TIDMARL
RNS Number : 6235G
Atlantis Resources Limited
31 May 2017
31 May 2017
ATLANTIS RESOURCES LIMITED
("Atlantis", the "Company" or the "Group")
Final Results
Atlantis Resources Limited, a vertically integrated turbine
supplier and project owner in the tidal power industry, is pleased
to announce its final results for the year ended 31 December
2016.
The full Annual Report and Group financial statements can be
read and downloaded from the Company's website:
http://www.atlantisresourcesltd.com and the Annual Report will be
distributed to shareholders.
Financial highlights
-- This is the first set of full year results presented in pounds sterling rather than Singapore dollars as a result
of the change in functional currency from 1st January 2016.
-- Group loss for the year was GBP7.3 million, a decrease of GBP9.3m on the previous year's profit. The previous
year included one off gains arising from the acquisition of Marine Current Turbines of GBP9.2m and the disposal
of 50% of our stake in Atlantis Operations Canada Limited of GBP0.9m.
-- The consolidated group cash position at 31 December 2016 was GBP10.2 million, including GBP8.6 million held at
MeyGen Limited.
-- Net assets increased to GBP66.6 million over the year from GBP57.7 million.
-- In April 2016 Atlantis raised GBP6.5 million before expenses from new and existing shareholders to fund project
development activities across the Atlantis portfolio and to secure opportunities for portfolio growth.
Operational highlights
-- In April 2016 the Group announced a partnership agreement with Equitix, a market leading developer, investor and
fund manager of infrastructure assets. Under this agreement, Atlantis and Equitix agreed to work together to
advance Atlantis's portfolio of tidal power projects in Scotland, which represent a combined potential capacity
of over 600MW.
-- In May 2016 Atlantis completed the acquisition of Scottish tidal project assets from ScottishPower Renewables
(UK) Limited ("SPR"). As a result of the transaction, Tidal Power Scotland Limited ("TPSL") acquired development
rights for an additional 110MW of projects in Scotland, and SPR became a 6% shareholder in TPSL. One of the
projects, the Sound of Islay, has previously been awarded NER300 funding of EUR21 million.
-- In June 2016 the MeyGen site was connected to the 33kV Ness of Quoys distribution network in readiness for export
of first power.
-- In August 2016 DEME Concessions NV, a member of the DEME Group, ("DEME") completed its purchase of shares in
"TPSL". DEME paid GBP2 million in cash consideration to a wholly owned subsidiary of Atlantis for a 2% stake in
TPSL.
-- In November 2016 Meygen exported its first power to the grid following successful installation of all four
foundations in October.
Post period end highlights
-- In January 2017, the European Commission awarded GBP17.3 million (EUR20.3 million) in Horizon 2020 grant funding
for the next phase of the MeyGen project, Phase 1B, or Project Stroma. This funding is in addition to the
previously awarded NER300 funding of EUR17 million. Atlantis also announced the formation of a new division,
Atlantis Energy, to apply its skills and experience in complementary sectors in marine renewable energy. This
was supported by memoranda of understanding with floating wind developer Ideol and with Natural Energy Wyre, a
key player in the proposed Wyre Valley tidal barrage and flood protection scheme.
-- In February 2017 the fourth and final turbine, the Company's AR1500, was installed in Phase 1A of the MeyGen
project. The turbine reached full power output shortly afterwards and demonstrated levels of performance above
the contractual baseline required.
-- In March 2017 Atlantis signed a preferred supplier agreement with SBS INTL LTD ("SBS"), a privately-owned
international marine, subsea and renewable energy project developer, for the supply of turbines, engineering
services and equipment for a 150MW (megawatt) tidal-stream array located in Lombok, Indonesia. Atlantis also
announced its intentions to pursue projects in France, where commercial seabed leasing rounds are planned.
-- In May 2017, the Group signed a strategic partnership agreement with Hyundai Engineering and Construction Co. Ltd
for collaboration on the development of ocean power renewable projects globally, and in particular the
development of tidal stream projects in South Korea.
