CBM Cambrex Corp

29 March 2018

CLEANTECH BUILDING MATERIALS PLC, NASDAQ FIRST NORTH, COPENHAGEN

TICKER: CBM

Cleantech Building Materials plc

Annual Results to 31 December 2017

Cleantech Building Materials plc ("CBM" or the "Company" or the "Group"), presents its results for the twelve months ended 31 December 2017.  The audited financial statements are appended to this announcement.

Chairman's Statement

Looking at 2017 in its entirety, the Group continued to make good progress throughout the year.

We strengthened our sales team and also concluded distribution agreements with the Xinli Group, Seedatanarice, Vorrawut Materials, Thanh Thanh Liem, MMF Timberhub, and Hung Trang Corp. These initiatives have revealed a strong demand for Accoya^® Wood, a demand that comfortably exceeds our current ability to supply. Until we have our own factory producing the necessary output we are reliant on supplies from Accsys Technologies' plant in Arnhem. We have been told now that production output from this plant will increase in 2018 and, as a consequence, we expect to be able to sell more Accoya^® Wood to our distributors during the second part of the year.

We progressed our discussions with a major state owned chemical company in China to create a joint venture to construct an Accoya^® factory there. The terms of the joint venture have been substantially agreed with our prospective Chinese partners but are awaiting formal approval. However, other potential partners have since presented themselves, and in the interest of getting the best deal for the Company and its shareholders, we are openly pursuing all of these opportunities.

Jon Sumner, our former CFO left the Group for personal reasons and was replaced by Dwight Zou. Dwight is an experienced CFO who in the short period of time that he has been with us has set up our office in Shanghai, recruited support staff and played an important part in the negotiations with our prospective Chinese partners. I am also pleased to report that Ting Yian Ann has joined the Board of our subsidiary, Diamond Wood, as a non-executive director. Ting is a Singapore national and brings with him over twenty years' experience of operating chemical companies in China. Most recently Ting was CEO of Dragon Crown, a chemical logistics company which is listed on the Hong Kong main market. Under Ting's leadership Dragon Crown built and operated chemical facilities in Jiangsu province, China where Diamond Wood plans to build the first Accoya^® Wood factory. He will be advising our executive team as we move forward. Both Dwight and Ting bring invaluable industry expertise and a wealth of experience to the team.

The Group reported a loss of €4,936,000 for the 12 months ended 31 December 2017. This loss includes non-cash related items totalling approximately €2,250,000 including depreciation and amortisation, share-based payments (options) and finance costs.

We are well placed to make 2018 a transformational year for the Group and I would like to take this opportunity to thank all of our staff and advisers for all of their hard work in 2017.

Strategy and Objectives

The Group's primary strategic objectives for 2018 are to:

1. secure the financing required to commence the construction of its own Accoya^® Wood manufacturing facility in China to facilitate the commercial production of its own Accoya^® Wood during 2019.

2. secure a Build and Operate agreement with an experienced firm to ensure the Accoya^® Wood manufacturing facility is constructed on time and on budget, and operated efficiently.

3. grow sales of Accoya^® Wood both to new and existing distributors, and directly to wood product manufacturers.

4. build strong relationships with large-volume wood manufacturers through testing and trials in anticipation of Accoya^® Wood being produced in the Group's own factory.

5. develop its marketing and sales initiatives to further expand market channels and offtake agreements in the Chinese and ASEAN markets.

6. Improve liquidity and ease trading for shareholders through the inclusion of its shares for trading on the Vienna Stock Exchange's Third Market.

Financial Overview

The Group's revenues for the 12 months ended 31 December 2017 remained steady at €874,000 (9 months ended 2016: €531,000) and consisted mainly of Accoya^® Wood sales to Thailand, Philippines, Singapore and Malaysia.

The Group realised a net loss of €4,936,000 for the year to 31 December 2017 (9 months ended 31 December 2016: €3,596,000).

Since reaffirming its Accoya^® licence with Accsys Technologies plc in 2014, the Group has successfully appointed a number of distributors of Accoya^® Wood in the ASEAN region, including offtake agreements in China and Thailand. The demand from the Group's distributors exceeded demand in 2017 due to product shortages from Titan Wood in Europe, a situation which is expected to continue through the first half of 2018 until which time Titan Wood has completed its announced increase in capacity at its Arnhem factory.

During 2017 the Group advanced its discussions with several potential partners, including a state-owned Chinese conglomerate, to significantly grow its business and to construct and operate its own Accoya^® Wood manufacturing facility. Once the Group is producing its own Accoya^® Wood, the Board believes the financial performance of the Group will be radically transformed.

As at 31 December 2017, the Group had cash and cash equivalents of €120,000 (2016: €113,000) and net current liabilities of €1,214,000 (2016: €775,000).

Going Concern

The consolidated financial statements have been prepared on the going concern basis.

The Directors have considered the future liquidity of the Group in light of the net loss of €4,936,000 (9 months to Dec 2016: loss of €3,596,000) during the current period and the net current liabilities as at 31 December 2017 of €1,214,000 (2016: €775,000) and the material uncertainty regarding the Group's ability to raise funding and to execute the Group's business plan. The Directors have reviewed the Group's cash flow projections prepared by management covering a period of twelve months from the date of the consolidated financial statements. Based on these cash flow projections, the Group will have sufficient financial resources in the twelve months to 31 March 2019 to meet its financial obligations as and when they fall due. Management's projections make key assumptions with regard to (i) the anticipated cash flows from the Group's operations and (ii) the availability of future funding from the loan facility.

Future Developments

The Group continues to advance its discussions with potential partners, including a state-owned Chinese conglomerate, to significantly grow its business and to construct and operate its own Accoya^® Wood manufacturing facility.

The Company's next financial report will be unaudited accounts for the six months to 30 June 2018 which will be published on 29 August 2018.

THE DIRECTORS OF CLEANTECH BUILDING MATERIALS PLC ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT

Further information may be found at the Company's website at www.cbm-plc.com

Further Enquiries:

The information communicated in this announcement is "inside information" for the purposes of article 7 of the Market Abuse Regulation 596/2014.

Cambrex (NYSE:CBM)
Historical Stock Chart
From Mar 2024 to Apr 2024

Cambrex (NYSE:CBM)
Historical Stock Chart
From Apr 2023 to Apr 2024