Europlasma: 2010 First-Half Earnings

Oct 28, 2010, 02:45 ET from Europlasma

BORDEAUX, France, October 28, 2010 /PRNewswire-FirstCall/ -- During the Board meeting held on October 20th, 2010, Europlasma's directors approved the financial statements for the first half of 2010 (period ended June 30th, 2010).

    CONDENSED CONSOLIDATED               Jun 30, 2010 Jun 30, 2009 Change
    INCOME STATEMENT                          (6 months)   (6 months)
    Limited statutory auditors' review      EUR'000      EUR'000      %

    NET REVENUES                             16,117       14,800     9%
    EBIT                                     -1,791       -2,296    22%
    NET INCOME (GROUP SHARE)                 -1,312       -1,933    32%

At the end of the first half of 2010, the breakdown of business for the Group's companies was as follows:

Air depollution activities (Europe Environnement subsidiary) represented 66% of revenues for the first half of 2010 (compared with 65% in H1 2009), up 10% yoy thanks to the public contracts won, despite a still slow industrial market.

The upturn in business reflects the positive impacts of the repositioning of the sales teams on public contracts in order to offset the persistently weak level of industrial investments over the period. Growth has primarily been achieved thanks to various commercial successes in Europe: more specifically, air treatment facilities have been delivered in Poland, the UK, Spain and Ireland. Outside of Europe, the Europe Environnement Group has benefited from contracts in Russia and Morocco, while a recovery seems to be taking shape in the US.

With optimized support structures and a production tool based on leading-edge technology (new industrial site at Aspach-Le-Haut, in Alsace) since May 2009, Europe Environnement is continuing to develop its business internationally with a view to generating profitable growth.

The asbestos and hazardous waste destruction activities (Inertam subsidiary) represented 26% of revenues for the first half of 2010 (compared with 30% in H1 2009), achieving a dynamic commercial performance (+5% in relation to H1 2009), in line with the Group's development plan.

During the first half of the year, public organizations (regional councils, public housing office, etc.) and major institutional players chose the vitrification channel for eliminating waste containing asbestos materials and resulting from their asbestos removal and renovation contracts. Inertam also benefited from new contracts in connection with the national urban renovation program. In this context, Inertam is processing high volumes of floor slabs from schools and colleges. At the same time, with the increase in the number of photovoltaic energy production facilities fitted on buildings in France, Inertam is processing roofs which contain asbestos (fibrocements) and are being replaced with solar panels. In line with its budgets, Inertam vitrified a total of nearly 2,600 tons of hazardous waste processed during the first half of 2010.

The historical business for marketing and operating the proprietary plasma torch technology represented 8% of revenues for the first half of 2010 (compared with 5% in H1 2009), up 9%.

The company is benefiting primarily from the first returns of its arrival on a new market: low-level radioactive waste. Europlasma is currently working to reduce and immobilize radioactive waste at the Kozloduy nuclear power plant in Bulgaria (cf. press release from September 10th, 2009). At this stage, the contract represents a contribution of EUR5.2 million over four years for Europlasma, which has already completed 28% of its mission.

During the period, the new green electricity production activities based on energy reclamation from residual waste and/or biomass (CHO-Power) focused primarily on finalizing the agreement for financing production units with a financial partner.

The development of the project pipeline has continued. However, the main focus has been on finalizing the financing for the Morcenx plant, which will showcase the Group's expertise and gasification technology.

Over the first half of 2010, Europlasma recorded a -EUR1.8 million operating income (loss) (compared with -EUR2.3 million in H1 2009). The operating margin came to -11% of revenues, compared with -16% for the first half of 2009. The optimization of the cost structure (-EUR500,000) is mainly linked to the improvement in productivity after billing started up on some significant contracts.

The EUR197,000 in non-recurring income is linked to income from the sale of Europe Environnement's first industrial site, following the move to the new head office in 2009. A second and final site was sold after the end of the half-year period, generating EUR591,000 in capital gains. This will be recognized in the consolidated accounts at December 31st, 2010.

Net income (Group share) came to -EUR1.3 million, compared with -EUR1.9 million for the first half of 2009, an increase of 26%.

On the balance sheet at June 30th, 2010, the decrease in cash and cash equivalents (EUR11.4 million at June 30th, 2010, compared with EUR13.9 million at December 31st, 2009) reflects (i) the scheduled repayment of borrowings, and (ii) the financing of activities relating to the deployment of the contract in Bulgaria.

Events occurred since the end of the half-year period

Capital increase: the two capital increases launched by Europlasma on July 12th, 2010 to finance part of its share for building the first CHO-Power plant in Morcenx have been carried out successfully, raising EUR6.3 million.

Change of governance: the Board of Directors appointed Pierre Catlin as non-executive Chairman in August 2010. Pierre Catlin has strong experience of the waste and utilities sector after 25 years spent in executive management positions, particularly within the Suez group. He joined Europlasma in May 2009 as a member of the Advisory Board. Didier Pineau and Jean Claude Rebischung were reappointed as Chief Executive Officer and Deputy Chief Executive Officer respectively for a five-year period.

