TIDMECO
EcoSecurities Group - Interim Results
4 August 2009
ECOSECURITIES GROUP PLC
Interim Results for the six months ended 30 June 2009
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 2009.
Highlights
* Significantly improved financial performance underpinned by a
successful forward sales strategy and management action on
costs.
* Increase in consolidated revenue to EUR60.0m for the first half
of 2009, an increase of 348% over the same period last year.
Revenue recognised in respect of 4,274,000 CERs and 313,000
VERs in the period (825,000 CERs and 346,000 VERs for the first
half of 2008).
* Net revenue, including other income, of EUR11.6m for the first
half of 2009 (EUR4.8m for the first half of 2008).
* Profit before income tax for the first half of 2009 of EUR1.1m
(EUR10.0m loss for the first half of 2008).
* Issuance from the Group's portfolio was 820,000 CERs net to
EcoSecurities during the first half of 2009 (595,000 CERs for
the first half of 2008).
* On a net basis to EcoSecurities at 30 June 2009, the pre-2012
CER portfolio's 158 registered projects were capable of
producing 40 million CERs (127 projects and 35 million CERs at
31 December 2008), representing 40% (34% at 31 December 2008)
of the Group's portfolio.
* Of the registered projects, projects capable of producing
32 million CERs for EcoSecurities are already operational
(26 million CERs at 31 December 2008).
* Control of administrative expenses has remained tight and
expenditure for the first half of 2009 of EUR11.3m was 24% lower
than the same period last year.
* EcoSecurities continues to retain a strong consolidated net
cash position which amounted to EUR55.3m at 30 June 2009 with
inventory on hand of EUR7.1m including 263,000 CERs and 2,458,000
VERs.
* The policy of forward sales has resulted in contracted future
revenues of EUR380.6m at 30 June 2009 with an associated Net
Trading Margin of EUR163.1m.
* The weighted average sale price of the forward sales was
EUR13.80 per CER and the weighted average acquisition price of
the pre-2012 CER portfolio was EUR8.02 per CER at 30 June 2009.
* CER issuances currently anticipated for 2009 remain in line
with the Board's expectations.
* The Board of EcoSecurities has today written to shareholders
recommending the rejection of the offer by Guanabara Holdings
B.V. as being opportunistic and wholly inadequate.
* The Group's contracted projects and portfolio of pre-2012 CERs
on a net basis can be analysed as follows:
30 June 2009
Project cycle landmark (cumulative No. of projects Million CERs
values)
Contracted 447 124
Due diligence 69 23
Portfolio 378 101
Operational stage:
Financed 344 90
Construction started 331 86
Operation started 235 57
CDM stage:
PDD complete 293 73
Submitted to validation 292 73
HNA obtained 254 67
Validated 190 50
Submitted to registration 189 50
Registered 158 40
Verified 37 14
Issuing 31 6
Mark Nicholls, Chairman, commented:
"I am very pleased to report that for the six months ended 30 June
2009, EcoSecurities achieved its first period of profitability. With
EcoSecurities' visibility of revenues provided by the forward sales
contracts, its reduced cost base and strong balance sheet, the Group
is well positioned not only to progress successfully during the
current period of low CER prices and worldwide economic downturn but
also to take advantage of the potential recovery of CER prices in the
latter part of the first commitment period of the Kyoto Protocol.
The Board of EcoSecurities remains fully committed to delivering
shareholder value to all its shareholders."
Analyst Meeting
The Group is holding a conference call for analysts and shareholders
today at 10:30 BST. Analysts or shareholders wishing to participate
should contact Ged Brumby at Citigate Dewe Rogerson on +44 (0) 20
7282 2996 (ged.brumby@citigatedr.co.uk) for further details.
For further information please contact:
EcoSecurities Group +353 1 613 9814
plc
Bruce Usher, CEO
Adrian Fernando, COO
James Thompson, CFO
RBS Hoare Govett +44 20 7678
Limited 8000
Justin Jones / Hugo Fisher
Citigate Dewe Rogerson +44 20 7638
9571
Ged Brumby / Tom Baldock
The directors of the Company accept responsibility for the
information contained in this announcement. To the best of the
knowledge and belief of the directors of the Company (who have taken
all reasonable care to ensure that such is the case), the information
contained in this announcement is in accordance with the facts and
does not omit anything likely to affect the import of such
information.
RBS Hoare Govett Limited, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting
exclusively for EcoSecurities and no one else in connection with this
matter and will not be responsible to anyone other than EcoSecurities
for providing the protections afforded to clients of RBS Hoare Govett
Limited nor for providing advice in relation to this matter, the
content of this announcement or any matter referred to herein.
Under the provisions of Rule 8.3 of the Irish Takeover Panel Act
1997, Takeover Rules, 2007 (the "Rules"), if any person (other than a
"recognised intermediary") is, or becomes, "interested" (directly or
indirectly) in 1% or more of any class of "relevant securities" of
the Company, all "dealings" in any "relevant securities" of the
Company (including by means of an option in respect of, or a
derivative referenced to, any such class of "relevant securities")
must be publicly disclosed in accordance with Rule 2.9 of the Rules,
including the details set out in Rule 8.6 of the Rules, by no later
than 3:30 p.m. (London time) on the London business day following the
date of the relevant transaction. This requirement will continue
until the date on which the offer becomes, or is declared,
unconditional as to acceptances, lapses or is otherwise withdrawn or
on which the "offer period" otherwise ends. If two or more persons
"act in concert", to acquire an "interest" in "relevant securities"
of the Company, they will be deemed to be a single person for the
purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Rules, all "dealings" in
"relevant securities" of the Company by the offeror or the Company,
or by any of their respective "associates", must be disclosed by no
later than 12.00 noon (London / Dublin time) on the London / Dublin
business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose
"relevant securities" "dealings" should be disclosed, can be found on
the Irish Takeover Panel's website at www.irishtakeoverpanel.ie. The
Irish Takeover Panel also provides an appropriate form for any
disclosures under Rules 8.1 or 8.3.
"Interests in securities" arise, in summary, when a person has long
economic exposure, whether conditional or absolute, to changes in the
price of securities. In particular, a person will be treated as
having an "interest" by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative
referenced to, securities.
