LONDON (Alliance News) - Nature Group PLC Wednesday said it swung to a pretax loss after contract delays and reduced revenue but is positive about its second half.
Nature reported a pretax loss of GBP720,000 in the six months ended June 30, compared to a GBP1.4 million profit in the first six months of 2013, after it suffered from contract delays and its ongoing rebuild of its Gibraltar operation.
The wastewater treatment company said it will not pay an interim dividend but expects to pay a declare dividend if the second-half performance is in line with its expectations, it said.
Revenues also fell due to the contract delays, to GBP9.1 million in the first-half of 2014 from GBP11 million in the comparable period in 2013.
"Both maritime and oil and gas performed below management expectations, albeit for very distinct reasons," it said.
Nature are "feeling the pressure" from the decline of calling ships at the Rotterdam port, which has been decreasing by 5% per year over the last four years, it said. Nature will be re-evaluating its operations as a result, it said.
"We are well placed to redefine our commercial strategy to seek alternative business opportunities. In addition to ensuring that we operate the optimum barge fleet to service the market, we are extending our offering into a wider range of maritime wastes," said Nature.
Nature added that a major one-off contract, delayed from the first half of the year, has now been completed at the start of the second half, which will make a significant contribution to the full year.
"We expect the waste/recycled oil market to change in 2015 resulting in our Portugal facility being one of the only viable locations in Europe to upgrade waste oil. This will not only directly benefit our Portugal location but also strengthen our position in the Rotterdam area," it added.
It continues to rebuild its Gibraltar plant after a fire in 2011. The Gibraltar rebuild has been outsourced to a third party due to its resources being more usefully deployed on customer contracts, said Nature.
Nature's oil and gas division suffered six-month delays for its major contract in Brazil due to visa issues for its offshore operators. "Although the first half was quieter than we anticipated, the second half is showing a significant increase in contracted activity," it said.
Its longer-term strategy for its Maritime Division remains to build reception facilities at a network of ports around the world along the major shipping routes. Houston was added this year and next year the port of Sohar in Oman will be added to its network, it said.
Nature Group said it is looking at new locations to develop in the Far East, Africa and South America as part of its longer-term plan to provide a global network of waste treatment facilities.
"For our oil and gas division, we want to expand our fleet of rental units, capitalising on the successful projects completed and the proven delivery of 80% savings," said Nature.
"We remain extremely positive about the new projects in the pipeline for our oil and gas division and expect, in the second half of the year, to accelerate our activities in that sector as well as fix several of our challenges in maritime, especially in Gibraltar and Rotterdam," it added.
Nature Group's shares were down 15% to 21.70 pence per share Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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