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31 August 2021
CLEANTECH BUILDING MATERIALS PLC, NASDAQ FIRST NORTH GROWTH MARKET, COPENHAGEN
Cleantech Building Materials plc
Unaudited Interim Results to 30 June 2021
Cleantech Building Materials plc (“CBM” or the “Company” or the “Group”), presents its unaudited results for the six months ended 30 June 2021. The financial statements are appended to this announcement.
Strategy and Objectives
The CBM Group’s primary strategic objectives for 2021 are:
To engage a leading engineering, procurement and construction firm to lead the construction of an Accoya® Wood manufacturing facility in China.
Together with the Group’s chemical industry joint venture partner, Nantong Acetic Acid Chemical Company Limited (“NTAAC”), to ensure that the Accoya® Wood manufacturing facility is constructed on time and on budget, and operated efficiently.
To build relationships with large-volume wood product manufacturers through testing and trials in anticipation of Accoya® Wood being produced in the Group’s own factory.
To develop the Group’s marketing and sales initiatives to further expand market channels and offtake agreements in the Chinese and ASEAN markets.
The Group has made progress towards achieving these objectives during the six months ended 30 June 2021.
Financial Review of the Business
The Group’s revenues for the six months ended 30 June 2021 amounted to €680,000 (six months ended 30 June 2020: €447,000). The revenues recovered following the disruption of construction projects in China and the ASEAN regions due to the Covid pandemic in 2020.
The Group realised a net loss of €2,176,000 for the six months ended 30 June 2021 (six months ended 30 June 2020: €1,639,000). The net loss for the current period was mainly due to salaries, share option costs and professional costs. Strict cost control has limited the extent of the loss.
As at 30 June 2021, the Group had cash and cash equivalents of €60,000 (30 June 2020: €40,000) and net current liabilities of €211,000 (30 June 2020: €839,000). The Group’s equity and debt financing arrangements provide sufficient working capital to continue the expansion of the Group’s marketing and sales activities in China and the ASEAN markets, and to progress the financing and build plans for its own Accoya® Wood factory in China. The Group continues to closely manage its cash position to ensure that any costs of financing are mitigated as fully as possible. In December 2020, the Group obtained an additional loan facility of €1m to March 2022 to support the Group’s operations. In March 2021 the joint venture agreement with NTAAC was signed and NTAAC subsequently made capital contributions to the joint venture corresponding to agreed milestones. On 1 June 2021 the Family Office Investor made equity investments corresponding to agreed milestones.
The Group has been investing to increase its marketing and sales activities and has successfully appointed eight wholesalers and distributors of Accoya Wood in the China and ASEAN regions. These agreements include escalating volume purchase commitments over a three-year period in exchange for market segment exclusivity. All of these Offtake Distribution agreements are extendable beyond 2021, conditional on sales performance. The Group foresees a growing order book from 2021 onwards; but in the short term remains constrained by Titan Wood’s limited supply of Accoya® wood until the Group has completed the construction of its own Accoya® wood factory.
The Group continues to work closely with our Chinese JV partner, NTAAC, to progress the construction of the first Accoya® Wood factory in Asia. Once the Group is producing its own Accoya® wood, the CBM Board believes the financial performance of the Group will be radically transformed.
On 31 March 2021 the Group announced the signing of a comprehensive joint venture agreement with NTAAC to form a joint venture company, Jiangsu Dragon Wood, (“JDW”) that will develop and operate an Accoya® Wood factory in Nantong China.
On the 18 May 2021 the Group announced that the joint venture company, JDW, had signed a long-term contract for land, utilities and various tax incentives with the Nantong local government’s Administration Committee of Jiangsu Rudong Yangkou Port Economic Zone. Under this contract, JDW will acquire 16 hectares of land on which it will build the factory. The factory will initially produce 40,000 m3 of Accoya® Wood annually, but the land available will potentially allow expansion of the factory to increase annual production to 480,000 m3 of Accoya® Wood.
On 1 June 2021 the Group announced that the Family Office Investor, which signed a Subscription Agreement in 2019 to invest €15 million euros based on agreed milestones, had made a further equity investment at €1.25 per share related to milestone 2 completion. This is the third equity investment made by the Family Office, demonstrating their commitment to CBM and JDW.
Finally, on 28 June 2021, the Group announced that our subsidiary, Diamond Wood China Limited, (“Diamond Wood”) had entered into a distribution and offtake agreement with Halogen Corporation. Halogen Corporation are based in Ho Chi Minh City and sells prestigious building material brands for its customers from its facility in Thuan An City, and throughout Vietnam across its distribution network. This is the latest of a number of distribution agreements that Diamond Wood have signed, creating an extensive distribution network across China and the ASEAN Region.
Events after the reporting date
No material matters to report.
The interim financial information for the six months ended 30 June 2021 was approved by the Board for release on 31 August 2021.
THE DIRECTORS OF CLEANTECH BUILDING MATERIALS PLC ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT
Further information may be found at the Company's website at www.cbm-plc.com
Cleantech Building Materials plc
Keswick Global AG (Certified Adviser)
IFC Advisory Limited (Financial PR)
+44 20 3934 6630
The information communicated in this announcement is “inside information” for the purposes of article 7 of the Market Abuse Regulation 596/2014.