26 September 2024
EQTEC plc
("EQTEC",
the "Company" or the "Group")
Interim results for the six
months ended 30 June 2024
EQTEC plc (AIM:EQT), a global
technology innovator powering distributed, decarbonised, new energy
infrastructure through its waste-to-value solutions for hydrogen,
biofuels, and energy generation is pleased to announce its
unaudited, interim results for the six months
ended 30 June 2024 ("H1
2024"), with post-period
progress.
Financial highlights
· Revenue: €1.45 million (H1 2023: €0.145 million), a 10x
increase from previous year.
· Gross
profit €0.826 million (H1 2023: €0.036 million)
· Gross
margin improvement to 50%+ ((FY 2023: 15%)
a 3x increase from previous year, underpinned by a shift toward high-margin IP-rich services and
a departure from high-risk development activities.
· EBITDA
loss: €1.60 million (H1 2023: €1.92 million) a 17% reduction from
previous year.
· Capital raise of £0.85 million (€1.0 million) through the
placing of new shares, and refinance of loan facility.
· Post-period payroll costs reduction of c.14% executed
through operational and organisational
transitions.
· Post-period, £1.1 million (€1.3 million) equity investment
raised in September through the placing of new shares and £2.0
million received in full settlement of the LOGIK legal
claim.
The net loss, including significant
non-recurring items amounting to €1m, was €3.19 million (H1 2023:
€2.42 million), including €1.55 million of debt servicing and other
financing costs the majority of which were one off and
non-recurring.
The Company expects to sustain
improvement to gross margin for the whole of 2024 compared to 2023,
as a result of its focus on improving rates, cost management, and
delivery excellence.
Commercial and operational highlights, including post-period
end
· Revenue focus shifted and diversified successfully in line
with strategic intent
o Consistent, month-on-month revenues for entirety of H1
2024
o 51% of H1
2024 revenues from design engineering services (FY 2023:
77%)
o 24% of H1
2024 revenues from equipment sales (FY 2023: 0%)
o 25% of H1
2024 revenues from operations and maintenance services to built
plants, creating the base for recurring revenues (FY 2023:
0%)
o No
revenues from development services in H1 2024 (FY 2023: 23%) as the
Company fully exited capital-intensive development
activities.
· Solid
progress with client project delivery toward future equipment and
services orders
o Equipment
delivered, integrated and commissioning underway at client plant in
Greece
o Grande-Combe front-end engineering design ("FEED") complete with client Idex
finalising business case toward financial close
o Gardanne
pre-FEED and some FEED work completed with further funding sought
from public funds to complete FEED
o Simonpietri Enterprises Limited ("SEL") Hawaii project pre-FEED work
completed in period, with notice to proceed for FEED obtained post
period (September 2024)
o Feasibility completed on second Hawaii RNG project with a
capacity of 8 tonnes per hour ("tph"), with EQTEC selected as core
technology supplier after period end (July 2024)
o Proposal
made for second project with SEL for RNG application with a
capacity of 20 tph post period end (August 2024)
o Combined
potential design engineering services for new RNG Projects in
Hawaii for revenues of c. €2 million within a projected delivery
schedule of 5 months, if both projects secure the expected
funding.
· Innovation and partners
o Successful
results tests for liquid fuels applications, driving commercial
progress into the liquid fuel sector, under the 50/50 joint venture
with partner CompactGTL.
o Completion
of preliminary engineering including selection of Zeton as designer
and fabricator of modular gas-to-liquid capability at University of
Lorraine (France) R&D facility
o Successful
biochar and ashes tests at R&D centre at University of Zaragoza
(Spain)
· Stabilisation of Italia MDC reference plant
o Funding of
€2.9 million received from Banca del Fucino
o Appointment of Operations Manager to manage on-site
team
o Recruitment and hiring of full team to operate and maintain
plant
o Assessment
and engagement of competitive suppliers and prospective biochar
buyers
o Acquisition of property housing plant and storage, increasing
total value of asset
· Strategic transition enabled by further funding
o Logik
settlement reached in April 2024, followed by receipt of £2 million
full payment post period end in September 2024
o £0.25
million drawn down from loan facility in May, £0.85 million equity
investment raised in May, through the placing of new shares and,
post-period, £1.1 million equity investment raised in September
through the placing of new shares
o Lead
operations role transitioned from UK to Spain, with Murli
Bhamidipati joining Barcelona-based engineering team as Operations
Director in October
o Brian Cole
appointed as non-executive director, in September making the
composition of the Board of Directors two executive directors and
three non-executive directors following Jeffrey Vander Linden
stepping down at the end of the month
Ian
Pearson, Chairman of EQTEC, commented:
"Not since I have been involved with
EQTEC have we witnessed consistent, steady revenues from our
high-value engineering services, equipment supply and plant support
services; nor have we been able to achieve margins commensurate
with our high-value, world-leading capabilities.
The external market forces driving the global
shift towards sustainable energy and the circular economy continue
to present significant opportunities for EQTEC. The growing demand
for solutions that address both waste management and clean energy
generation is creating a unique space for us to apply our
proprietary technology and engineering expertise. As we position
ourselves to meet these demands, the Management Team has made
important strides in rebasing the Company, including refining our
business model to focus on high-margin, IP-rich services and
strategic partnerships. These efforts, combined with the ongoing
operational and organisational transition, leave us well-placed to
take full advantage of the opportunities in front of us and drive
long-term value creation."
David Palumbo, CEO of EQTEC, commented:
"Our performance in H1 2024 compared
to H1 2023 demonstrates the impact of our strategic re-focus.
Revenue has increased tenfold for the period, and gross profit has
significantly improved, which is a direct result of our shift
towards high-margin, IP-rich services and away from high-risk,
capital-intensive development activities. While we have made
considerable progress in stabilising our operations and delivering
consistent results, much work remains to be done as we continue to
rebuild value for our shareholders.
