 506 | -12 911 |
| Finance items convertible loan | - | - | - | 205 302 |
| Net financial items 3 |
1 249 | -3 343 | 19 231 | 193 403 |
| Profit (loss) before tax | -112 021 | -74 402 | -325 730 | 6 518 |
| Income tax expense | -23 320 | 1 359 | -21 450 | -10 401 |
| Profit (loss) for the period | -88 701 | -73 044 | -304 280 | -3 883 |
| Attributable to: | ||||
| Equity holders of the parent | -88 701 | -73 044 | -304 280 | -3 883 |
| Non-controlling interest 6 |
- | - | - | - |
| Earnings per share, ordinary | -0.6 | -0.5 | -1.9 | -0.0 |
| Earnings per share, diluted | -0.6 | -0.5 | -1.9 | -0.0 |
| Q4 2022 | Q4 2021 | 2022 | Full year 2021 |
|---|---|---|---|
| Group | Group | Group | Group |
| -88 701 | -73 044 | -304 280 | -3 883 |
| 6 031 | 5 273 | 3 291 | 2 184 |
| -82 670 | -67 771 | -300 989 | -1 699 |
| -82 670 | -67 771 | -300 989 | -1 699 - |
| - | - | Full year - |
| At 31 December | |||
|---|---|---|---|
| Note | 2022 | At 31 December 2021 | |
| Group | Group | ||
| ASSETS | Audited | ||
| Deferred tax asset | 48 295 | 21 300 | |
| Goodwill | 54 085 | 54 085 | |
| Other intangible assets | 195 160 | 32 537 | |
| Property plant and equipment | 2 | 564 728 | 771 134 |
| Right-of-use asset | 92 933 | 93 139 | |
| Equity-accounted investment | 6 | 213 148 | 171 806 |
| Investment in associated company | - | - | |
| Other non-current assets | 222 339 | 7 652 | |
| Total non-current assets | 1 390 688 | 1 151 653 | |
| Inventory | 14 873 | 5 783 | |
| Accounts receivable | 30 233 | 18 120 | |
| Other receivables | 5 463 | 21 395 | |
| Assets held for sale | - | 18 318 | |
| Cash and cash equivalents | 121 667 | 284 903 | |
| Total current assets | 172 235 | 348 518 | |
| Total assets | 1 562 924 | 1 500 171 | |
| EQUITY AND LIABILITIES | |||
| Share capital | 1 658 | 1 490 | |
| Other paid-in capital | 2 318 107 | 1 906 483 | |
| Retained earnings | -1 159 984 | -839 493 | |
| Equity attributable to the owners of the | |||
| parent | 1 159 781 | 1 068 479 | |
| Non-controlling interests | - | - | |
| Total equity | 1 159 781 | 1 068 479 | |
| Deferred tax liabilities | 128 145 | 124 740 | |
| Non-current interest bearing liabilities | 3 | 72 588 | 86 757 |
| Long-term leasing liability | 3 | 93 157 | 92 214 |
| Other non-current liabilities | - | - | |
| Total non-current liabilities | 300 473 | 303 711 | |
| Current interest bearing liabilities | 3 | 18 385 | 17 848 |
| Tax payable | - | 450 | |
| Short-term leasing liability | 3 | 9 710 | 7 555 |
| Accounts payable | 3 | 29 050 | 44 442 |
| Other current liabilities | 3 | 52 107 | 57 685 |
| Total current liabilities | 102 669 | 127 981 | |
| Total equity and liabilities | 1 562 924 | 1 500 171 | |
| QUANTAFUEL ASA |
| Q4 2022 | Q4 2021 | Full year 2022 | Full year 2021 | |
|---|---|---|---|---|
| Group | Group | Group | Group | |
| Profit (loss) for the period, before tax | -112 021 | -74 402 | -325 730 | 6 518 |
| Depreciation and amortisation | 10 387 | 9 826 | 54 152 - |
20 061 |
| Income taxes paid | - | - | 448 | - |
| Share-based payment expense | 1 027 | 2 949 | 8 764 | 11 404 |
| Net financial items | -46 883 | 3 310 | -30 162 | -197 357 |
| Increase/(decrease) in inventory Increase/(decrease) in net accounts receivable and |
-697 | -2 283 | -9 090 | -2 565 |
| payable Increase/(decrease) in net other receivables and other |
-14 995 | -2 838 | -27 504 | -24 256 |
| payables | 36 214 | -6 445 | 2 904 | -24 351 |
| Cash flows from operating activities | -127 417 | -69 883 | -327 115 | -210 547 |
| Purchase of property, plant and equipment | -31 843 | -46 269 | -69 899 | -194 173 |
| Purchase of intangible asset | - | - | - | -2 087 |
| Purchase of shares | - | - | 31 452 | -4 260 |
