DGAP-News

PETROTEC AG: Weaker H1 results due to pressure on UCOME prices and high feedstock prices - Seite 2

2013 to EUR 9.1 mill. as of Jun. 30, 2014. Through the agreement from the
first quarter 2014 the current loans of Petrotec's major shareholder (ICG)
in an amount of EUR 7.3 mill. were extended at least till end of first
quarter 2015. The company has reduced its total liabilities by EUR 3.6
mill. to EUR 26.9 mill. as of Jun. 30, 2014 compared to Dec. 31, 2013.
Petrotec's equity ratio improved to 50.1% compared to 47.6 % as of the
balance sheet date on Dec. 31, 2013, which is mainly attributable to the
reduced asset position.

Compared to 2013 year end Petrotec's working capital declined by EUR 3.4
mill. to EUR 13.2 mill. due to the favorable development of inventories and
trade receivables. In the period under review Petrotec generated a net cash
flow from operating activities amounting to EUR 4.8 mill. (H1 2013: EUR 7.0
mill.) mainly thanks to the decrease in inventories and trade receivables.

Regulation Update

Similar to the situation prior to implementation of 36. BImSchV, Petrotec
again faces a high level of regulatory uncertainty due to the
de-carbonization framework (mandatory blending switching from energy volume
base to a CO2 emission saving base) which should commence on Jan. 1, 2015.
Details of the implementation and monitoring are not expected to be set
before November 2014, just a few weeks before the go-live date of the
regulation. This unfortunate fact paralyses the market and encourages
buyers, the mineral oil industry, to keep their purchases of biodiesel to
the absolute minimum required.

The Spanish quota, which only accepted biodiesel produced from certified
plants to count for the Spanish mandate, came into effect in Q2 2014.
Petrotec managed to get its full capacity of two production plants
certified. Thus, it is all set up to sell volumes into this market. Since
Petrotec produces and sells sustainable double counting biodiesel, it is
awaiting the introduction of the double counting scheme into the Spanish
market, expected to take place in 2015, to further increase its activity in
Spain.

Outlook

On the longer terms management sees a further increasing of the demand for
biodiesel mainly thanks to an increasing number of countries adopting the
double counting scheme and to higher blending obligations in order to
achieve the GHG saving targets. Yet, on the short term, due to the
decreasing trend of the UCOME prices following the decrease in the FAME0
margin over gasoil, the company expects a relative weak third quarter.
Having to secure its plants' continuous operations, the company often