Eco (atlantic) Regulatory News (ECO)

19 Jan 2007 07:00

EcoSecurities Group plc19 January 2007 EcoSecurities Group plc Trading Update EcoSecurities increases portfolio to 156 million Carbon Credits EcoSecurities Group plc (the "Group" or "EcoSecurities"), one of the world'sleading companies in the business of originating, implementing andcommercialising carbon credits from greenhouse gas emission reduction projects,today issues a trading update for the six month period ended 31 December 2006. Origination The Group continued its strong project origination performance during theperiod, with projects and tonnage added ahead of expectations. The total grossCertified Emission Reduction ("CER") portfolio grew by 26 million tonnes to 156million CERs at 31 December 2006. In line with the Group's policy ofcontinually assessing the projects within the portfolio for expected operatingand regulatory performance, this total takes into account volume adjustmentsprincipally relating to several biodiesel projects in Indonesia. The totalnumber of projects with which the Company has contracted grew to 353. Inaddition, the Group has a further 21 million CERs from projects that had yet tocomplete the full contracting and due diligence process at year end and whichhave not yet been added to the portfolio. Adjusting for the relative proportions of Agency, Principal and ProjectDevelopment contracts in the gross portfolio, the Group's net ownership positiontotals 127 million CERs at 31 December 2006. The Group's net ownership expandedby a considerable amount during the period, primarily due to the restructuringof its EcoMethane joint venture whereby the Group will now acquire all the CERsgenerated from these landfill gas projects. Other highlights of the Group's origination activities included continuedgeographic expansion with the opening of additional representative offices inKenya and Singapore, bringing the total number of offices and representativeoffices to 23 at year end (2005: 14). EcoSecurities also signed strategicagreements with Standard Bank, the largest retail bank in South Africa, and UOBKay Hian, a division of the second largest bank in Singapore, to maximisebusiness development activities in Africa and Southeast Asia, respectively. Implementation Implementation of the Group's contracted projects - the process of guiding CleanDevelopment Mechanism ("CDM") projects through the United Nations registrationprocess - made further progress in the second half of 2006. Notwithstanding thewell publicised delays experienced in external validation and verification ofprojects and with the CDM Executive Board ("EB") in the processing of projects,the pace of registrations increased in the latter part of 2006. The number ofprojects registered with the EB by the Group increased from 17 at 30 June 2006to 53 at the end of December 2006. These registered projects are expected toproduce 16 million CERs through to 2012. A total of 84 projects inEcoSecurities portfolio are now operating, and are expected to produce 39million CERs through to 2012. Commercialisation The Group executed a number of new sales transactions in the second half of 2006with counterparties in Europe and Japan, significantly increasing the amount ofcontracted forward sales over the 2008 to 2012 period. The total gross contractvolume of CERs sold forward during the period was 8 million tonnes, increasingthe total forward sale contract volume to 29 million tonnes. The total NetTrading Margin on contracted forward sales at 31 December 2006 increased to €151million, up from €100 million as at 30 June 2006. For the year ended 31 December 2006 the Group will recognise revenue from thesale of verified CERs from a number of Principal, Agency and Project Developmentprojects. A total gross number of 451,442 CERs were verified in relation to theGroup's projects during the year. At year end 67,954 of these CERs had not yetbeen sold. Operations and Finance Despite significant expansion in 2006, costs were within expectations.Furthermore, the Group's cash position at year end was larger than anticipated,placing EcoSecurities in a comfortable position going into 2007. Bruce Usher, Chief Executive Officer, commented: "Throughout 2006 the Group placed significant emphasis on building its carboncredit portfolio, which grew to a gross total of 156 million CERs and a nettotal of 127 million CERs at the end of 2006. Despite experiencing theindustry-wide delays in the processing of our projects by the CDM ExecutiveBoard, we have continued to progress a significant number of projects throughthe CDM process. "During 2006, there have been many developments raising not only the awarenessof climate change, but also examining the likely economic impacts. In particularthe publication of the Stern Report in the UK has helped focus attention on thisongoing problem and need for emissions trading and project offsets. In addition,tighter EU emissions targets brought about by recent EU ETS National AllocationPlans and accelerating policy momentum in the United States, especially inCalifornia, will contribute to further development of the global carbon marketand provide additional opportunities for EcoSecurities in 2007." + Note: Gross and net contract volume measures expected CER production fromprojects through to the end of 2012 and does not adjust for operating orregulatory risk. Gross and net contract volume excludes projects where theprobability of either the development of a relevant methodology or theunderlying development of the project is still uncertain. CDM = Clean Development Mechanism, the provision of the Kyoto Protocol thatgoverns project level carbon credit transactions between developed anddeveloping countries CER = Certified Emission Reduction, carbon credits created by Clean DevelopmentMechanism projects. One CER corresponds to 1 tonne of CO2e emission reductions EU ETS = European Union Emissions Trading Scheme, a market based "cap and trade"system for green house gases adopted by the European Union member states - Ends - For further information please contact: EcoSecurities Group plc + 353 (0) 1613 9814 Bruce Usher, CEOPedro Moura Costa, President & COO Citigate Dewe Rogerson + 44 (0) 20 7638 9571 Kevin Smith / Ged Brumby About EcoSecurities: EcoSecurities is one of the world's leading companies in the business oforiginating, implementing and commercialising carbon credits. EcoSecuritiesstructures and guides greenhouse gas emission reduction projects through theKyoto Protocol, acting as a principal between the projects and the buyers ofcarbon credits. EcoSecurities works with companies in developing and industrialising countriesto create carbon credits from projects that reduce emissions of greenhousegases. EcoSecurities has experience with projects in the areas of renewableenergy, agriculture and urban waste management, industrial efficiency, andforestry. With a network of offices and representatives in 21 countries on fivecontinents, EcoSecurities has amassed one of the industry's largest and mostdiversified portfolios of carbon projects. Today, the company is working on 353projects in 36 countries using 17 different technologies, with the potential togenerate more than 156 million carbon credits. EcoSecurities also works with companies in the developed world to assist them inmeeting their greenhouse gas emission compliance targets. Utilising its highlydiversified carbon credit portfolio, EcoSecurities is able to structure carboncredit transactions to fit compliance buyer's needs, and has executedtransactions with both private and public sector buyers in Europe, North Americaand Japan. Working at the forefront of carbon market development, EcoSecurities has beeninvolved in the development of many of the global carbon market's most importantmilestones, including developing the world's first CDM project to be registeredunder the Kyoto Protocol. In 2006, EcoSecurities won the Point Carbon Award for'Best CDM/JI Project Developer'. EcoSecurities' consultancy division has been atthe forefront of all the significant policy and scientific developments in thisfield, and has been voted the world's leading greenhouse gas advisory firm overthe last five years through reader surveys conducted by Environmental FinanceMagazine. EcoSecurities Group plc is listed on the London Stock Exchange AIM (tickerECO.L). Additional information is available at www.ecosecurities.com. This information is provided by RNS The company news service from the London Stock Exchange