| Dividend | - | - | - | 4 000 |
| Increase/(decrease) in other non-current assets | -62 704 | - | -174 652 | -14 |
| Interest income received | - | 1 012 | - | 1 012 |
| Cash flows from investment activities | -94 547 | -45 258 | -213 100 | -195 523 |
| Proceeds from issue of shares | - | 1 040 | 387 048 | 3 157 |
| Proceeds from borrowings | 91 480 | 24 466 | -4 052 | 12 830 |
| Payment of lease liabilities | -4 153 | -3 793 | -16 561 | -12 129 |
| Interest expenses paid | 686 | -803 | -3 932 | -5 108 |
| Exchange differences | 9 012 | - | 14 474 | - |
| Cash flows from financing activities | 97 026 | 20 910 | 376 978 | -1 250 |
| Net change in cash and cash equivalents | -124 936 | -94 231 | -163 236 | -407 320 |
| Cash and cash equivalents at beginning of period | 246 604 | 379 133 | 284 903 | 692 223 |
| Cash at cash equivalents at end of period Group | 121 667 | 284 903 | 121 667 | 284 903 |
| Share | Share | Retained | Non-controlling | |||
|---|---|---|---|---|---|---|
| capital | premium | earnings | Total | interests | Total equity | |
| Equity at 31 December 2020 | 1 358 | 1 373 496 | -802 593 | 572 261 | 81 726 | 653 987 |
| Profit (loss) | - | - | -3 883 | -3 883 | - | -3 883 |
| Change in NCI share of plant excess value | - | - | - | - | - | - |
| Total comprehensive income | - | - | -3 883 | -3 883 | - | -3 883 |
| Translation differences, net | - | - | 2 184 | 2 184 | - | 2 184 |
| Total OCI | - | - | -1 699 | -1 699 | - | -1 699 |
| - | - | - | - | - | - | |
| Increase in share capital | 132 | 521 582 | - | 521 714 | - | 521 714 |
| Equity effect of aquisition minority shareholders |
- | - | -35 202 | -35 202 | -81 726 | -116 928 |
| Share-based payments | - | 11 404 | - | 11 404 | - | 11 404 |
| Equity at 31 December 2021 | 1 490 | 1 906 483 | -839 493 | 1 068 479 | - | 1 068 479 |
| Profit (loss) | - | - | -304 280 | -304 280 | - | -304 280 |
| Change in NCI share of plant excess value | - | - | - | - | - | - |
| Total comprehensive income | - | - | -304 280 | -304 280 | - | -304 280 |
| Translation differences, net | - | - | 3 291 | 3 291 | - | 3 291 |
| Total OCI | - | - | -300 989 | -300 989 | - | -300 989 |
| Increase in share capital | 168 | 402 860 | -19 500 | 383 528 | - | 383 528 |
| Equity effect of aquisition minority shareholders |
- | - | - | |||
| Other changes Equity | - | - | - | |||
| Share-based payments | - | 8 764 | - | 8 764 | - | 8 764 |
| Equity at 31 December 2022 | 1 658 | 2 318 107 | -1 159 984 | 1 159 781 | - | 1 159 781 |
The interim condensed consolidated financial statements ('the Statements') of Quantafuel ASA and its subsidiaries ('the Group') for the period ended 30 September 2022 were authorised for issue by the Board of directors on 14 th November 2022.
Quantafuel ASA was formed in 2014 and is a Norwegian public limited company listed on Euronext Growth Oslo. The Group's head office is in Lilleakerveien 2C, 0283 Oslo, Norway.
Quantafuel is a technology-based energy company converting waste plastics back into low-carbon synthetic oil products replacing virgin oil products. Quantafuel is establishing, operating and owning dedicated plastic-toliquid (PtL) plants and plans to establish several plants throughout Europe and beyond.
The strategy is to expand the production footprint internationally to have a meaningful contribution to solve one of the most pressing environmental challenges of our time.
The Statements have been prepared in accordance with IAS 34 Interim Financial Reporting. The statements do not include all the information and disclosures required in the annual financial statements and should be read together with the Group's annual consolidated financial statements as of 31 December 2021.
