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Biodiesel, Any ASX companies investing in it ?
XtRmSt
post Posted: Nov 21 2005, 11:35 PM
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I take 10% commision

ABGbiodiesel.com propectus out closes 5th dec

lmaosmiley.gif

 
bello
post Posted: Nov 21 2005, 08:21 PM
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Oil and the Future. ABC Catalyst 8pm Thursday 24 Nov


 
bello
post Posted: Nov 21 2005, 08:47 AM
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In reply to: Ronin on Saturday 19/11/05 10:19am

Thanks everyone, especially Ronin, lots of reading ahead. But in the immediate term ARW seems a safe place to back the technology. I had a qiuck read of the Prospectus which is still available on their web site, and it appears that they are already saving money on development and spending. All going well, a good PE, and a div policy.

 
Ronin
post Posted: Nov 19 2005, 09:19 AM
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In reply to: bello on Friday 18/11/05 08:54am

Hi bello

ARW (and its major shareholder AMU) was the subject of that report, although it was a bit disappointing in the coverage. (I suppose that is par for the course for television though, as the medium is not conducive to in-depth analysis).

For those interested, the transcript is at www.abc.net.au/7.30/content/2005/s1508486.htm.

A great read on the bio-diesel market and its potential was included in the ARW prospectus (see www.arfuels.com.au/ausrf/files/ARF_Prospectus.pdf). That document will spell out their business model and give you a better idea of just how well they are placed to make a motza when their plants get up and running.

Two plants are already under construction (at Adelaide and Picton/W.A.) and will deliver annual production of around 40m litres of biodiesel a year. Five plants are planned, so it wont be too far off before we hear of the next plant/s being developed.

The feasibility study showed very healthy profits at prices much much lower than today's, so ARF will be very profitable indeed at current oil and - by derivation - diesel prices. ARF has an off-take agreement with a European trading house for the entire production of their first three plants (at 84cents a litre from memory) but has the right to sell elsewhere if it can get a better price. Which of course will be the case now. Based on company presentations I have been to and my calcs, I see each fully operational plant delivering profits in excess of A$8m per annum at current prices.

As an aside, ARW are using Energea technology for their biodiesel production - with continuous (as opposed to batch) processing. The technology offers considerable capex and opex advantages, and is proven technology. There is a similar scale plant (40ml pa) already successfully operating in Spain, and a much bigger (250ml pa) plant in the UK. so technology risk is minimal. As well, Energea guarantee their technology. ARW have singed a feedstock agreement with Gartner Smith, so that removes another element of risk to their production.

With two plants being contructed and due to start production next year, and three more on the drawing board, ARW looks to have a great future. It has 108m FPOs on issue which, at Friday's close of $1.30 gives it a market cap of A$140m. On the basis of estimated annual profits from its two biodiesel plants, I have it on a potential PER of 8.75. In view of its growth prospects (another 3 plants) that seems pretty skinny to me.

All up, ARW looks an attractive investment (I am exposed to its fortunes via my holding in AMU).

 
monkey man
post Posted: Nov 18 2005, 07:00 PM
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Im not sure of the output, but SAFF (South Australian Farmers Federation) are already producing biodiesel.

MM



--------------------
To give anything less than your best is to sacrifice the gift - Steve Roland Prefontaine
 
monoply
post Posted: Nov 18 2005, 06:56 PM
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Axiom Energy has a code AXE, but no price history or annoucements. Im guessing they were going to list, but never went ahead with it? Anyone know?

Cheers
mono

 


bello
post Posted: Nov 18 2005, 11:59 AM
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In reply to: Mork on Friday 18/11/05 10:11am

Thanks guys. I will have a look. Apparently Axiom Energy is another, but I can't find them listed.
BEI is another a mate told me about. I have not yet researched any of these.

As an industry and commodity that does not require huge infrastructure change by the consumer, I would be tipping this to be a very successful area to invest in, depending on company fundamentals.

 
Mork
post Posted: Nov 18 2005, 09:11 AM
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check out ARW, should be starting production this qtr.

 
The Zinc Punter
post Posted: Nov 18 2005, 09:01 AM
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In reply to: bello on Friday 18/11/05 09:54am

Hi Bello - I don't know any biodiesel comapanies but I know that ANO has a diesel nanotecnology additive that seems to be getting plenty of traction.

Not sure if that helps

Cheers
Zinc

ps - I hold a handful of ANO

 
bello
post Posted: Nov 18 2005, 08:54 AM
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I saw a very interesting report on the use of Biodiesel in Australia and Europe on the 7:30 Report, and have since heard some serious Private Equity is about to enter the market.
Does anyone know of any ASX listed companies with an investment in Biodiesel ?

 
 



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