RNS Number : 1897D
EcoSecurities Group plc
11 September 2008
Press release for the interim statement 11 September 2008
ECOSECURITIES GROUP PLC
Interim Results for the six months ended 30 June 2008
Dublin, Ireland - EcoSecurities Group plc ('EcoSecurities', or the 'Company'), one of the world's leading companies in the business of
sourcing, developing and trading carbon credits from greenhouse gas emission reduction projects, today announces its interim results for the
six months ended 30 June 2008.
Highlights
* First period of significant issuance from the Group's portfolio with 595,000 CERs issued to EcoSecurities during the first half of
2008 (72,000 CERs for H1 2007).
* Consolidated revenue rose to EUR13.4m for the first half of 2008, an increase of 140% over the same period last year.
* Revenue recognised in respect of 825,000 CERs and 346,000 VERs in the period (283,000 CERs and 38,000 VERs for H1 2007).
* CER deliveries and cash collection in the period were not affected by the lack of a connection between the CITL and the ITL as
management took steps to deliver via connected registries.
* Inventory on hand or contracted of over 2.86 million CERs at 30 June 2008 with an average acquisition cost of EUR13.50 per CER
(837,000 CERs at 31 December 2007).
* Enhanced focus on implementation activities resulted in 103 viable projects registered with the CDM EB at 30 June 2008. On a net
basis to EcoSecurities, these 103 projects are capable of producing 29 million CERs (72 projects and 13 million CERs at 31 December 2007),
representing 24% (10% at 31 December 2007) of the Group's portfolio. Of the registered projects, projects capable of producing 24 million
CERs for EcoSecurities are already operational.
* Increased average size of projects - projects registered during the first half of 2008 averaged 597,000 CERs per project. 72% of
the portfolio comprised projects capable of producing more than 300,000 CERs to 2012 each.
* Post-2012 CER portfolio increased to 115 million at 30 June 2008 (103 million at 31 December 2007).
* VER contracted portfolio amounted to 14 million (11 million at 31 December 2007), including 6 million VERs from projects in the
US. Inventory at 30 June 2008 included 1.7 million VERs.
* Continued control of costs - operating expenses held at EUR14.9m for the period (EUR14.7m for H1 2007) despite an increase in
average headcount to 298 (230 for H1 2007).
* Loss for the period of EUR11.1m (EUR(13.2)m for H1 2007).
Current trading and outlook
* On a net basis, the CER portfolio at 29 August 2008 comprised 408 projects capable of producing more than 118 million CERs to 2012
(388 projects and 121 million CERs at 30 June 2008).
* 155 projects validated by 29 August 2008 and these projects are capable of producing 46 million CERs on a net basis (125 projects
and 38 million CERs at 30 June 2008), representing 39% of the portfolio (31% at 30 June 2008). Of the registered projects, projects capable
of producing 22 million CERs for EcoSecurities are already operational.
* EcoSecurities' emission reduction inventory continues to grow with 1.4 million CERs and 1.8 million VERs at 29 August 2008).
* The Group continues to originate both post-2012 CERs and VERs. At 29 August 2008 EcoSecurities' portfolio included 126 million
post-2012 CERs and 16 million contracted VERs.
* Over the next 12 months EcoSecurities anticipates a rapid increase in the generation of emission reductions from its pre-2012 CDM
portfolio projects. However, as a result of delays in the verification and issuance process, EcoSecurities currently anticipates CER
issuances for the next 12 months are likely to be markedly below previous expectations.
* EcoSecurities' cash balance at 29 August 2008 was EUR58m, including EUR15m of restricted cash, EUR11m of which was released in
September 2008.
The Group's contracted projects and portfolio of pre-2012 CERs on a net basis can be analysed as follows:
29 August 2008 30 June 2008
Project cycle landmark No. of projects Million CERs No. of projects Million CERs
(cumulative values)
Contracted 496 156 491 155
Due diligence 88 38 103 34
Portfolio 408 118 388 121
Operational stage:
Financed 355 102 335 104
Construction started 334 90 310 95
Operation started 190 50 185 56
CDM stage:
PDD complete 276 76 255 77
Submitted to validation 248 71 235 73
HNA obtained 216 67 206 71
Validated 155 46 125 38
Submitted to registration 152 46 121 37
Registered 107 28 103 29
Verified 24 4 23 4
Issuing 23 4 22 4
Mark Nicholls, Chairman, commented:
"Now that the first commitment period of the Kyoto protocol has commenced, it is pleasing that the first half of 2008 for EcoSecurities
has been marked by the first significant issuances from the portfolio and deliveries of CERs to customers. The Group has also enhanced the
quality of its pre-2012 CDM portfolio by advancing projects through the CDM stages, in particular, the increased volume of CERs generated
from projects validated and submitted to registration. Despite the difficulties which are reducing CER issuances in the short term,
EcoSecurities remains well placed to realise the long term value of its portfolio."
