29th Sep 2006 07:05
Gas Turbine Efficiency plc ("GTE" or "the Company"), a leadingsupplier of advanced high pressure gas turbine cleaning systems forthe aviation and power generation industries, announces its financialresults for the six months to 30 June 2006. £ Financial Highlights £ -- Total revenues were $2.1m (H1 2005: $2.3m) £ -- Aviation revenues were $1.3m (H1: 2005: $1.0m) £ -- Revenues from industrial sector $0.8M (H1 2005: $1.3m) £ -- Operating loss amounted to $1.1m (H1 2005: $1.0m) £ -- Basic and fully diluted loss per share of $0.02 (H1 2005: $0.04) £ -- Cash and cash equivalents totalled $3.5m as at 30 June 2006 (H1 2005: $0.2m) £ Operating Highlights £ -- Significant progress made on OEM qualification in the industrial sector with global OEMs which is the cornerstone of GTE's long term strategy £ -- Pratt & Whitney expanded EcoPower(TM) service to Europe and Asia hubs £ -- Multi-year agreement signed with Siemens Industrial Turbines AB £ -- First Middle Eastern order received £ -- Second office opened in New York State for engineering support to existing and potential partners £ -- Set up a Russian subsidiary to target its large installed base of industrial turbines £ Steven Zwolinski, CEO of GTE, said: "We have made tremendousprogress in the first half to strengthen relationships with keyindustrial global OEMs by focusing on completing the demanding butnon-recurring process of GTE technology qualification. We are justentering the last phase of our negotiations with several global OEMsand hope to achieve necessary qualifications soon. £ These steps have made a positive impact on our business, leadingto a strong pipeline of orders for the second half of 2006. As aresult, the Company remains confident of delivering significantrevenue growth for the full year 2006 and beyond." £ Overview £ GTE made considerable progress in the first half of 2006 toposition itself for sustained long term growth and the steps takenduring the period have already started making a positive impact on thebusiness. The Company's systems enable gas turbine operators toachieve substantial savings in their energy costs, reduce emissionsand cut maintenance downtime. Operating data from a number of gasturbine operators suggests that they are achievingbetter-than-expected cost efficiency in real-life working conditions -which validates the compelling benefits of our advanced high pressuresystems. £ Our customers include global OEMs such as Pratt & Whitney,Rolls-Royce, Saab and Siemens as well as gas turbine operators such asCalpine, Norsk Hydro, SNAM, Statoil and TexasGenCo. £ Turnover decreased by 8% to $2.1m (H1 2005: $2.3m) reflecting alower contribution from the industrial segment, partly offset by asharp increase in sales into the aviation market. The fall in revenueswas in line with the Company's expectations and its strategy,discussed below, to focus on establishing long term partnerships withglobal original equipment manufactures (OEMs). £ Operating review £ The Company achieved several notable milestones in the first halfof 2006 as it continued to target the global market for wash systemsin power generation, aviation, oil & gas and marine segments. Themarket opportunity available to GTE is both large and growing. Theglobal installed base for civilian and military aircraft engines isestimated at approximately 120,000 units while the number ofindustrial turbines currently in use is estimated at more than 40,000units. £ Aviation systems £ Revenues from aviation systems, where GTE is the exclusivesupplier of on-wing wash systems to Pratt & Whitney's EcoPower(TM)business (PW), rose by 30% to $1m. £ In February 2006, the Company won a $1.3m order from PW for twocomplete cleaning systems for new commercial aviation hubs in Asia andEurope, taking the total number of its service hubs to five. The orderreflected a planned global rollout by EcoPower(TM), which provideswash services to a wide range of aircraft fleets powered by enginesmanufactured by PW as well as other major OEMs. EcoPower(TM)'s firstEuropean hub at Schiphol airport commenced operations in July withMartinair as its launch customer. In Asia, its first hub is located inSingapore where it will serve a wide range of aircraft operators. £ As previously announced, in January 2006 GTE's contract with PWwas extended to 2014. This contract provides a solid foundation forlong term growth for the Company. GTE generates revenues under thiscontract from the sale of GTE equipment as well as royalties based onthe number of washes carried by EcoPower(TM). £ While the civil aviation market is expected to gain momentum, theCompany has also targeted the military segment, where it already has anumber of customers including the Swedish Air Force. As a result,there has been significant increase in inquiry levels from potentialmilitary customers in the first half of the year. £ Industrial £ Revenues from the industrial segment (which includes powergeneration, oil & gas and marine industries) decreased to $0.8mcompared with revenues of $1.3m in the corresponding period last year.However, the result was in line with the Company's expectations andits strategy to work directly with global OEMs, and the required,non-recurring process of GTE technology qualification. During thequalification period, GTE was required to de-emphasise direct salesinto a significant portion of its end-customer base. £ Although the strategy impacted turnover in the short term, theCompany strongly believes it will open up considerably larger marketopportunities in the long term by providing access to the global OEMs'large installed user base. To this end, GTE is currently makingexcellent progress in achieving an extensive programme of productqualifications at key global OEMs in the US and Europe, which isexpected to pave the way for long term partnership agreements. £ In May 2006 GTE signed a multi-year agreement with SiemensIndustrial Turbines AB (SIT), part of Siemens AG, to supply itscleaning systems as a standard feature of SIT's complete range ofturbines. The deal strengthened an existing arrangement under whichGTE's cleaning systems have been incorporated as a standard product inSIT's turbines since 1995. GTE will manufacture and supply gas turbinecleaning systems to SIT in Sweden for inclusion in its entire range ofindustrial turbines, as well as other future models, for shipmentsworldwide. The turbines are designed to deliver an output of between17 megawatts and 43 megawatts and aimed primarily at the mid-rangepower generation and the oil & gas industries. £ New geographic markets £ The Company has also entered the highly promising markets in theMiddle East and Russia. Both regions are attracting major investmentby the international oil and gas industry. The Middle East is alsoinvesting heavily in water desalination plants, which are largeconsumers of power. In Russia there is already a large installed baseof industrial turbines. £ GTE is at an advanced stage of appointing a distributor in AbuDhabi to address the Middle East market and has just received itsfirst order from that region. In Russia, GTE has set up a newsubsidiary based in St Petersburg with a sales and marketing director. £ Financial Review £ Turnover decreased by 8% to $2.1m (H1 2005: $2.3m) reflecting alower contribution from the industrial segment, partly offset by asharp increase in sales into the aviation market. Turnover from theeastern hemisphere, which covers Europe and the rest of worldexcluding the Americas, accounted for the majority of the sales. £ Operating loss amounted to $1.1m (H1 2005: $1.0m). £ Pre-tax loss amounted to $1.19m compared with a $0.96m loss in thecorresponding period last year. £ Basic and fully diluted loss per share was $0.02 (H1 2005: $0.04). £ Cash and cash equivalents totaled $3.5m as at 30 June 2006 (H12005: $0.2m). £ Outlook £ During the first half of the year GTE focused on strengtheningrelationships with key global OEMs and on expanding into new regions.These steps have made a positive impact on our business, leading to astrong pipeline of orders for the second half of 2006. As a result,the Company remains confident of delivering significant revenue growthfor the full 2006 and beyond. Copyright Business Wire 2006Related Shares:
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