We are operating in a competitive
sector where many companies are still in the early stages of
validating their technology without any real commercial
application. In contrast, EQTEC's technology is already
commercially tested and delivering real-world solutions across
multiple geographies. As we scale our business, our priority
remains to strengthen our foundations, drive revenue growth, and
maintain our leadership in the clean energy sector."
Current trading and
outlook
The Company is building on its H1
2024 momentum to drive its transition toward being a technology
licensor and innovator, shifting the focus of its efforts toward
revenue generation, driving client collaboration and supporting
clients in progressing their projects. This includes building the
foundations for innovation at its R&D centre to support work on
advanced syngas chemical applications such as synthetic
fuels.
The Company is making good progress
with a number of reference plants that it can use for prospective
client visits, for R&D in a live, commercial-scale environment
and for engineering on-site training and development:
· At the
Italia MDC in Gallina, Tuscany, the plant has already accommodated
a number of client visits, including visits in the first half of
2024 for prospective clients looking to build plants with EQTEC
technology at their core. In September, the plant also had a visit
from a local delegation of representatives led by the newly elected
mayor of Castiglione d'Orcia. Based on this and the
successful passage of tests by the provincial environmental
protection agency, the plant is gaining positive visibility and
credibility in the local community, making it a champion of clean
waste disposal and energy generation in one of Italy's places of
natural beauty.
· In
Greece, the Company supported clients with the commissioning of its
plant built on EQTEC technology, following replacement of
components damaged in flooding that hit the region.
· In
North Fork, California, USA, the Company made another visit to the
plant to carry out an on-site inspection of the full facility,
following a focused effort by the various contractors on site to
complete construction of the plant and work toward
commissioning. The plant has experienced a range of delays
throughout 2023 and early 2024 as various parties working on the
project changed. The Company has been informed that final
construction work is now progressing well, and that commissioning
is expected to start in Q4 2024.
· In
Belišće, Croatia, the Company completed a design reconfiguration of
the project to address the local industry requirement of
eliminating unrecyclable plastic waste and provide energy to the
neighbouring plants. This reconfiguration achieves a much
stronger financial performance of the project making it more
attractive to funders in the current environment. The project
is awaiting receipt of its waste management permit and the signing
of binding term sheets for the waste supply and offtake by local
blue-chip industrial players. Ongoing discussions with both
equity and debt funders are progressing and the Company expects to
re-start construction on site in early 2025.
Other client projects have faced
delays as a result of their broader business contexts:
· The
Company completed FEED work for the Grande-Combe project in
Villers-sous-Montrond, Doubs, France and has been working closely
with project owner Idex to finalise the business case for the heat
offtake, in support of financial close. Additionally, Idex
awaits approval of the building permit, which it has said it
expects by the end of 2024. The Company has an expectation the
project will proceed from early 2025.
· Other
projects in France, including Gardanne, Limoges and others focused
on the application of EQTEC technology for the production of
renewable natural gas ("RNG") have been paused by their various
owners in light of the delay by the French government in releasing
tariffs for RNG, with these companies preferring to wait for the
formalisation of the tariff before further investing in project
development. EQTEC is hopeful the government will proceed with this
action soon, as it expects to be in a favourable position to
support a number of RNG projects in France.
· The
Blue Mountain Electric Company project in Wilseyville, California,
USA, is still awaiting financial close in light of ongoing
negotiations between project developer Phoenix Biomass Energy Inc.
and the United States Department of Agriculture ("USDA") over finalising requirements for
the USDA loan guarantee program. The Company has partially
completed pre-FEED work on the project and looks forward starting
FEED as soon as it receives a notice to proceed.
A number of other projects and
opportunities have progressed as the Company partners with new
developers and other engineering companies:
· The
Company completed FEL 2 (pre-FEED) work on a project in
Kapolei, Hawaii for SEL. The planned EQTEC
gasification system will convert construction and demolition
debris, landscaping waste, and invasive plant biomass from
landscape restoration and wildfire prevention projects, into
biochar and electricity for organic fertilizer production. The
Company has received from SEL, in September, notice to proceed
toward start of FEL 3 (FEED) work for a value of €380,000 and an
expected delivery program of 4 months.
Additionally, the Company submitted
to SEL a proposal for a second project that would result in a
waste-to-RNG facility with a capacity of 20 tph. The FEL3
(FEED) proposal is for the amount of c. €1.0 million with a
delivery programme of 5 months.
· Also,
in Hawaii, USA, the Company completed feasibility work on a project
that would convert 8 tph tonnes of waste into RNG. On the back of
the feasibility, the developer has selected EQTEC as the core
technology provider and a FEL3 (FEED) proposal has been made to the
client for the amount of c. €1.0 million with a delivery programme
of 5 months.
· Based
on the Company's collaboration agreement formalised at the end of
2023 with development, project management and engineering company
Tresca Energía S.A. ("Tresca") of Spain, the partners have
progressed discussions toward a first project that would convert
approximately 7 tph of biomass into RNG. The Company has been
informed that Tresca has secured the development capital and
expects to starts design and engineering work in Q4
2024.
Business strategy and organisational changes
The Company's business strategy
emphasises: (1) continuously developing and leveraging its IP-rich
engineering and innovation capabilities; (2) de-risking its
portfolio by occupying a narrow segment of the value chain,
collaborating with the world's best value chain partners; and (3)
driving higher margins through licensing its IP for use by
owner-operators, deploying its engineering and design capabilities
to get its IP deployed into more places, for the best-suited
business models.
Financial performance over the first
half of 2024 improved relative to previous periods as the Company
realised benefits from its strategic shift away from the
development of high-risk, legacy projects and toward focusing as a
pure-play technology provider on pre-funded, risk-mitigated
projects owned and driven by credible infrastructure owners and
investors. The Company views its H1 2024 financial performance as
indicative of its future commercial potential, as it refocuses most
of its business development and engineering efforts on steady,
reliable revenues from higher-probability client
projects.
To support the Company's next stage
of growth, the Board has implemented a number of operational and
organisational transitions to advance its strategy for growth.