Analyst Meeting
The Group is holding a meeting/conference call for analysts today at 09:00 BST. Analysts wishing to participate should contact Ged
Brumby at Citigate Dewe Rogerson on +44 (0) 20 7638 9571 (ged.brumby@citigatedr.co.uk) for further details.
For further information please contact:
EcoSecurities Group plc +353 1 613 9814
Bruce Usher, CEO
Pedro Moura Costa, President
Adrian Fernando, COO
James Thompson, CFO
Citigate Dewe Rogerson +44 (0) 20 7638 9571
Kevin Smith / Ged Brumby
Notes to Editors
CDM = Clean Development Mechanism, the provision of the Kyoto Protocol that governs project level carbon credit transactions between
developed and developing countries.
CDM EB = CDM Executive Board, supervisor of the CDM under the authority and guidance of, and fully accountable to, the Conference of the
Parties serving as the Meeting of the Parties to the Kyoto Protocol.
CER = Certified Emission Reduction, carbon credits created by Clean Development Mechanism projects. One CER corresponds to 1 tonne of
CO2e emission reductions.
CITL = Community Independent Transaction Log, the electronic settlement system for all trading of carbon credits carried out under the
EU ETS.
DOE = Designated Operational Entity, an organisation accredited by the CDM Executive Board. A DOE has two key functions, to validate and
subsequently request registration of a proposed CDM project and to verify Emission Reductions from a registered CDM project activity.
EU ETS = European Union Emissions Trading Scheme, a market based 'cap and trade' system for greenhouse gases adopted by the European
Union member states.
ITL = International Transaction Log, a component of the trading infrastructure that forms the central hub of the settlement system which
delivers carbon credits from buyers to sellers.
Net trading margin = The net spread on principal sales over the portfolio average direct acquisition cost, net of commission to third
parties and excluding other direct costs and fixed cost allocations.
VER = Voluntary or Verified Emission Reduction, carbon credits created by emission reduction projects. One VER corresponds to 1 tonne of
CO2e emission reductions.
EcoSecurities is a world leading company in the business of sourcing, developing and trading carbon credits. EcoSecurities structures
and guides greenhouse gas emission reduction projects through the project cycle, working with both project developers and buyers of carbon
credits.
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 over 25 countries on five continents, EcoSecurities has amassed
one of the industry's largest and most diversified portfolios of carbon projects.
Utilising its highly diversified portfolio, EcoSecurities is able to structure carbon credit transactions to fit any buyers' 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 has been at the forefront of all significant policy and scientific developments in this field.
EcoSecurities Group plc is listed on the London Stock Exchange AIM (ticker ECO).
Additional information is available at www.ecosecurities.com.
Chairman's statement
In January 2008, the first commitment period of the Kyoto Protocol commenced and the industrialised countries listed in Annex 1 of the
UN Framework Convention on Climate Change have to comply with the emission reduction targets stipulated by the Protocol. The issuance and
delivery of the carbon credits that have been created over the recent preparatory years can be used by Governments and companies to comply
with the Protocol.
In the first half of 2008 EcoSecurities continued to make, in line with its strategy, significant progress with the monetisation of its
pre-2012 CER portfolio and its implementation activities. The half year period provided the first significant production and sales of CERs.
The delay in the CITL / ITL link up had a limited impact on the business, largely due to the fact that EcoSecurities had developed
contingency plans in the form of registry accounts in Switzerland, Japan and New Zealand, through which the Group's delivery obligations
could be met.
EcoSecurities achieved several milestones in terms of its portfolio advancement through the CDM cycle, having significantly increased
the number of registered projects (excluding projects not anticipated to be commissioned in the foreseeable future) from 72 at 31 December
2007 to 103 by the 30 June 2008, representing projects capable of producing 29 million pre-2012 CERs net to EcoSecurities. This increase in
project registration shows that EcoSecurities' focus on its core implementation activities is delivering results.