-- On 24 May 2017 Atlantis announced that it had raised GBP4.05 million from new and existing shareholders through
the issue of new equity.
Tim Cornelius, Chief Executive of Atlantis Resources Limited
commented:
"2016 was a very significant year for the Group as we saw the
realisation of over 10 years of hard work in the energisation of
MeyGen Phase 1A. At the start of 2017 we were delighted to get
confirmation from Ofgem that MeyGen Phase 1A has received full
accreditation as a tidal generation plant, ensuring it receives
five Renewables Obligation Certificates for each megawatt hour of
generation.
"2016 was of course also significant for the UK as a whole, but
we were reassured by confirmation that our existing sources of
European public funding for UK projects would be unaffected by the
decision to leave the EU. In particular, we will continue to
benefit from the EUR37 million of capital and revenue support
awarded to the next phase of the MeyGen project, known as Project
Stroma. This preserves our opportunity to use this project to
demonstrate the cost reducing innovations which are essential to
allow tidal power to compete against longer established
technologies. We were also buoyed by the recent announcement of the
intention of the French government to launch commercial tenders for
tidal power development in Normandy and Brittany, providing us with
the opportunity to further geographically diversify our development
pipeline in the near future.
"Whilst tidal stream remains our primary focus, we recently
announced the creation of a new division, Atlantis Energy, as part
of our diversification strategy. This division has had a busy
start, signing agreements with partners on offshore floating wind,
and tidal barrage projects. 2017 promises to be a year of
technological and geographical diversity and advancement as we
continue to build this part of the business alongside our latest
tidal stream opportunities in France and Asia."
This announcement contains inside information.
Enquiries:
Atlantis Resources +44 (0)20 3727 1000
Tim Cornelius, Chief Executive Officer
Simon Counsell, Chief Financial Officer
Peel Hunt LLP (Nominated Adviser
and Broker) +44 (0)20 7418 8900
Adrian Trimmings
Jock Maxwell Macdonald
George Sellar
FTI Consulting +44 (0)20 3727 1000
Ben Brewerton
Alex Beagley
James Styles
CHAIRMAN'S STATEMENT
This year has been another year of world firsts for the Group
and tidal power, during which we have cemented our reputation as
the driving force behind a growing sector. Above all our other
achievements, I am delighted to be able to report the generation of
first power from Phase 1A of the MeyGen project and full Ofgem
accreditation, the culmination of many years of hard work and
perseverance.
In June 2016, we connected to the 33kV Ness of Quoys
distribution network, whichpaved the way for us to export our first
power to the grid in November 2016. The connection was closely
followed by our deal with Lochend Wind Energy Limited to deliver
electricity to the grid whenever the MeyGen tidal project is not
making full use of the available export capacity. This
unprecedented arrangement further demonstrates our pioneering role
in the renewables industry, combining wind energy with tidal energy
to make more efficient use of existing grid assets.
The second half of 2016 was dominated by the installation of
subsea equipment and the commencement of generation, with the
fourth and final turbine, supplied by the Atlantis turbine and
engineering services division, being installed in February 2017 and
reaching full power soon afterwards. I was particularly pleased to
welcome the First Minister of Scotland, Nicola Sturgeon, to
formally unveil the MeyGen project at Nigg Energy Park in Scotland
in September 2016, just before the start of the foundation
installation campaign.
As the year drew to a close we formalised our decision to
proceed with the development for the next stage of the MeyGen
project, known as Project Stroma, or Phase 1B. We have been working
diligently to further refine the design of the turbines and balance
of plant based on the lessons learned from Phase 1A, thus
demonstrating progress to lower the cost of energy for tidal
stream. This phase of the project will benefit from both EUR20.3
million of capital grant funding from Europe's Horizon 2020
programme, as well as EUR16.8 million in revenue support under the
NER300 scheme.
