PETROTEC : Best results since IPO for business year 2013

Petrotec AG

Corporate News

Annual Financial Results 2013

Petrotec AG: Best results since IPO for business year 2013

- Sales: EUR 193 mill. (2012: EUR 166 mill.) up 16%

- EBIT: EUR 4.9 mill. (2012: EUR 2.9 mill.), EBIT-margin 2.5 % (2012: 1.7 %)

- Record high production of waste-based biodiesel of more than 138K tons (2012: close to 130K tons)

- Forecast 2014: sales between EUR 150 mill. and EUR 220 mill., EBIT margin expected to be in the range of 2-4 percent

Borken, March 18th, 2013 - Petrotec AG (ISIN DE000PET111), one of the largest European producers of waste to biodiesel predominantly from used cooking oil, reports group sales of EUR 193 mill. (previous year: EUR 166 mill.). The company reported EBITDA of EUR 7.5 mill. (previous year EUR 5.3 mill.) and an operating profit (EBIT) of EUR 4.9 mill. (previous year EUR 2.9 mill.) in the financial year 2013 (Jan. 1st to Dec. 31st). Net profit amounted to EUR 4.0 mill. compared to EUR 0.9 mill. in the previous year. Undiluted earnings per share (EPS) are EUR 0.16 compared to EUR 0.04 in 2012.

Record production of more than 138K tons

Thanks to continuous debottlenecking efforts of its production processes, Petrotec achieved a new production record of more than 138K tons of biodiesel at both German plants located in Emden and Südlohn-Oeding, for a total increase of more than 7% compared to previous year. Utilization further improved from 70% in 2012 to 75% in 2013. Petrotec continued the growth of its activity in Spain and started producing with an additional local plant with the aim of diversifying and growing its local production capacity. In addition, the company increased its trading activity. Germany has been the major sales market for Petrotec's biodiesel in 2013 meeting a healthy demand for "ISCC DE" certified waste-based biodiesel. Some volumes have been sold to the Benelux countries and the UK as well. In the fourth quarter (due to legal requirements in respect to winter blending specifications) Petrotec served the latter markets with a FAME -10 (biodiesel, Fatty Acid Methyl Ester with a plugging point at minus 10 degree Celsius) product based on rapeseed methyl ester (RME) with a maximum share of Petrotec's double counting eligible used cooking oil biodiesel.

Towards the end of 2013, the company accomplished the first stage of the upgrading of the central process in one of its plants. On the same occasion the company performed a more extensive maintenance of other production units. The upgrade is expected to be completed between the second and third quarters of 2014. This important upgrade is expected to improve the competitive position of the company. As reported earlier this year in an Ad-Hoc notice published on February 5, 2014, said upgrade triggered a slower than anticipated recommission of the plant and resulted in a lower production for Q4. In the meantime the company is expected to be able to continue its operation as usual.

Equity ratio of 47.6 %

The balance sheet as of December 31, 2013 is affected on the assets side by declined inventories of EUR 15.1 mill. (previous year EUR 19.6 mill.). On the liabilities side equity increased due to the current year profit of EUR 4.016 mill. and the increase in capital reserve as a consequence of the stock option program by EUR 0.382 mill., to EUR 27.7 mill. (previous year: EUR 23.3 mill.). Due to declined inventories level the total assets position slightly declined to EUR 58.2 mill. (previous year EUR 59.3 mill.). In parallel, the annual net profit increased the equity and pushed up the equity ratio to 47.6 % compared to 39.3 % in 2012.

Cash position of EUR 9.9 mill.

In fiscal year 2013, Petrotec achieved a positive operating cash flow of EUR 11.6 mill. compared to a negative operating cash flow of EUR 6.3 mill. in 2012. Petrotec's cash flow from investing activities of EUR 1.4 mill. (previous year EUR 1.1 mill.) is mainly attributed to the technical upgrades of the biodiesel plants and the melting plant. The working capital of the Company amounted to EUR 16.6 mill. (previous year EUR 20.4 mill.) at the end of fiscal year 2013. Overall, increased cash flow of EUR 2.0 mill. resulted in cash at the end of the year of EUR 9.9 mill. (previous year EUR 7.9 mill.).

Regulation

One major challenge for the business year 2013 was the implementation of the 36 BImSchV (Bundes-Immissionsschutzverordnung). Addressing the German market only, this new tractability requirement has created a unique system worldwide to trace double counting feedstock and especially UCO based for blending purposes. Petrotec adjusted its system, sources and working procedures to those high tractability standards within the very limited time frame granted by the 36 BImSchV from publishing to implementation in the beginning of the year 2013 and remains one of the leaders in this market. The EU also adopted a tractability system for UCO, which is slightly different from the ISCC DE certification system. Due to those differences Petrotec was challenged with producing two types of biodiesel - both out of UCO, both sustainable, yet one labeled "ISCC DE" to address the German market only and the other labeled "ISCC EU" to address the rest of European market. Petrotec successfully managed to overcome these new challenges by adjusting its systems and implementing new working processes to address these new requirements.

