Trading Update

EcoSecurities Group plc 13 July 2006 EcoSecurities Group plc Trading Update First CER Revenues Recognised EcoSecurities Group plc (the "Group" or "EcoSecurities"), one of the world's leading originators of projects which generate carbon credits, today issues a trading update relating to it's half year period ended 30 June 2006. Highlights of the period include recognition of the Group's first revenues relating to the sale as a principal of Certified Emission Reductions ("CERs"); and the growth of the Group's portfolio of CERs to over 130 million tonnes. Origination - Performance Excels Origination performance has continued to be strong with the gross contract volume of the Group's carbon credit portfolio growing to 130 million CERs at 30 June 2006. Since the IPO last autumn which referenced the portfolio as at 31 October 2005, the Group has added 59 million tonnes of CERs to its portfolio which is in line with the Board's expectations. The highlight of the growth in the portfolio during this period was the increase in principal contracts, with over 95% of the additions relating to principal agreements, which significantly exceeded our expectations. (Note: Gross contract volume includes all expected CER production from projects through to the end of 2012 and does not adjust for operating or regulatory risk, nor does it account for splitting of volumes with project partners and developers. Gross 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.) Other highlights of the Group's origination activities include the contracting of several development projects which reduce emissions of nitrous oxide, a major greenhouse gas, 310 times more potent than CO2. These projects represent EcoSecurities first involvement in emissions abatement of industrial gases and represent a substantial growth opportunity for the Group going forward. As announced on 12 July 2006 the Group signed 8 agreements for the development of such projects in China. The Group continues to make progress related to its joint development agreement with Cargill. MOU's for seven projects were signed in June relating to projects in Latin America, South Africa and Eastern Europe. Implementation - 17 Registered Projects Underlying project development and Clean Development Mechanism ("CDM") accreditation continues to progress. Of the 213 projects in the portfolio, over 150 are now financed, while 108 are either under construction or already in operation. At present, 17 projects have been fully registered with the CDM Executive Board. Once full registration is completed and the projects become operational, they will begin to accumulate emissions reductions that will be subsequently verified and sold as CERs by the Group. To date 66 of the Group's projects are in operation and are expected to generate 2.5 million tonnes per year of emissions reductions. While both the Group's CDM process submissions and the underlying progress in construction and operation of the contracted projects is progressing in line with our expectations, the rate of both Host Country and CDM registration approval has continued to be slow, albeit at an improving pace. Commercialisation - Initial Principal Revenues in the First Half of 2006 The highlight of the first half was the recognition of the Group's first principal trading revenues which resulted from the sale of CERs produced by a landfill gas project in China, where carbon credits are created through the capture of methane gas. The CERs, the first ever to be produced from a project in China, were sold to a major market participant in Europe and the transaction sets the precedent for sale of the Group's future non-committed production into the spot market. Future Group revenues will be generated through a combination of deliveries against committed forward transactions as well as through spot market sales. Furthermore, the Group made particularly strong progress in June with a total €220 million of CERs now having been sold forward, up from €140 million as at 31 May 2006. Highlights of transactions in June included completion of a transaction with a European government as well as a large Japanese corporate. The Net Trading Margin (NTM) locked in from the future delivery of 21 million tonnes of CERs related to these transactions is €100 million. The NTM is calculated as total revenue less costs based on the contract terms that EcoSecurities has with each project (i.e., agency fees, price paid for CERs, etc.). The Group's margins have continued to grow during the year due to a number of factors including a stronger balance sheet, continued strong market prices and the growth of the Group's portfolio. Bruce Usher, CEO of EcoSecurities, commented on performance in the first half "I am very pleased with the progress we have made over the first half of 2006, which was our first reporting period as a public company. The project portfolio has now begun to produce CERs and generate revenues for the Group which is a key milestone achievement. The progress the Group has achieved is based on its strength in origination, via amassing a large and diversified portfolio of projects, and commercialisation via the successful structuring of forward sales to meet the specific needs of Kyoto related compliance buyers. The Group's geographic spread and depth of expertise enables it to add value to the entire spectrum of the carbon credit development process and this is demonstrated by the attractive margins the Group continues to achieve. The larger our portfolio becomes, the more attractive the Group's value proposition becomes to both project developers and Kyoto compliance buyers. We continue to focus on our core strengths in origination, implementation and commercialisation of carbon credit projects. Given current market prices and attractive margins we plan to maintain this focus as a market leader and will continue to build shareholder value." Analyst Seminar The Group is holding a seminar for analysts in London on the morning of Wednesday 19 July 2006. Analysts wishing to attend should contact Ged Brumby at Citigate Dewe Rogerson on 020 7638 9571 for further details. - Ends - For further information please contact: EcoSecurities Group plc Bruce Usher, CEO +44 (0) 1865 202 635 Pedro Moura Costa, COO +44 (0) 1865 202 635 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, developing and trading carbon credits. EcoSecurities structures and guides greenhouse gas emission reduction projects through the Kyoto Protocol, acting as principal intermediary 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 20 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 213 projects in 26 countries using 17 different technologies, with the potential to generate more than 130 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. EcoSecurities' consultancy division has been at the forefront of all the significant policy and scientific developments in this field. EcoSecurities Consult has been recognised as the world's leading greenhouse gas advisory firm over the last five years by reader surveys conducted by Environmental Finance Magazine. EcoSecurities Group plc is listed on the London Stock Exchange AIM (ticker ECO). Additional information is available at www.ecosecurities.com. This information is provided by RNS The company news service from the London Stock Exchange
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