(Sharecast News) - Simec Atlantis Energy announced a profit before tax of £4.5m for the first half of 2023 on Wednesday, marking a notable shift from the £8.6m loss reported during the same period last year.
The AIM-traded firm put the impressive financial turnaround down to a £10m development premium, recognised as revenue after inking the Uskmouth land lease agreement with Uskmouth Energy Storage on 20 June.
Last year's restructuring efforts by the group appeared to bear fruit amid reduced employee and depreciation costs.
Even though the company's financial performance was somewhat impacted due to maintenance and repair costs associated with the MeyGen tidal turbine, the expenses were still less compared to the same time in 2022.
Of the £10m development premium from the Uskmouth deal, £4m was received in July.
Simec noted that the initial £6m was obtained in 2022 as a loan and later recognised as income on signing the land lease in June.
Finance costs for the company remained relatively stable, closely aligning with the figures from the prior year.
However, the group's unaudited consolidated cash position as of 30 June totalled £1.5m, reducing from £3.4m at the same time last year.
The financial statement also highlighted that cash and cash equivalents included encumbered deposits worth £0.8m, which remained unchanged year-on-year.
"I am pleased to report a strong first half of 2023 for Simec Atlantis Energy, with SAE completing the sale of its first battery energy storage system (BESS) development project at Uskmouth and delivering much improved financial performance with a profit of £4.5m, a result both of the development premium realised from the sale of this first BESS development project as well as the significant restructuring of the business undertaken in 2022," said chairman Duncan Black.
"SAE has built and continues to develop a strong pipeline of projects on which it is actively executing with a clear focus on delivering on our strategy to develop alternative energy solutions."
At 1003 BST, shares in Simec Atlantis Energy were up 11.02% at 1.14p.
Reporting by Josh White for Sharecast.com.
Simec Atlantis (SAE)