Cleantech Building Materials: Unaudited Interim Results to 30 June 2022
30 September 2022
CLEANTECH BUILDING MATERIALS PLC, NASDAQ FIRST NORTH GROWTH MARKET, COPENHAGEN
TICKER: CBM
Cleantech Building Materials plc
Unaudited Interim Results to 30 June 2022
Cleantech Building Materials plc (“CBM” or the “Company” or the “Group”), presents its unaudited results for the six months ended 30 June 2022. The financial statements are appended to this announcement.
Strategy and Objectives
The Group’s primary strategic objectives for 2022 are:
1. To advance the engineering, procurement and construction of an Accoya® Wood manufacturing facility in China;
2. To build relationships with large-volume wood product manufacturers through testing and trials in anticipation of Accoya® Wood being produced in the Group’s own factory;
3. To develop the Group’s international marketing and sales initiatives to further expand market channels and offtake agreements; and
4. To develop the Group’s relationships with key suppliers of Radiata Pine and Acetic Anhydride.
The Group has made progress towards achieving these objectives during the six months ended 30 June 2022.
Financial Review of the Business
The Group’s revenues for the six months ended 30 June 2022 amounted to € Nil (six months ended 30 June 2021: €680,000). This is due to the transfer of the commercial activities to the joint venture in Nantong, China from August 2021.
The Group realised a net loss of €2,412,000 for the six months ended 30 June 2022 (six months ended 30 June 2021: €2,176,000). The net loss for the current period was mainly due to salaries, share option costs and third party legal, financial and engineering professional costs. Strict cost control has limited the extent of the loss.
As of 30 June 2022, the Group had cash and cash equivalents of €464,000 (30 June 2021: €60,000) as well as an available facility of approximately €2.9m, and an equity commitment to finance the Chinese joint venture. The Company has net current liabilities of €177,000 (30 June 2021: €211,000).
The Group’s current business is the importing and marketing of Accoya® Wood, which the Group has done since 2008. The Group has sufficient financing available to operate this existing import business on a going concern basis. The Group’s Directors are of a view that an opportunity exists for the Group to build and operate its own Accoya® factory in China.
In order to fund its operations and the construction of the new factory, the Group has a loan facility available from a third party, the financing commitments by Nantong Acetic Acid Chemical Company Limited and a leading Chinese bank, and the 10 July 2019 subscription agreement for €15m. However, the provision of the funds is inherently uncertain, as they are conditional on the achievement of project milestones related to the construction of the Accoya® Wood factory in China. These milestones include certain government approvals and project execution deliverables. Several key milestones have already been achieved, and the Company has received equity funds in relation to these milestones. In summary, the validity and success of our business plan is dependent on many factors, some outside of the direct control of the Group’s management.
Despite these uncertainties, the Directors are confident that the Group has sufficient financing in place to build an Accoya® Wood factory and to execute the Group’s business plan and to fully realise the carrying amount of the non-current assets.
Once the Group is producing its own Accoya® Wood, the CBM Board believes the financial performance of the Group will be radically transformed.
Business Update
During 2022 the planned Chinese factory project has continued to advance, with key government approvals being received for “Energy Conservation Review” and the “Social Impact Review”, which are key gateways for the construction of the Accoya® production facilities. The Energy Conservation Review is an especially difficult one for industrial projects, due to the Chinese central government’s strict new controls implemented during 2020 and 2021.
LBT Shanghai was engaged to localise the Basic Engineering Technology Design, resulting in a detailed Front End Engineering Design as the basis for the construction.
The unprecedented lock-downs in China, and particularly in the Shanghai region, delayed the Accoya® Wood factory project by several months. The situation has stabilised, and management is taking actions to mitigate the delay.
On 9 August 2022 we announced the appointment of Colin McKendrick as CEO. Colin’s high level experience of working in China in the chemical production sector will significantly enhance our capabilities as we move towards the construction and operation of the factory.
Sales continue to be constrained by the lack of Accoya® Wood supply from Europe. The European Accoya® Wood factory is expected to bring new capacity online during H2 2022, which should provide some small additional volumes. It is the Directors’ view that the demand in China and ASEAN markets will only be satisfied once the Group completes its China Accoya® factory.
Events after the reporting date
No material matters to report.
The interim financial information for the six months ended 30 June 2022 was approved by the Board for release on 30 September 2022.
THE DIRECTORS OF CLEANTECH BUILDING MATERIALS PLC ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT
Further information may be found at the Company's website at www.cbm-plc.com
Further Enquiries:
| Cleantech Building Materials plc Adrian Wyn-Griffiths | info@cbm-plc.com +44 20 3934 6630 |
| Keswick Global AG (Certified Adviser) | info@keswickglobal.com +43 1 740 408045 |
| IFC Advisory Limited (Financial PR) Tim Metcalfe Zach Cohen | +44 20 3934 6630 |
The information communicated in this announcement is “inside information” for the purposes of article 7 of the Market Abuse Regulation 596/2014.
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