LONDON (ShareCast) - (Sharecast News) - Waste gas-to-energy technology company EQTEC reported improved revenues of €1.56m (£1.38m) in its first-half results on Wednesday, up from €0.55m year-on-year.
The AIM-traded firm said its loss for the six-month period ended 30 June was €1.96m, widening from €1.87m at the same time last year.

It had announced a debt restructuring and placing in June, carrying out a debt-for-equity swap for a total of £2.70m of existing debt, resulting in a reduction of around 60% in its debt obligations.

The company said it had also raised £0.75m with new and existing shareholders during the period, and had implemented a cost reduction programme to reduce cash costs through to July next year.

Net current assets at period end stood at €0.53m, swinging from net current liabilities of €2.65m at the end of the 2018 year, while net assets were €15.80m as at 30 June, rising from €11.87m at the end of December.

On the operational front, the board noted that it had updated its business strategy and refined it to focus on three key verticals during the half-year, those being the recovery of clean energy from biomass, industry-specific elimination of waste streams, and the elimination of waste streams.

It signed a conditional memorandum of understanding with COBRA Instalaciones Y Servicios and Scott Brothers Enterprises during the period, to jointly develop the proposed 25MW Billingham Energy waste gasification and power plant.

EQTEC also noted the signing of a framework agreement with Phoenix Biomass Energy to jointly develop biomass gasification power projects in the United States, with five projects already identified, including North Fork and NAPA.

It also agreed with Phoenix to acquire a 19.99% ownership of North Fork Community Power for the development of a 2MW biomass project in North Fork, California, for a consideration of $2.5m (£2.01m), to be satisfied by the supply of certain items of the existing equipment currently held at EQTEC's Newry site.

Since the period ended, the company had appointed David Palumbo to its board in August, and as chief executive officer in September.

Dr Yoel Aleman was also appointed to the board, as chief technical director, in August.

It confirmed that cash cost reduction initiatives, including certain cash salary reductions for directors and senior managers of the firm, were currently being implemented.

An equipment sale and services contract with NFCP was signed, with a sales value of €2.2m to EQTEC, payable in stages according to a schedule of certain agreed milestones, with the first payment being €0.88m on NFCP's financial close.

The company said the NAPA Project special purpose vehicle was set to be relocated to an adjacent site to accommodate a larger 2MW capacity power plant, with planning having already been resubmitted in July.

Planning permits were expected to be in place in the first quarter of 2020, and construction and installation was intended to start immediately after receipt.

EQTEC also noted that SI Capital was appointed as its sole broker since the period ended.

"The group is concentrating on the three abovementioned verticals in the highly attractive waste to energy market," said non-executive chairman Ian Pearson.

"We have made progress in all three and specifically in the recovery of clean energy from biomass for projects in California.

"Our framework agreement with Phoenix, which involves five identified projects, has already demonstrated progress for EQTEC, with the group engaged to provide its proprietary EGT to Phoenix for two power plants in California."

Pearson said the design work for the first power plant in Napa County had already been completed and paid for, with the firm having also agreed with Phoenix to acquire a 19.99% ownership of NFCP on financial close, for a consideration of $2.5m, to be satisfied by the supply of certain items of the existing EGT equipment currently held at the Newry site.

"In September, we entered into an equipment sale and services contract with NFCP, with a sales value of €2.2m to EQTEC, payable in stages according to a schedule of certain agreed milestones, with the first payment being €0.88m on NFCP's financial close, which is currently anticipated to occur in October.

"With over 90,000 hours of operational data at the Movialsa plant in Spain which eliminates olive pomace waste and recovers energy, we believe we are the reference gasification technology for this waste stream and believe we are well positioned to secure new projects.

"EQTEC is in continued discussions with a major Spanish business group, which is active in the sector, to partner and collaborate on potential projects in Spain."

The company was also seeking other partnerships in the space to supply technology and services to other olive pomace waste producers in the greater Mediterranean area, Pearson explained.

"During the first half of 2019, we continued to make strong progress in developing our project pipeline in all targeted sectors and this has continued into the second half of the year with the signing of the NFCP Equipment Sales and Services contract, which, assuming financial close, will represent a significant milestone for the group.

"The focus of the board will be on building on the foundation for growth, focusing on increasing sales in the context of a leaner organisation, continuing to solidify the capital structure of the group and focus on funding requirements including establishing new funding structures for project finance and additional funds to continue with its activities and its planned development programme.

"We look forward to keeping shareholders updated on key developments going forward."

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