Final Results

RNS Number : 6849N

Atlantis Resources Limited

20 May 2015

 

20 May 2015

ATLANTIS RESOURCES LIMITED

("Atlantis", the "Company" or the "Group")

Final Results

London - 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 2014.

The full Annual Report and Group financial statements can be read and downloaded from the Company's website:  http://www.atlantisresourcesltd.com/company-documents/annual-reports.html

Highlights - year to 31 December 2014

·      February 2014 - Atlantis raised approximately £12 million before expenses and became the first tidal developer to be admitted to AIM.  In the same month, Atlantis announced that it had been awarded €7.7 million of European Commission grant funding

·      August 2014 - Atlantis is awarded a £7.5 million two year contract with the UK's Energy Technologies Institute (the "ETI") to design and deliver a multi-turbine foundation structure for installation at MeyGen

·      September 2014 - financial close was announced for £51.3 million of funding for the first 6 MW phase of Atlantis's MeyGen project

·      October 2014 - Atlantis raised a further £5.0 million before expenses from new and existing shareholders in support of its commitment to equity investment in MeyGen

Highlights - post year end

·      January 2015 - construction works commenced at the MeyGen site in northern Scotland to establish the onshore power conversion centre and drill cable routes for power export; the project is on track to deliver first power in 2016

·      March 2015 - Atlantis entered into a multi-million pound turbine construction contract with Lockheed Martin for delivery of the first AR1500 turbine to MeyGen in 2016

·      April 2015 - Atlantis announced the execution of a sale and purchase agreement with Siemens AG for the acquisition of Marine Current Turbines Limited ("MCT").  On completion of the acquisition, the Atlantis UK project portfolio will be boosted by 50% and the turbine product offering will be expanded to include the SeaGen system.  A 1.2 MW SeaGen demonstration unit has been in operation at Strangford Lough in Northern Ireland since 2008 and is included in the acquisition

Tim Cornelius, Chief Executive of Atlantis Resources Limited commented:

"2014 was a seminal year for Atlantis and we have again reached new milestones for the Group and the wider tidal sector.  Having become the first tidal developer to successfully float on AIM, we then secured another industry first when we achieved financial close on a funding package of more than £51 million for the first phase of our flagship MeyGen project in Scotland, the world's largest tidal stream power development.  Construction is now underway at MeyGen, and it's exciting to see the onshore works begin to take shape.  We're on track to deliver our 1.5 MW turbine to the project for installation in 2016, and we've contracted industry leader Lockheed Martin as our major delivery partner for this first-in-class machine.

"The start of 2015 has been just as notable, culminating in our announcement of the execution of a sale and purchase agreement for the acquisition of MCT from Siemens AG in April.  This will bring a host of benefits to both our turbines and projects businesses, and is positive news for consolidation in an industry which continues to mature and grow."

For further information please contact:

Atlantis Resources Limited	via FTI Consulting
Tim Cornelius, Chief Executive Officer
Duncan Black, Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and Broker)	[phone]
Daniel Harris Jock Maxwell Macdonald Euan Brown
FTI Consulting	[phone]
Ben Brewerton Alex Beagley Stephanie Blott James Styles

 

CHAIRMAN'S STATEMENT

2014 and the start of 2015 have undoubtedly borne witness to the most exciting period yet in the history of our company.  Commencing in February 2014 with our public listing, and culminating in the execution of an agreement to acquire another major tidal player from Siemens AG this year, the team has worked tirelessly to realise the potential of this clean, green energy sector. 

Not least of our achievements has been the commencement of construction for the first phase of the MeyGen project - truly a world first.  In September 2014 we announced financial close on a £51 million funding package for construction and installation of the first 6 MW of the MeyGen development.  The total potential of this site is almost 400 MW - powering the equivalent of more than three quarters of the homes in Edinburgh.  In January 2015, the onshore works commenced to construct the building which will house the power conditioning equipment and control centre, and to drill the bores through which the power export cables will bring the energy to shore.  Offshore cable laying is scheduled to start in the summer, and we're on track to be producing electricity from the tides in 2016.  Atlantis, having originated the project and fostered its development from the start, remains an 85% shareholder in the project company, alongside fellow investor, Scottish Enterprise (through its Renewable Energy Investment Fund).  The funding package also included contributions from The Crown Estate, the Department of Energy & Climate Change, and Highlands and Islands Enterprise.

