Eco Investor Update
A Weekly News Update for Environmental Investors
February 2012 - No 67
Sims Metal Management
The non-cash impairment is mostly from its North America segment and relates to acquisitions and joint ventures before 2007-08. The company said it attributes the impairment to the timing and valuation of previous significant acquisitions of traditional scrap metal recycling companies before the global economic downturn and US recession.
Dividends and the share buyback will not be affected.
The company expects underlying earnings (EBITDA) before the goodwill impairments and other adverse items of around $15 million to be about $141 million compared to $138 million in the previous corresponding half.
First half results were impacted by difficult operating conditions and margins for its traditional metals, particularly in North America. Results for Australasia and Europe excluding the UK traditional metals business were solid, and results for Sims Recycling Solutions were in line with the prior corresponding half.
The announcement saw its shares plunge from $15.34 to $13.45 before recovering to around $14.40. (ASX: SGM)
Tox Free Solutions
Managing director Steve Gostlow said "These businesses will add significantly to our existing hazardous waste platform and will position Toxfree as the industry leader in this segment of the market."
The transaction is scheduled to complete on 15th February. (ASX: TOX)
Interest Rate Securities
Transpacific SPS Trust
Moree Solar Farm and the three other projects - from Infigen-Suntech, AGL, and TRUenergy - can update their applications for reassessment by the Solar Flagships Council.
A $306.5 million grant is on offer to build a large-scale, solar photovoltaic power station. A decision is expected in the second quarter.
The Minister for Resources and Energy, Martin Ferguson, said this process provides the Moree project with the opportunity to demonstrate whether it is still the most meritorious project. (ASX: IFN)
Clean TeQ Holdings
The shares initially jumped on news of a joint venture with Tokyo based Nippon Gas Co to provide water desalination services to the coal seam gas sector. But they kicked on when soon after Clean TeQ also announced $3 million in new contracts for the design and construction of air capture and purification systems for two wastewater treatment plants in NSW.
The projects will use Clean TeQ's OdourTeQ biological air treatment technology that is cost effective for treating odours from municipal wastewater.
The company said winning the two projects adds substantially to its current project work and reinforces its position as the leading supplier of biologically-based air pollution control systems in Australia.
"We have long known that our OdorTeQ biological treatment technology is world class, so it's no surprise that we are winning more and more projects based on this platform," said chief executive Peter Voigt. "We are looking to expand our market geography and become a supplier to the greater Asian marketplace." (ASX: CLQ)
DoloMatrix will receive about $58 million when the sale completes on the expected date of 15 February. (ASX: DMX)
These include greenfield and brownfield opportunities and cover new mine developments, mine expansions and retrofitting existing sites where energy efficiency improvements and fuel costs savings are sought.
Enerji chief executive, Greg
Pennefather, said "Energy Developments is well known for delivering
safe, innovative, reliable, secure power generation in remote communities
throughout Australia. It has over 276 MW remote area energy operations
across 32 projects." (ASX: ENE)
August Investments said "Financially the company is profitable, receiving fees to plant the trees from large Australian companies. Profit has been growing at a fast rate, with projected earnings of 4 cents per share for 2011-12 - a 309 per cent increase over the previous year.
"The environmental benefits of planting trees on degraded land is obvious, but the company's reliance on just one species is somewhat of a concern - monocultures can be prone to diseases. But overall we see this company as positive, although still speculative.
"We compared Carbon Conscious with a similar company, CO2 Ltd. Carbon Conscious seemed to provide the best value to shareholders."
Ceramic Fuel Cells
Ausgrid's energy efficiency expert Paul Myors said "The fuel cell used gas and waste heat to produce most of the on-site power, but with 65 per cent less greenhouse gas impact than power sourced from the grid."
The 1.5 kilowatt BlueGen unit combined with a conventional 1 kilowatt rooftop solar system and a 0.5 kilowatt solar pergola system produced an average 32 kilowatt hours of electricity per day. Of this, the BlueGen unit produced an average of 28 kilowatt hours per day, and the average solar output was 4 kilowatt hours per day.
The BlueGen unit saved 6,950 kilograms of carbon dioxide in the year from November 2010 to October 2011 compared to greenhouse emissions from the NSW electricity grid. This was nearly five times the carbon emission savings from the Smart Home's solar PV unit, which saved 1,470 kilograms of carbon dioxide.
The family charged the home's car a new Mitsubishi i-MiEV electric vehicle an average of eight times per month and drove it for more than 5,000 kilometres. The electric car added an average 2.5 kilowatt hours a day to the home's electricity use. Ausgrid found the electric car would have been about 75 per cent cheaper that a comparable petrol car to run, as it was only charged after 8 pm when electricity rates were cheaper.
"The Smart Home in essence has become a fully functioning power station," said Mr Myors.
Last year Ausgrid ordered 25 BlueGen units as part of the $100 million Smart Grid, Smart City project and these are now operating in homes in Newcastle.
Meanwhile the UK Government plans to increase the feed in tariff for micro Combined Heat and Power (m-CHP) in October from 14.1 pence to 15.6 pence. This will comprise a generation tariff increase from 11.0 pence to 12.5 pence for every kilowatt hour of electricity generated on-site, plus an export tariff of 3.1 pence for every kilowatt hour exported to the grid.
