Final Results

RNS Number : 7191Q
Hydrogen Utopia International PLC
30 June 2022
 

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30 June 2022

Hydrogen Utopia International PLC

 (the "Company" or "HUI")

Final Results

 

 

Hydrogen Utopia International PLC (AQSE:HUI), a company pioneering non-recyclable waste plastics to hydrogen technology, is pleased to announce its results for the period ended 31 December 2021.

 

HIGHLIGHTS OF 2021

 

Business Development:

·     AQSE Growth Market IPO finalised - trading commenced 6 January 2022

· Electron Technologies BV engaged to develop with HUI a carbon neutral cutting edge pyrolysis and gasification reactor, the chemical conversion chamber, to run on green electricity

· Framework agreement encompassing hydrogen extraction and gas clean-up equipment, design and engineering services signed with Linde Engineering at COP 26

· Creation of substantial project pipeline in Poland, Greece and Ireland and exploring further opportunities across Continental Europe  

Organisation and Growth:

· Recruitment and appointment of a Board with a broad range of skills, experience, expertise and connections in business development, financial structuring and fundraising, sophisticated engineering and waste solutions, project management and alternative and renewable energy

· Recruitment of a full-time CFO

·     Establishment of a network of contacts and consultants in target locations across Europe

Financial Highlights:

· Net assets at period end of £4.6 million, including just under £4.7 million of cash after payment of or provision for IPO costs

· In line with expectations as HUI's business is developing, the group did not generate any revenue for the reporting period and the loss amounted to £1.036 million

·     Cash outflow from operating activities amounted to £980,000

 

Guy Peters, Executive Chairman of HUI commented:

 

"In the very short period of time covered by these results, HUI has transitioned from concept to a fully fledged business poised to help tackle the worldwide plastic waste issue and to recover energy from that waste and turn it into clean fuel.  None of that would have been possible without the help and support of our shareholders, whom we would like to thank for all of their support."

 

Aleksandra Binkowska, Chief Executive Officer of HUI commented:

 

"I would like to express my gratitude to our long-term shareholders for their continued support. It is difficult to articulate what a challenge HUI has undergone in planning to build a first of a kind facility which destroys plastic waste and turns it into valuable gases. This incredible undertaking wouldn't be possible without the help of our well-established partners such as Linde and Electron and the efforts of the team we have built. The world is going through a turbulent time. Following the train of thought of a renowned Slovenian philosopher, Slavoj Žižek, the world is currently facing "Four riders of the Apocalypse: Pandemic, War, Famine and Death". Our technology and other technologies like ours can help create a more sustainable world. We aim to work in close cooperation with major international businesses, national and local government and the public and private institutions. Jointly we can roll out our systems globally, improve them and subsequently create an entirely new approach to plastic waste. This is my ambition and primary goal for the years to come."

The annual report and accounts for the year ended 31 December 2021 will be sent to shareholders shortly and will be available to view on the Company's website: www.hydrogenutopia.eu.  

For more information about the Company, please refer to our website:   www.hydrogenutopia.eu

 

For further information please contact:

 

Hydrogen Utopia International PLC

Kate Templeman

Communications Manager

Hydrogen Utopia International

+447312530958

Kate.templeman@hydrogenutopia.eu

www.hydrogenutopia.eu 

 

Alfred Henry Corporate Finance Limited (AQSE Corporate Adviser)

Jon Isaacs 

+44 20 3772 0021

                                                           

Novum Securities Limited (Broker)                                                                 

Jon Belliss/Colin Rowbury     

+44 20 7399 9400

   

Chairman's statement

 

Overview

This is the first published Annual Report and Accounts for Hydrogen Utopia International PLC ("HUI" or the "Company") and it covers the period which ended immediately preceding the Company's IPO and admission of its shares to trading on the AQSE Growth Market. Trading on AQSE commenced on 6 January 2022.

 

HUI is pioneering the use of technology using non-recyclable waste plastic to produce hydrogen and/or other alternative energy sources which are not dependent upon the use of coal, gas, oil or fossil fuel derived electricity.

 

HUI's plants will not only provide alternative energy but also address the major environmental threat posed by waste plastic. Vast quantities of plastic with a huge variety of industrial, consumer and healthcare uses continue to be produced worldwide. We believe that attempts to limit or substitute plastic use are unlikely to make any significant difference to the quantities of waste plastic generated by our society in the foreseeable future - plastics are too useful. HUI's plants will provide an alternative use for that waste plastic without the need for incineration or landfill.

 

It is HUI's intention to become one of the leading new European companies specialising in turning non-recyclable mixed waste plastic into carbon-free fuels, new materials or distributed renewable heat. The pressing need to deal with growing amounts of waste plastic combined with a real momentum in demand for and the use of hydrogen from renewable sources pave the way for a rapid deployment of and investment in HUI facilities.