Terms in quotation marks are defined in the Rules, which can also be
found on the Irish Takeover Panel's website. If you are in any doubt
as to whether or not you are required to make a disclosure under Rule
8, you should consult the Irish Takeover Panel.
RBS Hoare Govett Limited has given and not withdrawn its written
consent to the issue of this document with the references to its name
in the form and context in which they appear.
KPMG has given and not withdrawn its written consent to the issue of
this document with the references to its name in the form and context
in which they appear.
Chairman's statement
I am very pleased to report that for the six months ended 30 June
2009, the EcoSecurities Group achieved its first profit before income
tax. This is an indication of the strength of EcoSecurities' strategy
and shows the ability of the Group to monetise its pre-2012 CER
portfolio despite the current difficult economic climate. This
milestone has been realised as a result of our long standing policy
of selling forward CERs to mitigate the impact of low CER prices,
increased CER issuances from our pre-2012 portfolio and rigorous
control of administrative expenses.
The low point in the price of CERs, reached in February 2009, was a
result of large volumes of EUAs being sold by obligated entities in
the midst of the credit crunch. This downward pressure on the price
of CERs has since reduced and the price has partially recovered.
However, as we have said previously, EcoSecurities believes that
there is the potential for CER prices to recover more fully in the
latter stages of the first commitment period of the Kyoto Protocol
once the worldwide economic downturn starts to reverse.
The existing pre-2012 CER forward sales contracts have mitigated the
effects of the continued weakness in the price of CERs.
EcoSecurities' consolidated revenue continues to be generated mainly
from the delivery of CERs under the forward sale contracts.
The inherent value of the Company, relative to the low share price,
has been identified by a number of organisations and the Company
received unsolicited approaches in June 2009 from Guanabara Holdings
B.V. ("Guanabara") and EDF Trading Limited and then, in July 2009,
from Tricorona AB (publ) that they were each considering making
offers for the Company, although EDF Trading Limited subsequently
withdrew their approach. On 23 July 2009, Guanabara announced that
an offer document containing details in relation to its cash offer
for EcoSecurities at 77 pence had been posted to shareholders on 22
July 2009. The Board of EcoSecurities believes that this approach is
opportunistic and wholly inadequate. In a separate circular posted
to shareholders today, the Board of EcoSecurities sets out the
reasons for it recommending that shareholders reject the offer. The
Board of EcoSecurities remains fully committed to delivering value to
all its shareholders.
The policy environment that EcoSecurities operates in is divided into
two components, the current Kyoto framework, where the majority of
EcoSecurities' value is derived, and the emerging post-Kyoto
framework. Within the current system, in which policy actions are
regulatory in nature, the CDM continues to be a challenging
environment, involving delays and slow decision making. However, we
observe active enhancements within the functioning of the CDM, as the
UNFCCC secretariat continues to increase its staff count and the
Executive Board implements a series of process changes designed to
improve the efficiency of the CDM. Over the past half year, the
emergence of a CDM Project Developer Forum, which EcoSecurities
chairs, has proved to be a good addition to the dialogue around those
needed enhancements, supplementing the broader policy sweep covered
by IETA and CMIA.
The broader issue of the post-Kyoto regime is beginning to come into
some focus. With the House of Representatives passage of the Waxman
Markey Bill, it appears increasingly likely that the US will join the
world of cap and trade and offsets, increasing the overall scope of
emissions trading several times over. While passage in the Senate
must still occur and will likely involve further changes, the Waxman
Markey Bill as written would create a US market of up to 2 billion
tonnes CO2e per year, split between domestic and international
sources. The re-engagement of the US is also a positive for the
Copenhagen process that is seeking to define the post-Kyoto era from
the global community's perspective. While any final agreement out of
Copenhagen will only emerge at the very end of that process, it seems
increasingly clear that the world's largest industrial emitters, the
US, China and the EU, are collectively determined to emerge with a
system that promotes international emissions trading in one form or
another.
As announced previously, Bruce Usher has expressed the wish to step
down as Chief Executive Officer when a suitable successor is
appointed. Mr Usher, who is stepping down to pursue personal
interests, remains fully committed to the Company and will continue
as a non-executive director after he has stepped down as Chief
Executive Officer. He and the Board believe that a new Chief
Executive Officer, located closer to the head office, will be
important in achieving the next stage of the Group's development. The
Board has engaged an international executive search firm and the
search process is progressing.
Prices in the carbon market have improved somewhat since February
2009, although the environment remains challenging and is expected to
remain so for the short term. However, with EcoSecurities'
visibility of revenues provided by the forward sales contracts, its
reduced cost base and strong balance sheet, the Group is well
positioned not only to progress successfully during the current
period of low CER prices and worldwide economic downturn, but also to
take advantage of the potential recovery of CER prices in the latter
part of the first commitment period of the Kyoto Protocol.
Mark Nicholls
Chairman
Chief Executive Officer's review
I am very pleased that the EcoSecurities Group is reporting its first
period of profitability. EcoSecurities has benefitted from its long
standing policy of hedging a significant portion of its pre-2012 CER
portfolio which has mitigated the effect of lower CER prices. In
addition, issuance for the pre-2012 CER portfolio has increased and
we continue to control administrative expenses.
The Group's strategy remains the issuance and monetisation of the
existing pre-2012 CER portfolio and we have made good progress during
the first six months of 2009.
Revenue and production
The first half of 2009 saw another period of rapid increase in
consolidated revenue for EcoSecurities as scheduled and advanced
deliveries of CERs under existing forward sale contracts increased.
Group revenue for the first six months of 2009 was EUR60.0m, an
increase of EUR46.6m over the EUR13.4m reported for the same period last
year. Sales of CERs amounted to EUR58.1m and represented
4,274,000 CERs. Net issuances for the first six months of 2009
amounted to 820,000 CERs to EcoSecurities representing an increase
from 791,000 CERs for the full year in 2008 and the gross number of
CERs issued by projects managed by EcoSecurities amounted to
2,587,000 for the first six months of 2009, up from 1,920,000 for the
full year in 2008.
EcoSecurities' consulting services business continued to provide GHG
management and climate change strategy services to various public and
private sector clients throughout the first six months of 2009. In
addition, the consulting team continues to contribute to the policy
and market understanding of EcoSecurities by consistently monitoring
and contributing to the ongoing climate policy debate, alongside
tracking carbon market developments.
