Interim Results
Rurelec PLC
27 September 2007
Rurelec PLC ('Rurelec')
Interim results for the 6 months ended 30th June 2007
Rurelec PLC, the AIM quoted power developer and owner of power plants in Latin
America, today announces its interim results for the 6 months ended 30th June
2007.
Highlights:
•Strong organic growth for power generation businesses
•Operating profit £1.97 million (2006: £1.5 million), an increase of 31%
•Guaracachi successfully commissioned 71 MW of open cycle capacity in
Santa Cruz with the completion of GCH 11, Bolivia's newest power plant
Post period highlights
•Construction of the new CCGT capacity nearly two thirds complete
•Currently establishing Rurelec Climate Change Finance ('RCCF') to
securitise the revenue from the forward sale of United Nations CERs
generated by both projects
For further information please contact:
Rurelec PLC Daniel Stewart Parkgreen Communications
Peter Earl, CEO Stewart Dick Clare Irvine / Lindsay Bancroft
+44 (0)20 7793 7676 +44(0) 20 7776 6550 +44 (0) 20 7851 7480
Rurelec PLC ('Rurelec')
Interim results for the 6 months ended 30th June 2007
Chairman's Statement
I am pleased to report the results of Rurelec PLC for the half year to 30th
June, 2007. Rurelec recorded a profit after tax for the period of £0.94 million
(2006: £6.9 million) on revenues of £10.5m (2006: £9.4m). Operating profit for
the period was £1.97 million compared to £1.5 million for the same period in
2006. This represents an increase in operating profit over the previous period
of 31 per cent. in Sterling and of 47 per cent. at constant exchange rates
reflecting very strong underlying earnings growth.
It should be noted that the comparable half year after tax figures for 2006
included significant 'negative goodwill' credited to income. While Rurelec
expects to report further continuing uplifts in the value of its portfolio of
Latin American power assets during the course of the full year as new capacity
is constructed and commissioned, the results released today primarily underline
the fact that to date 2007 has been a year of strong organic growth for
Rurelec's power generation businesses.
In Bolivia, Guaracachi has continued its programme of power plant construction,
successfully commissioning 71 MW of open cycle capacity in Santa Cruz in March
2007 with the completion of GCH 11, Bolivia's newest power plant. I am delighted
to report that this new General Electric 6 FA has performed faultlessly since
commissioning and has provided an important reserve factor for Bolivia's power
industry.
Further organic growth in Guaracachi is expected in the second half of 2007 with
the commissioning of two more Jenbacher 616 gas engines in Sucre, scheduled to
take place in November. The addition of nearly 100 MW of new combined cycle
capacity in Santa Cruz is expected to occur at the end of 2008.
In Argentina, Energia del Sur has performed in line with expectations. While
generation output has been high and revenues running at record levels, gas
prices have risen to reflect the national shortage of natural gas and
electricity margins have been under pressure since gas providers have been
unwilling to enter into long term gas contracts at fixed prices. However,
margins are expected to improve considerably at the end of the first quarter of
2008 as a result of both increasing electricity tariffs at the generation level
and the planned commissioning of 60MW of new CCGT capacity.
Construction of the new CCGT capacity is nearly two thirds complete. The largest
single element of the project, the heat recovery steam generators or HRSGs,
which are both the most expensive and longest lead time items, were shipped to
Argentina from South Korea in August and will be assembled in the coming months.
Rurelec has played an important role from its London headquarters in financing
the CCGT expansions in both Argentina and Bolivia. Rurelec is in the process of
establishing Rurelec Climate Change Finance ('RCCF') to securitise the revenue
from the forward sale of United Nations CERs generated by both projects. Rurelec
PLC intends to lock in high prices for CERs for the life of the Kyoto Protocol
and to use the proceeds of securitisation to provide the capital needed for the
development of new power plant capacity. RCCF is at the cutting edge of carbon
credit finance. I am proud of the hard work which has gone into this effort, the
effects of which will be reflected in Rurelec's profitability from 2008 onward.
Further expansion is expected from Rurelec companies' efforts to export power
from their home countries. Bolivia in particular has the capacity to export
power to its neighbours and Guaracachi continues to finalise its 120 MW Yacuiba
export project to supply power to northern Argentina. Domestically too,
Guaracachi is exploring further turbine upgrade and expansion options based on
its fleet of Frame 5 gas turbines in Santa Cruz.