EcoSecurities' portfolio continues to evolve with the addition of new projects and to advance through the CDM stages. The size of
projects registered during the period averaged 597,000 CERs per project and the portfolio remains well diversified with respect to both
geography and technology. However, the market and EcoSecurities are still experiencing delays related to the CDM project cycle, due in part
to the complex and bureaucratic nature of the approval process.
In line with its views of the future of emission reduction markets, EcoSecurities continued to make progress in other areas including
secondary CER trading, VERs, the US market and post-2012 markets. The Group had its first issuance of VERs from a US based project and
continued to capitalise on attractive CER prices within the secondary market and built a position of over 2.86 million CERs at an average
acquisition cost of EUR13.50. In parallel to this, the Group continued to grow its post-2012 portfolio with 115 million CERs originated by
30 June 2008.
The Group continued to control costs and manage its cash reserves to withstand the uncertainties related to this market and this will
remain a key focus for the future.
With a strong balance sheet and a clear and focused strategy, EcoSecurities is well placed to not only realise the long term value of
its assets, but also to capitalise on additional growth opportunities offered in the rapidly developing carbon market.
Executive directors' review
2008 is the beginning of the first commitment period of the Kyoto Protocol and during the period the policy framework continued to
develop in a manner that is positive for the long-term prospects of emissions trading. The first half was notable as being the first period
of significant issuances of CERs to EcoSecurities from its portfolio projects and also of deliveries of CERs by the Group to its customers
under the forward sales contracts. During the period EcoSecurities has also further developed the quality of its portfolio in respect of its
progress through the CDM cycle, operational status and technology mix.
Strategy
EcoSecurities' strategy continues to be:
* Focus on the issuance and monetisation of the existing pre-2012 CER portfolio
* Develop the post-2012 CER portfolio and retain the capacity to maintain leadership post-2012 in what we believe will be a
project-based carbon market similar to the CDM
* Develop the activities relating to our core emission reduction work which are not 2012-dependent, including secondary CER trading,
the voluntary sector and the US
This is based on the Group's view that the carbon markets will continue to operate and grow post-2012.
EcoSecurities will continue to originate CERs for its pre-2012 portfolio but it is the Group's expectation that this opportunity will
decline as the end of Kyoto's first commitment period approaches.
While the Group will continue to take a prudent approach to capital investments and corporate development, EcoSecurities is also
exploring further innovative ways of pursuing these strategic activities.
Revenue and production
The first half of 2008 marked the first period of significant issuance from the EcoSecurities' portfolio. 595,000 CERs were issued to
EcoSecurities from its portfolio projects. This represented an eightfold increase over the level for the first half of 2007. The gross
number of CERs issued by projects managed by EcoSecurities amounted to 705,000. This increase in portfolio production corresponded with an
increase in the level of sales of CERs, which amounted to EUR8.9m, plus revenue from VERs, agency revenue, sales of other emission reduction
types and consultancy services. Sales of CERs were principally directed at fulfilling existing forward sales but in addition spot sales of
102,000 CERs were made, taking advantage of attractive CER prices.
Despite this growth, as announced at the AGM, the level of portfolio production was below expectations at the start of the year as
registrations and project operation were delayed and many projects underwent their first verification.
In addition to the rapid increase in the production of CERs, the performance of the secondary trading business and VERs was particularly
pleasing. The secondary trading operation was able to contract a significant number of CERs at attractive prices, while VER sales for the
first half of 2008 were more than double the level for the whole of 2007. Activity in the US started to gain further momentum marked by the
first issuance of VERs from a US based project.
Gross profit for the first half of 2008 amounted to EUR4.8m, an increase of nearly 561% over the full year 2007 figure.
The activities of the Group in the first half of the year have built up inventory and contracted purchases amounting to 2.86 million
CERs at 30 June 2008, with an average acquisition price of EUR13.5, which are available, along with future portfolio production, to meet the
Group's future net delivery obligations.
The continued delay in connecting the CITL to the ITL has had less impact than originally expected. At the beginning of the year the
possibility of a delay in the connection continuing until April 2009 or beyond appeared possible and EcoSecurities took appropriate steps to
manage the situation including the opening of registry accounts in Switzerland, Japan and New Zealand. Consequently none of the CER sales
in the first half of 2008 and consequent receipt of cash has been affected by the lack of a connection.
