Simec Atlantis Energy said MeyGen, the world’s largest tidal stream array, achieved initial revenue-recognition after the successful takeover of three turbines in Phase 1A, although the group loss for the period grew to £10.6 million from £7.3m.
The Fountainbridge-based business, formerly known as Atlantis Resources, in December announced that it was joining the business empire of billionaire industrial magnate Sanjeev Gupta. It noted its deal to acquire Uskmouth power station in south Wales from Simec Energy, a subsidiary of Gupta’s GFG Alliance, in a reverse takeover.The deal completed last week.
Simec Atlantis Energy also said the transaction is intended to be the first of several acquisitions by GFG Alliance “that will transform Atlantis into a diversified energy company of scale”.
Simec Atlantis Energy, which says it has a diversified portfolio of more than 1,000 megawatts in various stages of development, also said MeyGen last year saw all four turbines successfully installed and generating power to the grid, resulting in Renewables Obligation Certificates accreditation.
Formal completion of the construction phase was achieved early this year, with the array having generated more than 7 gigawatt hours of energy to date and in March set a new world record for monthly production from a project of its kind.
Additionally, in November, heads of terms were inked with the Duchy of Lancaster for an option for the long-term lease of the riverbed required to develop the Wyre estuary tidal barrage and flood-protection project.
Atlantis chief executive Tim Cornelius said 2017 “has been the most important year in the company’s history”, adding: “The Simec partnership provides us with transformational growth prospects as we move into an exciting new era, building a diversified sustainable energy business of material scale with the support of Simec and the GFG Alliance.
“Our focus now is on progressing the proposed conversion of the Uskmouth power station. We also remain focused on seizing the opportunities associated with the GFG Alliance’s high-quality renewable power asset pipeline by acquiring and developing operational, cash-yielding projects to drive the business forward and create a renewable energy platform that will deliver attractive returns for our shareholders.”
Analyst Adam Forsyth of Cantor Fitzgerald said in a note initiating coverage of the firm that its transformation into Simec Atlantis Energy “creates a major renewable energy development company with a pipeline of strong assets”.
He added: “The tidal opportunity remains but the Uskmouth project brings a really flexible asset into the mix and the portfolio beyond this is strong. Combined with the ability to secure offtake in long term agreements we think Simec Atlantis will offer a diversified opportunity of scale. We initiate with a target price of 75p and a ‘buy’ recommendation.”