By 2008 Rurelec will have a high market share in terms of the installed power
generation capacity of Bolivia. For this reason the Directors are now looking at
ways to expand the group's portfolio of power plants into other neighbouring
countries to include Chile and Peru. Rurelec is also making advances in the area
of isolated generation in Latin America, taking advantage of technology
developments in the use of renewable fuels for small power plants situated off
the grid which benefit from carbon credits and concessionary finance.
The outlook for Rurelec is therefore bright indeed and we expect to maintain our
policy of progressive dividend payments linked to the Company's continuing
growth.
Jimmy West
Chairman
RURELEC PLC
CONSOLIDATED INCOME STATEMENT (unaudited)
for the half year ended 30 June 2007
6 months 6 months
to 30/6/07 to 30/6/06
Notes £'000 £'000
Revenue 10,521 9,361
Cost of sales (7,291) (6,461)
Gross profit 3,230 2,900
Administrative expenses (1,261) (1,397)
Operating profit 1,969 1,503
Negative goodwill 3 - 5,572
Finance income 33 169
Finance expense (443) (238)
Profit before tax 1,559 7,006
Tax expense (618) (78)
Profit for the period 941 6,928
Attributable to minority interest 843 749
Attributable to shareholders of 98 6,179
Rurelec PLC
Earnings per share (basic) 4 0.14p 9.05p
Earnings per share (diluted) 4 0.14p 9.05p
Other financial information:
Underlying earnings per share 4 0.14p 0.99p
(basic and diluted)
Net asset value per share 6 47.5p 42.1p
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
(unaudited) for the half year ended 30 June 2007
Profit for the period attributable to 98 6,179
shareholders of Rurelec plc
Exchange differences on translation (686) (1,791)
of overseas operations
Total recognised income and expense 5 (588) 4,388
for the period
RURELEC PLC
CONSOLIDATED BALANCE SHEET (unaudited)
at 30 June 2007
30/6/07 31/12/06 30/6/06
Notes £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 75,063 70,886 58,950
Investments 1 3 18
Trade and other receivables 441 442 535
Deferred tax assets 460 359 311
75,965 71,690 59,814
Current assets
Inventories 2,985 3,146 2,972
Trade and other receivables 8,448 8,530 8,063
Cash and cash equivalents 5,104 3,179 5,361
16,537 14,855 16,396
Total assets 92,502 86,545 76,210
Equity and liabilities
Equity attributable to shareholders of
Rurelec PLC:
Share capital 1,466 1,366 1,366
Share premium 23,983 21,303 21,299
Translation reserve (5,634) (4,948) (2,175)
Retained earnings 15,027 16,542 8,263
5,6 34,842 34,263 28,753
Minority interest 28,434 29,985 23,437
Total equity 63,276 64,248 52,190
Non-current liabilities
Trade and other payables 246 247 491
Deferred tax liabilities 723 739 -
Borrowings 13,596 10,522 13,959
14,565 11,508 14,450
Current liabilities
Trade and other payables 8,029 5,935 9,360
Borrowings 6,632 4,854 210
14,661 10,789 9,570
Total liabilities 29,226 22,297 24,020
Total equity and liabilities 92,502 86,545 76,210
RURELEC PLC
STATEMENT OF CONSOLIDATED CASH FLOWS (unaudited)
for the half year ended 30 June 2007
6 months 6 months
to 30/6/07 to 30/6/06
£'000 £'000
Net cashflow from operating activities
Result for the period before tax 1,559 7,006
Adjustments 1,796 (4,620)
Taxation paid (1,002) (263)
Change in inventories 88 (209)
Change in trade and other (486) (2,604)
receivables
Change in trade and other 2,999 718
payables
Net cash inflow from operating activities 4,954 28
Investing activities
Additions to plant, property (7,105) (2,781)
and equipment
Deferred consideration paid - (431)
Acquisition of 50.00125% of - (7,913)
Empresa Electrica Guaracachi S.A.
