Final Results

RNS Number : 8054D

Camco International Ltd

22 May 2012

 



22 May 2012

Camco International Ltd

("Camco" or "the Company")

Final Results for the year ended 31 December 2011

Camco, a global developer of clean energy projects and solutions to reduce emissions, is pleased to announce its consolidated final results for the year ended 31 December 2011 and an update on trading to 30^th April 2012.

Review of Carbon Portfolio

European economic matters have adversely impacted carbon prices, which has had a direct effect on the Company's 2011 results and value. Since year end, the Company has successfully adapted to these external market forces by restructuring its carbon business and the positive outcome of these efforts is set out in this statement.

The Board of Directors has undertaken a full review of the Company's carbon contracts, which has been independently reviewed by a global investment bank with significant activity in the carbon market. The result of the review is that, at the current carbon price forward curve, Camco's share of the discounted future revenue from its CER portfolio is €49.1 million¹.

HIGHLIGHTS as at 31 December 2011

·     Loss of €29.2m for the year (2010: profit of €10.1m) including, as announced on 3 January 2012, a fair value adjustment of €21.7m  and capitalised cost write-down of €2.0m  at year end, to reflect  carbon price reduction for floating price or unsold contracts

·     Carbon segment operating expenditure  reduced to €5.2m (2010: €7.9m)

·     Restructure, turnaround and subsequent disposal of UK Advisory business for £3.25m plus earn out, held for sale at year end

·     Doubling of post 2012 carbon credit portfolio to 67.4m tonnes eligible for delivery into Phase III of the EU Emissions Trading Scheme (EU ETS) (2010: 30.0m tonnes)

 HIGHLIGHTS to 21 May 2012

Group

·     Cash balance at 30 April 2012 €16.4m (Dec 2010: €12.4m)

·     CER contracts at the current carbon price forward curve have discounted future revenues of €49.1m (independent review completed), after taking account of contract costs of €5.6m; this compares with net carbon contracts recognised in the accounts at 31 December 2011 of €10.3m

North America

·     First biogas plant in USA 4.5MW generating power (capex US $20m+)

·     Second project under development in USA (capex US $50m+)

·     Pipeline of US $100m further projects in the biogas sector

Asia

·     SEA Joint Venture ("JV") cash balance at 30 April 2012 €19.9m

·     JV CER portfolio at 30 April 2012 12.2m tonnes

Africa

·     Camco and Rex have been awarded a US $4.7m contract to bring solar power to off-grid communities in rural Tanzania, the contract value to Camco being US $1.1m

 Scott McGregor, Camco Chief Executive, said,

"I'm pleased to report the hard work we have done over the past six months has resulted in a carbon portfolio with significant value despite current market conditions. Camco has successfully restructured to operate in the new environment and expanded its business model to develop clean energy projects. Long term clean energy projects will provide the Company with stable annuity streams from power production complimenting a carbon business which can once again produce good margins. We are now the leader in strategic markets where emission reduction and clean energy development will be a focus for the coming decades."

Carbon Portfolio update as at 30 April 2012

During 2012 the Company sought to structure its carbon portfolio in line with market conditions. The Board has undertaken a full review of its carbon contracts and potential revenues given the recent external market changes. This review has been subject to a further independent review commissioned by the Board, which has been performed by a leading global investment bank with significant activity in the carbon market. Certain contracts have been structured in a way to provide a win-win arrangement for the Company and our clients to deliver the projects in a low carbon price environment. In a small number of cases the Company is of the view that due to counterparty performance issues the contracts are not enforceable, accordingly such contracts have no revenue impact.

As a result of the review contract costs of €5.6m have been accrued in the Group's accounts as at 31 December 2011, mainly relating to contracts with issuances in progress, and have also been included in the discounted future revenues below. These costs are not realised losses and the Company will do its best to minimise them over the coming period. The following table outlines CER discounted future revenue and includes a price sensitivity analysis.

CER Carbon Portfolio Discounted Future Revenue as at 30 April 2012

Sensitivity to carbon price	CER Carbon price	Pre 2012 Discounted Future Revenue (€m)	Post 2012 Discounted Future Revenue (€m)	Total
	- € 2	4.6	25.8	30.4
	30 April 2012 CER forward curve	8.5	40.6	49.1
	+ € 2	12.5	55.5	68.0
	+ € 4	16.2	72.1	88.3

The following assumptions have been made calculating the discounted future revenue of contracts:

·     Discount rate of 10%

·     The figures shown are carbon revenues and do not take into account verification (third party audit) costs of delivering the carbon credits and operating expenses, which appear in the accounts as cost of sales and administrative expenses respectively, or certain developer fees that may be received by the Company, which also appear in the accounts as revenue, and do not represent a forecast profit figure for the portfolio

·     Since the figures are based solely on cash forecasts from the delivery of carbon credits, no additional value is priced in for the optionality embedded in certain contracts; the option value of a contract may exceed its discounted future revenue

·     No value is given for post-2020 production credits

·     Includes €5.6m of contracts costs

CER Portfolio Volume as at 30 April 2012

To Deliver	Pre 2012 CDM Production (m tonnes)	Post 2012 CDM Production (m tonnes)
Contracted	16.5	68.3
Registered	15.8	28.9

	Pre 2012 CDM	Post 2012 CDM
Issued to date	17.0	-

Following restructuring, the Company no longer has a fixed average buy price². For pre and post 2012 contracts the Company earns a percentage of market price for credits delivered, secured either indirectly through the purchase and resale of in specie carbon credits or directly as cash commission received on their sale. This has enabled the Company to extract value from contracts in a low carbon price environment.

All volumes stated are those in which Camco has such a commercial interest, rather than solely projects under management, and are based on actual issuances and risk adjusted forecasts. It is likely the majority of credits produced pre 2012 will be delivered into the market during 2013 for use within Phase III of the EU ETS.

The Company also has contract rights over 30.4m CERs. These are where the Company has the right to propose an off-take arrangement, in most cases first right of refusal. During 2011 the Company has converted contract rights of 7.3m tonnes into portfolio volumes. Additionally the Company has a CER portfolio held through its Southeast Asia JV of 12.2m tonnes for delivery into post 2012 markets.

JV CER Portfolio Volume as at 30 April 2012

	JV CDM (m tonnes)
Contracted	12.2
Registered	2.7
Issued	-

CER carbon price forward curve as at 30 April 2012³.