First, as announced on 9 August 2024 and 16 September 2024, it has
moved operational leadership from London to Barcelona, appointing
Murli Bhamidipati as Operations Director
for EQTEC Iberia SLU. Amongst Mr Bhamidipati's primary objectives
is organising and managing the engineering team for growth and
scale. As a consequence, Chief Technical Officer (CTO) Dr. Yoel S.
Alemán Méndez will focus entirely on growing the Company's
innovation capabilities and on driving engineering excellence so
that the Company can deliver best-in-class solutions based on
EQTEC's unique technology. Finally, the Company is rationalising
its staffing outside of Barcelona to focus on the development of
the business around its technology innovation and engineering and
to reduce costs where possible. The Company will work more closely
with partners to deliver into various projects and
markets.
Changes to the Board of
Directors
In line with the transition of
operations leadership to Barcelona, Jeffrey Vander Linden will
resign from the Board of Directors (the "Board") on 29 September 2024, as
announced on 9 August 2024. Additionally, as announced on 18
September 2024, the Company has appointed Brian Cole to the Board
as a non-executive Director. These two changes will leave the total
number of directors on the Board at five.
The principal, unaudited, condensed
and consolidated financial statements for the six months ended 30
June 2024 are set out below:
EQTEC plc
Unaudited condensed consolidated statement of profit or
loss
for
the six months ended 30 June 2024
|
|
Notes
|
6 months
ended
30 June
2024
|
6 months
ended
30 June
2023
(Restated)
|
|
|
|
€
|
€
|
|
Revenue
|
6
|
1,449,324
|
145,293
|
|
Cost of sales
|
|
(623,670)
|
(109,528)
|
|
Gross profit
|
|
825,654
|
35,765
|
|
Operating income/(expenses)
|
|
|
|
|
Administrative expenses
|
|
(2,329,461)
|
(2,122,832)
|
|
Reversal of impairment of project
costs
|
|
36,920
|
-
|
|
Impairment of other
receivables
|
|
(37,995)
|
-
|
|
Other income
|
|
11,238
|
52,914
|
|
Other losses/(gains)
|
7
|
(1,897)
|
182,833
|
|
Foreign currency losses
|
|
(140,933)
|
(68,897)
|
|
Operating loss
|
|
(1,636,474)
|
(1,920,217)
|
|
Share of loss from equity accounted
investments
|
|
(53,478)
|
(102,996)
|
|
Gain/(loss) on revaluation of equity
accounted investment
|
|
-
|
16,726
|
|
Change in fair value of
investments
|
|
-
|
(6,822)
|
|
Finance income
|
|
51,566
|
39,451
|
|
Finance costs
|
8
|
(1,547,344)
|
(449,300)
|
|
Loss
before taxation
|
6
|
(3,185,730)
|
(2,423,158)
|
|
Income tax
|
9
|
(8,173)
|
-
|
|
Loss for the period from continuing
operations
|
|
(3,193,903)
|
(2,423,158)
|
|
Loss for the period from discontinued
operations
|
19
|
-
|
(1,448)
|
|
LOSS
FOR THE FINANCIAL PERIOD
|
|
(3,193,903)
|
(2,424,606)
|
|
Loss/(Profit) attributable to:
|
|
|
|
|
Owners of the company
|
|
(3,193,885)
|
(2,424,594)
|
|
Non-controlling interest
|
|
(18)
|
(12)
|
|
|
|
(3,193,903)
|
(2,424,606)
|
|
|
|
|
|
|
|
|
6 months
ended
30 June
2024
|
6 months
ended
30 June
2023
(Restated)
|
|
|
|
€ per share
|
€ per share
|
|
Basic loss per share:
|
|
|
|
|
From continuing operations
|
10
|
(0.0163)
|
(0.0231)
|
|
From discontinued
operations
|
|
-
|
(0.0000)
|
|
Total basic loss per share
|
10
|
(0.0163)
|
(0.0231)
|
|
Diluted loss per share:
|
|
|
|
|
From continuing operations
|
10
|
(0.0163)
|
|
|
From discontinued
operations
|
|
-
|
(0.0000)
|
|
Total diluted loss per
share
|
10
|
(0.0163)
|
(0.0231)
|
|
|
|
|
|
|
|
|
|
|
|
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
1.
GENERAL
INFORMATION
The unaudited interim condensed
consolidated financial statements of EQTEC plc ("the Company") and
its subsidiaries ("the Group") for the six months ended 30 June
2024 were authorised for issue in accordance with a resolution of
the directors on 23 September
2024.
EQTEC plc ("the Company") is a
company domiciled in Ireland. The Company's registered office is at
Building 1000, City Gate, Mahon, Cork T12 W7CV, Ireland. The
Company is quoted on the London Stock Exchange's Alternative
Investment Market (AIM:EQT) and the London Stock Exchange has
awarded EQTEC the Green Economy Mark, which recognises listed
companies with 50% or more of revenues from environmental/green
solutions.
The Group is a technology provider
to clients in the Utility, Industrial and Waste Management sectors
with its own, proprietary and patented technology for clean
production of synthesis gas (syngas), a fossil fuel alternative
that will increasingly contribute to production of the world's
baseload energy and biofuels. Syngas plants utilising EQTEC
technology are fuelled by waste from industrial, municipal,
agricultural, forestry and other sources. Syngas can be used either
as a direct replacement for natural gas or as an intermediate fuel
for generation of a range of final fuels including hydrogen,
renewable natural gas (RNG), liquid biofuels, thermal energy,
electrical power and chemicals such as methanol or
ethanol.
EQTEC designs, develops and supplies
core technology to syngas production plants in Europe and the USA,
with highly efficient equipment that is modular and scalable from
1MW to 30MW and beyond. EQTEC's versatile solutions convert at
least 60 types of feedstock, including biomass wastes, industrial
wastes and municipal solid waste, with no hazardous or toxic
emissions.
In future, EQTEC intends to augment
its services and equipment revenues with recurring revenues from
licensing of its technology to syngas plant owners, providing
value-added services including maintenance, upgrades and data-based
services over the lifetime of each plant.
