The Perth-based wave-energy aspirant Carnegie Clean Energy has been hit by another wave of losses, as its problematic solar and micro-grid business continues to bleed and the company was forced into more heavy write-downs.
Carnegie was suspended from trade on the Australian Stock Exchange last week after failing to deliver its interim results in time. They were released on Wednesday, but they do not make for pretty reading, with a bottom line net loss of $45 million, including nearly $40 million in write-downs.
The major culprit is the Energy Made Clean solar micro-grid business, bought for top dollar in 2016 to provide the cash flow to support the further development of the new wave energy technology.
But the EMC business has been a disaster, and has been a drain on funds because of ongoing losses, despite the completion in the past year of the Garden Island micro-grid, the CSIRO kilometre telescope array and another solar micro-grid at the Delaware Air Weapons range in the Northern Territory, and the Northam solar farm.
The EMC business lost $6 million in the last six months.
Carnegie tried to sell EMC last year to the listed Tag Pacific, but that deal fell through. This, and negative publicity about funding issues for the flagship 20MW Albany Wave Energy Project, and share sales by the departed EMC founder John Davidson, took toll on the company’s market price, the directors say, in turn forcing them to further write down its assets.
The value of the company’s CETO wave energy technology, regarded as one of the leaders in the world, is written down by another $32 million, adding to the $35 million write down in the technology announced six months ago.
Further write downs were taken on the value of the Garden Island project ($2.2 million), the Northam solar farm ($2.3 million) and its joint venture with Lend Lease ($2.3 million)
The accounts also reveal that the company received a $2 million unsecured finance facility to provide funding for operations from a company controlled by one of its directors, the former AFL footballer and funds manager Michael Fitzpatrick.
Carnegie says it is still trying to sell EMC, or find other options to stem the cash burn, and says potential buyers are looking through a data room. It has blamed its woes on the performance of EMC, and the cut-throat nature of the solar and storage business.
It also received last year a $2.6 million payment from the state government to progress the Albany wave energy project, which could start off with a 1MW pilot, grow to a 20MW facility and even be expanded to 100MW.
But this payment was only half the originally intended payment, and the company has since been asked to lay out a proposal to access the balance of the proposed $19.9 million funding.
Italian energy giant Enel continues to show an interest in the CETO wave technology, and last year invested another $1 million to further its progress.