Home » AFYREN announces its 2023 half-year financial results

AFYREN announces its 2023 half-year financial results

19 September 2023

Press release

New progress in commercial, industrial, and extra-financial terms:

A solid financial situation as of June 30, 2023:

Clermont-Ferrand/Lyon, September 19, 2023, at 7:30 a.m. CEST – AFYREN, a greentech company that provides manufacturers with low-carbon, bio-based products through its unique fermentation technology based on a completely circular model, today announced financial results for the half-year ended June 30, 2023, and approved by the Board of Directors on September 18, 2023.

Nicolas SORDET, CEO of AFYREN, stated: “The first half of the year has seen significant progress on several key projects for AFYREN. Thanks to a major mobilisation of all its teams, AFYREN NEOXY is close to the start of continuous production and the successful transition to industrial scale, to meet the sustained demand of its customers. The commitment of our teams has also enabled us to make parallel progress on our discussions with our partner for the creation of a joint venture in Thailand. As a result, we are progressing on the roadmap that should enable us to operate three plants in France and abroad by 2027”.

Update on AFYREN NEOXY’s progress

In June 2023, AFYREN announced significant progress in the plant’s production operations and the delivery of the first batches of bio-based organic acids.

Since June, the work to make operations more reliable and start continuous production has made tangible progress: the technical solutions identified are gradually being deployed, and the positive results mean that AFYREN NEOXY can expect to reach breakeven in the first half of 2024 (initially planned for the end of the 2023 financial year).

As a reminder, once industrial production started, AFYREN plans to gradually ramp up volumes to produce 16,000 tonnes of carboxylic acids per year at full capacity. This production, which offers a unique, low-carbon, local alternative to petroleum-based competition, has applications in markets as varied as human and animal nutrition, flavour and fragrances as well as lubricants and technical fluids.

Since the beginning of 2023, strategic customers have renewed their confidence in the project led by AFYREN, confirming commercial commitments for cumulative contractual revenue of over €165 million.

Ongoing structuring of joint venture agreement with Mitr Phol in Thailand

In January 2023, AFYREN announced that it entered into a partnership project with Mitr Phol, a world leader in the sugar industry, to set up a biorefinery in Thailand to serve the Asian market which represent 25% of the carboxylic acids global market. This second plant project aims to achieve a production capacity of around 28,000 tonnes per year at full capacity.

Discussions concerning the project’s joint venture (70% owned by AFYREN and 30% by Mitr Phol) are in advanced stages. The next step is the signature followed by engineering studies to specify the investment required and the schedule for construction and production start-up.

Success of the first HR barometer (AFYREN Global People Survey)

In January 2023, AFYREN organised its first internal barometer for all employees. Carried out in the form of an online survey on themes such as support for Group strategy and objectives, internal relations, quality of working life, and skills development and recognition, the barometer was a resounding success, with a 97% employee participation rate.

It highlighted strengths and areas for improvement at various levels of the organisation. It was followed by collective workshops, organised from April to July 2023 within each team, to co-construct concrete action plans. A Group action plan based on certain initiatives is also being rolled out.

AFYREN is setting up a long-term monitoring system to track progress: a second HR barometer is scheduled for 2024.

Strengthening of AFYREN NEOXY’s financial situation

In the first half of 2023, AFYREN NEOXY’s financial situation was reinforced to secure the progress of the AFYREN NEOXY start-up phase.

In March 2023, AFYREN NEOXY secured a €5 million overdraft facility with BNP for 2023, reduced to €2.5 million in 2024, to cover financing needs arising during the start-up phase (pre-financing of disbursements of grants, etc.).

In April 2023, AFYREN NEOXY took out a €1 million Innovation loan (Prêt Innovation) with Bpifrance. The loan is repayable in 31 quarterly instalments, including a deferred principal repayment on the first 11 instalments.

In accordance with existing financing agreements, AFYREN and Bpifrance subscribed in May 2023 to a €3.5 million capital increase (of which €2 million subscribed by AFYREN) and €3 million convertible bond issue by AFYREN NEOXY (of which €1.5 million subscribed by AFYREN).

Other financing has been secured since June 2023: a €6 million New Industry loan (Prêt Nouvelle Industrie) subscribed in August 2023 with Bpifrance and two factoring contracts signed in September 2023 with BPCE Factor concerning receivables from French and foreign customers.

Net loss in line with development progress and solid financial position

See table 1 in our press release

The Company’s revenue amounted to €1.96 million in the first half of 2023, up 11% from €1.76 million in the first half of 2022. Revenue is essentially made up of income from patent and know-how licenses of the Group, unchanged from the first half of 2022, and income from various contracts entered into with AFYREN NEOXY, up compared with 2022, because of various technical services provided in the context of the start-up of the plant.

Net operating expenses amounted to €5 million in the first half of 2023, compared with €4.3 million in the first half of 2022, an increase of €0.7 million.

This increase was mainly attributable to:

Operating expenses include €0.4 million related to development costs for the Group’s future plants, increasing by €0.2 million compared with the first half of 2022. In addition, research and development spending recognised as expenses increased from €0.6 million in the first half of 2022 to €0.9 million in the first half of 2023.

After recognition of other expenses of €(0.5) million, current operating income was €(3.1) million, the increase in expenses was partially offset by the increase in revenue.

Financial result records a €0.7 million improvement thanks to financial income from cash and cash equivalent investment.

The share accounted for in AFYREN NEOXY’s net income was €(2.5) million in the first half of 2023, compared with €(1.4) million in the first half of 2022. This change is mainly related to the plant’s operating expenses, in the absence of revenue. AFYREN NEOXY will recognise revenue when acid batches are delivered to its customers from continuous production.

Net income was €(5.1) million at the end of June 2023, compared with €(4.2) million at the end of June 2022: the net loss reflects a phase in which AFYREN and AFYREN NEOXY teams have been fully mobilised by the reliability and start-up of the first plant and the development of subsequent plants.

See table 2 in our press release

As of June 30, 2023, AFYREN has a solid balance sheet with Shareholder’s equity of €65.9 million, the decrease compared to end of December 2022 coming from the net loss of the period.

As of June 30, 2023, AFYREN’s total financial debt was low, at €5.2 million including lease liabilities and €4.9 million excluding lease liabilities .

The Group has a cash position of €52.7 million which enables it to meet its obligations and finance its future developments. Cash outflows over the period totaled €9.7 million, of which €3.5 million related to the strengthening of the AFYREN NEOXY financial position and €3.6 million from the repayment of a convertible bond subscribed in March 2020, against €1 million of new loan subscription (Prêt Innovation). Adjusted for these items, the underlying cash burn was €3.6 million.

2027 outlook

As part of its growth strategy, the Company aims to achieve the following by 2027:

These objectives depend on certain variables, in particular:

[…]

Download the Press Release