Futures Contract	ECX price per CER
Dec-12	€3.92
Dec-13	€4.38
Dec-14	€4.66
Dec-15	€4.91
Dec-16	€5.04
Dec-17	€5.09
Dec-18	€5.23
Dec-19	€5.38
Dec-20	€5.57

Other Carbon Credit Portfolio Volumes as at 30 April 2012

	JI (m tonnes)	CAR (m tonnes)	VER (m tonnes)
Contracted	5.4	2.5	3.5
Registered	4.2	0.8	2.5
Issued	0.4	0.4	2.5

_______________

¹ As a result of the restructuring such revenues are derived from a percentage of the carbon market price (whether this is secured indirectly through the purchase and resale of in specie carbon credits or directly as cash proceeds from their sale) rather than being subject to a fixed average buy price for both pre and post 2012 contracts, enabling value to be derived from them in a low carbon price environment. The figure includes costs of continuing certain projects where the value net of fees is negative but excludes cases where the Board and independent reviewers are of the view contracts are not enforceable due to performance.

² Excluding where the Company has accrued contract costs or is of the view contracts are not enforceable due to performance.

³ Excluding where the Company has accrued contract costs or is of the view contracts are not enforceable due to performance.

Glossary of Carbon Portfolio Terms

CAR	Climate Action Reserve, a non-profit voluntary registry for greenhouse gas emissions and the official registry for the California cap and trade system.  The purpose of the registry is to help companies and organisations with operations in the state establish emission baselines against which any future emission reduction requirements may be applied.  California Carbon Allowances (CCAs) are the tradable permit under the California cap and trade system and    Climate Reserve Tonnes (CRTs) are generated units of emissions reduction equal to one metric tonne CO2e.
CDM	Clean Development Mechanism, one of the three flexible mechanisms under the Kyoto Protocol, the standard for project based emission reduction activities in Annex 1 generating Certified Emission Reductions (CERs).  CERs are units equal to one metric tonne CO2e.  They can be used to meet an Annex B party's emission commitment or as a unit of trade in emissions trading systems, such as the EU ETS.
CO2e	Carbon dioxide equivalent, a measurement unit used to indicate the global warming potential of greenhouse gases.  Carbon dioxide is the reference gas against which other greenhouse gases are measured.
EUA	European Union Allowances, the tradable permit under the EU ETS equal to one metric tonne CO2e.
JI	Joint Implementation, one of the three flexible mechanisms under the Kyoto Protocol, the standard for project based emission reduction activities between Annex B countries, generating Emission Reduction Units (ERUs).  ERUs are units equal to one metric tonne CO2e. They can be used to meet an Annex B party's emission commitment or as a unit of trade in emissions trading systems, such as the EU ETS.
VER	Verified Emission Reduction, a unit generated by carbon reduction projects that are assessed and verified by third party organisations rather than through the UNFCCC.  Camco's VER portfolio comprises of Gold Standard and Verified Carbon Standard projects.

Enquiries:

Camco	[phone]
Scott McGregor, Chief Executive Officer
Singer Capital Markets (Nominated Adviser and Broker)	[phone]
Jonathan Marren
Kreab Gavin Anderson (Investor Relations Advisor)	[phone]
Ken Cronin
Citigate Dewe Rogerson (Public Relations Advisor)	[phone]
Chris Gardner
Malcolm Robertson

About Camco

Camco International Limited (Camco, AIM: CAO) is a global developer of clean energy projects and solutions to reduce emissions with operations in China, US, UK, Africa, Europe and Southeast Asia. Camco has a 20 year track record in project development, technical delivery and policy development, working with local industry, multinational companies, governments and regulatory bodies.

Some of our clients include Shell, Conch, Yangquan, Itochu, the EU Commission, United Nations, ADB, AWF, SIDA, EPA, and the US, South African, Kenyan and Chinese Governments.

Camco's Clean Energy Project Development and Investment teams collaborate with industry, project developers, equipment providers and investor groups to create emissions-to-energy projects and maximise sustainable energy production across a range of industries; including agricultural methane, industrial energy efficiency, coal mine methane, municipal solid waste, biomass and landfill gas.

The Carbon Project Development business 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.

 In Africa we provide strategic, commercial and technical expertise accrued over two decades to deliver low carbon energy and sustainable development solutions. The experience of this team spans emissions assessment, carbon management strategies and project delivery, as well as international energy and climate change policy.

Chairman's Report

For Camco there were two sides to 2011. In financial terms it was a disappointing year, especially given our excellent results in 2010. By far the most significant impact to our bottom line was the decline in carbon prices. In operational terms, however, Camco has laid the foundations for growth even in difficult markets, expanding our services to build clean energy projects, progressing our carbon projects through the qualification process, delivering credits through the issuance process and serving our customers with leading energy and carbon advice. Despite the current inefficiencies in the EU ETS, regulatory incentives to reduce emissions and develop clean energy remain high in our markets.

The EU had a difficult year as the euro zone debt crisis continued and short to medium term expectations of economic output inevitably led to the above mentioned decline in EUA and CER prices. The EU carbon market, which was designed to set a fixed cap on emissions regardless of economic activity, is now seen as dysfunctional. Reform is clearly needed to ensure it is fit for purpose as the most cost-effective method of reducing emissions in the EU, with the ability to cope with changes in economic output and other important factors.

We have taken feedback from shareholders regarding the value of the Company's carbon portfolio following the price decline. To address this, the Board of Directors has undertaken a full review of the Company's carbon contracts, which has been independently reviewed by a global investment bank with significant activity in the carbon market. In order to provide transparency we have disclosed further details on our carbon portfolio subject to commercial considerations and regulatory requirements.

Long term commitments to emission reductions remain in place and political support has grown through 2011 to enact changes to the ETS in order to address the shortcomings. The prospect of a move from a 20% to a 30% reduction in the 2020 emissions target also remains on the political agenda and the 2050 roadmap adopted in December 2011 gives the market the clear signal it needs that this is a region with a vibrant marketplace for continued emission reduction activity for years to come.

Although California's cap and trade programme was delayed by a year and will now start in 2013, it is encouraging to see that regulators are taking additional time to establish a robust, credible programme from the start. Camco expects to be one of the few providers of offsets into the programme through its commitment to register projects under the Climate Action Reserves Livestock Protocol. Camco's strong position in the livestock sector, where we have the largest volume of registered projects and issued offsets, means we will deliver consistent volumes of offsets into the California programme between now and 2020. We expect implementation of the offset infrastructure to be complete by the end of 2012.

Further good news came out of Asia-Pacific this year. Australia made great strides through 2011 with the official passing of legislation to introduce an ETS and to cut emissions by 5% of 2000 levels by 2020. The broad ranging and dynamic legislation adds a very significant source of medium term demand for Camco's carbon portfolio and expands the global clean energy and carbon marketplace that will support Camco's future growth.

