Chairman's Statement

The year ended 31 March 2010 and the period since, has seen considerable change and development across the NTR plc Group. Whilst we continue to evolve as a diversified renewable energy and sustainable waste management Group, we do so in the context of unprecedented macroeconomic and capital markets dislocation in our principal markets, most notably the United States.


These conditions have, to varying degrees, had significant implications for certain of our businesses. However, the Group and all of its businesses have responded rapidly and assertively to the particular circumstances that they collectively face.


Notwithstanding these challenges, the Group achieved several notable development milestones through the period:


Wind Capital Group (WCG), our US wind development business, completed the financing, construction and commissioning of a 150 MW, US$340 million wind farm at Lost Creek in North Western Missouri. This project was completed two months ahead of schedule and within budget. The wind farm has the capacity to provide power to 50,000 homes.
Stirling Energy Systems Inc (SES) completed the construction and commissioning of its first utility scale solar park, utilising its proprietary “SunCatcher” power generating technology, at Maricopa, Arizona. This solar park, with 1.5 MW of generating capacity and over 100,000 hours of quality power production at the time of writing, provides a reference plant for the future utility scale deployment of the SunCatcher.

In parallel with the development and deployment of the SunCatcher, Tessera Solar America (TSA) continued to pursue the permitting process on its two keystone Californian development sites at Imperial Valley and Calico. I am very pleased to report that both of these projects, with a combined capacity of 1.3 GW (1,300 MW), have received final permitting consent in recent weeks from the California Energy Commission and the US Government Department of the Interior.

Green Plains Renewable Energy Inc. (NASDAQ: GPRE), an ethanol producer in which the Group, following GPRE’s recent acquisition of Global Ethanol LLC., holds a 31% equity interest, has, as of 21 October last, reported seven consecutive quarters of revenue and earnings growth, reporting revenues of US$1,813 million and earnings attributable to its shareholders of US$55 million for the last four trailing quarters.
GPRE has accessed the capital markets twice in 2010. In March 2010, it completed the sale of 6.3 million shares of common stock, at a price per share of US$13.50, to institutional and retail shareholders, generating net cash proceeds of approximately US$79 million, enabling it to look for opportunities to expand its diversified platform, including the recently announced increase of production capacity by over 30% through the acquisition of Global Ethanol LLC. In October 2010, GPRE completed the placement of US$90 million in convertible notes, due 2015.
In June 2009, Greenstar North America (GSNA), our US sustainable waste management business, opened the largest fully automated single stream waste recycling facility in the state of Texas, at San Antonio. Latterly, in May 2010, GSNA also opened a further single stream facility at Des Moines, Iowa. These facilities have combined processing capacity of 300,000 tonnes per annum, with significant growth in recycling rates in these cities since the introduction of single stream.
Greenstar Ireland completed the acquisition of the commercial waste and recycling activities of Veolia Environmental Services in Ireland in April 2010, thereby expanding and consolidating its position in key regional markets, including Dublin and Cork.
In August 2010, the Group completed the sale of its UK waste management business, Greenstar UK, for net proceeds of €96 million.

These positive developments were achieved in circumstances where conditions were, and indeed remain, extremely challenging.


Our core operating businesses, Greenstar Ireland and Greenstar North America, experienced very difficult trading conditions in their respective markets. Both businesses responded decisively to these challenges through a combination of significant cost reductions and a continuing drive for improved operational efficiencies. As a result, despite a revenue decline of €35.3 million to €228.6 million, net percentage EBITDA margins were maintained, a great achievement in what are essentially fixed
cost businesses.


Market conditions for our renewable energy development businesses remain challenging. While our view on the medium term outlook for these businesses remains positive, the combination of current capital market conditions, uncertainty in the US utility sector with respect to near term power demand and the short term loss of momentum on sectoral policy initiatives, means that these businesses face difficult yet different near term challenges.


In the case of Wind Capital Group, the immediate near term challenge is the lack of available utility contracts (Power Purchase Agreements) currently in the market. With a strong pipeline of high quality projects, and a proven management team, WCG is well placed to secure PPAs when the market reopens, while in the meantime continuing to maintain and improve its competitive offering. This has had the impact of deferring the need for major capital fundraising in WCG.


