Preliminary Results for the year ended 31 December 2004 and Placing of 9,732,617 New Ordinary Shares
D1 Oils plc ("D1 Oils"), the UK-based global low cost producer of biodiesel, announces its results for the year ended 31 December 2004 and Placing of 9,732,617 New Ordinary Shares at a price of 265p (the "Placing"), raising funds of £25.8 million (gross of expenses).
D1 Oils is expanding its operations in new and existing territories to meet the increasing scale of opportunity in the biodiesel market. The net proceeds of the Placing of £24.3 million will be used to leverage these opportunities and meet the growing demand for biodiesel as a sustainable renewable fuel resource, assisting D1 Oils in its objective to become a leading producer of biodiesel and related feedstocks.
Results and Placing:
• Net proceeds from Initial Public Offering in October 2004 were £11.5m
• Operational expenditure was in line with expectations, despite acceleration in D1 Oils' business plans leading to loss on ordinary activities before taxation for the year ended 31 December 2004 of £3.1m
• Cash balance was £9.6m on 31 December 2004
• The Placing announced today raised £24.3 million (net of expenses)
• 9,732,617 New Ordinary Shares have been placed at a price of 265p per Ordinary Share
2004 and Q1 2005 operational highlights:
• Indian joint venture company, D1 Mohan Bio Oils Limited, expanded its initial planting target of 5,000 hectares to 100,000 hectares
• Joint venture with Jazeera Modern Technology of Saudi Arabia announced to oversee planting of 5,000 hectares and up to 100,000 hectares of Jatropha in the desert outside Riyadh
• Secured £25 million of third party financing for D1 Oils' global operations
• Current specification of D1 20 refinery successfully completed its 24/7 test
• Original planting programme expanded to cover in excess of 267,000 hectares, a seven fold increase over the 37,000 hectares of land stated in D1 Oils' Admission document
• D1 Oils intends to deploy up to 9 D1 20 refineries by the end of 2006 as against a previous target of 3 stated in its Admission document
New developments not previously announced:
D1 Oils also announces today details of new joint ventures in China and Saudi Arabia highlighting the additional global opportunities D1 Oils is pursuing.
• In China, D1 Oils has entered into a conditional 50 year joint venture agreement with Sichuan Yangtze River Technology Company Limited, Chengdu, to develop a Jatropha biodiesel refining and feedstock supply business for the Chinese and International markets with a target of producing 500,000 tonnes per annum from the region as soon as practical. A minimum of 150,000 hectares and up to 2 million hectares of land is to be procured for the project
• In Saudi Arabia, D1 Oils has entered into a strategic alliance agreement with Abdullatef Al-Rajhi International Group for the design, development and implementation of waste water management facilities and infrastructure for the reclamation of up to 300,000 hectares of land suitable for producing Jatropha crops
Current trading and Outlook
Since the financial year-end, D1 Oils' business has continued to trade in line with the Directors' expectations and the Board remains confident about the prospects of D1 Oils during 2005. Certain key business goals have been accelerated, including the extension of planned planting programmes and expansion of D1 Oils' operations in existing and new territories. D1 Oils will continue to implement and execute its business plan and will continue to strengthen the security of its supplies by expanding its portfolio of sources of oil.
Commenting on the results and Placing, Karl Watkin, Chairman of D1 Oils said:
"I am pleased to be able to report that D1 Oils is making excellent progress and has accelerated certain key components of its business plan. D1 Oils has further increased its opportunities worldwide as the market is getting stronger, partly through Kyoto and International government policy initiatives, giving us the opportunity to gain a further competitive advantage in key markets. The Placing announced today will help D1 Oils to secure a leadership position through enabling the company to pursue a more aggressive expansion policy and is a key step towards our objective of becoming a leading sustainable global low cost producer of biodiesel."
Philip Wood, Chief Executive of D1 Oils said:
"The Placing and new joint ventures announced today will enable us to expand much more rapidly. We have increased our total planting targets seven fold since last October. We expect China and India to be two of the largest markets in the world for biodiesel. In addition to the expansion of our business in India where planting targets have increased twenty fold, we now have an exciting new joint venture in China with the potential to put us in a market leadership position. Mirroring the substantial increase in our capacity to produce oil bearing seeds, we intend to significantly expand our access to refining capacity, including increased deployment of our proprietary D1 20 refining technology."
D1 Oils plc
Karl Watkin, Chairman
Philip Wood, CEO
020 7321 3885
020 7586 6641
Notes to editors:
D1 Oils plc is the owner of technical, marketing, logistical and other intellectual property related to the establishment, development and harvesting of jatropha plantations, the extraction of oil from the harvested seed and the production of biodiesel and other valuable by-products from the vegetable oil.