China's 12^th five-year plan (2011-15) approved in March included targets to reduce the nation's greenhouse gas emissions in terms of carbon dioxide output per unit of GDP by 17% by 2015. An energy consumption cut of 16% per unit of GDP was also approved signalling a strong commitment to emissions and energy efficiency in this fast growing market. As part of this effort several cities and provinces have begun to plan cap and trade schemes for carbon trading.

Given our reduced cost base and reinvigorated focus on our core business, we expect Camco to deliver profitably on its existing carbon credit portfolios and new opportunities across regions and markets. We have high hopes for our clean energy project development business rolling out the exciting project pipeline in North America, Asia and Africa. In the carbon business, although we anticipate continuing pressure on margins in the short term, we do expect our substantial post 2012 portfolio to find growing interest in both the EU ETS as well as the new compliance markets developing in North America, Australia and China in the mid to longer term.

Recently we have had some board changes. I am happy to welcome Zainul Rahim as a non-executive Director to the Board while Yariv Cohen has resigned from the Board. I would like to thank all our staff and our non-executive directors for the contribution that they made to the Company during the year. Derya Yilmaz, our group financial controller, has taken on financial responsibilities due to recent finance personnel changes. Despite meeting 2011 operational targets, due to the external pricing environment and subsequent impact on profits Scott McGregor our CEO has waived his bonus and LTIP entitlement for 2011 which the Board has acknowledged and accepted.

The Board remains confident in the Company's ability to meet its expectations in the year ahead and believes there is much to be excited about in Camco for the coming years.

Jeff Kenna

Acting Chairman

21 May 2012

CEO's Statement

In the last two annual reports, I have reported on the development of our business and on the progress we made towards expanding Camco's business model. I am proud of what we have achieved this year with the evolution into a global clean energy business in addition to our established carbon project development business. We now hold the leading market position in all the regions where we operate, a result of the efforts of our staff in advancing our ability to deliver value to clients in a changing regulatory world.

The second half of 2011 was one of the most difficult regulatory markets we have experienced for many years, a substantial external shock to the carbon market from the economic downturn in Europe and a consequential over supply of allowances led to a sharp fall in prices. Although the company performed well in meeting its operating targets the falling value of carbon commodities has had a direct impact on the Group's 2011 results and profitability.

Throughout the history of the Company we have had to respond quickly to market change, each time we have adapted intelligently and as a result strengthened our position. For the short term, the price shock has put pressure on our business to adjust to a new environment - we have done so successfully, working side by side with our clients to create win-win outcomes.

In the medium to long term we continue to believe that as action is taken by regulators and governments, market inefficiencies will be corrected. With the patchwork of cap and trade markets and renewable incentive regulations emerging around the world we view this as one of the most promising periods we have seen. The only guarantee in this sector is that it will continue to change and we will be judged on our ability to continue to change with it. However there is no doubt that global demand for our activities of reducing emissions and developing clean energy will only become stronger.

Operational Review

Operationally we have achieved important milestones in 2011.

Decisive developments in clean energy business

One of our exciting developments this year was the financial close and construction of the first dairy farm biogas plant in Idaho, USA, wholly owned and operated by Camco. This project is a prime example of how we have broadened our business model, using the skills and resources built from years of experience in one market and applying them to another. This 4.5MW project is designed to produce biogas from the manure of over 15,000 cows, which fuels the generation of renewable electricity. The plant is three times the size of the average plant in North America. We have secured a long term  annuity stream for this project with power purchasing agreements providing the majority of revenue and additional contributions coming from carbon credits, fibre by-products and renewable energy certificates. Apart from this project, which has commenced generating power since year end, we are working on a pipeline of projects worth over  US $150 million.

In China and Southeast Asia we are looking to develop and bring into operation a number of projects which capture and utilize methane and other by-products generated by the major agricultural activities in the region, such as palm oil and starch production. In the process these projects reduce emissions and improve the sustainability of these key cash crops. Both regions also have immense potential for industrial and property sector energy efficiency projects and we have growing opportunities in those sectors.

In Africa we won a number of important contracts. We see substantial interest in Africa to support energy efficiency measures and off-grid renewable energy development. In 2011 Camco was awarded two new project development contracts in East Africa worth US $1.8m in revenue over the next three years, one being a US $1.1m contract from the EU to scale up its existing Solar Photovoltaic Clusters project, installing small-scale solar home systems in Tanzania. This will continue to be a focal area for us in 2012.

Operating the carbon business under pressure to deliver long term value

With economic growth rates in Europe still lower than in previous years, manufacturing and thus emissions output slowed, reducing demand for carbon credits within the EU ETS, which to-date remains our key sales market. CER prices fell by 62% in the second half of 2011. As a result of a fair value balance sheet revaluation, which is undertaken at each year end, we are reporting a substantial loss for the year. Our carbon projects deliver value to Camco and our partners over many years (typically seven to ten) and as such short term volatility in carbon commodity prices may affect only a specific period of a projects total delivery. However, we will revalue all future volumes from the completed projects in our portfolio recognised on the balance sheet at the prices prevailing at that reporting date.

Our teams have worked hard to build long term value by increasing our post 2012 portfolio to 67.4m tonnes at the year end, which will deliver value through to 2020 even at low carbon prices. The portfolio has continued to increase in 2012. Registration of our projects prior to 31 December 2012 is also important to ensure EU ETS eligibility, and we had 93% of our pre 2012 portfolio registered at year end 2011. We issued 58% more credits in 2011 than in 2010.

In the US, our team has continued to develop our agricultural carbon portfolio for use in the California market, which will be the second largest after the EU ETS when it begins in 2013. Camco continues to lead the agricultural livestock manure management sector here. Our North America carbon portfolio has continued to expand throughout 2011 with 2.5m tonnes now under management and has the largest number of "Livestock Gas Capture/Combustion" projects registered under the Climate Action Reserve (CAR) standard.

UK business

Our UK Advisory business was sold in early 2012, post balance sheet date, so that the Company may focus on its core markets.

Outlook

Despite the challenges we encountered this year, Camco successfully expanded its business model to develop clean energy projects in 2011. Long term this will provide the Company with stable annuity streams from power production complimenting a carbon business which can once again produce good margins.  We are now the leader in strategic markets where emission reduction and clean energy development will be a focus for the coming decades.

