Petrotec AG

Corporate News

Results of first nine months 2014 (Jan. 1^st to Sep. 30^th)

Petrotec AG: Weaker 9M results due to pressure on UCOME prices

- Net loss of EUR 1.6 mill. for 9M 2014

- Revenues of EUR 134.3 mill. down 7.1 % (9M 2013: EUR 144.6 mill.)

- Net cash flow from operating activities of EUR 11.2 mill. in 9M 2014 (9M 2013: EUR 13.6 mill.)

- Equity ratio improved to 52.9 % (Dec. 31, 2013: 47.6 %)

- Total liabilities further reduced by 23 %

Borken, November 12^th, 2014 - Petrotec AG (ISIN DE000PET1111), the largest European producer of waste based biodiesel predominantly from used cooking oil, reports group sales revenues of EUR 134.3 mill., down 7.1 % compared with the prior year (9M 2013: EUR 144.6 mill.) in the first nine months (Jan. 1^st to Sep. 30^th) of the business year 2014. Sales volumes increased by 3.0 %, mainly thanks to a stronger trading activity. The primary reason for the decline in sales is a sharp drop in the biodiesel sales prices (-13% compared to parallel period last year) mainly driven by the drop in the value of the virgin oils and the corresponding prices of virgin oil biodiesel. The company generated an operating loss (EBIT) of EUR 0.4 mill. (9M 2013: operating profit EUR 6.2 mill.). Net loss reached EUR 1.6 mill. (Previous year: net profit EUR 4.7 mill.) and earnings per share (EPS) went down to minus EUR 0.07. Biodiesel production volumes in 9M 2014 declined by 3,152 tons to 105,694 tons (9M 2013: 108,846 tons).

In Q3 2014 Petrotec' revenue declined by 20% to EUR 38.3 mill. (Q3 2013: EUR 47.6 mill.), mainly driven by lower biodiesel sales prices (-21% compared to parallel period last year).The company generated an operating loss (EBIT) of EUR 0.4 mill. Biodiesel production volumes in Q3 2014 declined by 1,421 tons (-4%) to 36,287 tons (Q3 2013: 37,708 tons). Likewise, sales volume declined by 4.5% to 40,354 tons.

Equity ratio increased to 52.9 %

Total assets as of Sep. 30, 2014 have declined to the comparable at year end 2013 and amount to EUR 49.7 mill. The decline from EUR 58.2 mill. is primarily due to the decline in inventories by EUR 7.8 mill. Cash and cash equivalents overall increased from EUR 9.9 mill. as of Dec. 31, 2013 to EUR 12.4 mill. as of Sep. 30, 2014. Through the agreement from the first quarter 2014 the current loans of Petrotec's major shareholder (ICG) in an amount of EUR 7.3 mill. were extended till end of first quarter 2015. The company has reduced its total liabilities by EUR 7.1 mill. to EUR 23.4 mill. as of Sep. 30, 2014 compared to Dec. 31, 2013. Petrotec's equity ratio improved to 52.9 % compared to 47.6 % as of the balance sheet date on Dec. 31, 2013, which is mainly attributable to the reduced asset position.

Compared to 2013 year end Petrotec's working capital declined significantly by EUR 9.4 mill. to EUR 7.2 mill., primarily due to the reduction of inventory. In the period under review Petrotec generated a net cash flow from operating activities amounting to EUR 11.2 mill. (9M 2013: EUR 13.6 mill.) mainly due to the decrease in inventories and trade receivables.

Regulation Update

As expected during the whole Q3, Germany's Lower House of Parliament in mid-October passed a government bill introducing a cap on GHG for road fuels. The so-called decarbonisation will be effective from January 1, 2015 mandating a CO2 reduction for fuels companies of 3.5 % from 2015, 4 % from 2017 and 6 % from 2020. The Upper House of Parliament is expected to also pass the bill. The issue remains the implementation directive, which is expected very late in the year. This creates significant uncertainty amongst market players. Also controls on GHG reduction values are not defined representing a risk as it may encourage fraud. Junior environment minister stated in the parliament that biofuels with a more favourable carbon footprint, such as biofuels from waste, will enjoy "clear prospects" from 2015 (thanks to the new law). Nevertheless, an opposite impact on the demand for UCOME in the German market might well be the eventual outcome, as producer of virgin oil based biodiesel are claiming to have much higher GHG savings compared to the RED standard values.