Portfolio advances
The net portfolio of pre-2012 CERs (which excludes agency contracts and only includes EcoSecurities' share of principal contracts) can
be analysed as follows:
30 June 2008 31 December 2007
Project cycle landmark No. of projects Million CERs No. of projects Million CERs
(cumulative values) (Note 1) (Note 1)
Contracted 491 155 405 150
Due diligence 103 34 37 20
Portfolio 388 121 368 130
Operational stage:
Financed 335 104 328 104
Construction started 310 95 285 88
Operation started 185 56 135 39
CDM stage:
PDD complete 255 77 234 73
Submitted to validation 235 73 217 66
HNA obtained 206 71 176 55
Validated 125 38 111 24
Submitted to registration 121 37 104 23
Registered 103 29 72 13
Verified 23 4 16 3
Issuing (Note 2) 22 4 12 2
Note 1 The "No. of projects" figures above exclude projects for which, although they are still under contract with the Group, no
pre-2012 CERs are currently expected and hence no CERs are included in the figures above. At 30 June 2008 there were 60 such excluded
projects, of which 26 are PDD complete and validated projects and 23 are registered projects.
Note 2 The issuing amounts represent the total number of pre-2012 CERs that are capable of being issued by projects that have already
issued some CERs.
The emphasis on originating large sized projects has continued to yield results. At 30 June 2008 72% of the net pre-2012 portfolio was
represented by projects of more than 300,000 CERs.
As a result of the progress on signing of larger projects, the prioritisation of the portfolio and the recruitment of implementation
specialists last year, at 30 June 2008 the proportion of registered projects had risen to 24% of the portfolio, up from 10% at 31 December
2007, and the proportion of validated projects had risen to 31% of the portfolio, up from 18% at 31 December 2007.
At 29 August 2008 the registered pre-2012 net portfolio had declined slightly to 28 million CERs. As a proportion of the portfolio, the
registered projects remained stable at 24% and the validated proportion had increased to 39% showing further benefits of the rapid PDD
production last year. This progress continued with 40 PDDs completed in the first half of 2008.
The operational stage of the projects continued to advance with the registered and operating portfolio at 30 June 2008 growing to 24
million pre-2012 CERs net to EcoSecurities. This represents an increase of 167% since 31 December 2007. At 29 August 2008 the registered and
operating net portfolio of pre-2012 CERs had declined slightly to 22 million.
The portfolio is concentrated in high yielding sectors with over 80% of the registered portfolio by technology type being in N2O
abatement, hydroelectricity, wind or geothermal. The portfolio also includes a number of small projects with high sustainable development
attributes, some of which will be delivered to governmental funds in Japan and Austria.
The focus in the field of N2O abatement since 2006 has also proved successful, resulting in the first registrations. During the first
half of 2008 12 N2O projects capable of generating 11 million pre-2012 CERs net to EcoSecurities were registered. An additional 3 million
CERs are included in the portfolio from projects that are submitted to registration. The net portfolio of pre-2012 CERs of this high
yielding methodology amounted to 37% of the registered portfolio.
EcoSecurities continues to work with Credit Suisse on the joint origination of pre-2012 CER projects. In the first half the
collaboration resulted in EcoSecurities signing, with Credit Suisse, four emission reduction purchase agreements with a large operator of
wind power facilities in China, for the development and purchase of 1.6 million CERs. These were the first transactions under the carbon
purchase facility agreed between EcoSecurities and Credit Suisse in 2007 for the origination of emission reduction projects on a worldwide
basis.
Consistent with EcoSecurities' expectation of an active market beyond 2012, the Group's post-2012 CER portfolio grew to 115 million CERs
at 30 June 2008 from 103 million CERs at 31 December 2007. The Group's VER contracted portfolio amounted to 14 million VERs at 30 June 2008
(11 million at 31 December 2007).
Overheads
Following a significant expansion during 2007, EcoSecurities had largely achieved its desired staff resource level and was able to
rationalise costs in certain areas in order to maintain business efficiencies. This rationalisation affected neither capacity for project
registration, verification and issuance nor key geographical regions where further expansion in resources may be needed. As a result
administration expenses for the first half of 2008 have remained below budget and represent a decrease of 32% from the second half of 2007.