Scott McGregor

Chief Executive Officer

21 May 2012 

 Financial Review 

 The substantial fall in carbon prices during the second half of 2011 has significantly decreased the fair value of contracts held in accrued income and the CDC assets work in progress on the balance sheet at year end. This fall resulted in a fair value adjustment of €21.7m (2010: €1.8m) and capitalised cost write-down of €2.0m (2010:€0.7m) at year end to reflect the carbon price reduction for floating or unsold contracts. Aside from the fair value and capitalised costs write down, the carbon segment booked revenue for contracts where sale prices had been locked in and for projects completed during the year. This, together with the administrative costs, has resulted in a total loss for the year of €29.6m from continuing operations. Administrative costs have been kept tight during the year with a reduction to €13.4m in 2011 (2010: €14.1m), which includes a €1.6m impairment loss on development costs. Carbon segment operating expenditure has been reduced to €5.2m (2010: €7.9m).

The projects segment achieved financial close of one of the largest biogas projects in North America, this asset was under construction as at the reporting date, subsequently commencing operation in early 2012. Post year end, the Company sold its UK Advisory business to focus on its core segments. The deal was worth £4.5m, comprising an initial consideration of £3.25m with an earn-out of up to £1.25m. The Company also sold its interest in a UK wind farm for €1.3m resulting in a gain of €0.6m.

Carbon segment

The Group recognises revenue based on the fair value of the carbon credits to be received from contracts, once the development work on these projects is completed by the Group and the project is deemed "CDC operational", meaning as a minimum they are fully commissioned and registered with the relevant regulatory body. CDC operational projects are only a proportion of Camco's carbon portfolio; projects still in the development phase where the Company has secured the rights to receive future revenue streams are not recognised in revenue. For further details refer to the Group accounting policies which have been applied consistently as outlined in Note 1 of the accounts.

Accrued income is recognised for CDC operational projects. The balance contains:

·     Accrued income for contracts with fixed sale prices

·     Accrued income for contracts with floating sales prices or that are unsold

Accrued income on floating and unsold contracts is re-valued at each balance sheet date according to carbon market prices (a one-month simple moving average based on ECX prices has been applied). CER carbon prices used in the valuation of accrued income as at 31 December 2011 and 31 December 2010 are shown in the table below (post 2012 CER futures contracts were not exchange traded at 31 December 2010 and the December 2012 price was applied to any deliveries forecast in this period):

Futures Contract	31-Dec-11	31-Dec-10
Dec-11	€ 4.71	€ 11.67
Dec-12	€ 5.33	€ 11.44
Dec-13	€ 5.61	n/a
Dec-14	€ 5.87	n/a
Dec-15	€ 5.87	n/a
Dec-16	€ 6.08	n/a
Dec-17	€ 6.39	n/a
Dec-18	€ 6.62	n/a
Dec-19	€ 6.89	n/a
Dec-20	€7.21	n/a

Source: Intercontinental Exchange ECX CER Futures www.theice.com

For the balance sheet date of 31 December 2011, due to the carbon price reduction in 2011 the accrued income balance was reduced by €21.7m (2010:€1.8m) for floating and unsold contracts.

The accrued income balance remaining on the balance sheet for carbon development contracts (CDCs) is €15.9m, outside of this are accrued contract costs of €5.6m, resulting in net accrued income of €10.3m.  Accruals for the cost of delivering credits amounting to €4.5m and payments on account of €6.4m are also recognised.  Between them these balances represent the discounted future revenues and costs for all CDC operational projects. 

In the second half of the year the Group limited its commercialisation activities due to the depressed market prices, while continuing to seek opportunities complimentary to its longer term outlook. Camco's commercial strategy is to time structured sales when market conditions are favourable, reducing exposure to short term volatility in the carbon price. The success of this strategy can only be judged over the whole lifecycle of a project, and not solely in the context of revaluation of volumes at the balance sheet date. In the first half of 2011, Camco was successful in executing a series of transactions when the carbon price was stronger.

The Group continued to originate projects throughout 2011 and as a result increased the post 2012 CER portfolio volume by 123.9%. Significantly, the structure of these contracts means they deliver value even at low carbon prices. Registration prior to the end of 2012 will ensure eligibility for Phase III of the EU ETS, providing cash flows through to 2020. CDM registration rates continued to increase with 61.7m tonnes now registered across the pre and post 2012 portfolio and issuances accelerating to 12.8 m CERs in 2011 (2010: 8.1m).

Projects segment

At year end the Group had a biogas project under construction in the USA. The project is ahead of schedule and budget. The project is owned by a wholly owned subsidiary which holds majority non-recourse debt during construction to be repaid by the operation of the project upon completion. The Company expects to receive an ITC grant in 2012 for its biogas which will be used to repay secured debt on the project. At year end, the project had €15.4m assets under construction, €2.3m cash for costs to complete and a €15.6m construction loan. Reflecting the shift towards clean energy project development in our work in Africa, we are now reporting results for the Africa region within the Projects segment.

Cash and cash equivalents

At 31 December 2011, the Group had cash and cash equivalents of €14.4m (2010: €12.4m) with short-term borrowings of €3.8m.

The key movements in cash during 2011 were: carbon receivables on deliveries in 2011 (inflow €25.6m), carbon payables on deliveries in 2011 (outflow €11.6m), working capital prepayments for carbon (outflow €4.5m), discontinued operations net contribution (outflow €0.3m), operating expenditure for continuing operations (outflow €10.3m), proceeds from the sale of Renewable Partnership Ltd (€1.3m), loan proceeds (inflow €19.2m) and capex items (outflow €14.3m). The cash reduction from recurring operating activities was €2.5m in the year.

€15.4m of the cash inflow from debt is for US biogas project capital expenditure (project assets under construction). This debt will be repaid from the project revenue over the life of the project.

The Directors consider the Group to be well placed to manage this cash position profitably delivering its growing carbon portfolio to 2020 and continuing to create future value by developing clean energy projects.

Despite the fair value write down of the accrued income, the Group continues to maintain strong cash reserves. Since year end the Group's cash balance has improved as a result of the on-going performance of the business in 2012, completion of certain carbon transactions, and the sale of the UK Advisory business.

