- publishes its results and major achievements over the first
half of 2024 - confirms the competitiveness of the
geothermal lithium production project with the conclusions of the
pre-feasibility study (PFS) - updates its assumptions and
medium-term goals
First half 2024 results
- Gross business volume of €6 million supported by drilling
activities and in line with the forecast
- Fast growing portfolio of geothermal energy production projects
by 2gré
- Completion of the pre-feasibility study (PFS) for Lithium de
France: a key step towards the industrialization phase enabling to
update the assumptions and the medium-term goals
- Strategic partnership with Herrenknecht, leading German
manufacturer, to create DrillDeep, a subsidiary dedicated to deep
drilling
- Further strengthening of teams
Outlook
- Confirming of a 2024 gross business volume between €16 million
and €18 million, representing growth of 35% to 50% versus 2023
- Confirming deployment of an investment program of around €50
million for 2024
- Confirming completion of the pre-feasibility study (PFS)
- Launching a definitive feasibility study (DFS) in 2025 which
will include the front-end engineering design to help define the
project financing terms
Regulatory News:
Arverne Group (FR001400JWR8 - ARVEN), a French industrial
company specialized in the production of renewable underground
resources to support the energy transition, announces its financial
results for the first half of 2024:
- consolidated revenues of €4.5 million in
line with the forecast; - gross business volume of €6.0 million in
line with the forecast, including 50% of the shallow drilling
revenues of DrillHeat1; - a strong financial position with net cash
amounting to €118.2 million; - major technical advances achieved in
the first half of the year:
- Completion of the pre-feasibility study (PFS) on the
lithium process, marking a key step towards the launch of the
industrial phase of geothermal lithium production,
- execution of two new 3D exploration campaigns in Alsace
during summer 2024, positioning the Group as one of the most active
players in geophysical data acquisitions in Europe over the past
three years;
- Ramp-up of the industrial tool capacity with equipment
orders and preparation of the first drilling operations, increase
of the drilling rig fleet,
- ongoing Group structuring and strengthening
of the teams reaching 167 employees by the end of the period (187
including the 20 DrillHeat employees), representing an increase of
61%.
“The first half of the year saw further major advances for
Arverne Group driven by the dedication of all our teams, partners
and shareholders, to whom I extend my warmest thanks. Our 3D
exploration campaigns have reached an unprecedented scale in our
industry. The acquisition of new permits has broadened our scope of
action and growth potential. In parallel, we have strengthened and
optimized our organizational structure, building up qualified
teams. Lithium de France successfully completed its pre-feasibility
study (PFS), marking a major step towards the launch of the
industrial phase of lithium production with improved visibility.
These achievements are not just isolated successes, but solid
pillars on which we are building Arverne Group’s future. They
provide us with the resources and skills necessary to achieve our
ambitions. We are builders, visionaries who are shaping the future
of energy.” says Pierre Brossollet, Founder, Chairman and CEO of
Arverne Group.
H1 2024 highlights
2gré: geothermal potential confirmed
The project identification work carried out by our teams in
recent months has enabled us to build up a portfolio of geothermal
heat production projects with an estimated potential of over 60
power plants and 3.5 TWh of production.
Project stage
Heat production
(GWh/year)
Projects nearing completion
410
Projects in development:
pre-feasibility study in progress, negotiation of contractual and
commercial terms
1,340
Targeted potential projects:
geothermal potential study launched
750
Prospective projects identified:
prospect expresses geothermal needs, geothermal potential to be
qualified
940
Against a backdrop of rapid market changes and in order to meet
customer needs, 2gré’s project development strategy has been
refined:
- Acceleration, particularly in the
Ile-de-France region, a historical development zone for deep
geothermal energy, with the Dogger reservoir (1,500 meters deep,
60-80 degrees)
- Increase in production capacity of standard
geothermal power plants: the possible addition of a heat pump to
boost annual production potential (from 35 GWh to more than 60
GWh), adapt the output temperature to the needs of heating systems
and industrial customers, while also meet increased operating hours
mandates by the public authorities
- Preparation of the first 3D sub-surface
data acquisition in the Auvergne-Rhône-Alpes region for a new
geothermal project on the Riom Clermont Ferrand Exclusive
Exploration Permit (PER)
Taking these factors into account, along with the significant
project portfolio, the first geothermal heat production of is now
scheduled for 2026.
