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Quadrise projects progressing apace, but needs more money

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Quadrise Fuels International Plc AIM:QFI the London-headquartered synthetic emulsion fuels developer published its interim financials for the six months to end-December and an update on 1Q23 today (29th March).

The company reported a GBP1.7m loss which expanded from GBP1.5m for the corresponding period of 2021 and was GBP3m worse off in terms of cash reserves from this time last year. The company said that it had production and development costs of GBP1m and administrative costs of GBP600,000. The company had total assets of GBP6.4m, against GBP9.3m at end-December 2021.

Quadrise opened trading at 1.49p today and had fallen to 1.3p within the first hour of trading.

The company is in a good place. As previously reported, the fuel manufacturer was testing its bioMSAR (Biomass multiphase superfine atomised residue) transportation biofuel with in partnership with Wärtsilä Corporation [NASDAQ Helsinki:WRT1V], a Finnish company which manufactures and services power sources and other equipment in the marine and energy markets.

The testing was completed in December and the fuel is to undergo a further hazard identification and operability study to assess feasibility and safe operability prior to use on a Wärtsilä 2-stroke engine.

Milestones expected

Elsewhere, Quadrise’s projects are progressing well and the company said: “further milestones [are] expected to be passed in 2Q23 and the second half of 2023. As previously reported Quadrise is working with a number of third parties to develop more sustainable fuel technology, including Vetoro, the Dutch chemical company developing biofuels from woody residues and Mediterranean Shipping Company (MSC), the world’s largest container shipping company.

The company said it: “still expects to deliver commercial revenues in the current financial year” however, to get there the company is going to need more money which will be “required to see every key project through to commercialisation.”

Tom Fraine, an analyst for ShoreCap commented: “Favourable oil and oil product economics, along with an increasing focus on emissions reductions and biofuels, have further increased the business case for low cost, lower carbon MSAR and bioMSAR. We remain optimistic regarding the potential scale of Quadrise’s projects. The company’s proprietary fuels have the ability to significantly reduce both fuel costs and emissions. bioMSAR and MSAR also make the transportation and handling of fuel easier versus conventional heavy fuel oil and no significant adaptions to equipment are required for their usage.”

Quadrise specializes in the development and commercialization of low-cost, environmentally-friendly fuel technologies. One of their most innovative products is bioMSAR, a synthetic fuel made from biomass.


Commercial revenues

The company said: “Valkor expects drilling permits at Asphalt Ridge to be awarded in 2Q23, with low carbon intensity, low sulphur heavy oil to be extracted and available for conversion to MSAR and bioMSAR for trials during 2H23.” It is then hoped that Quadrise would lead the commercial supply of it fuels. This is important for Qusadrise, as concluding a deal with Valkor would lead to commercial revenues in this financial year.

The winds seem to be blowing in the right direction for Quadrise. Globally emissions reductions is the top of a ‘To-Do’ list for many governments, and the War in Ukraine has put in focus the origination and diversification of supplies of fuel that are low-cost and low-emissions. With Covid a distant memory, Quadrise is able to hit the road (and seas) once again and start trialling its products globally.

Jason Miles, chief executive said in a statement today: “The second half of 2022 and the start of this year proved to be both rewarding and challenging. While delays, such as those experienced in Morocco, have been frustrating, I am pleased that each of our core projects remains on track for a positive outcome and we are developing protocols to help us overcome some of the logistical challenges we have encountered.”

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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