AlphaValue Corporate Services Fundamental Analysis FR
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AlphaValue Corporate Services
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Ecoslops

CR
Bloomberg   ALESA FP
Other Energies  /  France  Web Site   |   Investors Relation
The cleantech making oil residues green
Earnings/sales releases07/04/2017

Sines to reach operating profit in 2017; confirming the project pipeline

Fact

H2 16 EBITDA came in at -€1m (vs. -€2m in H1 16). The net loss was €0.8m (vs. -€2.6m in the first half).


Analysis

Ecoslops confirmed that its model should be profitable in the current oil price environment.
The Sines unit should achieve positive EBITDA in 2017 and process around 25kt (85% of capacity). In 2018, Sines is expected to run at 30kt (3,000 tons/month for ten months) and contribute a net operating profit.
It is worth noting that the P2R unit is able to treat residues at both low and high flash points: this represents a competitive advantage, given the difficulty to process low flash point waste products in Europe.
The company’s industrial track record at Sines proves the potential and quality of Ecoslops’ process. Ecoslops achieved a cost reduction of €0.7m there, while it almost doubled its revenues.

The company confirmed that three new projects should be signed by the end of 2017. This includes Marseille, where the feasibility study has been completed. The construction of the plant should start in 2018 and require €13m in capex.
The ARA project, Egypt and Oman are the frontrunner candidates for the other two units.
The effective roll-out of upcoming units should confirm Ecoslops’ proposition and enhance its attractiveness, while benefiting from the acquired experience.


Impact

We will integrate the H2 16 results. The net loss was smaller than our estimate (at -€4.4m for the full year, vs. the actual -€3.4m).


Target
Upside 82.8%
Price (€) 12.9
Market Cap (€M) 56.9
Perf. 1W: 3.61%
Perf. 1M: 13.2%
Perf. 3M: 10.7%
Perf Ytd: 13.2%
10 day relative perf. to stoxx600: 3.94%
20 day relative perf. to stoxx600: 12.0%
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