Interim Chairman’s Statement 2010

February 28 2011

The six months ended 30 September 2010, and the period since, were characterised by further considerable change as NTR plc (NTR) continues to evolve as a diversified Renewable Energy and Sustainable Waste Management Group. These changes are a reflection of the Group’s decisive response to rapidly changing and very challenging trading and capital markets conditions.

Renewable Energy

Wind Capital Group (“WCG”), our US wind development business has, following a long period of shortages in available utility Power Purchase Agreements (“PPAs”), recently secured PPAs for 250 MW of new Wind Development projects in the US Midwest. These PPAs were secured following competitive tendering processes and are a clear demonstration of the quality of WCG’s development pipeline and its highly competitive market offering. WCG will continue to bid for further PPAs, while in parallel, preparing for new project construction to commence in quarter 3, 2011. In line with its ability to identify and exploit new market potential, the company has also recently signalled its intent to broaden its footprint from the Midwest to other less mature wind markets within the US, including the South-East.

Stirling Energy Systems (“SES”), our solar manufacturing business was, as I stated in my last report, severely impacted by prevailing capital market uncertainties. These uncertainties meant that SES has not been in a position to secure new equity financing to enable it to continue SunCatcher commercialisation in the originally envisaged timetable. Accordingly, this business has, since the half year-end, been very substantially restructured, resulting in a significantly reduced level of cash spend, while the business continues with the engineering development of the technology as it seeks a strategic partner to further progress SunCatcher commercialisation.

Tessera Solar North America (“TSNA”), our US solar development business, received final permitting consent for its Imperial Valley and Calico projects in California during October 2010. Since that time, TSNA has entered agreements to dispose of its interests in these projects. The purchasers will fund further development expenditure on these projects, in return for which TSNA will receive certain upfront payments, together with further payments on the achievement of specified development milestones over the coming 24 months. These transactions help to optimise the value of the recently permitted projects through short-term deployment of solar power under different ownership.

Green Plains Renewable Energy, Inc. (NASDAQ:GPRE), the fourth largest ethanol producer in the world in which the Group holds a 31% equity interest, has a total production capacity of some 660MG per annum, which is soon to expand by a further 55MG per annum with the acquisition announced in recent weeks of a dry-mill ethanol plant in Minnesota for US$55m. In addition, Green Plains’ balanced portfolio includes upstream grain storage and agribusiness operations and downstream ethanol distribution. In its latest published results, Green Plains reported a sixth consecutive quarter of revenue and earnings growth, with revenues of US$1,813 million and earnings of US$55 million for the four quarters to 30 September 2010.

Sustainable Waste Management

Greenstar, our Sustainable Waste Management business, faced different trading conditions in its two markets. While we have seen some improvement in trading conditions in the US, the situation in Ireland remains challenging and is further exacerbated by continuing regulatory uncertainty.

In Ireland, a combination of lower front end volumes and pricing, and non-commercial landfill pricing has resulted in severe pressure on overall revenues and margins for Greenstar Ireland. This pressure has been eased somewhat by significant cost reductions and operational restructuring and the successful integration of the recent acquisition of Veolia’s Irish waste operations. However, the restoration of sustainable returns in this business will require policy uncertainty to be resolved in the market so that Local Authority and private sector landfills are treated equally on all matters. This should result in the restoration of commercial landfill pricing.

Greenstar North America (“GSNA”) continued to consolidate its position as the leading recycling led waste management business in selected regional markets across the US. It recently announced the upgrading of its 90,000sq ft facility in Houston as the first single-stream recycling facility in that city and the opening of a new recycling centre in Poland, Ohio.  The business, headquartered in Houston, Texas, has strong regional market positions in Texas, Iowa, Pennsylvania and New Jersey. As its positions in these markets are further consolidated, the opportunity exists to expand the business footprint in adjacent regional markets.  As part of our effort to create national awareness for the “Greenstar” brand, GSNA recently entered an agreement to be the lead sponsor and exclusive waste service provider to the Houston Dynamos NFL team.

In August 2010, the Group completed the sale of Greenstar UK, our UK waste management business, for net proceeds of €96 million.


Financial Results

Group Revenue from continuing operations for the six months ended 30 September 2010 was €168.0 million, compared to €118.0 million for the same period last year, an increase of €50 million.

Group EBITDA loss for the period was €54.3 million, which includes costs of €73.8 million in our solar division. These costs have since been significantly curtailed. EBITDA in our core wind and waste businesses and NTR’s share of the net income attributable to theethanol business totalled €23.2 million, compared to €11.3 million in the comparable period last year.

The Group recorded an operating loss from continuing operations for the six months of €90.9 million, compared to an operating loss of €60.6 million for the same period last year.