MeyGen's success has attracted infrastructure and private
finance partners from across Europe, with whom we are working to
strengthen our portfolio. In April, we announced our new
partnership with Equitix Limited for investment in our UK pipeline,
and this was closely followed by an investment by DEME Concessions
NV who acquired a 2% shareholding in Tidal Power Scotland Limited,
our Scottish portfolio holding company. We also completed the sale
of a 6% share in Tidal Power Scotland Limited to ScottishPower
Renewables (UK) Limited, in exchange for the transfer of
development rights for 110MW of further Scottish projects.
Meanwhile, we were heartened by robust support from our
shareholders in a GBP6.5 million capital raise in April 2016, and a
further GBP4.05 million in May 2017.
We are striving harder than ever to drive down costs to ensure
that our power is an attractive economic choice in the short term
as well as providing a host of social and environmental benefits.
We continue to make excellent progress in our ambition to provide
sustainable and predictable green energy on a commercial scale, and
to do so wherever there is available tidal resource. In April 2017
we signed an agreement with SBS Intl Ltd to develop a 150MW project
in Indonesia, and since the end of the reporting period we have
reported our active pursuit of opportunities in France and South
Korea.
We are also branching out into related energy project
opportunities through our new Atlantis Energy division, which
allows us to make the most of our experience in developing uniquely
complex projects. I would like to take this opportunity to thank
all of those who have partnered with and supported Atlantis through
a very
challenging year, including our shareholders and many key
stakeholders, and to thank our people and my fellow directors for
their continued dedication as we move into the next exciting period
of delivery.
ANNUAL GENERAL MEETING
Our Annual General Meeting will be held on 29 June 2017 and the
notice of the meeting accompanies this Annual Report.
I look forward to this opportunity to meet our shareholders.
John Mitchell Neill
Chairman
30 May 2017
CHIEF EXECUTIVE OFFICER'S STATEMENT
PROFILE
The Group focuses on three core activities: power generation,
project development and technology delivery. Our power generation
activities are currently focused on MeyGen Phase 1A. Our project
development capability has been honed through the origination,
development and delivery of the MeyGen tidal stream project, and we
continue to apply these skills to new opportunities in house as
well as offering our specialist services to third party project
owners. By targeting the early part of the project lifecycle we can
maximise our opportunity to create value both for our customers and
for ourselves as project owners. Our turbine and engineering
services division, meanwhile, ensures we have the means to deliver
our projected reductions in the cost of energy. This allows our
projects and those of third party developers to remain economically
viable and financially attractive to infrastructure investors and
governments in the long term, against competition from other
sources of renewable power production in a range of global
markets.
UPDATE
2016 was a very significant year for the group as we saw the
realisation of over 10 years of hard work in the energisation of
MeyGen Phase 1A. It was a challenging yet rewarding journey, and
through tenacity, innovation and entrepreneurship we have continued
to lead the tidal power sector on the road to commercial maturity.
Initial indications are that the performance of our own turbine
generator, the AR1500, will exceed our expectations in terms of
power curve performance and we look forward to validating these
claims over the coming months. All the Phase 1A turbines are
currently undergoing upgrades proposed by the turbine suppliers
following an initial period of operation, and are scheduled for
reinstallation in mid-2017 when they will undergo their final
performance and reliability guarantee tests.
The UK's decision to leave the European Union in July 2016 was
followed by the reassuring confirmation that our existing sources
of European public funding for UK projects would be unaffected. In
particular, we will continue to benefit from the EUR37 million of
capital and revenue support awarded to the next phase of the MeyGen
project, known as Project Stroma. This preserves our opportunity to
use this project to demonstrate the cost reducing innovations which
are essential to the future viability of tidal power as it competes
against longer established technologies.
The necessity of rapid cost reduction was highlighted by the UK
government's decision to withdraw ring-fenced support for marine
energy, but we are nonetheless pleased to have the opportunity to
compete in the 2017 allocation round for contracts for difference.
