Decision to initiate early capacity expansion ahead of plan and review the company’s operational and financial goals due to increased customer interest
- Net sales for the period amounted to SEK 1,313 thousand (232).
- The loss after financial items amounted to SEK -66,224 thousand (-21,071).
- Cash flow from operating activities amounted to SEK -52,711 thousand (-15,994).
- Cash flow from investing activities was SEK -93,240 thousand (-29,492).
- Earnings per share, before and after dilution, amounted to SEK -2.2 (-0.9).
- The net cash position* equaled SEK -254,867 thousand (-711,996).
*A negative number means that the total cash exceeds the total interest bearing debt.
Significant events during the interim period
- No significant events have occured during the period.
- On October 19, Renewcell signed a letter of intent with Kelheim Fibers GmbH for production of up to 10 000 metric tons of Circulose®-based fibers.
- During October, the Company received the first loan disbursements corresponding to approximately SEK 320 million.
- At the beginning of December 2021, all production of Circulose® dissolving pulp at Renewcell’s plant in Kristinehamn certified as 100% recycled according to Recycled Claim Standard (RCS).
- During December, Renewcell signed for multi-year purchasing agreements with three different European textile sorters – SOEX in Germany, Texaid in Switzerland, and Sysav in Sweden.
- Net sales for the period amounted to SEK 2,778 thousand (1,453).
- The loss after financial items amounted to SEK -133,430 thousand (-68,722).
- Cash flow from operating activities amounted to SEK -117,695 thousand (-54,897).
- Cash flow from investing activities was SEK -312,174 thousand (-30,195).
- Earnings per share, before and after dilution, amounted to SEK -4.3 (-3.3).
Significant events after the interim period
- Due to increased customer interest, the company has decided to initiate an expansion of production capacity in Renewcell 1 (Ortviken) from 60,000 to 120,000 metric tons ahead of plan. The company is also initiating an evaluation of the opportunity to raise its operational goals. BNP Paribas and Carnegie have been retained by the company to explore the financing for raising the operational goals.
Other events after the interim period
- On January 12, 2022, Levi’s new version of Levi’s was released the classic 501 with the name “Levi’s 501® Original Designed for Circularity” using a blend of Circulose® and organic cotton.
- In cooperation with the leading Chinese manufacturer of viscose filament yarn Yibin Hiest, Renewcell has successfully used 100 percent Circulose® pulp for the production of viscose filament yarn in industrial scale which opens up further product segments for 100 percent Circulose® fibers among sportswear, which replacement for polyester filaments and among luxury goods such as replacement for silk.
Decision to initiate expansion and evaluate raised goals due to increased customer interest
As we mark a year since project start, I can happily state that despite a very tight timeline, we are still in phase with our original planning with the establishment of Renewcell 1 in Ortviken. The assembly of our 17-tonne roller presses and the introduction of a large number of new employees during the fourth quarter were two of the clearest signs that we are maintaining a high pace in our progress.
Like businesses everywhere, we have experienced challenges in timely delivery of building materials and key components as well as increased shipping costs. I am grateful that our careful work to minimize risk in the beginning of the project now gives us the tools to be able to push back cost increases to a large extent. We have also been able to successfully balance short term cost increases with long term savings to remain within budget for Renewcell 1 as a whole.
Our team in the demonstration facility in Kristinehamn has new record highs during the quarter. Record production for 24 hours, for a week, for one month and for a quarter are all reflected in our best production figures to date. However, the main focus for operations at the Kristinehamn facility remains to carry out tests to ensure that the start-up of Renewcell 1 (Ortviken) is as smooth as possible. We have signed new cooperation agreements that lays the foundation for a European “closed loop” for textiles. This kind of regional closed loop is highly sought after by fashion brands and policy makers. On the supplier side, we entered into long-term new collaborations with three European sorters of consumer textiles.
Over the past year, the market has shown a sharp increase in interest in Circulose®. We have proven our ability to sell industrial quantities to our customers for both commercial fiber production and testing. In addition to our Letter of Intent with Germany-based Kelheim Fibres for the production of up to 10,000 metric tons of Circulose®-based fibers per year, the dialogues about commercial collaborations with other fiber producers and brands have been intensified.
Due to an increased customer interest we have decided to initiate the expansion from 60,000 to 120,000 metric tons capacity ahead of plan. In addition, we are reviewing the opportunity to bring forward the target of 360,000 metric tons in capacity from 2030 to already 2025. BNP Paribas and Carnegie have been retained by the company to explore the financing for raising the operational goals.
In 2022, Renewcell will lead the global textile industry into a new era of large-scale circularity. I feel proud that in 2021, point by point, we have delivered on a very ambitious, and at times pressured, plan that has taken us to where we stand today. I would like to thank our 110 committed, knowledgeable and flexible employees for helping our customers move forward in the marketing of Circulose®- based clothing, supporting and finding ways to solve problems while at the same time developing and implementing our culture of Care and Progress”.
Stockholm, February 2022
Patrik Lundström — CEO