Gross profit for the first six months of 2009 was EUR9.1m, an increase
of 91% over the EUR4.8m reported for same period last year. The cost of
sales per CER was in excess of that of the portfolio average as
3,712,000 CERs sold in the first six months had been purchased on the
secondary market at higher prices.
VER prices have remained weak since the year end and inventory and
purchase contract provisions of EUR1.7m, largely against VERs in
inventory, have been charged in arriving at the gross profit for the
first half of 2009 reported above.
At 30 June 2009, forward sales amounted to 27.6 million CERs. This
amount excludes any put options held by the Group, the strike price
of which is below the market price at 30 June 2009 of EUR11.80 per CER.
The total expected revenue for the period from 1 July 2009 to 2013 in
respect of contracted sales amounts to EUR380.6m and represents a net
trading margin of EUR163.1m. At 30 June 2009, the weighted average sale
price of the contracted sales currently scheduled for delivery in the
period from 1 July 2009 to 2013 was EUR13.80 per CER.
During the first half of 2009, as the price of CERs was volatile,
EcoSecurities accelerated the delivery of certain forward sales
contracts which increased sales above the planned level.
The forward sales are largely to Japanese and European utilities, a
major Japanese trading company buying on behalf of the Japanese
government, European and Japanese government agencies and major
European banks.
The Group reported net revenue, comprising gross profit and other
income, for the first six months of 2009 of EUR11.6m (EUR4.8m for the
first half of 2008).
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 2009 31 December 2008
Project cycle landmark (cumulative No. of Million No. of Million
values) projects CERs projects CERs
Contracted 447 124 482 144
Due diligence 69 23 85 41
Portfolio 378 101 397 103
Operational stage:
Financed 344 90 352 90
Construction started 331 86 337 86
Operations started 235 57 202 52
CDM stage:
PDD complete 293 73 287 71
Submitted to validation 292 73 267 69
HNA obtained 254 67 241 67
Validated 190 50 164 43
Submitted to registration 189 50 162 43
Registered 158 40 127 35
Verified 37 14 26 4
Issuing 31 6 26 4
The weighted average acquisition price of the pre-2012 CER portfolio
at 30 June 2009 was EUR8.02 per CER (EUR7.84 at 31 December 2008).
At 30 June 2009, the Group had inventory of 263,000 CERs
(1,710,000 CERs at 31 December 2008) and 2,458,000 VERs
(2,122,000 VERs at 31 December 2008).
At 30 June 2009, 158 projects had been registered with the CDM
Executive Board, up from 127 projects at the 31 December2008. On a
net basis to EcoSecurities, these 158 projects are capable of
producing 40 million CERs (35 million CERs at 31 December 2008),
representing 40% of the Group's net pre-2012 CER portfolio (34% at
31 December 2008). At 30 June 2009, 190 projects (164 projects at
31 December 2008) had been validated and these projects are capable
of producing 50 million pre-2012 CERs on a net basis (43 million CERs
at 31 December 2008), representing 50% of the portfolio (42% at
31 December 2008). Of the registered projects, projects capable of
producing 32 million CERs (26 million CERs at 31 December 2008) for
EcoSecurities are already operational.
Consistent with EcoSecurities' expectation of an active market beyond
2012, the Group's post-2012 CER portfolio amounted to 125 million
CERs at 30 June 2009 (132 million CERs at 31 December 2008).
The Group's VER contracted portfolio amounted to 9 million VERs at
30 June 2009 (9 million at 31 December 2008).
The Group's contracted carbon credit projects at 30 June 2009 can be
summarised as follows:
+-------------------------------------------------------------------+
| Carbon credit type | Gross volume | Net entitlement to |
| | Million tCO2e | Group |
| | | Million tCO2e |
|------------------------------+---------------+--------------------|
| CERs to 2012 (principal) | 105 | 98 |
|------------------------------+---------------+--------------------|
| CERs to 2012 (agency) | 9 | 1 |
|------------------------------+---------------+--------------------|
| CERs to 2012 (project | 3 | 2 |
| development) | | |
|------------------------------+---------------+--------------------|
| Subtotal pre-2012 CER | 117 | 101 |
| portfolio | | |
|------------------------------+---------------+--------------------|
| Pre-2012 CERs (due | 24 | 23 |
| diligence) | | |
|------------------------------+---------------+--------------------|
| Subtotal contracted pre-2012 | 141 | 124 |
| CERs | | |
|------------------------------+---------------+--------------------|
| CERs post-2012 (options and | 130 | 125 |
| ERPAs) | | |
|------------------------------+---------------+--------------------|
| VERs | 9 | 9 |
|------------------------------+---------------+--------------------|
| Total volume contracted | 280 | 258 |
+-------------------------------------------------------------------+
Of the post-2012 CER portfolio, 95% of the contracted volume
represents contracts where there is no fixed price obligation.
Administrative expenses for the six months ended 30 June 2009
amounted to EUR11.3m, a reduction of 29% below the level of EUR15.9m for
the second six months of 2008.
The Group reported a maiden profit before income tax for the first
six months of 2009 of EUR1.1m (EUR10.0m loss for the first half of
2008).
Outlook
Portfolio issuances currently anticipated for 2009 remain in line
with the Board's expectations.
As a result of EcoSecurities' policy of hedging a significant portion
of its pre-2012 CER portfolio and as a result of the ongoing cost
control measures, the Group is resilient to a period of weak CER
prices and is also well positioned to take advantage of the potential
recovery in CER pricing in the later stages of the first commitment
period of the Kyoto Protocol.
EcoSecurities remains well placed to capture the further growth
opportunities which the Board believes will be presented by the
continuing evolution of the global carbon market.