Net Group financing costs for the six months were €19.1 million, compared to €5.4 million for the six months ended 30 September 2009. After tax and minority interests, losses attributable to equity holders in NTR were €94.9 million.

Total assets amounted to €1.26 billion and equity attributable to shareholders amounted to €521.6 million at 30 September 2010.



At 30 September 2010, NTR had liquid resources in the form of cash held at corporate level, of €102.1 million.  Since then, the Group has sold certain of its Roads assets for net proceeds of €29 million and has secured the release of funds held in escrow amounting to €12 million. When viewed in conjunction with the actions taken to eliminate solar project development costs and reduce cash spend in our solar manufacturing business, which I referred to above, the Group’s balance sheet and funding position remains robust.

Consolidated net borrowings at 30 September 2010 were €111 million.



The Board indicated at our recent AGM (December 2010) that dividend policy would be under review given our stated intention to provide a significant liquidity event within three years and taking into account prevailing economic conditions. In line with these factors, the Board is not declaring an interim dividend. The Board will keep the question of payment of any future dividend under close review.



The Board believes that the current price of the Company’s shares on the “grey” market does not reflect the inherent value and future prospects of the Group’s portfolio of assets.  NTR holds strong positions in a range of quality performing assets across the renewable energy and sustainable waste sectors, backed by balance sheet strength. The Group has, in recent weeks, completed a comprehensive three year strategic planning review and has determined a series of strategic priorities under the theme “Recapturing Growth”.

The main tenets of the strategy are:



With its solid portfolio of businesses, significant Renewable Energy Development capability and credibility, a robust Balance Sheet and capable and committed management, the Group has in place the ingredients necessary to rebuild shareholder value.


Strategic Relationship Agreement with BlackRock Inc. to Launch Renewable Power Investment Group.

In fulfilment of one of its strategic priorities, the Group has, this week, entered into a strategic relationship agreement with BlackRock Inc. to launch a new renewable power investment group.  The renewable power investment group will combine the international track-record of NTR in renewable power infrastructure development with the global fund management and distribution capabilities of BlackRock. A number of key renewable power principals from NTR will join the BlackRock Alternative Investors (“BAI”) investment platform, which currently manages over US$110 billion of assets across a range of alternative investment strategies. With assets under management of some $3.561 trillion (31 December 2010), BlackRock Inc. is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide.

As part of the strategic relationship between the two companies, NTR will provide market perspectives and insights to the renewable power investment team and will also retain an economic interest in the new investment platform.

We see this as an exciting and significant development for NTR to work with a fund management group of such reach and reputation as BlackRock. For some years now, we have identified renewable power as being a highly attractive asset class and believe that it represents a compelling investment proposition as global long-term trends point to an expansion in energy demand.


Leadership Announcements

In line with this exciting strategic relationship with BlackRock Inc., NTR is pleased to make the following leadership announcements.

Jim Barry, Group Chief Executive will transition to Blackrock Inc. as Chief Investment Officer of the renewable power investment business between now and the summer.  He will have responsibility for establishing the new venture, which will be a significant opportunity for NTR. Jim will continue to be extensively available to NTR during the transition period.

Michael McNicholas, currently Chief Operating Officer of NTR, has been appointed Deputy Chief Executive Officer of NTR and will assume responsibility for day to day operations with immediate effect, with a view to being appointed Group CEO following the planned transition. Michael joined NTR in 2010 as Chief Operating Officer and is a main Board Director. He previously worked across a variety of senior positions in the Irish utility, ESB.

Michael Walsh, Group Finance Director, has been appointed Chief Executive Officer of Woodford Capital Limited., the investment vehicle of the Roche family, with effect from 4 April 2011. 

Neil Parkinson, Chief Executive Officer of Greenstar Ireland, will succeed Michael Walsh as Chief Financial Officer.  Neil has previously been Finance Director and CEO of ESAT Group and has held a number of CEO positions within the NTR Group. He will take up his new position from 21 March 2011.



NTR has been through a period of significant transition in recent months. Much has been accomplished in that time, including the successful sales of Greenstar UK, certain Roads assets and the solar development projects and the restructuring of the solar manufacturing business. Further challenges remain as we complete our transition to a diversified Renewable Energy and Sustainable Waste Management Group.

The Board expects this transition to be largely completed by the end of Financial Year 2011/2012.

The Board is confident that the actions which we have taken, and continue to take, will both underpin the financial stability of the Group and create a strategically coherent business platform from which to deliver significant shareholder value within a three year timeframe.

The Board extends its appreciation to management and staff throughout the Group.


Tom Roche


25 February 2011

News and Investor Alerts

Receive Altas Investments news/press releases by email

Sign Up

RSS Feeds

Subscribe to Altas Investments's Newsfeeds.

RSS Subscribe

Media Enquiries