Stobart reports 72% increase in volume of biomass fuel supplied

By Erin Voegele | October 30, 2018

The U.K.-based Stobart Group has released interim financial results for the six months ended Aug. 31, reporting increased revenue and EBITDA for its Stobart Energy division, with a 72 percent increase in the volume of biomass fuel sold.

According to the company, Stobart Energy has long-term agreements in place to supply 2 million metric tons of biomass fuel per year, with the capacity to supply 3 million metric tons per year by fiscal year 2022.

The division reported £29.9 million ($38 million) in revenue for the six-month period, up from £25.3 million reported for the same period of 2017. EBITDA increased from £2.7 million during the six months ended Aug. 31, 2018, to £6.5 million for the six months ended Aug. 31, 2018.

Stobart Energy supplied 657,950 metric tons of biomass fuel during the six month period, up from 382,775 metric tons during the same period of last year. Underlying EBITDA per ton reached £13.19, up from £12.1 during the same period of 2017.

Stobart said key driver for the 72 percent growth in the volume of fuel sold was that plants that underwent commissioning last year are now approaching commercial volumes. The company attributed the improvement in EBITDA per metric ton to the customer mix, the benefits of increased volume, and continued focus on cost management.

While biomass volumes sold have increased year-on-year, Stobart said that continuing challenges around the commissioning of third-party power stations means that the company’s infrastructure has been underutilized. According to Stobart, two major plants in Widnes and Tilbury, U.K., experienced unplanned outages during the first half of the year. The company also noted commissioning started later than expected at the Margam and Templeborough, U.K., plants, and indicated the development of Port Clarence has been delayed until early 2019.

Stobart said it is continuing to work to maintain the integrity and viability of the supply chains it has created for these plants. “We continue to invest in people, processing and storage capacity, and have specialist transport fleet and IT systems to ensure we have a best in class infrastructure ready to deliver a full end-to-end supply chain solution to our customers,” Stobart said in a statement. Although the company said it is challenging to accurately forecast the successful operation of third-party power plants, it expects further progress during the second half of the year. “We are confident the business has the right infrastructure in place to ensure the division can grow rapidly as more plants start to operate on a more consistent basis,” Stobart said.

In addition to the Stobart Energy division, the Stobart group also operates divisions dedicated to aviation, rail, and infrastructure and investments. Overall, the company reported total statutory revenue of £151.3 million for the six-month period, up from £124.6 million during the same period of 2017. The company reported a £17.5 million loss for the period, compared to a £11.9 million profit for the same period of last year.