Stobart impacted by biomass plant commissioning delays

By Erin Voegele | November 01, 2017

Stobart Group Ltd. has released interim results for the six months ended Aug.  31, reporting its Stobart Energy division was impacted by continued delays in the commissioning of third-party power plants in Europe. Those delays have impacted short-term volumes by 33 percent, the company said.

"Our Energy business has improved EBITDA per tonne, despite experiencing delays by our partners in commissioning new power stations,” said Warwick Brady, CEO of Stobart Group. “This has caused some volatility and impacted short-term performance, with no impact on the duration of our long-term contracts, which begin post commissioning.”

Stobart Energy said it is the number one supplier of biomass in the U.K., souring and supplying fuel to more than 30 biomass plants under a mix of short- and long-term contracts. During the six months ended Aug. 31, the company sold 382,775 metric tons of biomass fuel, down from 469,259 metric tons supplied during the same period of last year. Underlying EBITDA per metric ton was £12.01 ($15.92), up from £10.44 during the six months ended Aug. 31, 2016. Revenue for the Stobart Energy division reached £29.7 million, down from £36 million during the same period of last year. Divisional underlying EBITDA was £4.6 million for the six months ending Aug. 31, down from £4.9 million during the same period of last year.

In its financial report, Stobart indicated that the Mersey Bioenergy and Tilbury Green Power plants have experienced longer than expected commissioning periods. Sobart said the MBE plant completed its 28-day continuous commissioning period in May. Commercial operations should have commenced following the commissioning period. However, Stobart indicated commercial takeover of the plant has yet to happen. TGP started its commissioning period in March, but major damage to the plant in July means the commissioning period wasn’t expected to resume until October. Stobart also said it is continuing to experience challenges in the form of severe delays in relation to three new plants at Templeborough, Margam and Port Clarence.

In addition, Stobart discussed plans to focus on refuse derived fuel (RDF) and solid recovered fuel (SRF) opportunities in the medium- to long-term in anticipation of expected growth in demand from a new wave of energy-from-waste (EFW) plants. Stobart said it is currently in talks with a number of EFW plants to provide a full-service solution that encompasses fuel aggregation, construction services, and power plant operating and maintenance services.

In addition to the Energy division, the Stobart Group also includes Stobart Aviation, Stobart Rail and Civil Engineering, Stobart Infrastructure and Stobart Investments. Overall, the company reported revenue of £124.6 million for the six months ended Aug. 31, up from £65.3 million during the same period of last year. Underlying EBITDA was £131.8 million, up from £20.2 million.