Quadrise Fuels International Plc [LON:QED] the London-headquartered synthetic emulsion fuels developer has published its final results to end-June 2024.
The biofuels manufacturer reported a loss after tax of GBP2.9m, down marginally by 6.5% from a loss of GBP3.1 a year ago. The numbers would have been better but Quadrise committed GBP1.3m to administrative and corporate expenses and GBP1.5m to production and development costs.
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As previously reported, Quadrise has, despite still being in loss-making territory, had a year of progress after a challenging 2023 mainly due to delays in key projects in Utah and Morocco. With those problems behind them the company is confident of a turn of fortune.
Quadrise progress slower than anticipated
Jason Miles, the company’s CEO said in a statement to the market: “We acknowledge that progress during the period has been slower than we had previously anticipated, however the time for Quadrise technology delivery is now and the team are focused on achieving that goal [… We] entered the 2024/25 financial year with strong momentum and [are] preparing to play [our] part in accelerating the global transition away from fossil fuels.”
The company’s total assets improved from GBP5.3m to GBP6.3m year-on-year and it improved its cash position y-o-y by 130% to GBP3m. The firm has booked cumulative tax losses of GBP64.7m which it could potentially offset against future profits.
Prior to the end of 1H24, Quadrise said that its partnership with MSC (Mediterranean Shipping Company) and Cargill in Antwerp to trial its biofuels on the MSC Leandra with the world’s largest container shipping company was advancing at pace. The AIM-listed company said it had secured operating permits ahead of schedule and was ready to install its plant and machinery at the test site as soon as the tripartite cooperation agreement was signed, which is imminent.
Quadrise gets good news in Utah
The company also got regulatory greenlights from the State of Utah’s Board of Oil, Gas and Mining, which has long-been a thorn in Quadrise’s side, to progress its joint venture with Valkor Technologies to commercialise Heavy Sweet Oil (HSO) recovered from sands within the designated Asphalt Ridge area. The plan details unit operations for enhanced oil recovery and the establishment of an Enhanced Recovery Unit on behalf of project sponsors Heavy Sweet Oil LLC and AC Oil LLC.
Commercialisation requires the use of the latest enhanced oil recovery techniques for low-carbon extraction and processing. Production of the HSO by Valkor will commence from the pilot wells using electrical heating initially to maintain oil flow, as the HSO is extremely viscous otherwise at reservoir conditions. After one-to-two years the electrical heating will be replaced with steam and CO2 flooding. This will provide stable long-term production for 20+ years per well.
As previously reported, once a minimum of USD15m of project finance is raised by Valkor, they will pay Quadrise USD1m under the terms of the Site License and Supply Agreement concluded in June 2023. A further USD0.5m is then due upon delivery of an MSAR Manufacturing Unit from Quadrise to the project site in Utah, followed by quarterly payments of USD75,000 for technology transfer and marketing support.
Although not yet breaking even, Tom Fraine, an equity research analyst for broker Shore Capital is still bullish about Quadrise. He said: “We see considerable potential for Quadrise’s fuels to support decarbonisation in shipping and other industries, whilst lowering costs and being safer and simpler to use compared to conventional fuels.”
Fraine continued: “Further credibility to Quadrise’s opportunities was confirmed on the announcement [of…] a supply agreement with Cargill, a major supplier of biofuels and one of the largest private companies by revenue in the world. We also see OCP as a very attractive partner in Morocco and note the near-term prospect of revenues being paid in relation to Quadrise’s project with Valkor in Utah.”
Quadrise shares opened trading on 8th October at 1.4125p, up 96% over one-year but down 50% year-to-date with its shares ranging between 0.66p and 3.47p over a 52-week period. The company has a market cap of GBP24.7m.