Derya Yilmaz

Group Financial Controller

21 May 2012 

Consolidated Statement of Financial Position

at 31 December 2011  

		2011	2010
		€'000	€'000
Non-current assets
Property, plant and equipment		15,988	740
Goodwill on acquisition		433	1,959
Other intangible assets		-	452
Intangible assets - carbon in specie		644	2,030
Investments in associates and joint ventures		13,152	11,921
Other investments		3	236
Deferred tax assets		132	192
		30,352	17,530
Current assets
Work in progress - carbon development contracts		3,199	6,053
Prepayments and accrued income		16,844	45,510
Trade and other receivables		4,387	5,563
Cash and cash equivalents		14,369	12,382
Assets held for sale		4,620	-
		43,419	69,508
Total assets		73,771	87,038
Current liabilities
Loans and borrowings		(4,138)	(485)
Trade and other payables		(19,381)	(25,078)
Tax payable		(322)	(143)
Liabilities held for sale		(1,891)	-
		(25,732)	(25,706)
Non-current liabilities
Loans and borrowings		(15,360)	(12)
Deferred tax liabilities		-	(126)
		(15,360)	(138)
Total liabilities		(41,092)	(25,844)
Net assets		32,679	61,194

Consolidated Statement of Financial Position (continued)

at 31 December 2011

Equity attributable to equity holders of the parent		2011 €'000	2010 €'000
Share capital		1,892	1,856
Share premium		75,542	74,861
Share-based payment reserve		559	1,173
Retained earnings		(44,916)	(15,645)
Translation reserve		(155)	(890)
Own shares		(243)	(161)
Total equity		32,679	61,194

These financial statements were approved and authorised for issue by the board of directors on 21 May 2012 and were signed on its behalf by:

Michael Farrow

Director

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2011

		2011	2010
Continuing operations		€'000	€'000
Revenue:
Earned in the year		10,195	23,952
Carbon price fair value adjustment		(21,654)	(1,837)
Revenue		(11,459)	22,115
Cost of sales		(4,638)	(5,776)
Gross (loss)/profit		(16,097)	16,339
Other income - carbon		-	5,770
Other income - net gain on disposal of investment		578	-
Administrative expenses		(13,356)	(14,063)
Restructuring charges		(236)	(82)
Results from operating activities		(29,111)	7,964
Financial income		2,217	2,624
Financial expenses		(1,749)	(1,223)
Net financing income		468	1,401
Share of loss of equity-accounted investees		(670)	(187)
(Loss)/profit before tax		(29,313)	9,178
Income tax (expense)/credit		(328)	888
(Loss)/profit from continuing operations		(29,641)	10,066
Discontinued operation
Profit/ (loss) from discontinued operation (net of income tax)		370	(1)
(Loss)/profit for the year		(29,271)	10,065
Other comprehensive income
Exchange differences on translation of foreign operations		735	(784)
Total comprehensive income for the year		(28,536)	9,281
(Loss)/profit  for the year attributable to:
Equity holders of the parent		(29,271)	10,065
Non-controlling interest		-	-
(Loss)/profit for the year		(29,271)	10,065
Total comprehensive income for the year attributable to:
Equity holders of the parent		(28,536)	9,281
Non-controlling interest		-	-
Total comprehensive income for the year		(28,536)	9,281

Consolidated Statement of Comprehensive Income (continued)

for the year ended 31 December 2011

Basic (loss)/profit  per share in € cents		2011	2010
From continuing operations		(15.85)	5.67
From continuing and discontinued operations		(15.65)	5.67
Diluted (loss)/profit  per share in € cents
From continuing operations		(15.85)	5.67
From continuing and discontinued operations		(15.65)	5.67

Consolidated Statement of Changes in Equity

for year ended 31 December 2011

		2011	2011	2011	2011	2011	2011	2011	2011	2011
		Share capital	Share premium	Share-based payment reserve	Retained earnings	Translation reserve	Own shares	Total equity attributable to shareholders of the Company	Non-controlling interest	Total  equity
		€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balance as at 1 January 2011		1,856	74,861	1,173	(15,645)	(890)	(161)	61,194	-	61,194
Total comprehensive income for the year
Loss for the year		-	-	-	(29,271)	-	-	(29,271)	-	(29,271)
Other comprehensive income
Foreign currency transaction differences		-	-	-	-	735	-	735	-	735
Total comprehensive income for the year		-	-	-	(29,271)	735	-	(28,536)	-	(28,536)
Transactions with owners, recorded  directly in equity
Contributions by and distributions to owners
Share-based payments		-	-	21	-	-	-	21	-	21
Issuance of shares		36	681	-	-	-	(717)	-	-	-
Own shares		-	-	(635)	-	-	635	-	-	-
Total contributions by and distributions to owners		36	681	(614)	-	-	(82)	21	-	21
Changes in ownership interests in subsidiaries that do not result in a loss of control
Acquisition & settlement of non-controlling  interest		-	-	-	-	-	-	-	-	-
Total changes in ownership interests in subsidiaries		-	-	-	-	-	-	-	-	-
Total transactions with owners		36	681	(614)	-	-	(82)	21	-	21
Balance at 31 December 2011		1,892	75,542	559	(44,916)	(155)	(243)	32,679	-	32,679

Consolidated Statement of Changes in Equity

for year ended 31 December 2010

		2010	2010	2010	2010	2010	2010	2010	2010	2010
		Share capital	Share premium	Share-based payment reserve	Retained earnings	Translation reserve	Own shares	Total equity attributable to shareholders of the Company	Non-controlling interest	Total  equity
		€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balance as at 1 January 2010		1,730	72,277	1,856	(25,711)	(106)	(391)	49,655	-	49,655
Total comprehensive income for the year
Profit for the year		-	-	-	10,065	-	-	10,065	-	10,065
Other comprehensive income
Foreign currency transaction differences		-	-	-	-	(784)	-	(784)	-	(784)
Total comprehensive income for the year		-	-	-	10,065	(784)	-	9,281	-	9,281
Transactions with owners, recorded  directly in equity
Contributions by and distributions to owners
Share-based payments		-	-	102	1	-	-	103	-	103
Issuance of shares		126	2,584	-	-	-	(555)	2,155	-	2,155
Own shares		-	-	(785)	-	-	785	-	-	-
Total contributions by and distributions to owners		126	2,584	(683)	1	-	230	2,258	-	2,258
Changes in ownership interests in subsidiaries that do not result in a loss of control
Acquisition & settlement of non-controlling  interest		-	-	-	-	-	-	-	-	-
Total changes in ownership interests in subsidiaries		-	-	-	-	-	-	-	-	-
Total transactions with owners		126	2,584	(683)	1	-	230	2,258	-	2,258
Balance at 31 December 2010		1,856	74,861	1,173	(15,645)	(890)	(161)	61,194	-	61,194

