Quantafuel releases its fourth quarter results

Quantafuel today reported its fourth quarter results. Delayed positive cash flow from operations combined with required funding of ongoing and future projects have resulted in the need of a financing solution by mid Q2 2023. Meanwhile, there is good progress with Quantafuel’s pipeline projects.

Per 31^stDecember 2022, Quantafuel ASA had a cash position of NOK 122 million. 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. 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 Dubai MK II Front End Engineering and Design (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 optimise 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. The ongoing value-engineering work is believed to confirm a level acceptable to an FID with attractive project finances. All partners are confident that the end result will be a plant defining a new standard within chemical plastic recycling.

Since October, Quantafuel has executed a strategic review in preparation of the roll-out of the next generation Plastic-to-Liquid (PtL) plants, and the encouraging feedback we have received is that we are a global leader within chemical recycling of plastic waste.

This quarter we have continued to reach new milestones at Skive. All four lines are now operational and energy-wise optimised by reactors primarily heated by self-produced gas. Produced volumes are increasing on a monthly basis, but a delayed positive cash flow is causing an increased cash constraint on the company.

The construction of the plastic sorting facility in Esbjerg, through the 50/50 JV ReSource Denmark ApS with Eurazeo, is progressing on plan, with an estimated start of commissioning in Q4 2023. Out of a yearly sorting capacity of 160,000 tonnes, the first 20,000 tonnes are already secured. Current construction costs indicate a 10% increase due to the incorporation of higher safety standards in design in combination with the general market development.

In February 2023, we reached a major milestone in the UK when our planning application for a PtL plant in Sunderland was granted without objections and with full support from Sunderland Council. In addition, we are moving ahead with additional sites in the UK and have entered into promising discussions with feedstock suppliers and oil offtakers.

Lars Rosenløv, Quantafuel’s CEO, expresses his satisfaction with employees’ commitment and drive to deliver on business plans and strategies, while underlining the importance of finding the best possible solutions to the company’s capital constraint:

“The key for our company at the moment is to conclude on the strategic review and find a financing solution which will bring this company forward into the next phase of its development, which is to realise ongoing projects and the MK II concept. As I have emphasised before, it takes time to build a new industry, and despite some setbacks I am proud of how far we have come and look forward to converting our ambitions into reality going forward.”

The presentation of the fourth quarter results will be available here from 3pm CET today.