Hydrodec Share Discussion Threads

[the shuffle man] 30/11/2012 08:27

But in return Hydrodec will get 5% of all sales which goes straight down to the bottom line. We need to see more details but as is said before this could be the game changer we have been waiting for.

[capricious] 30/11/2012 08:21

It's certainly one of the better alternatives we've hoped to see, rather than a straight dilutive offering.

And 50% of something that has a future expansion route that can double current capacity, with 5% royalties, is just great.

Surely this will push the share price to previous highs.

Well done Hydrodec!

[capricious] 30/11/2012 08:13

So effectively they sell just under a half of the entire US business or of a new venture? I'd really like an estimate on the amount, this may significantly reduce the CUL debt overhang, or more likely help expansion in other business areas(US/Japan, Industrial oils etc).

I can see a major utility using such a venture to gain environmental credentials and at the same time gain feedstock security (costs etc)

The small note seems to understate the huge impact of the change.

I wouldn't be surprised if after a few more years, the new partner tries to buy the remaining operations. Still if we can get Japan on track and partnerships with Lubricant blenders, things look pretty bright.

Hi Shuffle, just saw you mentioned the capital, I was writing mine as you posted.

[the shuffle man] 30/11/2012 08:08

They are forecast to make an EBITDA loss of $2.8m this year.

Is this deal a game changer for the company. Presumably the money coming in will plug the capital shortfall that has been mentioned, possible allow the debt to be repaid and allow for the continued expansion of the Group.

The feedstock supply is impressive. Can this model be rolled out across the whole US.

[vitamal] 30/11/2012 08:02

Earnings before interest tax and depreciation amortisation I think

[the shuffle man] 30/11/2012 07:58

Looks like great news but can someone please explain. The JV will pay 5.5x EBITDA of the US company for the year ending 31/12/12. But there are no earnings as the company is currently making a loss, so how does this work ?

[vitamal] 30/11/2012 07:11

Sounds like a positive move

[sueyou1] 28/11/2012 13:44

Nice to see some blue!

[capricious] 28/11/2012 11:31

It's obviously a good sign that the share price now responds quickly to good news, even if that news has been expected and initially relatively small. Good change.

[capricious] 28/11/2012 09:55

Thanks Wes1

[wes1] 28/11/2012 09:19

NOTICE OF DECISION TO GRANT A SPECIAL IMPORT PERMIT UNDER THE
HAZARDOUS WASTE (REGULATION OF EXPORTS AND IMPORTS) ACT 1989

28 Nov 2012

The particulars of the permit are as follows:

(a) the hazardous waste to be imported is waste transformer oil containing polychlorinated biphenyl;

(b) the quantity of the waste to be imported is a maximum of 2700 metric tonnes;

(c) the waste will be packaged in International Standards Organization (ISO) tanks;

(d) the method of transport by which the waste is to be imported from System of Energy, SA de CV, Avienda Tercera 1675, Colonia Eduardo Guerra, Torreon Coahuilla 27280, in Mexico is:

(i) by ship from the ports of Manzanillo, Lazaro Cardenas and Veracruz in Mexico to Balboa in Panama;

(ii) by ship from Balboa in Panama to Auckland in New Zealand;

(iii) by ship from Auckland in New Zealand to Sydney in Australia; and

(iv) by road from Sydney to the Hydrodec facility at Young, NSW 2594.

(e) no shipment is authorised under this permit before the date above or after 18 November 2013; and

(f) after the import, the waste is to be recovered at the Hydrodec facility at 90 Old Temora Road, Young, NSW 2594, through recovery operation R9 re-refining or other uses of previously used oil.

[luminoso] 27/11/2012 17:07

Good article. Could explain todays rise ?

[dreamtwister] 26/11/2012 18:29

video presentation posted on here mentioned that hyr cleaned up a contaminated site.
& went on to build a plant,i wonder if they used thier sister company's technology, if so ? the same senerio could be implemented to the land of the rising sun.

[sueyou1] 26/11/2012 16:56

Hydrodec

I'd imagine few readers have come across Hydrodec before. This clean-tech industrial oil-rerefining group is listed on AIM and has a market capitalization of little more than 50 million pounds. Revenue has grown sixfold over the past five years, but the company has yet to make a profit.

On the face of it, that may not sound too promising. However, Hydrodec has pulled off something of a profile-raising coup with the recent appointment of a new chairman: Lord Moynihan. The energy minister from 1990 to 1992, Lord Moynihan recently stood down as chairman of the British Olympic Association after a seven-year term during which he oversaw Team GB's successes in the Beijing and London games.

Since the announcement of Lord Moynihan's appointment as the chairman of Hydrodec in October, he and his fellow directors have been buying shares with abandon:

(list of buys)

A fairly impressive show of faith from the directors of a loss-making company, I think you'll agree! The shares are currently trading at 11.25 pence.

Contrarian
The five companies in this article all face challenges of various sorts in the short term, but the directors have backed their businesses against the market's present valuation of them.

[obbig60] 26/11/2012 16:11

Some big share trades today with little impact on the price, what's going on?

[burlington] 20/11/2012 16:31

Large buy at 15.15 1050000.
My top up shown as sell.