The accounting policies used in preparation of the Statements are consistent with those used for preparation of the Group's annual financial statements for 2021.
| Property and | Machinery and | Assets under | ||
|---|---|---|---|---|
| plant | equipment | construction | Total | |
| Period ended 31 December 2020 | 59 615 | 551 304 | 610 919 | |
| Additions | 49 255 | 147 931 | 197 185 | |
| Reclassification held for sale | -18 318 | - | -18 318 | |
| Disposals | -2 333 | -2 333 | ||
| Derecognition | - | -2 329 | -2 329 | |
| Depreciation | -7 964 | -3 015 | -10 979 | |
| Exhange differences | - | -3 011 | -3 011 | |
| Net book value 31 December 2021 | - | 80 254 | 690 879 | 771 134 |
| Period ended 31 December 2021 | - | 80 254 | 690 879 | 771 134 |
| Reclassification | 604 885 | -604 885 | - | |
| Additions | 25 505 | 30 730 | 23 690 | 79 925 |
| Reclassification to R&D | -163 624 | - | - | -163 624 |
| Disposals | - | -70 340 | -70 340 | |
| Derecognition | - | -5 373 | - | -5 373 |
| Depreciation | -20 453 | -16 516 | - | -36 969 |
| Exhange differences | -10 026 | - | -10 026 | |
| Net book value 31 December 2022 | 436 287 | 89 095 | 39 344 | 564 728 |
Quantafuel has in accordance with IAS 38 recognised certain costs in regard to the Skive plant cost as development costs. From a total of NOK 620 million, NOK 163.6 million has been reclassified as development costs. The knowledge acquired throughout the multiple process modifications and rebuilds will be implemented in our second-generation plants (MK II) and therefore providing important value for future plants, as well as providing value through licensing.
As for previous quarterly financial reporting, Quantafuel has conducted a valuation of the Skive plant. There has been no need for impairment based on the current estimates.
Below is an overview of financial assets and liabilities, other than cash, held by the group:
| Financial assets other than cash: | 2022 | 2021 | ||
|---|---|---|---|---|
| Debt instruments at amortised cost: | ||||
| Trade and other receivables | 23 977 | 39 515 | ||
| Non-current deposits | 222 339 | 7 652 | ||
| Sum financial assets | 246 317 | 47 167 | ||
| Total current | 23 977 | 39 515 | ||
| Total non-current | 222 339 | 7 652 | ||
| Financial liabilities: Interest-bearing liabilities: | ||||
| Interest rate | Maturity | 2022 | 2021 | |
| Current interest-bearing liabilities: | ||||
| Loan from Sparebank 1 SMN | 8.75% | 2023 | 7 640 | 7 640 |
| Loan from DGI | CIBOR 3 + 7.03% | 2023 | 10 745 | 10 208 |
| Lease liabilities | 8.48% / 6% | 2023 | 9 710 | 7 555 |
| Total current | 28 095 | 25 404 | ||
| Non-current interest-bearing liabilities: | ||||
| Sparebank 1 SMN | 8.75% | 2026 | 21 647 | 29 287 |
| Innovasjon Norge | 4.95% | 2024 | 2 400 | 2 400 |
| Loan from DGI | CIBOR 3 + 7.03% | 2028 | 48 541 | 55 071 |
| BASF liability | n.a. | - | - | |
| BASF conversion right liability | n.a. | - | - | |
| Lease liabilities | 8.48% / 6% | 2034 | 93 157 | 92 214 |
| Total non-current | 165 745 | 178 971 | ||
| Total interest-bearing liabilities | 193 840 | 204 375 | ||
| Other financial liabilities at amortised cost: | ||||
| 2022 | 2021 | |||
| Trade and other payables | 74 574 | 102 127 | ||
| Total current | 74 574 | 102 127 | ||
| Total non-current | - | - |
At 31.12.2022 Quantafuel Kristiansund AS was in breach of a covenant related to the working capital requirement for the loan from Sparebank 1 SMN. The Covenant requirement is a positive working capital of NOK 2.5 million. The company has received a signed waiver from the bank and have replaced the working capital covenant with a Corporate guarantee of NOK 10 million related to the loan.
Share options of the parent company have been granted to Directors of the Board, executive management and other employees. As of 31.12.2022, the Company had 8,660,335 options outstanding. Each option gives the right to subscribe for one share. The options outstanding at the reporting date has an exercise price between NOK 4.60 – 77.00 per share, and with an exercise period that ends between 12 June 2023 and 1 November 2026.
