RNS Number : 6890V
Nature Technology Solutions Limited
02 June 2008
Nature Technology Solutions Limited
Preliminary Unaudited Results for the Year ended 31st December 2007
Contract awarded for deployment of treatment unit in the North Sea
Financial Highlights 2007
* Maiden Group Profit, pre-tax of �391,984 , post-tax of �312,111
* Turnover up 89% to �2.25m
* Operating profit up 110% to �1.12m
* Earnings before interest, tax, depreciation and amortisation ('EBITDA') of �0.56m
Chairman's Statement
Results
I am delighted to report our first year of Group profits, which is a tribute to the application of our technology, enthusiasm of the
team, and indeed a reward for the patience of our shareholders over the last seven years.
Pretax profits for the Group in 2007 amounted to �391,984 (2006 - loss �104,368) from attributable revenues of �2,254,234 (2006 -
�1,191,241) which is an excellent outcome for the year, and demonstrated the earnings capacity of our technologies in both Norway and
Gibraltar. This translated into post tax profits of �312,111 compared to a �73,298 loss in 2006. Revenues for 2007 included two contracts,
one in the north of Norway and the other in Gibraltar, which could be described as 'non-recurring', and which contributed significantly to
the year's profits. However, we believe that the Group is now sufficiently well established and broadly based to win such major contracts on
a regular basis.
Of the operating profit of �1.12m, Norway contributed �0.7m of which our 40% owned quayside joint venture in Tananger provided �0.18m in
earnings to our Group , partly due to favorable prices and volumes in 2007, which may take some effort to repeat in 2008.
The balance of operating profit, �0.42m, was generated from our share of earnings achieved by our 50% owned Gibraltar company, Slop Oil
Reception and Treatment Ltd ('SORT'), which is the port oil waste reception facility in that location, and indeed was the original
foundation for the Group. The substantial improvement in both turnover and profits were also enabled by completing the re-siting and
enlargement of facilities in the Port of Gibraltar which now offer over 6,000 cubic metres of storage for reception and treatment of oily
wastewaters. Its reputation as a reception facility at the entrance to the Miditerranean was further enhanced by the award of the new EU
IPPC waste licence and ISO 9001 accreditation. The substantial profit earned by SORT and near completion of its major capital expenditure
enabled the company to pay its first dividend to the Group, a policy which is expected to continue.
Other significant developments in 2007
Purchase of 100% of Northern Treatment AS
Shareholders will be aware that over the last 3 years, we have invested in the development of a new Offshore Treatment Unit ('OTU')
which was designed to treat rig and platform generated wastes offshore in the North Sea (and, if successful, worldwide). The technology was
designed to treat the waste, and then discharge clean water to sea under the new and demanding standards in place, thus saving very
substantial transport and disposal costs ashore and contributing to the 'greener' environment. This project was financed through our 60%
owned Norwegian company, Northern Treatment AS, but in September last year we bought out our 40% partner's interest to give us full control
over final development, marketing. and ongoing OTU operations in Norway.
Near sale of our Gibraltar investment
In October last year we received an unsolicited approach from a well established Greek 'slops' operator for our 50% interest in SORT,
the Gibraltar joint venture. After exhaustive negotiation we agreed a price of $6m (about �3m) and, having signed a Memorandum of
Understanding, commenced the sale process.. The offer capitalised the value of our Gibraltar investment at an effective amount of 0.6p per
ordinary share and potentially enabled a substantial return of cash to shareholders and retention of our core Norwegian interests. In the
event, we withdrew from this transaction in March and, having established a fundamental value on SORThave identified opportunities to expand
our Ports operations in the region and elsewhere.
Current trading and prospects
Norway
After more than a year of discussions and negotiations we are delighted to report the contracted deployment of our OTU on a major North
Sea drilling rig, operating offshore Norway.. The unit is currently being installed and will be tested to ensure that our rigorous targets
for treatment of offshore wastes, and their discharge to sea as clean water, are met in the field. The contract is on a 'day rate' basis for
equipment, chemicals and operating staff for an initial period of 3 months . A successful outcome to these tests will enable possible
extension of this contract and acceleration of marketing to other rigs and platforms in the North Sea and elsewhere.
Whilst it will be challenging to maintain the 2007 profitability of our joint venture quayside plant in Tananger, its considerably
enhanced capacity should enable increased throughput if waste volumes are available. The company, SAR Treatment AS ('SART'), paid its maiden
dividend to the Group this year from 2007 profits and we believe it should be a good source of future cash flow.
Internationally, we have been negotiating a contract for the design, build and delivery of a treatment unit to a man-made drilling
island in Kazakhstan which, if awarded, would generate revenues for 2008 and onwards .
