Quantafuel – Excellent Presentation. Do watch

QFUEL presented Q2 this morning. The presentation focused on the project pipeline, that has moved significantly. The highlites were signing up Dubai plant with BASF as investor, progress in Sunderland and Esbjerg plants and new licensing agreement with Sapiem. Skive modification in Q3 will mean that Skive will be running on self produced gas on all lines. Both Skive and Kristianslund should be cash positive by the year end.

QFUEL is about future of plastic recycling. QFUEL should be European leader in chemical recycling of plastic. And QFUEL is delivering.

Link to the presentation https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20220831_5

The brokers focused on preanounced cost increases driven mainly by higher energy costs. The most important is the progress. See below part of Qfuel comments:

Q2 2022 is characterised by significant achievements for Quantafuel. Quantafuel is confidently moving forward into the next phase; large-scale global implementation supported by strong and long-standing partners.

“The past quarter has been an important and eventful one for Quantafuel. We are moving forward into the next phase of our strategy and the commitment shown by key partners illustrates their support and confidence in Quantafuel becoming a frontrunner in the plastic recycling industry,” says CEO of Quantafuel, Lars Rosenløv.

One of the key milestones during the second quarter was the signing of the front-end engineering design (FEED) agreement for developing a Plastics-to-Liquid (PtL) processing plant in Dubai in cooperation with DUBAL Holding and our strategic partner BASF.

Furthermore, the recently announced agreement with Saipem, enables this top-five engineering major to globally market PtL plants under Quantafuel’s technology license. The agreement has added a new dimension to Quantafuel’s business model and provides even more flexibility and speed creating additional income streams over time.

Another important step in Quantafuel’s growth strategy was entering a joint venture with investment fund Eurazeo for our sorting facility in Esbjerg, Denmark. It is a game-changer for the plastic waste market in Denmark, and a prerequisite for the co-located large-scale PtL plant we are planning as a next strategic step in Esbjerg.

Quantafuel reported the completion of line three in the beginning of June, which also enabled the use of self-generated gas for reactor heating. This autumn, all four reactors at Skive will have the necessary equipment installed for heating with self-produced gas. With the current highly volatile and pricey European gas market, this is a significant contribution to our plant economics.

As reported in a press release on 5th July 2022, our Skive operation has been exposed to pressure on operating costs during Q1 and Q2. Key contracts have already been successfully addressed, improving the operational margin. Our efforts to counter cost increases along with the general drive to lower cost in Skive will continue and begin to show positive effects in Q3. At full production Skive will on a yearly basis deliver approximately NOK 70 million free cash flow based on current feedstock and offtake assumptions.

“Skive has been instrumental for where Quantafuel stands today. Our Mk II plants are built on all the key learnings from Skive combined with the long experience of our strategic partners. We are excited about the future,” says Rosenløv.

Please see the attached Q2 2022 report and Q2 2022 presentation for full financial figures, including details on Quantafuel’s operation and projects. Key highlights from the report:

– FEED agreement for PtL plant in Dubai signed with DUBAL Holding and BASF
– Quantafuel adds global licensing business model via Saipem cooperation
– Joint venture and financing for Esbjerg sorting plant signed with Eurazeo
– Three production lines operational in Skive
– Forecast positive cash flow from plants by year-end

Following Proof of Concept for the Skive plant, announced on 28 March 2022, Quantafuel Skive has been subject to a number of technical reviews and commercial invitations for the use of Quantafuel’s technology. The Skive project has total full capex of NOK 620 million. As significant part of Skive’s costs relates to the development cost of Quantafuel’s Intellectual Property, Quantafuel has reclassified NOK 163.6 million related to these developments from Property Plant and Equipment (PPE) to other intangible assets as per 30.06.22.

Day by day we are proving that we are in a good position to build a circular economy for plastics in Europe and beyond. The achievements reached the past quarter position us as a frontrunner and we have strong industrial and financial partners keen to take the next step with us.

Mintra news

We wrote here before Mintra, high beta play on shipping and energy sector. Mintra today announced another contract with oil major. We expect the trend to continue.

The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice. Please do your own research before making any investment action.

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