Atlantis Energy hails 'breakthrough' year despite widening losses

Simec Atlantis Energy, the Edinburgh-based renewable power firm, has more than doubled its annual losses in 2018, but said the year was in many ways a “breakthrough” period for the listed group.

Chief executive Tim Cornelius says the aim is for Atlantis to be the leading independent generator of sustainable energy in the UK. Picture: Jon Savage.

The firm, which has offices in Edinburgh’s Fountainbridge, also said its pioneering ­MeyGen tidal energy project in the Pentland Firth generated revenues of £2.1 million in the 12 months to December.Additionally, it is to receive compensation of £5m for the collapse of its planned purchase of a portfolio of Scottish hydro schemes. Overall group losses for the year to December came in at £24m, a year-on-year increase of £13.4m that was attributed to “significant” changes in the group in the period.It flagged that increased depreciation expense of £5m and finance costs of £1.5m were due to MeyGen becoming operational in April of that year and the acquisition of Simec Uskmouth Power (SUP) in the following June. “SUP acquisition costs and financial results also contributed to the increased loss,” Atlantis added.MeyGen has produced more than 17 gigawatt hours of sustainable energy to date “and has exported more electricity to grid than any other tidal project”, Atlantis stated.The firm, which said it has a diversified portfolio of more than 1,000 megawatts in various stages of development, also highlighted milestones such as in June 2018 raising £20m.“Funds raised continue to be used for incremental project development activities across the Atlantis portfolio and to secure opportunities for portfolio growth as well as working capital funding for the enlarged group.”Tim Cornelius, chief executive of Atlantis, commented: "In many ways, 2018 was a breakthrough year for Simec Atlantis.“Our ambition is to grow quickly to become the leading independent generator of sustainable energy in the UK and we are making significant steps towards achieving that goal: we have commenced work on the world's first conversion of a coal power station to 100 per cent waste derived fuel at Uskmouth; and we are expanding MeyGen.“Our sustainable energy projects are not just good business, they are making a meaningful contribution towards tackling some of the biggest issues facing society today: climate change and the war on plastics."Looking at 2019, in March Atlantis raised more than £5m to secure funding for the acquisition of Green Highland Renewables (GHR). The deal had been announced in November 2018, with Atlantis having agreed to acquire GHR from its largest shareholder Simec Energy in a £124.7m deal.Atlantis said earlier this month that it was no longer proceeding with the purchase as planned - and was considering “an alternative transaction structure” in relation to GHR.The firm in a separate filing yesterday that as a result of the revised transaction the net proceeds will be used for the company's “general corporate purposes”.It said Simec has agreed to pay Atlantis £5m in cash to be released from its obligations under the agreed deal, and is to make a £2m interest-free committed debt facility available to Atlantis.Such additional financial resources will be used towards delivering its flagship 220 megawatt Uskmouth waste-to-energy conversion project.Cornelius added: "Although not the original intention, this is an excellent outcome for Atlantis. We will end up with more near-term cash to deploy on key development projects which are intended to deliver the largest possible returns for investors.”