LONDON (Alliance News) - Velocys PLC Wednesday said its pretax loss was slightly narrower in 2015 as the company continues to progress its first gas-to-liquids plant that will act as an example in the hope of demonstrating the company's technology and ambitions.
The small scale gas-to-liquids company said its pretax loss in 2015 amounted to GBP21.1 million compared to the GBP23.3 million loss reported in 2014 after reporting a rise in income. The loss before exceptional items amounted to GBP21.6 million compared to a GBP22.0 million loss the year before.
Revenue before exceptional items rose to GBP2.0 million in the year from GBP1.7 million in 2014, but its gross profit fell to GBP727,000 from GBP1.2 million.
Total administrative expenses rose to GBP26.7 million from GBP25.8 million, but a rise in other income to GBP3.8 million from only GBP56,000 allowed Velocys to report a narrower operating loss of GBP22.2 million compared to the GBP24.5 million loss last year.
"Our technology is differentiated and is being rolled out at ENVIA, and the next challenge is to determine exactly where we must focus commercially. Even with current commodity prices the economics of smaller scale gas-to-liquids plants are attractive in certain markets," said Chief Executive David Pummell.
The gas-to-liquids plant being built for ENVIA Energy will act as Velocys' commercial reference plant to demonstrate the company's technology. ENVIA Energy is the name of the joint venture company in which Velocys holds a stake as the company looks to build a plant capable of producing renewable fuels and chemicals from biogas and natural gas.
Velocys said it made "good progress" during 2015 at ENVIA Energy's gas-to-liquids project in Oklahoma City in Mid-West US. The company said the manufacture of reactors and catalysts has been completed whilst the fabrication of all modular process units finished and delivered.
The project is expected to be fully funded through to completion, commissioning and operation with mechanical completion expected in the middle of this year, the company said.
"Under [CEO] David Pummell's leadership the reinvigorated Velocys team has started 2016 on a firm footing and is focused on delivering the completion and operation of ENVIA Energy's gas-to-liquid plant. Once it is up and running, Velocys will be a very different business, with a leadership position in smaller scale GTL in the important North American market," said Chairman Pierre Jungels.
Velocys shares were trading down 5.0% to 35.65 pence per share on Wednesday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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