The turbines side of the business has continued to progress well, entering into a supply agreement to deliver a 1.5 MW AR1500 machine to MeyGen in 2016.  We have been working with Lockheed Martin Corporation to complete the detailed design and carry out component testing, and in March 2015 we signed up Lockheed Martin as our major delivery partner for the turbine.  This relationship continues to go from strength to strength, with Lockheed Martin also committed to delivering the yaw drive and variable pitch system for this first MeyGen turbine under our long term teaming agreement. 

The turbines business has been further bolstered by our recent announcement of the execution of a sale and purchase agreement for the acquisition of MCT, which boasts an unrivalled operating pedigree through its 1.2 MW installation at Strangford Lough in Northern Ireland, and which will diversify our product line with leaner, lighter machines for lower intensity sites and floating applications.  Siemens AG, the current owner of MCT, will not only become a significant shareholder in Atlantis as a result of this transaction, but will also commit to a continuing technology and equipment supply relationship for our mutual benefit.

The projects side of the business will also benefit from the MCT acquisition, which will boost the UK development pipeline by 50% to 600 MW of seabed leases and agreements for lease, extending our interests into England, Northern Ireland and Wales as well as building on our strong Scottish presence.  I look forward to updating you with news of these opportunities as we move into what promises to be another busy year for Atlantis.

Finally, I would like to thank the Atlantis staff and my fellow directors for all of their hard work in delivering our objectives, and to thank our shareholders whose continuing support we very much appreciate.

ANNUAL GENERAL MEETING

Our Annual General Meeting will be held on 24 June 2015 and the notice of meeting will accompany our annual report.  I look forward to the opportunity to meet our shareholders and to discuss our performance and the opportunities which lie ahead.

John Neill

Chairman

19 May 2015

 

CHIEF EXECUTIVE OFFICER'S STATEMENT

PROFILE

Atlantis Resources Limited, a global leader in the tidal power sector, is focused on two core business areas - the development of projects and the supply of turbines and associated equipment, both to third parties and to our own projects.  We're domiciled in Singapore, from where we manage our activities in Asia, but our principal project and operations office is in Edinburgh, supported by a design satellite office in Bristol and a corporate office in London.  There's been a lot of emphasis this year on the UK, and Scotland in particular, as we achieved financial close of £51 million of funding for the first phase of our MeyGen project, but we continue to work with our project partners to pursue project development and turbine sales opportunities in North America and Asia, and to identify sites and customers of interest around the world.  The two sides of the business, projects and turbines, are described below.

PROJECTS

Although we have been deriving energy from the tides for centuries, in its modern form the tidal industry is a relatively immature sector.  From the very start, therefore, we have recognised that it is not enough for us to create a successful technology solution - we also need to identify and develop the sites to host that technology.  This kick-starts a market for our turbines while also, crucially, building ourselves a founding stake in projects which are forecast to yield attractive returns.  With our agility and sector specific knowledge we have shown that we can take a greenfield site through the consenting, design and procurement process, secure project finance and attract new equity participants.  Construction has now started on the MeyGen project, and it is our objective to replicate this success across our portfolio.

TURBINES

The AR1500 design team continues to work closely with the MeyGen project team to ensure delivery of a turbine which can perform in the challenging and high energy environment of the Pentland Firth, and we've engaged Lockheed Martin as our quality and systems integration provider to ensure that the rigour and consistency born of a century in aerospace and defence flows through from the detailed design and into our manufacturing and assembly processes.  The MeyGen site is one of the most energetic tidal environments in the world, and the AR1500 is, consequently, a turbine which is built to not only survive extreme flows, but to exploit them.  This makes it the ideal choice for other top tier sites such as those elsewhere in the Pentland Firth and in the vast flows of Canada's Bay of Fundy, but the acquisition of MCT will add a new string to our bow, expanding the Atlantis product line with a smaller, lighter and less powerful turbine which may be the best economic choice for smaller scale or lower energy sites.  MCT's SeaGen turbine is also better suited than the AR1500 to floating applications, which show promise for the future - particularly for deeper water sites.  SeaGen's greatest attribute, however, is the operating record established by the two 0.6 MW demonstration units installed in Strangford Lough in Northern Ireland in 2008.  This deployment was a world first, and has produced, besides more than 9 GWh of electricity, an unsurpassed database of environmental monitoring, operations and maintenance information.  Atlantis intends to continue to operate this iconic asset, as well as pursuing opportunities for expansion of the site into a commercial array (for which a 20 MW agreement for lease has already been granted).

In pursuit of our ancillary technology products, Atlantis has been undertaking testing and development of its proprietary installation tools, designed to facilitate deployment and connection of turbines as safely and efficiently as possible, without the need for divers or submersible vehicles.  We also continue with the industry leading programme of work contracted to us by the ETI to develop the StreamTec foundation system for deployment at the MeyGen site.