Outlook
During the period there was an increase in net delivery obligations of 1.7 million CERs (of which 1.3 million are for delivery in 2010
or later) and a reduction of 0.8 million CERs as a result of deliveries. At 30 June 2008 net delivery obligations amounted to 29.7 million
CERs. The total future expected revenue in respect of forward sales at 30 June 2008 amounted to EUR572m (EUR558m at 31 December 2007) and
represents a net trading margin of EUR254m (EUR282m at 31 December 2007).
Following positive comments from the European Commission and successful software testing, it is now expected that the connection of the
CITL to the ITL will be made before the end of 2008. Furthermore, the majority of the Group's deliveries for the second half of 2008 are
via ITL connected registries so the impact associated with a further delay would be limited.
Following the success in containing the level of administrative expenses in the first half of 2008, the Board anticipates that the
administrative expenses for the whole of 2008 will be below that of 2007.
EcoSecurities' cash balance remained healthy, comprising EUR59m at 30 June 2008, including EUR18m of restricted cash. The balance at 29
August 2008 declined slightly to EUR58m. In addition, in September 2008 EUR11m of restricted cash was released, further enhancing
EcoSecurities' free cash levels.
Over the next 12 months EcoSecurities anticipates a rapid increase in the generation of emission reductions from its pre-2012 CDM
portfolio projects. However, many projects are undergoing their first verification and the time taken by the CDM process and DOEs to
complete verification and issuance has increased. As a result of this, the Group currently anticipates that CER issuances from its
portfolio for the next 12 months are likely to be markedly below previous expectations.
Although the process remains complex and slow, the Group is pleased with the pace of registrations of its projects during the first half
of 2008. EcoSecurities is confident of its ability to optimally manage the CDM registration, verification and issuance processes. Given
the level of portfolio production, high inventory levels at 30 June 2008 and contracted future purchases, EcoSecurities believes that it is
well placed to meet its ongoing net delivery schedule.
Financial review
Income statement
EcoSecurities' consolidated revenue rose to EUR13.4m for the first half of 2008, an increase of 140% over the same period last year.
EUR12.7m was derived from the sale of 825,000 CERs and 346,000 VERs. Sales of 68,000 mtCO2e of other emission reduction types have been
recognised as other income. Of the sales of CERs, 724,000 were in fulfilment of existing delivery obligations of the Group and 102,000 were
spot sales. All sales of CERs during the first half of 2008 were for delivery via an ITL linked registry and for which payment is not
dependent on the timing of the link of the CITL to the ITL. Consulting revenue amounted to EUR0.5m. The gross margin on CER sales was 42%
during the period, reflecting the mix of acquisition costs and sales prices for CERs.
Administrative expenses for the first half of 2008 were broadly in line with the same period last year at EUR14.9m despite a 30%
increase in the average headcount from 230 to 298, reflecting a strategy of cost containment whilst continuing to support and invest in the
Group's key departments and local offices. The principal component of administrative expenses continues to be staff costs and associated
expenditure.
Finance income for the first half of 2008 increased to EUR2.9m from EUR1.2m in the same period last year as a result of cash levels on
hand and market rate movements earned on short-term bank deposits. Finance expense amounted to EUR2.8m and comprised mainly unrealised and
realised foreign exchange differences on the Group's financial assets and liabilities (principally receivables, payables and bank deposits)
and mark to market adjustments on derivative contracts.
The tax charge of EUR1.2m during the first half of 2008 is due to foreign tax on profitable overseas subsidiaries. The net loss
declined to EUR11.1m for the first half of 2008 from EUR13.2m in the same period last year due to a combination of higher revenues and cost
containment measures.
Balance sheet
Intangible assets increased by EUR1.8m over the first half of 2008 reflecting the greater maturity of the CER portfolio to 2012 and an
increased number of projects in the portfolio now in the CDM process. The Group's policy is to capitalise identifiable costs of CDM project
implementation and project investments and then amortise these costs based on CER flows from the projects to which they relate.
Inventory comprised 1,384,000 CERs and 1,702,000 VERs at 30 June 2008 and increased significantly over the prior year due primarily to
CER and VER issuances and secondary purchases. The derivative financial asset of EUR1.5m relates to mark to market adjustments on
unrealised forward foreign currency contracts. Current trade receivables include EUR4.2m of receivables due from sales of CERs pending the
linking of the CITL to the ITL. Of the current assets, EUR5.9m relates to trade receivables from CER sales in the first half of 2008 for
which payment was received in July 2008.
During the first half of 2008 the Group committed to an investment of EUR7.9m over three years in future rights to CERs from a CDM
project in China. A further EUR0.2m was invested in project-related transactions to secure the rights to CERs.
