It’s been a year of positive progress for ‘One to Watch’ stock, Quadrise [LON:QED], the London-headquartered synthetic emulsion fuels developer. And the company is seeing out 2024 with another round of positive news.
Quadrise has nailed-down a number of partnerships for its MSAR and bioMSAR fuels, although management said that it wished to be moving faster than it had done after a 2023 of delay and disappointment, not least when its primary projects in Morocco and Utah seemed mired-down by operational and technical issues.
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The company announced this week that it had completed positive engine testing results for its new bioMSAR prototypes, which included one prototype made with 100% biofuels; a first for Quadrise. This is a significant milestone for Quadrise’s ambition to provide the marine transport industry completely fossil-fuel commercial-scale fuel options by 2030.
The tests were completed in partnership with Aquafuel Research Ltd. in the company’s testing facility on a 40kW 4-stroke Cummins diesel engine using blends of Quadrise’s bioMSAR. The test proved that Quadrise’s bioMSAR emulsion technology can be used to create a viable non-fossil fuel with low emissions for the marine transport industry and the AIM-listed firm’s fuels also improve engine efficiency and reduce fuel costs.
Quadrise Fuels ‘ahead of schedule’
Tom Fraine, an analyst for broker Shore Capital, which has Quadrise under coverage said: “[…] Quadrise confirmed positive engine testing results on new prototypes of its bioMSAR fuel, including the company’s first 100% biofuel. We see this confirmation as encouraging and continue to believe the company is ahead of schedule in working towards its goal of offering an entirely fossil-free fuel at commercial scale by 2030. This follows a series of encouraging updates from Quadrise since 22 November, which have helped drive a 128% increase in the share price. We are encouraged to see the momentum of positive news flow continuing.”
Although the company isn’t yet making money, announcing a loss after tax of GBP2.9m for the year to end-June in October, it has been moving closer to break-even, and could turn to profit sometime next year. At the time Jason Miles, the company’s CEO said in a statement to the market: “We acknowledge that progress during the period has been slower than we had previously anticipated, however, the time for Quadrise technology delivery is now and the team are focused on achieving that goal [… We] entered the 2024/25 financial year with strong momentum and [are] preparing to play [our] part in accelerating the global transition away from fossil fuels.”
Potential high-margin annual revenues
As Fraine notes: “[The] update follows the announcement on 26 November that the company has signed a three-way agreement with MSC and Cargill for a trial on an MSC vessel. This opportunity with MSC and Cargill alone could be worth a multiple of Quadrise’s current enterprise value in potential high-margin annual revenues, if only a small percentage of MSC’s overall fuel demand was switched to MSAR or bioMSAR. MSC currently consumes close to 10 million tonnes of fuel oil annually and we believe Quadrise could charge around USD50 per tonne for the use of its technology.”
Quadrise is planning on making further tests of biofuel blendstocks to accelerate the development of its BioMSAR Zero fuel, in the hope it will develop a emissions-free marine fuel blend before its 2030 target.
Miles said: “These hugely encouraging results demonstrate the capability of the Quadrise team and the adaptability of our unique proprietary oil-in-water emulsion chemistry, squarely positioning the company to address the ongoing decarbonisation of the marine sector.”
Utilising fuel sources that currently have low economic value
The Quadrise technology mixes oil and water to create a stable biofuel and the aim is to tap into sources of biofuels, using carbohydrates produced in sugar or starch crops such as maize, sugar cane, or sweet sorghum which, the company says, do not currently have higher-value applications.
Miles continued: “Quadrise and our development partners are excited by these results, and we look forward to progressing the testing programme to the next stages, with the intention of launching our first fossil-free bioMSAR Zero product at commercial scale well in advance of 2030.”
Quadrise Fuels shares have advanced this year, opening Friday (6th December) at 4.1995p, up 47.5% year-to-date. The company’s shares have jumped 174% since 21st November. Quardrise’s market cap is GBP70.8m. It remains ‘One to Watch’.