Consolidated Statement of Cash Flow

for year ended 31 December 2011

Continuing operations	Notes	2011	2010
		€'000	€'000
Cash flows from operating activities
Cash generated by operations	a	(3,732)	(15,766)
Income tax paid		(50)	(146)
Net cash outflow from operating activities		(3,782)	(15,912)
Cash flows from investing activities
Proceeds from sales of investments		1,314	1,303
Payment for acquisition of joint venture		-	(3,791)
Acquisition of property, plant and equipment		(14,327)	(309)
Net cash outflow from investing activities		(13,013)	(2,797)
Cash flows from financing activities
Proceeds from the issue of share capital		36	2,188
Proceeds from new loan		19,227	-
Repayment of borrowings		-	(18)
Interest paid		(98)	-
Payment of finance lease liabilities		(23)	(87)
Net cash inflow from financing activities		19,142	2,083
Net increase/(decrease) in net cash and cash equivalents		2,347	(16,626)
Net cash and cash equivalents at 1 January		11,907	28,324
Effect of foreign exchange rate fluctuations on cash held		16	209
Net cash and cash equivalents at 31 December		14,270	11,907

Consolidated Statement of Cash Flow

for year ended 31 December 2011

			2011		2010
			€'000		€'000
(a) Cash flows from operating activities
(Loss)/profit for the period			(29,271)		10,065
Adjustments for:
Depreciation			313		540
Amortisation of intangible assets			337		337
Carbon price fair value adjustment			21,654		1,857
Impairment loss on CDC assets			1,968		732
Impairment of discontinued operation			-		120
Share of loss of equity accounted investees			670		187
Gain on increase of control from associate to  JV			(1,704)		-
Gain on sale of investment			(578)		-
Share-based payment transactions			117		102
Income tax expense/(credit)			13		(894)
Other income - Carbon			-		(5,770)
Finance cost			918		1,240
Finance income			(513)		(1,393)
Foreign exchange loss/(gain) on translation			733		(1,315)
Interest received			50		83
Interest paid			(10)		(16)
Impairment loss on  development costs			1,556		-
Operating cash flows before movements in working capital			(3,747)		5,875
Changes in working capital
Decrease/(increase) in CDC assets			886		2,000
Decrease/(increase) in intangible assets			1,386		(3,464)
Decrease in prepayments			2,056		158
Decrease/(increase) in accrued income			9,215		(10,378)
Increase in trade and other receivables			(1,106)		(1,346)
Decrease in trade and other payables			(12,434)		(6,919)
Increase/(decrease) in tax provision			12		(980)
Cash used by operations			(3,732)		(15,766)

Notes

(forming part of the financial statements)

1        Accounting policies

Camco International Limited (the "Company") is a public company incorporated in Jersey under the Companies (Jersey) Law 1991.  The address of its registered office is Channel House, Green Street, St Helier, Jersey JE2 4UH.  The consolidated financial statements of the Company for the year ended 31 December 2011 comprise the Company, its subsidiaries and associates and jointly controlled entities (together the "Group").  The Company is admitted to the Alternative Investment Market ("AIM") of the London Stock Exchange.

A  Statement of compliance                                                                           

These consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the European Union ("adopted IFRS").

These consolidated financial statements have been prepared in accordance with and in compliance with the Companies (Jersey) Law 1991 an amendment to which means separate parent company financial statements are now not required.

These consolidated financial statements were approved by the Board on 21 May 2012.

B  Basis of preparation                                                                                   

The financial statements are presented in Euros, the functional currency of the Company, rounded to the nearest thousand Euros.                                                                                                           

The preparation of financial statements in conformity with adopted IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates.   

The estimates and underlying assumptions are reviewed on an on-going basis.  Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.  The most significant techniques for estimation are described in the accounting policies below.

The accounting policies set out below have been applied consistently in the year and presented in these consolidated financial statements.  The accounting policies have been consistently applied across all Group entities for the purposes of producing these consolidated financial statements.          

The financial statements have been prepared on the historical cost basis and on a going concern basis.  The Group has sufficient financial resources together with long term contracts with a number of customers and suppliers across different geographic areas and industries. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

Notes (continued)

1          Accounting policies (continued)

Presentation of Cash Flow Statement

Presentation of Reporting cash flows from operating activities has been changed from direct method (whereby major classes of gross cash receipts and gross cash payments are disclosed) to the indirect method in order to reflect the underlying information held by the Group, (whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows). Comparatives have been also changed to indirect method.

C  Accounting for Carbon Development Contracts ("CDCs")               

The Group enters into CDCs with clients from which carbon credits are received.  Carbon credits under the Kyoto Protocol, also known as Certified Emission Reductions ("CERs") or Emission Reduction Units ("ERUs") are generated through the highly regulated Carbon Development Mechanism ("CDM") and Joint Implementation ("JI") processes respectively.  These follow a number of steps including the approval of the project methodology and monitoring procedures, project design, project approval by the Designated National Authority ("DNA"), project validation by a Designated Operational Entity or equivalent ("DOE"), project acceptance by the host country, registration, verification and certification by a DOE.  Verification of carbon credit production takes place at least once a year during the production year.  The Group works with the client at all stages of the process using proprietary knowledge and experience to negotiate this complex process. Carbon credits are also generated outside the Kyoto Protocol under voluntary or regional emission reduction schemes.

Revenue recognition on CDC consultancy services                                                                

The Group derives revenue from the provision of consultancy services to carbon project clients under CDCs. The Group receives payment for the services by either cash commission or non cash carbon credit.  Revenue from CDCs is only recognised once the Group's services to secure the production of carbon credits are significantly complete and receipt of the consideration, be it cash or carbon credits, can be forecast reliably.  Revenue is recognised once a CDC is registered by a DOE (where payment is due to Camco irrespective of a CDC's registration this criteria will not apply) and Camco has provided significantly all of its services.

The timing of revenue collection is uncertain as carbon credits may be generated over subsequent years as they are issued.  The amount and timing of commission or carbon credits to be received may be dependent upon the number of carbon credits received by the customers, which is determined by assessing the specific technical, contract and economic risks identified on the project.

Revenue is recognised at the fair value of the consideration receivable from the contracts, at which point accrued income is recognised.  The fair value is the estimated net value of the carbon credits to be received, which is dependent upon the expected number to be delivered and the intrinsic value.  If the expected number or value of the carbon credits subsequently changes an adjustment is made to the accrued income balance with an associated credit or debit taken to revenue.  The unwinding of any financing element of accrued income is recognised as finance income or expense.

The CDCs are scheduled to deliver of carbon credits under Clean Development Mechanism and other regional schemes until at least 2020. The Group and Company has taken advantage of the own use exemption in relation to carbon credits and as such does not account for the contract under IAS 39 and 32.