Gibraltar
Since 2007 we have further increased our reception tankage from 6,000 to approximately 7,000 tonnes and now have the facilities and
approvals to accept 'low flash' wastewaters resulting from crude oil tanker washings. This has already resulted in an increase of
approximately 60% in volumes for the first 5 months of 2008. Whilst certain of 2007's one-off revenues will not recur this year, SORT's
budget is for gross revenues to equal or exceed those achieved last year. An additional location from which waste would be generated for
SORT's reception and treatment operations is under active discussion, although will not impact profitability in the current year.
UK and Middle East
We are hopeful of establishing a joint venture facility in Aberdeen similar to our quayside plant in Norway, in order to service the UK
North Sea oil industry. Also in Aberdeen we have been discussing the acquisition of a soil remediation solutions provider which, if
completed, would extend our technology base into the UK and provide another environmental leg to the Group.
A recently signed joint venture with a major US Group could also introduce us to potential business in the treatment of maritime
wastewaters in the Gulf region of the Middle East.
Staff
As will be evident from the growing pace of activities within all areas of the Group over the last year, staff have been continually
challenged by the demands of finding treatment solutions, the design and production of complex equipment and its commissioning, and the
hours involved in interfacing with clients. All have risen to the occasion and I would like to thank them for their commitment on behalf of
shareholders, and hope that they are enjoying the environment they have helped to create. The current, and the next, phases of growth
require additional key staff in many areas of the business and I trust that we can attract the additional talent necessary to take the next
quantum leap forward.
Richard Eldridge Chairman 2nd June 2008
NATURE TECHNOLOGY SOLUTIONS LIMITED
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR TO 31ST DECEMBER 2007
Unaudited Audited
Year to Year to
31/12/2007 31/12/2006
� �
REVENUE Revenues from operations 1,030,888 264,036
Joint ventures 1,223,346 927,205
2,254,234 1,191,241
COST OF SALES Direct cost of operations (517,375) (225,854)
Joint ventures (616,019) (431,820)
OPERATING PROFIT 1,120,840 533,567
Other income 18,962 7,535
Administrative expenses (559,307) (473,738)
Finance costs (24,496) (20,622)
Depreciation and goodwill impairment cost (164,015) (151,110)
Profit / (Loss) on ordinary activities before taxation 391,984 (104,368)
Minority interest - 21,354
Taxation on profit /(loss) on ordinary activities (79,873) 9,716
Profit / (Loss) for the financial period 312,111 (73,298)
Basic profit / (loss)per share 0.00064 (0.00017)
NATURE TECHNOLOGY SOLUTIONS LIMITED
CONSOLIDATED BALANCE SHEET AT 31ST DECEMBER 2007
Unaudited Audited
As at As at
31/12/07 31/12/06
� �
ASSETS:
NON CURRENT ASSETS
Tangible assets 678,762 434,450
Intangible assets 152,172 148,429
Investments 1,954,553 1,715,856
Deferred tax assets 85,047 110,888
Total non current assets 2,870,534 2,409,623
CURRENT ASSETS
Debtors 305,780 205,391
Balance at bank 268,375 211,902
Total current assets 574,155 417,293
TOTAL ASSETS 3,444,689 2,826,916
LIABILITIES:
CURRENT LIABILITIES (323,304) (325,896)
NON CURRENT LIABILITIES (227,085) (206,551)
NET ASSETS 2,894,300 2,294,469
EQUITY
Called up share capital 49,239 43,959
Share premium account 1,978,636 1,696,196
Capital Reserve 2,864,130 2,864,130
Profit and loss account (1,997,705) (2,309,816)
TOTAL EQUITY 2,894,300 2,294,469
NATURE TECHNOLOGY SOLUTIONS LIMITED
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR TO 31ST DECEMBER 2007
Unaudited Audited
Year to year to
31/12/07 31/12/06
� �
Reconciliation of operating profit to net cash flow from operating activities:
Profit for the year/(loss) before tax 391,984 (73,298)
Adjustments for:
Depreciation 24,567 13,027
(Increase)/Decrease in debtors (100,389) (58,082)
Decrease/(increase) in deferred tax 25,841 (6,509)
(Decrease)/increase in creditors (61,931) 173,989
Net cash from operating activities 280,072 49,127
Financing activities:
Issuing of ordinary share capital 287,720 215,481
Investing activities:
Acquisition of intangible fixed assets (268,879) (54,032)
Acquisition of tangible fixed assets (3,743) (415,181)
Increase in investments (238,697) (147,575)
Increase/(Decrease) in cash and cash equivalents 56,473 (352,180)
Analysis of cash and cash equivalents during the year
Balance at start of period 211,902 564,082
Increase/(decrease) in cash and cash equivalents 56,473 (352,180)
Balance at end of period 268,375 211,902
Notes to the accounts
1. The calculation of profit per share has been based on the profit for the
period and the average 487,993,384 Ordinary Shares in issue throughout the
period.
2. These unaudited results have been prepared on the basis of the accounting
policies adopted in the accounts to 31 December 2006.
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