SIMEC Atlantis Sees Loss Widen
- Business & Finance
SIMEC Atlantis Energy has reported losses for the year of 2018 of £24.0 million.
Based on the company’s preliminary report, this result compares to £10.6 million loss in 2017.
According to Atlantis, the increase in the year-on-year loss of £13.4 million reflects the significant changes in the Group in the period.
Increased depreciation expense of £5 million and finance costs of £1.5 million are the result of MeyGen becoming operational in April and the acquisition of SUP in June. SUP acquisition costs and financial results also contributed to the increased loss, the company noted.
Revenue of £2.2 million for the year (£0.3 million in 2017), includes an increase of £1.8 million from power sales from the Meygen Phase 1A project.
“The overall loss for the year reflects the development investment we continue to make in our flagship tidal energy and waste to energy projects, with consistent revenue generation from power sales expected as they come online over the next 24 months,” said John Neill, non-executive chairman.
Earlier this year, board directors of Atlantis decided the company will not be proceeding with the acquisition of Green Highland Renewables (GHR) as previously envisaged.
“We entered 2019 with the announcement of our intention to acquire the Green Highland Renewables (GHR) Group of companies
from the GFG Alliance. Having assessed the available financing options for the Group to purchase GHR, it was determined that
an alternative transaction structure would be in the interests of shareholders and we will provide further information in the near future,” Neill added.
Atlantis has namely agreed to release the SIMEC group from its obligations under the GHR sale and purchase agreement (SPA) in consideration for receipt of a payment in cash of approximately £5 million, pursuant to a payment agreement, which will be deployed towards the delivery of its 220MW Uskmouth waste-to-energy conversion project. Furthermore, SIMEC has agreed pursuant to a loan agreement made between Atlantis and SIMEC to make a £2 million interest free loan available to Atlantis.
Tim Cornelius, CEO of Atlantis, stated: “Although not the original intention, this is an excellent outcome for Atlantis. We will end up with more near-term cash to deploy on key development projects which are intended to deliver the largest possible returns for investors.”