Just to show I'm not totally negative on HYR, here's a more positive thought.
According to the Hydrodec website Canton has a capacity to re-fine up to 20,000 gallons per day and can treat PCB levels up to 49ppm. EPA permit for up to 2,000 ppm pending approval.
Australia, on the other hand, has a capacity to re-refine up to 20,000 litres per day
and can receive PCB oil of any level.
This US pcb limitation seems to be a severe restraint on Hydrodec's ability to improve the overall sales mix between higher margin transformer oil and lower margin base oil, as highly contaminated oils would continue to be burnt rather than entering the recycle chain.
The recent trading update highlights reauthorisation of the PCB treatment permit from the US EPA for a further 5 years with enhanced operating capabilities including unlimited PCB treatment (previously limited to 2,000 parts per million) and the ability to store PCB containers onsite. (note the discrepancy with the website here as the update indicates they were already operating to 2000ppm).
So perhaps we will see some good news regarding supply of feedstock going forwards as the incineration process for highly contaminated oils should incentivise recycling.
First off I think the glass half full etc analogy isn't appropriate for investing. I prefer the optimist, pessimist, realist version, and try to stay firmly in the latter camp. And I have to agree with Callun that the major points of the highlights are revenue growth of a miserable 6% and a Canton utilisation rate of 61%, which is reflected in the fact that volume sold was 4 million litres less than last year. This isn't a company going forward in leaps and bounds, it's a company that's making slow progress, which isn't enough with the debts it's got. So we'd all better pray for something transformational to come through, whether it's feedstock solutions, third party licensing deals or something else entirely (license in Japan to treat PCB contaminated oil?).
Thanks, one4all, for the blog link, it was worth reading but again ignored the problems with feedstock, implying that ramping up production would be straightforward. The blogger also makes the point that the lease debt is paying only circa 4% interest, but fails to mention the 10% interest rate (plus 1% one-off extension fee) that Andrew Black's loan is incurring, although a link to the announcement is provided. The explanation re Aviva's holding was interesting, if true it might account for why we've had no new declarations, but overall I think the blog lacked a bit of balance. The job link suggests HYR have ambition but as this Group Process Engineer is expected to take a leading role in licensing and expansion plans it suggests to me that nothing's likely to happen in the short term as (s)he hasn't even been appointed yet.
Talking of treating PCB contaminated oil, that was originally the USP of this company, and how it was going to make money, cos this was oil that the traditional users couldn't touch. That focus seems to have gone, just the last bullet point of the announcement mentioning an enhanced reauthorisation of the US PCB treatment permit. Now the focus seems to be on recycling any old oil. But still, they seem to do that better than the competition, turning it back into a premium product, so there should be ways of making a profitable business out of it.
There are some positives from this update. The $450k EBITDA has been almost entirely generated in the second half (first 6 months: $26k), so even before any hoped for progress, if the 2nd half performance is duplicated this year it should mean maybe $1m EBITDA for 2018. And the continued improvement in oil sales mix towards the higher margin transformer oil is another plus. However it seems that profit is a long way off yet as all Chris Ellis talks about is, ability to deliver an improved positive EBITDA in the coming years. The loss for the first 6m was $2.5m on a basically break-even EBITDA, so on those figures it's going to need an EBITDA of $5m plus to show a yearly profit.
So I'm certainly less confident about my investment than I was a month ago, and I definitely don't see any significant short term gains any more. Is that a glass half empty attitude? I don't think so.
Again, yes, your comments are, of course, an accurate reflection of the past performance of HYR.
I would ask you to forgive our enthusiasm because, I for one, am more recently arrrived and have not endured the pain and disappointment of the past.
There is something fortuitous in being a newbie, able to get in at the bottom of the cycle (hopefully) and therefore being in a position to profit from a rising sp (if it happens) rather than trying to recoup losses.
Pardon me if I can't join your enthusiasm for these points you mention. I have been a shareholder for many years and grown cynical after reading similar enthusiastic reports year after year that have still to improve the share price.
For instance, in 2013 EBITDA was highlighted as $0.2M profitable.
Revenue was up 54% to $40M, against today's reported $17.8M
Total oil sales were reported as 37 M litres, against today's 29.3M.
Canton utilisation 78% (before the fire).
Ok, so I've cherry picked a few figures, but check other reports and you will find a tale of positive growth in just about everything they measure, but we seem no closer to seeing a profitable company.
By 2014 the company was debt free and "on the cusp of profitability" according to proactive Investors. Four years on, and the SP is struggling to remain above 2p?
Whatever happened to the exciting development opportunities promised in 2012? The visions of earlier years disappeared with Ian Smale, it seems.
