Business Update

RNS Number : 4726Y

Camco Clean Energy PLC

22 February 2013

 



Camco Clean Energy plc

Business Update

Camco Clean Energy plc (the "Company") today announces an update further to its previous announcement on 29 November 2012.

CER carbon business - Update on impact of carbon (CER) price

The significant fall in the CER price highlighted in the announcement of 29 November 2012 has not reversed with the Dec 13 CER price currently trading at €0.34 having been €3.96 on 30 June 2012.

As indicated, the board continues to take action to reduce its cash outflow and best conserve its cash resources. Such action involves focusing on a reduction in central overheads and costs relating to the carbon business with the aim of delivering a material reduction in operating expenses. So far the Company has reduced total cash expenses by approximately 50%.  The Company is also focussed on expanding revenue from energy projects and other sources to replace revenue previously earned from the CER business. This action continues and whilst the Board is pleased with the progress that has been made to date, a further update on these measures will be made in due course.

As at 31 December 2012, the Company had adjusted net cash of €7.13m (see note 1) which had reduced to €5.20m (see note 2) as at 15 February 2013 after settling a number of liabilities relating to 2012 shortly after the period end. These balances include cash held by the US biogas asset (€1.26m as at 15 February 2013) but exclude the cash held within the Camco South East Asia joint venture of €5.50m as at 31 December 2012 (€5.13m as at 15 February 2013) net attributable to the Company.

North America

The Company continues to expand its biogas energy project and carbon businesses in the growing North American market.

Our 100% owned 4.5 MW clean energy biogas plant in Jerome, Idaho has been, after an initial ramp up period, fully operational for the past six months and meeting anticipated electricity production levels that are sold to the grid under a long-term power purchase agreement.   The Company has a portfolio of additional renewable energy projects under development.  Demand for the renewable gas generated by projects targeted by the Company is driven by state renewable energy mandates for electricity and state and federal initiatives for advanced biofuels for transportation. 

The California cap and trade program commenced at the start of 2013 and the second auction of allowances was completed earlier this week.  Unlike the European trading system, the California system has a legislated floor price that is currently $10.71 with mandated annual increases.  The Company is a market leader in the compliance offset business in North America and anticipates offsets from its existing portfolio to be approved as California compliance offsets in the first half of 2013.

Africa

The Company has progressed its energy project development business in Africa following the previously announced establishment of a Joint Venture with MW1.  The company now has a 20MW pipeline of Solar PV projects and has signed its first land lease option on a 5MW solar PV project.   There is high demand and strong incentives to develop distributed renewable energy projects in Africa and the company is well positioned to capitalise on this market with its 6 offices in Africa, 20+ years project experience and delivery reputation.  

Our African consulting business has started the year well signing new projects which support the scaling of renewables and low carbon energy strategy.  The African advisory business provides the company with a base in Africa to support climate change mitigation and local renewable energy development. 

South East Asia

Our South East Asia team is on budget to deliver our 2 MW biogas development project and the project will soon enter commissioning.  The project will recover biogas containing methane from palm oil mill effluent and will be the largest Palm Oil biogas plant in Malaysia.

The team has a portfolio of further biogas and energy efficiency projects it is bringing to market from its project pipeline.

2012 Annual Results

As indicated in the announcement on 29 November, the fall in the CER price will lead to significant carbon fair value adjustment to revenue at the year end and a corresponding negative impact on the Company's overall result for 2012.

In accordance with the AIM Rules, the Company anticipates releasing its Annual Results before the end of June 2013 at the latest.

Scott McGregor said:

"I'm pleased to report we have made good progress towards re-structuring the Company to stabilise at a low cost base and continue our growth in our energy projects business.  The Company has faced a very tough period over the past few months where the market shock of a collapse of the CER carbon price has greatly reduced our core source of revenue.  As a consequence we are accelerating our focus on our energy projects business faster than expected and have significantly reduced the operating costs of the Company. Our China team will continue to service our emission reduction projects.  We are now fully focussed on development in our growth markets of North America and Africa and overseeing the SE Asian joint venture activities.

I would like to thank all our staff and project partners who have worked hard to see us through this difficult period and rapidly transform the Company."

Enquiries:

Camco Clean Energy plc	[phone]
www.camcocleanenergy.com
Scott McGregor, Chief Executive Officer
Jonathan Marren, Chief Financial Officer
N+1 Singer (Nominated Adviser and Broker)	[phone]
James Maxwell, Andrew Craig

Notes

(1)        Adjusted net cash is calculated as follows:

	H1 2012	FY 2012	As at 15/02/13
	€'000	€'000	€'000
Cash and cash equivalents	16,101	11,132	5,200*
Less cash restricted for sole use in construction of biogas project in North America	(456)	-	-
Less unsecured loans	(3,904)	(4,000)	-
Adjusted net cash	11,741	7,132	5,200
Adjusted net cash per share (pence)	5.0p	3.1p	2.4p

*           $1.683m (approx. €1.260m) of this balance is held within the corporate entity owning the US Biogas asset and is not available to the Company for general working capital purposes.

(2)        Net Cash held by Camco South East Asia Limited ("CSEA"):

	H1 2012	FY 2012	As at 15/02/13
	€'000	€'000	€'000
Net cash attributed to Camco Clean Energy	7,310	5,504	5,133
Net cash attributed to Camco Clean Energy per share (pence)	3.1p	2.4p	2.3p

Adjusted net cash in note (1) above does not include net cash held by Camco South East Asia Limited ("CSEA") which Camco Clean Energy accounts for as a joint venture. Camco Clean Energy currently owns 60.1% of CSEA. The balances in Note 2 above reflect Camco Clean Energy's percentage share of the net cash in CSEA.

(3)        H1 2012 refers to the unaudited balance as at 30 June 2012, FY 2012 refers to the un-audited balance as at 31 December 2012, and as at 15/02/13 refers to the unaudited balance as at 15 February 2013.

Notes to the editor

About Camco Clean Energy

Camco Clean Energy plc (AIM: CCE) is an experienced project developer working to develop, construct and operate projects that contribute to building a sustainable future.

With more than 20 years of successful project delivery we help clients in Asia, North America, Africa and Europe to implement clean energy and emission reduction solutions, reducing costs and maximising financial and environmental benefits. We have an outstanding track record in technical delivery and commercial expertise, working with local industry, multinational companies, governments and regulatory bodies.

Camco Clean Energy has created one of the largest emission reductions portfolios and has structured ground breaking and innovative arrangements for the sale and delivery of emission reductions to compliance and voluntary buyers.

 

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