UK-based used oil re-refiner Hydrodec last Wednesday reported a US$31.14 million loss for 2015, compared to an US$8.45 million loss for 2014. Total income dropped to US$43.84 million for the 2015 fiscal year, down almost 20 percent from US$54.74 million in 2014.
Total sales volumes increased to 62.1 million litres from 48.6 million litres in 2014, with the acquisition of the business and assets of Eco Oil Limited in April 2015.
Gross profit of US$1.1 million compared to US$14.3 million in 2014 reflects limited revenues from the Canton facility, lost production in Australia following its relocation to Bomen, and the adverse impact of the lower global oil price on the UK recycling business.
Group Operating EBITDA loss, after restructuring and recommissioning costs, of US$12.8 million in 2015 compared to US$1.6 million gain in 2014 reflects production delays in the US, costs associated with the relocation of operations in Australia; the effects of the decline in the world oil price and changing market conditions on margins in the UK recycling business.
In a news release, the company said that 2015 was a challenging year for the Company due to the collapse in the world oil price and difficult market conditions particularly in the UK, while, in the USA, the company faced delays and cost overruns in the commissioning of its rebuilt and expanded plant at Canton. In December 2013, an explosion and fire destroyed the processing unit at the Canton rerefinery. All six trains in Canton are now operational. The rebuild of the Canton plant was completed during the year, re-establishing a plant with a nameplate capacity significantly higher at 45 million litres compared to 27 million litres prior to the incident in December 2013.
Following a strategic auction process, Hydrodec sold its UK operations to Andrew Black, a Non-Executive Director and substantial shareholder on March 4, 2016 for a consideration of £1 in cash, including the transfer of circa. £1.2 million of existing third party indebtedness. In addition, the Buyer granted Hydrodec a contractual right to receive a proportion of the Buyers entitlement to any future profits of the UK re-refining project. The UK re-refining project also offers a potential opportunity to develop transformer oil re-refining capacity in the UK.