I can see calluns point, there is an ongoing problem with feedstock which is undoubtedly slowing progress. But tk also has a point worth noting about margins, revenue and profitability, all of which are valid.
So, the basic difference here is between glass half full and glass half empty.
There are some remaining challenges but Im a glass half full type. Still holding and watching.
You have conveniently left off the second half of the sentence. They may have sales orders but without the feedstock they will be unable to fill them. This is not a new problem but so far they have failed to deal with it satisfactorily. If they don't, I can't see the SP doing much better than bumbling along the floor.
Good results as predicted with positive EBITDA, already confirmed sales further improving already this year.....2018 has begun strongly in terms of sales orders in the US and Australia. Onwards and upwards........
Very disappointing if you were expecting evidence of strong growth to come.
Revenues up an uninspiring 6%.
Whoopee, positive EBITDA. There was a time, long ago, when they talked of actually making a real profit.
Canton utilisation a miserable 61%. Not much use having "robust demand for superfine products" if you can't produce them. With a strong demand to use what would be feedstock for fuel suggests that this will be an ongoing problem for some time. Have we already seen the peak practical Superfine production rate?
Predictably SP knocked back by this update.
All this in an improving environment for oil related businesses.
Again II failing its customers. Todays trading update does not appear in the news section.
Good progress reported by the company (HYR that is) with a really positive outlook for 2018.
Fall back in sp possibly due to the expected licensing news being absent.
But, hey, a good chance to topup.
Come on II. Time to get your systems sorted, it is almost 2 months since you introduced the new platform!!
In anticipation of next update, due soon.
BUY (posted in absence of the availability of the recommendation buttons above: I thought this problem may have been addressed in yesterdays shutdown, but, no !)
I think the story about the technology has been out in the wider world for a long time, the question has always been, can this company actually use it to make money, and the answer so far has always been a resounding, No. Maybe this time it will be different (but maybe not).
I was half expecting this rise when I noticed the 50-day moving average had crossed above the 200-day one, a bullish sign for chartists. Could well be just traders looking to make a quick profit.
But, whatever our views, I think we're all hoping it might be sustainable this time.
I was referring to the whole HYR story, Callum. The patented process, the carbon credits, the green credentials created by recycling, the huge implication for the whole oil industry (unless youre burning it to heat your house or make electricity, etc, you can recycle). The sooner this message gets out into the wider world the better.
And then shareholders will see some action :-)))
Problem here is that if HYR gets too ahead of itself and appears above the parapet itll be bought out by one of the big oil companies who will then bury the tech and the patents for good. That would be shameful and should be resisted if they try it.
Well, timing is the key, as always. If youre in too early theres a risk of price erosion. If youre in too late you miss valuable lift. Try8ng to gauge the bottom is never easy.
However, for those joining recently(like I have) there may be reason to be joyful ;-)))
Glass half full here
Always takes a little while to get a foothold. There are lots of established businesses that dont want to see it happen and do what they can to hold things back.
The PoO is working in our favour here and will help.
But, patience is the key. Dont buy here if you want a multi bag overnight.
Longer term, and as the business gains traction, this will fly.
OK, so maybe 50p-£1 is a slight exaggeration but I do think there's some cause for optimism regarding the share price, in the short term (6m) at least, so I've actually gone and bought again today. Now praying that the oil price holds up at least into the middle of next year, cos I'm unsure about how much of HYR's operating improvement is down to the company and how much is just down to the improved oil price.
Finally sold out. Who's bought the last 7.18%, I wonder. I assume it was their 53.5m that boosted the volume yesterday, but still the SP rose. Must have been an eager buyer to take that many, and I expect we'll see a declaration soon.
Nice to get this particular monkey off HYR's back. Might help put a bit more upward pressure on the share price.
Results slowly improving, long term seller gone, 50p next week :-)
However, from a personal perspective I am still to be satisfied with the speed of our progress, Chris Ellis, CEO.
Can't say I'm satisfied either. Nice to see operating cashflow positive, but at $426k it's less than the $570k finance costs, and wouldn't even be positive if it wasn't for an increase in trade & other payables of $677k. I can understand why he's assessing, strategic acquisition opportunities and partnerships cos paying off the debts is going to take several years at this rate of progress. But with the current state of HYR's finances you can be sure that any acquisition or partnership will further dilute our holdings, in one way or another.
They've got to get the feedstock issue in USA sorted out. I thought the collaboration with G&S was supposed to solve this. Canton utilisation rate 61%. What's the point of extra trains if they can't get the feedstock to supply them?
Might as well put this away for another 12-18 months and see if there's any value left then.
Ho, hum, the more things change, the more they stay the same.
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