LONDON (ShareCast) - Active Energy (AEG), the AIM-listed supplier of woodchip and timber products, saw its share price jump on Monday after the company concluded two important commercial deals which it says will improve operating efficiencies and drive down processing costs.

Firstly, the firm secured its third Turkish MDF supply contract win of 2014 and will supply 87,000 metric tonnes of wood chip to Kastamonu Entegre this year, generating $9m in revenue.

In addition to the two similar deals in Turkey signed in January, AEG has now secured contracts to supply around 315,000 metric tonnes of wood chip for MDF manufacturing, worth $33m in annual revenues.

This compares to the £0.2m the whole company generated in revenues in 2012.

Meanwhile, AEG also signed a new full-service logistics agreement with TIS, owners of the second-largest port in Ukraine, which will help it to consolidate all wood chip production and shopping operations into a single dockside facility.

Chief Executive Richard Spinks labelled these new deals as a “major strategic development” for AEG.

"The group is now on track to produce and deliver approximately 475,000 tonnes of wood chip in 2014 for both the MDF manufacturing and biomass fuel markets, a considerable uplift over the 80,000 tonnes that we achieved in the last six months of 2013 via our legacy port operations,” he said.

AEG’s stock was 5.3% higher at 2.29p by 10:07, giving a market capitalisation at £14.5m.

BC

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