This regime replaces the outgoing Renewables Obligation, under
which MeyGen Phase 1A has now received full accreditation, ensuring
it receives five Renewables Obligation Certificates for each
megawatt hour of generation.
Whilst tidal stream remains our primary focus, we've also
announced the creation of a new division, Atlantis Energy, through
which we can apply our origination and development expertise to
energy projects in related areas. We offer these skills to third
party project owners as well as putting them to work to identify
opportunities for broadening our own portfolio. We've already
signed up an agreement with Ideol, a leading developer of offshore
floating foundation solutions, and we're working with Natural
Energy Wyre to progress the Wyre tidal barrage project on the
Lancashire coast in England. 2017 promises to be a year of
technological and geographical diversity as we continue to build
this part of the business alongside our latest tidal stream
opportunities in France and Asia.
SUMMARY OF RESULTS
As a result of the relocation of the Group's corporate
headquarters from Singapore to Edinburgh, the Group's
presentational currency changed from Singapore dollar to Great
British pounds ("GBP"), effective 1 January 2016. All comparative
figures have been restated and are also presented in GBP.
For the year ended 31 December 2016, the Group recorded a post
tax loss of GBP7.3m, a decrease of GBP9.3m on the prior year
profit. The prior year included one off gains arising from the
acquisition of Marine Current Turbines ("MCT") of GBP9.2m and the
disposal of 50% of our stake in Atlantis Operations Canada Limited
("AOC") of GBP0.9m.
Revenue from consulting services was GBP0.2m, down from GBP1.4m
in the previous year as a result of the completion of the final
design phase of our contract with Energy Technologies Institute
("ETI"). The completion of this phase of the ETI project also
contributed towards lower costs during the year.
Total expenses for the year were GBP9.1m, a reduction on the
prior year of GBP2.9m. Prior year expenses included an impairment
charge of GBP1.9m, primarily on the AR1000 turbine, which was
considered to be obsolete. Further cost reductions were realised in
Research and Development costs and subcontractor costs, as noted
above.
Other gains were GBP2.8m which, when excluding the one off items
noted above relating to MCT and AOC, were down GBP0.4m on the prior
year. The MCT acquisition in 2015 resulted in a bargain purchase
gain, mainly in respect of the fair value of turbine technology and
seabed options, while the AOC disposal resulted in a re-measurement
gain on the remaining 50% held by the Group.
The Group's net assets increased during the year by GBP8.9m to
GBP66.6m. In April 2016, the Group raised approximately GBP6.5m
through a successful share issue. In return for a 6% stake in the
Group's project development company, Tidal Power Scotland Limited
("TPSL"), we acquired additional seabed options from Scottish Power
Renewables worth GBP6.6m. Further, DEME Group took an additional 2%
stake in TPSL in consideration for GBP2m cash. The Group retains a
92% interest in TPSL. Finally, Scottish Enterprise made a further
GBP1.3m equity injection to MeyGen Holdings Limited ("MGHL"),
increasing their shareholding to 16.55%. The Group retains the
remaining 83.45% interest in MGHL.