Bruce Usher
Chief Executive Officer
Financial review
Income statement
Despite the global recession and drop in Carbon Credit prices,
EcoSecurities' consolidated revenue rose to EUR60.0m for the first half
of 2009, an increase of EUR46.6m or 348% over the same period last year
and reflects the benefit of the Group's strategy to forward sell a
proportion of the pre-2012 CER portfolio. Some EUR59.4m was derived
from the sale of 4.3m CERs and 0.3m VERs and other revenue from the
issuance of CERs from the pre-2012 portfolio. Of the sales of CERs,
4.0m CERs were in fulfilment of existing delivery obligations of the
Group, which were contracted before 31 December 2008, and 0.3m were
sales entered into during the first half of 2009. Net revenue
increased 141% over the same period last year to EUR11.6m. Revenues
from consulting services grew slightly over the same period last year
and amounted to EUR0.6m as the benefits of the restructuring of this
business at the end of 2008 began to take effect. The gross profit
margin percentage increased to 15.3% in first half of 2009 from 6.6%
for the year to 31 December 2008, reflecting the relative mix of
acquisition costs and sales prices and a lower level of charge for
inventory impairment and onerous contracts required for the first six
months of 2009 of EUR1.7m (EUR3.3m for the year ended 31 December 2008).
Other income of EUR2.5m for the first six months of 2009 (EURnil for the
first half of 2008) represents principally the margin from the net
settlement of CER delivery obligations and other margin arising from
the secondary trading of Carbon Credits.
Administrative expenses for the first half of 2009 were EUR3.6m lower
than the same period last year at EUR11.3m, representing a 24.2%
decrease. This reduction results from the cost containment
initiatives started during 2008. Although the average headcount
reduced from 298 for the first half of 2008, to 258 for the first six
months of 2009, the Group continued to prioritise the business areas
involved in realising delivery of CERs from the existing pre-2012 CER
portfolio. The principal component of administrative expenses
continues to be staff costs and associated expenditure.
Finance income for the first half of 2009 decreased to EUR1.3m from
EUR2.9m in the same period last year, mainly as a result of lower
market returns available on our cash deposits. The Group's strategy
has been to spread cash deposits with secure financial institutions
during the global credit crisis. Finance income also benefited from
EUR1.0m realised and unrealised foreign exchange gains on the Group's
financial assets and liabilities (principally receivables, payables
and bank deposits) and unrealised mark to market movements on open
JPY/EUR hedges. Finance expense amounted to EUR0.6m and comprised mainly
of realised losses of matured JPY/EUR hedges and the cost of settling
an open CER option position.
The tax charge of EUR0.8m during the first half of 2009 is mainly due
to foreign tax on profitable overseas subsidiaries.
The Group made a profit after income tax of EUR0.3m for the first half
of 2009, a EUR11.4m improvement over the same period last year. This
profit reflected the Group's strategy of hedging against CER market
price movements by forward selling a proportion of the pre-2012
portfolio and continued cost containment measures whilst still
investing in core business processes surrounding the realisation of
CERs from the pre-2012 portfolio, which has led to an increased
number of the Group's projects maturing to an issuing stage and
generating CERs.
Balance sheet
Intangible assets increased to EUR12.2m at 30 June 2009, reflecting the
greater maturity of the pre-2012 CER portfolio 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 EUR3.0m of CERs and EUR4.1m of VERs at 30 June 2009,
a significant reduction from the inventory held at year end,
primarily as a result of deliveries against forward sales in the
first half of 2009. The derivative financial asset of EUR0.4m relates
to mark to market adjustments on unrealised forward foreign currency
contracts and the derivative financial liability relates to mark to
market positions on unrealised Carbon Credit futures contract
positions. Some EUR0.8m of deferred income in non-current trade and
other payables was reclassified to current trade and other payables
in the period, reflecting deferred income realisable in the second
half of 2009.
At 30 June 2009, the Group's contracted commitment to investments
totalled EUR8.2m (EUR8.4m at 31 December 2008).
Cash flow
The net cash inflow generated from operations of EUR21.3m for the first
half of 2009 (EUR28.5m outflow for the first six months of 2008) was
mainly due to a net decrease on working capital, comprising
principally inventory, which decreased by EUR21.3m, and trade
receivables, which decreased by EUR12.6m, partially offset by the
settlement of foreign exchange derivative contracts of EUR10.3m net.
The net cash outflow from investing activities amounted to EUR4.3m
(EUR1.5m for the first half of 2008) and comprised the investment in
intangible assets less interest received on the Group's cash
deposits. The net cash outflow from financing activities amounted to
EUR4.9m (EUR3.8m inflow for the first half of 2008) and is mainly
explained by cash set aside as collateral against letters of credit,
margin calls on open futures and foreign exchange contract positions.
The cash balance increased by EUR17.6m to EUR56.3m at 30 June 2009 from
EUR38.7m at 31 December 2008. Some EUR5.0m of the cash held was used to
provide collateral and margin calls on letters of credit and open
futures and foreign exchange contract positions.
