--ADDS BROKER COMMENT--
Active Energy revealed an 11% rise in revenue to US$12mln while gross profits improved more than 98% to US$1.22mln, and a pre-tax loss of US$2mln included significantly higher finance cost, the company added.
A strong performance at the group’s Ukrainian wood fibre business, which upped shipped volumes by 70%, was a key highlight, while the company also said demand for wood-chip product remains above levels that it is currently able to satisfy.
Upgrades to processing facilities are now proceeding on-schedule, it added, and these efforts are expected to yield a significant increase in volumes and revenues in from the fourth quarter of 2015 onwards.
"Overall, the first half of the year demonstrated that the group is making excellent progress towards achieving the strategic vision that I outlined when I assumed the role of CEO in 2012,” Spinks said.
Spinks added that the company is in an “even stronger position” to create shareholder value.
He says the company is now “an international operation across several vertically-integrated and complementary industry sectors."
"Although equipment issues at our wood fibre division impacted upon its performance, they prove the wisdom of the Board's decision to invest significant funds in upgrading and expanding our production facilities,” Spinks added.
Active Energy also highlighted today the progress with other initiatives, such as the successful research into coal replacement biomass – which led to the recently announced establishment of AEG CoalSwitch venture – as well as the 'Forestry to Fuel' initiative with Ukrainian government.
The company highlighted also the completion of financier due diligence for the group's Canadian KAQUO Forestry & Natural Resources Development Corporation joint venture.
“The successful conclusion of our search for a Biomass for Energy coal replacement fuel will not only open important new markets, but also complement and increase the profitability of our other trading activities,” Spinks said.
“And, despite the delays caused by the Alberta government investigation, we are close to securing the funding to enable us to commence forestry operations in the group's Canadian joint venture in January 2016."
Broker WH Ireland, following today’s results, said Active Energy is now well positioned to move into profit in the 2016 financial year.
Analyst Ian Berry, in a note, said: “2015 has proved a difficult year for AEG but nevertheless progress has been made in the core wood chip business, which should lead to a move into profit in FY 2016.
“We have assumed no benefit from the two JV’s in our estimates but both have the potential to be game changing for the group subject to the necessary financing and approvals being put in place.”