The Q4 major news was restarting on Skive today. QFUEL showed an online tour of the plant and showed one line already heating up. Second line should be in operation by mid March too the management reconfirmed. CAPEX increased by 10 mln only. Do watch the Q4 replay from Quantafuel web, it should be there shortly after the call end. Very impressive.
The recent share price drop on the plant recent down time was around 10 NOK or 40%. The market took this as a major event. The CEO said before, that such issues happen even for operating plants. “there are gas leaks on monthly basis for similar plants”. It is comforting how quickly the process identified the issue and how quickly the plant was repaired.
Brokers summaries on the Q4
QFUEL NO – Quantafuel – Skive production to resume within days & 2022 guidance reiterated
Quantafuel reports Q4 EBITDA of NOK -61m, which is in line with our expectations. Most importantly, the company state that the first reactor chamber is repaired with heating ongoing and plastic feeding expected to commence within days at Skive. Thereafter, production from the second line is expected to commence by mid-March. This is slightly ahead of previous guidance and our expectations.
Quantafuel also reiterates the 2022 production guidance of 12,000 MT of plastic waste to be recycled, which in our view is positive compared to market expectations. The company is therefore back on track towards achieving “proof-of-concept” and a successful production ramp-up that are key to prove up the value of the technology. With NOK 284m of cash at YE’21 and NOK 400m of additional equity secured in Jan’22, Quantafuel is in a good position to finance further growth. At Esbjerg, close on financial partner is likely the next step.
QFUEL announce 4q21 results this morning posting revenues of NOK 2.3m (CS NOK 4m), EBITDA coming in at NOK -61m (CS NOK -26m), and net income NOK -74m (CS NOK -32m). Revenues mainly stem from operations in Kristiansund (NOK 1.5m) and NOK 0.7m in grants through Avfall Norge. The higher costs compared to CS numbers are mainly driven by higher SG&A and COGS due to increased operations. Cash positions amounted to NOK 285m at the end of 4q21, with additional NOK 400m raised through a private placement end of January.
Skive production target of 12,000 MT for full year 2022 is maintained, where the company expect the two lines operating though January to be back in production by mid-March. This is in line with previous announcement made post the mechanical failures in February. As a result of these repairments, estimated Skive CAPEX is increased by NOK 10m to a total of NOK 620m.
Further announcements include continued progress at the Kristiansund facility towards an integrated sorting, mechanical and chemical recycling plant (completed expansion to 20,000 MT capacity sorting line), construction of the Esbjerg sorting facility is expected to begin during 1h22 with first production in 2h23. Target start date of the planned chemical recycling facilities with VTTI is significantly delayed due to complications regarding the permitting process.
Quantafuel sticks to ’22 production guidance
Quantafuel released its Q4 report this morning. It now guides for both lines to be back mid-March (vs previously minimum 1 line).
The first line has been repaired and expected operational within the next few days. It is keeping the FY ’22 production guidance of 12.000t (which is hence unchanged vs before the Q1’22 shutdown). Q4 EBITDA was -61m (ABGSCe -40m), but its YE cash position was NOK 284m (vs ABGSCe NOK 264m), i.e this is prior to the NOK 400m equity issue.
The financial guidance appears unchanged, except that Skive total capex (now completed) ended at NOK 620m (vs. guidance 610m). The company continues to work on the roll-out plan, but states that permitting issues is pushing start-up on the Amsterdam plant with Vitol to ’25-26 (ABGSCe ’24). The Dubai plans could offset this slippage vs our estimates, depending on the scale (guided start-up ’23-24). We expect the market to focus on the positive update on Skive, and hence consider this a positive report albeit hampered by the slippage on the roll-out in Amsterdam.
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