23rd May 2007 11:03
D1 Oils Plc23 May 2007 Annual General Meeting 23 May 2007 D1 Oils plc (D1), the UK-based global producer of biodiesel, today held itsAnnual General Meeting. D1's Chairman, Lord Oxburgh of Liverpool, said: The year 2006 was one of substantial achievement across the business. At thestart of the year we had only just begun planting of our primary feedstock,Jatropha curcas, and our refinery technology was not yet in commercialmanufacture. One year on we believe we are an established leader in thescientific and commercial development of jatropha, and we have achievedsignificant planting worldwide. Our refinery technology is in commercialoperation in Teesside, with further capacity expansion underway on Teesside andon Merseyside. A successful placing in December, despite challenging marketconditions, raised £49.2m before expenses to fully fund the business. The fundsraised will enable us to maintain our growth and development. Over the year andin the months since we believe we have built the foundations of a business thatwill deliver supplies of sustainable, inedible oils for biodiesel production. Operations 2006 began with the January appointment of Elliott Mannis as Chief ExecutiveOfficer and the subsequent redefinition of our organisation and future strategyaround the three core business activities of agronomy, refining and trading.With our direction and purpose set, we were able to achieve significant progressthroughout the business. In agronomy, together with our partners, we have a substantial jatropha plantingfootprint across our three operational regions of Southern Africa, India andSouth East Asia. By the end of 2006 we had planted or obtained rights to offtakefrom a total of over 124,000 hectares. As of 31 March 2007 we have increasedthis to over 156,000 hectares. Our plant science programme is progressing very positively. We have gathered asufficiently wide range of jatropha material to support the first evercommercial breeding and product placement trials for the crop. We have nowcollected more than 200 accessions of jatropha from three different continentsand over twenty countries. Using field and laboratory data from this material,we have established a breeding process and global trials network to identifywhich individual jatropha cultivars are best adapted to the differentcultivation zones. The first commercial outcome of the plant science programmeis our 'E1' elite seed material, selected for higher yield and good biodieselprofile. We expect this seed will deliver oil yields of 2.7 tonnes per hectareunder properly managed conditions when the trees attain maturity. E1 seedmultiplication is continuing in all three regions. We expect to be able to plant50,000 hectares with this material in 2008. In refining, we brought our first biodiesel refineries in the UK into beneficialoperation, creating a total capacity of 32,000 tonnes at our Teesside site. Wealso succeeded in processing crude jatropha oil into European standard biodieselin March 2006. During January 2007 we completed the acquisition of a secondrefining and distribution site at Bromborough on Merseyside, which we anticipatewill enable us to add a further 100,000 tonnes of capacity by the end of 2007.Work on the first phase of operations to convert the existing facilities forproduction of biodiesel at Bromborough is on track, and the Environment Agencyhas now confirmed that biodiesel processing can be undertaken at the site withinour existing permit. We delivered our fifth D1 20 refinery unit to our Teessidesite on 23 April this year. This is the first of our upgraded D1 20 units andhas an enhanced capacity of 10,000 tonnes per year. The commissioning of theunit will increase our Teesside production capacity to 42,000 tonnes. In trading, we began the development of a global supply chain to support ouragronomy and refining operations. Having received the first volume shipments ofsoya oil in the middle of 2006, we signed our first offtake deal with Petroplusfor supply of soya biodiesel in October last year. On 1 February 2007 the Board stated that it was continuing negotiations begun in2006 with certain parties. Negotiations with one of these parties continue. Anon-binding Memorandum of Understanding regarding a strategic collaboration hasbeen agreed and a further announcement will follow in due course. Finances During the year we raised additional funding of £49.2m gross (£46.2m net ofexpenses). Net cash at 31 December was £48.2m. The loss for the year was £12.6mand reflects continuing investment for future growth. Management Subsequent to the year end, Karl Watkin, a founder of the Company, stood down asChairman to be replaced by myself after I joined the Board in September 2006.Karl Watkin remains with the Company as a Non-Executive Director. PeterCampbell, also a founder director, stood down from the Board as of 31 March2007. We would like to thank both for everything they have contributed to thebusiness. Outlook Transport energy policies across the globe are now increasingly driven by thechallenges of climate change and fuel security. We believe biofuels, and inparticular biodiesel, offer a means to secure cost-effective supplies ofsustainable transport fuel in the medium-term. Biofuels are increasinglysupported by national and regional policy initiatives. In the UK a mandatorybiodiesel blend will be phased in progressively under the Renewable TransportFuels Obligation (RTFO). Meeting UK and European demand without recourse to imported feedstocks isincreasingly challenging. The short-term impact of lower diesel prices andincreased food-grade feedstock costs is now significantly impacting industrymargins, and we believe it prudent to plan for edible vegetable oil pricesremaining relatively high for the foreseeable future. Having protected ourmargins by securing supplies of soya at significantly lower prices earlier in2006, we are exploring alternative avenues to meet our offtake commitments. We believe this situation validates our strategy to develop supplies ofalternative, inedible oils like jatropha that are not subject to the same demandpressures as food oils. It is our objective to land crude jatropha oil in the UKat a target price that is very competitive with the cheaper food-gradealternatives and to be able to refine it profitably without government subsidyor support. We expect our first supplies of jatropha oil during 2008. Our goal is to concentrate on planting and offtake relationships that candeliver supplies of jatropha oil in commercial volumes, and to develop the rangeof logistics capabilities to bring that oil to market, both in producing regionsand in developed markets, including the UK and continental Europe. The Board isconfident that our global team is well placed to realise this goal. On behalf ofthe Board we would like to take this opportunity to thank our executivemanagement, our business teams, and our partners and advisors for their hardwork and support over the year. Contacts: D1 Oils:Graham Prince, Head of Corporate CommunicationsTel: +44 (0) 1642 755580Mobile: +44 (0) 7973 323840 Brunswick Group:Mark AntelmeTel: +44 (0) 20 7404 5959 Notes to Editors D1 Oils plc is a UK-based global producer of biodiesel. We are building a globalsupply chain and network that is sustainable and delivers value from'earth-to-engine'. Our operations cover agronomy, refining and trading. We arepioneering the science, planting and production of inedible vegetable oils; wedesign, build, own, operate and market biodiesel refineries; and we source,transport and trade seeds and seedlings, seedcake, crude vegetable oils andbiodiesel. This information is provided by RNS The company news service from the London Stock Exchange ENRelated Shares:
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