Ceramic Fuel Cells' managing director Brendan Dow said the proposed tariff increase is a step in the right direction, but not as high as was sought by leading suppliers.
The BlueGen product has been included in a new Channel 4 series in the UK called Home of the Future. (ASX: CFU)
Micro Cap Companies
Kieran Rodgers, who was previously the finance director and chief financial officer, has replaced Philip Wood as managing director. Mr Wood resigned as a director as per the terms of his 2010 employment agreement
The board expressed its sincere appreciation for Mr Wood's longstanding service to the company, including as its managing director and chief executive officer since 2001.
The placement was for 83.333 million shares at 1.5 cents each to a small number of investors, including clients of stockbroker Taylor Collison Ltd.
$487,092 of the placement has been allotted immediately under the ASX's 15 per cent placement capacity rule, and shareholder approval will be sought for the remaining $762,908, including a separate approval for the participation in the placement $220,000 by director and new managing director Mr Rodgers.
The placement is for working capital for the zinc blending project in Victoria until the expected return of environmental bonds for electric arc furnace dust later this year; a delay in the expected receipt of a final environmental bond from the Tasmanian EPA; payment of a contractual employee entitlement; and on-going activities. (ASX: INL)
Po Valley Energy
The company also said production at its Sillaro field is still impacted by the extreme weather conditions in northern Italy.
The Sillaro field normally produces from two wells, Sillaro 1 and Sillaro 2. Recently, the gas has been yielding minor quantities of condensate, however, with the colder winter temperatures, condensate production has increased.
The Sillaro 2 well is currently producing 1.6 million scfd.
"As a precaution, production from the Sillaro 1 well, where the condensate was believed to originate, will be brought back into production gradually while the situation is fully evaluated," said Po Valley Energy chief executive, Giovanni Catalano. "As a result production from the Sillaro field is expected to be between 1.6 million and 2.8 million scfd in the interim."
While the condensate levels are low, they may reach a level requiring the installation of standard condensate processing equipment on site.
"Restarting production at Vitalba was a key objective for Po Valley. The temporary reduction of production from the Sillaro field is disappointing, however, condensate management is a straightforward operational issue and should not impact the long-term economics of the field.
"While a temporary reduction in revenue is never welcomed, our approach is appropriately cautious in order to properly address this matter while maintaining our excellent operating record in Italy," said Mr Catalano. (ASX: PVE)
"Mr Stack brings to the RedFlow Board a widely respected background as a company director, both listed and unlisted, including several as chairman," said RedFlow managing director, Phil Hutchings
These companies include Bow Energy, Flight Centre, and Australian National Industries. Mr Stack was a partner of national law firm Allen, Allen & Hensley, and until 2011 was a corporate advisor to one of Australia's largest electricity generators.
Shares in RedFlow again fell to a post IPO low of 65 cents on 8 February after doing so in late January. (ASX: RFX)
The initial order is for 1,274 rolling frames in completely knocked down (CKD) form. The first 72 units are underway with another 216 units leaving this month. Subsequent shipments will be three containers per month to July 2012.
Vmoto said it anticipated that a further supply agreement will be negotiated.
The CKD units consist of all components other than batteries and the electric motor, which are supplied independently. Eclimo holds one of two licenses for the manufacture and distribution of electric scooters in Malaysia. Malaysian law requires that products are predominantly assembled in Malaysia using local labour, so the scooters are shipped in CKD form and assembly is completed in Malaysia, said Vmoto managing director, Charles Chen.
The scooter will be called the Eclimo ES 11. Eclimo is establishing new dealer premises to distribute the scooters. The Malaysian Government has embarked on an aggressive program to make Malaysia's transport systems the greenest in Asia and Eclimo has had substantial Government support with the project, said Mr Chen.
Eclimo would initially like to sell more than 20,000 electric scooters to advance the country's clean energy strategy. (ASX: VMT)
The rise coincided with WestSide's December quarter report. This showed steady progress rather than anything out of the ordinary. (ASX: WCL)
The updates were commissioned as part of the restructuring process for Dart's international portfolio, and cover all Dart international CBM assets, including reserves and resources that will be attributed to Dart on completion of the recently announced BG Group and Greenpark transactions.
The update confirmed commercial reserves at the projects in Liulin in China, Sangatta West in Indonesia, Airth in Scotland and at a fourth project, Canonbie, also in Scotland, that will transfer to Dart on completion of the Greenpark transaction. All of these project areas have near term sales gas potential.
Dart expects that in 2012 it will be in a position to add further reserves in the UK and India, with potential for additional reserves at other projects in Poland and Indonesia.
Dart International chief executive, John McGoldrick, said the hallmark of a successful business is the ability to take a large gas-in-place resource and progressively migrate it into the higher and more valuable category of contingent resource, and then into commercially saleable reserves. "The updated assessments show this process is working well at Dart, and we continue moving towards achieving our core objective of first revenues from sales production in 2012 and into 2013."
