Cashflow Positive Quarter
- Cashflow positive from operations for March quarter
- Sales momentum building up in North America
- Decisions pending on major European applications
4c Cashflow Quarterly Commentary
Phoslock Water Solutions (PWS) lodged its 4c quarterly cashflow with the ASX today for the period 1 January 2011 to 31 March 2011. PWS recorded a positive Net Operating Cash Flow from Operations for the quarter. Cash at the end of the quarter was $800,000.
Inventory was increased during the quarter in anticipation of major orders during 2011. Cash operating expenses for the quarter were 2% lower at $683,000 (versus $691,000 in December 2010 quarter).
Much of the activity undertaken in Europe during the March quarter focussed on the preparation and finalization of proposals for major lake restorations projects in Germany, Italy, Denmark, Finland and the U.K. The projects have a total value of nearly A$6 million. Decisions on more than half of these projects are expected during the upcoming quarter with applications to take place during either the second half of 2011 or 2012.
Ice cover as a result of the unusually cold Europe winter limited the ability of Phoslock Europe and Bentophos to undertake applications during the quarter, however lakes have now thawed and the first application for Europe for 2011 was completed earlier this week in Eastern Germany.
Retail sales for 2011 commenced during the quarter with Phoslock now being sold in major specialty stores and garden centres in Germany, France and the Benelux countries. Phoslock Europe’s retail distributor confirmed that retail sales of Phoslock increased over the previous year and a further increase in sales is expected during 2011 and beyond.
PWS’s licensees in California and Florida have been very active during the quarter and have built up an impressive array of pipeline projects, a number of which are scheduled to be applied over the next two quarters.
SePRO is in the early stages of launching Phoslock to its target market in the United States.
PWS continues its work in Ontario in Canada. Several projects totalling up to 200 tons are anticipated to be undertaken in Ontario during the June and September 2011 quarters. PWS’s licensee for Quebec and the Atlantic provinces has been identifyied a number of new projects, some of which could be applied in 2011.
During the quarter Phoslock completed a number of small and medium sized applications in Australia. Several applications were made to waste water ponds and small lakes, to reduce the phosphorus levels of discharge water. Several medium sized applications are scheduled for April and May.
Sales to the aquaculture sector in Australia and parts of Asia continued to increase during the March quarter. In Australia there are eight aquaculture farming operations which are using Phoslock as part of their water quality management. The enquiry rate from aquaculture companies both in Australia and overseas continues to be high.
The factory is currently in production to meet anticipated orders for the second half of 2011.
Cash Flow & Liquidity
PWS maintains a satisfactory liquidity position. As at the date of this announcement PWS had net current assets (cash, inventory and receivables) of A$2.5m and was debt free.
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