Mission NewEnergy says Europe is no longer a viable market for its biodiesel products, after a global oil major opted out of the last four months of a six-month biodiesel supply contract.
The Perth-based biodiesel producer announced today it now expected to make just $12 million from the European supply deal, after it originally estimated it would be worth $40 million when first signed in August last year.
The customer, which Mission did not name, cancelled shipments for March and April 2012 on February 14, citing the availability of cheaper biodiesel supplies in the market.
Mission said today the customer had cancelled the remaining shipments scheduled for May and June.
“Given current unfavourable cost and price dynamics and competition from biodiesel produced in tax advantaged countries such as Argentina and Indonesia, Mission has no further visibility on sales into Europe,” the company said in a statement to the ASX.
Despite the revenue downgrade, Mission NewEnergy stocks had risen by 4.8 per cent at 10:23AM WST, trading at $1.31.