PERTH, Australia, June 2, 2011 /PRNewswire/ --
Chairman – Peter
Carre:
As I said in the 2010 Annual Report, the 2010 financial year has
been a challenging one for the Water Resources Group Limited
(WRG). Since the release of the Annual Report, trading
conditions have arguably become considerably worse, due principally
to the delays in decisions by the customers to award contracts to
WRG to proceed with water treatment plants. As you will have seen
from the Annual Report, the result was not what any us of hoped it
would be in terms of achieving contract revenues. Mr. Harcourt will
discuss progress on contract matters shortly.
What I can say is that your directors are working very hard to
improve WRG's performance. One of the first things that the Board,
with management, instigated after last year end's listing on the
ASX was a thorough review of all of WRG's business opportunities
and technologies. We did this out of concern that our business
development was performing poorly and was impeding not only the
share price, but also the advance of other aspects of WRG. The
entire Board spent a significant amount of time together in
strategy sessions reviewing the strategic input from
management.
As a result of our review of WRG's business, and the strategic
options available to us in view of the lack of timely progress on
concluding contracts, we made tough decisions to restructure the
group's business. This is an ongoing process that will take
considerably more time to complete, as we eventually move the
business more fully to the US. However, the restructure is
essential in order to properly position WRG and reduce our burn
rate so we can take advantage of opportunities which we have reason
to believe are likely to arise in the near term as a result of the
hard work that WRG has put into getting our technology and our
business development to this stage.
With the resignation in May 2011
of Murray Vitlich as CEO and Phil
Mirams as CFO, Brian Harcourt
agreed to take over as interim CEO and has found a replacement CFO
for that interim period. Mr. Harcourt has done this with his usual
combination of focus, determination and energy and has the complete
confidence and support of the Board. The Board believes that the
initiatives currently being undertaken will deliver a stronger
company, able to prosper even if these uncertain times continue for
longer that we would want. The fact is that along with Bob Campbell, our chief technology officer, the
company is in the hands of the founders, which we consider a good
place for it to be. Mr. Harcourt will address what we are doing in
the markets, what we are doing to achieve contract awards and what
prospects exist for future technology. We share a common believe
based on sound principles that we are on the cusp of major
advances. Next year at this time I plan to be taking you through
those achievements.
CEO – Brian Harcourt:
Welcome to the meeting and I am pleased to report the progress
in each of our three Joint Venture areas.
1. Mexico – Our Joint Venture
Partner, ATL Interamericana, S. de R.L. de C.V. (ATL), has
advised us that this project is still on track although delayed.
ATL continues to work with CAPAMA (the water commission operated by
the municipality of Acapulco) to
quantify and develop an opportunity to supply CAPAMA up to 40,000m3
per day of water from ASWRO systems over the next 3 to 4 years.
This is expected to generate over US$100
million in revenue for the WRG group. We have been advised
that Fonadin, the Mexican National Infrastructure Fund, is making a
grant to the project for US$45-50
million, in order to subsidize the cost of the water to the
poorer community. This is delaying matters, but we are confident of
securing this contract this year.
2. Morocco – as disclosed in
WRG's prospectus dated 16 November
2010, a memorandum of understanding for 8,000 cu m per day
was signed on 29 October 2010 with
Office Cherifien des Phosphates (OCP). Following on from my
recent trip to Morocco, the
directors expect to conclude the Water Offtake Agreement concerning
the 8,000cu m per day from which we are confident that significant
additional business will follow in Morocco. OCP is the world's leading exporter
of phosphate rock and derivative products. Its products are an
important component in global food security as they provide
essential nutrients to food crops and help rebuild healthy
soils.
As the largest enterprise in Morocco, OCP is a key driver of the country's
economy. Phosphate and its derivatives represented in 2010, in
value, approximately one quarter of Morocco's exports and the Company directly
employs more than 18,000 employees.
3 Saudi Arabia – We have had our marketing and senior technical
executives in Saudi Arabia during
May and that area is developing well. Upon WRG securing the Water
Offtake Agreement with OCP we anticipate that this will open up
significant business opportunities in Saudi Arabia for WRG.
www.WaterResourcesGroup.com
SOURCE Water Resources Group Limited