To achieve these advances, the teams have been strengthened with
the addition of technical experts, geologists, drilling managers
and salespeople. As of June 30, 2024, the number of employees has
risen to 15.
Serge Guibert, Chief Financial Officer, also joined the Group on
July 1, 2024.
Lithium de France: completion the pre-feasibility study that
confirms competitive production costs, and positioning the project
in the first quartile worldwide
Lithium de France successfully completed its pre-feasibility
study (PFS), marking a major step towards the launch of the
industrial phase of lithium production.
The results obtained strengthen the group’s assumptions, and
confirm a new level of due diligence that clarify the feasibility
of the project. The costs identified position the project in the
first quartile of lithium projects worldwide.
Lithium de France is therefore able to announce strategic
technical decisions and update key financial assumptions:
- choice of product: decision to
produce lithium carbonate (LC), a product better suited to the
electric vehicle industry’s energy transition goals;
- choice of extraction technology:
extraction technology (DLE) will be based on “adsorption”, with the
aim of confirming its performance in 2025 using a pilot plant;
- lithium production cost: estimated
below €4,500/t of lithium LC and placing the project in the first
quartile of the cost curve in terms of cash cost;
- process efficiency: 91% of recovery
rate;
- investment and production: total
gross CapEx (excluding subsidy) adjusted to €1,800 million - €1,900
million (including 15% contingency) for the production of 27,000
t/year of lithium (LC) to be reached in 2031;
The company also announces:
- the grant of a new lithium license in
Alsace (Les Poteries Minérales) and the submission of two new
Exclusive Exploration Permit (PER) applications;
- the completion in summer 2024 of two 3D
exploration campaigns (100 km² and 60 km²), bringing the total
surface area of imaging data acquired to 310 km² in two years
- the ordering of Long Lead Items to prepare
the drilling campaign
The successful completion of this stage enables Lithium de
France and its strengthened teams (36 employees, +71% vs. H1 2023)
to prepare for the launch of the definitive feasibility study (DFS)
at the beginning of 2025.
Scale-up of drilling companies
Arverne Drilling Services and DrillDeep2, deep
drilling
The drilling business continued to improve its execution
capacity, with three projects completed over the period. In order
to secure the future operations and accelerate the integration
strategy in response to growing drilling needs, a new subsidiary,
DrillDeep, was created in March 2024 with the leading German
manufacturer Herrenknecht.
The construction of a new state-of-the-art drilling rig is in
its final stage, with delivery scheduled for the end of 2024.
As in the other Group divisions, teams have been strengthened,
with staff numbers rising from 71 (June 30, 2023) to 98 as of June
30, 2024, particularly to prepare for the drilling campaigns of
Lithium de France and 2gré.
DrillHeat3, shallow drilling
The company acquired three new drilling machines in the first
half of the year, bringing the total to six. DrillHeat completed 16
projects, drilled more than 26,000 meters and installed 160
geothermal probes for public authorities and commercial
buildings.
To keep pace with the ramp-up of operations, the workforce has
been increased from 11 (June 30, 2023) to 20 as of June 30,
2024.
Expanded governance: structuring appointments
The Group announces new appointments and forthcoming
developments to strengthen its governance:
- Guillaume Saincaize joined Arverne
Group as Human Resources Director in April 2024.
- Laurence Guillemot joined Arverne
Group in June 2024 as Head of development of shallow geothermal
energy.
- Frédéric Houssay, previously a Group
Director, has taken on operational duties and was appointed
Director of New Business for the Grand Est Region on September 1,
2024.
- Damien Bevillon, currently Managing
Director of 2gré, will become Exploration and Production Director
of Arverne Group on October 1, 2024;
- Martin Jahan de Lestang joins the
Group on October 1, 2024 as Managing Director of 2gré.
Gross business volume driven by drilling activities
The Group’s consolidated revenues totaled €4.5 million with a
significant contribution (€4.4 million) from Arverne Drilling
Services (ADS). The 20% decline compared to the first half of 2023
was anticipated. It is mainly due to the temporary interruption of
a well maintenance campaign earlier in the year that the Group
already included in its 2024 targets. The commissioning of a new
rig on the second semester will allow the Group to diversify its
revenues.
