Member Info for nastid

I’m wouldn’t attribute the question necessarily as being silly, given that throughout HYR’s life, any number of institutes have invested without profit being close. I do agree the substance of the answer in the current context. In order to get further interest from instituationals, they have to show feedstock increases, and later ways to expand into the market. The transformer oil market is a growth market. The climate debate isn’t going away, and Hydrodec is well placed to take advantage but ‘only’ if they get more feedstock. I’d be happy to see central costs covered but with their improved margins, they do have a route to overall profitability. (if they address feedstock levels).

They were never going to be in a position to announce a profit this year. What is a possibility, is cash flow that covers central costs.

I guess the timing of the recent seller, means they got wind of something but that update doesn’t warrant a panic sell. Maybe spooked by the AUS side of things but the operation there has always been very limited, operationally and organic growth wise. The move reduced costs but if it takes cash from the growth market in the US, then longer term, it might be a benefit to not have it in its current form. They had a supply deal that was delayed, if that has been slower than envisioned, maybe explains the underperform.

The US business looks good, the increased feedstocks is welcome news, and as discussed previously, closed loop is the way to go. I would’ve expected more of them already but with the carbon credits, and recent Superfine accreditation, I presume that has opened the door to the utilities.

Been fairly quite for while, so I thought I'd help keep this site alive (when it's not down), by posting.

I wonder if Hydrodec's process can currently, or be modified, to clear up sulphur atoms/sulphuric compounds. I believe it does that, or to a degree, when it reforms carbon/hydrogen atoms lost during the oils usage.

Heading into 2020, with the new shipping regs, we're going to have a large surplus build up, of sulphur rich oils/fuel oils.

I remember once breaking down the cost by item of the process, I think but it was a while ago now, electricity and Hydrogen where the higher value consumables.

Electricity for the past couple years seems to have remained flat to slight increases, at least for industrial/commercial, in Ohio. If you're in California the jump is far higher. As to hydrogen, I'm not sure. The unit cost may have reduced as other sources become available but I presume it's storage, and therefore electricity that makes up that cost.

Operational costs: I'm presuming again that the actual theoretical capacity, doesn't really impact the overall running cost. Meaning x amount of consumables for y amount of feedstock but as they scale up, utilisation and operational efficiency increases. The onsite storage is likely larger but that must be a static cost, and I don't think they have increased the number of employees.

Yes they did lose market share during the down time but demand is now strong. The industry recognises the product quality of Superfine, so that isn't the overriding issue. Competition of feedstock has always been around, the G&S was meant to address that.

With respect, I don't agree with your analysis.

The reactor designs were an evolution of 10 years of previous experience. A lot of the extra capacity was due to the improvements fed into the new design. The rest, being part of the strategic equation, from the joint deal with G&S. The deal was supposed to eventually provide enough feedstock for 10 trains, not just 6. Besides, the cost to create the expanded throughput, given the design, would not have been much different if it had remained at previous values.

I'm assuming part of the issue that hasn't seen G&S supply enough feedstock, is logistical in nature. That was a known factor in possibly establishing a second operation, nearer to other G&S facilities. I can't see any real additional costs for the larger capacity, in capital or central admin costs, over the previous size.

Margins have continued to increase, and are at a pretty good level in comparison to previous years. On current output, they have around 10 million litres spare capacity (if they really pushed the reactors). At the operational level things are good, they need to feed the reactors and increase yearly output. If they do that, they can be nicely profitable, without that...

As to crude in general. Even with the Saudis telegraphing that more output was on the way, the price bounced around the $65 mark. To me, that showed underlying strength, and an eventual continuation of the march upward. I mentioned a previous bottle neck in the US, it's now predominantly the reason for turning things on it's head. Brent had weakness, whilst WTI moved up, bringing the differential down significantly.

Is an RNS charged per letter?

Given that they had already updated previously, it was not a surprise that they didn't use the AGM to output much more but that was lean to say the least.

We're hostage to the MM(s), who has been playing around with the spread a fair amount in the run up to the AGM.

As to the AGM,There might be an added general update but the AGM is often just process stuff. My expectations are towards seeing a continued easement on feedstock, rather than a big announcement.

That may have been true a couple of months ago but since then, the ramping has died down.

The most effective way around the competition, is adding closed loop deals. These are probably less straightforward, as you have to have available reclamation facilities (in house or otherwise) at the supplier end. I find it hard to imagine that they wont add some deals with OEMs, especially now with CCs. Not sure how the ACR calculate credits but roughly per barrel, the EPA quote 0.43 metric tons of Co2 emissions. The advantage is more USP but the sums do stack up better on the bigger deals. In the next updates, we should get a clearer picture as to the state of easing (or not) of feedstock constraints.

As far as I know, they (Greenbottle + Avista, both Mr Black's) are building/re-building a plant in Denmark. What isn't known, is whether they are using in-house IP, or the Hydrodec one. Nice if it were the new HYR tech, given the 10% royalty that should still apply. I imagine anywhere other than England, they would welcome a new plant/expansion, with no multi year protracted planning phase. I can't see any feedstock sourced outside the US (other than Canada/Mexico) being viable (unless PCB contaminated, which is pretty much impossible to import). With transport costs rising, even within the US, logistically speaking, it's not straightforward. Originally G&S was meant to have supplied enough for full capacity, and future expansion. Not sure the reason why they haven't, could be simple costs as mentioned above, otherwise I wonder if there are any financial penalties for not supplying the feedstock. I believe Hydrodec had to purchase feedstock from G&S, even when the reactors were still being rebuilt, and thus couldn't be re-refined. Could explain why Mr Black needed the recently discussed credit line but still begs the question, why the less used debt form.

trade volume today. Someone took the opportunity to buy at the lows. The flight down on small volume might've been MMs garnering interest, or some stops hit as it drifted down. Next update I'll be looking to see if they are closing the gap to reach central costs. As posted before, If I'm not mistaken, they aren't far off.

