Trading Update
EcoSecurities Group plc
19 January 2007
EcoSecurities Group plc
Trading Update
EcoSecurities increases portfolio to 156 million Carbon Credits
EcoSecurities Group plc (the "Group" or "EcoSecurities"), one of the world's
leading companies in the business of originating, implementing and
commercialising carbon credits from greenhouse gas emission reduction projects,
today issues a trading update for the six month period ended 31 December 2006.
Origination
The Group continued its strong project origination performance during the
period, with projects and tonnage added ahead of expectations. The total gross
Certified Emission Reduction ("CER") portfolio grew by 26 million tonnes to 156
million CERs at 31 December 2006. In line with the Group's policy of
continually assessing the projects within the portfolio for expected operating
and regulatory performance, this total takes into account volume adjustments
principally relating to several biodiesel projects in Indonesia. The total
number of projects with which the Company has contracted grew to 353. In
addition, the Group has a further 21 million CERs from projects that had yet to
complete the full contracting and due diligence process at year end and which
have not yet been added to the portfolio.
Adjusting for the relative proportions of Agency, Principal and Project
Development contracts in the gross portfolio, the Group's net ownership position
totals 127 million CERs at 31 December 2006. The Group's net ownership expanded
by a considerable amount during the period, primarily due to the restructuring
of its EcoMethane joint venture whereby the Group will now acquire all the CERs
generated from these landfill gas projects.
Other highlights of the Group's origination activities included continued
geographic expansion with the opening of additional representative offices in
Kenya and Singapore, bringing the total number of offices and representative
offices to 23 at year end (2005: 14). EcoSecurities also signed strategic
agreements with Standard Bank, the largest retail bank in South Africa, and UOB
Kay Hian, a division of the second largest bank in Singapore, to maximise
business development activities in Africa and Southeast Asia, respectively.
Implementation
Implementation of the Group's contracted projects - the process of guiding Clean
Development Mechanism ("CDM") projects through the United Nations registration
process - made further progress in the second half of 2006. Notwithstanding the
well publicised delays experienced in external validation and verification of
projects and with the CDM Executive Board ("EB") in the processing of projects,
the pace of registrations increased in the latter part of 2006. The number of
projects registered with the EB by the Group increased from 17 at 30 June 2006
to 53 at the end of December 2006. These registered projects are expected to
produce 16 million CERs through to 2012. A total of 84 projects in
EcoSecurities portfolio are now operating, and are expected to produce 39
million CERs through to 2012.
Commercialisation
The Group executed a number of new sales transactions in the second half of 2006
with counterparties in Europe and Japan, significantly increasing the amount of
contracted forward sales over the 2008 to 2012 period. The total gross contract
volume of CERs sold forward during the period was 8 million tonnes, increasing
the total forward sale contract volume to 29 million tonnes. The total Net
Trading Margin on contracted forward sales at 31 December 2006 increased to €151
million, up from €100 million as at 30 June 2006.
For the year ended 31 December 2006 the Group will recognise revenue from the
sale of verified CERs from a number of Principal, Agency and Project Development
projects. A total gross number of 451,442 CERs were verified in relation to the
Group's projects during the year. At year end 67,954 of these CERs had not yet
been sold.
Operations and Finance
Despite significant expansion in 2006, costs were within expectations.
Furthermore, the Group's cash position at year end was larger than anticipated,
placing EcoSecurities in a comfortable position going into 2007.
Bruce Usher, Chief Executive Officer, commented:
"Throughout 2006 the Group placed significant emphasis on building its carbon
credit portfolio, which grew to a gross total of 156 million CERs and a net
total of 127 million CERs at the end of 2006. Despite experiencing the
industry-wide delays in the processing of our projects by the CDM Executive
Board, we have continued to progress a significant number of projects through
the CDM process.
"During 2006, there have been many developments raising not only the awareness
of climate change, but also examining the likely economic impacts. In particular
the publication of the Stern Report in the UK has helped focus attention on this
ongoing problem and need for emissions trading and project offsets. In addition,
tighter EU emissions targets brought about by recent EU ETS National Allocation
Plans and accelerating policy momentum in the United States, especially in
California, will contribute to further development of the global carbon market
and provide additional opportunities for EcoSecurities in 2007."
+ Note: Gross and net contract volume measures expected CER production from
projects through to the end of 2012 and does not adjust for operating or
regulatory risk. Gross and net contract volume excludes projects where the
probability of either the development of a relevant methodology or the
underlying development of the project is still uncertain.
CDM = Clean Development Mechanism, the provision of the Kyoto Protocol that
governs project level carbon credit transactions between developed and
developing countries
CER = Certified Emission Reduction, carbon credits created by Clean Development
Mechanism projects. One CER corresponds to 1 tonne of CO2e emission reductions
EU ETS = European Union Emissions Trading Scheme, a market based "cap and trade"
system for green house gases adopted by the European Union member states
- Ends -
For further information please contact:
EcoSecurities Group plc + 353 (0) 1613 9814
Bruce Usher, CEO
Pedro Moura Costa, President & COO
Citigate Dewe Rogerson + 44 (0) 20 7638 9571
Kevin Smith / Ged Brumby
About EcoSecurities:
EcoSecurities is one of the world's leading companies in the business of
originating, implementing and commercialising carbon credits. EcoSecurities
structures and guides greenhouse gas emission reduction projects through the
Kyoto Protocol, acting as a principal between the projects and the buyers of
carbon credits.
EcoSecurities works with companies in developing and industrialising countries
to create carbon credits from projects that reduce emissions of greenhouse
gases. EcoSecurities has experience with projects in the areas of renewable
energy, agriculture and urban waste management, industrial efficiency, and
forestry. With a network of offices and representatives in 21 countries on five
continents, EcoSecurities has amassed one of the industry's largest and most
diversified portfolios of carbon projects. Today, the company is working on 353
projects in 36 countries using 17 different technologies, with the potential to
generate more than 156 million carbon credits.
EcoSecurities also works with companies in the developed world to assist them in
meeting their greenhouse gas emission compliance targets. Utilising its highly
diversified carbon credit portfolio, EcoSecurities is able to structure carbon
credit transactions to fit compliance buyer's needs, and has executed
transactions with both private and public sector buyers in Europe, North America
and Japan.
Working at the forefront of carbon market development, EcoSecurities has been
involved in the development of many of the global carbon market's most important
milestones, including developing the world's first CDM project to be registered
under the Kyoto Protocol. In 2006, EcoSecurities won the Point Carbon Award for
'Best CDM/JI Project Developer'. EcoSecurities' consultancy division has been at
the forefront of all the significant policy and scientific developments in this
field, and has been voted the world's leading greenhouse gas advisory firm over
the last five years through reader surveys conducted by Environmental Finance
Magazine.
EcoSecurities Group plc is listed on the London Stock Exchange AIM (ticker
ECO.L). Additional information is available at www.ecosecurities.com.
This information is provided by RNS
The company news service from the London Stock Exchange