Petrotec AG

Corporate News

Results of first nine months 2015 (Jan. 1^st to Sep. 30^th)

PETROTEC AG: Slightly improved market conditions in Q3 yet still 9M negative bottom line

- Net loss of EUR 2.5m for 9M 2015

- Revenues of EUR 97.6m down 27.3 % (9M 2014: EUR 134.3m)

- Net cash flow from operating activities of EUR 1.8m in 9M 2015 (9M 2014: EUR 11.2m)

- Equity ratio declined to 49.7 % (Dec. 31, 2014: 51.2 %)

Borken, November 11^th, 2015 - PETROTEC AG (ISIN DE000PET1111), the largest European producer of waste based biodiesel predominantly from used cooking oil, reports group sales revenues of EUR 97.6m, down 27.3 % compared with the prior year (9M 2014: EUR 134.3m) in the first nine months (Jan. 1^st to Sep. 30^th) of the business year 2015. The company generated an operating loss (EBIT) of EUR 1.5m (9M 2014: EUR 0.4m). Net loss reached EUR 2.5m (previous year: EUR 1.6m) and earnings per share (EPS) went down to EUR -0.10 (9M 2014: EUR -0.07).

Slightly improved market conditions in Q3 2015 enabled PETROTEC to improve its EBITDA result (Q3 2015: EUR 0.9m vs. Q3 2014: EUR 0.3m). However, considering that Q3 was seasonally one of the stronger profit-generating quarters in the past, the bottom-line negative profit still reflects the weaker market conditions compared to previous years. In 9M 2015 sales volumes of biodiesel have been pushed down significantly (-24.4%), mainly due to a sharp drop in trading activity (4,860 tons in 9M 2015 vs. 18,105 tons in 9M 2014 (-73.2 %)). The trading spreads almost completely disappeared, mainly due to regulation changes in the German market. Together with a unit price decrease of 8.6 % in 9M 2015 compared to 9M 2014, the biodiesel sales value dropped by 30.9 %. Unfortunately, the above trends in the UCOME market were only partially reflected in the feedstock market. The demand for UCO was kept relatively healthy, and despite certain adjustments, the decrease in feedstock prices did not fully compensate for the decrease in UCOME price.

In Spain, the management maintained its decision from mid 2014 to stop local tolling production due to the decreasing trend in UCOME prices. Therefore, in terms of biodiesel sales for this year, the company is missing the 7,700 tons it had produced in Spain in the first half of 2014. The company has kept its trading activity in Spain and either trades feedstock locally or supplies its own plants with this feedstock.

Biodiesel production volumes in 9M 2015 declined by 8,518 tons to 97,176 tons (9M 2014: 105,694 tons) due to tighter feedstock supply as well as production slow-downs and interruptions for various technical reasons.

Equity ratio declined to 49.7 %

Total assets as of Sep. 30, 2015 have declined to the comparable at year end 2014 and amount to EUR 43.6m. The decline from EUR 47.1m is primarily due to the reduced trade receivables as well as the reduced cash position. Cash and cash equivalents overall declined from EUR 11.1m as of Dec. 31, 2014 to EUR 9.7m as of Sep. 30, 2015. The major shareholder, REG European Holdings B.V. (REG) provided at balance sheet date Sep. 30, 2015 financial loans amounting to EUR 11.5m compared to EUR 12.9m at year end 2014 after a principle payment of EUR 1.0m and Q4 2014 interest (EUR 0.4m) during the first quarter of 2015. PETROTEC's equity ratio declined to 49.7 % compared to 51.2 % as of the balance sheet date on Dec. 31, 2014, which is mainly attributable to the accumulated loss of the period 2015.

Compared to 2014 year end PETROTEC's working capital declined by EUR 1.1m to EUR 5.1m, due to the development of inventories and trade receivables. In the period under review PETROTEC generated a net cash flow from operating activities amounting to EUR 1.8m (9M 2014: EUR 11.2m) mainly due to the improvement of EBITDA in the third quarter and the release of working capital.

Regulation

The de-carbonization regulation which has been effective in Germany since January 1, 2015 introduced the following CO2 reduction targets for marketers of fossil fuels: 2015: 3.5 %, 2017: 4 %, 2020: 6 %. Obligated parties (= oil companies) seem to be able to comfortably reach the 3.5 % target which reduces demand on the market. The waste-biodiesel association MVaK has intervened with the authorities in order to safeguard the high CO2 emissions reduction in the application of the law. Given the "right" price, UCOME remains the undisputed leader in biodiesel CO2 reduction.

Outlook

In the longer term, the management believes that the company holds the necessary competitive attributes, compared to other waste-based biodiesel producers, to recover from the losses it has experienced in the past few quarters. The management holds a positive view of the ability of the company to achieve this recovery as soon as supply and demand in the market rationalize.

On the short term, since its lowest point in Q4 2014 and throughout the year 2015, biodiesel prices and spreads between biodiesel and feedstock have started to recover. In Q3 2015 the demand for UCOME also started to recover, although the local German market demand has still been negatively affected by the de-carbonization regulation. The management expects to continue seeing a slow recovering trend in the UCOME market.

Following the better than anticipated Q3 results the management has revised its guidance for the financial year 2015 as published in the half year 2015 report. While the management still expects the annual sales to meet its original guidance of EUR 100m to EUR 150m, it now expects the EBIT margin to be in the range of 0 % and -3 %.

Delisting of PETROTEC AG

On April 8, 2015, the Frankfurt Stock Exchange approved the application of the company, dated March 24, 2015, for the revocation of the admission of its shares to trading in the regulated market of the Frankfurt Stock Exchange and published this revocation on the same date so that the revocation of the admission of the shares to trading in the regulated market of the Frankfurt Stock Exchange became effective as of the end of October 8, 2015. Accordingly, trading in PETROTEC AG shares on any regulated market of any stock exchange has discontinued as of the day-end of October 8, 2015.

Report download

The full 9M 2015 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 2015 PETROTEC group key figures

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 notification.

About PETROTEC AG

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, 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 (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 1m tons of waste and saved over 3m tons of CO2 emissions. Until the delisting of its shares as per 8 October 2015 (see section "Delisting of PETROTEC AG" above) PETROTEC used to be 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 EUR 24,543,741, equalling 24,543,741 shares. As at balance sheet date Dec. 31st, 2014, the main shareholder is REG European Holdings B.V., Netherlands, with a stake of 84 %, free float is approx. 10 %. In the business year 2014 (Jan. 1st to Dec. 31st) PETROTEC reached sales of EUR 167.2m and generated an EBIT of EUR -2.2m and a net loss of EUR -3.8m. The Company employs about 105 employees.

Press contact

PETROTEC AG
Vera Berlin-Knippenberg
Investor Relations
Tel.: +49 (0) 2862 910080
ir@petrotec.de

End of corporate news