Carbon Conscious responds to languishing share price with profit upgrade.
Listed carbon offset specialist Carbon Conscious has reminded investors of its growing revenue and profit prospects as it seeks to arrest a slide in its share price since a burst of enthusiasm after the carbon pricing legislation was passed in November July.
The share price of Carbon Conscious more than halve in the six weeks from the passage of the Clean Energy Future bill, prompting the company to confirm that an expanded offset deal with origin Energy announced in November would more than double revenue in 2011/12 and lift profit four-fold.
The Perth-based company expects net profit will jump 309 per cent to $3.5 million for the year to the end of June, while revenue was forecast to rise by 129 per cent to $16 million, in line with its predictions for a rights issue late last year. CEO Peter Balsarini says Carbon Conscious should achieve a net profit of $14 million in fiscal 2013 and $23 million in 2014, delivering earnings per share of 16c and 26c in those two years.
Its share price, which peaked just above 40c in November, slumped to below 20c in early January, before rebounding to 30c after the earnings upgrade.
The improved outlook is almost entirely due to its large contract with Origin Energy, which exercised an option for increased plantings in November. Carbon Conscious says these planting can generate carbon credits at between $13 and $18 a tonne, compared to the $23/t fixed price under the carbon pricing legislation.
Balsarini said the carbon market was not well understood, which was one of the reasons prompting its expanded profit guidance. He said he was confident other emitters captured under the carbon pricing legislation would seek similar offset deals. The statement said the company has a contract deal pipeline worth $1.5 billion currently under consideration with client.