The calculated value is recognised as part of equity in the statement of financial position. The options recognised at the reporting date is NOK 34.4 million and NOK 0.1 million for social security taxes. The change in the liability in the period is recognised as salaries and personnel costs in the income statement. Quantafuel may at any time resolve to terminate all issued options against a cash consideration equal to the market value of the option shares as the time of the termination, less the exercise price for such options.
On 31 January 2022, new shares were registered in the Norwegian Register of Business Enterprise, following the Private Placement closed 28 January 2022. Quantafuel issued 16,000,000 shares at NOK 0.01 per share. The subscription price was set at NOK 25.0 per share, giving a share premium of NOK 399,840,000. KIRKBI Invest A/S, a company closely related to Board member Kasper Trebbien, was allocated 4,000,000 shares in the Private Placement.
On 24 March 2022 new shares were registered in the Norwegian Register of Business Enterprise. Quantafuel issued 13,333 shares at NOK 0.01 per share. This capital increase was related to stock options being exercised. The shares were exercised at subscription prices at NOK 14.90 per share.
On 6 April 2022 new shares were registered in the Norwegian Register of Business Enterprise. Quantafuel issued 800,000 shares at NOK 0.01 per share. This capital increase was related to the first tranche of payment related to the purchase of Quantafuel UK minority shares.
The total share capital of Quantafuel as of 31 December 2022 was NOK 1,658,285.13 divided by 165,828,513 shares, each with a par value of NOK 0.01.
On 12 July Quantafuel Group, through Quantafuel Denmark ApS, sold 50% of the shares in Quantafuel Esbjerg ApS (now: Resource Denmark ApS) to Eurazeo. Eurazeo has committed a total of EUR 40 million to the project. Resource Denmark Aps will therefore no longer be part of the consolidated Quantafuel Group, but recognised as an Equity-accounted investee along with Geminor Invest AS.
On 19th December 2022, Geminor established a new subsidiary to focus on waste management for plastics. The company is named Polynate. Quantafuel has a 40% shareholding in Geminor, and as part of the shareholders agreement when establishing the company, the parties also agreed on an option where Quantafuel will have the right to buy 50% of Polynate if Quantafuel is to divest it's 40% shareholding in Geminor.
On 10 January 2023 Quantafuel Group established a new company in the UK, Quantafuel Rosyth Ltd. This will be a fully owned subsidiary of Quantafuel UK Ltd.
This report contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as "ambition", "continue", "could", "estimate", "expect", "believe", "focus", "likely", "may", "outlook", "plan", "strategy", "will", "guidance" and similar expressions to identify forward-looking statements. All statements other than statements of historical fact, including, among others, statements regarding plans and expectations with respect to Quantafuel's development and returns, balance sheet and long-term underlying earnings growth; market outlook and future economic projections and assumptions; capital expenditure guidance; production guidance; development and construction activities; projected unit of production cost; accounting decisions and policy judgments, ability to put new plants into profitable production, and the impact thereof; expected dividend payments; estimated provisions and liabilities; implementation of IFRS, and the impact thereof; planned acquisitions and divestments; and the projected impact or timing of administrative or governmental rules, standards, decisions or laws, including with respect to and future impact of legal proceedings are forward-looking statements.
You should not place undue reliance on these forward- looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons.
These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including levels of industry product supply, demand and pricing; price and availability of alternative fuels; currency exchange rate and interest rate fluctuations; the political and economic policies of operating countries; general economic conditions; political and social stability and economic growth in relevant areas of the world; global political events and actions; economic sanctions, security breaches; changes or uncertainty in or non-compliance with laws and governmental regulations; the timing of bringing new plants on stream; an inability to exploit growth or investment opportunities; material differences from reserves estimates; an inability to find and develop new plants; ineffectiveness of crisis management systems; adverse changes in tax regimes; the development and use of new technology; geological or technical difficulties; operational problems; operator error; inadequate insurance coverage; the lack of necessary transportation infrastructure when a field is in a remote location and other transportation problems; the actions of competitors; the actions of partners; the actions of governments; counterparty defaults; natural disasters and adverse weather conditions, climate change, and other changes to business conditions; an inability to attract and retain personnel; relevant governmental approvals; industrial actions by workers and other factors discussed elsewhere in this report.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, we undertake no obligation to update any of these statements after the date of this report, whether to make them either conform to actual results or changes in our expectations or otherwise.
Quantafuel ASA
(Euronext Growth: QFUEL)
Org.no: 915 119 484
Address: Lilleakerveien 2c 0283 Oslo Norway
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