Annual report for the period 1 January – 31 December 2020
During a year characterized by Covid-19, the development of existing projects has continued largely according to plan, and despite the pandemic, we have managed to establish ourselves in the US market without being physically in place. We have taken a major step towards our aim of becoming a leading investor in geothermal energy production.
The result of – SEK 71.3 million compared with +2.5 SEK in 2019 is partly due to the strengthened krona which affected the result by – SEK 22.8 million. Despite the fact that the business has developed positively and the shares in the portfolio companies have increased in value in local currency, this means a net write-down of SEK 6.9 million. Furthermore, interest expenses increased by SEK 22.9 million compared with the previous year, of which interest expenses for the bond accounted for SEK 13.2 million. The interest rate has been unchanged during the year and the increased cost is due to the company paying interest for 12 months in 2020, but in 2019 only for parts of the year. The remaining increase in interest expenses is attributable to increased loans from the parent company and ultimately the company’s owners. The negative result is also an effect of the company choosing to be conservative in the valuation of ongoing projects.
In 2020, we have, among other things:
- Commissioned two power plants in Japan. At the end of April, the first project, Waita, was commissioned. At the beginning of June, the second power plant, Midori, was commissioned. Ryuta Hiratsuka was hired as the new CEO of Baseload Power Japan after Ito Masahiro.
- Continued work on a number of projects in Taiwan. Drilling began at the end of August for the Westlake project, which is expected to be the first commercial geothermal project in Taiwan. The project development was delayed due to some of the drilling equipment getting stuck in the drilling pipe at a depth of 630 meters, but is now up and running.
- Converted the convertible loan issued by Baseload Capital to the Icelandic company Varmaorka. The new shares make Baseload the largest owner in the company. Varmaorka commissioned Reykholt’s power plant, which will supply 300 kW to the electricity grid. A new cooling system was installed at the Fludir power plant, which is expected to reduce internal electricity consumption by up to 15%.
- Established a subsidiary in the US, Baseload Power US. The company began investing in a first project in California by acquire contracts and equipment from the existing owner. Commissioning of the power plant is expected to take place during the second half of 2021. Three land lease agreements were signed in Nevada, where there is great potential for the development of new geothermal projects.
- Initiated a collaboration with the New Zealand company Geo 40. Baseload participated in the new issue carried out by Geo40 during the year. Geo40 has developed a technology for extracting silicon and other minerals from geothermal water, which reduces the operating costs of geothermal power plants. At the same time, minerals are produced in a sustainable way.
- Renegotiated and changed the terms of the green bond that the company issued during the first quarter of 2019 to better suit the company’s business model. The first money was deducted from the bond. All covenants that the company must live up to were met during all quarters of 2020. In May, the bond was listed on Nasdaq.
- Strengthened liquidity by the parent company Baseload Capital Holding AB raising a convertible loan of SEK 94.2 million from the main owners during the year.
The information was submitted for publication at 19:00 CET on 31 March 2021.
For more information, please contact:
Alexander Helling CEO of Baseload Capital