Esken Ltd (LSE:ESKN, OTC:ESKNF), the aviation and renewables group, saw its shares drop after it cut the profit forecast for its Esken Renewables business following unplanned outages at biomass plant customers.
These unforeseen outages have reduced the total volume of waste wood supplied by Esken Renewables and the associated gate fee income, Esken said in a statement.
As a result, the forecast for Esken Renewables' underlying profit (EBITDA) has been reduced to £20mln for the year ending 28 February 2023 from the previously guided £22mln.
The company expects more normalised plant operating levels in full-year 2024.
It said Esken Renewables has entered into a new sub-supply agreement to support the Chilton Biomass plant, which will replace the supply currently provided from the Port Clarence processing and storage site.
Esken Renewables will close the Port Clarence site on 31 March 2023 and this action, alongside the new sub-supply agreement, is expected to deliver an additional £0.9mln of annual recurring EBITDA from 1 April 2023.
The closure of the Port Clarence site will also generate a one-off cash inflow of £0.9mln after exit costs.
The new sub supply arrangement does not impact the Chilton Biomass Fuel Supply Agreement with Esken Renewables, which runs to December 2029.
Esken shares were down 1.89% at 5.79p midmorning, having fallen to 5.35p earlier.