James Thompson
Chief Financial Officer
Condensed consolidated income statement for the six months to 30 June
2009
6 months to 30 6 months to Year ended 31
June 30 June December 2008
2009 Unaudited 2008 Audited
Unaudited
EUR'000 EUR'000 EUR'000
Revenue 59,977 13,401 69,476
Cost of sales (50,828) (8,621) (64,915)
Gross profit 9,149 4,780 4,561
Other income 2,460 37 1,027
Administrative expenses (11,268) (14,875) (30,736)
Profit/(loss) from 341 (10,058) (25,148)
operating activities
Finance expense (575) (2,778) (10,867)
Finance income 1,292 2,884 4,825
Profit/(loss) before 1,058 (9,952) (31,190)
income tax
Income tax expense (803) (1,187) (1,021)
Profit/(loss) for the
period attributable to
equity holders of the
Group 255 (11,139) (32,211)
Profit /(loss) per share
(expressed in EUR cents per
share)
Basic profit /(loss) per 0.22 (9.79) (28.0)
share (EUR cent)
Fully diluted profit 0.20 (9.79) (28.0)
/(loss) per share
(EUR cent)
Condensed consolidated statement of comprehensive income for the six
months to 30 June 2009
6 months to Year ended
6 months to 30 June 31 December
30 June 2008 2008
2009 Unaudited Unaudited Audited
EUR'000 EUR'000 EUR'000
Profit/(loss) for the period 255 (11,139) (32,211)
Currency translation reserve
movement 987 (470) (1,485)
Total recognised income and
expense for the period
attributable to equity
holders of the Group 1,242 (11,609) (33,696)
Condensed consolidated statement of changes in equity for the six
months to 30 June 2009
Share Share Currency Share Other Retained Total
capital premium translation based reserves loss
reserve payment
reserve
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 294 175,655 (1,991) 1,234 (573) (102,179) 72,440
January
2009
Profit for - - - - - 255 255
the period
Issue of 1 60 - - - - 61
shares
Foreign - - 987 - - - 987
exchange
translation
differences
Employee - - - 245 - - 245
share
option
scheme -
value of
services
provided
Transfer on - - - (18) - 18 -
exercise of
share
options
At 30 June 295 175,715 (1,004) 1,461 (573) (101,906) 73,988
2009
Condensed consolidated balance sheet at 30 June 2009
30 June 2009 30 June 2008 31 December
Unaudited Unaudited 2008
Audited
Note EUR'000 EUR'000 EUR'000
Assets
Non-current assets
Intangible assets 12,217 5,855 8,001
Property, plant and 3,392 4,824 4,432
equipment
Deferred tax assets 429 220 369
Trade and other 1,184 1,817 920
receivables
Total non-current assets 17,222 12,716 13,722
Current assets
Inventory 7,109 24,817 29,208
Derivative financial 374 1,472 -
assets
Trade and other 4,426 13,578 16,984
receivables
Cash and cash equivalents 4 56,320 58,951 38,745
Total current assets 68,229 98,818 84,937
Total assets 85,451 111,534 98,659
Shareholders' equity
Issued share capital 3 295 292 294
Share premium 175,715 175,597 175,655
Share based payment 1,461 1,115 1,234
reserve
Currency translation (1,004) (976) (1,991)
reserve
Other reserves (573) (573) (573)
Retained loss (101,906) (81,129) (102,179)
Total shareholders' equity 73,988 94,326 72,440
attributable to
shareholders of the Group
Liabilities
Non-current liabilities
Trade and other payables 2,250 3,041 3,000
Interest bearing loans and 1,000 - 1,000
borrowings
Deferred tax liabilities 133 178 134
Total non-current 3,383 3,219 4,134
liabilities
Current liabilities
Trade and other payables 7,155 9,556 10,571
Derivative financial 316 3,346 10,456
liabilities
Current tax payable 609 941 460
Provisions - 146 598
Total current liabilities 8,080 13,989 22,085
Total liabilities 11,463 17,208 26,219
Total equity and 85,451 111,534 98,659
liabilities
Condensed consolidated cash flow statement for the six months to 30
June 2009
6 months to Year ended
6 months to 30 June 31 December
30 June 2009 2008 2008
Unaudited Unaudited Audited
Note EUR'000 EUR'000 EUR'000
Cash flows from operating
activities
Profit/(loss) for the
financial period/year 255 (11,139) (32,211)
Income tax expense 803 1,187 1,021
Finance income (1,292) (2,884) (4,825)
Finance expense 575 2,778 10,867
Settlement in cash of CER
delivery obligation - (2,710) (2,710)
Settlement of derivative
contracts (10,960) 2,570 1,795
Depreciation of property,
plant and equipment 728 618 1,060
Amortisation of intangible
assets 37 - 172
Impairment of intangible
assets 126 218 605
Write down of inventory 796 - 2,846
Impairment of property,
plant and equipment 2 - 144
Share based payment expense 245 243 383
Foreign exchange movement 1,954 128 3,972
Change in inventory 21,303 (13,902) (21,139)
Change in trade and other
receivables 12,612 (988) (3,577)
Change in trade and other
payables (4,451) (2,223) (423)
Change in provisions (691) (670) (219)
Interest paid (71) (66) (158)
Tax paid (715) (1,656) (2,163)
Net cash generated/(used)
from operating activities 21,256 (28,496) (44,560)
Cash flows from investing
activities
Interest received 233 1,414 2,607
Purchase of property, plant
and equipment (189) (787) (974)
Investment in intangible
assets (4,389) (2,126) (4,788)
Net cash used in investing
activities (4,345) (1,499) (3,155)
Cash flows from financing
activities
Proceeds from the issue of
ordinary share capital 12 2,440 2,500
Proceeds from issue of new
loans - - 1,000
Movement in restricted cash
deposits (4,938) 1,381 19,337
Net cash (used)/generated
from financing activities (4,926) 3,821 22,837
Net increase/(decrease) in
cash and cash equivalents 11,985 (26,174) (24,878)
Cash and cash equivalents
at start of period 38,635 68,629 68,629
Effect of foreign exchange
rate fluctuations on cash
and cash equivalents 652 (1,570) (5,116)
Cash and cash equivalents
at end of period 4 51,272 40,885 38,635
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 accounts for the year ended 31 December 2008.
The interim financial information has been prepared in accordance
with recognition and measurement requirements of International
Financial Reporting Standards (IFRS) as endorsed by the EU
Commission. The accounting policies and methods of computation
adopted in the preparation of the financial information are, except
as noted below, consistent with those set out in the Group's
consolidated accounts for the year ended 31 December 2008 which were
prepared in accordance with International Financial Reporting
Standards (IFRS) as endorsed by the EU Commission.
The preparation of the interim financial information requires
management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of certain assets,
liabilities, revenues and expenses together with disclosure of
contingent assets and liabilities. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is
revised, if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both
current and future periods.
The interim financial information for both the six months ended 30
June 2009 and the comparative six months ended 30 June 2008 are
unaudited. The financial information for the year ended 31 December
2008 represents an abbreviated version of the Group's statutory
accounts for that year. Those accounts contained an unqualified
audit report and have been filed with the Registrar of Companies.
Changes in accounting policies
A number of changes in accounting policies arise in the current
period from the adoption of new or revised International Financial
Reporting Standards as follows:
* IFRS 8 Operating segments, which became effective on 1 January
2009, sets out the requirements for disclosure of financial and
descriptive information about an entity's operating segments,
its products and services, the geographical areas in which it
operates and its major customers. The adoption of this standard
has not had a significant impact on the Group's financial
reporting.
* IAS 23 Borrowing costs has been revised with effect from 1
January 2009. Consequently, the Group is now required to
capitalise borrowing costs, to the extent that they are
directly attributable to the acquisition, production and
construction of a qualifying asset, as part of the cost of that
asset. This change in accounting policy has had no impact on
the Group's financial reporting to date as the Group currently
has no qualifying borrowings.