Cash flow
The net cash outflow from operations of EUR(28.5)m over the period (EUR(21.6)m for H1 2007) was mainly due to the losses for the period
and the increase on working capital, comprising principally inventory which increased by EUR13.9m. Included in the cash flow from operations
was a net outflow of EUR2.7m from the settlement of the contract and related transactions described in note 6.
The net cash outflow from investing activities amounted to EUR(1.5)m (EUR(1.2)m for H1 2007) and comprised the investment in intangible
assets less interest received on the Group's cash deposits. The net cash generated from financing activities amounted to EUR3.8m (EUR33.6m
for H1 2007) and comprised EUR2.4m as a result of the exercise in full by Cargill Inc. of a warrant granted in 2005 to subscribe for
ordinary shares and the releases of restricted cash to EcoSecurities.
The cash balance amounted to EUR59.0m at 30 June 2008, a reduction of EUR29.1m over the first half of 2008.
Consolidated income Statement
as at June 30 2008
6 months to 6 months to Year ended
30 June 30 June 31 Dec
2008 2007 2007
Unaudited Unaudited Audited
Note EUR000 EUR000 EUR000
Revenue 13,401 5,593 7,222
Cost of sales (8,621) (3,491) (6,499)
Gross profit 4,780 2,102 723
Other Income 37 - -
Administrative expenses
General (14,875) (14,656) (36,633)
Total (14,875) (14,656) (36,633)
Loss before financing costs (10,058) (12,554) (35,910)
Financing costs (2,778) (713) (14,464)
Finance income 2,884 1,238 7,043
Loss before tax (9,952) (12,029) (43,331)
Income tax expense (1,187) (1,157) (1,748)
Loss for the period (11,139) (13,186) (45,079)
Loss all attributable to:
Equity holders of the Company (11,139) (13,186) (45,079)
(11,139) (13,186) (45,079)
Earnings per share (expressed in cents per share)
Basic and fully diluted (9.79) (14.16) (44.00)
earnings per share
Consolidated Statement of recognised income and
expense
6 months to 6 months to Year ended
30 June 30 June 31 Dec
2008 2007 2007
Unaudited Unaudited Audited
Note EUR000 EUR000 EUR000
Loss for the period (11,139) (13,186) (45,079)
Currency translation reserve 4 (470) (163) (432)
movement
Total recognised income and expense for the period (11,609) (13,349) (45,511)
All attributable to:
Equity holders of the Company (11,609) (13,349) (45,511)
(11,609) (13,349) (45,511)
Consolidated balance sheet
At June 30 2008
30 June 30 June 31 Dec
2008 2007 2007
Unaudited Unaudited Audited
Note EUR000 EUR000 EUR000
Assets
Non-current assets
Intangible assets 5,855 4,550 4,039
Property, plant and equipment 4,824 3,450 4,712
Deferred tax assets 220 - 229
Trade and other receivables 1,817 5,031 834
Total non-current assets 12,716 13,031 9,814
Current assets
Inventory 24,817 2,670 10,916
Derivative financial assets 1,472 - 2,641
Trade and other receivables 13,578 5,808 20,973
Cash and cash equivalents 5 58,951 79,902 88,076
Total current assets 98,818 88,380 122,606
Total assets 111,534 101,411 132,420
Shareholders' equity
Issued capital 3 (292) (256) (282)
Share premium (175,597) (118,908) (173,127)
Share based payment reserve 4 (1,115) (1,058) (902)
Currency translation reserve 4 976 237 506
Other reserves 4 573 573 573
Retained loss 4 81,129 38,195 70,019
Total shareholders' equity (94,326) (81,217) (103,213)
attributable to shareholders of the
parent
Liabilities
Non-current liabilities
Trade and other payables (3,041) (3,409) (3,040)
Deferred tax liabilities (178) (58) (186)
Total non-current liabilities (3,219) (3,467) (3,226)
Current liabilities
Interest bearing loans and borrowings - (7,559) -
Trade and other payables (9,556) (7,685) (12,137)
Derivative financial liabilities (3,346) - (1,505)
Current tax payable (941) (1,483) (1,411)
Provisions (146) - (10,928)
Total current liabilities (13,989) (16,727) (25,981)
Total liabilities (17,208) (20,194) (29,207)
Total equity and liabilities (111,534) (101,411) (132,420)
CONSOLIDATED CASH FLOW
STATEMENT
6 months to 6 months to Year ended
30 June 30 June 31 Dec
2008 2007 2007
Unaudited Unaudited Audited
EUR000 EUR000 EUR000
Cash flows from operating
activites
Loss for the financial (11,139) (13,186) (45,079)
period/year
Income tax expense 1,187 1,157 1,748
