Development in activities and financial matters
Fiscal 2023 was marked deeply by a massive drop in the market price for waste-based biofuel in June 2022. The drop was almost 50% and reduced the value of inventory in transit drastically. The main reason for this scenario was the Russian invasion of Ukraine which caused hefty speculations on the energy markets if EU member states would waiver the blending mandate for traffic fuel. Consequently, XBM encountered difficulty in trading older inventory from the third quarter of 2022. The resulting cash-flow challenges, that were to be seen by the beginning of the first quarter 2023, caused Nordea Bank to put the structural finance on hold, until they felt assured that XBM would be able to service the financial facilities provided by Nordea Finance. The suspension of the financial facilities has blocked new business opportunities and impeded revenue streams. XBM and Nordea negotiates about settlement of the engagement, which is expected to be completed in early 2024. XBM and Nordea has entered into a settlement agreement per 31 August 2023, but due to delayed compulsory documents from the Indian authorities, it was not possible for XBM to dispose of the inventory. An extension of the settlement agreement already entered into with Nordea have been achieved, as the company now has received the necessary official documents for refining and exportation of the inventory. In fiscal 2023, the turnover came to USD 35,703,252, down from USD 119,679,061 in the previous year. The loss came to USD 10,361,367 in 2023 compared to a profit of USD 534,309 in fiscal 2022. This is not satisfactory, but the management is confident, that it is recoverable. XBM will resume trading business once the restructuring of bank finance has been completed in the beginning of the fourth quarter 2023. We expect to be fully recovered with a monthly turnover of USD 10 million by the end of fiscal 2024.
04-10-2023