I'm not an accountant so if I'm wrong. someone can correct me but after looking through the results, with a little more detail, I estimate they need around $1ml - $1.5ml to cover central costs. This year, although starting off with lower volumes, it will be an improvement over last, if they continue as they are. I don't have enough info to make an estimate but if I were to hazard a guess, they would be doing well to get EBITDA in $750k-$1ml range.... with favourable Forex (2017, a 300k hit), further reduction in costs, and better feedstock supplies. If I recall a while back, I posted that part of the reason they haven't had the supplies from G&S, might be logistical in nature, and the RNS bears that out. The cost to get supplies to Canton from the various regions, don't always make them a variable option. One of the strategic reasons to add another site, was to specifically utilise the stocks in question. The EPA approval for unlimited PCB treatment might open up a few more feedstock opportunities (small o). Shame they can't import the stuff into the US, as countries would almost be giving it away. As to Mr Black, and our recent debate. All his actions to date, suggest he does not have a nefarious agenda. The interest due on his loans, is currently being rolled up, and he's extended the term date to June 2019. Yes there is always the possibility that with an aim share, something happens, or is decided that leaves the small holder out in the cold but I think we'd all be colder without his support. The strategic review mentions growth strategies, not a review on whether something like delisting is a good idea. Never say never but we're pretty close to covering all central costs, it'd be a kick in the teeth if it happened now. The 7.6ml deal with an OEM is significant, and I'm sure there will be more to come. The clearing of historic carbon credits, mean they are free to approach industry players with a carbon credit proposition, as part of any new relationship (closed-loop etc). The competition for feedstock will not disappear, as long as there are other applications but the CCs should play a bigger part going forward.

The RNS state it's his AIM portfolio, so presumably not his main investments or activity on other major bourses. Does anyone know what other AIM shares he holds?

Especially if the portfolio contains a basket of all or some of his main investments. The RNS wouldn't specify such detail. The kind of debt vehicle in question, isn't used so much here, given the highly developed debt market we have access to. There have been past examples where holders have kept this secret, for underhand means, if not illegal.

Hi David.I. Not sure about the delist route. I was referring to buying the remaining stock. A major holder like Mr Black, if he were to go past 30%, he would have to offer at least the last 12 months high. My understanding is the board don't have to take the offer. Sounds like the delist approach would not trigger the same mechanism but can't see Mr Black delisting, or getting approval. If he defaulted on his revolving credit line, the bank maybe more likely to do that. Again, is it a given that the votes would back such a move.

To clarify, at a minimum, any bid (relating to the 12 month high) can't be lower than the above, as far as I'm aware regarding the rules.

It's nothing new. Ever since Mr Black has been a backer, there is always a chance that if he wanted to, it'd probably happen. The counter argument, is that he could've got the company a lot sooner and cheaper, if he stopped backing the co. Also, having a big backer, can act as a protection against low outside bids. One poster mentioned that dodgy directors use this charge on shares, as a way to keep the funds and walk away... but the logic of recently lending cash, interest free, seems counter intuitive. Also, if the portfolio includes all his different holdings, it's a less likely scenario. Until Jan 2019, the floor price is 3.1p'ish. Surely the easiest and cheapest way to get the company, would be to not roll over existing credit lines. The revolving credit seems more likely for capital expenditure, for his many interests, of which Hydrodec is one. I've always appreciated his backing, obviously but at the same time, it's foolish not to openly debate such things, as they happen often enough, and not to the benefit of small holders.

My take regarding Mr Black, I think his actions are actively to prevent unnecessary dilution. Granted I imagine he has the funds to buy into an offering but there's a level where it just hurts your holding. Funding for explicit capital expenditure and concrete growth potential, yes, treading water, no. A small cash injection with no additional interest, tells me he is confident in the operational level of the company. Especially pertinent now that David Alan Dinwoodie is a non exec, although I do have some trepidation if there were any lapse in progress, given the relative position of it's most generous backer. ... I just saw Mr Black switched nominee accounts, with a charge on his entire portfolio... giving a revolving credit facility... be interested to know how big and what it might be used for.... enough to buy a company with a great product? Then there is Slickers, I'm sure he has some big plans. Although it's frustrating that the UK side recovered so quickly after selling, I'm glad he's done a good job, I bet the employees think the same.

On a first cursory pass, I'd say that it looks pretty good. The $4.3ml accounting loss is lower than the $5ml'ish, I estimated last year. With improved feedstock, things could turn around quickly. I'm trying to approximate any direct HYR impact of the new 2020 regs but need to dig up better info. Crude took a dip when the Saudi's telegraphed that they had buckled to pressure from Trump... I'm not so sure this will stop the slow uptick as we go into 2019. The proposed increase in supply, will see OPEC cuts dropping to 100% compliance, rather than the 150% today. Demand and geo political risks remain, and as mentioned, new regs will likely drive WTI... counter to this, I believe there is a supply chain bottleneck for US crude suppliers, which if fixed, may increase stock coming to the market.