London-based HydroDec Group PLC said its pre-tax loss widened in the first half of 2015 after “short-term issues” and lower oil prices negatively impacted earnings.
The clean-tech industrial oil re-refining group reported a USD 7.6 million pre-tax loss in the first six months of 2015, widening from the USD3.1 million loss a year earlier as revenue dropped to USD 19.8 million from USD 25.4 million.
Sales in the first half rose to 33.2 million litres of refined oil products from only 25.5 million litres, which was boosted by the acquisition of Eco Oil Ltd in April.
The company said the ramp up to full production of its Canton, Ohio, U.S. plant has been slower than expected. Four out of six trains are operating at a reduced rate, producing approximately 38,000 litres of SUPERfine™ base oil per day.
In the UK, lower oil prices have created a significant market dislocation in supply and demand for used oil and used oil products.
“Hydrodec UK has responded, and continues to react to, and operate in, a tough trading environment, with a second phase of restructuring underway. The security of feedstock supply delivered by the combined business underpins the rationale and longer term strategy for a UK re-refinery where base oil margins are less volatile and continue to trade at a significant premium to fuel oil,” it said.
Earlier in 2015 at the company’s annual general meeting, it laid out a six-point plan to boost company earnings. That plan consists of delivering the U.S. plant; embedding the outsourcing relationship with Southern Oil in Australia; delivering a leading waste management business in the UK; building a technology platform through patents and partnerships; building out the lubricant and oil re-refining market and creating growth by de-risking technology through partnerships and integration in the value chain.
“The key elements of this comprehensive strategy are in place; the board and management all believe that delivery of this strategy and plan will drive the company to profitability.”