EOP Biodiesel AG exceeds FY 2005/06 forecast

EBIT up 193% to €2.51 million – EBIT margin nearly 7% – Significant growth in sales and earnings expected

(PresseBox) ( Pritzwalk, )
EOP Biodiesel AG, Pritzwalk, ended the financial year 2005/06 (to 30 June) with an annual net profit of €1.22 million (previous year: €0.03 million), exceeding its forecast by about 20%. Biodiesel manufacturer EOP’s earnings before interest and taxes (EBIT) showed a 193% year-on-year improvement in the reporting period to €2.51 million (previous year: € 0.85 million) with sales revenues up 10.8% to €33.7 million (previous year: €30.66 million). EBIT margin improved from 2.70% to 6.96%. Earnings per share were €0.27. Without the costs of two capital increases and the costs of paying back the mezzanine capital, net profit for the year would have been €2.73 million and earnings per share would have been €0.61.

“EOP Biodiesel AG has a sound economic base and with the proceeds of two capital increases is well prepared for the planned growth course,” said CFO Prof. Karl-Wilhelm Giersberg. On the reporting date, 30 June 2006, the company’s equity ratio had increased to 62% from 4% over the financial year despite an increase in balance sheet total to €51.53 million. Cash and cash equivalents amounted to €16.06 million (previous year: €6.87 million). Fixed assets were 162% covered by capital resources.

“Over the past twelve months,” said CEO Sven Schön, “we have taken important steps to ensure a sustainable outlook for EOP Biodiesel AG’s future.” These include, in addition to the capital increases and the Entry Standard stock market listing, a significant enlargement of biodiesel production capacities. The enlargement of the existing factory in Pritzwalk will quadruple the annual capacity to 132,500 tonnes, with the new facility going into operation at the beginning of 2007.

In 2007, railway sidings are to be built along with the further expansion of production capacities. To increase the oil mill’s output EOP Biodiesel AG plans to install an extraction plant. That will enable the company to supply internally more than 41% of its vegetable oil requirements. In order not to be affected by future energy price increases, EOP Biodiesel AG will take forward the use of by-products generated in biodiesel production for energy supply purposes.

The company is also extending its international activities and has acquired a stake in an oil mill in Latvia. In the new financial year a majority shareholding has already been acquired in ABID Biotreibstoffe AG, which is building a biodiesel plant in Austria with an annual capacity of 100,000 tonnes. “By increasing international business we are reducing our reliance on the German market. At the same time we are developing into an important European producer and gaining a place among Germany’s Top 10,” Schön continued.

Despite partial taxation since the beginning of August the company anticipates ongoing demand for biodiesel. Its price advantage over conventional diesel is likely to continue. EOP Biodiesel AG will be able at least partly to offset the tax-related price increase by means of improved processes, more favourable raw material procurement terms and effects of scale resulting from the new production facility. Furthermore, the market for blended biodiesel (the B5 market) will grow strongly as a result of the mandatory blending agreed by the German government. This segment is one that EOP Biodiesel AG has hardly supplied in the past. Finally, agriculture – an important sales market for EOP – continues to be exempted from the mineral oil tax. In the medium term EOP Biodiesel AG aims to sell 50% of its production to the mineral oil industry for blending (the B5 market) and 30% as pure biodiesel (the B100 market) to large customers such as road hauliers and agriculture, leaving 20% to be exported.

EOP Biodiesel AG expects 2006/07 sales to be nearly double compared to the reporting period to more than € 60 Mio. The annual net profit keeps pace with this trend by rising to more than €3 million. The company’s profitable growth course is based mainly on the capacity expansion that is under way.
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