In thousands of euros
H1 2024
H1 2023
Deep drilling (Arverne Drilling
Services)
4,369
5,239
Other
116
341
Consolidated revenues
4,485
5,580
Shallow drilling (DrillHeat)
)
1,550
884
Gross business volume
6,035
6,445
Gross business volume for the period amounted to €6 million. It
was primarily driven by DrillHeat which posted non-consolidated
revenues of €3.1 million over the period, up 75%.
The main subsidiaries Lithium de France4 and 2gré5 are still in
the investment phase.
Operating results reflecting the implementation of the growth
and structuring strategy announced by the Group
The investments made by the Group, recognized under “Other
income and expenses” in the amount of €3.4 million, mainly relate
to the consolidation of the deep drilling rig fleet (refurbishment,
start-up), as well as preparatory investments for the Lithium de
France drilling campaign due to start in 2025.
To support this operational ramp-up, the company has
strengthened its teams, with average headcount over the period
rising to 171 (including 19 at DrillHeat) from 115 in H1 2023. As a
result, personnel expenses have doubled to €9.5 million, in line
with this increase in headcount and the improvement of the Group’s
governance (creation of the Executive Committee, the Board of
Directors and the strengthening of subsidiary general management).
These expenses include €1.9 million relating to the allocation of
free shares.
In thousands of euros
H1 2024
H1 2023
Revenues
4,485
5,580
Purchasing and subcontracting
(7,030)
(4,301)
Personnel expenses
(9,388)
(4,850)
Taxes and duties
(171)
(114)
Other income and expenses
3,245
538
Current EBITDA (excl.
exceptional items)
(8,859)
(3,145)
Depreciation and provisions
(948)
(905)
Current operating
income
(9,807)
(4,051)
Other non-current income and
expenses
0
12,600
Operating income
(9,807)
8,550
As a result of this announced investment phase, current EBITDA
(excluding exceptional items) amounts to an €8.9 million loss
compared to a €3.1 million loss in H1 2023.
The Group posted a net loss of €9.6 million, including €2.6
million financial income generated by the investment of surplus
cash and a €2.1 million impairment write-down on the current
account with subsidiary DrillHeat.
In thousands of euros
H1 2024
H1 2023
Operating
income/(loss)
(9,807)
8,550
Financial income and expenses
2,608
1,230
Share of equity-accounted
companies
(2,125)
0
Income and similar taxes
(224)
(520)
Net income/(loss)
(9,548)
9,261
of which Group share
(8,427)
10,374
of which minority interests
(1,122)
(1,113)
It is reminded that H1 2023 net income of €9.3 million was
positively impacted by the recognition of a €6.5 million badwill
gain on the acquisition of 2gré and proceeds of €6.9 million from
the sale of Arverne Drilling shares.
Growth in fixed assets
In line with its plan, the Group continued to
roll out its investment strategy in the first half of the year:
- the development of Exclusive Exploration
Permits (PER) in geothermal energy for 2gré and projects combining
geothermal energy and geothermal lithium production for Lithium de
France, representing an investment of €3.7 million over the
period,
- the development of drilling capacities and
Group structuring, representing an investment of €8.1 million over
the period.
Fixed assets (property, plant and equipment and intangible
assets) thus increased by €10 million from €58.6 million at
December 30, 2023 to €68.5 million at June 30, 2024.
Gross cash at the end of the period amounts to €136.8
million.
Robust financial structure
The company’s financial structure is solid with shareholders’
equity reaching €170.4 million at 6/30/2024 vs. €178.4 million at
12/31/2023, and a limited level of gross debt (€18.6 million). The
increase in debt (€6.8 million compared to 12/31/2023) is mainly
due to the acquisition of the company’s headquarters through a real
estate lease agreement.
The net cash position shows a large surplus of €118.2 million,
enabling the Group to continue implementing the investment plan
announced.