* IAS 1 Presentation of financial statements has been revised
with effect from 1 January 2009. The standard introduces a
"statement of comprehensive income" and effectively replaces
the statement of recognised income and expense. The Group has
adopted the "two separate statements" approach of presenting
income and expense within an income statement as before and
components of other comprehensive income within a statement of
comprehensive income. The Group also now presents a statement
of changes in equity as a primary statement.
The financial information is presented in euro, rounded to the
nearest thousand.
3 Share capital
In the first half of 2009 the number of ordinary shares of EUR0.0025 in
issue increased by 426,679 to 118,181,352 reflecting the exercise of
employee share options by employees and the final element of the
deferred consideration in respect of past acquisitions.
4 Cash and cash equivalents
30 June 30 June 31 December
2009 Unaudited 2008 Unaudited 2008
Audited
EUR'000 EUR'000 EUR'000
Cash at bank and in hand 2,246 21,392 16,361
Short term deposits 49,026 19,493 22,274
Cash and cash equivalents 51,272 40,885 38,635
for the purposes of the
cash flow statement
Restricted cash 5,048 18,066 110
Cash and cash equivalents 56,320 58,951 38,745
The borrowing facility allowing collateralised financing of an amount
up to equivalent of the prevailing market value of 2,000,000 CERS
remained undrawn at 30 June 2009. At 30 June 2009, the facility
equated to EUR23,600,000.
KPMG report on the Interim Results
Set out below is the full text of a report on the Interim Results
from KPMG:
"The Directors
EcoSecurities Group plc
40 Dawson Street
Dublin 2
RBS Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
4 August 2009
Dear Sirs
We report on the profit estimate comprising the interim financial
statements of EcoSecurities Group plc (the "Company") and its
subsidiaries (together the "Group") for the six month period ended 30
June 2009 (the "Profit Estimate") issued by the Company dated 4
August 2009. This report is required by Rule 28.3(a) of the Irish
Takeover Panel Act, 1997, Takeover Rules, 2007 (the "Takeover Rules")
and is given for the purpose of complying with that rule and for no
other purpose.
Accordingly, we assume no responsibility in respect of this report to
the offeror or any person connected to, or acting in concert with,
the offeror or to any other person who is seeking or may in future
seek to acquire control of the Company (an "Alternative Offeror") or
to any other person connected to, or acting in concert with, an
Alternative Offeror.
Responsibilities
It is the responsibility of the directors of the Company to prepare
the Profit Estimate in accordance with the requirements of the
Takeover Rules. In preparing the Profit Estimate the directors of the
Company are responsible for correcting errors that they have
identified which may have arisen in the unaudited financial results
and unaudited management accounts used as a basis of preparation for
the Profit Estimate.
It is our responsibility to form an opinion as required by the
Takeover Rules as to the proper compilation of the Profit Estimate
and to report that opinion to you.
Save for any responsibility which we may have to those persons to
whom this report is expressly addressed and which we may have as a
result of the inclusion of this report in an offer-related document
(a "Document") to be issued by the Company on 4 August 2009, to the
fullest extent permitted by law we do not assume any responsibility
and will not accept any liability to any other person for any loss
suffered by any such other person as a result of, arising out of, or
in connection with this report or our statement, required by and
given solely for the purposes of complying with Rule 28.4 of the
Takeover Rules, consenting to its inclusion in a Document.
Basis of preparation of the Profit Estimate
The Profit Estimate has been prepared on the basis of preparation set
out in Note 2 to the interim financial statements and comprises the
unaudited interim financial results for the six months ended 30 June
2009. The Profit Estimate is required to be presented on a basis
consistent with the accounting policies of the Group.
Basis of opinion
We conducted our work in accordance with the Standards for Investment
Reporting issued by the Auditing Practices Board in the United
Kingdom and Ireland. Our work included evaluating the basis on which
the historical financial information for the six months ended 30 June
2009 included in the Profit Estimate has been prepared and
considering whether the Profit Estimate has been accurately computed
using that information and whether the basis of accounting used is
consistent with the accounting policies of the Group.
We planned and performed our work so as to obtain the information and
explanations we considered necessary in order to provide us with
reasonable assurance that the Profit Estimate has been properly
compiled on the basis stated.
However, the Profit Estimate has not been audited.
Opinion
In our opinion the Profit Estimate has been properly compiled on the
basis stated and the basis of accounting used is consistent with the
accounting policies of the Group.
Yours faithfully
KPMG
Chartered Accountants"
RBS Hoare Govett report on the Interim Results
Set out below is the full text of a report on the Interim Results
from RBS Hoare Govett, the Company's financial advisers:
"The Directors
EcoSecurities Group plc
40 Dawson Street
Dublin 2
4 August 2009
Dear Sirs
We refer to the interim financial statements of EcoSecurities Group
plc (the "Company") and its subsidiaries for the six month period
ended 30 June 2009 (the "Interim Results"). We have discussed the
Interim Results and the basis on which they have been prepared with
you as directors of the Company.
We have also discussed the accounting policies and basis of
calculation for the Interim Results with KPMG, EcoSecurities Group
plc's auditor, and have considered their letter of today's date
addressed to yourselves and ourselves on this matter. You have
confirmed to us that all information material to the Interim Results
has been disclosed to us. We have relied on the accuracy and
completeness of all such information and have assumed such accuracy
and completeness for the purpose of rendering this letter.
On the basis of the foregoing, we consider that the Interim Results,
for which you as directors of the Company are solely responsible,
have been compiled with due care and consideration.
This letter is provided to you solely in connection with Rule 28.3
(a) of the Irish Takeover Panel Act, 1997, Takeover Rules, 2007 and
for no other purpose. To the fullest extent permitted by law, we
accept no responsibility in respect of this letter to any persons
other than to you solely in your capacity as directors of the
Company.