Major contract for Europe Environnement: Amplast, a fully-owned subsidiary of Europe Environnement, signed a major contract of over EUR10 million at the end of August 2010 with Air Liquide Italy to manufacture and install the gas treatment line for 3Sun's solar cell and panel production plant, which is under construction in Sicily. Final delivery is scheduled for July 2011. The implementation of this contract will have an impact on this fiscal year's accounts with approx. EUR3 million in revenue recognized in 2010 and the rest in 2011.

Recruitment of a new Chief Financial Officer: Estelle Mothay, a statutory auditor and member of the Association of Chartered Certified Accountants (ACCA), joined Europlasma in September 2010. She previously worked with Europlasma as an auditor for PricewaterhouseCoopers.

Finalization of an agreement for financing CHO-Power units with the financial partner specialized in renewable energies: the Group is currently completing the financing agreement for CHO-Power. A separate press release will be published.

Outlook for 2010

For FY 2010, the Europlasma group intends to generate profitable growth with revenues increasing by over 50% vs. 2009.

With a clear improvement in the order book for 2010 compared with 2009, Europe Environnement is targeting a return to growth and profitability through major orders, such as the Air Liquide Italy contract signed in September 2010.

In 2010, Inertam will benefit, among other factors, from institutional and private operators planning ahead for moves to tighten up the regulatory framework and extend it to include new materials which contain asbestos (non-crumbly materials) and whose harmfulness was previously not recognized by the law.

Lastly, CHO-Power will recognize its first income in FY 2010.

HY financial statement

Limited statutory auditors' review on the consolidated interim financial statements.

    Condensed consolidated
    income statement   Jun 30, 2010 (6 months) Jun 30, 2009 (6 months)
    (EUR'000)                   %                         %           %
                      EUR'000   of revenues    EUR'000    of revenues Change

    NET REVENUES       16,117          100%     14,800          100%    +9%
    Other operating
    income                802            5%      1,250            8%   -36%
    consumed          -10,837          -67%    -10,755          -73%    +1%
    Staff costs        -5,991          -37%     -5,811          -39%    +3%
    Other operating
    expenses              -31            -         -25            -    +24%
    Tax                  -440           -3%       -419           -3%    +5%
    Net change in
    depreciation and
    amortization       -1,412           -9%     -1,337           -9%    +6%
    EBIT               -1,791          -11%     -2,296          -16%   +22%
    income and
    expenses             -164           -1%        -92           -1%   +78%
    income and
    expenses              197            1%        -77           -1%     -
    Corporate income
    tax                   389            2%       -442           -3%     -
    Share in earnings
    from equity
    affiliates              1            -           -            -      -
    amortization         -447           -3%        436            3%     -
    NET INCOME         -1,815          -11%     -2,460          -17%   +26%
    interests             503            3%        527            4%    -5%
    (GROUP SHARE)      -1,312           -8%     -1,933          -13%   +32%

    Balance sheet - Assets (EUR'000)              Jun 30, 2010   Dec 31, 2009

    Goodwill                                            12,285         12,403
    Intangible fixed assets                              2,236          2,376
    Tangible fixed assets                               19,498         19,887
    Long-term financial investments                        468            490
    Fixed assets                                        34,488         35,157
    Inventories and work-in-progress                     1,695          1,505
    Receivables                                         15,711         14,568
    Cash, cash equivalents and other                    11,359         13,923
    Current assets                                      28,864         29,995
    TOTAL ASSETS                                        63,252         65,152

    Balance sheet - Liabilities (EUR'000)         Jun 30, 2010 Dec 31, 2009

    Shareholders' equity (group share)                  30,125       31,404
    Minority interests                                   3,785        4,243
    Provisions                                             940          983
    Financial liabilities                               14,550       15,135
    Sundry liabilities and other                        13,852       13,386
    TOTAL LIABILITIES                                   63,252       65,152

HY financial report will be published on on October 29th, 2010

About Europlasma

Founded in 1992, Europlasma is a French Group specialized in clean technologies and renewable energy production. The Europlasma Group is made up of four main units and 260 employees who are all firmly committed to sustainable development and experts in waste processing and reclamation.

    - Europlasma develops, produces and markets waste processing and energy
      production solutions based on its proprietary plasma torch technology.
    - Inertam is the global specialist for the destruction and
      reclamation of asbestos and hazardous waste.
    - CHO Power is a waste gasification power producer (EfW - Electricity
      from Waste).
    - Europe Environnement is the European market leader for ventilation and
      air depollution systems for industry.

    Press and investor contacts:

    Anne Borderes
    Tel: +33-5-56-49-70-00

    Tel: +33-1-53-65-68-68

SOURCE Europlasma