Velocys plc (VLS.L), the sustainable fuels technology company, is pleased to announce its interim results for the six months ended 30 June 2019.
Henrik Wareborn, CEO of Velocys, said:
“2019 has been a positive year for the Company. The demand for our Fischer Tropsch technology is growing on both sides of the Atlantic, which is why we have concentrated our efforts on project development and reactor manufacturing. These last six months have seen Velocys accelerate the move from conceptto commercialisation – transitioning from research, development and testing, to focusing on commercial scale client delivery and operational excellence.
We have delivered our first reactor and all catalyst charges to our client in Oregon (Red Rock Biofuels) and the manufacturing of the remaining reactors is advancing. We are now focusing all our efforts on commercial delivery – for our client in Oregon and for our two projects in Mississippi, USA (Bayou Fuels) and Immingham, UK (Altalto).
None of this would have been possible without the recent support of our shareholders new and old along with the hard work and dedication that all our staff have put in to achieve the Company’s goals. I would like to make a personal thanks to Dr Pierre Jungels for his guidance of the Company over the years that he has been Chairman and wish him well for the future.”
Operational Highlights:
· Good progress has been made in delivering the sustainable fuels strategy.
· The Bayou Fuels Mississippi project has been transformed during the period by changing the power source to solar and including CO2 capture, which has reduced the project’s carbon intensity score, improving project returns significantly, creating an attractive differentiator for investment into this project.
· The Immingham UK project has completed all pre-FEED work (Front End Engineering and Design) and has submitted its planning application. Additional funding from our partners in the project, received post period end, has ensured that we can reach the FEED stage in the next few months.
· Delivery of one reactor and all the catalyst to our client Red Rock Biofuels in the period. Manufacture of the remaining reactors is underway.
Financial Highlights:
· The commercial scale FT reactor demonstration in Oklahoma was safely and comprehensively concluded with complete decommissioning of the site, return of the two FT reactors to Velocys and sale of certain assets and return of the site to one of our JV partners for a total of 3.3m, which is now fully paid, with £1.7m paid during the period and £1.6m post period end.
· Revenue of £22,000 (H1 2018: £392,000).
· Operating loss of £5.2m, exceptional items of credit of £0.6m (H1 2018: £11.0m before exceptional items of £14.3m).
· Cash* at period end £1.3m (31 December 2018: £7.0m).
· H1 2019 cash outflow £5.1m (H1 2018: cash inflow £8.9m).
· Fund raise of approximately £7m (before expenses) in July 2019 (post-period end).
· Complementing commitments received by the Company from the Altalto Immingham waste-to-sustainable-fuels project’s strategic partners, British Airways and Shell, of £2.8 million in total in July 2019 (post-period end).
* Defined as cash, cash equivalents and short-term investments.
Outlook
· The revised, truly renewable focused profile of the Bayou Fuels Mississippi project is aiding discussions with partners and investors to progress to the next stage of development.
· Advancing the Immingham UK project into FEED with industry partners Shell and British Airways and towards financial close in 2021 is a key objective.
· Delivery of the remaining reactors in 2019 to our client Red Rock Biofuels is underway.
velocys