Outlook

On the longer terms management sees a further increasing of the demand for biodiesel mainly thanks to an increasing number of countries adopting the double counting scheme and to higher blending obligations in order to achieve the GHG saving targets. On the short term UCOME in Germany might no longer count double over virgin oil based biodiesel (as of 2015), while still counting double in other European member states, still implementing the double counting scheme. This might result in German UCOME producers seeking for better values for their products in export markets.

With a temporary decreasing trend of the UCOME prices following the decrease in the FAME 0 margin over gasoil, the management expects a relative weak fourth quarter. Within that outlook the management holds its assessment and sees a high probability that a positive EBIT for the year 2014 can no longer be achieved.

Report download

The full 9M 2014 financial report can be found in the following link:

http://www.petrotec.de/core/cms/front_content.php?idart=386&changelang=2&lang=2

9M 2014 Petrotec group key figures

EUR million	Q3 2014	9M 2014	Q3 2013	9M 2013
Sales revenues	38.3	134.3	47.6	144.6
EBIT	-0.4	-0.4	2.5	6.2
EBT	-0.8	-1.6	2.0	4.8
Profit/Loss of the period	-0.8	-1.6	2.0	4.7
EPS in EUR, undiluted	-0.03	-0.07	0.08	0.19
Operative cashflow	-	11.2	-	13.6
Cash & equivalents	-	12.4	-	10.7
Equity ratio %	-	52.9	-	49.6
No. of shares as of Dec. 31 / Sep. 30	24,543,741	24,543,741	24,543,741	24,543,741

 

Disclaimer

This corporate news contains forward looking statements, which are based on assumptions and estimates of the management of Petrotec AG. Although Petrotec management believes that these assumptions and estimates are correct, actual future developments and results can deviate substantially from these assumptions and estimates due to many factors. These factors can include alteration of the economic situation, legal and regulatory constraints in Germany and the EU, and changes in Petrotec's general business and competitive environment. Petrotec assumes no liability and provides no warranty that future developments and actual future results will conform with the assumptions and estimates expressed in this corporate news.

About Petrotec

Petrotec AG, Germany, is the largest European producer of waste-derived biodiesel, mainly based on used cooking oil. The Company owns an overall nominal production capacity of 185,000 tons per year at two locations in Germany. Petrotec runs a vertically integrated business model including own collection of used cooking oil from more than 15,000 collection points, treatment and refining of the raw material up to the technologically demanding production of waste-based biodiesel. The Company sells its biodiesel primarily to large mineral oil companies in northwest Europe. The usage of waste based biodiesel enjoys a preferential double counting scheme granted by major EU countries as part of the mandatory blending quotas. Petrotec's EcoPremium biodiesel provides significant environmental and climate advantages with the highest CO2 emission reduction of 83% (compared with fossil diesel) amongst all biofuels approved by the EU Renewable Energy Directive (2009/28/EC). Since its IPO in 2006, Petrotec cleaned more than 800,000 tons of waste and saved over 2.5 million tons of CO2 emissions. Petrotec is a public listed company (ISIN DE000PET1111) in the regulated market of Frankfurt Stock Exchange, in the Prime Standard segment, complying with high international transparency standards. It has a capital stock of 24,543,741 Euro, equaling 24,543,741 shares. Main shareholder is IC Green Energy Ltd., Israel, with a stake of 69 percent, freefloat is approx. 18 percent. In the business year 2013 (Jan. 1^st to Dec. 31^st) Petrotec reached sales of EUR 193 mill. and generated an EBIT of EUR 4.9 mill. and a net profit of EUR 4.0 mill. The Company employs about 115 employees.

Press contact

Petrotec AG

Vera Berlin

Investor Relations

Tel.: +49 (0) 2862 910080

ir@petrotec.de

End of corporate news