Timothy James Cornelius
Chief Executive Officer
30 May 2017
FINANCIALS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
Year ended 31 December 2016
2016 2015
GBP'000 GBP'000
Revenue 235 1,375
Other gains 2,824 13,288
Employee benefits expenses (4,782) (4,634)
Other operating expenses (2,326) (2,652)
Subcontractor costs (249) (615)
Depreciation and amortisation (1,611) (1,572)
Impairment loss on property,
plant and equipment - (1,881)
Research and development
costs (140) (618)
Total expenses (9,108) (11,972)
------- --------
Results from operating activities (6,049) 2,691
Finance costs (1,004) (614)
------- --------
(7,053) 2,077
Share of results of equity-accounted
investees (211) (49)
(Loss)/profit before tax (7,264) 2,028
Tax expense - -
------- --------
(Loss)/profit for the year (7,264) 2,028
------- --------
Other comprehensive income
Items that are or may be
reclassified subsequently
to profit or loss
Exchange differences on
translation of foreign operations (148) 263
Other comprehensive income
for the year,
net of tax (148) 263
======= ========
Total comprehensive income
for the year (7,412) 2,291
======= ========
(Loss)/profit attributable
to:
Owners of the Group (7,716) 2,102
Non-controlling interests 452 (74)
======= ========
Total comprehensive income
attributable to:
Owners of the Group (7,864) 2,185
Non-controlling interests 452 106
======= ========
(Loss)/earnings per share
Basic and diluted (loss)/earnings
per share (0.06) 0.02
======= ========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 2016
2016 2015
GBP'000 GBP'000
Assets
Property, plant and
equipment 62,694 41,114
Intangible assets 36,324 30,960
Investments in subsidiaries - -
Loans to subsidiaries - -
Investment in joint
venture - 211
Loan to joint venture 1,236 910
Trade and other receivables - -
Non-current assets 100,254 73,195
-------- --------
Trade and other receivables 4,868 6,207
Cash and cash equivalents 10,232 12,268
Current assets 15,100 18,475
-------- --------
Total assets 115,354 91,670
======== ========
Liabilities
Trade and other payables 10,172 8,477
Provisions 2,339 2,036
Loans and borrowings 2,790 2,128
Current liabilities 15,301 12,641
-------- --------
Loans and borrowings 29,592 17,451
Deferred tax liabilities 3,830 3,830
-------- --------
Non-current liabilities 33,422 21,281
-------- --------
Total liabilities 48,723 33,922
-------- --------
Net assets 66,631 57,748
======== ========
Equity
Share capital 91,220 84,918
Capital reserve 12,665 5,709
Translation reserve 7,167 7,315
Option fee 6 6
Share option reserve 3,191 3,078
Accumulated losses (55,666) (47,950)
-------- --------
Total equity attributable
to owners of the Company 58,583 53,076
Non-controlling interests 8,048 4,672
-------- --------
Total equity 66,631 57,748
======== ========
STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Company
------------------------------------------------------------------------
Share Non-
Share Capital Translation Option option Accumulated controlling
capital reserve reserve fee reserve losses Total interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
At 1 January 2015 78,483 5,486 7,232 6 2,206 (50,052) 43,361 4,135 47,496
------------------- -------- -------- ----------- ------- -------- ----------- ------- ------------ -------
Total
comprehensive
income for the
year
Profit for the year - - - - - 2,102 2,102 (74) 2,028
Other comprehensive
income - - 83 - - - 83 180 263
------------------- -------- -------- ----------- ------- -------- ----------- ------- ------------ -------
Total comprehensive
income for the
year - - 83 - - 2,102 2,185 106 2,291
Transactions with
owners,
recognised
directly
in equity
Contributions by
and
distributions to
owners
------------------ -------- -------- ----------- ------- -------- ----------- ------- ------------ -------
Issue of ordinary
shares 6,435 - - - - - 6,435 - 6,435
Recognition of
share-based
payments - - - - 872 - 872 - 872
Changes in
ownership
interest in
subsidiary
Dilution of
interest
in a subsidiary
without
change in control - 223 - - - - 223 431 654
------------------- -------- -------- ----------- ------- -------- ----------- ------- ------------ -------
Total transactions
with owners 6,435 223 - - 872 - 7,530 431 7,961
-------- -------- ----------- ------- -------- ----------- ------- ------------ -------
At 31 December 2015 84,918 5,709 7,315 6 3,078 (47,950) 53,076 4,672 57,748