SUMMARY OF RESULTS

Revenue in the year to 31 December 2014 was derived from the provision of consulting services, predominantly in relation to the ETI project for cost reduction in tidal energy which Atlantis has been contracted to deliver.  The Group's total revenue for the financial year ending 31 December 2014 was approximately S$5.3 million, reduced from S$6.2 million for the previous year as a result of there having been no equipment sales in this period.

Total expenses for the year ending 31 December 2014 were S$19.8 million, a rise of S$0.6 million from the previous year.  This increase is attributable to a doubling in the average number of employees from 17 for the year ending 31 December 2013 to 35 in the year ending 31 December 2014.  This workforce expansion was, in large part, in support of the construction of the MeyGen project; however, these costs are capitalised and funded as part of the MeyGen project funding.  The remaining additional employees, the costs of whom are expensed, are primarily engaged in the delivery of the AR1500 turbine to the MeyGen project under the Atlantis turbine supply agreement.

The loss for the year ending 31 December 2014 was S$16.2 million, an increase of S$6.5 million on the previous year.  The primary reason for the increased loss was the impact in the year ending 31 December 2013 of the "other gains" resulting from the negative goodwill arising from the acquisition of MeyGen, which was in part offset by additional financing costs relating to the conversion of shareholder loans.  The other factors contributing to the enlarged loss are the S$0.9 million reduction in revenue and the S$0.6 million increase in expenses as described above.

The Group's net assets were boosted to S$98.0 million at 31 December 2014 from S$21.6 million 12 months earlier.  This was a result of the capitalised expenditure on construction of Phase 1A of the MeyGen project, as well as increased cash, also primarily relating to funding for the MeyGen project.  Total liabilities fell from S$66.7 million at 31 December 2013 to S$48.6 million at 31 December 2014, chiefly as a result of the Company's conversion and repayment of shareholder loans.  This was, however, partially offset by an increase in borrowings relating, in the main, to the financing of MeyGen Phase 1A.  Total equity attributable to the owners of the Company rose to S$89.4 million at 31 December 2014 from S$21.6 million at 31 December 2013.

The net cash used in operating and investing activities was S$35.8 million, an increase of S$27.2 million from the previous period.  Net cash from financing activities for the year was S$58.0 million, of which S$35.6 million was the proceeds from the issue of shares and S$7.3 million was from borrowings.  Total cash and cash equivalents at 31 December 2014 were S$23.1 million, compared with S$0.9 million at 31 December 2013.

Timothy Cornelius

Chief Executive Officer

19 May 2015

FINANCIALS

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Year ended December 31, 2014

		2014		2013
		S$'000		S$'000
Revenue		5,279		6,190
Other gains		1,129		18,690
Employee benefits expenses		(7,016)		(4,667)
Other operating expenses		(5,375)		(5,867)
Subcontractor costs		(3,363)		(4,489)
Depreciation and amortisation		(3,185)		(3,201)
Research and development costs		(840)		(961)
Total expenses		(19,779)		(19,185)
Results from operating activities		(13,371)		5,695
Finance costs		(2,835)		(15,360)
Loss before tax		(16,206)		(9,665)
Tax credit/(expense)		11		(11)
Loss for the year		(16,195)		(9,676)
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations		996		(1,975)
Other comprehensive income for the year, net of tax		996		(1,975)
Total comprehensive income for the year		(15,199)		(11,651)
Losses attributable to:
Owners of the Group		(16,195)		(9,676)
Total comprehensive income attributable to:
Owners of the Group		(15,199)		(11,651)
Loss per share
Basic and diluted loss per share (S$)		(0.22)		(0.26)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

December 31, 2014

		2014		2013
		S$ '000		S$ '000
ASSETS
Non-current assets
Available-for-sale investments		-		-
Property, plant and equipment		70,508		3,007
Intangible assets		43,194		44,040
		113,702		47,047
Current assets
Cash and cash equivalents		29,247		2,620
Trade and other receivables		3,719		1,601
Other assets		-		37,052
		32,966		41,273
Total assets		146,668		88,320
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables		18,562		6,805
Provisions		795		1,104
Current tax payable		-		11
Loans and borrowings		-		38,762
		19,357		46,682
Non-current liabilities
Deferred tax		7,905		7,602
Loans and borrowings		21,375		12,414
		29,280		20,016
Total liabilities		48,637		66,698
Net assets		98,031		21,622