Annual targets for 2024
Confirming gross business volume between €16 million and €18
million, up 35-50% versus 2023, mainly driven by the expansion
of the drilling rig fleet which has enabled the Group to diversify
its customer portfolio and carry out new projects, including
Aéroports de Paris in the second half of 2024
Confirming deployment of an investment program of around €50
million including three exploration campaigns and the delivery
of a drilling rig scheduled for the second half of 2024
Confirming completion of the pre-feasibility study (PFS),
a key milestone with results that enable the announcement of major
technical decisions (choice of product, extraction process),
confirmation of key financial data (overall investment, recovery
rate efficiency, extraction cost) with a competitive production
cost
Filing of a new drilling permit application and
finalization of two applications for filing in H1 2025
Update of medium-term goals in light of the results of the
pre-feasibility study (PFS)
Given the technical orientations and the revised techno-economic
assumptions following the completion of the PFS, the Group updates
its medium-term goals6 and details its timeline for the upcoming
development phasis, in an improved visibility context.
2024-2031: Confirmation of total gross investment program
of €2,400 million, including €500 million7 borne by 2gré and
between €1.800 million and €1,900 million8 by Lithium de France
2026: First geothermal energy production by 2gré
2028: First geothermal lithium production by Lithium de
France Consolidated revenues between €180 million and €220 million
Current EBITDA margin of around 40%9
2031: Annual production capacity for 2gré to reach 1.8
TWh of geothermal heat Annual production capacity for Lithium de
France to reach 27 kt of lithium (LC) and 2.2 TWh of geothermal
heat Consolidated revenues between €900 million and €1,000 million
Current EBITDA margin of around 70%
Arverne Group expects the definitive feasibility study (DFS) for
Lithium de France to launched beginning of 2025. This study will be
carried out over an estimated period of 12 to 18 months.
This stage, that will include the pre-project engineer of the
industrial facilities and the geothermal lithium resources
estimation after the first wells, will serve as a basis to define
the terms of the project financing with the banks and shareholders.
The DFS could lead to a reassessment of the ambitions.
Next publication: March 26, 2025, FY
2024 results
About Arverne Group Arverne Group specializes in
harnessing underground resources to transform them into
environmentally friendly, local and renewable energy, contributing
to the prosperity of local communities. As an integrated industrial
player, Arverne Group spans the entire underground value chain,
from exploration to drilling and production to sales to end-users.
Arverne Group aims to become the French leader in geothermal energy
and its by-products, including low-carbon geothermal lithium.
Founded in Pau in 2018, Arverne Group has structured its business
activities around several subsidiaries, notably 2gré (sale of
geothermal heat), Lithium de France (geothermal heat and extraction
and sale of geothermal lithium) and Arverne Drilling Services
(drilling operations). A mission-driven company, Arverne Group is
listed on the professional segment of Euronext Paris and is part of
the Tech Leaders segment of Euronext Paris (ISIN FR001400JWR8,
symbol ARVEN). www.arverne.earth
Consolidated income statement
In thousands of euros
6/30/2024
6/30/2023
6 months
6 months
Revenues
4,485
5,580
Other operating income
177
171
Capitalized production
3,396
940
Purchases consumed
(717)
(311)
External expenses
(6,313)
(3,990)
Personnel expenses
(9,388)
(4,850)
Taxes and duties
(171)
(114)
Other operating expenses
(328)
(573)
Current EBITDA
(excl.exceptional items)
(8,859)
(3,147)
Depreciation and amortization
(948)
(905)
Current operating
income
(9,807)
(4,052)
Other non-current operating
income
0
13,435
Other non-current operating
expenses
0
(835)
Operating income
(9,807)
8,550
Income from cash and cash
equivalents
2,587
0
Gross cost of financial debt
(220)
(490)
Net cost of financial
debt
2,367
(490)
Other financial income
273
1,780
Other financial expenses
(32)
(60)
Share of net income of
equity-accounted companies
(2,125)
0
Income before tax
(9,325)
9,780
Income tax
(224)
(520)
Total net
income/(loss)
(9,548)
9,261
Share of net income of
equity-accounted companies
(1,122)
(1,113)
Net income/(loss) - Group
share
(8,426)
10,374
Net income/(loss) -
non-controlling interests
(1,122)
(1,113)
Earnings per share (€)
(0.21)
0.68