Finance income (2,884) (1,239) (7,043)
Finance expense 2,778 713 14,464
Settlement in cash of CER (2,710) - -
delivery obligation
Depreciation and amortisation 618 374 724
Impairment of intangible 218 - 1,323
assets
Write-down of inventory - - 429
Share-based payment expense 243 394 307
Foreign exchange movement 2,698 (244) (994)
Change in inventory (13,902) (2,399) (11,345)
Change in trade and other (988) (5,558) (8,773)
receivables
Change in trade and other (2,223) (923) 3,610
payables
Change in provisions (670) - 816
Interest paid (66) (404) (334)
Tax paid (1,656) (302) (974)
Net cash out flow from (28,496) (21,617) (51,121)
operating activities
Cash flows from investing
activities
Interest received 1,414 1,016 3,262
Acquisition of businesses - (185) (170)
Purchase of property, plant (787) (1,213) (2,849)
and equipment
Investment in intangible (2,126) (798) (8,214)
assets
Net cash used in investing (1,499) (1,180) (7,971)
activities
Cash flows from financing
activities
Gross proceeds from the issue of ordinary share 2,440 43,618 100,045
capital
Payment of share issue - (1,319) (3,502)
transaction costs
Repayment of borrowings - - (7,866)
Movement in restricted cash 1,381 (8,722) (13,136)
deposits
Net cash generated from 3,821 33,577 75,541
financing activities
Net increase/(decrease) in cash and cash equivalents (26,174) 10,780 16,449
Cash and cash equivalents at 68,629 54,045 54,045
start of period
Effect of foreign exchange (1,570) (52) (1,865)
rate fluctuations on cash and
cash equivalents
Cash and cash equivalents at 40,885 64,773 68,629
end of period
Notes to the financial information
1. General information
EcoSecurities Group plc and its subsidiaries (together the Group) source, develop and trade carbon credits. The Group also offers
consulting services. It operates through a global network of subsidiaries, branch offices and representatives.
2. Basis of preparation
The information in this document does not include all the disclosures required by International Financial Reporting Standards in full
annual statutory accounts and it should be read in conjunction with the Group's annual financial statements for the year ended 31 December
2007.
The accounting policies adopted are consistent with those followed in the preparation of the Group's annual financial statements for
the year ended 31 December 2007.
3. Share capital
In the first half of 2008 the number of ordinary shares of EUR0.0025 in issue increased by 3,717,731 to 116,686,665 reflecting the
exercise in full by Cargill Inc. of a warrant granted in 2005 to subscribe for up to 3,248,720 ordinary shares, the exercise of employee
share options and the issuance of ordinary shares as part of the deferred consideration for the purchase of Trexler Climate + Energy
Services Incorporated.
4. Reserves
Currency Share based Other Retained
Translat Payment reserv earnings
ion reserve es
reserve
EUR000 EUR000 EUR000 EUR000
At 1 January 2008 506 (902) 573 70,019
Loss for the period - - - 11,139
Foreign exchange translation differences 470 - - -
Employee share option scheme -
value of services provided - (242) - -
Transfer on exercise of share options - 29 - (29)
At 30 June 2008 976 (1,115) 573 81,129
5. Cash and cash equivalents
30 June
30 June 2007 31 Dec
2008 2007
EUR000 EUR000 EUR000
Cash at bank and in hand 21,392 9,940 33,875
Short-term deposits 19,493 54,833 34,754
Cash and cash equivalents for the purposes
of the cash flow statement 40,885 64,773 68,629
Restricted cash 18,066 15,129 19,447
Cash and cash equivalents 58,951 79,902 88,076
6. Provisions
During the first half of 2008 the Group settled the transactions which gave rise to the net financial loss
of EUR9.2m described in note 21 of the audited financial statements for the year ended 31 December 2007.
The net effect on the consolidated income statement in the first half of 2008 as a result of differences
between the estimates used in determining the charge for the year ended 31 December 2007 and the
actual outcome was a net credit of EUR0.1m to financial income.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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