28 May 2020 07:00
For immediate release
28 May 2020
ContourGlobal plc ("ContourGlobal" or the "Company")
Annual General Meeting Chairman's Update
Following yesterday's Annual General Meeting, Craig Huff, Chairman of ContourGlobal plc ("ContourGlobal" or the "Company") issued the following statement:
2019 was a strong year for ContourGlobal. Due to very good operational performance and new business acquisitions, we delivered a 12% increase in Funds from Operations to $338 million and Adjusted EBITDA rose 15% to $703 million.
We returned $99 million in dividends to shareholders, a 10% increase on the previous year.
Most importantly, this was done with industry leading safety standards and operational efficiency. In 2019, we had just one Lost Time Incident ('LTI'), occurring in November after 442 days without a recordable LTI.
As seen in our recent first quarter trading statement, on 15 May, ContourGlobal is experiencing only minimal operational and financial impact from COVID-19. The resilience and financial strength of our business is reflected in the upgrade received yesterday from S&P Global Ratings, which takes our issuer rating to BB from BB-, and the rating on our senior secured notes to BB+ from BB.
We remain focused on the health and well-being of our employees, and I repeat the thanks of our Chief Executive Officer, Joseph C. Brandt, to all of our power plant-based front line employees who have kept our facilities operational and safe during this challenging period.
As mentioned in our recent trading statement, we have obtained and are deploying both PCR tests, antibody testing, and PPE at our power plant locations and our offices. Meaningful operational changes put into place in late February have enabled the Company's 107 power plants to continue to operate safely and without interruption.
Action was taken around critical spares and inventory to ensure continued reliability of operations. To date, the disruption in spares and supply chain has been insignificant.
The Company is not involved in the distribution of power and has limited exposure to merchant markets and energy pricing. The Company has received force majeure notices from some suppliers and commercial customers, but these have not been material and are not expected to impact future operations. No government support or use of 'furlough' has been taken by the Company.
As set out in my letter in the Annual Report, the performance of the Company's share price has been disappointing and is not reflective of the performance of the business, or of the Company's intrinsic value.
In April, we commenced a £30 million share buy-back programme as a signal that we believe the shares are undervalued. To date we have repurchased 3.5 million shares for a total consideration of £5.5 million. As mentioned in my letter in the 2019 Annual Report, we are pursuing several initiatives that we believe will help close this gap. These include monetizing the value-gap between private market values for renewable assets and how we are being valued in the public markets by pursuing our strategy of minority sales, exploring a sale of our Brazilian portfolio which given the movement in exchange rates we are less likely to pursue in the near term, investing in our low-carbon growth pipeline in hard currency (US dollar or Euro) markets, and returning capital to shareholders.
Earlier this year we announced that the project in Kosovo would not proceed and that there would be no further investment in coal-fired generation.
Our capability across different technologies makes us ideally placed to pursue and deliver low carbon growth. The successful implementation of a hybrid solution on the island of Bonaire in the Caribbean is a good example for our ability to innovate. We installed a state-of-the-art battery system, together with a new energy management system to increase the renewable generation, minimize the environmental impact, and reduce the cost of energy for the customer.
We remain committed to diversity at all levels of our Company. The Board currently consists of 9 members. We currently have one female Board member, following the departure of Ruth Cairnie during the year. We have retained the services of an external consultant to find a replacement, independent, non-executive director.
Within our senior executive management group, the Planning and Operations Committee, five of the eight members are female.
We recently announced our first quarter dividend of $27 million, of an expected $108 million for 2020, a 10% increase over last year. We also reiterated our full year 2020 Adjusted EBITDA guidance of $710 million to $745 million.1
Since listing, we have returned over $227 million to shareholders. We maintain our target of a 10% increase in annual dividends.
We continue to drive our growth pipeline and see opportunities, which we believe may well be increased by current uncertainties. We remain positioned to deliver additional growth as soon as conditions allow.
ContourGlobal has shown significant resilience so far in 2020 as a result of the operational excellence, the robustness of the business and financial model, and the careful management of risk. All of these put us in a strong position to continue to return value for the benefit of all stakeholders.
1Based on constant exchange rates from 2019 of EUR/USD 1.12 and BRL /USD 0.25, and assuming no prolonged disruption to operations, human resource and to our off-takers arising from the current Covid-19 pandemic.
ENQUIRIES
Investor Relations - ContourGlobal
John Smelt - SVP, Investor Relations
Tel: +44 (0) 203 62690 47
Mob: +44 (0) 7500 129 218
john.smelt@contourglobal.com
Media - Brunswick
Charles Pretzlik/Simon Maine
Tel: +44 (0) 207 404 5959
Contourglobal@brunswickgroup.com
Cautionary note regarding forward-looking statements
These results include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout these results and the information incorporated by reference into these results and include statements regarding the intentions, beliefs or current expectations of the directors or the Company concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy of the Company and the industry in which it operates.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company's ability to control or predict. Forward-looking statements are not guarantees of future performance. The Company's actual results of operations, financial condition, liquidity, dividend policy and the development of the industry in which it operates may differ materially from the impression created by the forward-looking statements contained in these results and/or the information incorporated by reference into these results. In addition, even if the results of operations, financial condition, liquidity and dividend policy of the Company and the development of the industry in which it operates, are consistent with the forward-looking statements contained in these results and/or the information incorporated by reference into these results, those results or developments may not be indicative of results or developments in subsequent periods.
Other than in accordance with its legal or regulatory obligations, the Company does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.