Dutch treat for Nature Group

Port facilities and waste water treatment specialist Nature Group has hit the headlines after an explosion at its Gibraltar facilities, but is still negotiating big contracts with multinational oil groups and other companies in Brazil and elsewhere in the wake of its transforming takeover of Dutch offshore waste collection group International Slop Disposal (ISD) and its subsidiary Ecoscrub.

Nature is investigating the cause and consequences of the Gibraltar blast.’ Meanwhile, Richard Eldridge, chairman of the Jersey-based AIM counter, says the ISD deal, concluded in December and worth £16 million in shares and cash, would have had a massive impact on last year’s profits of £1.5 million pre-tax, marginally down on 2009, and its turnover, up 33 per cent to £6.8 million, had it taken place earlier in the year. Directors stress the Gibraltar incident was local in nature and in no way affects the company’s operations elsewhere.

The 'slop and scrub' takeover has turned Nature Group into Europe's leading maritime waste reception and treatment concern, with ISD, No 1 maritime and offshore waste collector in the key Dutch port of Rotterdam, a major part of the enlarged company. ISD's boss Andreas Drenthen has become chief executive and his colleague Bernard Muller deputy chairman of Nature Group, which, already well versed in serving the oil, marine and process industries, can now combine its own capabilities in waste water treatment, both onshore and offshore, with ISD's expertise in logistics and management and its key relationships in the field.

Eldridge confirms that consolidating Nature's results with those of the Dutch groups would have doubled 2010's net profits to £3 million on turnover of nearly £16.4 million. The company, which ended 2010 with cash up by £4.12 million to £5.7 million after a £3 million placing at 50p, has proposed a 16.6 per cent dividend increase to 0.7p a share, says integration of the Dutch companies is already bearing fruit.

With 25 years of experience, Nature’s core strength now derives from research begun at Norway’s Stavanger University in 1996. Its technology uses a patented chemical to separate hydrocarbons and suspended particles from water, enabling the company to design, build, implement and operate waste treatment facilities for the oil and gas industry on and offshore.

The pre-acquisition company, operating out of Gibraltar and Malta, increased Gibraltar revenues 25 per cent last year and is now expanding reception tonnage from 7,000 to 12,000 tonnes. Nature won a turnkey oil waste treatment contract for Duqm Oman in the Gulf and, though its oil services side suffered from major contract terminations, a restructuring of this division is expected to pay off this year.

The Duqm Oman project took longer than expected to gain momentum after its initiation last year, but the company has identified a new international port location for waste oil treatment services and has reached agreement in principle. ISD has helped this division of Nature Group restructure and refocus on broader international markets.
  Elsewhere, the company has begun waste oil collections from Italy and hopes to have its compact treatment units used offshore from August, thus, it suggests, ‘potentially generating a new international market later in the year’.  On the engineering side, Nature claims its ‘Ecoscrub’ technology has demonstrated its efficacy with reductions of more than 90 per cent in emissions and odours from fuel oil.

The combined group now has operations in Europe ranging from the Mediterranean, where it operates 15 barges to collect waste generated from cargoes, processing and ships’ operations from ports and at sea, to Norway, the UK and Holland. Further afield, Nature plans to open port reception facilities over the next three years in Panama, the Middle East, Singapore and the Gulf of Mexico.

The company has already designed and built a complete on-site containerised unit to treat water from drilling and refining activities in Kazakhstan for US oil services giant Halliburton. This should go into operation in the third quarter of this year.

Before the explosion, analysts saw the transformed Nature more than trebling pre-tax profits to £6.8 million this year, with £8.2 million pre-tax on the cards for 2012. Nature shares have retreated on the Gibraltar incident, as the issues of liability and costs remain to be resolved. For the longer term, they could still prove a potentially rewarding specualtion.