======== ======== =========== ======= ======== =========== ======= ============ =======
STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Company
-------------------------------------------------------------------------
Share Non-
Share Capital Translation Option option Accumulated controlling
capital reserve reserve fee reserve losses Total interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
At 1 January 2016 84,918 5,709 7,315 6 3,078 (47,950) 53,076 4,672 57,748
------------------ -------- -------- ------------ ------- -------- ----------- ------- ------------ -------
Total
comprehensive
income for the
year
(Loss)/Profit for
the
year - - - - - (7,716) (7,716) 452 (7,264)
Other
comprehensive
income - - (148) - - - (148) - (148)
------------------ -------- -------- ------------ ------- -------- ----------- ------- ------------ -------
Total
comprehensive
income for the
year - - (148) - - (7,716) (7,864) 452 (7,412)
Transactions with
owners,
recognised
directly
in equity
Contributions by
and
distributions to
owners
----------------- -------- -------- ------------ ------- -------- ----------- ------- ------------ -------
Issue of ordinary
shares 6,302 - - - - - 6,302 - 6,302
Recognition of
share-based
payments - - - - 113 - 113 - 113
Changes in
ownership
interest in
subsidiary
Dilution of
interest
in a subsidiary
without
change in control - 6,956 - - - - 6,956 2,924 9,880
------------------ -------- -------- ------------ ------- -------- ----------- ------- ------------ -------
Total transactions
with owners 6,302 6,956 - - 113 - 13,371 2,924 16,295
-------- -------- ------------ ------- -------- ----------- ------- ------------ -------
At 31 December
2016 91,220 12,665 7,167 6 3,191 (55,666) 58,583 8,048 66,631
======== ======== ============ ======= ======== =========== ======= ============ =======
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December 2016
2016 2015
GBP'000 GBP'000
Cash flows from operating
activities
(Loss)/profit for the year (7,264) 2,028
Adjustments for:
Bargain purchase arising
from business combination - (9,174)
Gain on disposal of subsidiary - (451)
Re-measurement gain on investment
retained in the former subsidiary - (451)
Grant income (1,958) (2,834)
Interest income (127) (26)
Impairment loss on property,
plant and equipment - 1,881
Depreciation of property,
plant and equipment 61 36
Amortisation of intangible
asset 1,550 1,536
Interest expense 1,004 614
Share-based payments 113 872
Provisions made/written
back during the year 432 150
Share of loss of joint venture,
net of tax 211 49
Net foreign exchange (467) (261)
Operating cash flows before
movements in working capital (6,445) (6,031)
Movements in trade and other
receivables (1,077) 113
Movements in trade and other
payables (5,775) (996)
-------- --------
Net cash used in operating
activities (13,297) (6,914)
-------- --------
Cash flows from investing
activities
Purchase of property, plant
and equipment (14,150) (18,252)
Expenditure on project development - (1,194)
Cash received from disposal
of subsidiary - 250
Acquisition of subsidiary,
net of cash acquired - 56
Net cash used in investing
activities (14,150) (19,140)
-------- --------
Cash flows from financing
activities
Proceeds from grants received 5,577 13,281
Proceeds from issue of shares 6,539 2,500
Share issuance cost (237) (277)
Proceeds from borrowings 10,232 7,755
Deposits released 440 856
Non-controlling interest 3,300 896
-------- --------
Net cash from financing
activities 25,851 25,011
-------- --------
Net decrease in cash and
cash equivalents (1,596) (1,043)
Cash and cash equivalents
at 1 January 10,182 10,992
Effect of foreign exchange
rate changes on the balance
of cash held in foreign
currencies - 233
Cash and cash equivalents
at 31 December 8,586 10,182
======== ========
Further detail may be read and downloaded from the company
website:
http://www.atlantisresourcesltd.com/company-documents.html
Annual General Meeting
Atlantis also announces that a Notice will be sent to
shareholders today to convene the Annual General Meeting ("AGM") of
the company.
The AGM will be held at the offices of Ashurst LLP, Broadwalk
House, 5 Appold Street, London EC2A 2HA at 10:00 a.m. (London time)
on Thursday, 29 June 2017. The AGM Notice is also available on the
company's website:
http://www.atlantisresourcesltd.com/company-documents/notices.html.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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