Trading Statement
23 Mars 2007 - 8:01AM
UK Regulatory
RNS Number:5642T
Tersus Energy Plc
23 March 2007
TERSUS ENERGY PLC
('Tersus Energy' or 'Tersus')
UPDATE ON TRADING AND FINANCING
In advance of announcing audited results for the year to 31 December 2006 Tersus
Energy Plc today provides an update on trading and financing.
Financial Highlights
(Results for 2006 are un-audited)
* Revenue of #4.5 million consisting of: Navitas #2.4 million; Envinta
#0.3 million; Advisory Services #1.8 million. (31 December 2005 #2.7
million consisting of: Navitas #1.5 million; Advisory Services #1.2
million)
* Pre tax loss of #0.7 million (31 December 2005 #0.9 million*)
* This result includes a profit of #0.6 million (US$1.1 million) on the
disposal of Tersus' holding in Dynamotive Energy Systems Corporation.
* Net assets of #5.0 million (31 December 2005 #5.5million)
* Restated to reflect the adoption of FRS 20.
Tersus Energy Controls
*Navitas Technologies Inc ('Navitas'), which is 100 per cent owned and was
acquired in April 2005, made a profit in the year to 31 December 2006 before
interest, tax, depreciation and amortisation ('EBITDA') of Canadian $292,000
and is budgeting for improved performance in 2007. (The 2005 EBITDA in the
post acquisition period was Canadian $133,000).
*Envinta Corporation Inc ('Envinta'), which is 100 per cent owned and was
acquired in May 2006, did not achieve expected levels of turnover in the
year to 31 December 2006 and made an EBITDA loss for the period from
acquisition of US $266,000. Envinta is now trading at breakeven and is
budgeted to operate profitably in 2007.
*Tersus has decided to offer Navitas for sale in order to realise value
from the investment and to focus on its Asian Renewables and BioEnergy
businesses. The sale could include Envinta, if appropriate, and should
benefit from Tersus' research and analysis into suitable acquisition targets
for a consolidation of Energy Controls companies in North America. Initial
discussions are underway with a number of interested parties.
Tersus Asian Renewables
*Tersus' 50 per cent interest in Jasfour Power Private Ltd ('Jasfour') has
been formalised creating a vehicle through which Tersus is developing its
interest in wind power in India. Jasfour is seeking financing for the
acquisition of its first wind farm, which has 15mw of generating capacity
and which has been in operation for just over a year, and project finance
for a related development, which is expected to be operational early in 2009
with a capacity of 50mw. A pipeline of further developments is under review
and negotiation by Jasfour.
*Tersus is a 50 per cent co-developer under a Joint Development Agreement
with First Philippines Wind Corporation of a 168mw onshore wind farm project
in the Philippines. The land lease for the first site ( for 42mw ) is
expected to be granted within weeks, following which further progress can be
made in negotiating off -take contracts, transmission, equipment supply, and
other aspects of project development.
*Hahn Renewable Energy LLC ('HAHN') has signed MOUs for a 500mw wind
project and for two 10mw solar projects in South Korea in which Tersus
expects to participate 50:50 under a Joint Development Agreement.
*ZhongHong (Baoding) Huiteng Wind Power Equipment Company Ltd ('HT
Blade'), a leading Chinese wind blade manufacturer in which Tersus has an
indirect interest of 3 per cent, is trading well, made an (unaudited) after
tax profit in excess of US$11 million in the year to 31 December 2006, and
is budgeting for a significantly increased level of profit in 2007.
.
Tersus BioEnergy
*Tersus' BioEnergy project pipeline is primarily focused on anaerobic
digestion opportunities using the proprietary thermophilic anaerobic
digestion technology developed by Enviro-Control Limited ('ECL') into which
Tersus invested in May 2006. ECL Developments Limited ('ECLD') is the 50:50
joint development company established by Tersus and ECL to exploit such
project opportunities.
*Tersus is working on a pipeline of more than 10 waste-to-energy projects
in the US and Europe. These projects are driven a) by environmental
compliance requirements for animal waste streams and b) by a desire to
mitigate ethanol commodity project risk via anaerobic digestion of whole
stillage and wet and dry distillers grain. ECLD has two MOUs for animal
waste projects in Belgium and is in active negotiations with a US developer
of corn-based ethanol production plants.
Tersus Advisory
*Tersus continues to provide advisory services on existing assignments
including the Bens Run salt dome gas storage facility where a potential
purchaser is nearing completion of detailed due diligence. The sale of the
project would give rise to a significant fee payable to Tersus.
Future Direction and Financing
*Tersus' strategy is to sell its Energy Controls interests and to focus
its activities and its resources on its BioEnergy and Asian Renewable
businesses. These offer opportunities for substantial project investment on
which Tersus would expect to earn significant developer fees and/or carried
equity.
*Tersus will require additional finance in the coming six months in order
to achieve this objective. Such additional finance may come from the sale of
the Energy Controls businesses, from the sale of other Tersus interests, or
from one of a number of financing relationships which Tersus has been and is
discussing.
*Tersus has taken measures to reduce the running costs of the business.
This includes the deferral of senior management salaries with effect from 1
January 2007.
*The Board intends to issue to management and staff options over up to
three million new ordinary shares with an exercise price to be set at the
closing middle market price on the day following this announcement.
Conclusion
*The Board considers that Tersus' principal investments in Dynamotive
(now realised), Navitas, and HT Blade have been successful. It has taken
longer than anticipated for Envinta to achieve break-even, but indications
are that this has now been achieved.
*The market for BioEnergy opportunities remains active and Tersus has
numerous opportunities to capitalise on the intellectual property of
Enviro-Control Limited, in which it has a minority investment, and the
experience and expertise of its management.
*The market for Asian Renewables remains exciting and Tersus believes it
is well positioned to participate in projects available to developers and
operators in that market.
*The successful development of the BioEnergy and Asian Renewable
Businesses is dependent on making additional development capital available
from the sale of Navitas, other Tersus' assets, or from new financing.
For further information please contact:
Tersus Energy plc
Steve Levine, Chief Executive Tel: +1 978 635 0997
Officer
David Wilson, Finance Director Tel: +44 (0)20 7408 5416/+44 (0)7831 818121
KBC Peel Hunt Ltd Tel: +44 (0)20 7418 8900
Jonathan Marren
David Anderson
M:Communications
Partick d'Ancona Tel: +44 (0)20 7153 1547
Eleanor Williamson Tel: +44 (0)20 7153 1539
This information is provided by RNS
The company news service from the London Stock Exchange
END
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