Notes (continued)

1          Accounting policies (continued)

Treatment of CDC costs

CDC costs are presented under current assets as work in progress.  CDCs acquired by the Group are recorded initially at cost (or fair value if through business combination).

Subsequently, the directly attributable costs are added to the carrying amount of CDCs. These costs are only carried forward to the extent that they are expected to be recouped through the successful completion of the contracts.  The costs comprise consultancy fees, license costs, technical work and directly attributable administrative costs.  All other costs are expensed as incurred.  CDC costs carried as work in progress are stated at the lower of cost and net realisable value.     

Once the revenue recognition criteria on these contracts are met the CDC costs incurred on them are expensed in full. Accrued income is derecognised when the CERs or cash commission receivable under the CDC consultancy contracts are sold.

D    Intangible assets     

Carbon in specie The Group has a number of carbon credit registry accounts used to receive carbon credits from its projects.  These carbon credits are either transferred to buyers under existing sales contracts or, in the case of in specie consideration to the Group, sold for cash.  Carbon credits held at the balance sheet date are recognised as an intangible asset and valued at the relevant market price or contract price.

E  Non-current assets held for sale and discontinued operations

A non-current asset or a group of assets containing a non-current asset (a disposal group) is classified as held for sale if its carrying amount will be recovered principally through sale rather than through continuing use, it is available for immediate sale and sale is highly probable within one year.

On initial classification as held for sale, non-current assets and disposal groups are measured at the lower of previous carrying amount and fair value less costs to sell with any adjustments taken to profit or loss. The same applies to gains and losses on subsequent remeasurement although gains are not recognised in excess of any cumulative impairment loss.  Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets and investment property, which continue to be measured in accordance with the Company's accounting policies. Intangible assets and property, plant and equipment once classified as held for sale or distribution are not amortised or depreciated.

A discontinued operation is a component of the Company's business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier.  When an operation is classified as a discontinued operation, the comparative income statement is restated as if the operation has been discontinued from the start of the comparative period.

Notes (continued)

1          Accounting policies (continued)

F  Operating Segments                                                                                   

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. All operating segments' operating results are reviewed regularly by the Group's CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets corporate expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets other than goodwill.

G     Segmental reporting

Operating segments

The Group comprises of the following main reporting segments:

1.    Carbon: The Carbon Project Development teams provide CDC consultancy services on carbon asset development, commercialisation and portfolio management.

2.    Projects: The Clean Energy Project Development  teams collaborate with industry, project developers, equipment providers and investor groups to create emissions-to-energy projects and maximise sustainable energy production across a range of industries; including agricultural methane, industrial energy efficiency, coal mine methane, municipal solid waste, biomass and landfill gas

Inter segment transactions are carried out at arm's length.

Group also views its business geographically:  EMEA (including Europe, Middle East, Africa and Russia), ASIA (China and South East Asia), and USA (mainly North America)

Operating Segments (continued on next page)

Operating segments		Carbon				Projects		Eliminations		Consolidated
		2011	2010			2011	2010	2011	2010	2011	2010
		€'000	€'000			€'000	€'000	€'000	€'000	€'000	€'000
Revenue		8,544	22,217			1,651	1,735	-	-	10,195	23,952
Re-measurement of past revenue estimates		(21,654)	(1,837)			-	-	-	-	(21,654)	(1,837)
Inter-segment revenue		-	-			1,572	1,967	(1,572)	(1,967)	-	-
Total segment revenue		(13,110)	20,380			3,223	3,702	(1,572)	(1,967)	(11,459)	22,115
Segment gross margin		(17,985)	14,444			1,888	1,895	-	-	(16,097)	16,339
Other income - carbon		-	5,770			-	-	-	-	-	5,770
Other income - net gain on sale of investment		-	-			578	-	-	-	578	-
Segment administrative expenses		(5,242)	(7,928)			(4,780)	(2,523)			(10,022)	(10,451))
Segment result		(23,227)	12,286			(2,314)	(628)	-	-	(25,541)	11,658
Unallocated expenses										(3,217)	(3,510)
Share-based payments										(117)	(102)
Restructuring charges										(236)	(82)
Results from operating activities										(29,111)	7,964
Finance income										2,217	2,624
Finance expense										(1,749)	(1,223)
Share of loss of equity accounted investees										(670)	(187)
Taxation										(328)	888
Loss from discontinued operation (net of income tax)										370	(1)
Profit/(loss) for the year										(29,271)	10,065
Segment assets		35,712	75,995			32,189	4,733	-	-	67,901	80,728
Other investments		-	-			3	236	-	-	3	236
Unallocated assets										1,247	780
Assets held for sale										4,620	5,294
Total assets										73,771	87,038
Segment liabilities		(17,053)	(21,201)			(20,948)	-	-	-	(38,001)	(21,201)
Unallocated liabilities										(1,200)	(1,158)
Liabilities held for sale										(1,891)	(3,485)
Total liabilities										(41,092)	(25,844)
Capital expenditure		120	156			15,435	235	-	-	15,555	391
Depreciation		158	273			127	97	-	-	285	370
Amortisation of intangible assets		-	-			-		-	-	-	337
Impairment losses on goodwill, intangible assets and property,
plant and equipment		-	-			-	-	-	-	-	120

Notes (continued)

2    Segmental reporting (continued)

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of its customers, segment assets are based on the geographical location of the asset.

Geographical information

Revenue by geographical region:	2011	2010
	€'000	€'000
EMEA	(1,615)	1,725
ASIA	(11,121)	19,925
USA	1,277	465
Total revenue	(11,459)	22,115

Revenue by domicile of Group entity:	2011	2010
	€'000	€'000
EMEA	(12,983)	20,955
ASIA	191	387
USA	1,333	773
Total revenue	(11,459)	22,115

The Group derives carbon revenue from the provision of consultancy services to carbon clients under CDCs. With respect to this carbon revenue, the geographic analysis has been prepared based on the geographic location of the project that will generate the carbon credits. This location is not the geographic location of the carbon credit buyer and not necessarily where the services were performed.

Non-current assets by geographical region:	2011	2010
	€'000	€'000
EMEA	4,009	5,870
USA	15,983	930
ASIA	10,320	10,730
Non-current assets	30,352	17,530

3    Revenue

By reporting segments:	2011	2010
	€'000	€'000
Carbon	8,544	22,217
Carbon price fair value adjustment	(21,654)	(1,837)
Projects	1,651	1,735
Total revenue	(11,459)	22,115

Due to the carbon price reduction in 2011 the accrued income balance was reduced by €21.7m (2010: €1.8m) for floating and unsold contracts see note 7- Prepayments and accrued income for further details.

