Cleantech industrial oil re-refining group Hydrodec Group (LON:HYR) saw its shares fall during the Friday session, upon posting a disappointing set of full-year fundamentals.
The Group’s EBITDA loss of $1.2 million for 2018 was almost tripled during the 2019 full year, widening to $3.2 million. This was partially led by a contraction in the company’s revenues, down from $14.9 million to $11.6 million, which it said was impacted by working capital constraints.
The company continued, saying the decline in its gross unit margins reflected the higher cost of feedstock during the first half.
The reduced sales volumes of its oil products – from 23.0 million to 18.3 million on-year – were attributed to feedstock and working capital constraints during the second half. It reassured stakeholders that demand for SUPERFINE products “remains robust”.
Hydrodec Group comments
The company’s Chief Executive Officer and Interim Executive Chairman, Chris Ellis, responded to the update:
“Since stepping back into the role of CEO in Q4 2019, the conditions under which the Company has operated have been very challenging, as was communicated in the Company’s interim financial statements released in September 2019. Working capital constraints, by necessity, have a material impact on our ability to source feedstock, which in turn drives volume, margin and overall financial performance. It is in this context that the 2019 performance should be viewed and whilst, overall, it is extremely disappointing, there are some encouraging signs of early successes with our sustainability strategy, and this, together with traction with major US utility companies, gives me cause for greater optimism going into 2020.”
Following the update, Hydrodec shares dipped 29.76% or 3.05p, to 7.20p per share 14/02/20 16:30 GMT. The Group’s p/e ratio and dividend yield are unavailable, their market cap stands at £1.99 million.