New long-term target for Scandinavian Biogas for 2030, 3 TWh biogas production, mainly Bio-LNG

Energy
February 23, 2022

SIGNIFICANT EVENTS IN THE FOURTH QUARTER OF 2021

  • Sales volumes for the period are the highest of the year.
  • Stable positive cash flow from operating activities.
  • In Sweden, the investment project Stockholm bio-LNG (liquid biogas) has been launched.
  • In Norway, the Skogn II project is on track, and the plant has received ISCC certification.
  • Klimatklivet has granted investment aid of SEK 154 million for the project in Mönsterås.

RESULTS FOURTH QUARTER 2021

  • Energy sold increased by 7.4% to 93.3 (86.9) GWh.
  • Net sales totalled SEK 104.8 (82.3) million, corresponding to an increase of 27.4%.
  • Total income, including capitalised work, increased by 20.5% and amounted to SEK 124.6 (103.4) million.
  • EBITDA was SEK 22.7 (20.8) million.
  • Operating EBITDA was SEK 18.6 (15.0) million.
  • The operating EBITDA margin was 16.1% (16.1).
  • Profit/loss after tax amounted to SEK 1.1 (-12.0) million.
  • Basic and diluted earnings per share totalled SEK 0.04 (-0.39).
  • Cash flow from operating activities amounted to SEK 11.3 (42.4) million.

EVENTS IN 2021

  • Energy sold increased by 3.3% to 366.3 (354.7) GWh.
  • Net sales totalled SEK 393.8 (338.4) million, corresponding to an increase of 16.4%.
  • Operating EBITDA was SEK 80.9 (70.3) million.
  • The operating EBITDA margin was 19.2 (19.1) %.
  • In June, a corporate bond of SEK 700 million and a revolving facility of SEK 300 million were issued.
  • During the third quarter, the agreement for deliveries of Bio-LNG from Sweden and Norway with the Dutch filling station chain Rolande was expanded.
  • The growth plan has progressed, investment decisions for the Skogn II and Stockholm Bio-LNG projects have been taken.

SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD

  • New long-term target for 2030 defined – 3 TWh biogas production.
  • Reinforcement of a growth function in the Group management to meet the growing demand for Bio-LNG.

We have decided on a new long-term target for 2030 says MATTI VIKKULA President and CEO of SCANDINAVIAN BIOGAS FUELS INTERNATIONAL. The target for biogas production in 2030 is 3 TWh.

Investments must be steered towards sustainable projects and activities if the EU’s climate targets are to be met. This means that investors, companies and policy makers need tools to compare different investments from a sustainability perspective. They also need a standardised system that defines what is sustainable. A key important event in 2021 will be the introduction of the EU Green Taxonomy, a classification system for environmentally sustainable investments. The taxonomy applied already from 2021 and will be tightened year by year. Biogas fits well into the Taxonomy due to its advantages, it is produced mainly from waste products, manure and sewage sludge, and the residues can be reused as, e.g. fertilizer.

In the autumn budget of 2021, the Swedish Parlia- ment decided on a long-term strategy for further in- vestment in biogas until 2040. The budget now in- cludes a biogas production subsidy of SEK 500 mil- lion for 2022, increasing to SEK 700 million per year thereafter. More money will be injected into Klimat- klivet, with SEK 800 million in 2022, SEK 1.955 mil- lion in 2023 and SEK 3.155 million in 2024. The injec- tion of more money into Klimatklivet will help to ex- pand biogas production, among other things. This is important, not least to meet future EU requirements for biowaste recycling and manure digestion, areas where we are well positioned. The conditions for long-term investment in biogas plants are now in place.

During the year, we have continued to develop and invest in capacity expansion in line with our growth plan. In December, we announced that, together with local farmers, we plan to invest in a Bio-LNG (liquid biogas) production plant in Mönsterås. The Mön- sterås project has been granted SEK 154 million in investment support from Klimatklivet. We will also in- vest in our facility in Södertörn, which is expected to be the largest bio-LNG (liquid biogas) production fa- cility in Northern Europe. The total investment amounts to approximately SEK 300 million, and the plant is expected to be in production by the end of 2023. Klimatklivet has granted investment aid of SEK 145 million for the project.

The highest sales volume of the year was achieved in the fourth quarter, although production in the Swedish operations was negatively impacted by planned plant maintenance. The Norwegian operations continue to deliver at a stable and high level and significantly higher than last year. The same applies to the Korean operations, which delivered a stable quarter, slightly better than last year. Energy prices have risen sharply in the fourth quarter in a volatile market. Prices for future deliveries have also increased for Bio-LNG across Europe, driven mainly by the in- creased demand for heavy transport.

To meet the increased demand for Bio-LNG and to seize new market opportunities, we are strengthening the organisation with a growth-focused corporate function. The new organisation is effective from 1 February 2022 and will create opportunities to oper- ate outside our current home market in the Nordic region.

In conclusion, we have delivered a fairly strong quar- ter. Biogas deliveries increased from 86.9 GWh to 93.3 GWh, an increase of +7.4% compared to the previous year. Total revenues, including capitalised work, in the fourth quarter increased by 20.5 percent and amounted to SEK 124.6 million (103.4). Operat- ing EBITDA increased by 24.3 percent to SEK 18.6 (15.0) million, corresponding to a margin of 16.1 per- cent.

We expect very good long-term development, mainly based on increased demand for biogas with an im- proved price development. The announcement by the Swedish government of increased investment in the production of biogas in Sweden also supports this de- velopment, driven in particular by increased demand for heavy transport in Europe.

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