30th Sep 2014 13:52
LONDON (Alliance News) - Maple Energy PLC shares almost halved Tuesday, after it said its first-half profit plummeted due to lower ethanol sales prices and production volumes, and said it is investigating waiving senior loan agreements to use the capital as funding while it continues to seek a strategic investor for its ethanol business.
The sugar cane and ethanol production company with assets in Peru, reported a pretax loss of USD18.9 million for the six months to June 30, compared with a loss of only USD7.4 million in the first half of 2013, hit by a fall in ethanol production and prices.
On the back of weaker prices and production volumes, due to a reduction in tonnage of cane harvested, first-half revenue fell to USD49.4 million from USD71.6 million the prior year.
Last month, Maple Energy said it was still looking to find a strategic investor for its ethanol business and said it was still in talks with lenders to ensure it has working capital to continue operating that division. It has been attempting to find an investor for the Peru-based operation since the first quarter of 2014.
The company said Tuesday that talks are still progressing, and it is still seeking to close a transaction, which it said may or may not happen.
"The ability of the company to execute a transaction on a timely basis is critical for its ethanol business, as the performance of the ethanol business has deteriorated further due to challenging market conditions and lower agriculture performance," the company said in its statement Tuesday.
"In the meantime, the company is continuing to work closely with the senior lenders of Maple's ethanol business in order to maintain sufficient working capital and waive certain obligations under the senior loan agreements until new funding is available or an alternative transaction is undertaken. The continued working capital support from the seniors lenders will be critical in the coming months," it added.
Maple Energy shares were down 49% Tuesday afternoon at 2.85 pence.
Maple Energy said an aggregate amount of approximately 369,105 gross tonnes of sugar cane had been harvested and processed as of June 30, as well as an aggregate amount of approximately 24,062 cubic metres of fuel-grade ethanol produced at its ethanol plant.
The ethanol plant was shut down in mid-August for a approximately 12 weeks, a process needed as the sugar cane crop had not yet reached the age where it is suitable for harvesting.
"The lower sugar cane tons per hectare obtained due to the severe drought that affected the region during the last quarter of 2013 and first quarter of 2014 and the delay in expanding the plantation and performing the replanting activities are the main reasons affecting the quantity of cane available for harvesting," the company said.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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