Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on Ecoslops. We currently have 9 research reports from 1 professional analysts.
Production at Sines was 12,200 tons in H1 17, doubling from last year. The volume of sales stood at 9,700 tons, vs. 3,700 tons in H1 16. The product mix improved with an increase in value-added products.
Ecoslops has signed a memorandum of understanding (MoU) with the Port of Antwerp and ATPC (Antwerp Terminal and Processing Company), refiner and storage provider for the VTTI Group (Vitol Tank Terminals International). The parties will collaborate on the economic, technical and regulatory studies, aiming to file construction and operation permits quickly. These studies are expected to be completed by the end of 2017.
Following the positive results of the technical and commercial studies (since the MoU in September 2016), Ecoslops has signed an agreement with Total to build a micro-refinery at La Mède, near Marseilles. Construction should start in Q2 18 and the plant should become operational by the end of 2018.
H2 16 EBITDA came in at -€1m (vs. -€2m in H1 16). The net loss was €0.8m (vs. -€2.6m in the first half).
Ecoslops has signed a Letter of Intent with EGPC (Egyptian General Petroleum Corporation), through its subsidiary SSCO, in order to study the feasibility of a residue collection and recycling plant in the region of the Suez Canal. Ecoslops and EGPC/SSCO have agreed that, following the feasibility study, they will both invest in the joint-venture that would be created, with Ecoslops as a major shareholder and project manager.
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 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 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.
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.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Ecoslops. We currently have 9 research reports from 1 professional analysts.
We update this table which we first published in early January and highlight the continued progress of the biggest AIM companies so far this year and activity in general. The latest AIM Statistics show that there are 963 companies currently, with 28 new issues year to date raising £441m. What’s more, this momentum has been maintained since June. This demonstrates that despite, the uncertainty surrounding the UK economy, generally investors continue to be active in the AIM market. In Share News & Views we comment on Cohort, ECSC*, Porvair, Quarto*, SQS* and Xafinity.
Companies: BMS CRPR ECSC EUSP FDM PCF PPIX QRT SNX SPRP SQS TCN W7L
Since its inception in 2010, the Panmure Gordon Conviction List has outperformed the market, returning 284% against a Small Companies index that would have returned 221% over the same period.
Companies: ALD AVON CTH GKN HVN HCM INF NOG OTB POLY SNR SQS STJ
Nasstar* (NASA): Trading update (CORP) | Solid State* (SOLI): Initiation of coverage: Intention to double revenues in five years (CORP) | Mortice* (MORT): Further strong growth (CORP) | Petra Diamonds (PDL): Trading and guidance update (BUY) | The Mission Marketing Group* (TMMG): Positive trading update (CORP) | Connect (CNCT): In line but with a different mix (BUY) | Quixant* (QXT): Strong H1 performance underpins FY forecasts (CORP)
Companies: NASA SOLI MORT PDL TMMG CNCT QXT
The AIM market turned twenty-two in June and it is fair to say it has had its fair share of difficultiesH1 2017 saw a further net loss of constituents and we ask what will the rest of 2017 hold in store. Arguably the stability of the UK government, Brexit and the shift in global monetary policy will be the biggest themes for the remainder of the year.
Companies: IDP PEG AMYT SOU EVRH TST VANL W7L G4M
SDX Energy is a North Africa-focused E&P with production in Egypt and Morocco. The company benefits from strong cash flow generation from its oil production (Egypt) and high value gas production in Morocco, which is being re-invested to increase production markedly in H217. The company added to its portfolio in early 2017 and continues to seek other opportunities. We have adjusted our valuation, which sees the core NAV increase to 55p/share (from 40p/share) but RENAV fall to 67p/share. With further success in exploration at South Disouq this could grow further.
