Scirocco Energy PLC (AIM:SCIR) has updated investors on its first year with the EAG subsidiary, a 50% owned sustainable energy venture, describing it as a strong and projection-exceeding period.
EAG during the year acquired Greenan Generation Limited (GGL) which operates an anaerobic digestion (AD) plant in Northern Ireland – where it generated some 4mln kilowatt hours of power. That is equivalent to the annual usage of 1,250 homes, Scirocco noted.
The company noted that the AD plant achieved operational availability in excess of 93%, and, earnings (EBITDA) for the period are estimated at £602,000 after £295,000 of investment in mechanical upgrades and improvements made to “future proof” the GGL asset.
Scirocco chief executive Tom Reynolds said EAG has “validated the strategic focus on this asset type” and that further investments are being assessed actively.
"GGL has performed strongly, exceeding projections at the point of acquisition and demonstrating the highly cash-generative, profitable nature of the asset acquired. This strong cash flow profile has meant that EAG/GGL is self-sustaining and has enabled re-investment into the asset to enhance operational performance and improve EBITDA margins, with no further investment from Scirocco. Surplus cash generated by GGL will now be available to support further acquisitions," Reynolds added in a statement.
Chris Kerr, EAG managing director, commented: "Given the pipeline of projects that EAG has secured in the green gas and circular economy spaces over the last 12 months, we are looking forward to the continued support of Scirocco as our primary investor.
“Delivering even half of our current pipeline will create a business of significant scale which we can all be hugely proud of."
Kerr added: “Optimisation of the Greenan asset by the EAG team has delivered excellent numbers in our first year of ownership, and we are excited to deliver additional similar projects in 2023, as well as partnering with a global nutrient manufacturer to deliver phase one of our bio-fertiliser plant roll out.
“With the technical pathway to upgrade our AD residues into high-value growth media and fertiliser, EAG is in the perfect position to serve the ever-growing demand for sustainable gas and fertiliser."