British-based carbon offset project developer EcoSecurities posted a rise in its cash balance on Thursday, helped by healthy carbon offset delivery volumes.
The group's cash balance rose to 53.0 million euros as of April 30, compared with 38.7 million at the end of last December, it said in a trading update.
EcoSecurities expects its 2009 issuances of United Nations-backed credits, called Certified Emissions Reductions (CERs), to remain in line with expectations, but trimmed the number it expects to receive by 2012 to 100 million from 104 million.
The progress that EcoSecurities made in the second half of 2008 continued in 2009 with deliveries of CERs to forward sale counterparties being made as planned, Mark Nicholls, chairman of EcoSecurities, said in a statement.
The company has received 791,000 CERs so far in 2009, and posted an inventory of 850,000 CERs, down from 1.7 million at the end of 2008.
Its shares were up 3.3 percent at 41.1 pence at 0920 GMT (5:20 a.m. EDT).
In February, chief executive Bruce Usher said he would step down, closely followed by the resignation of president and co-founder Pedro Moura Costa in April.
EcoSecurities develops projects which avoid greenhouse gas emissions in the developing world, for example by building wind farms or improving energy efficiency.
The company sells the resulting carbon offsets to companies and businesses which are struggling to meet their climate targets. EcoSecurities hedges CER prices by entering into forward, fixed-price contracts.
Its policy of forward sales resulted in contracted future revenue of 414 million euros as of April 30, with an associated net trading margin of 172 million.
EcoSecurities' average price of forward sales was 13.60 euros per CER and it paid 8.12 euros per CER for its pre-2012 portfolio. This compares to forward sales of 13.66 euros and an average cost of 7.85 on February 28.
CERs for delivery in December, trading on the European Climate Exchange, were 25 cents, or 2 percent, lower at 12.30 euros a tonne on Thursday. CERs are up 72 percent after bottoming at 7.15 euros on February 12.
Analysts said higher CER prices meant good news for project developers like EcoSecurities.
Despite very grim predictions, the CER has performed better than expected. Nevertheless the share prices of the carbon traders have lagged, said Gus Hochschild of Mirabaud Securities.
These will receive a very considerable boost if a successive climate change regime is found to replace the Kyoto Protocol.
(Reporting by Michael Szabo and Nina Chestney; Editing by Simon Jessop)