Companies: SDX ENERGY
Tax bill in India for Shell (RDSA/B LN) | ExxonMobil (XOM US) (not covered): Exits East Natuna block in Indonesia | Hurricane Energy (HUR LN) (not covered): Option to raise and additional US$10 mm exercised | Sound Energy (SOU LN) (not covered): Tendara update in Morocco | Wentworth Resources (WRL LN)1,6; Buy, £0.40: Operational Update in Tanzania
Companies: XOM EXI SOU WRL
Quiz—Sch 1 from the omni-channel and international own brand in the women's value fast fashion sector. Offer TBA. Expected late July. Last year Quiz posted sales of £87.4m while pre-tax profits grew by 17pc to £5.7m | Arena Events Group -provider of temporary physical structures, seating, ice rinks, furniture and interiors. Raising £60m. Mkt cap £63m. Expected on the Chef’s birthday. 25th July. | Altus Strategies—African focused natural resource Company. Offer TBC. Expected Mid July. | Harvey Nash Group— Provider of professional recruitment and offshore solutions moving to AIM from Main. No capital to be raised. Mkt Cap c. £57.8m. | AnimalCare—RTO of Ecuphar NV, a European animal health company. £30m raise. Ecuphar FY16 rev £68.4m, underlying EBITDA £8.9m. Due 13 July. | NEXUS Infrastructure—£35m vendor sale. Mkt cap £70.5m. Provider of essential infrastructure services to the UK housebuilding and commercial sectors. Expected 11 July. FYSep16 rev £135.7m. | Greencoat Renewables - Schedule 1. Targeting a portfolio of operating renewable electricity generation assets, initially investing in wind generation assets in Ireland. Offer TBC. Due Mid July. | I3 Energy –Schedule 1 Update. Independent oil and gas company with assets and operations in the UK. Offer TBC, Mid July admission. | Verditek— Sch 1 update. The Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission late June | Rockpool Acquisitions—Northern Ireland based Company seeking strong NI acquisition with an international outlook. Raising £1.5m at 10p. Due 5 July. | Hipgnosis Songs Fund investment company offering pure-play exposure to Songs and associated musical intellectual property rights. Prospectus yet to be published. | Impact Investment Trust—Exposure to a diversified portfolio of funds providing SMEs across developing economies with the growth capital they need to have a positive impact on the lives of the world's poorer populations. Raising up to $150m at $1.00 | Residential Secure Income - social housing REIT raising up to £300m Admission due c.12 July. | Curzon Energy—Report on Proactive Investors of intended LSE float this year with acquisition of coal bed methane assets in Oregon. Looking to raise £3m plus. | NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June. | Kuwait Energy— has not been able to complete its initial public offering as announced in its Intention To Float of 3 May 2017. However, in light of positive feedback from potential investors, the Company remains committed to obtaining a London listing and continues to explore its options. | Supermarket Income REIT– Up to £200m raise to acquire a diversified portfolio of supermarket real estate assets in the UK, providing long-term RPI-linked income. Due 21 July.
Companies: EOG MERC EHP DTG FLK AGQ HAYD PROX ADT OPP
BP will release 2Q17 earnings on 1 August. We forecast clean replacement cost EPS of USc3.77, around 6% below the median consensus, down 2% YoY and down 51% QoQ. However, BP has pre-advised a ~US$750m pre and post-tax exploration write-off associated with the relinquishment its 50% interest in Block 24/11 offshore Angola which will not be treated as a non-operating item and is itself equivalent to around USc3.8 per share. We expect underlying cash flow generation, excluding the impact of Gulf of Mexico related payments of US$5.5bn, but expect the company to be overall cash negative after cash dividend, capex and Gulf of Mexico payments to the tune of around US$0.5bn in the quarter. As a result, we expect gearing to continue to increase, albeit modestly, to 28.2%. We forecast a maintained dividend of USc10 per share. We amend our FY17 EPS forecast to reflect our revised 2Q17 earnings forecast.
Our site visit to Central Asia Metals (CAML) confirmed that its Kazakh operations are a cashflow and dividend ‘factory’.
Companies: Central Asia Metals
This week, KEFI Minerals announced that it had signed an agreement with Oryx for US$135m of lease funding for Tulu Kapi. As a result, Oryx will assume c 70% of the project’s on-site capex requirements in a form of build, own, operate and transfer (BOOT) arrangement. Following full repayment of the lease, ownership will revert to KEFI.
