Petrotec AG : Successful restructuring and strong demand for waste based biodiesel lead to EUR 3 mio. net profit

Petrotec AG

Corporate News

Annual Financial Results 2011

Successful restructuring and strong demand for waste based biodiesel lead to EUR 3 mio. net profit

- Revenue up 97% to EUR 173 mio.

- EBIT of EUR 5.3 mio.

- Capturing of approx. 300,000 tons of CO2 emissions

- If more EU countries implement double counting schemes for waste-based biodiesel within their quota systems Petrotec expects demand to further increase for its EcoPremium biodiesel

- 2012: Sales of between EUR 150 mio. and EUR 190 mio. are targeted

Borken, March 16th, 2012 - Petrotec AG (ISIN DE000PET111), the largest European producer of waste to biodiesel mainly used cooking oil based, reported a 97% sales increase in financial year 2011 (January 1 to December 31, 2011). Sales totaled EUR 173 mio. (previous year: EUR 88 mio.). The Company generated an operating profit (EBIT) of EUR 5.3 mio., compared with an adjusted* EUR 5.8 mio. loss in the previous financial year and achieved an EBT of EUR 3.0 mio., compared with an adjusted* loss of EUR 7.8 mio. in 2010. Earnings per share went up from adjusted* minus EUR 0.67 to a positive EUR 0.20 in 2011.

Since 2009, Petrotec implemented a successful turnaround of its operational and financial structures. Backed by an increased demand for sustainable waste-based biodiesel, and efficiency improvements Petrotec ramped up production by more than 30% to reach a record high production of above 120,000 tons of biodiesel at both German plants located in Emden and Südlohn-Oeding.

Equity ratio of 43.9 %

Through implementation of two capital increases, subscribed capital more than doubled from EUR 11,549,999.00 to EUR 24,543,741.00, significantly improving Petrotec's balance sheet and financial strength. Equity capital rose by 235% to EUR 22.4 mio. and equity ratio rose to 43.9%, up from 17.3% in prior year. The contributions in kind of the second capital increase in 2011 lowered the group's liabilities in approx. EUR 7.5 mio. by swapping the major shareholder 'IC Green Energy Ltd.' debt to equity. The ratio of total liabilities, EUR 28.6 mio. to total assets, EUR 51.0 mio., improved from 82.7% in 2010 to 56.1% in fiscal year 2011. On the assets side, trade receivables more than doubled due to ramp up of biodiesel production and cash position improved substantially.

Cash position of EUR 11.1 mio.

In fiscal year 2011, Petrotec generated a positive operating cash flow of EUR 4.9 mio., compared with minus EUR 8.4 mio. in 2010. Including cash contributions from both capital increases cash position rose by EUR 7.8 mio. to EUR 11.1 mio. as of December 31, 2011 compared with EUR 3.3 mio. as of December 31, 2010. Despite substantial increase in business activity and soaring raw material prices, Petrotec kept its additional capital requirements to a minimum. The company invested EUR 2.1 mio. into its working capital to EUR 8.6 mio. Thus, a 32.3% increase in working capital supported 97% increases in business activity.

Waste-based biodiesel is the highest CO2 emission reduction biofuel which doesn't burden the tax-payer

During the business year 2011 and into 2012, regulation on biodiesel further developed to Petrotec's advantage. Major EU countries decided to incentivize the usage of waste based biodiesel as it provides a significant environmental advantage with the highest CO2 emission reduction of 83% (compared with fossil diesel) among all biofuels approved by the EU Renewable Energy Directive. The waste-based biodiesel UCOME (used cooking oil Methyl Ester), delivers more than double savings in CO2 emission compared with virgin oil based biodiesel mainly due to the fact that usage of used cooking oil (a waste product) as feedstock promotes protection of environment by preventing pollution of land and water sources. In addition waste based biodiesel doesn't require any land for agricultural growing hence it doesn't influence food commodities prices (known as the 'food vs. fuel' argument).

Above all, after years of subsidies and tax exemptions for the industry, national governments have now turned to the double counting framework which does not burden federal budgets or the tax-payer. This framework creates additional value to the environment and additional margin both to Petrotec and its customers, some of the large European oil majors.

Petrotec intends to expand its business model

For 2012, management expects further positive implementation of double counting frameworks across Europe. Germany has, by the end of 2011, already approved its respective legislation, Italy is to follow during the year and Spain is expected to introduce double counting next year.

Pending market development and cash position, Petrotec intends to further expand its own used cooking oil collection and treatment of raw materials, it will also further improve the processes and technologies in its biodiesel production aiming to improve production yields. Going forward, Petrotec intends to expand geographically its business model by acquiring used cooking oil collectors or waste management companies. The management also considers diversifying the business model to open up other revenue streams within the renewable energy sector in Europe to reduce the dependency on a single highly regulated market environment.

The Management Board expects similar sales figures in the 2012 financial year. Sales of between EUR 150 million and EUR 190 million are targeted in 2012 and an operating result (EBIT) is expected to stabilize around 3%.

*adjusted for the one time book profit of the IKB transaction of EUR 16.7 mio.

The 2011 full year financial report can be found in the following link:
http://petrotec.de/cgi-bin/show.ssp?id=305&companyName=petrotec&language=English

Press contact

Petrotec AG

Dr. Curt Philipp Lorber

Head of Investor Relations / Public Relations

Tel.: +49 (0) 2862 9100 65

ir@petrotec.de