Shareholders boost SIMEC Atlantis after 2017 loss filing

Recently renamed tidal developer SIMEC Atlantis has received a £5 million boost through fully subscribed bond offer, after reporting a post-tax loss of £10.6 million for the year 2017.

MeyGen tidal turbine (Photo: SIMEC Atlantis)

Namely, the loss reported by the company is 45% higher when compared to that of £7.3 million reported last year.

Contributing to the year loss, according to SIMEC Atlantis, are one-off costs relating to advisor fees for the recently completed acquisition of SIMEC Uskmouth Power – a GFG Alliance company – and the write down of the loan due from Atlantis Operations (Canada) as a result of the decision to exit the joint venture.

SIMEC Atlantis also informed of the ‘significant progress’ made last year on its flagship MeyGen Phase 1A tidal energy project, with all four turbines successfully installed and generating power to the grid, resulting in ROC accreditation and revenue generation.

Translating this to financial figures, the revenue from power sales on the MeyGen project amounted to £300,000 and relates to power generation post commissioning of the individual turbines late in 2017.

Commenting on the annual results, John Neill, Chairman at SIMEC Atlantis, said: “The 6MW first phase of the MeyGen project has now accumulated over 7GWh of generation – enough to meet the annual electricity needs of over 2,000 homes – and we are continuing to drive the cost reductions which, with the right support, could enable the further build out of the site to its full capacity of almost 400MW.

“The MeyGen project is integral to the Group, and its development from inception to a fully-fledged operational project reflects the growth and evolution of the wider business over the past decade.”

The full-year revenue recorded by SIMEC Atlantis in 2017 stands at £301,000, compared to the revenue of £235,000 filed in the prior year.

Total expenses for the year were £12.8 million as opposed to £9.1 million made last year, SIMEC Atlantis has reported, pointing out the costs associated with power sales that were recognized for the first time in 2017, in addition to the costs related to the SIMEC Uskmouth acquisition.

New year, new shareholders, new investments

In the period from April to June 2018, Atlantis raised £5 million, before expenses, through a fully subscribed five-year bond launched through Abundance investment platform.

Also, in May 2018, SIMEC Atlantis completed an equity fundraising  with £20 million in its pocket that will be used to secure working capital funding for the enlarged group.

“We will continue to assess each acquisition opportunity in the waste to energy and hydro power markets on its merits and will update the market on progress in due course,” said Tim Cornelius, the CEO of SIMEC Atlantis.

The total equity of SIMEC Atlantis, as recorded on December 31, 2017, is at £60.2 million – which is around £6 million less than last year.

Reflecting on the company’s annual results, Cornelius added: “We are delighted with the progress made at MeyGen this year where we have achieved a significant number of milestones including record turbine installation times, ROC accreditation and revenue generation from power sales. When coupled with the success of the SIMEC announcement in December, 2017 has been the most important year in the company’s history.

The AR1500 tidal turbine for MeyGen tidal array project (Photo: SIMEC Atlantis)

“Our relationship with the GFG Alliance, with its current portfolio of over 700MW of operating and development renewable energy assets, provides a pathway for further growth in both power generation and project development, whilst the technology delivery function, bolstered by experience at MeyGen, is critical to the success of the group’s tidal stream opportunities worldwide.”

The 4-trubine array has generated more than 7GWh of energy to date, and in March 2018 set a new world record for monthly production from a tidal stream array – generating 1.4GWh in 30 days.

Formal completion of the construction phase was achieved in early 2018. Before that, SIMEC Atlantis applied to the UK 2017 auction for contracts for difference to enable construction of a further 80MW of capacity at our MeyGen site.

The price submitted, according to the company, was significantly below the administratively set strike price for tidal stream projects and represented a reduction in subsidy support of two thirds versus that awarded to the first phase of MeyGen under the previous mechanism for supporting development of renewable technologies known as the Renewables Obligation.

The auction resulted in the vast majority of the available contracts awarded to large offshore wind projects, while SIMEC Atlantis application was unsuccessful.

However, the company said it has continued its engagement with the UK and Scottish governments, planning to participate in the next auction rounds set for 2019.