Eco (atlantic) Oil & Gas Share Discussion Threads

[mdchand] 21/4/2006 09:29

Broker: ABN Amro
Date: 21st April 2006
Subject: EcoSecurities - Very creditable progress

EcoSecurities has made strong progress since its IPO and its diversified portfolio continues to grow. Demand for CERs is increasing and, armed with a strong balance sheet, the group is capitalising on its early mover advantage. We initiate coverage with a Buy rating.

> Solid progress since IPO
EcoSecurities has shown strong progress since its IPO with a 25% increase in mostly higher margin projects. Gross contracted volumes have increased 30% to over 90m CERs and the group has been adding to the portfolio at a rate of 10m CERs per month, well in excess of its necessary run rate. While this is likely to slow moving forward, we expect a significant increase in its portfolio to 166m by year-end.

> Demand is rising, market activity is increasing
The group is seeing significant demand for CERs, particularly from European compliance buyers. EUA prices are up materially since the year-end and have recently traded above cEUR 30/tonne. CER prices have increased to EUR 15 in line with EUAs and we believe EcoSecurities' stronger balance sheet and higher profile post IPO enhances its negotiating position in securing prices at the top end of the market range.

> The group should be highly profitable and cash generative
The group is putting in the infrastructure for a substantially larger business. We forecast pre-tax losses of EUR 17.3m in 2006, but a large increase in carbon credit sales to 12m tonnes in 2007 based on an average price of EUR 15. We expect this to drive a swing in profits to EUR 9.0m. In 2008, we expect 27m CERs sold at a flat price of EUR 15 resulting in pre-tax profits of EUR 76.7m.

> Valuation looks attractive
We initiate coverage with a Buy rating and 300p price target. We believe EcoSecurities represents an excellent opportunity to play the fast-growing carbon market. Its rapidly expanding portfolio is a real asset and should yield significant benefits with profits forecast from 2007. The group trades on 2008F PE of 5.4x, which we view as attractive for a high-quality business operating in a growth market that looks increasingly likely to be extended beyond 2012. Our conservative DCF analysis to 2012 produces a value of 193p/share rising to 300p/share with a post-2012 option.

Recommendation Buy
Target Price £3.00

[olivepeel] 18/4/2006 20:31

this is just the sort of chart & thread I like

[artful dodger] 01/4/2006 16:11

carbon trading is with us and imo it's worth having at least a toe in the water

I welcome views on carbon trading and investing in the 'new' economic areas that arise as we work into the 21st century.
ironic how the century is beginning with a bull market in oil and commodities just as we start to try to get to grips with the damage that the last century's emmisions have caused.


web site


Chairman's Statement from results 03/06

EcoSecurities made considerable progress in 2005, culminating in the admission
of the Group's shares to trading on AIM in December. During this period, the
Group expanded rapidly, opening up a formal office in India and working towards
establishing full offices in China, Thailand, Indonesia, Malaysia, Mexico and
Chile. The Group has also increased the number of its employees to improve its
ability to originate and implement projects, growing from 27 employees to 85
employees at year end. At 28 February 2006, the Group had 104 employees, and
expects to grow to approximately 175 employees by the end of 2006.

2006 has started well as the Group, with the benefit of the recent capital
raising, seeks to take advantage of its position as one of the world's leading
originators of carbon credit projects. Operationally, we plan to continue to add
a significant number of employees to our locations in China, Thailand, Brazil,
India and Indonesia. To accommodate this growth, EcoSecurities has initiated an
office expansion in New York and is moving to new premises in Oxford and Dublin:
these projects are expected to be completed by 1 June 2006.

EcoSecurities has also separated its Consulting Division from the remainder of
the Group in order to allow the business to focus on the expansion of its
services, operating mostly from its offices in The Hague. At the end of 2005,
the Consulting Division received, for the fifth consecutive year, the award of
Best CDM/JI Advisory Group, based on a reader's survey conducted by UK's
Environmental Finance magazine.

The focus of the Group remains on project origination and development, and the
commercialisation of its carbon credit portfolio. The development of the market
and the Group's start to the year give the Board confidence for significant
growth in 2006 and beyond.

[asparks] 24/3/2006 10:35

General Alternative Energy Discusssion Thread

[stingray1690] 24/3/2006 08:44

I presume there was quite a positive broker note released, although I can't find anything yet.... afterall not much of a reaction to quite a good set of results...

S

[asparks] 23/3/2006 15:44

can anyone explain the trading that appears to have occurred today? It seems to be all over the place

[zapherz] 27/2/2006 21:32

Econergy and Ecosecurities are setting a good precedent for carbon credit companies prior to the Camco float next month.

Z