Companies: KEFI Minerals
Sound Energy (SOU LN) (not covered): Eastern Morocco Update
Companies: Sound Energy
Surprisingly weak July NY Empire State Manufacturing Index data, coming out at 9.8, against expectations of 15.0 and compared with June at 19.8, rather set US equities on the back foot from the open yesterday. Having touched new all-time highs on Friday, both the Dow Jones and S&P-500 trod water, choosing instead not to take any significant new positions until more companies detail their quarterly earnings. The list of those expected to report this week is long, including American Express, Bank of America, Goldman Sachs, General Electric, IBM, Microsoft, UnitedHealth and Visa. What limited trading features there were on Monday, however, comprised buying of Steels, following Trump’s suggestion he will seek protectionist measures to protect domestic plays against international dumping in the US, while beaten-up consumer discretionaries and gold stocks found demand, with the latter pushing the Arca Bugs index up 1.3%, as the precious metal for August delivery climbed US$6 to US$1,233.5/oz; semiconductor and transportation shares showed weakness. Producing its results after the market close, however, tech major Netflix released pleasing subscriber growth numbers as the migration away from traditional free-to-air TV continues to gather pace, which was sufficient to push the shares up 8.5% in after-market trading. Treasuries remained almost stationary with the 10-year benchmark yield moving just 1 basis point lower to 2.309%, its fifth decline in six sessions. Asian shares, however, were broadly weaker as their session drew to a close this morning. Australian stocks were the worst hit, with the S&P/ASX 200 index down over 1% as the country’s heavily weighted banks met strong selling once again sufficient to set the sub-index back by more than 2%. The Shanghai Composite fell again following Monday's hit, while the Nikkei suffered as the Yen gained against a weaker US$ pushing the index below the 20,000 level once again. European shares remained in a relatively good mood for most of yesterday’s trading, as they tracked Friday’s positive US close and then saw mining stocks boosted by news that China’s quarterly growth had topped expectations. This was short-lived, however, first dipping on news core Eurozone consumer prices had remained unchanged for the month of June and then again in the afternoon as the release of dull US data deflated optimism. The STOXX 600 eventually closed flat on the day, with both the CAC 40 and Xetra Dax ending with fractional losses as general weakness amongst financials, industrials and consumer stocks was somewhat offset by buying of mining and telecom stocks. During this morning’s Asian session, the Euro moved above US$1.15 in Asia for the first time since May 2016, driven by expectation of a slower future pace of US rate increases while the ECB is seen preparing to reduce its monetary stimulus; its policy statement due on Thursday is seen potentially reinforcing this expectation ahead of President Mario Draghi’s speech at Jackson Hole next month. Seen only rarely these days, but London managed to outperform its continental peers on Monday having remained in positive territory for the whole day, significantly due to its heavy weighting in mining stocks which make up 88% of the index’s weighting in basic materials companies and represent 8% of the FTSE100. Elsewhere amongst smaller issues, rebounds were also seen by Carillion and Micro Focus with both appearing to have entered oversold territory. A large amount of macro data is scheduled for release from the UK today, including the highly sensitive June Retail Producer and Consumer Prices and the DCLG House Price Index, followed by a speech from the BoE Governor, Mark Carney, at 14:30hrs BST. The EU provides its July ZEW Economic Sentiment Survey, while the US offers June its Export and Import Price Indices, its weekly Redbook, NAHB Housing Market and finally its API Weekly Crude Oil Stock. UK corporates due to release earnings or trading updates include British Land (BLND.L), NCC Group (NCC.L), Alliance Pharma (APH.L), IG Group (IGG.L), Royal Mail (RMG.L), Scapa Group (SCPA.L), and BHP Billiton (BLT.L). Feeling nervous ahead of today’s release of inflation data and following a weak Asian close, London is seen opening weaker this morning, with the FTSE-100 seen down 20-25 points in early trading.
Companies: HUM LEG FIF
Griffin Mining provided a positive trading update ahead of its planned interim results yesterday afternoon to confirm that whilst stronger commodity prices in general have been a positive, an exceptional 90% increase in the average price for its zinc concentrate over the last 12 months will drive profits higher than current market expectations. We have thereby significantly increased our forecasts for FY2017 and reiterate our Buy recommendation with a target price of 87p, underpinned by our 100p valuation of the Caijiaying operation.
Companies: Griffin Mining
Shell is due to report results for 2Q17 on 27 July. We forecast clean CCS EPS of US$0.43, down 6% QoQ but more than treble the results from last year for what should be another set of results confirming the improvement in underlying performance properly evident in the 1Q17 results. Moreover, cash flow should benefit from some US$7.5bn of cash disposal receipts as the fruits of the disposal programme flood in. That in turn should help drive a significant reduction in gearing to 24.6%, we forecast, which would support our thesis that Shell should be in a position to turn off the scrip around the end of the year and restart buy-backs in 2018.
Companies: Royal Dutch Shell