Business Description:
Environmental Clean Technologies Limited (ESI) is engaged in the business of commercialising and selling technologies that have potential within the energy and resources sector, capable of delivering environmental and commercial benefits.

Strategy Analysis:
For the half year to December 2002 ESI announced a net loss of $1.2m, compared to a net profit of $0.6m in the pcp. ESI outlined a number of reasons for the variance in results including the expenditure on marketing and commercialisation of ENERSLUDGE, delays in the award of four water/ wastewater contracts and increased tendering costs for larger local and overseas wastewater/ water projects for which ESI has bid alone or in joint venture with others. Operating revenues for the half year were $7.6m, up 24% over the pcp. Net operating cashflows for the period were negative $1.4m, compared to negative $2.3m in the pcp. ESI's half yearly result does not include contracts totalling $22m from tenders which it has won. The company expects to break even in the second half, yet this position could improve if it wins its share of tenders which are outstanding, currently in excess of $50m. ESI has recently focused on proving the commercial viability of its ENERSLUDGE technology. ENERSLUDGE technology has a waste volume reduction capability and enables bio oil to be recovered from sewage sludge which can be used as fuel. ESI believes that the operating costs are significantly lower than competing technologies. The first ENERSLUDGE plant in Subiaco, Western Australia has now been completed and two smaller plants overseas, the Mitsubishi Electric Corp plant in Japan and their own plant in Germany, have also been completed. The Subiaco plant is now processing around 750 tonnes of wet sludge per day, around 18 tonnes when dried.