Clean Air Power sounds profit warning

CLEAN Air Power, the Preston-based company which develops combustion technology for heavy-duty diesel engines, has issued a profit warning.

The AIM-listed company, which counts billionaire Chelsea FC owner Roman Abramovich among its investors, blamed a tough European market and delays in regulatory approval in the US for its current predicament.

A trading statement said: “Whilst there have been some notable recent successes, current trading has been very challenging. The introduction of Euro 6 emissions standards in Europe at the start of 2014 means that opportunities are now consolidating around a small number of operators who continue to run large fleets of Genesis-EDGE compatible Euro 5 vehicles. Whilst the Genesis EDGE system continues to prove its ability to generate attractive fuel savings in customer trials, it is increasingly difficult to predict with any certainty the timing or quantum of future orders in Europe.

“The challenging European market coupled with unexpected technical delays in achieving EPA (Environmental Protection Agency) certification and the first sales of the US Genesis EDGE Dual-Fuel product mean that full-year results are expected to be significantly below market expectations.”

Chief executive John Pettitt said Clean Air Power is in a “challenging transitional period” and is shifting its strategic focus away from Europe to the US and Russian markets.

“As we manage this transition there will be a short-term impact on sales but the long-term opportunity for Clean Air Power as a design, development and delivery partner on OEM and Tier 1 compression-ignited natural gas engine programs, remains significant. This potential was demonstrated by the recent Letter of Intent with a global truck manufacturer to commence the first phase of a production development program for an engine for the South East Asian market.”

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