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Trading statements

Active Energy Group expects FY loss

24 March 2016 07:50

Active Energy Group expects to report a loss for the year ended 31 December despite strong trading by its AEG WoodFibre division in the fourth quarter.

The group expects to publish its preliminary results for the year ended 31 December in early June.

The company has provided an update on trading in each of its divisions ahead of the release of the results:

AEG WoodFibre: AEG WoodFibre's trading concluded strongly in Q4:2015 and the division has continued to trade well in 2016, maintaining margins, although on volumes of approximately 23,500 tonnes per month, compared to approximately 27,000 tonnes per month in Q4:2015, primarily as a result of poor weather in January. The Board continues to anticipate that the division's new softwood production line will commence operating in Q2:2016, which will further enhance its operating capacity.

AEG TimberLands: Since the announcement on 7 December 2015, AEG has continued to negotiate with a fourth Métis Settlement and to commission at the Group's expense further due diligence on behalf of potential investors.

However AEG TimberLands' joint venture has continued to experience delays in its dealings, including matters related to the Alberta Government. The Board is trying to resolve these issues, but the delays have meant that forestry operations have been postponed beyond Q1:2016. As a result of the delays in the commencement of operations, approximately US$0.6 million of AEG expenditure relating to this division in 2015, which the Board had planned to capitalise, will now be charged to the profit and loss account.

A further announcement concerning AEG TimberLands will be made when appropriate.

AEG CoalSwitch: The Group announced on 7 March 2016 that the University of Utah's Clean and Secure Energy Institute had concluded that AEG CoalSwitch's technical and commercial viability for use as a standalone fuel, or co-fired in high concentrations with coal in traditional coal-fired power plants, provided significant environmental and commercial advantages to industrial power generators.

The Board believes that the successful outcome wholly justifies the Group's investment in this technology, which in the year ended 31 December 2015 amounted to approximately US$0.3 million.

Taking into account the above, the Group will report an operating loss for the year ended 31 December 2015 greater than that for the prior year.

Notwithstanding this loss, primarily as a result of the strong Q4:2015 trading of AEG WoodFibre and the Board's control of central costs, cash balances at 23 March 2016 amounted to in excess of US$1.0 million (30 June 2015: US$0.9 million). Chief executive Richard Spinks said: "These results demonstrate the importance to the Group of its profitable operations in AEG WoodFibre in Ukraine, which have enabled the Group to continue its investment in its exciting new opportunities in AEG Timberlands and AEG CoalSwitch. Although the Board is disappointed that it will be reporting losses for the Group for the full year, we remain very excited by the potential of AEG TimberLands and, particularly at the present time, AEG CoalSwitch."

Story provided by StockMarketWire.com

Related Company: AEG

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