(net of cash)
Interest received 33 169
Net cash outflow from investing activities (7,072) (10,956)
Financing activities
Net increase / (decrease) in loans 4,962 (521)
Proceeds from share issue 2,780 18,670
Interest paid (372) (238)
Dividend paid to shareholders (1,613) -
Dividend paid to minority shareholders
of Empresa Electrica Guaracachi S.A. (1,714) (2,046)
Net cash inflow from financing activities 4,043 15,865
Increase in cash and 1,925 4,937
cash equivalents during period
Cash and cash equivalents at 3,179 424
beginning of period
Cash and cash equivalents at 5,104 5,361
end of period
RURELEC PLC
Notes to the Interim Statement
for the six months ended 30 June 2007
1. Basis of preparation
This interim statement is unaudited and does not constitute Statutory Accounts
within the meaning of Section 240 of the Companies Act 1985. Statutory Accounts
for the year ended 31 December 2006 have been filed with the Registrar of
Companies. The auditors have made a report on those Statutory Accounts under
Section 235 of the Companies Act 1985. The auditors' reports were unqualified
and did not contain a statement under Section 237 (2) of the Companies Act 1985.
The financial information contained in this interim statement has been prepared
in accordance with the Listing Rules of the Financial Services Authority and all
International Reporting Standards ('IFRS') in force and expected to apply to the
Group's results for the year ended 31 December 2007 and on interpretations of
those Standards released to date.
2. Accounting policies
This interim statement has been prepared in accordance with the Group's IFRS
accounting policies. These policies were set out in the Group's Financial
Statements for the year ended 31 December 2006.
3. Negative goodwill
In the period to 30 June 2006, Negative Goodwill represented the excess of the
provisional fair values of the Group's share of the assets less the liabilities
acquired in the acquisition of the 50.00125% interest in Empresa Electrica
Guaracachi S.A. over the cost of acquiring that interest.
4. Earnings per share
a) Basic and diluted 30/6/07 30/6/06
Weighted average number of shares '000 '000
Basic earnings 69,072 68,289
Diluted earnings 69,072 68,289
Profit for the period £98,000 £6,179,000
Basic and diluted EPS 0.14p 9.05p
The profit figure used in the calculation of the basic and diluted earnings per
share for the 6 months period ended 30 June 2006 included £5.572m of Negative
Goodwill as set out in note 3 above.
b) Underlying earnings per share excluding the one-off adjustment for Negative
Goodwill (see note 3 above)
Underlying profit for the period £98,000 £607,000
Underlying EPS 0.14p 0.88p
RURELEC PLC
Notes to the Interim Statement
for the six months ended 30 June 2007 (continued)
5. Consolidated statement of changes in equity
30/6/07 30/6/06
£'000 £'000
Opening shareholders' funds 34,263 5,695
Proceeds from issue of shares 2,780 18,670
Total recognised income and expense (588) 4,388
Dividend paid (1,613) -
Closing equity shareholders' funds 34,842 28,753
On 21 May 2007, the company issued 3,400,000 Ordinary 2p shares at 59.25p per
share and on 29 June 2007, the company issued 1,600,000 Ordinary 2p shares at
57p per share, raising £2.78m net of expenses.
6. Net asset value
Based on the number of shares in issue at 30 June 2007 and the equity
attributable to the shareholders of the company, the net asset value per share
at 30 June 2007 was 47.5p (30 June 2006 - 42.1p).
7. The Board of Directors approved this interim statement on 24 September 2007.
This interim statement has not been audited.
8. Copies of this statement are being sent to all shareholders. Copies may be
obtained from the company's registered office, 5th Floor, Prince Consort House,
Albert Embankment, London SE1 7TJ.
For further information contact:
Rurelec PLC Daniel Stewart Parkgreen Communications
Peter Earl, CEO Stewart Dick Clare Irvine / Lindsay Bancroft
+44 (0)20 7793 7676 +44(0) 20 7776 6550 +44 (0) 20 7851 7480
Rurelec PLC is an AIM listed British company established to develop rural
electrification projects in South America. It is managed by a team with a strong
track record in developing power projects worldwide.
Since the company's flotation on AIM in August 2004, the company has acquired
power generation operations in Bolivia and Argentina.
This information is provided by RNS
The company news service from the London Stock Exchange