2. BASIS
OF PREPARATION
The unaudited interim condensed consolidated
financial statements are for the six months ended 30 June 2024 and
are presented in Euro, which is the functional currency of the
parent company. They have been prepared on a going concern basis in
accordance with International Accounting Standard (IAS) 34 Interim
Financial Reporting.
The annual financial statements of
the group are prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU. The condensed set
of financial statements has been prepared applying the accounting
policies and presentation that were applied in the preparation of
the Company's published consolidated financial statements for the
financial year ended 31 December 2023, except for the adoption of
new standards effective as of 1 January 2024. The Group has not
early adopted any other standard, interpretation or amendment that
has been issued but is not yet effective.
The financial information contained
in this interim statement, which is unaudited, does not constitute
statutory accounts as defined by the Companies Act, 2014. The
interim condensed consolidated financial statements do not include
all the information and disclosures required in the annual
financial statements and should be read in conjunction with the
Group's financial statements for the financial year ended 31
December 2023. The financial statements of the Group for the
financial year ended 31 December 2023 were prepared in accordance
with IFRSs as adopted by the European Union and can be found on the
Group's website at www.eqtec.com.
The financial information for the
six months ended 30 June 2024 and the comparative financial
information for the six months ended 30 June 2023 have not been
audited or reviewed by the Company's auditors pursuant to guidance
issued by the Auditing Practices Board. The comparative figures for
the financial year ended 31 December 2023 are not the Group's
statutory accounts for that financial year. Those accounts have
been reported on by the Company's auditor and will be delivered to
the Company's Registration Office in due course. The audit report
on those statutory accounts was unqualified.
The Group incurred a loss on
continuing operations of €3,193,903 (1H 2023: €2,423,158) during
the six-month period ended 30 June 2024 and had net current assets
of €6,613,982 (31 December 2023: €4,441,183) and net assets of
€19,274,528 (31 December 2023: €21,214,826) at 30 June
2024.
Going
concern
The unaudited interim financial
statements have been prepared on the going concern basis, which
assumes that the Company will have sufficient funds available to
enable it to continue to trade for the foreseeable
future.
The directors have carried out an
evaluation of financial forecasts, sensitised to reflect a rational
judgement of the level of inherent risk. The forecasts which
Management have prepared covering the next 12 months include
certain assumptions with regard to cost and overhead reductions and
the timing and amount of any funds generated from sales of the
Group's technology. The forecasts indicate that during this period
the Group will have sufficient funds to continue with its
activities for a period of at least 12 months from the date of
signing these unaudited interim financial statements.
After undertaking the assessments
and considering the level of inherent risk, the Directors have a
reasonable expectation that the Group has adequate resources to
continue to operate for the foreseeable future and for these
reasons they continue to adopt the going concern basis in preparing
the unaudited interim financial statements. The financial statements do not include any adjustments that
would arise if the Group were unable to continue as a going
concern.
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
3. BASIS
OF CONSOLIDATION
The unaudited interim condensed
consolidated financial statements include the financial statements
of the Group and all subsidiaries. The financial period ends of all
entities in the Group are coterminous.
4.
MATERIAL ACCOUNTING POLICIES
The material accounting policies
used in preparing the unaudited interim condensed consolidated
financial information are consistent with those disclosed in the
Annual Report and Accounts of EQTEC plc for the financial year
ended 31 December 2023, except for the adoption of new standards
and interpretations and revisions of existing standards as of 1
January 2024 noted below:
New/revised standards and interpretations adopted in
2024
The following amendments to existing
standards and interpretations were effective in the period to 30
June 2024, but were either not applicable or did not have any
material effect on the Group:
·
Amendments to IAS 1 Classification of Liabilities
as Current or Non-current;
·
Amendments to IAS 1 Non-current Liabilities with
Covenants;
·
Amendments to IFRS 16 Lease Liability in a Sale and
Leaseback;
·
Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements;
and
·
Amendments to IAS 21 Lack of Exchangeability.
The directors do not expect the
adoption of the above amendments and interpretations to have a
material effect on the interim condensed financial statements in
the period of initial application.
5.
ESTIMATES
The preparation of the interim
condensed consolidated financial statements requires management to
make judgements, estimates and assumptions that affect the
application of policies and reported amounts of certain assets,
liabilities, revenues and expenses together with disclosure of
contingent assets and liabilities. Estimates and underlying
assumptions are reviewed on an on-going basis. Revisions of
accounting estimates are recognised in the period in which the
estimate is revised.
The judgements, estimations and
assumptions applied in the interim financial statements, including
the key sources of estimation uncertainty, were the same as those
applied in the Group's last annual financial statements for the
financial year ended 31 December 2023.
6.
SEGMENT
INFORMATION
Information reported to the chief
operating decision maker for the purposes of resource allocation
and assessment of segment performance focuses on the products and
services sold to customers. The Group's reportable segments under
IFRS 8 Operating Segments
are as follows:
Technology Sales: Being the sale of
Gasification Technology and associated Engineering and Design
Services;
The chief operating decision maker
is the Chief Executive Officer. Information
regarding the Group's current reportable segment is presented
below. The following is an analysis of the Group's revenue and
results from continuing operations by reportable
segment:
|
|
Segment Revenue
|
Segment Profit/(Loss)
|
|
|
6 months ended
|
6 months ended
|
|
|
30 June
2024
|
30 June
2023
|
30 June
2024
|
30 June
2023
(Restated)
|
|
|
€
|
€
|
€
|
€
|
|
Technology Sales
|
1,449,324
|
145,293
|
(22,533)
|
(780,147)
|
|
Total from continuing operations
|
1,449,324
|
145,293
|
(22,533)
|
(780,147)
|
|
Central administration costs and
directors' salaries
|
(1,481,274)
|
(1,306,920)
|
|
Reversal of impairment of project
costs
|
|
36,920
|
-
|
|
Impairment of other
receivables
|
|
(37,995)
|
-
|
|
Other income
|
|
11,238
|
52,914
|
|
Other gains and losses
|
|
(1,897)
|
182,833
|
|
Foreign currency losses
|
|
(140,933)
|
(68,897)
|
|
Share of loss of equity accounted
investments
|
|
(53,478)
|
(102,996)
|
|
Gain/(loss) on revaluation of equity
accounted investment
|
|
-
|
16,726
|
|
Change in fair value of
investments
|
|
-
|
(6,822)
|
|
Finance income
|
|
51,566
|
39,451
|
|
Finance costs
|
|
(1,547,344)
|
(449,300)
|
|
|
|
|
|
Loss
before taxation (continuing operations)
|
(3,185,730)
|
(2,423,158)
|
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
6.
