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Scandinavian Biogas Fuels International AB (publ) Year-end report for the period 1 January – 31 December 2020

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Stock exchange listing, successful SEK 350 million new share issue, finalised acquisition of Biokraft Holding AS and Ekdalens Biotransporter AB – pro forma full-year EBITDA of SEK 103.6 million.

Fourth quarter in brief

  • Listing on Nasdaq First North Premier Growth Market, first day of trading 16 December.
  • Directed new share issue with gross settlement of SEK 350.0 million before transaction costs. 
  • Finalised acquisitions of Biokraft Holding AS and Ekdalens Biotransporter AB, now wholly owned subsidiaries.
  • The Group signed a multi-year contract with a customer in Europe for delivery of liquid biogas (LBG).
  • COVID-19 has affected the Group's sales of gas to a limited extent.
  • Net sales totalled SEK 82.3 million (99.7), a year-on-year decrease of 17.5% due primarily to maintenance stop to improve stability at Skogn was completed and production is operating at full capacity since February.
  • EBITDA was SEK 20.8 million (29.0).
  • Operating EBITDA for the period was SEK 15.0 million (17.0). 
  • The Group posted a loss after tax of SEK -12.0 million (-5.5).
  • Earnings per share amounted to SEK -0.39 (-0.33).  
  • Operating cash flow totalled SEK 42,4 million (21.9).   

Full-year in brief

  • Listing on Nasdaq First North Premier Growth Market, first day of trading 16 December.
  • Directed new share issue with gross settlement before transaction costs of SEK 350.0 million. 
  • Finalised acquisitions of Biokraft Holding AS and Ekdalens Biotransporter AB, now wholly owned subsidiaries.
  • The Company’s outstanding 2016/2020 bond loan of SEK 230 million was repaid on 10 February 2020 and replaced with a private credit facility of SEK 200 million, which was repaid on 30 September 2020 and replaced with a senior credit facility with significantly better terms.
  • COVID-19 has affected the Group's sales of gas to a limited extent.
  • Net sales totalled SEK 338.4 million (363.6), a year-on-year decrease of 6.9%.
  • EBITDA was SEK 80.6 million (87.8).
  • Pro forma EBITDA was SEK 103.6 million (103.7) including the acquisition of Ekdalens Biotransporter AB.
  • Pro forma operating EBITDA % was 22.4% (20.7).
  • The Group posted a loss after tax of SEK -63.2 million (-55.9).
  • A total negative impact on earnings of SEK 18.1 million was posted due to the judicial decision in Korea.
  • Earnings per share amounted to SEK -2.07 (-3.32).
  • Operating cash flow totalled SEK 89,4 million (0.00). 

Significant events after the end of the period

As anticipated, the Swedish Board of Agriculture confirmed in early 2021 that the total biogas subsidy scheme will amount to SEK 200 million for the year, with applications accepted from April through December 2021. No payments will be received under the scheme during the first quarter. Management expects the total subsidy amount for 2021 to be received according to plan, although over a nine-month, rather than twelve-month, period. 

Management's assessment is that the production stability issues in Skogn have been completed and thus LBG production is again expected to be at planned level.

No other significant events have occurred after the end of the period.   

All financial information in this report pertains to the Group unless otherwise specified. Figures in brackets relate to the year-earlier period.

Every care has been taken in the translation of this report. However, in the event of discrepancies, the original Swedish will supersede the English translation.

CEO comments on the period

‘The listing of the Group’s shares on Nasdaq First North Premier was by far the most significant event for the full year 2020. With the new share issue of SEK 350 million before transaction costs, we were able to secure equity financing for the Group’s growth plan while also gaining a broader, stronger ownership base. Anchor investors in the issue were Länsförsäkringar Fondförvaltning, Handelsbanken Hållbar Energi and Skandia Sverige Hållbar. Together, they acquired shares for SEK 130 million.

In another important and welcome step on our path forward, our Norwegian partner TrønderEnergi has now converted its investments in Biokraft, our previously jointly owned subsidiary, into shares in the Group. TrønderEnergi is now the Group’s largest shareholder.

The acquisition of Ekdalens Biotransporter improves the Group’s position in the market for industrial and agriculture-related organic waste streams for biogas production. The acquisition is an important step in the development of the Group’s business and gives us better oversight of the upstream and downstream production process in the value chain.

Operationally, the year started off well and satisfactorily in the first quarter. Unfortunately, performance deteriorated during the second quarter when COVID-19 impacted our customers and, consequently, our operation. We were able to secure improved profitability and cash flow for the Group during the third quarter. However, maintenance measures conducted at the plant at Skogn during Q4 had a negative impact on LBG production volumes. Our assessment is that the production stability issues in Skogn have been completed and thus LBG production is again expected to be at planned level.

 

The COVID-19 pandemic has had a major impact on the economy globally and in Scandinavia. It has had some impact on the Group’s business due to lower levels of raw production at the Stockholm treatment plants and somewhat weaker demand from certain customers, while recovery from the pandemic has been delayed. On the brighter side, the Swedish government confirmed in its autumn budget that it is preparing a long-term production subsidy scheme based on the Biogas Commission’s proposal published in late 2019. The Group is also seeing greater interest in biogas from large customers, particularly for liquid biogas (LBG). Conditions for the Swedish biogas industry will therefore be improved. In 2021, we will continue to focus on increased production and on the planned growth plan’

Matti Vikkula
President and CEO

Scandinavian Biogas will publish the report for the fourth quarter of 2020 on Thursday, February 18 at approximately 12.00 A conference call for investors, analysts and the media will be held at 15.00. The report will be presented at the conference call by President and CEO Matti Vikkula and CFO Anna Budzynski. The presentation will be held in English and will begin with a short presentation of the report followed by a question-and-answer session.

To participate in the conference call, use https://tv.streamfabriken.com/scandinavian-biogas or visit Scandinavian Biogas’s website, where you will also find the presentation material and related information. No physical meeting will be held.

The telephone number for the conference is:

Sweden: +46850558374
United Kingdom: +443333009267
United States: +18332498407

The year-end report 2020 for Scandinavian Biogas Fuels International AB (publ) is now available on www.scandinavianbiogas.com.

For further information, contact Matti Vikkula, CEO, and president,
Mobile; +46 70 597 99 38
E mail; matti.vikkula@scandinavianbiogas.com

The information in this press release is such that Scandinavian Biogas Fuels International AB (publ) must disclose in accordance with the EU Market Abuse Regulation (EU MAR) No. 596/2014. The information was submitted for publication on February 18, 2021, at 12:00 CET.

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