Long-suffering shareholders in embattled wave power company Carnegie Clean Energy have questioned the company’s ability to remain afloat.
- Shareholders fear for the future of Carnegie and its planned wave energy farm
- The company concedes it has failed to live up to shareholder expectations
- A plan to sell a stake in its solar microgrid company has also fallen over
Carnegie’s annual general meeting in Fremantle on Friday was the first chance for shareholders to quiz management about the company’s poor financial performance.
One shareholder, Greg Benjamin, said he had seen the value of his shares plummet.
“I’ve been coming along to these shareholder meetings now for more than 10 years,” he said.
“We always have a good story, there’s a lot of cause for optimism about wave energy, but we just haven’t seen any results.”
Carnegie concedes shareholders let down
In his address, chairman Terry Stinson conceded the company had failed its shareholders.
“Commercially, it would be an understatement to say that Carnegie failed to deliver on expectations,” he told the gathering.
“On $10 million in revenue, the company lost $63 million, including a $34.9 million write-down of intangibles.
“The losses continue into this year, however not at the same magnitude.”
Mr Stinson blamed the financial problems on budget blowouts, project delays and intense competition in the solar power industry.
But he said the company planned to turnaround its financial performance by focusing on its core business of wave energy.
Sale of solar subsidiary off
Investors also learned on Friday that Carnegie’s plan to sell a majority stake in its solar subsidiary, Energy Made Clean (EMC), at a 75 per cent loss to Sydney-based TAG Pacific Limited had fallen over.
“They needed to raise $4 million for the condition precedent on the deal and they weren’t able to do that,” Carnegie’s new chief executive Jonathan Fievez said.
“They have started the rights issue, but their commitments won’t come in until sometime in the future, I think mid-December, so there’s some uncertainty around whether they can raise that amount.”
Mr Fievez said there was no “single thing” which had gone wrong.
“It’s a combination of project issues, the projects were already stressed when we came on board, we brought on new projects which also ran over budget and had technical difficulties,” he said.
Some shareholders raised their concerns about Carnegie’s decision in 2016 to buy EMC.
As a result of its financial turmoil, Carnegie has been put on notice by the WA Government to show it can fund its $26 million share of a wave energy project in Albany by mid-February.
At least one shareholder at the AGM expressed concern about whether the company would be able to meet that deadline.
We’ll be more transparent, CEO says
Carnegie has also been accused of misleading shareholders over what projects would be delivered.
“I take them on board in as much as we acknowledge we need to be more transparent with our shareholders,” Mr Fievez said.
“But bear in mind we had 100 shareholders here today, and I didn’t hear any questions about [misleading shareholders].
“Our shareholders probably felt like everything was going swimmingly and clearly it wasn’t, we were having trouble with the EMC part of the business, and they felt like that was perhaps a surprise to them when we revealed the extent of that issue.
“So we’re listening to them and we’re planning on being far more transparent in the future, so they understand where we are going.”
Mr Fievez conceded shareholders “should be concerned”.
“We’ve got some big challenges ahead of us, but their concern and their attendance here today shows how passionate they are. They really want this company to work,” he said.