SEGMENT INFORMATION - continued
Revenue reported above represents
revenue generated from associated undertakings and external
customers. Inter-segment sales for the financial period amounted to
€Nil (2023: €Nil). Included in revenues in
the Technology Sales Segment are revenues of €517,061 (2023: €Nil)
which arose from sales to associate undertakings, joint ventures
and unconsolidated structured entities of EQTEC plc.
Segment profit or loss represents
the profit or loss earned by each segment without allocation of
central administration costs and directors' salaries, other
operating income, share of losses of jointly controlled entities,
investment revenue and finance costs. This is the measure reported
to the chief operating decision maker for the purposes of resource
allocation and assessment of segment performance.
|
Other segment
information:
|
Depreciation and
amortisation
|
Additions to non-current
assets
|
|
|
6 months
ended
|
6 months
ended
|
|
|
30 June
2024
|
30 June
2023
|
30 June
2024
|
30 June
2023
|
|
|
€
|
€
|
€
|
€
|
|
Technology sales
|
55,863
|
57,429
|
-
|
496,612
|
|
Head Office
|
117,664
|
97,695
|
-
|
-
|
|
|
|
|
|
|
|
|
173,527
|
155,124
|
-
|
496,612
|
|
|
|
|
|
|
The Group operates in four principal
geographical areas: Republic of Ireland (country of domicile), the
European Union, United States and the United Kingdom. The Group's
revenue from continuing operations from external customers and
information about its non-current assets* by geographical location
are detailed below:
|
|
Revenue from Associates and
External Customers
|
Non-current
assets*
|
|
|
|
6 months
ended
|
6 months
ended
|
As at
|
As at
|
|
|
|
30 June
2024
|
30 June
2023
|
30 June
2024
|
31 December
2023
|
|
|
|
€
|
€
|
€
|
€
|
|
|
Republic of Ireland
|
-
|
-
|
-
|
-
|
|
|
European Union
|
1,248,323
|
145,293
|
2,489,329
|
2,607,493
|
|
|
United States
|
165,501
|
-
|
-
|
-
|
|
|
United Kingdom
|
35,500
|
-
|
134,030
|
185,549
|
|
|
|
|
|
|
|
|
|
|
1,449,324
|
145,293
|
2,623,359
|
2,793,042
|
|
|
|
|
|
|
|
|
*Non-current assets excluding
goodwill, financial instruments, deferred tax and investment in
jointly controlled entities and associates.
The management information provided
to the chief operating decision maker does not include an analysis
by reportable segment of assets and liabilities and accordingly no
analysis by reportable segment of total assets or total liabilities
is disclosed.
|
7.
|
OTHER GAINS AND LOSSES
|
6 months
ended
|
6 months
ended
|
|
|
|
30 June
2024
|
30 June
2023
|
|
|
|
|
€
|
€
|
|
|
|
(Loss)/gain on debt for equity
swap
|
(1,897)
|
182,833
|
|
|
|
|
|
|
|
During the financial period, the
Group extinguished some of its borrowings by issuing equity
instruments. In accordance with IFRIC 19 Extinguishing Financial
Liabilities with Equity Instruments, the loss recognised on these
transactions was €1,897 (H1 2023: gain of €182,833).
During the 6-month period ended 30
June 2024, the Group announced a refinancing of its existing
secured loan facility. As a result of this refinancing, finance
costs of €1,009,169 were crystallised and capitalised as part of
the new refinanced facility. These finance costs have been
recognised in the period ended 30 June 2024.
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
|
9.
|
IINCOME TAX
|
6 months
ended
|
6 months
ended
|
|
|
|
|
30 June
2024
|
30 June
2023
|
|
|
|
|
|
€
|
€
|
|
|
|
|
Income tax expense
comprises:
|
|
|
|
|
|
Current tax expense
|
-
|
-
|
|
|
|
|
Deferred tax credit
|
-
|
-
|
|
|
|
|
Adjustment for prior financial
periods
|
8,173
|
-
|
|
|
|
|
Tax
expense
|
8,173
|
-
|
|
|
|
|
|
|
|
|
|
|
An income tax charge does not arise
for the six months ended 30 June 2024 or 30 June 2023 as the
effective tax rate applicable to expected total annual earnings is
Nil as the Group has sufficient tax losses coming forward to offset
against any taxable profits. A deferred tax asset as not been
recognised for the losses coming forward.
|
10.
|
LOSS PER SHARE
|
6 months
ended
30 June
2024
|
6 months
ended
30 June
2023
(Restated)
|
|
|
Basic loss per share
|
€ per share
|
€ per share
|
|
|
From continuing
operations
|
(0.0163)
|
(0.0231)
|
|
|
From discontinued
operations
|
-
|
0.0000
|
|
|
Total basic loss per
share
|
(0.0163)
|
(0.0231)
|
|
|
|
|
|
|
|
Diluted loss per share
|
|
|
|
|
From continuing
operations
|
(0.0163)
|
(0.0231)
|
|
|
From discontinued
operations
|
-
|
0.0000
|
|
|
Total diluted loss per
share
|
(0.0163)
|
(0.0231)
|
The loss and weighted average number
of ordinary shares used in the calculation of the basic and diluted
loss per share are as follows:
|
|
|
6 months
ended
30 June
2024
|
6 months
ended
30 June
2023
(Restated)
|
|
|
|
|
€
|
€
|
|
|
|
Loss for period attributable to
equity holders of the parent
|
(3,193,885)
|
(2,424,594)
|
|
|
|
Loss for the period from discontinued
operations used in the calculation of basic earnings per share from
discontinued operations
|
-
|
(1,448)
|
|
|
|
Losses used in the calculation of
basic loss per share from continuing operations
|
(3,193,885)
|
(2,423,146)
|
|
|
|
|
No.
|
No.
