31 July 2007

APPENDIX 4C

During the June 2007 quarter Advanced Engine Components Ltd ("ACE") expanded its revenue base to include direct sales of natural gas ("NG") engines. The engines are purchased from ACE original equipment manufacturer ("OEM") customers in China, built up and commissioned as NG engines by ACE staff and sold as completed NG engines to heavy duty vehicle manufacturers in China, Thailand and other Asian countries.

ACE’s total sales revenue for the June 2007 quarter was approximately $650,000. These sales can be categorised as:

• sale of natural gas vehicle system ("NGVS") kits A$170,000;

• sale of completed engines A$270,000; and

• sale of spare parts A$210,000.

Purchasers of NG engines are attracted to ACE as an engine supplier due to:

• the diversity of NG engines ACE can offer by manufacturer, size and power;

• ACE's ability to provide technical assistance at installation and commissioning; and

• the quality of ACE's after sales service and advice gained from ten years developmental experience and servicing of operational issues for heavy duty NG vehicles using the ACE NGVS.

The addition of NG engines to ACE's portfolio of products means ACE benefit through the entire product cycle with:

• the sale of the ACE NGVS and other patented components to the OEM;

• a margin on the sale of the NG or base engine to the vehicle manufacturer; and

• the ongoing sale of patented spare parts and consumables to the end user.

ACE's purchase and sale of the NG engines is funded through letter of credit financing facilities arranged with major Chinese and Japanese trading houses.

Involvement in direct sales of NG engines enables ACE to enhance OEM customer sales of NG engines which expands sales of the ACE NGVS and ACE spare parts.

Appendix 4C, 30 June 2007 (PDF, 461k)

For further information please contact:
Tony Middleton (Managing Director) on (08) 9209 6911; or
Email: shares@advancedengine.com

Back to Top