Balance sheet assets
In thousands of euros
6/30/2024
12/31/2023
Intangible assets
41,934
39,192
Tangible assets
26,558
19,445
Deferred tax assets
3,165
3,448
Total non-current
assets
71,658
62,085
Inventories
1,192
413
Trade and other receivables
3,408
2,710
Other current assets
9,152
13,661
Cash and cash equivalents
136,800
143,229
Total current assets
150,551
160,012
Total assets
222,209
222,097
Balance sheet liabilities
In thousands of euros
6/30/2024
12/31/2023
Capital and share premium
194,302
194,302
Other reserves
22,646
21,621
Accumulated results
(60,257)
(51,831)
Shareholders’ equity - Group
share
156,690
164,092
Non-controlling interests
13,710
14,346
Total shareholders’
equity
170,400
178,438
Borrowings and financial debt -
non-current
16,919
10,322
Other provisions
1,896
1,214
Deferred tax liabilities
5,697
5,465
Other non-current liabilities
3,280
3,437
Total non-current
liabilities
27,792
20,438
Borrowings and financial debt -
current
8,741
9,117
Other provisions
929
992
Trade payables
4,171
3,746
Other current liabilities
10,176
9,366
Total current
liabilities
24,017
23,221
Total liabilities
222,209
222,097
Cash flow statement
In thousands of euros,
IFRS
H1 2024
H1 2023
Net income/(loss)
(9,548)
9,261
Depreciation, amortization and
provisions net of reversals
1,149
809
Badwill
0
(6,496)
Other changes
4,074
(5,784)
Cash flow from
operations
(4,326)
(2,210)
Change in inventories
(71)
Changes in trade and other
receivables
(642)
(950)
Change in trade and other
payables
612
2,865
Change in other current
receivables/payables
3,165
(2,236)
Total change
3,064
(321)
Tax paid
(423)
166
Net cash flow from operating
activities
(1,685)
(2,366)
Net acquisition of fixed
assets
(5,496)
(816)
Capitalized development
expenditure
(2,739)
(1,327)
Other changes
(1,008)
3,565
Net cash flow from investing
activities
(9,243)
1,422
Capital increases
520
19,323
New borrowings
5,565
15,000
Repayment of borrowings
(1,512)
(6,754)
Other changes
(72)
Net cash flow from financing
activities
4,501
27,569
Change in cash and cash
equivalents
(6,428)
26,625
Cash and cash equivalents as
of January 1
143,227
3,165
Cash and cash equivalents as
of June 30
136,800
29,789
Disclaimer
This press release contains forward-looking statements. These
statements provide no guarantee of the Company’s future
performance. They relate to the Company’s future prospects,
developments and marketing strategy and are based on analyses of
earnings forecasts and estimates of amounts not yet determinable.
Forward-looking statements are subject to a variety of risks and
uncertainties, in particular those described in the Universal
Registration Document, as they relate to future events and are
dependent on circumstances that may or may not materialize in the
future. Forward-looking statements cannot, under any circumstance,
be construed as a guarantee of the Company’s future performance;
the Company’s actual financial position, results and cash flow, as
well as the trends in the sector in which the Company operates, may
differ materially from those proposed or reflected in the
forward-looking statements contained in this press release. Even if
the Company’s financial position, results, cash flows and
developments in the sector in which the Company operates were to
conform to the forward-looking statements contained in this press
release, such results or developments cannot be construed as a
reliable indication of the Company’s future results or
developments.
Certain figures and numbers appearing in this press release have
been rounded. Consequently, the total amounts and percentages
appearing in the tables are not necessarily equal to the sum of the
individually rounded figures, amounts or percentages.
__________________________ 1 Unconsolidated subsidiary owned at
50% and operated by Arverne Group 2 74% owned by Arverne Group and
26% by Herrenknecht 3 50% owned subsidiary operated by Arverne
Group 4 62.1% owned by Arverne Group 5 Company acquired in March
2023 and wholly owned by Arverne Group 6 Before results of
definitive feasibility study (DFS) 7 Before subsidies 8 Before
subsidies, and including 15% contingency 9 EBITDA margin
incorporating a majority “intra-group” contribution of €15 million
from drilling activities following the adjustment to the
development schedule resulting from the PFS
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240925395958/en/
Media Relations: communication@arverne.earth
arvernegroup@image7.fr
Investor Relations: investor.relations@arverne.earth
SEITOSEI.ACTIFIN - Mathilde Guillemot
mathilde.guillemot@seitosei-actifin.com
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