		2014		2013
		S$ '000		S$ '000
EQUITY
Share capital		185,500		114,906
Capital reserve		11,448		-
Translation reserve		280		(716)
Option fee		10		10
Share option reserve		4,932		3,994
Accumulated losses		(112,767)		(96,572)
Total equity attributable to owners of the Company		89,403		21,622
Non-controlling interests		8,628		-
Total equity		98,031		21,622

STATEMENTS OF CHANGES IN EQUITY

Year ended December 31, 2013

	Share	Translation	Option	Share option	Accumulated	Attributable to equity holder
	capital	reserve	fee	reserve	losses	of the Group
	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000
Group
Balance at January 1, 2013	111,282	1,259	10	3,435	(86,896)	29,090
Total comprehensive income for the year
Loss for the year	-	-	-	-	(9,676)	(9,676)
Other comprehensive income for the year	-	(1,975)	-	-	-	(1,975)
Total	-	(1,975)	-	-	(9,676)	(11,651)
Transactions with owners, recognised directly in equity
Contributions by and distributions to owners
Issue of share capital	3,621	-	-	-	-	3,621
Exercise of share options	3	-	-	-	-	3
Recognition of share based payments	-	-	-	559	-	559
Total	3,624	-	-	559	-	4,183
Balance at December 31, 2013	114,906	(716)	10	3,994	(96,572)	21,622

 STATEMENTS OF CHANGES IN EQUITY (cont'd)

Year ended December 31, 2014

	Share capital	Capital reserve	Translation reserve	Option fee	Share option reserve	Accumulated losses	Total	Non-controlling interest	Total
	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000
Balance at January 1, 2014	114,906	-	(716)	10	3,994	(96,572)	21,622	-	21,622
Total comprehensive loss for the year
Loss for the year	-	-	-	-	-	(16,195)	(16,195)	-	(16,195)
Other comprehensive income for the year	-	-	996	-	-	-	996	-	996
Total	-	-	996	-	-	(16,195)	(15,199)	-	(15,199)
Transactions with owners, recognised directly in equity
Contributions by and distributions to owners
Issue of ordinary shares	32,758	-	-	-	-	-	32,758	-	32,758
Conversion of convertible loans into shares during public offering	37,836	-	-	-	-	-	37,836	-	37,836
Recognition of share based payments	-	-	-	-	938	-	938	-	938
Dilution of interest in a subsidiary without change in control	-	11,448	-	-	-	-	11,448	8,628	20,076
Total	70,594	11,448	-	-	938	-	82,980	8,628	91,608
Balance at December 31, 2014	185,500	11,448	280	10	4,932	(112,767)	89,403	8,628	98,031

CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended December 31, 2014

	2014 S$ '000		2013 (restated) S$ '000
Operating activities
Loss before tax	(16,206)		(9,665)
Adjustments for:
Release of negative goodwill to income	-		(16,674)
Fair value of pre-existing interest in acquiree	-		(1,938)
FVTPL	-		3,189
Depreciation of property, plant and equipment	37		162
Amortisation of intangible asset	3,148		3,039
Interest expense	2,835		12,171
Bad debt expense	-		50
Share-based payments	938		559
Provisions made during the year	(309)		1,104
Net foreign exchange	727		(1,348)
Grant income	(668)		-
Operating cash flows before movements in working capital	(9,498)		(9,351)
Trade and other receivables	(2,411)		(852)
Inventory	-		1,636
Trade and other payables	7,574		2,759
Cash used in operations	(4,335)		(5,808)
Investing activities
Purchase of property, plant and equipment	(27,361)		(464)
Expenditure on project development	(4,080)		(1,908)
Acquisition of subsidiary, net of cash acquired	-		(418)
Net cash used in investing activities	(31,441)		(2,790)

 

Financing activities
Proceeds from grants received	4990		-
Proceeds from issue of shares	35,558		3,621
Share issuance cost	(2,800)		-
Proceeds from exercising of share options	-		3
Proceeds from borrowings	7,293		5,165
Repayment of borrowings	(2,400)		-
Deposits pledged	(4,446)		(1,712)
Interest paid	(262)		-
Non-controlling interest	20,076		-
Net cash from financing activities	58,009		7,077
Net increase (decrease) in cash and bank balances	22,233		(1,521)
Cash and cash equivalents at the beginning of the year	908		2,338
Effect of foreign exchange rate changes on the   balance of cash held in foreign currencies	(52)		91
Cash and cash equivalents at the end of the year	23,089		908

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 Wednesday, 24 June 2015.  The AGM Notice is also available on the company's website: http://www.atlantisresourcesltd.com/company-documents/notices.html.

 

END

 

 

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