Yours faithfully,
RBS Hoare Govett Limited"
Company information
Executive Directors
Bruce Usher
Adrian Fernando
James Thompson
Non-Executive Directors
Mark Nicholls, Chairman
Thomas Byrne
Alec Dreyer
Paul Ezekiel
Robert Flicker
Secretary
Patrick James Browne
Principal bankers
HSBC
HSBC House
Harcourt Centre
Harcourt Street
Dublin 2
Ireland
Bank of Ireland
Corporate Banking
Lower Baggot Street
Dublin 2
Ireland
Nominated adviser, financial adviser and broker
RBS Hoare Govett Limited
250 Bishopsgate
London
EC2M 4AA
United Kingdom
Registrars
Capita Corporate Registrars
Unit 5, Manor Street Business Park
Manor Street
Dublin 7
Ireland
Solicitors
Matheson Ormsby Prentice
70 Sir John Rogerson's Quay
Dublin 2
Ireland
Auditor
KPMG
Chartered Accountants
1 Stokes Place
St Stephen's Green
Dublin 2
Ireland
Registered office
EcoSecurities Group plc
40 Dawson Street
Dublin 2
Ireland
Glossary
"Carbon credits"
means greenhouse gas Emission Reduction benefits arising from
project-level activities;
"CDM"
means Clean Development Mechanism, being the provision of the Kyoto
Protocol that governs project level carbon credit transactions
between developed and developing countries;
"CER"
means Certified Emission Reduction, being carbon credits created by
CDM projects. 1 CER corresponds to 1 tonne of CO2e Emission
Reductions;
"CMIA"
means the Carbon Market Investors Association - an international
trade association representing businesses working to reduce carbon
emissions through the market mechanisms of the UNFCCC and the Kyoto
Protocol;
"CO2e"
means carbon dioxide equivalent and the unit used in the Kyoto
Protocol;
"ERPA"
means an Emission Reduction purchase agreement;
"Emission Reductions"
means units ascribed to the reduction of greenhouse gas related
emissions;
"EU ETS"
means the European Union Emissions Trading Scheme - A market-based
'cap and trade' system for GHGs adopted by European Union member
states in January 2005 in advance of their obligations under the
Kyoto Protocol;
"GHG"
means greenhouse gases, such as CO2 that trap heat in the atmosphere;
Gross"
means in respect of contracted and portfolio acquisitions of Emission
Reductions, the total project volumes without adjustment for
EcoSecurities' share of Emission Reductions from individual
contracts;
"IETA"
means the International Emissions Trading Association - an
international trade association involved in the development of an
active, global greenhouse gas market and the creation of systems and
instruments to ensure effective business participation;
"Kyoto Protocol"
means international agreement under which industrialised countries
commit to reduce GHG emissions;
"Net"
means in respect of contracted and portfolio acquisitions of Emission
Reductions adjusted for EcoSecurities' share of Emission Reductions
from individual contracts;
"Net Trading Margin"
means the net spread on principal arrangements, net agency fees
(after commission to third parties) and project development margins,
and excludes other direct cost inputs and fixed cost allocations;
"PDD"
means a Project Design Document;
"Portfolio"
means rights to buy or receive Carbon Credits from Emission Reduction
projects that are capable of producing up to a stated level of Carbon
Credits
"tCO2e"
means tonnes of carbon dioxide equivalent, units for carbon dioxide
equivalent calculations;
"UNFCCC"
means the United Nations Framework Convention on Climate Change,
signed in 1992;
"VER"
means Verified Emission Reduction, being carbon credits created
through voluntary emission reduction projects. One VER corresponds to
1 tonne of CO2e Emission Reductions.
PRESENTATION OF INFORMATION, BASES AND SOURCES
1 Forward-Looking Statements
This document contains statements that are or may be
"forward-looking" with respect to the financial condition, results or
operations and businesses of the Company. In some cases, these
forward-looking statements can be identified by the use of
forward-looking terminology, including the terms "believes",
"estimates", "forecasts", "plans", "prepares", "anticipates",
"expects", "intends", "may", "will" or "should" or, in each case,
their negative or variations or comparable terminology. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the actual results,
performance or achievements of the Company, or the industry in which
is operates, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements.
2 Presentation of Financial and Operating Information
Unless otherwise stated, the financial information concerning the
Company has been extracted from internal financial and management
information, the published annual reports and accounts of the Company
for the relevant periods and other information made publicly
available by the Company.
Financial information is reported under Irish GAAP unless otherwise
stated.
Unless otherwise stated, operating information concerning the
Company, including contracted project and portfolio figures, CER
issuance figures, project registration figures, weighted average sale
prices, weighted average acquisition prices, inventory data and
consulting services has been sourced from internal financial and
management information, the published annual reports and accounts of
the Company for the relevant periods and other information made
publicly available by the Company.
3 Third Party Sources
The Company confirms that the information in this document obtained
from third party sources has been correctly and fairly reproduced.
So far as the Company is aware and has been able to ascertain from
information published by such third parties, no facts have been
omitted which would render the reproduced information inaccurate or
misleading.
The Company does not have access to the facts and assumptions
underlying the data extracted from publicly available sources. As a
result, the Company is unable to verify such.
4 Page References
The relevant bases of calculation and source of information are
provided below in the order in which the relevant information appears
in this document and by reference to page numbers in this document.
Where financial or operating information is based on the underlying
sources and bases described in paragraph 2, the underlying sources
and bases are not repeated again. Where information is repeated in
this document, the underlying bases and sources are generally cited
once and not repeated again.
The reference to the Company being one of the world's leading
companies in the business of sourcing, developing and trading carbon
credits from greenhouse gas emission reduction projects is based on
the number of industry awards that the Company has obtained in recent
years and market research reports including:
(a) Environmental Finances' award for 'Best CDM/JI Project
Developer 2008' for the second year in a row alongside the award for
'Best Voluntary Market Project Developer';
(b) New Carbon Finance award for 'Top Carbon Off-taker by
Number of Deals' in 2008; and
(c) Verdantix, identifying the Company in their 'Helping you
Change with the Climate' research report of December 2008 identifying
the Company as one of the 4 leading firms in the carbon market in
their Green Quadrant 'Analysis of CDM Project Developer'.
The reference to the financial performance being significantly
improved and underpinned by successful forward sales strategy and
management action on costs is based on the 2007 and 2008 Annual
Reports and Accounts, internal management information and the interim
results set out in this announcement (the "Interim Results").
The reference to control of administrative expenses having remained
tight and expenditure for the first half of 2009 being 24 per cent
lower than the same period last year is based on internal management
information.
The reference to the policy of forward sales having resulted in
contracted future revenues of EUR380.6m at 30 June 2009 with an
associated Net Trading Margin of EUR163.1m is based on internal
management information.
The reference to CER issuances currently anticipated for 2009
remaining in line with the Board's expectations is based on internal
management information.
