Quantafuel delivered its Q1. The most important news are high run times of the Skive plant and reiterated the guidance to be CF positive in H2 for both Skive and Kristianslund. The management was very optimistic about the progress. The analysts focused on lowered production guidance for the year which overshadowed the other positive news. Pity the QFUEL did not pre-announce the run time successes to set the tone for the Q1 report.
Selected quotes from the Q1 call (emphasis added):
- This quarter was a significant step forward for Quantafuel.
- We have never been even close to the progress we are experiencing today. Not at any time in our history.
- This fact is not share by the general opinion… It is our high priority to close this gap.
- We will try to underpromise and overdeliver.
- We will invite you to a capital markets day in early September.
- We maintain out guidance that both our plants Skive, and Kristianslund would have positive cash flow during second half of this year
- The expected timing of our major project has not changed
- In Skive we achieved Proof of Concept running both lines for longer than 7 days with 90% of uptime.
- In January we had 20 plus days of continues operation and in March/April we set the Skive record at 30 days of continues operations on both lines.
- We are keeping our schedule to have lines 3 and 4 running within the end of Q2 and Q3.
- We are aiming to finish the year with running the plant at the designed capacity of 20 000 tons per year.
- We lowered our guiding of our production from 12 000 to a range of 6000-8000 tons. The lower guiding will allow us to make the tests needed to have the best possible platform for the next generation of plants.
- Skive production date are important but even more important is to execute the tests needed to ensure that the next generation of plastic to liquid plants is the best possible. The learnings from running Skive are instrumental to our success. The next generation of our plastic to liquid plants will be simpler, have more redundancy, achieving higher stability and uptime.
- We are also testing the plant for different plastic quantities… Different plastic quality can result in unwanted substances. It is important we understand for the next design both limitations and possibilities.
- We have tested highly contaminated plastic by biowaste and concluded the end product has the right quality.
- BASF nominated Skive plant for the Danish Plastic Price Award for 2022.
- Esbjerg sorting plant has progressed well while we were working on due diligence with potential financial partners. The process we expect we can conclude soon.
- 160 000 tons Esbjerg facility will be the largest sorting facility with in Denmark when it is complete in second half of 2023.
- In Dubai we have selected the site, verified that suitable feedstock is available and feasibility study was concluded. Next steep will be to proceed with the FEED phase leading to investment decision later.
- Kristianslund is performing well. We are rumping up volumes. The off-take market is strong with high demand and attractive prices for our products.
We expect material newsflow in the next weeks, namely:
- Commissioning of line three in Skive
- Contract with a financial partner for the largest sorting facility in Denmark in Esbjerg
- Progress on increasing run time in Skive
- FEED phase in Dubai announcement
- Commissioning of line four in Skive
In Summary, we were encouraged by the progress. Several positive announcements were made. The presentation was very good. I highly recommend to all investors to watch it. Link below:
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