NFL announced their 2nd quarter update after close of market.
Singapore plant:
Glycerine refining has yet to start, should start during February. Looking at NFL's announcements today and previous announcements made on 16/11/07 & 12/12/07 it would seem that this delay may have to do with plans to produce biodiesel using their 1st biodiesel unit being abandoned. Latest announcement states that no biodiesel will be produced other than for testing purposes until feedstock prices improve.
Glycerine refining units 2 & 3 appear to be on track for completion in February/March as per the announcement on 16/11/07.
Crude glycerine supplies are being obtained and expectation appears that they will use the plants to their full refining capabilities, ie 60,000mta (or more if they can achieve above nameplate capacity). Refined (or pharmaceutical grade) glycerine is selling in South East Asia at prices up to US$1,800/t compared to the US$1,450/t mentioned in NFL's 16/11/07 announcement.
Darwin plant: Same as Singapore except the glycerine refining unit is already operational and has already produced refined glycerine from externally sourced crude glycerine.
Cash position: Cash at 31/12/07 was A$37.9 million, down from A$73.2 million at 30/9/07. A$31 million was spent on the Singapore plant during the quarter. I questioned the company on the Singapore plant via email and was told today that the plant is on budget. Net operating cash flow was (A$627,000), pretty good considering their own revenue was interest income of A$856,000.
Feedstock supplies: NFL are still exploring long-term alternative feedstock supplies, such as jatropha.
Overall, a reasonable announcement, at least the glycerine operations should stop the cash burn until the biodiesel plants become profitable. Much better position than some other biodiesel operators.
BGC Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
