The SIMEC Atlantis Energy Ltd (LON: SAE) share price rallied 10% after releasing its interim results for the six months ended 30 June 2023. The company revealed that it generated a profit before tax of £4.5 million, marking a significant improvement from the £8.6 million loss reported in H1 2022.
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The profits generated during the period were driven by recognising the £10 million development premium paid by Uskmouth Energy Storage Ltd as revenues after the Uskmouth land lease agreement was signed on 20 June 2023. The company’s finances also benefited from the massive restructuring of the company in 2022.
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Due to the restructuring, SIMEC Atlantis incurred lower depreciation and employee costs than H1 2022. However, the company’s results could have been better were it not for the turbine repair and maintenance costs incurred at the MeyGen site, although the costs were lower than in the previous year.
The company generated revenues from selling its first battery energy storage system (BESS) development project at Uskmouth. The 230 MW BESS was sold via a land lease agreement with Uskmouth Energy Storage Limited, a Quinbrook Infrastructure Partners company.
SIMEC received the remaining balance of £4.0 million in July 2023 after the signing of the land lease. The company received the first instalment of £6.0 million as a loan in 2022, now recognised as revenue after the deal’s completion.
SAE also issued an update about its flagship MeyGen Phase 1 project, which operates successfully, although one turbine is out of commission as it undergoes preventative and upgrade works. The turbine will resume operations sometime next year, and the three other turbines are all working well.
The operations team at MeyGen is excellently operating and maintaining the MeyGen Phase 1 turbines. The team has developed invaluable expertise and experience, enabling the ongoing successful operations of the MeyGen Phase 1 project and will also be transferred to the Phase 2 project.
As for the Meyen Phase 2 project, the company announced it had won 22 MW over four Contracts for Difference (CfDs) from the UK government in the AR5 allocation round. The company now has a total array of 50 MW after winning 28 MW in the AR4 allocation round.
SIMEC Atlantis (SAE) share price.
The SIMEC Atlantis (SAE) share price rallied 10% to trade at 1.1275p, from Tuesday’s closing price of 1.0250p.
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