The reference to the Board of EcoSecurities having today written to
shareholders recommending the rejection of the offer by Guanabara
Holdings B.V. as opportunistic and wholly inadequate is based on a
Shareholder Circular to be published today.
The reference to the potential recovery of CER prices in the latter
part of the first commitment period of the Kyoto Protocol is sourced
from Barclays Capital Monthly Carbon Standard dated 20 July 2009 and
Société Générale Global Commodities Review dated 29 June 2009.
The reference to EcoSecurities' long standing policy of selling
forward CERs to mitigate the impact of low CER prices is based on
internal management information.
The reference to the low point in the price of CERs reached in
February 2009 being a result of large volumes of EUAs being sold by
obligated entities in the midst of the credit crunch and that this
downward pressure on the price of CERs has since reduced and the
price has partially recovered is sourced from internal management
information and from Barclays Capital Commodities Research dated 20
July 2009 and Société Générale Commodities Research dated 29 June
2009.
The reference to EcoSecurities' consolidated revenue continuing to be
generated mainly from the delivery of CERs under the forward sale
contracts is based on internal management information.
The reference to the inherent value of EcoSecurities relative to the
low share price having been identified by a number of organisations
is based on the following:
(d) a report from KBC Peel Hunt entitled 'Morning Note -
EcoSecurities - Buy' dated 17 July 2009;
(e) a report from Mirabaud entitled 'EcoSecurities Clean
Technology - Any More Bids? Mark II' dated 17 July 2009; and
(f) a research report from Matrix Corporate Capital entitled
'New Energy - Two Steps Forward.' dated 23 June 2009.
The reference to Guanabara announcing that it was considering making
an offer for the entire issued share capital of EcoSecurities at a
price of 60 pence per Ordinary Share is sourced from the announcement
made by Guanabara on 5 June 2009 entitled 'Guanabara - Rule 2.4
Announcement'.
The reference to EDF Trading announcing that it was also considering
making a cash offer for the entire issued share capital of
EcoSecurities at a price of at least 75 pence per Ordinary Share is
sourced from the announcement made by EDF Trading on 8 June 2009
entitled 'EDF Trading - Rule 2.4 Announcement'.
The reference to EDF Trading announcing that it did not intend to
progress its possible offer and had entered into a conditional
purchase agreement with Guanabara is sourced from the announcements
made by EDF Trading on 16 July 2009 entitled 'EDF Trading -
Statement Re Possible Offer for EcoSecurities' and 'EDF Trading -
Portfolio Purchase Agreement with Guanabara in relation to
EcoSecurities'.
The reference to Tricorona AB (publ) reviewing the situation
regarding the possibility of making an offer for EcoSecurities is
sourced from the press release made by Tricorona AB (publ) on 21 July
2009 entitled 'Tricorona - Possible Offer for EcoSecurities'.
The reference to Guanabara's cash offer of 77 pence per Ordinary
Share for the entire issued and to be issued share capital of
EcoSecurities is sourced from the Offer Document.
The reference to the policy environment that EcoSecurities operates
in being divided into two components, the current Kyoto framework,
where the majority of EcoSecurities' value is derived, and the
emerging post-Kyoto framework is based on internal EcoSecurities'
research.
The reference to the CDM continuing to be a challenging environment,
involving delays and slow decision making, within the current system,
in which policy actions are regulatory in nature, is based on the
report of the UNFCCC entitled "Call for Inputs on Efficiency in the
Operation of the CDM and Opportunities for Improvement" and available
at: http://cdm.unfccc.int/public_inputs/2009/cdmimprov/index.html.
The reference to the UNFCCC secretariat increasing its staff count
and the Executive Board implementing a series of process changes
designed to improve the efficiency of the CDM is based on the UNFCCC
report entitled "Framework Convention on Climate Change - Executive
Board of the Clean Development Mechanism Forty-Eight Meeting Report"
published on 17 July 2009.
The reference to the emergence of a CDM Project Developer Forum,
which EcoSecurities chairs, over the past half-year having proved to
be a good addition to the dialogue around those needed enhancements,
and supplementing the broader policy sweep covered by IETA and CMIA
is based on a publication from Point Carbon entitled "Project
Developers Launch Lobby Group" published on 19 November 2008 and
available at:
http://www.carbon-financeonline.com/index.cfm?section=global&id=11694&action=view&return=home.
The reference to the increasing likelihood of the US joining the
world of cap and trade and offsets, increasing the overall scope of
emissions trading several times, creating a US market of up to 2
billion tonnes CO2e per year, split between domestic and
international sources is based on The American Clean Energy and
Security Act (H.R. 2454) approved by the US House of Representatives
on 26 June 2009.
The reference to the Copenhagen process is based on information about
the UNFCCC meetings to be held in Copenhagen sourced at:
http://en.cop15.dk/ and http://unfccc.int/2860.php.
The reference to prices in the carbon market having improved somewhat
since February 2009, although the environment remains challenging and
is expected to remain so for the short term is based on Barclays
Capital Monthly Carbon Standard dated 20 July 2009 and Société
Générale Global Commodities Research dated 29 June 2009.
The reference to EcoSecurities having benefited from its long
standing policy of hedging a significant portion of its pre-2012 CER
portfolio which has mitigated the effect of lower CER prices is based
on internal forward sales information and forward carbon market
pricing information (as referenced above).
The reference to the Group's strategy remaining the issuance and
monetisation of the existing pre-2012 CER portfolio is based on
internal management information and the 2008 Annual Report and
Accounts.
The reference to the Group having made good progress during the first
six months of 2009 is based on the Interim Results.
The reference to the first half of 2009 seeing another period of
rapid increase in consolidated revenue for EcoSecurities as scheduled
and advanced deliveries of CERs under existing forward sale contracts
increased is based on the Interim Results and internal management
information.
The reference to the VER prices having remained weak since the year
end is based on internal management information and internal market
research.
The reference to EcoSecurities accelerating delivery of certain
forward sales contracts during the first half of 2009 is based on
internal management information.
The reference to the price of CERs being volatile in the first half
of 2009, is sourced from the ECX website: http://www.ecx.eu/.
The reference to the forward sales being largely to Japanese and
European utilities, a major Japanese trading company buying on behalf
of the Japanese government, European and Japanese government agencies
and major European banks is based on the internal management
information.
=--END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
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