Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Quadrise Fuels International: Year Of Progress Despite Coronavirus

Published 05/10/2021, 09:23
Updated 17/08/2023, 13:25

During FY21 Quadrise (LON:QFI) made significant progress on trials in each of its target sectors: industry, marine, upstream and power; and launched a bio-fuel branded as bioMSAR. Progress has been slower than management expected, primarily because of COVID-19 restricting travel and site access. Nevertheless, the funds raised in March still provide the cash resources to progress the ongoing trial programmes to commercial revenues and positive sustainable cash flows even though management’s estimated timescale for this has slipped from calendar year (CY) Q422 to CY Q123.

EPS Estimates

Share price performance

Share Price Performance

Progress on three trial programmes despite delays

Following the signing of a joint development agreement in January 2021, Quadrise and MSC Shipmanagement could potentially start on-vessel, commercial-scale trials as early as CY H122. If successful, the trials may be followed by commercial roll-out of bioMSAR and/or MSAR across MSC’s global fleet. Recent tests on samples from Greenfield Energy’s site in Utah have confirmed that heavy sweet oil from the site is suitable for conversion to both MSAR or bioMSAR for potential power and marine applications. Quadrise and the customer in Morocco are preparing for a larger-scale industrial trial in early CY Q421 and a commercial trial later in the same quarter. Recent third-party tests on Quadrise’s new biofuel show CO2 savings that are materially ahead of existing biofuels.

Cash runway to sustainability maintained

Quadrise is still pre-revenue. Stripping out share option and exceptional charges, operating losses narrowed by £0.3m y-o-y in FY21 to £2.9m, reflecting lower administrative costs. Free cash outflow decreased by £0.6m to £2.4m. Quadrise completed a placing and oversubscribed open offer in March, raising £7.0m (gross) at 2.7p/share, leaving the group with £7.0m cash, no debt and no convertible securities at end FY21. Despite the programme delays, management expects it has the cash resources to progress the ongoing trial programmes to commercial revenues and positive sustainable cash flows by CY Q123.

Valuation: Modest adoption transformational

Based on data from the company, our scenario analysis calculates that even modest adoption of MSAR would generate material profits. A single refinery producing MSAR equivalent to 1.9Mtpa heavy fuel oil (HFO) under a licensing model would generate $15.9m in annual EBITDA (see our November 2020 outlook note).

Exhibit 1: Financial summary

Income Statement

BALANCE SHEET

Cash Flow

Read original article here

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.