The issue facing SES is the current state of capital markets, in particular the scale and risk tolerance of capital available in the private equity market. In my review of 2009 I noted, and I quote “notwithstanding the strength of the Group’s balance sheet, the scale of the opportunity available to our businesses will mean that those businesses will require access to new sources of third party equity capital in order to ensure that they meet their full potential”.


Despite the significant advances made by SES in the commercialisation of the SunCatcher, the likely timing within which a third party strategic investor and project capital is secured has been affected by prevailing capital market uncertainties. Accordingly, while continuing to seek a strategic partner, SES expects that commercialisation of the SunCatcher will require a longer timeframe than previously envisaged. The business will be restructured to take account of this longer timeframe for SunCatcher commercialisation.


The NTR Board is fully supportive of this course of action by SES, which ensures that the impressive progress made in the commercialisation of the SunCatcher can be continued, in a manner mindful of the current challenging funding climate.

Financial results
Group Revenue from continuing operations for the year ended 31 March 2010 was €244.7 million, compared to €309.5 million for the prior year.


Earnings before interest, tax, depreciation and amortisation (“EBITDA”), before impairments, in the Group’s core operating businesses (Greenstar Ireland and Greenstar North America) was €30.8 million compared to €35.5 million in 2009. Development spend in our solar and wind energy businesses, together with central overhead, amounted to €106.5 million (2009: €75.6 million). The Group’s share of EBITDA in our other businesses (GPRE, Roads, CAW) amounted to €10.8 million (2009: €15.5 million), resulting in an overall Group EBITDA loss from continuing operations, before impairments, of €64.9 million (2009: loss of €24.6 million).


In the context of the difficult trading and funding situations affecting our businesses, we undertook a prudent review of the carrying value of our investments. Accordingly, gross impairment charges of €147.9 million (net of tax and minority interests: €96.0 million) were recorded in respect of our Sustainable Waste Management and Solar businesses. Depreciation, amortisation and net finance costs from continuing operations amounted to €54.4 million, resulting in Group losses before tax from continuing operations of €267.2 million.


After taxation, the loss from discontinued operations and minority interests, the loss attributable to equity holders of NTR plc amounted to €210.6 million (2009: loss of €22.4 million).


Total assets of the Group at 31 March 2010 amounted to €1.38 billion, while total equity attributable to NTR shareholders was €604.6 million.


Group cash resources at 31 March 2010 amounted to €64.7 million. In addition, the Group had a further €23.1 million held in escrow and in subsidiaries held for sale.


Since the year end, the Group has announced the sale of Greenstar UK and certain assets within our Roads division, which will realise net proceeds of €125 million in aggregate.


Accordingly, I am pleased to report that through a combination of prudent management of the Group’s cash and liquid resources, carefully selected and executed asset realisations and decisive responses to prevailing market circumstances, the Group’s balance sheet and funding position remains robust.


Board and secretary
Eamon Bolger retired as Company Secretary on 5 July 2010. The Board wishes to express its gratitude to Eamon for his many years of service to the Group.


Caroline Bergin was appointed as Company Secretary on 5 July 2010.


Michael McNicholas, who joined the Group as Chief Operating Officer in April 2010, was appointed as an Executive Director on 9 September 2010.


The Board welcomes both Caroline and Michael to the Group and looks forward to working with them in the coming years.


An interim dividend of 2.28 cent per share was paid on 29 January 2010. The Directors are recommending a final dividend of 4.94 cent per ordinary share. This final dividend, if approved by Shareholders at the Annual General Meeting on 8 December 2010, will be paid on 15 December 2010, to Shareholders on the Register on 26 November 2010.


The past two years have seen unprecedented turmoil in both the International economy and in capital markets. The impact of this turmoil on the Group has been extensive across all sectors.


Rapid and decisive management actions to address these challenges have clearly helped to mitigate their impact on the Group, and in particular to underpin the continuing financial strength and stability of NTR plc.


Managing through the type of challenging circumstances which we now face requires resilience and strength of purpose and on behalf of the Board, I would like to express my gratitude to management and staff at all levels in the Group for the work that they do in such difficult circumstances.


We remain committed to the continuing development of NTR plc as a diversified renewable energy and sustainable waste management Group, while at all times doing so in the context of ensuring the continued financial strength and stability of the Group.


Tom Roche

Tom Roche - Chairman

Tom Roche