BIOPETROL INDUSTRIES AG
BIOPETROL INDUSTRIES AG: Strong growth in a difficult environment
BIOPETROL INDUSTRIES AG / Quarter Results Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. ---------------------------------------------------------------------- Strong growth in a difficult environment • Sales grow again by more than 50% • Loss on valuation according to IFRS/stable cash flow • Volatility and new confidence define business Zug, 18 November 2008: In the third quarter of 2008 the extreme conditions for the business of BIOPETROL INDUSTRIES AG continued as prices for vegetable and mineral oils, driven by speculation, reached historical highs and were extremely volatile. The credit and banking crisis increasingly unsettled customers and suppliers and the unchecked import of subsidised biodiesel (B99) from the USA had an extreme impact on the margins of European biodiesel producers. The logistical strength of the locations Rostock and Rotterdam supported our efforts of reliably supplying the increasingly important European markets in which there are legal requirements for mandatory blending of biodiesel at competitive prices and with individual specifications. We are increasingly managing to use production in our Schwarzheide and Rostock plants very flexibly and often by quickly switching production to benefit from fluctuations in raw materials prices. In the process alternative raw materials are increasingly being used in the multi-feedstock plants of BIOPETROL. With our sea-port locations at Rostock and Rotterdam we have further expanded our international trading in biodiesel and biodiesel components. Consequently trading has increased, while our own production fell again. Sales + 56.7% on previous year Sales rose 56.7% over the first 9 months of 2007 to EUR 243.575 million (EUR 155.436 million). At EUR 103.682 million sales in the third quarter of 2008 once more rose strongly compared to the figure for the second quarter of 2008, EUR 83.312 million. In the first 9 months of this year BIOPETROL sold 236,295 tonnes of biodiesel (previous year 199,817 tonnes) and 8,217 tonnes of pharmaceutical-grade glycerine (previous year 10,021 tonnes). Derivatives value and pressure on margins characterise the result The margins also remained under pressure in the third quarter of 2008. The remains of the B100 market which still existed were served by highly subsidised imports of B99. A considerable portion of German biodiesel capacity is no longer being used; several producers have in the meantime filed for insolvency. In this environment BIOPETROL achieved operationally a positive result. Before changes to valuation due to trading contracts, in the first nine months the adjusted EBITDA was EUR 9.418 million (previous year EUR 4.921 million) and the adjusted EBIT was EUR 7.030 million (previous year EUR 2.780 million), for the third quarter an adjusted EBITDA of EUR 8.258 million (previous year EUR 3.950 million) and an adjusted EBIT of EUR 7.444 million (previous year EUR 3.222 million) were achieved. For purchase contracts and hedging transactions the value of derivative financial instruments reduced to EUR 3.006 million (end of 2007: EUR 25.225 million) and the value of derivative financial liabilities reduced to EUR 5.338 million (end of 2007: EUR 8.937 million). In the valuation of sales contracts, the short-term provision for anticipated losses from contracts on 30 September 2008 was EUR 0 (end of 2007: EUR 15.064 million). Including these devaluations prescribed by IFRS at current market prices the EBITDA was EUR – 1.644 million (previous year 5.868 million) and the EBIT was EUR – 4.032 million (previous year 3.727 million). The EBITDA and EBIT margins fell correspondingly to - 0.7 (previous year 3.8)% and – 1.7 (previous year 2.4)% respectively. The group’s net loss reached EUR – 11.561 million following a profit of EUR 3.430 million in the first 9 months of the previous year. As in the previous year, the undiluted net profit per share is determined on the basis of 37,000,000 shares. The undiluted result per share is accordingly EUR – 0.31 for Q1 to Q3 of 2008, following EUR 0.07 in the same period of the previous year. Stable cash flow development The operational cash flow developed very positively in the third quarter at EUR 17.337 million and almost completely offset the negative cash flow from the first half year. One year ago, on 30 September 2007, the cash flow was EUR -6.726 million. Cash flow from financing activity was characterised by interest payments totalling EUR 3 million for the convertible bond. The line of credit used in the first half year totalling EUR 5.461 million has been completely repaid. Cash and cash equivalents totalling EUR 13.626 million are now available to the operational business. Cash flow from investment activity was EUR – 13.909 million. The investment programme is essentially complete. The plant in Rotterdam which is designed to produce 400,000 t/a biodiesel and 60,000 t/a bioglycerine is currently being prepared to start production in November. The ratio between equity capital and borrowed capital has changed slightly from the end of 2007, at 38 9.