VLS.L Share News (VLS)

(Sharecast News) - Sustainable fuels technology company Velocys reported a fall in revenue to £22k, from £0.39m year-on-year, in its interim results on Wednesday.
The AIM-traded firm did manage to shrink its operating loss to £5.2m for the six months ended 30 June, before exceptional items of credit of £0.6m, which was narrower than the £11m operating loss it reported a year ago, although that was before exceptional items of £14.3m.

It did note that the commercial scale FT reactor demonstration in Oklahoma was "safely and comprehensively" concluded during the period, with complete decommissioning of the site, return of the two FT reactors to Velocys and sale of certain assets and return of the site to one of its joint venture partners for a total of 3.3m.

That was now fully paid, with £1.7m paid during the period and £1.6m post period end, the board reported.

Cash at period end stood at £1.3m, down from the £7.0m the company reported at the end of the 2018 financial year, while its first half cash outflow totalled £5.1m, swinging from a cash inflow of £8.9m in the first half of 2018.

The company completed a fund raise of around £7m before expenses post period end, in July.

Velocys also noted that complementing commitments had been received from the Altalto Immingham waste-to-sustainable-fuels project's strategic partners, British Airways and Shell, of £2.8m in total post period end, also in July.

On the operational front, the firm said "good progress" had been made in delivering its sustainable fuels strategy.

It explained that the Bayou Fuels Mississippi project had been "transformed" during the period by changing the power source to solar, and including carbon dioxide capture, which reduced the project's carbon intensity score, improving project returns, and creating what the board described as an "attractive differentiator" for investment into the project.

The Immingham UK project had completed all pre-front end engineering and design (FEED) work, and had submitted its planning application.

Additional funding from Velocys' partners in the project, which was received post period end, had ensured that the company reach the FEED stage in the next few months, the board confirmed.

It also reported delivery of one reactor and all catalyst to its client Red Rock Biofuels in the period.

Manufacture of the remaining reactors was now underway.

Looking ahead, Velocys said the revised, "truly renewable"-focussed profile of the Bayou Fuels Mississippi project was aiding discussions with partners and investors to progress to the next stage of development.

Advancing the Immingham UK project into FEED with industry partners Shell and British Airways, and towards financial close in 2021, was said to be a "key" objective.

Delivery of the remaining reactors in 2019 to Red Rock Biofuels was also actively underway.

"2019 has been a positive year for the company," said Velocys chief executive officer Henrik Wareborn.

"The demand for our Fischer Tropsch technology is growing on both sides of the Atlantic, which is why we have concentrated our efforts on project development and reactor manufacturing.

"These last six months have seen Velocys accelerate the move from concept to commercialisation - transitioning from research, development and testing, to focusing on commercial scale client delivery and operational excellence."

Wareborn noted that the company delivered its first reactor and all catalyst charges to its client in Oregon - Red Rock Biofuels - with the manufacture of the remaining reactors advancing.

"We are now focusing all our efforts on commercial delivery - for our client in Oregon and for our two projects in Mississippi- Bayou Fuels - and Immingham - Altalto.

"None of this would have been possible without the recent support of our shareholders new and old along with the hard work and dedication that all our staff have put in to achieve the company's goals."