Link to release here
23 September 2021
Velocys Gross Profit £3.3m first half 2021
Velocys plc (VLS. L), the sustainable fuels technology company, is pleased to announce its interim results for the six
months ended 30 June 2021.
Henrik Wareborn, CEO of Velocys, said:
“Our interim results demonstrate that Velocys has achieved an important milestone, recognising £8.2m of revenue
and £3.3m gross profit in HY2021 from our first major commercial customer contract. The downwards trend in our
operating loss continued, declining to £2.0m in HY2021 from £2.6m in HY2020 (£5.2m in HY2019 and £11.0m in
HY2018). This shows that the Company is controlling its spending well whilst also delivering to our customers and
progressing our two reference projects towards funding for their FEED stages and then onto financial close. “At the same time, I am pleased with the safe and efficient operational performance of Velocys despite the challenges
of COVID-19, and excited about the sustainable fuels market dynamics and the business development opportunities
available to us for the short, medium and long term.”
Financial highlights
• Revenue of £8.2m (HY2020: £0.2m), mainly from licensing fees and sales of reactors and catalyst for
customer contract awarded in 2017.
• Gross profit of £3.3m (HY2020: £0.1m).
• Operating loss of £2.0m (HY2020: £2.6m).
• Cash at period end of £8.3m (31 December 2020: £13.1m).
• Cash outflow of £4.8m (HY2020: cash outflow £3.2m).
Operational highlights (including post period events)
Significant momentum across the Company’s reference projects and commercial collaborations:
• Bayou Fuels (Mississippi, US) reference project:
• Advancement of multiple pre-FEED workstreams.
• Koch Project Solutions (part of Koch Industries Inc) appointed via a Strategic Framework Agreement to
provide a turn-key EPC contract.
• The Biden Administration in the US announced in early September an extensive programme of policy
support to accelerate the supply of sustainable fuels in aviation and highlighted Velocys’ technology as a
key contributor to scaling up sustainable aviation fuel (“SAF”) production.
• Advanced discussions held for potential fuel offtake arrangements.
• Preparations underway towards project financing for the FEED stage of the project which is expected to
occur in HY1 2022.
• Altalto (UK) reference project:
• British Airways extended the Altalto option agreement with Velocys thereby demonstrating continued
commitment for domestic UK SAF production.
• Altalto was awarded a grant under the Green Fuels Green Skies of £2.4m in August by the UK
Government to cover 100% of the costs to advance this critical waste conversion facility for the UK for the
next 7 months. Page 2 of 25
• Continued technical development of the project and discussions to drive UK Government policy to support
future funding of the project.
• Commercial SAF projects:
• Collaboration agreement signed with Toyo Engineering in Japan to start development of their commercial
scale biomass-to-jet fuel project along with other renewable fuel opportunities
• Velocys selected by Toyo Engineering to supply a compact FT reactor for a demonstration project to
convert CO2 and Hydrogen directly to synthetic “e-fuels” via Artificial Photosynthesis.
• Fuel from the NEDO demonstration in Japan was used in a commercial flight on 17 June by Japan
Airlines powered by a 25% blend of SAF and fossil standard Jet A1 fuel. This was the first time globally a
commercial flight was fuelled by such a large blend percentage of synthetic jet fuel made from woodchips.
• £8.1m revenue recognised from US customer project following completion of a contract awarded in 2017.
• Other highlights:
• We have appointed two new Non-Executive Directors; Ann Markey and Tom Quigley who bring extensive
corporate finance and renewables experience to the Board.
• In July 2021 a £0.5m loan awarded in 2020 by the Small Business Administration, a US Federal Agency,
from the Paycheck Protection Program as part of the US Government’s stimulus package in April 2020
was fully forgiven and became a grant.
• Continued investment into our IP strategy and strengthening of the IP portfolio.
• Completion of the evaluation and design of the de-bottlenecking of the reactor core manufacturing line as
a pre-cursor to streamlining and expanding Velocys reactor manufacturing capacity.
Outlook
• The final stage of preparing the US Bayou Fuels project for its FEED fund raise is underway to take
advantage of increased investor appetite for advanced fuel decarbonisation technologies in the US alongside
achieving the best possible technical readiness to commence FEED. Velocys is targeting completion of fuel
offtake agreements for the project ahead of completion of substantial third-party FEED project funding which
is currently expected in H1 2022. The Company believes that securing substantial FEED funding will
significantly de-risk funding for the remainder of the project to financial close. Velocys will be a key supplier to
the project following commencement of FEED.
• Global government policy support to accelerate SAF supply is increasing, as evidenced by the recent
announcement by the White House in the US and separately the UK Government’s SAF mandate consultation
process. Whilst there is a significant lead time to construct and deliver commercial scale biorefineries, Velocys
is confident that having first of a kind projects in FEED with world leading partners will provide us with many
more commercial opportunities to offer executable pathways to achieve the “net-zero” targets of our clients
globally. Certain information contained in this announcement would have constituted inside information (as defined by Article 7
of Regulation (EU) No 596/2014) prior to its release as part of this announcement.
For further information, please contact:
Velocys Henrik Wareborn, CEO Andrew Morris, CFO Lak Siriwardene, Director of Communications & Sustainability
+44 1865 800 821
Panmure Gordon (UK) Limited (Nomad and joint broker) Hugh Rich (Corporate Broking) Emma Earl (Corporate Finance) John Prior (Corporate Finance) +44 20 7886 2500
Shore Capital Stockbrokers Limited (Joint broker) Henry Willcocks (Corporate Broking) Toby Gibbs (Corporate Advisory) James Thomas (Corporate Advisory) Liam Zabludowicz (Corporate Advisory)
Radnor Capital Partners (Investor Relations)
Joshua Cryer Iain Daly +44 20 7408 4090 +44 20 3897 1830 Page 3 of 25
Field Consulting (General PR)
Rob Jeffery
+44 20 7096 7730
Notes to Editors Velocys is an international UK-based sustainable fuels technology company. Velocys designed, developed and now
licenses proprietary Fischer-Tropsch technology for the generation of clean, low carbon, synthetic drop-in aviation and
road transport fuel from residual woody biomass and municipal solid waste. The Velocys technology can also enable
the production of zero carbon fuels for the airline industry from renewable power and CO2. Velocys is at present developing two reference projects: the Bayou Fuels project in Natchez, Mississippi, USA
(incorporating Carbon Capture and Storage) and the Altalto project in Immingham, UK, to produce fuels that significantly
reduce both greenhouse gas emissions and key exhaust pollutants for aviation and road transport. Originally a spin-out
from Oxford University, in 2008 the Company acquired a US company based on complementary reactor technology
developed at the Pacific Northwest National Laboratory. Velocys is headquartered in Oxford in the United Kingdom. www.velocys.com