(Restated)
|
|
|
|
Weighted average number of ordinary
shares for
|
|
|
|
|
|
the purposes of basic loss per
share
|
196,306,565
|
104,746,823
|
|
|
|
Weighted average number of ordinary
shares for
|
|
|
|
|
|
the purposes of diluted loss per
share
|
196,306,565
|
104,746,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive and anti-dilutive potential ordinary
shares
The following potential ordinary
shares were excluded in the diluted earnings per share calculation
as they were anti-dilutive.
|
|
|
30 June
2024
|
30 June
2023
(Restated)
|
|
|
Share warrants in issue
|
55,450,910
|
20,538,468
|
|
|
Share options in issue
|
673,045
|
673,045
|
|
|
Convertible loans
|
572,825,165
|
2,766,983
|
|
|
LTIP Share options in
issue
|
2,116,937
|
3,747,799
|
|
|
Total anti-dilutive shares
|
631,066,057
|
27,726,295
|
Events after the balance sheet date
177,163,874 ordinary shares were
issued after the period end. If these shares were in issue prior to
30 June 2024, they would have affected the calculation of the
weighted average number of shares in issue for the purposes of
calculating both the basic loss per share and diluted loss per
share by 29,527,312.
Retrospective
Adjustments
The comparative earnings per share figures have been restated to
reflect:
(1) The disposal of a subsidiary in
2023, leading to a restatement of comparative figures to reflect
discontinued operations (see Notes 34 and 35); and
(2) The capital reorganisation that took place in December 2023,
leading to a decrease in the number of ordinary shares
outstanding.
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
|
11.
|
PROPERTY, PLANT AND EQUIPMENT
During the six-month period ended 30
June 2024, the Group acquired property, plant and equipment to the
value of €Nil financed by new leases (H1 2023 - €489,130) and €Nil
financed by cash. (H1 2023: €7,482).
|
|
12.
|
INTANGIBLE ASSETS
|
|
|
|
|
Included are the following amounts
relating to goodwill in intangible assets:
|
|
|
|
|
|
|
30 June
2024
|
31 December
2023
|
|
|
Cost
|
|
|
€
|
€
|
|
|
At start and at end of the financial
period
|
|
16,710,497
|
16,710,497
|
|
|
|
|
|
|
|
|
|
Accumulated impairment
losses
|
|
|
|
|
|
At start of the financial
period
|
|
6,710,497
|
1,427,038
|
|
|
Impairment losses
|
|
-
|
5,283,459
|
|
|
|
|
|
|
|
|
|
|
|
|
At end of the financial
period
|
|
|
6,710,497
|
6,710,497
|
|
Carrying
value
|
|
|
|
|
|
At start and at end of the financial
period
|
|
10,000,000
|
10,000,000
|
|
13.
|
INVESTMENTS ACCOUNTED FOR USING THE EQUITY
METHOD
|
|
Investments accounted for using the
equity method are made up as follows:
|
|
|
30 June
2024
|
31 December
2023
|
|
|
|
€
|
€
|
|
|
Investment in associate
undertakings
|
3,477,820
|
3,474,359
|
|
|
Investment in joint
ventures
|
3,374,354
|
3,358,029
|
|
|
|
|
|
|
|
|
6,852,174
|
6,832,388
|
|
|
|
|
|
|
|
|
|
|
The carrying amount of
equity-accounted investments has changed as follows in the six
months to June 2024:
|
|
Associate
Undertakings
|
Joint
Ventures
|
|
|
6 months
ended
30 June
2024
|
6 months
ended
30 June
2024
|
|
|
€
|
€
|
|
Beginning of the period
|
3,474,359
|
3,358,029
|
|
Loans advanced in period
|
-
|
35,660
|
|
Loans repaid in period
|
-
|
(14,080)
|
|
Interest accrued on loans in
period
|
51,566
|
-
|
|
Share of loss on equity-accounted
investments in period
|
(48,105)
|
(5,372)
|
|
Investment in joint
venture
|
-
|
117
|
|
|
|
|
|
|
3,477,820
|
3,374,354
|
14.
DEVELOPMENT ASSETS
|
|
30 June
2024
|
31 December
2023
|
|
|
|
€
|
€
|
|
|
|
|
|
|
|
Costs associated with project
development
|
479,914
|
613,516
|
|
|
The Group uses its expertise in
engineering, project management, permitting, planning and financing
to develop waste to value projects. Once the projects reach a
certain level of maturity, third party investors are allowed invest
in the project SPV. The Group charges a premium to the project SPV
for the development services over and above the costs incurred in
developing the project.
Costs associated with project
development, including loans advanced to project undertakings
(together "Total Project Costs") comprise expenses associated with
engineering, project management, permitting, planning, financing
and other services, incurred in furthering the development of a
project towards financial close. Total
Project Costs set out above represent the cost of delivery of
project development services and are transferred to cost of sales
when the project SPV is invoiced by the Group for project
development work.
|
|
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
|
15. TRADE AND OTHER
RECEIVABLES
|
|
|
Included in trade and other
receivables is an amount of €2,360,947 (31 December 2023: €Nil)
receivable in respect of the legal settlement agreement announced
on 3 April 2024 of claims made against Logik Developments Limited
and its wholly owned subsidiary, Logik WTE Limited amounting to
£2,000,000. The Group received these settlement funds on 4
September 2024.
16.
