InfraStrata (INFA ) said it continues to make “solid commercial progress” as it builds “a significant pipeline of opportunities” amongst the sectors it is seeing most traction in. 

The Group, which is focused on strategic energy infrastructure, fabrication, shipbuilding and vessel repairs, said it is witnessing a macro-economic recovery, particularly in the cruise and ferry market, which is resulting in increasing contract values and higher client spend. 

As a result, InfraStrata has booked revenues of circa £9 million during the 11-month period to 30 June 2021, with c. £3 million of this having been booked in the latest quarter alone.  

InfraStrata’s contracts in the ferry market fall at around £0.8m and £1m on average. The Group said it is currently negotiating several multi-ship deals with different operators as it expects the market ‘to continue to create a substantial baseload of work for the Company.’ 

It said it expects to see more cruise vessels preparing for cruising over the summer and into 4Q21. To date, it said conversations are already well underway with a number of clients for dry docking bookings, which includes the P&O Azura into Belfast's ship repair quay. 

The Group said it anticipates signing additional cruise clients for simultaneous multiple dockings in Q3 and Q4 of this calendar year. To allow overseas clients to conduct large value works programmes at its Harland & Wolff (Belfast) base, the Group has rolled out an innovative financing programme for its cruise clients in conjunction with external partners. 

In the renewables space, InfraStrata said it has completed its first major fabrication contract and as a result, is now ready to commence the fabrication, a month ahead of schedule. 

‘Whilst conventional energy has had a difficult year, we are now starting to see enquiries focusing on repurposing of facilities and electrification of existing assets to complement the growing portfolio of offshore wind farms in the North Sea,’ the Company told investors. 

The Group said it continues to pursue projects as it expects a modest recovery in the market in 2021, ‘with more robust activity and contracts in 2022 as the global economy normalises.’ 

In regard to the FRSU project in Furness, the Company said it has formally withdrawn from the project since it ‘no longer sees a business case’ for it. Instead, it said it will focus its attention and resources on revenue generation within the Harland & Wolff Group. 

John Wood, CEO of InfraStrata commented, "We continue to make solid commercial progress and we are building a significant pipeline of opportunities with a near-term focus on renewables, defence and cruise & ferry, where we are seeing the most traction.”   

Addressing investors, he added, “The Saipem fabrication contract is a real game changer for InfraStrata and provides a solid platform for us to grow the renewables side of our business, as is welcoming the first vessel from Carnival UK. Our current focus is absolutely clear: to convert opportunities to contracts as quickly as possible and increase organic cash flows so as to be in an annualised cash break-even position by the end of the current calendar year.” 

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In particular, InfraStrata said it has built “a sizable, weighted pipeline of opportunities across our five markets” since the Company acquired Harland & Wolff (Belfast) in December 2019.  

The Group said its recently secured contracts “validates our business strategy and provides the ideal platform to secure similar, if not larger, fabrication contracts across all our sites."  

The Group said it believes that it has “a firm set of foundations” that it is ready to capitalise on and that it expects to see clients increasing their contract spend as the world opens up, ‘leading to larger contract values and enabling it to achieve a baseload level of revenues.’  

Following “steady progress" in the first months of 2021, InfraStrata said it expects ‘major renewable and fabrication projects’ to come into fruition in the months ahead.    

The company noted that it now has the largest fabrication footprint in the UK, ‘with the capacity and capability of attracting large fabrication contracts by offering clients optimised delivery schedules, spreading fabrication risk across four sites and significant cost savings.’   

Reasons to  INFA

InfraStrata is a London-listed firm focused on the development, commercialisation and operation of advanced high-value strategic infrastructure facilities across the globe.    

Energy Storage    

The group holds a salt cavern gas storage project at Islandmagee in County Antrim, Northern Ireland is a pioneering low-cost fast cycle facility that it believes will provide ‘safe, secure and flexible gas storage that will in time serve the island of Ireland and the UK mainland.’    

In May 2020, the company entered into a term sheet with West Face Long Term Opportunities Global Master L.P to acquire Meridian Holdings Co., under which sits the proposed Floating Storage and Regasification Unit Project (“FSRU Project”), located in North West England.    

The Project will be the UK’s first to be developed and commercialised. Since more than 30% of the UK’s natural gas supplies arrive via LNG (liquified natural gas) cargoes, the FSRU is positioned to take advantage of LNG arriving in the UK seeking storage and regasification.    

The estimated CAPEX for the FSRU Project will be circa £350m-£450m with further CAPEX optimisation planned through value engineering. The CAPEX for the FSRU Project is expected to be funded by putting together a consortium of partners at the project level. Estimated project revenues come to £80-£100mm annually with a 25-30 year project life.    

Discussions with key partners have commenced with a consortium consisting of globally recognised companies involved in the development, construction, operations and commercialisation of regasification terminals worldwide will be formed in due course.   

Pipeline    

As the Group stands today, the Directors of INFA have identified a potential weighted pipeline of “£2 billion in contract opportunities between now and 2025” and believe there are near term revenue opportunities of £80.5 million and up to £825 million in the medium term.    

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