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Tersus Energy Plc (TER)

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Friday 23 March, 2007

Tersus Energy Plc

Trading Statement

Tersus Energy Plc
23 March 2007


                               TERSUS ENERGY PLC

                         ('Tersus Energy' or 'Tersus')

                        UPDATE ON TRADING AND FINANCING


In advance of announcing audited results for the year to 31 December 2006 Tersus
Energy Plc today provides an update on trading and financing.


Financial Highlights

(Results for 2006 are un-audited)

   • Revenue of £4.5 million consisting of: Navitas £2.4 million; Envinta
     £0.3 million; Advisory Services £1.8 million. (31 December 2005 £2.7 
     million consisting of: Navitas £1.5 million; Advisory Services £1.2 
     million)
   • Pre tax loss of £0.7 million (31 December 2005 £0.9 million*)
   • This result includes a profit of £0.6 million (US$1.1 million) on the
     disposal of Tersus' holding in Dynamotive Energy Systems Corporation.
   • Net assets of £5.0 million (31 December 2005 £5.5million)

* Restated to reflect the adoption of FRS 20.


Tersus Energy Controls

   •Navitas Technologies Inc ('Navitas'), which is 100 per cent owned and was
    acquired in April 2005, made a profit in the year to 31 December 2006 before
    interest, tax, depreciation and amortisation ('EBITDA') of Canadian $292,000
    and is budgeting for improved performance in 2007. (The 2005 EBITDA in the
    post acquisition period was Canadian $133,000).
   •Envinta Corporation Inc ('Envinta'), which is 100 per cent owned and was
    acquired in May 2006, did not achieve expected levels of turnover in the
    year to 31 December 2006 and made an EBITDA loss for the period from
    acquisition of US $266,000. Envinta is now trading at breakeven and is
    budgeted to operate profitably in 2007.
   •Tersus has decided to offer Navitas for sale in order to realise value
    from the investment and to focus on its Asian Renewables and BioEnergy
    businesses. The sale could include Envinta, if appropriate, and should
    benefit from Tersus' research and analysis into suitable acquisition targets
    for a consolidation of Energy Controls companies in North America. Initial
    discussions are underway with a number of interested parties.


Tersus Asian Renewables


   •Tersus' 50 per cent interest in Jasfour Power Private Ltd ('Jasfour') has
    been formalised creating a vehicle through which Tersus is developing its
    interest in wind power in India. Jasfour is seeking financing for the
    acquisition of its first wind farm, which has 15mw of generating capacity
    and which has been in operation for just over a year, and project finance
    for a related development, which is expected to be operational early in 2009
    with a capacity of 50mw. A pipeline of further developments is under review
    and negotiation by Jasfour.
   •Tersus is a 50 per cent co-developer under a Joint Development Agreement
    with First Philippines Wind Corporation of a 168mw onshore wind farm project
    in the Philippines. The land lease for the first site ( for 42mw ) is
    expected to be granted within weeks, following which further progress can be
    made in negotiating off -take contracts, transmission, equipment supply, and
    other aspects of project development.
   •Hahn Renewable Energy LLC ('HAHN') has signed MOUs for a 500mw wind
    project and for two 10mw solar projects in South Korea in which Tersus
    expects to participate 50:50 under a Joint Development Agreement.
   •ZhongHong (Baoding) Huiteng Wind Power Equipment Company Ltd ('HT
    Blade'), a leading Chinese wind blade manufacturer in which Tersus has an
    indirect interest of 3 per cent, is trading well, made an (unaudited) after
    tax profit in excess of US$11 million in the year to 31 December 2006, and
    is budgeting for a significantly increased level of profit in 2007.

.
Tersus BioEnergy

   •Tersus' BioEnergy project pipeline is primarily focused on anaerobic
    digestion opportunities using the proprietary thermophilic anaerobic
    digestion technology developed by Enviro-Control Limited ('ECL') into which
    Tersus invested in May 2006. ECL Developments Limited ('ECLD') is the 50:50
    joint development company established by Tersus and ECL to exploit such
    project opportunities.
   •Tersus is working on a pipeline of more than 10 waste-to-energy projects
    in the US and Europe. These projects are driven a) by environmental
    compliance requirements for animal waste streams and b) by a desire to
    mitigate ethanol commodity project risk via anaerobic digestion of whole
    stillage and wet and dry distillers grain. ECLD has two MOUs for animal
    waste projects in Belgium and is in active negotiations with a US developer
    of corn-based ethanol production plants.


Tersus Advisory

   •Tersus continues to provide advisory services on existing assignments
    including the Bens Run salt dome gas storage facility where a potential
    purchaser is nearing completion of detailed due diligence. The sale of the
    project would give rise to a significant fee payable to Tersus.


Future Direction and Financing

   •Tersus' strategy is to sell its Energy Controls interests and to focus
    its activities and its resources on its BioEnergy and Asian Renewable
    businesses. These offer opportunities for substantial project investment on
    which Tersus would expect to earn significant developer fees and/or carried
    equity.
   •Tersus will require additional finance in the coming six months in order
    to achieve this objective. Such additional finance may come from the sale of
    the Energy Controls businesses, from the sale of other Tersus interests, or
    from one of a number of financing relationships which Tersus has been and is
    discussing.
   •Tersus has taken measures to reduce the running costs of the business.
    This includes the deferral of senior management salaries with effect from 1
    January 2007.
   •The Board intends to issue to management and staff options over up to
    three million new ordinary shares with an exercise price to be set at the
    closing middle market price on the day following this announcement.


Conclusion


   •The Board considers that Tersus' principal investments in Dynamotive
    (now realised), Navitas, and HT Blade have been successful. It has taken
    longer than anticipated for Envinta to achieve break-even, but indications
    are that this has now been achieved.
   •The market for BioEnergy opportunities remains active and Tersus has
    numerous opportunities to capitalise on the intellectual property of
    Enviro-Control Limited, in which it has a minority investment, and the
    experience and expertise of its management.
   •The market for Asian Renewables remains exciting and Tersus believes it
    is well positioned to participate in projects available to developers and
    operators in that market.
   •The successful development of the BioEnergy and Asian Renewable
    Businesses is dependent on making additional development capital available
    from the sale of Navitas, other Tersus' assets, or from new financing.


For further information please contact:

Tersus Energy plc
Steve Levine, Chief Executive        Tel: +1 978 635 0997
Officer
David Wilson, Finance Director       Tel: +44 (0)20 7408 5416/+44 (0)7831 818121

KBC Peel Hunt Ltd                    Tel: +44 (0)20 7418 8900
Jonathan Marren
David Anderson

M:Communications
Partick d'Ancona                     Tel: +44 (0)20 7153 1547
Eleanor Williamson                   Tel: +44 (0)20 7153 1539




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