 

A HUI facility uses non-recyclable mixed waste plastic as feedstock and turns it into a high calorific synthetic gas (syngas) from which new products such as hydrogen or methane can be extracted or it can be used as a fuel in itself to produce electrical power.

 

HUI is targeting areas where there is significant private sector interest or potential, where financial backing is accessible and/or where substantial EU and/or government funded sources of grants and loans are or may be available.

 

In terms of conventional energy sources, the global increase in fossil fuel-based energy prices reinforces the need for alternative energy sources, which HUI's plants can provide. This demand for alternative sources of energy and energy supply has been compounded as a consequence of the war in Ukraine and current sanctions against Russia. Western and Central European countries have either determined to move away altogether from Russian gas and oil supplies or they are increasingly reluctant to place any significant dependence upon such supplies.

 

HUI's waste plastic to energy plants will produce syngas that could be used as a fuel in its own right, as a gas engine fuel to produce electrical power or to produce methane or hydrogen. Heat produced as a by-product of the process can be sold and fed into district heating systems, for example, which in Eastern Europe are used extensively.

 

HUI believes that building new HUI waste plastic to energy plants could be significant in allowing local communities across Europe to ameliorate the effects of the resultant gas and energy supply crisis and the anticipated market changes brought about by ongoing sanctions against Russia and the reluctance to rely upon it as an energy supplier in the future.

 

HUI plants were always anticipated to have the flexibility to switch between different outputs and their modularity and flexibility should enable HUI to build bespoke units to satisfy local demand.

 

Since our IPO, we have continued our efforts to build a pipeline of HUI facilities in Europe, with the intention of establishing a first plant as soon as practicable. Pursuant to that aim, at the end of April 2022 we announced that we had reached an agreement in the Republic of Ireland which we anticipate will lead to our first operational full scale waste plastic to hydrogen facility in Europe. This offers us a suitable site in an EU Just Transition Fund region, access to an investment grade plastic feedstock supplier and the potential to agree offtake for the facility's anticipated hydrogen and syngas outputs with a substantial customer whose covenant would be regarded as of a very high quality. Planning of the site in Ireland and discussions with the potential supplier and customer are ongoing and we anticipate being in a position to provide further updates in the near future.


Financial

The financial statements presented are those for the HUI group, including the Company (which was incorporated in May 2021) and its principal subsidiary in the UK (which was incorporated and commenced trading in October 2020) together with HUI's subsidiaries in Poland and Greece. 


In line with expectations, the HUI group did not generate any revenue in the reporting period and the total loss for the period amounted to £1,036,461. The Group has not recognised a deferred tax asset in respect of the losses incurred to date - which should nevertheless be available to offset against profits in the future.

 

Net assets at the period end amounted to £4.6 million. Cash assets and receivables amounted to just under £4.7 million at that date -including just under £2.7 million of cash at bank and £1.9 million of cash receivable from the proceeds of the IPO fundraising, the balance of which was received shortly following the IPO. To the extent that IPO listing costs were not already paid at period end, full provision has been made for the costs of the IPO.

 

Cash outflow for the period from operating activities and in the purchase of property, plant and equipment amounted to some £980 thousand. Net cash inflows from the issue of shares in the period (excluding the £1.9 million of IPO proceeds shown as current assets in trade receivables) amounted to some £3.68 million.

 

Climate Change

HUI is dedicated to helping to deliver climate change by creating a cleaner, more sustainable future for our planet through utilising technology to replace fossil fuels where possible.

 

Our vision is to accelerate a circular and net zero, clean economy through:

· tackling the worldwide plastic waste issue by utilising waste plastic that is not recycled/cannot be recycled/cannot be recycled economically as a feedstock for HUI facilities;

· deploying innovative clean technologies that recover energy from non-recyclable plastics and turn it into clean fuel; and

· becoming the leader in monetising the conversion of non-recyclable plastic waste into new products and energy.

 

G R Peters

Executive Chairman

30 June 2022

 

 

Chief Executive Officer's statement

 

HUI's business was founded on 1st October 2020 during the second wave of the Covid-19 pandemic. The timing was important, as the world seemed to have woken up to the realisation that a utopian aspiration of eradicating the usage of plastic was unachievable. The Covid-19 pandemic has actually led to an increased demand for single-use plastics that has intensified pressure on an already out-of-control global plastic waste problem. The studies say that it is impossible, impractical or uneconomic to recycle about 90% of plastics, which subsequently leads to landfilling or incineration. Neither are perfect solutions. We believe that HUI's solution is far closer to perfection: tackling both of the burning environmental issues - providing the world with a solution to waste plastic and helping the transition from the use of fossil fuels by creating alternative valuable fuels such as synthetic gas and hydrogen.

