HydroDec Group plc Q3 Trading Update (6492U)
26 October 2017 - 5:00PM
UK Regulatory
TIDMHYR
RNS Number : 6492U
HydroDec Group plc
26 October 2017
26 October 2017
Hydrodec Group plc
("Hydrodec", the "Company" or the "Group")
Q3 Trading Update
Hydrodec Group plc (AIM: HYR), the cleantech industrial oil
re-refining group, is pleased to provide a trading update for the
quarter ended 30 September 2017.
Highlights
-- Strongest quarterly EBITDA performance in Group's history,
with Group EBITDA expected to exceed US$330,000, representing an
improvement of US$605,000 on the comparable period last year (Q3
2016: loss of US$275,000), driven by improved pricing and margins
and reductions in corporate costs
-- Revenues expected to exceed US$4.7 million (Q3 2016: US$4.3 million)
-- Group sales volumes of premium quality SUPERFINE transformer
oil and base oil of 7.7 million litres (Q3 2016: 8.2 million
litres)
-- Canton plant utilisation consistent with H1 2017 at 61% -
feedstock remains key constraint to higher throughput and strategic
initiatives continue to progress in securing sustainable, increased
supplies going forward
-- Gross unit margins materially up on prior year at 14% (Q3
2016: 7%) - driven by improved sales mix in the US between higher
margin transformer oil and lower margin base oil - and further
improvement on H1 (H1 2017: 13%)
-- In the US business, the Company is pleased to confirm the
award of a two year agreement to supply up to 7.6 million litres
annually of its SUPERFINE transformer oil to a major transformer
original equipment manufacturer ("OEM")
Outlook
This update confirms the progress over the past 12 months, with
Q3 demonstrating further improvement over the recent half year
results. Demand for our product remains robust and the award of a
two year contract from a major OEM in the US underlines the quality
of the product the Company produces. The focus remains on expanding
the number and value of significant feedstock contracts that in
turn will drive the utilisation of the operations and further
improve the Group's EBITDA and cash-flow generation going
forward.
Chris Ellis, Chief Executive Officer of Hydrodec, commented: "I
am very pleased to confirm further strong progress in positive
Group EBITDA in the most recent quarter of 2017, as much of the
recent hard work begins to reap its reward. As indicated at the
beginning of the year, I am confident that 2017 will see the Group
deliver full year positive EBITDA for the first time in its
history, with scope for further material improvement from the
existing facilities. While maintaining a sharp focus on the
operational performance of the business, we will look for
opportunities to deploy our clean-tech re-refining technology to
capitalise on the large market opportunity that we see."
For further information, please contact:
Hydrodec Group plc 01372 824750
Chris Ellis, Chief Executive
Canaccord Genuity (Nominated
Adviser and Broker) 020 7523 8000
Henry Fitzgerald-O'Connor
Richard Andrews
Vigo Communications (PR adviser
to Hydrodec) 020 7830 9700
Patrick d'Ancona
Chris McMahon
Notes to Editors:
Hydrodec's technology is a proven, highly efficient, oil
re-refining and chemical process initially targeted at the
multi-billion US$ market for transformer oil used by the world's
electricity industry. MarketsandMarkets forecasts that the global
transformer oil market is expected to grow from US$1.98 billion in
2015 to US$2.79 billion by 2020 at a CAGR of 7.14% from 2015 to
2020. Spent oil is currently processed at two commercial plants
with distinct competitive advantage delivered through very high
recoveries (near 100%), producing 'as new' high quality oils at
competitive cost and without environmentally harmful emissions. The
process also completely eliminates PCBs, a toxic additive banned
under international regulations.
In 2016 Hydrodec received carbon credit approval from the
American Carbon Registry ("ACR"), enabling its product to be sold
with a carbon offset and creating an incremental revenue stream.
The Group is now generating carbon offsets through the re-refining
of used transformer oil, which would otherwise ordinarily be
incinerated or disposed of in an unsustainable manner. This is a
highly distinctive feature for the Group, confirming (as far as the
Board is aware) Hydrodec as the only oil re-refining business in
the world to receive carbon credits for its output. This is a
significant endorsement of the Company's proprietary technology and
standing as a leader in its field.
Hydrodec's plants are located at Canton, Ohio, US and Bomen, New
South Wales, Australia.
Hydrodec's shares are listed on the AIM Market of the London
Stock Exchange. For further information, please visit
www.hydrodec.com.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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