Velocys posts £5.7m loss in interim half-year results

Sustainable aviation fuel (SAF) company Velocys today (21 September) announced a £5.7m loss before income tax for the six-month period covering January to June this year.

Velocys's Altalto facility in Immingham could convert up to 500,000 tonnes of municipal solid waste into fuel for planes and cars each year

In the same six-month period in 2021, the company lost £2.2m. Velocys says their losses last year were lower because they included a gross profit of £3.3m.

The “key components” of the loss, Velocys says, are operating expenses including staff-related costs, reference project spend, depreciation and amortisation and “other corporate running costs”.

Despite the loss, the company struck an optimistic tone, saying that it had “continued to successfully pursue its commercialisation strategy against an increasingly favourable legislative backdrop”.

“Our interim results show tangible progress with multiple milestones reached over the course of the period,” Henrik Wareborn, Velocys’s CEO, said. “The progress we have made, alongside the policy tailwinds, creates a solid platform for the company to deliver.”

‘Policy tailwind’

In partnership with British Airways, Velocys is developing the ‘Altalto’ facility in Immingham, North East Lincolnshire, which could convert up to 500,000 tonnes of municipal solid waste into fuel for planes and cars each year (see letsrecycle.com story).

The progress we have made, alongside the policy tailwinds, creates a solid platform for the company to deliver

  • Henrik Wareborn, CEO of Velocys

In his statement, Mr Wareborn welcomed the launch of the UK’s ‘Jet Zero’ strategy in July. The strategy includes an ambition for a minimum of five commercial-scale SAF plants to be under construction in the UK by 2025 and a mandate for at least 10% SAF to be blended into conventional aviation fuel by 2030.

Mr Wareborn said: “Both these initiatives bode very well for Altalto, which is exactly the type of commercial-scale SAF plant the UK government is seeking.

“We look forward to the outcome of the government’s pledge to further work with industry to create the long-term conditions for investable projects in the UK.”

Altalto

During the first half of 2022, Velocys continued site engineering, geotechnical work and the integration of carbon sequestration at the Altalto site in readiness for connection to the East Coast Carbon Capture and Storage cluster (see letsrecycle.com story).

It also welcomed Foresight Group LLP to the Altalto project, selling the private equity investment manager the subsidiary it set up to own the site for £9.75m. Velocys retains an option to repurchase the company in up to three years’ time.

In the same period, Velocys applied to the Department for Transport to obtain a share of the £165m available from the Advanced Fuels Fund launched in July 2022. The fund prioritises commercial scale SAF plants that require additional support to become ready for investment and construction.

And, with a group of partners, the company submitted a separate application under the Advanced Fuels Fund competition for a share of the £22m specifically allocated for e-fuels projects. Velocys says the fund provides an opportunity to conduct feasibility, technical validation and potentially site selection for projects in the UK.

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