 

On 1st January 2021 the EU banned the shipment of non-recyclable plastic waste to countries outside the OECD and tightened controls on exports to OECD countries and within Europe. Some poorer countries, which are growing in affluence, are also slowly restricting the import of unwanted plastic, increasing pressure on every country to deal with its own plastic waste.

 

During the unprecedented crisis caused by the Covid Pandemic, the EU unleashed the largest funding package in its history; EUR 1.7 trillion which would be targeted at the poorest regions within the European Union. EU Leaders made it very clear that the Covid Pandemic should increase our efforts to speed up the transition from fossil fuel use and move swiftly to alternative sources of energy. Pressure to increase hydrogen production increased, along with an understanding that the demand for hydrogen will not be fully met for a very long time. This means that all possible sustainable methods of producing hydrogen must be implemented. Currently the price of hydrogen is averaging around EUR12 per kg. The EU has decided to allocate funds to the most impacted areas across the Continent in regions where the transition is needed most.

 

All of the above factors led to HUI's foundation and the rapid development of its business. We believe in addressing the needs of the most impacted regions in the EU with the help of EU funds, as well as local, national and private sector funding. HUI's ambition is to create a substantial project pipeline of systems across the Continent, particularly where coal mining has to be phased out, where unemployment is very high and where there is an urgent need to create new employment opportunities to preserve the local communities. Each of our systems can provide about 2.75 tonnes of hydrogen per day, which can fuel approximately 84 public buses or waste trucks or other heavy vehicles.

 

HUI is based on two fundamental pillars: building a state of the art, 4.0. technology for converting waste plastic to hydrogen or alternative fuels and creating a substantial project pipeline.  Once the first plant has been built, this should ensure that we can capitalise rapidly on the knowledge and interest in the system in our target markets.

 

In building a state of the art system, we are most proud of the partners we have secured in developing the first plant.  We engaged Electron, a Netherlands based high-tech thermal engineering company, which has worked with General Electric, Boeing, Tata Steel and Shell to provide state of the art and highly specialised engineering solutions. HUI. Electron and its consulting engineers are developing a cutting edge pyrolysis and gasification reactor, the chemical conversion chamber, which will run on green electricity, making our system carbon neutral. Electron is in the final phases of completing the design and material choices. We believe that Electron has the capacity to build up to 20 pyrolysis and gasification reactors annually, which provides us with confidence in our ability to meet market demand. Electron also took a shareholding in HUI in our pre-IPO funding round, which is a strong measure of their support and confidence in our business. Electron is currently constructing a test rig that will test the first pyrolyzing stage of the system.

 

We have also partnered with Linde, the leading global industrial gases and engineering company. Linde Engineering initially performed a four month technical feasibility evaluation in mid 2021 in relation to the deployment of syngas cleanup and hydrogen extraction in an HUI waste plastic to hydrogen plant. Subsequently, at COP26, Linde and HUI signed a framework agreement under which Linde would provide hydrogen extraction and gas clean-up equipment, design and engineering services to HUI with a right of first refusal on every HUI project. Under that agreement, HUI recently tasked Linde Engineering with providing engineering guidance and advice by assessing the interfacing of the chemical conversion chamber and synthesis gas designs. Where necessary or desirable, Linde Engineering will suggest improvements to enhance the potential performance, longevity and/or integration of a complete HUI waste plastic to hydrogen facility. They will also help facilitate the fabrication and commissioning of a fully integrated HUI waste plastic to hydrogen plant.

 

The second pillar of HUI's business is based on creating a substantial project pipeline. Our first project on the European Continent is anticipated to be based in Konin, Poland, where the city has expressed interest in deploying 10 systems and an agreement was signed with the City of Konin in February 2021. A suitable plot for the proposed HUI plant, close to the city's existing waste remediation facilities was identified and we were initially given the land by Konin to commence our FEED study. Later we entered into a 3 year lease agreement, which is expected to be followed by a long term lease or purchase of the land. We engaged SWECO, a pan- European engineering consultancy, to review the necessary planning consents required for a plant in Konin and they submitted an application for an Environmental Impact Assessment in December 2021. Earlier this month we received a number of follow up queries to our application, to which we are in the process of responding.

 

Subsequent to the Konin agreement, in January 2022 we signed a Letter of Intent with the regional waste management company operating in Ostrów Wielkopolski, Greater Poland, which has built a number of modern waste management facilities in the region. It has agreed, subject to final contract, that it will provide a plot of land at one of its facilities with the necessary utilities to operate an HUI waste plastic to hydrogen plant, it will provide assistance with the permitting of the site, it will source and provide the waste plastic feedstock necessary to operate the system and it will assist in procuring funding for the plant from EU, national or local grants and/or private funding. It has also offered its full assistance in finding off-take partners for the hydrogen and energy produced by the plant. It is intended that the heat energy produced by a plant would be fed into a district heating system.

