Half Yearly Report
2013 OPERATIONAL HIGHLIGHTS
· North America power projects
o Jerome 4.5MW Biogas Facility continues to meet monthly power rate targets enabling it to fully benefit from the fixed rate agreed in its power purchase agreement
o Reached agreement to acquire the Twin Falls 2.1MW Biogas Facility bringing the Company's biogas portfolio to a capacity of 6.6MW. This acquisition is expected to complete in Q4
· North America carbon
o California Air Resources ("CAR") Board announced on 24 September 2013 that it was issuing the first carbon offset credits (California Carbon Offsets ("CCOs")) in the Californian carbon market
o As part of this first compliance offset issue, Camco was issued 54,497 CCOs from a project which destroys ozone depleting substances/gases, which would have otherwise been emitted into the atmosphere
o Camco has also developed a significant number of the agricultural methane projects currently listed under the Program which are under its management
o Current auction floor price in the Californian carbon market is USD $10.71 and this floor price will increase by inflation plus 5% each year, providing more overall price certainty for market participants than the European Trading Scheme
o Upon issuance by CAR of offset credits this will provide the company with important cash flows from its US carbon business
· Africa
o Recent $1m USAID project awarded to develop biomass power solutions from agricultural waste for local communities in Tanzania and Benin to increasing agriculture productivity
o The South African government has announced the schedule for the Small IPP Procurement Program with the first round of projects to be submitted in October 2013. The Company has previously announced it has signed a land lease option on a 5MW project which it will submit in the first round and also has under development a further 20MW pipeline of similar size PV projects
· REDT*
o Passed the first selection phase of the Energy Storage Technology Demonstration Competition organized by the UK Department of Energy & Climate Change (DECC). This phase involved a feasibility study for a 1.2 MWh storage system in Scotland
o UK Pilot system has performed for the last year as expected, with a proven round-trip efficiency of > 75%
· China carbon
o Despite the continued low carbon price environment our team continues to deliver some cash flow from its CDM and VER portfolio. The Company has also commenced trading activities in the EU to provide services to EU compliance buyers and sellers
o Our team continues to work through restructuring our CDM contracts protecting the company from contingent liabilities and addressing our partners' best interests during the collapse of the carbon market
· South East Asia
o Disposed of its entire 60.1% interest in Camco South East Asia for $6.01m with the proceeds being used to invest in the Company's clean energy project development business in the US and Africa and for general working capital purposes
· Operations
o As previously announced, the Company continues to keep close control over its cost base and reduce expenditure where possible whilst maintaining operational functionality. The majority of these actions have now been taken including relocating three offices to significantly lower cost facilities
* Camco Clean Energy plc, on a fully diluted basis, has an economic interest of 49% in REDT.
FINANCIAL HIGHLIGHTS for the period ending 30 June 2013
· Cash and cash equivalents of €8.3m which includes cash held in escrow of €2.3m pending completion of the acquisition of the Twin Falls Biogas Facility. Adjusted net cash(1) of €6.0 million representing 2.7 pence per share
· Revenue earned in the period of €5.2m with no required carbon fair value adjustment. This compares with €3.7m revenue earned in H2 2012 which the Directors believe is a more comparative period than H1 2012 (€12.2m) as a result of the carbon price fall during the second half of 2012
· Gross profit of €2.6m compared to a gross loss of €7.4m in H2 2012 and a gross profit of €7.6m in H1 2012
· Administration expenses reduced to €4.8m compared to €5.8m in H2 2012 and €6.5m in H1 2012. Administration expenses include depreciation on the Jerome Facility of €0.4m (H2 2012: €0.4m, H1 2012: €nil). A further reduction in administration expenses is anticipated in the second half of the year which will benefit from the full effect of the cost saving measures undertaken in H1 2013