Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on ECOSLOPS. We currently have 4 research reports from 1 professional analysts.
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Sines refining volumes 2016 in line with expectations; >98% of waste processed
12 Feb 17
Sines refining volumes 2016 in line with expectations; >98% of waste processed EARNINGS/SALES RELEASES ANALYSIS 2016 revenues came in at €4.3m, beating our estimate (at €4.1m), growing from €2.3m in 2015 thanks to the ramp-up of the core business of micro-refining at Sines and sales of refined products (€2.2m vs. €0.3m in 2015). During H2 16, Ecoslops started studies on the Marseille project at Total’s site. Ecoslops confirms it aims at signing contracts for two new industrial units by end-2017; this would raise its outstanding balance to three projects, including Marseille. The Sines unit processed more than 17kt of slops during 2016 (of which 11 kt in H2), in line with our expectations. Ecoslops transformed over 98% of waste into refined products. This proves the potential and quality of Ecoslops’ process. The company reaffirmed it can treat 30kt of slops per year, as announced previously, and aims to process 25kt at Sines in 2017. The success of Sines’ operations supports Ecoslops’ commercial proposition and should help to sign the next projects.
Ecoslops wins ADEME SME initiative award
01 Dec 16
Ecoslops wins ADEME SME initiative award LATEST ANALYSIS Ecoslops’ project on 3D digital modelling and modularisation has been selected by France’s ADEME (Agence de l’environnement et de la maîtrise de l’énergie) within its “Recycling and valorisation of waste” initiative. The project will be eligible for a subsidy. The 3D digital model should help the company to streamline the engineering and construction of its plants through standardisation and modularisation. This in turn should reduce development costs and improve time-to-market.
Ecoslops to benefit from potential new green regulations on shipping hydrocarbon residues
23 Nov 16
Ecoslops to benefit from potential new green regulations on shipping hydrocarbon residues REGULATION ANALYSIS The Paris Agreement doesn’t directly address shipping. Global environmental regulations on the industry are drafted by the UN International Maritime Organization (IMO). At the end of October, the IMO agreed on a roadmap (2017 through to 2023) to develop a strategy to cut greenhouse gas emissions from ships to be adopted in 2023. According to the roadmap, IMO’s Marine Environment Protection Committee should define, among other things, the role of the “shipping sector in supporting the goals of the Paris Agreement.” Targets have not been set yet and it is unclear whether the framework would include stricter regulations on the disposal and treatment of sludges, bilge water and slops – not greenhouse emissions stricto sensu. However, additions to policies on hydrocarbon residues are likely in the context of regulating pollution from shipping and would probably support Ecoslops’ basket of opportunities, as the company offers a proven outlet to these by-products of the global maritime trade.
The path to green-solving slops
08 Nov 16
We initiate coverage of Ecoslops (BUY): the company renews the oil residues from shipping (slops and sludge), turning them into fuels through its unique technology. The current market capitalisation stands at c. €28m with the share price at €9.1; we see a large upside potential (+114%) based on the company’s project pipeline. Refining slops The world fleet generates more than 100m tons of oil residues. These wastes are rich in residues and heavy metals and therefore represent an environmental challenge. Ecoslops offers an integrated solution to port authorities, allowing them to comply with the regulations while recycling residues on shore. The company’s innovation lies in combining advanced refining techniques within a small processing plant, compared to typical refineries. Ecoslops operates its first industrial scale treatment unit (nominal capacity of over 30kt of recycled fuel) in the port of Sinès, Portugal. The group aims at signing contracts for three new projects by the end of 2017. It plans to build one in Marseille (we expect it to be a standard size, i.e. nominal capacity at 100t/day); we expect a larger plant in the ARA region (nominal capacity at 300 t/day) and another standard one in Abidjan (Ivory Coast). Ecoslops is a play on its ability to grow the volume of value-added products: 1) business development (expanding the asset base with new projects); 2) availability of slops; 3) smooth running of the plant; 4) commercial conditions in buying and collecting slops; 5) fuel product prices. The company has climbed a steep learning curve during the ramp-up of its Sines plant. Such an engineering development and industrial optimisation have taken several years. Ecoslops is the only player mastering this know-how and is partnered with Heurtey Petrochem, the downstream engineering specialist. This, coupled with a track record (being able to show a successful project in operation), represents a strong moat and contributes to position Ecoslops as the solution of choice to the slops conundrum across global ports. The effective roll-out of upcoming units should confirm Ecoslops’s proposition and enhance its attractiveness, while benefiting from the acquired experience. Growth runway By 2020, Ecoslops should be refining c. 210kt per year. This represents c. 0.2% of the world’s slops production and underlies a huge growth runway for the firm, which proposes a proven green solution to this by-product of global maritime trade. Therefore, there is a wide scope to expand the project pipeline beyond the next three units we are accounting for based on current visibility.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
Opuama production restarts
21 Feb 17
Eland has confirmed the successful restart of exports from OML 40 through the new shipping alternative that it has implemented. Sales from the export terminal are expected imminently, re-establishing cash generation for Eland. Cash at YE16 was US$11.1m which has since reduced to US$5.9m, mainly reflecting initial operating expenses for the shipping alternative. While it is early days, Eland has demonstrated its ability to restart exports and production from OML 40 following the shut-down of the Forcados terminal a year ago. Production to date is averaging around 7kbd and we expect that to ramp up as Opuama operational performance improves. At US$55/bbl Brent, we estimate Eland is generating a net cash margin of around US$25/bbl. We reiterate our Buy recommendation and 95p per share Target Price.
Small Cap Breakfast
24 Feb 17
GBGI—Schedule One update from integrated provider of international benefits insurance. Raising £32m at 150p. Admission expected tomorrow. Anglo African Oil & Gas— Admission expected early March. Acquiring stake in producing near offshore field in the Republic of the Congo. Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb.
Operating update and shareholder activism
15 Feb 17
December and January have seen the emergence of shareholder activism at Bowleven (BLVN), bringing its strategy and management into greater focus. Its largest shareholder (Crown Ocean Capital, COC) evolved from being a supportive shareholder to voting against a number of resolutions at the December AGM, to recently calling for the widespread removal of the board and a radically different company structure. Operationally, the company reports that a new development concept is under review by the stakeholders in Etinde, where production would be piped to existing gas processing facilities in Equatorial Guinea. Such a solution would (if approved) require significantly less capex and could be brought online relatively quickly vs other solutions (fertiliser, FLNG, gas to power). We leave our valuation largely unchanged, save for a revision to cash holding to reflect the recent operational update. Our new core NAV is 49p/share.