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September 30, 2022

CLEANTECH BUILDING MATERIALS PLC, NASDAQ FIRST NORTH GROWTH MARKET, COPENHAGEN

TICKER: CBM

Cleantech Building Materials plc

Unaudited Temp worker Results at June 30, 2022

Cleantech Building Materials plc (“CBM” or the “Company” or the “Group”), reports its unaudited results for the six months ended 30 June 2022. Financial statements are attached to this announcement.

Strategy and objectives

The Group’s main strategic objectives for 2022 are:

1. Advance the engineering, procurement and construction of an Accoya® wood manufacturing plant in China;
2. Build relationships with high-volume wood product manufacturers through testing and trials in anticipation of Accoya® Wood produced in the Group’s factory;
3. Develop the Group’s international marketing and sales initiatives to further expand marketing channels and collection agreements; and
4. Develop the Group’s relations with the main suppliers of Pin Radiata and Acetic Anhydride.

The Group made progress towards achieving these objectives during the six months ended June 30, 2022.

Company financial review

Group revenue for the six months ended June 30, 2022 amounted to €0 (semester ended June 30, 2021: €680,000). This is due to the transfer of business activities to the joint venture in Nantong, China from August 2021.

The Group realized a net loss of €2,412,000 for the six months ended June 30, 2022 (six months ended June 30, 2021: €2,176,000). The net loss for the current period is mainly attributable to salaries, stock option costs and third-party legal, financial and engineering costs. Strict cost control limited the extent of the loss.

As of June 30, 2022, the Group had cash and cash equivalents of €464,000 (June 30, 2021: €60,000) as well as an available facility of approximately €2.9 million and a commitment of equity to finance the Chinese joint venture. The Company has a net current liability of €177,000 (30 June 2021: €211,000).

The current activity of the Group is the import and marketing of Accoya® Wood, which the Group has been doing since 2008. The Group has sufficient funding to operate this existing import business on a going concern basis. The directors of the Group are of the view that there is an opportunity for the Group to build and operate its own Accoya® factory in China.

In order to finance its operations and the construction of the new plant, the Group has a loan facility available from a third party, financing commitments from Nantong Acetic Acid Chemical Company Limited and a leading Chinese bank, and the subscription contract of July 10, 2019 for €15 million. However, the availability of the funds is inherently uncertain, as they are conditional on the achievement of project milestones related to the construction of the Accoya® Wood factory in China. These milestones include certain government approvals and certain deliverables of project execution. Several key milestones have already been achieved and the Company has received equity in connection with these milestones. In summary, the validity and success of our business plan depends on many factors, some of which are beyond the direct control of the Group’s management.

Despite these uncertainties, the Directors are satisfied that the Group has sufficient financing to build an Accoya® Timber Factory and execute the Group’s business plan and fully realize the carrying value of non-current assets.

Once the Group produces its own Accoya® Wood, the board of directors of CBM believes that the financial performance of the group will be radically transformed.

Company Update

In 2022, the planned Chinese factory project continued to progress, with the achievement of key government approvals for “energy conservation review” and “social impact review”, which are key gateways for the construction of the Accoya.® production facilities. Energy conservation review is particularly difficult for industrial projects, due to strict new Chinese central government controls put in place in 2020 and 2021.

LBT Shanghai was contracted to locate the basic engineering technology design, resulting in a detailed front-end engineering design as the basis for construction.

Unprecedented lockdowns in China, and particularly in the Shanghai region, have delayed the Accoya® Wood factory project of several months. The situation has stabilized and management is taking steps to mitigate the delay.

On August 9, 2022, we announced the appointment of Colin McKendrick as CEO. Colin’s high-level experience in China in the chemical production sector will greatly enhance our capabilities as we move towards building and operating the plant.

Sales continue to be limited by lack of Accoya® Wood supply from Europe. The European Accoya® The wood mill is expected to bring new capacity online in the second half of 2022, which should provide some small additional volumes. Directors believe demand in the Chinese and ASEAN markets will not be met until the group completes its China Accoya program® factory.

Events after the reporting date

No material item to report.

The interim financial information for the six months ended June 30, 2022 has been approved by the Board for publication on September 30, 2022.

THE DIRECTORS OF CLEANTECH BUILDING MATERIALS PLC ACCEPT RESPONSIBILITY FOR THE CONTENT OF THIS ANNOUNCEMENT

Further information is available on the Company’s website at www.cbm-plc.com

Other requests:

Cleantech Building Materials plc
Adrian Wyn-Griffiths
[email protected]
+44 20 3934 6630
Keswick Global AG (certified advisor) [email protected]
+43 1 740 408045
IFC Advisory Limited (Financial PR)
Tim Metcalfe
Zach Cohen
+44 20 3934 6630

The information provided in this press release is “inside information” within the meaning of Article 7 of Market Abuse Regulation 596/2014.

  • Provisional accounts of CBM June 30, 2022