29/08/2008 - 12:26

Mission NewEnergy posts maiden profit

29/08/2008 - 12:26

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Perth-based Mission NewEnergy Ltd, formerly Mission Biofuels, has reported its maiden net profit of $2.3 million for the year ending June 30 2008.

Mission NewEnergy posts maiden profit

Perth-based Mission NewEnergy Ltd, formerly Mission Biofuels, has reported its maiden net profit of $2.3 million for the year ending June 30 2008.

Group revenue for the renewable energy producer was $24.08 million and earnings before interest, tax, depreciation and amortisation was $7.92 million.

Managing director Nathan Mahalingam said the maiden profit was very pleasing and put the company in a position for continued strong revenue and earnings growth in FY09.

"We are pleased with the positive result, which has been achieved in the face of some challenging conditions in the industry," said Mr Mahalingam.

"The 2008 result was driven by a strong contribution from our feedstock business and we expect substantial further growth to come from this business in the current financial year as planting and exports of seeds are increased substantially.

"In addition, we expect a greater contribution to come from our refinery business when construction of our second 250,000 tpa biodiesel plant is completed and output increased.

"With a positive outlook for each of our business divisions we are forecasting revenue and earnings to grow significantly in the 2009 financial year.

The feedstock business performed strongly and achieved total revenue of $12.9 million and an EBITDA of A$7.99 million.

This result was achieved mainly through the planting of about 180,000 acres by contract farmers in FY2008. The planting target for FY2009 is almost 3.5 times more.

Post year end, Mission has planted approximately a further 120,000 acres, taking total acreage planted to-date to approximately 300,000 acres.

The company expects to plant a further 450,000 acres in FY08, taking total planted acres to 750,000 by the end of FY09.

The refining business achieved revenue of $9.9 million and an EBITDA of A$0.5 million.

The refining business, which commissioned the first 100,000 tonne per annum,biodiesel plant in December 2007, only commenced production of biodiesel during the last two months of FY2008 and recorded sales of approximately 7,000 tonnes.

Mission expects margins to significantly improve as in FY07 there were significant overheads while the plant was not producing.

During the year, the refinery also procured crude glycerine, which was refined and sold as pharmaceutical glycerine.

The refining facility is currently in production to fulfil orders secured for August and September and based on current orders secured and those under advance negotiation, the company expects to produce and sell approximately 110,000 tonnes of biodiesel for FY2009. The second 250,000 tpa Biodiesel Plant is currently under construction and is expected to be completed by the end of 2008 within budgeted capital cost.

In February 2008, the Company also constructed two wind mills of 1.65 megawatts each in the Indian state of Maharashtra for generation of electricity.

The company expects to produce and sell approximately 110,000 tonnes of biodiesel for FY2009, a substantial increase on the 7,000 tonnes of biodiesel produced in FY08.

Meanwhile, the Feedstock operations, which exported its first batch of seeds in FY2008 expects to further increase such exports.

There is a shortage of seeds as planting material in the market. Based on current contracts and the feedstock planting program envisaged for this financial year, the directors and management of the Company are confident that the Group's performance will show a significant improvement in FY2009.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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