Swedish floating wind technology developer has reported a SEK 115 million (nearly EUR 11 million) impairment related to its TwinHub floating wind project in the UK.
Hexicon’s project secured a Contract for Difference (CfD) in the UK government’s fourth allocation round (AR4) in 2022 at a strike price of GBP 87.30/MWh.
The same year, the company started offshore site investigations and selected London Marine Consultants as the Principal Designer for the 32 MW floating project, and Mingyang Smart Energy as the preferred turbine supplier.
Hexicon says that since early 2024, the company has focused on divesting the project, but that recent market developments made it challenging to secure a divestment on terms that would generate material proceeds for Hexicon.
“Divestment of the TwinHub project remains a priority, as the project continues to entail certain ongoing costs and liabilities”, the company stated on 30 January.
The impairment that Hexicon reported is driven by a combination of significantly increased inflation and supply chain costs, which have adversely affected the financial viability of the TwinHub project over time, the company said. SEK 127 million (almost EUR 12 million) of intangible assets and goodwill are written down, together with other adjustments, including revised deferred tax effects, which provides a positive effect of SEK 12 million (around EUR 1 million), resulting in a net effect on the Group of SEK 115 million (almost EUR 11 million).
The impact of the impairment is contained only within this project, according to Hexicon, which completed a control balance sheet on 30 January, according to which the remaining projects held by Hexicon Holding AB have sufficient surplus values for the company’s equity to amount to at least the registered share capital.
“The impairment announced today is clearly disappointing and reflects several years of effort to achieve a financially orderly exit from the TwinHub project”, said Marcus Thor , CEO of Hexicon.
“Hexicon’s portfolio remains geographically diversified and spans multiple stages of development, meaning that while one project is now being written down, other projects in the portfolio have simultaneously increased in value. We continue to focus our investments on the most valuable and promising projects as we progress towards commercialising the portfolio.”