i(x) Net Zero PLC (LON:IX), the AIM investing company which focuses on Energy Transition and Sustainability in the Built Environment, has announced a portfolio update up in respect of its investee companies to the period ended 31 March 2024 and an upward revision to its 31 December 2023 net asset value in respect of its holdings in these portfolio companies to $151.3m†.
Portfolio NAV
| 31 December 2023 (unaudited) | 30 June 2023(unaudited) | 31 December 2022 (audited) | |
| Portfolio NAV | $151.3m† | $149.1m | $63.8m |
| Portfolio NAV per Share* | 142.4p† | 140.4p | 65.2p |
| Ordinary share price | 24.0p | 14.0p | 16.5p |
| Discount of share price to Portfolio NAV | 83.2% | 90.0% | 74.7% |
† Includes Carbon Engineering investment, now sold, for comparative purposes
* Exchange rate of 0.8084 USD/GBP as at 19 April 2024 with total voting rights of 85,877,429 in 2023 and 79,056,811 in 2022
Company Milestones and Performance Highlights (2023 and Q1 2024)
The combination of an enhanced executive team in early 2023, a focused investment strategy and streamlined operations has enabled the Company to work with its investee companies and has seen a significant NAV increase from $63.8m as at 31 December 2022 to $151.3m† as at 31 December 2023 (a $87.5m or 2.4x NAV increase in one year†).
The appointment of Par Lindstrom as CEO in January 2023, and Jonathan Stearns as Chief Financial Officer in April 2023, has enhanced the investment acumen on energy transition and sustainability investments. Whilst continuing to work with its investee companies. the Company’s operations have been streamlined and expense management has improved NAV to OpEx ratio from 6.5% (2H2022) to 2.3%† (2H2023).
Liquidity risk in a challenging macro-economic environment has been mitigated via a secured line of credit obtained from the European Depository Bank, while the Company has re-negotiated and increased ownership in key investee company holdings. The first realised exit for the Company was achieved in November 2023 with a successful sale of Carbon Engineering at 7.2x multiple of invested capital (MOIC). A robust, proprietary deal pipeline for new investment opportunities has been further developed and the Company made its first new investment as a public company in November 2023 in Citron Energy, which is getting ready to scale.
Portfolio update
i(x) Net Zero offers investors access to a portfolio of investee companies that is uniquely focused on the long-term secular trend of capital flowing towards sustainable finance. In November 2023, the Global Sustainable Investment Alliance published its Global Sustainable Investment Review, finding that US$30.3 trillion is invested in sustainable assets globally which accounts for approximately 35 per cent of all professionally managed assets across the US, Canada, Japan, Australasia and Europe.
There is a growing weight of legislative and policy initiatives that offer support to ambitious business owners around the world to invest in companies that are pushing the boundaries of innovation and creating technologies that have the potential to generate jobs, support communities and energise the move towards a greener future.
WasteFuel
In mid-2023 WasteFuel secured a $10 million investment from bp, to further assist WasteFuel’s plans to develop a global network of plants to convert municipal and agricultural waste into bio-methanol, a biofuel which could play a significant role in decarbonising hard-to-abate sectors like shipping. This investment by bp was at a price which dramatically increased the NAV of the Company’s holding in WasteFuel by $84.78 million to a total reported NAV of $131.69m as at June 30 2023, and $131.50m as at December 31, 2023.
WasteFuel intends to develop multiple bio-methanol plants around the world in collaboration with local strategic partners including waste companies, with the first project expected to be in the GCC. Ever since bp’s funding, WasteFuel has continued to proceed its projects in the GCC, with two of them leading the way. Bp and WasteFuel have entered a memorandum of understanding to offtake the produced bio-methanol and, working together, to help optimize and improve bio-methanol yields and economics. WasteFuel has a proven track record of working with global partners as it pursues its plans for a global network of bio-methanol plants converted from waste. In 2022 WasteFuel entered a commercial-scale bio-methanol partnership with A.P. Moller – Maersk, the global container logistics company. WasteFuel also has continued to develop its projects in the GCC, to develop the first commercial scale municipal waste-to-renewable methanol plant in the Middle East.
WasteFuel Featured on TIME and Statista’s 2024 List of America’s Top GreenTech Companies.
Enphys
Enphys remains in talks with a leading and well-established advanced biofuels company in Latin America and has until 8 June 2024 to consummate an initial business combination.
Citron Energy
Since the Company’s investment in November 2023, i(x) Net Zero has advanced the development of multiple projects in the US. The near term opportunity to conclude multi-year offtake and supply contracts has been accelerated by the increasing awareness of the need to address carbon footprint and GHG emissions for industries including cement and lime production as well as an increasing focus on net zero recycling and limited space for new landfills. With equipment sources in place and site development activities well advanced, Citron expects to accelerate the development of its project pipeline over the near term.
Carbon Engineering
Following completion of the sale of Carbon Engineering Ltd. To Occidental Petroleum Corporation in November last year at a 7.2x realized multiple of invested capital, the Company received the first tranche of the proceeds in November 2023 and expects the second tranche in November this year and a final payment in November 2025. Occidental’s $1.1bn purchase of Carbon Engineering was a landmark moment for carbon capture sequestration (CCS) startups, marking the first major acquisition of a carbon removals company, with the transaction regarded as one of the leading Energy Transition deals of the year in 2023, showing the strength and investment acumen of i(x) Net Zero.
Context Labs
Context Labs has continued to successfully deliver on a number of projects including the EQT, Williams, Jonah Energy and Carbon GeoCapture projects. There were advances in discussions with Microsoft and Dell and a collaboration began with EEMDL, a multi-disciplinary research and education center with a mission to be the global data and analytics hub to support improved greenhouse gas emissions accounting across energy supply chains.
Pär Lindström, Chief Executive Officer, commented: “i(x) Net Zero’s investee companies have shown good resilience over the past twelve months and the ability to make continued progress in their goal of helping to decarbonise their respective industries.
“Our portfolio of investee companies is helping some of the world’s hardest to decarbonise sectors, such as shipping and aviation, to make significant strides forward with the planned provision of sustainable fuel from WasteFuel to the likes of Maersk and NetJets.
“Given the tailwinds in our favour and the success of our recent 7.2x realised multiple of invested capital on the disposal of Carbon Engineering, the Company looks to the future with confidence.”
Further detail will be provided in i(x) Net Zero’s final results which are expected to be released in mid-June 2024, along with a further portfolio update.