EQUITY
During the 6-month period ended 30
June 2024, 2,106,774,908 shares of €0.01 each (6 months ended 30
June 2023: 2,106,774,908 shares of €0.001 each) were issued as
follows:
|
Amounts of shares
|
6 months
ended
|
6 months
ended
|
|
|
30 June
2024
|
30 June
2023
|
|
Ordinary Shares of €0.001 each
issued and fully paid
|
|
|
|
-
Beginning of the period
|
-
|
9,421,479,112
|
|
-
Issued in lieu of borrowings and settlement of payables
|
-
|
510,214,535
|
|
-
Share issue for cash - public and private placement
|
-
|
1,596,560,373
|
|
|
|
|
|
Total Ordinary shares of €0.001 each authorised, issued and
fully paid at the end of the period
|
-
|
11,528,254,020
|
|
Ordinary Shares of €0.01 each issued
and fully paid
|
|
|
|
-
Beginning of the period
|
181,485,890
|
-
|
|
-
Issued in lieu of borrowings and settlement of payables
|
15,237,530
|
-
|
|
-
Share issue for cash - public and private placement
|
60,887,491
|
-
|
|
|
|
|
|
Total Ordinary shares of €0.01 each authorised, issued and
fully paid at the end of the period
|
257,610,911
|
-
|
On 17 December 2023, a capital
re-organisation took place whereby (1) each existing ordinary share
of €0.001 each was sub-divided into 10 ordinary shares of €0.0001
each; (2) every 1,000 sub-divided shares of €0.0001 each was
consolidated into 10 ordinary shares of €0.01 each; and (3) 9 out
of every 10 ordinary shares of €0.01 each was re-designated into 9
deferred "C" ordinary shares of €0.01 each.
17.
BORROWINGS
During the six months ended 30 June 2024, the
following occurred in relation to debt securities:
Secured Loan Facility
During May 2024, the Company
announced that it had secured a refinancing of its existing secured
lending facility. The new funding replaces the previous funding
with a non-convertible secured term loan facility with no scheduled
repayments until 21 May 2026. The outstanding debt will only reduce
proportionally to future capital inflows prior to the 24-month
maturity date.
Unsecured Convertible Loan Facility
During May 2024, the Company
announced a further drawdown of £260,638 on the unsecured
convertible loan facility which was set up in November
2023.
On 4 September 2024, after the
balance sheet date, certain lenders under the unsecured convertible
loan facility were automatically deemed to have issued a conversion
notice at a conversion price equal to the Issue Price in respect of
their respective outstanding loan balances. Accordingly, a total
amount of £522,000 (principal and interest) was converted into
52,200,000 new Ordinary Shares at a price of 1 pence per new
Ordinary Share.
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
|
18.
|
LEASES
Lease liabilities are presented in
the statement of financial position as follows:
|
|
|
|
|
30 June
2024
|
31 December
2023
|
|
|
|
€
|
€
|
|
|
Current
|
208,418
|
202,798
|
|
|
Non-current
|
297,340
|
400,518
|
|
|
|
|
|
|
|
|
505,758
|
603,316
|
|
|
|
|
|
|
The Group has a lease for its
offices in Iberia, Spain and London, United Kingdom. The lease
liabilities are secured by the related underlying asset. Further
minimum lease payments at 30 June 2024 were as follows:
|
|
Minimum lease payments
due
|
|
|
Within 1
year
|
1-2 years
|
2-3 years
|
3-4 years
|
4-5 years
|
After 5
years
|
Total
|
|
|
€
|
€
|
€
|
€
|
€
|
€
|
€
|
|
30 June
2024
|
|
|
|
|
|
|
|
|
Lease payments
|
220,740
|
128,683
|
105,600
|
74,800
|
-
|
-
|
529,823
|
|
Finance charges
|
(12,322)
|
(6,982)
|
(3,878)
|
(883)
|
-
|
-
|
(24,065)
|
|
Net Present
Values
|
208,418
|
121,701
|
101,722
|
73,917
|
-
|
-
|
505,758
|
|
|
|
|
|
|
|
|
|
|
31 December
2023
|
|
|
|
|
|
|
|
|
Lease payments
|
218,124
|
184,420
|
105,600
|
105,600
|
22,000
|
-
|
635,744
|
|
Finance charges
|
(15,326)
|
(9,270)
|
(5,391)
|
(2,343)
|
(98)
|
-
|
(32,428)
|
|
Net Present
Values
|
202,798
|
175,150
|
100,209
|
103,257
|
21,902
|
-
|
603,316
|
|
19.
|
DISCONTINUED OPERATIONS
|
On 12 July 2023, the Group disposed
of 95% of its interest in Grande-Combe SAS, retaining 5% which has
been transferred to other investments. The combined results of the
discontinued operations included in the loss for the financial
period is set out below:
|
|
6 months
ended
30 June
2024
|
6 months
ended
30 June
2023
|
|
|
€
|
€
|
|
Revenue
|
-
|
-
|
|
Cost of sales
|
-
|
-
|
|
Gross profit
|
-
|
-
|
|
Administrative expenses
|
-
|
(1,448)
|
|
Finance costs and income
|
-
|
-
|
|
Loss from discontinued operations
before tax
|
-
|
(1,448)
|
|
Taxation
|
-
|
-
|
|
Loss for the financial period from
discontinued operations (attributable to owners of the
Company)
|
-
|
(1,448)
|
|
|
|
|
|
Cash flows generated by Grande-Combe
SAS for the financial years under review were as
follows:
|
|
|
|
|
6 months
ended
30 June
2024
|
6 months
ended
30 June
2023
|
|
|
€
|
€
|
|
Operating activities
|
-
|
(1,448)
|
|
Investing activities
|
-
|
-
|
|
Financing activities
|
-
|
-
|
|
Net cash flows used in discontinued
operations
|
-
|
(1,448)
|
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
|
20.
|
RELATED PARTY
TRANSACTIONS
|
The Group's related parties include
Altair Group Investment Limited ("Altair"), the associate and joint
venture companies, unconsolidated structured entities and key
management.
