D1 Oils remains positive despite first half sales drop

Sep 9 2009 By The Journal

TROUBLED biofuel company D1 Oils has seen its half-year sales drop further, from £2.2m to £1.5m, as it continues to seek extra funding for its jatropha planting venture.

The firm announced in July that it was buying back oil giant BP’s 50% stake in the joint venture to plant the crop used to make biofuel for £0.5m after it failed to attract a third investor.

D1 altered its focus from biofuel production to jatropha growing last year when it closed refineries on Teesside and Merseyside with the loss of 90 jobs.

However, the Middlesbrough company, which was founded by North East entrepreneur Karl Watkin, still believes it is in good financial shape, despite incurring further net losses of £2.8m in the six-month period.

The board believes it is still cash positive, with cash equivalents and term deposits of £12m, and expects to be launching the first Jatropha seeds to farmers between the remainder of this year and early 2010.

As well as its use as a biofuel, the firm also said it was developing the use of Jatropha by-products for use in animal feeds.

Chief executive Ben Good said: "Our new unified management team has made a strong start to restructuring and streamlining operations.

"We believe the company is now well positioned to implement a business plan that will demonstrate value within existing cash reserves. We will continue to focus on our use of cash across the group, tightening our geographic focus and concentrating on investment in plant science and realising delivery of crude Jatropha oil and co-products from our existing planting. Cash-flow forecasts approved by the board show the group will remain cash positive at least until the end of 2010."

The firm’s plant at Riverside Park in Middlesbrough has now been bought by Middlesbrough logistics company AV Dawson. Chairman Brian Myerson said: "Biodiesel will form a growing proportion of global energy use over the next decade, particularly in developing countries.

"D1 Oils concentrates exclusively on the commercial development of Jatropha curcas. We are positioned to capitalise on our experience in planting and husbandry and our established lead in the science and technology of the crop."