Forecast

Alongside the ongoing iLUC debate (indirect land use change), a first step in potentially changing the competitive environment is expected in the year 2015 in the German market, where the biodiesel accountability towards the blending quota will depend mainly on its contribution to GHG emissions savings. Being one of the most sustainable biodiesels commercially available, the highly sustainable products marketed by Petrotec, are likely to enjoy the introduction of these new measures. Petrotec is confident that its CO2 reduction credential will put it in an advantageous regulatory position. In the long term, the EU is coming back to the sources of the initial motivation for which it has created incentive programs to support renewable energies of any sort, and emphasized on GHG emissions savings as the leading objective. Once more the latter represents strength of the company's products. It is therefore the assessment of the management that the company shall enjoy also this long term intention that has recently been announced by the EU. Alongside, the company will act through all the associations it takes part in to ensure the continuation of the distinctive obligation to blend biofuels, in 2020 and beyond. One of the major achievements of the business year 2013 has been the further improvement of the production processes to raise yields and to extend the capacities to process lower quality feedstock. This paves the way for Petrotec's long term strategy to form flexible production lines.

In 2014 the Spanish market could gain momentum. Most likely a mandatory blending quota will be introduced with a double counting scheme. Petrotec is ready to serve such a demand in Spain even beyond its current capacities.

To a certain extent, the ability of the company to forecast its profitability for both the short and long term depend on its ability to exercise the investment opportunities its management has identified, which in turn depend on financing resources availability. The management provides its guideline for the year 2014 under the assumption that it will only exercise the limited investment plan it has budgeted. As there are a number of risk factors such as regulation, development of feedstock and biodiesel prices, tax, currency and the Eurozone debt and financial crisis and assuming no extreme worst case scenario actualization, Petrotec could estimate in 2014 a range for sales between EUR 150 mill. and EUR 220 mill. The EBIT margin is expected to be in the range of 2-4 percent. Going forward, Petrotec will give a more precise forecast in August 2014 together with its half year results.

End of Bafin loan; granting a new credit instead from ICG

In 2009 IC Green Energy Ltd., Tel-Aviv, Israel, granted under the BaFin (German Financial Supervisory Authority) exemption regulation EUR 10.45 mill. loans at an interest rate of 8% to Petrotec AG to support the restructuring of the company. After the capital increase in exchange for non-cash contributions (dept-to-equity swap) in December 2011 these loans remained at an amount of EUR 7.256 mill. The principal will become due on March 19, 2014. The loans were extended by an agreement dated March 17, 2014. In this context, the loans were rescheduled to be paid in the years 2014-2017. The interest rate was also adjusted from 8% to 10%. The company may, at any time, voluntarily prepay the amounts outstanding under this agreement in whole or in part without being subject to any prepayment fee or other penalty. After March 31, 2015 ICG has the right to demand for an immediate repayment of the loan.

Report download

The 2013 full year financial report can be found in the following link:

http://irpages2.equitystory.com/download/companies/petrotec/Annual%20Reports/DE000PET1111-JA-2013-EQ-E-00.pdf

Petrotec group key annual financial figures 2010 - 2013

Disclaimer

This corporate news contains forward looking statements, which are based on assumptions and estimates of the management of Petrotec AG. Although Petrotec management believes that these assumptions and estimates are correct, actual future developments and results can deviate substantially from these assumptions and estimates due to many factors. These factors can include alteration of the economic situation, legal and regulatory constraints in Germany and the EU, and changes in Petrotec's general business and competitive environment. Petrotec assumes no liability and provides no warranty that future developments and actual future results will conform with the assumptions and estimates expressed in this corporate news.

About Petrotec

Petrotec AG, Germany, is the largest European producer of waste-derived biodiesel, mainly based on used cooking oil. The Company owns an overall nominal biodiesel production capacity of 185,000 tons per year at two locations in Germany. Petrotec runs a vertically integrated business model including own collection of used cooking oil from more than 15,000 collection points, treatment and refining of the raw material up to the technologically demanding production of waste-based biodiesel. The Company sells its biodiesel to large mineral oil companies in northwest Europe. The usage of waste based biodiesel is incentivized by major EU countries with a double counting scheme as part of the mandatory blending quotas. Petrotec's EcoPremium biodiesel provides significant environmental and climate advantages with the highest CO2 emission reduction of 83% (compared with fossil diesel) amongst all biofuels approved by the EU Renewable Energy Directive (2009/28/EC). Since its IPO in 2006, Petrotec has cleaned more than 700,000 tons of waste and saved over 2 million tons of CO2 emissions. Petrotec is a public listed company (ISIN DE000PET111) in the regulated market of Frankfurt Stock Exchange, in the Prime Standard segment, complying with high international transparency standards. It has a capital stock of 24,543,741 Euro, equaling 24,543,741 shares. Petrotec's main shareholder is IC Green Energy Ltd., Israel, with a stake of 69 percent, freefloat is approx. 18 percent. In the business year 2013 (Jan. 1st to Dec. 31st) Petrotec reached sales of EUR 193 mill. and generated an EBIT of EUR 4.9 mill. and a net profit of EUR 4.0 mill. The Company employs about 115 employees.

Press contact

Petrotec AG

Investor Relations

Falk v. Kriegsheim

ir@petrotec.de

Tel. +49 172 9837109

End of corporate news