Dart director Simon Poidevin has acquired 27,272 shares at 45 cents each. (ASX: DTE)
Micro Cap Companies
The Fuels and Energy Technology Institute (FETI) has over 50 researchers and advanced facilities and instrumentation. It aims to be a centre of excellence in the field of energy science and engineering in the world.
Research activities cover fossil fuels and renewable energy technologies. The Institute will carry out basic and applied research in energy and fuel conversions to develop advanced technologies that address national needs and to transfer these to the commercial sector.
It is supported by funding from the Australia and WA governments, industry partners and the University.
Mr Stroud said "This Institute has demonstrated that biofuels have Government and private investment support, which is critical for driving research through to commercialization in this fast growing sector."
Minister for Resources and Energy, Martin Ferguson, who launched the Fuels and Energy Technology Institute, "Advanced biofuels have a wide range of applications, in everything from aviation and shipping to electricity generation. Australia is well placed to capitalize on the opportunities on offer and facilities like these at Curtin University will help us do that." (ASX: AEB)
Forrest Capital Pty Ltd is to place 115 million shares at 0.5 cents per share. Each share will have a free attaching option with an exercise price of 1 cent by 31 December 2014. The placement is subject to shareholder approval.
Forrest will also underwrite a proposed 1 for 2 rights issue to shareholders at 0.5 cents each and also with free attaching options.
The conditional placement will raise $575,000 and the rights issue will raise $647,500.
A representative of Forrest is likely to join the EcoQuest board.
On a non exclusive basis Forrest will also identify other eco-products and eco-technologies to be acquired by EcoQuest. (ASX: ECQ)
The funds will go towards installation of the first Opcon Powerbox at the Carnarvon Power Station.
Enerji and Energy Developments are evaluating sites for Enerji's Opcon Powerboxes in Queensland and Western Australia, as per their October 2011 cooperative agreement to look at sites nominated by Energy Developments.
These include Greenfield and Bonfield opportunities and cover new mine developments, mine expansions and retrofitting existing sites where energy efficiency improvements and fuel costs savings are sought.
Enerji chief executive, Greg Penne father, said "Energy Developments is well known for delivering safe, innovative, reliable, secure power generation in remote communities throughout Australia. It has over 276 MW remote area energy operations across 32 projects."
Enerji has ordered six Opcon Powerboxes, the first of which has arrived and is being prepared for installation at Horizon Power's Carnarvon power station this month. (ASX: ERJ)
Green Rock Energy
Mahzor Holdings Pty Ltd has increased its stake from 6.1 to 10 per cent. (ASX: GRK)
Kimberley Rare Earths
Mr Parker has strong corporate experience in the resource and energy sectors with 30 years in commercial, development and strategy roles, preceded by 10 years in technical roles. He worked with Rio Tinto for 26 years, then was managing director of Felix Resources and more recently managing director of Norton Gold Fields.
Shares in Kimberley Rare Earths fell to a post IPO low of 7.3 cents on 7 February. (ASX: KRE)
MediVac shares have hit a new all time low of 1.1 cents. (ASX: MDV)
Water Resources Group
Intersuisse Ltd acted as the placing agent with support from Patersons Securities Ltd.
Brian Harcourt, chief executive of Water Resources Group, said "We are pleased to have raised these additional funds to further assist with our operational cash flows and financial flexibility in the lead up to first revenues. Preliminary work has commenced for our Cape Verde contract and we look forward to getting this and other projects under way this year." (ASX: WRG)
Ocean Power Technologies
The autonomous PowerBuoy is a self-sustaining power source for offshore equipment and devices that operates in a wide range of sea conditions. It is significantly smaller than the company's standard utility PowerBuoy due to the lower power requirements of deep ocean applications
Charles F. Dunleavy, chief executive officer of OPT, said the autonomous PowerBuoy exceeded the design specification and met all goals set by the US Navy in a variety of demanding ocean conditions.
"The unique ability to supply persistent levels of power, with no routine maintenance requirements and in extended no-wave periods, represents an entirely new offering for satisfying offshore power needs.
"We believe these results establish baseline capabilities for our autonomous product line in support of maritime security applications as well as other markets such as the offshore oil and gas industry, the oceanography community and aquaculture sector."
Currently, systems requiring remote power at sea are often powered by diesel generators, which require maintenance and fuel replenishment. The OPT system requires no maintenance for three years.
The PowerBuoy was designed to provide power for the Navy's radar and communications payload on a continuous basis of 150 W with an extended target to exceed this rating. The actual results were significantly better than expected as the PowerBuoy supplied continuous power in excess of 400 W throughout its deployment and produced peak sustained electrical power of 1,500 W.
This power more than supported its 150 W payload 24 hours a day, seven days a week, for the duration of the three month operations. The on-board power management and storage system allowed power to be supplied during extended periods with no wave activity.
The autonomous PowerBuoy performed well in both calm and extreme ocean conditions in the water depth at which it was moored of 37 metres. As previously reported, it was in the direct path of Hurricane Irene, which hit the New Jersey coastline on 27 August 2011 and emerged from the two-day storm undamaged. (Nasdaq: OPTT)
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