(Alliance News) - HydroDec Group PLC on Friday reported a widened interim loss and warned that annual earnings will be significantly behind expectations due to reduced feedstock supply.
The stock was trading 55% lower on Friday in London at 18.85 pence a share.
The industrial oil re-refining company said its loss widened in the six months to the end of June to USD2.9 million from USD2.1 million reported a year earlier, despite revenue rising to USD7.1 million from USD6.4 million.
HydroDec said sales volumes in the first half of 11.0 million litres were up on prior year's 10.3 million litres, as it continued to sell "successfully" all the Superfine products that it produces.
Meanwhile, average selling prices were marginally ahead of the first half of 2018, which is encouraging against a backdrop of a softer crude market, HydroDec noted.
Feedstock volumes of 10.8 million litres were collected at an average landed price of USD1.17 per gallon - 50% higher cost than in the prior year. Cost increases have been driven by macro events, the company explained.
"This has been a mixed period for Hydrodec but the direction of travel for the business both strategically and operationally is exciting," said Chief Executive David Dinwoodie.
"The adverse impact of G&S's reduced feedstock supply over the summer period, together with protracted refinancing negotiations, means the company's revenue and earnings will be substantially behind expectations for this financial year. However, the board remains confident that this financial performance is due to short term issues which it is working hard to mitigate, with the results of that work already starting to be seen."
"The board will undertake an accelerated strategic review and it remains confident about the company's future prospects," added Dinwoodie.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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