% (end of 2007: 38.3%). Due to recruitment, particularly in Rotterdam, the average number of employees rose to 155 (end of 2007: 120). Outlook In uncertain times customers look for and appreciate more and more reliable suppliers such as BIOPETROL, whose capacity and flexibility they can use. Current harvests and harvest expectations for almost all oil seeds were and are pleasingly high. With regards to B99 the US government has closed the splash and dash loophole with retrospective effect. Germany intends from 1 January 2009 to increase mandatory blending to B7. At the same time the use of soya and palm oil should no longer be used for the quota or for tax-advantaged deliveries. In addition biofuels which have already received a tax subsidy, such as e.g. B99, should also not be included in the mandatory quota and not receive a further tax advantage. We therefore assume that after more than 2 years we finally have fair competitive conditions again in Germany. In Germany the consumption of diesel has increased in the last 5 years by 4%. In the process the price of diesel has already overtaken the price of premium petrol. Europe now imports annually more than 28 million tonnes of diesel and diesel pre-products from Russia. According to the calculations of the ADAC it can be expected that the German recovery programme will encourage the buying of diesel vehicles. This too will result in a further increase for demand in diesel fuel, so that with the shortening supply from the mineral oil industry, the foreseeable supply bottleneck can only be avoided with biodiesel. BIOPETROL’s biodiesel plants are well placed in Europe to benefit from a future sustainability certification. Further progress has been made in the consolidation of the German biodiesel market and this has brought about a clear reduction in overcapacity. We have not allowed ourselves to be shaken from the development and expansion of our business in extremely difficult times. We now want to reap the benefits of these efforts. We feel well equipped to do this. For the fourth quarter and for the whole of 2008 we expect operationally – meaning before commodities futures – a positive result. The comprehensive quarterly report (Q3 as at 30 September 2008) is published in German and English on the company’s website at www.biopetrol-ind.com. About the company With its German, Dutch and Swiss subsidiaries, BIOPETROL INDUSTRIES AG, which has its head office in Zug (Switzerland), produces and sells biodiesel and pharmaceutical-grade glycerine of the highest quality. Among our customers are the oil industry and oil traders, large-scale fleet operators, public short-distance transport, as well as the agricultural and construction industries. The pharmaceuticals and cosmetics industries are in addition supplied with bioglycerine of pharmaceutical quality. At the present date, BIOPETROL INDUSTRIES AG has annual productive capacities in Schwarzheide and Rostock of around 350,000 tonnes of biodiesel and 30,000 tonnes of pharmaceutical-grade glycerine. In Rotterdam, BIOPETROL is building an installation with an annual productive capacity of 400,000 tonnes of biodiesel and 60,000 tonnes of bioglycerine. By the end of 2008, annual capacity should then be more than doubled to a total of 750,000 tonnes of biodiesel. Further expansion of capacity in Rotterdam is planned. We are working actively on extending our product range, based on the coproduct bioglycerine. Disclaimer This press release represents neither an offer for sale nor a request for the submission of an offer to purchase or subscribe to securities. This announcement and the information contained therein are not intended to be directly or indirectly passed on to or within the United States of America, Canada, Australia or Japan. Contact Public Relations Andrea Beyer Phone: +49 (0) 211 155 77 96 10 Mail: andrea.beyer@biopetrol-ind.com Contact Investor Relations Gerd Rückel Phone +49 (0) 69 577 0 300 31 Mail: gerd.rueckel@biopetrol-ind.com 18.11.2008 Financial News transmitted by DGAP ----------------------------------------------------------------------
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