Transactions with Altair
During the six-month period ended 30
June 2024, Altair advanced €117,125 (H1 2023: €905,640) by way of
borrowings and was repaid €Nil (H1 2023: €1,707,919) with respect
to these loans. Interest payable to Altair for the six-month period
ended 30 June 2024 amounted to €8,727 (H1 2023: €42,295). Included
in borrowings, net of amortisation costs, at 30 June 2024 is an
amount of €283,107 (31 December 2023: €152,643) due to Altair from
the Group
Transactions with associate undertakings and joint
ventures
The following aggregated
transactions were made with associate undertakings and joint
ventures in the six months ended 30 June 2024:
|
|
6 months
ended
30 June
2024
|
6 months
ended
30 June
2023
|
|
Loans to associated undertakings and joint
ventures
|
€
|
€
|
|
Beginning of the financial
period
|
6,278,269
|
5,174,551
|
|
Loans advanced in period
|
35,660
|
225,250
|
|
Loans repaid in period
|
(14,080)
|
(33,200)
|
|
Reclassified as equity
|
-
|
(254,470)
|
|
Interest accrued on loans in
period
|
51,566
|
31,597
|
|
Exchange differences
|
-
|
2,450
|
|
|
|
|
|
At end of the financial
period
|
6,351,415
|
5,146,178
|
|
|
6 months
ended
30 June
2024
|
6 months
ended
30 June
2023
|
|
Sales of goods and services
|
€
|
€
|
|
Technology sales
|
215,990
|
-
|
|
Other income
|
6,128
|
52,913
|
|
|
|
|
|
Recharge of costs
|
1,147
|
-
|
|
|
30 June
2024
|
31 December
2023
|
|
Period-end balances
|
€
|
€
|
|
Included in trade
receivables
|
4,649,188
|
4,701,946
|
|
Included in other
receivables
|
70,004
|
31,482
|
|
Included in other
payables
|
118
|
129,737
|
Transactions with unconsolidated structured
entities
During the 6-month period ended 30
June 2024, the Group generated sales of €301,071 from Biogaz
Gardanne SAS (6 months ended 30 June 2023: €Nil), an unconsolidated
structured entity. Included in trade and other receivables at 31
December 2023 is €1,108,444 receivable from Biogaz Gardanne SAS (31
December 2024: €807,373).
Transactions with key management
Key management of the Group are the
members of EQTEC plc's board of directors. There have been no
non-remuneration transactions with key management in the six months
ended 30 June 2024. At 30 June 2024, directors' remuneration unpaid
amounted to €271,368 (31 December 2023: €66,568).
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
21. EVENTS AFTER THE
BALANCE SHEET DATE
Receipt of funds
under settlement agreement
On 4 September 2024, the Company
received £2,000,000 from the proceeds of the legal settlement
agreement with Logik Developments Limited.
Share Placings
On 4 September 2024, the Company
announced that it had raised, in aggregate, £1.1 million before
expenses by way of a £1 million placing and a subscription of
£100,000 to new and existing institutional and other investors for,
in aggregate, 110,000,000 new ordinary shares of €0.01 each in the
capital of the Company ("Ordinary Shares") (together, the
"Fundraise Shares") at a price of 1 pence per new Ordinary Share
(the "Issue Price"). In addition, on 9 September 2024, the Company
raised £72,528 from existing retail investors via the Winterflood
Retail Access Platform ("WRAP") platform at the Issue Price through
the issue of a total of 7,252,815 new Ordinary Shares
In addition, certain lenders under
the unsecured convertible loan facility were automatically deemed
to have issued a conversion notice at a conversion price equal to
the Issue Price in respect of their respective outstanding loan
balances. Accordingly, a total amount of £522,000 (principal and
interest) was converted into 52,200,000 new Ordinary Shares at the
Issue Price.
The Company further announced that
it issued, in aggregate, 7,711,059 new Ordinary Shares at the Issue
Price to certain strategic service providers providing business
development and advisory services to the Group in satisfaction of
fees due to them.
22.
APPROVAL OF FINANCIAL
STATEMENTS
The condensed consolidated financial
statements for the six months ended 30 June 2024, which comply with
IAS 34, were approved by the Board of Directors on 23 September
2024.
This announcement contains inside
information as defined in Article 7 of the EU Market Abuse
Regulation No 596/2014, as it forms part of United Kingdom domestic law by
virtue of the European Union (Withdrawal) Act 2018, as amended, and
has been announced in accordance with the Company's obligations
under Article 17 of that Regulation.
ENQUIRIES
|
EQTEC plc
David Palumbo
|
+44 20 3883 7009
|
|
Strand Hanson - Nomad &
Financial Adviser
James Harris / Richard
Johnson
|
+44 20 7409 3494
|
|
Shard Capital Partners LLP -
Broker
Damon Heath / Isabella
Pierre
|
+44 20 7186 9927
|
|
Fortified Securities -
Broker
Guy Wheatley
|
+44 20 3411 7773
|
|
Global Investment Strategy UK Ltd -
Broker
Samantha Esqulant
|
+44 20 7048 9045
|
About EQTEC
EQTEC is one of only a few circular
economy technology providers able to address the dual challenges of
growing quantities of global waste and the growing demand for
energy and biofuels. EQTEC cleanly converts waste into a range of
valuable commodities that support new energy and industrial
infrastructure. With one of the world's most experienced
thermochemical conversion technology and engineering teams, EQTEC
provides bespoke waste management and new energy solutions through
best-in-class innovation, infrastructure engineering and
value-added services for developers, owner-operators and
industrials.
EQTEC's end-to-end process solutions
are in demand from around the world with highly efficient equipment
that is modular and scalable from three tonnes of waste per hour.
Its versatile solutions process dozens of varieties of feedstock,
including plastics, mixed municipal waste, industrial waste and
other non-recyclables, all with no hazardous or toxic emissions,
producing a wide range of valuable commodities including synthesis
gas ("syngas") electricity,
heat and steam, synthetic natural gas, hydrogen, liquid fuels or
other chemicals.
The Company is quoted on the London
Stock Exchange's Alternative Investment Market (AIM) (ticker: EQT)
and the London Stock Exchange has awarded EQTEC the Green Economy
Mark, which recognises listed companies with 50% or more of
revenues from environmental/green solutions.
Further information on the Company
can be found at www.eqtec.com.