Notes (continued)

4    Non-current assets held for sale and discontinued operations

In May 2010, the Group made the decision to close the operations of Camco Advisory Services (Beijing) Limited (formerly known as Sinosphere Beijing (WOFE) Ltd). This separate business unit was not classified as a discontinued operation as at 31 December 2009 and the comparative Consolidated Statement of Comprehensive Income has been represented to show the discontinued operation separately from continuing operations. The only material effect is the write down of goodwill associated with the business (€120,000).  The fixed assets of the business are being transferred to the China Carbon business (located in the same office) at net book value. 

On 15 January 2012, the Company sold its entire UK advisory division, consisting of Camco Advisory Services Limited (UK) and its subsidiaries. In November 2011 the Company was committed to a plan to sell this division due to streamline its focus on core geographical and business areas. The related assets and liabilities were classified as held for sale at 31 December 2011.  No re-measurement gain or loss has been recognised as the disposal group's carrying value is lower than its fair value less costs to sell.

Camco Advisory Services Limited (UK) was sold for a total consideration for the sale of £4.5m comprising an initial £3.25m paid on closing and up to £1.25m over the next two years through an earn-out structure.

	2011		2010
	€'000		€'000
Results of discontinued operations
Revenue	6,965		8,093
Expenses	(6,910)		(7,980)
Impairment of goodwill (see note 14)	-		(120)
Profit /(loss) before tax	55		(7)
Tax on profit	315		6
Profit/(loss) for the year	370		(1)
Basic earnings per share in € cents		(0.20)	(0.00)
Diluted earnings per share in € cents		(0.20)	(0.00)
Cash flows used in discontinued operations
Net cash used in operating activities		(303)	(278)
Net cash used in investing activities		(30)	(9)
Net cash from financing activities		1	202
Net cash used in discontinued operations		(332)	(85)

Notes (continued)

4    Non-current assets held for sale and discontinued operations (continued)

	2011
	€'000
Assets classified as held for sale/disposal groups:
Property, plant and equipment	36
Goodwill	1,526
Intangible asset	114
Trade and other receivables	1,675
Prepayments and accrued income	881
Cash and cash equivalents	132
Deferred tax asset	256
Total assets classified as held for sale	4,620
Liabilities classified within disposal groups:
Trade and other payables	(1,558)
Corporation tax payable	(57)
Deferred tax liability	(32)
Loans and borrowings	(244)
Total liabilities classified as held for sale	(1,891)

5    (Loss)/profit per share

Profit/loss per share attributable to equity holders of the Company is calculated as follows:

	2011	2010
	€ cents per share	€ cents per share
Basic (loss)/profit per share
From continuing operations	(15.85)	5.67
From continuing and discontinued operations	(15.65)	5.67
Diluted (loss)/profit per share
From continuing operations	(15.85)	5.67
From continuing and discontinued operations	(15.65)	5.67
(Loss)/profit used in calculation of basic and diluted (loss)/profit per share	€'000	€'000
From continuing operations	(29,641)	10,066
From continuing and discontinued operations	(29,271)	10,065
Weighted average number of shares used in calculation
Basic	186,990,087	177,375,319
Diluted	186,990,087	177,648,693

Notes (continued)

5    (Loss)/profit per share(continued)

Weighted average number of shares used in calculation - basic	2011	2010
	Number	Number
Number in issue at 1 January	185,618,253	173,007,585
Effect of own shares held	(3,460,610)	(4,627,388)
Effect of share options exercised	1,890,754	3,718,830
Effect of shares issued in the year	2,941,690	5,276,292
Weighted average number of basic shares at 31 December	186,990,087	177,375,319
Weighted average number of shares used in calculation - diluted	2011	2010
	Number	Number
Number in issue at 1 January	185,618,253	173,007,585
Effect of own shares held	(3,460,610)	(4,627,388)
Effect of share options exercised	1,890,754	3,718,830
Effect of shares issued in the year	2,941,690	5,276,292
Dilutive effect of share options granted	-	273,374
Weighted average number of diluted shares at 31 December	186,990,087	177,648,693

6    Trade and other payables

		2011	2010
		€'000	€'000
Trade payables and non CDC accruals		4,807	3,944
Other accruals - CDC accruals		7,668	9,207
Payment on account received		6,426	10,200
Deferred income		480	1,727
		19,381	25,078

Notes (continued)

7    Prepayments and accrued income

		2011	2010
		€'000	€'000
Prepayments		722	3,261
Accrued income - CDC accruals*		15,939	40,907
Accrued income - other		183	1,342
		16,844	45,510
*Accrued income represents the Group's best estimate of the value of carbon credits to be received.

The reduction in "Accrued Income-CDC Accruals" above reflects €21.7m reduction in respect of adjustments made to reflect the carbon price for floating price or unsold contracts (calculated at the average price during December 2011) together with movements on this balance which relate to carbon credits being delivered and sold or earned in the period.

The group recognises revenue based on the fair value of the carbon credits to be received from contracts, once the development work on these projects is completed by the Group and the project is deemed "CDC operational", meaning as a minimum they are fully commissioned and registered with the relevant regulatory body. CDC operational projects are only a proportion of Camco's carbon portfolio; projects still in the development phase where the Company has secured the rights to receive future revenue streams are not recognised in revenue. For further details refer to the Group accounting policies which have been applied consistently as outlined in Note 1 of the accounts.

Accrued income is recognised for CDC operational projects. The balance contains:

·      Accrued income for contracts with fixed sale prices

·      Accrued income for contracts with floating sales prices or that are unsold

Accrued income on floating and unsold contracts is re-valued at each balance sheet date according to carbon market prices. CER carbon prices used in the valuation of accrued income as at 31 December 2011 and 31 December 2010 are shown at table below:

	Dec-11	Dec-12	Dec-13	Dec-14	Dec-15	Dec-16	Dec-17	Dec-18	Dec-19	Dec-20
31-Dec-11	€4.71	€5.33	€5.61	€5.87	€5.87	€6.08	€6.39	€6.62	€6.89	€7.21
31-Dec-10	€11.67	€11.44	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a

Source: Intercontinental Exchange ECX CER Futures www.theice.com

8    Post Balance Sheet Event

On the 15 January 2012 the Group sold its UK advisory business and total consideration for the sale of Camco Advisory Services Limited (UK) was £4.5m comprising of an initial £3.25m paid on closing and up to £1.25m over the next two years through an earn-out structure. The business sold had a book value to the Company of £2.2m.

 

END

 

 

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