[capricious] 16/11/2012 12:19

I've been trying to get enough info to post about feedstock/resale margins, but unless you subscribe to something like icis, it's difficult to get up-to-date pale oil prices.

What I've gleaned from previous articles and the eia.gov website I managed to get some past prices for comparison, then using trade outlets and converting price per ton (fob) (converting from metric to US where needed) and the average gallons per ton (294) of Pale oils, I came up with :-

Feedstock (no2 Diesel oil, 'spot') vs resale (Pale 60), approx spread

Nov 2011 $3.1 vs $3.88
Mar 2012 $3.3 vs $4.1-4.3
May 2012 $2.99 vs $4-4.25
Nov 2012 $3.18 vs $4-4.2*

The spread looks to have been stable throughout much of this year, but there is an increasing demand for distillate fuels, which may have an impact of feedstock costs.

I believe the spread between actual Superfine resale to Pale 60 benchmark, has narrowed, meaning margin improvements have come from greater industry acceptance of Hydrodec's product.

* some were quoting in excess of $1500/ton, but I'd be really surprised if they are accurate as that would make for over $5/g.

[capricious] 12/11/2012 11:52

Here's the article that has been mentioned, I cannot vouch for the accuracy as it is a copy/past.

---
Investors should resist any temptation to chase the plethora of director purchases at industrial oil refining specialist Hydrodec. The shares remain a sell until the business plan is further de-risked.

Last week Chairman Lord Colin Moynihan paid £98,750 for 790,000 at 12.5p apiece to add to a 2.2m share swoop worth £198,929 last month.

Hydrodec's patented protected processes clean contaminated industrial transformer oil so it can be re-used with little environmental impact. Sales rose 37% to $13.9m in the six months to end June, thanks in part to diversified feedstock channels and a broader customer base.

But investors should remain on their guard. The company is still in the red and continues to burn cash, eating through $700,000 in the first half, before investment in new business. It also has to re-pay a £12.8m loan within the next two years after a share conversion option lapsed last week, paying 8% interest a year in the interim.

Lord Moynihan, Britain's minister for energy under conservative leader John Major between 1990 and 1992, is a veteran company director and investor. He took over as Hydrodec chairman just three weeks ago when he succeeded Neil Gaskell.

Finance director Chris Ellis and non-executive director Andrew Black, the Betfair founder, have bought shares worth £542,894 between them in the past couple of weeks.

Shares says: a jam tomorrow story worth to watch but not buy just yet. Sell 13p.

---

As posted before, the timing is a little opportunistic, released as the share price was already collapsing down after the not unfamiliar spike up.

It doesn't offer anything new, as it's a rehash of previously known analysis.

[quilarvium] 11/11/2012 18:13

Well I do believe in the long term future of growth in hydro but given the current chairing and volatility it is also a great one to trade on a regular basis.This technology is world beating and the world catches on slow vey slow, so there is a fortune to be made trading this or buying heavily into it for long term value as the I rectors have.A director knows what is happening before the city has a clue in shares like this.Hydro are high risk but high reward if you believe the new statutory regulations for May 2013 regarding USA recycling are about to be up onto the agenda.Good luck with your investments.

[capricious] 09/11/2012 10:58

Did the article mention what the $700k was for, i suspect much may include the plans for forward looking growth, instead of basic running costs?

It seems we are getting an acceleration in the large utilities coming round to alternative disposal/renewal. Obama's re-election is at least likely to see a continued move in this direction, lest they get slapped with uncompetitive taxes or the like.

It's getting late in the year, so I guess the first fund raising will be early next year with maybe a second later on. Hydrodec's market penetration is confirmation of growth prospects in the US domestic market. Once they have the first set of funds, based on previous performance, expect the team to progress in a safe and efficient manner, with minimal disruption.

Sadly I've pretty much discounted any progress in Japan. The disparity between the early stages, and now, is stark, which points to something major. I await to be surprised.

[capricious] 09/11/2012 10:36

Hi all,

I haven't seen the article, but as Shuffle says, it isn't new news. The timing of the article, just as they see the price come back down after the spike to 14.5p, is a little opportunistic, although of course the sentiment of risk has been there for a long while.

The aforementioned spike, is something that has happened many times with Hydrodec, with Monday being a day to watch out for. The price is given free reign being very much out of character, and then quickly collapses. I hope it can remain around these levels without requiring further news.

I believe the $5 million is probably what the board plan on raising to kick off their first stage expansion plans. With the two years and some good progress in business (new and old), it may provide better funding terms, at least that is my thought. They could even offer new CULs to pay for the previous with different terms, less dilutive etc. Not great, but it will be done on the backdrop of growth, rather than nosediving into a recession (touch wood).

[the shuffle man] 09/11/2012 08:12

The article basically says until they derisk the business plan they rate the shares a sell. They burnt through $700,000 in the first half and now need to find £12.8m over the next 2 years to repay the CULS that were not converted.

I suppose this is not new news and should have been taken into account in the latest Eddison note.

Does anyone know where Eddison get their $5m shortfall figure from.

I dont think the directors would have put alot of money into this if they werent confident that things would turnaround to take care of all these issues.

[quilarvium] 09/11/2012 07:36

Well it's great with a bit of bad news ref that article.This should fall further.