 

Interest in the system is growing significantly - we are currently in discussions with cities in the regions of Pleszew, Wałbrzych, Jarocin and Kalisz. The Greater Poland region and its neighbouring Voivodships are extremely interested in hydrogen and are focused on being the leaders in hydrogen production. Konin is running its first hydrogen bus, whilst Poznań has ordered 84 buses to be delivered in the next 5 years. The first hydrogen summit in Poland was hosted in Poznań, where HUI is making many connections: we are currently in discussions with the largest waste management companies as well as tyre and plastic manufacturers.

 

We have also been very active in exploring markets across the Continent. We have established wholly owned subsidiaries in Greece and Ireland. In Greece we were allocated a free of charge plot of land in the region of Florina (West Macedonia), where the largest EU grant is being allocated. We are in discussions with local feedstock and off take providers.

 

The most advanced project as of today is located in Tipperary, Ireland, where we intend to co-locate our plant alongside other plastic waste recycling technology companies with a view to creating a hub.  In Ireland we are also in discussions with a Tier 1 feedstock and off- take supplier.

 

HUI believes that speed to market is everything, so we are relentlessly exploring opportunities in Bulgaria, Italy, Germany and the Netherlands. We believe in engaging local, well-connected people to open doors and spread the word about HUI's technology.

 

We believe that our plastic to hydrogen facilities represent perfect ESG projects. Following the Russian invasion of Ukraine, a political imperative has been added to the impetus to develop our plants. The united response of the Western World to the Ukraine invasion has been to change the approach to energy policies forever. Now projects such as ours have also become much more political in their potential contribution to energy self-reliance and energy independence. Businesses and consumers across Europe are facing incredible challenges from soaring gas and oil prices. Our plants can help in this context - by producing hydrogen as an alternative fuel and by producing syngas and heat. The price of natural gas is a benchmark for syngas prices. The clean syngas from an HUI system can be blended with natural gas, thereby reducing dependence upon primary fossil fuel sources and more particularly those sourced from Russia. We believe that this transition represents the future and we are extremely proud to be a part of it.

 

A Binkowska

Chief Executive Officer 

30 June 2022


 

 

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31 DECEMBER 2021

 

 


Period



ended



31 December



2021





£



Administrative expenses


(1,036,645)






Operating loss



(1,036,645)


Investment revenues



184







Loss before taxation


(1,036,461)


Income tax expense



-







Loss and total comprehensive income for the period



(1,036,461)






Profit for the financial period is all attributable to the owners of the parent company.



Total comprehensive income for the period is all attributable to the owners of the parent company.



Earnings per share



Basic


(0.40)


Earnings per share from continuing operations


Basic


(0.40)


The income statement has been prepared on the basis that all operations are continuing operations.

 









GROUP STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2021

 

 


2021





£



Non-current assets


Property, plant and equipment



386,533







Current assets


Trade and other receivables



1,995,864


Cash and cash equivalents


2,697,612








4,693,476







Current liabilities



Trade and other payables



505,071







Net current assets


4,188,405







Net assets


4,574,938







Equity



Called up share capital



344,320


Share premium account



2,214,684


Other reserves



3,052,395


Retained earnings



(1,036,461)






Total equity


4,574,938














 

GROUP STATEMENT OF CASHFLOWS

FOR THE PERIOD ENDED 31 DECEMBER 2021

 


2021




£

£



Cash flows from operating activities



Cash absorbed by operations



(594,920)






Net cash outflow from operating activities


(594,920)


Investing activities


Purchase of property, plant and equipment


(386,556)


Interest received


184







Net cash used in investing activities


(386,372)


Financing activities


Proceeds from issue of shares


2,558,904


Proceeds from shares to be issued


1,120,000







Net cash generated from/(used in) financing activities


3,678,904







Net increase in cash and cash equivalents


2,697,612



Cash and cash equivalents at beginning of year


-







Cash and cash equivalents at end of year


2,697,612















 

 

NOTES TO PRELIMINARY RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2021

 

1.        The financial information set out above does not constitute statutory accounts for the purpose of Section 434 of the Companies Act 2006.   The financial information has been extracted from the statutory accounts of Hydrogen Utopia International Plc and is presented using the same accounting policies, which have not yet been filed with the Registrar of companies, but on which the auditors gave an unqualified report on 30 June 2022.

 

The preliminary announcement of the results for the period ended 31 December 2021 was approved by the board of directors on 30 June 2022.

 

2.  Earnings per share

 


2021



£



Number of shares



Weighted average number of ordinary shares for basic earnings per share

256,298,031








Earnings (all attributable to equity shareholders of the company)



Continuing operations



Loss for the period from continued operations


(1,036,461)







Earnings per share for continuing operations



Basic earnings per share


(0.40)







Basic earnings per share



From continuing operations


(0.40)







Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares outstanding during the year.

 








 

 

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