GLO.L Regulatory News (GLO)

5 December 2019

ContourGlobal plc

Trading Update

ContourGlobal plc (the "Company"), an international owner and operator of contracted wholesale power generation businesses, today issues a trading update for the period from 1 January 2019 to 30 September 2019.

Strong operating and financial performance

·; Adjusted EBITDA up 19% from $447.0 million to $531.6 million reflecting the full 9 month of ownership impact of the Spanish Concentrated Solar Power ("CSP") acquisition completed in May 2018 ($48 million), the cash gain realized on the sell down of a minority stake in the CSP assets in H1 2019 ($52 million) and improved renewable generation ($9 million) particularly in wind, partially offset by negative foreign exchange impact ($19 million).

·; Proposed quarterly dividend of USD 3.6901 cents per share, equivalent to $24.75 million, reflecting our commitment to 10% year on year dividend growth supported by ContourGlobal's strong and predictable cash flow generation. The quarterly dividend is expected to be paid on 31 December to shareholders on the register at 13 December 2019.

·; Strong cash flow generation; Funds from Operations ("FFO") reached $285.4 million in Q3 YTD 2019, a 16% increase from Q3 YTD 2018, mainly explained by the cash generated from the acquired CSP assets and the successful refinancing of the corporate bond in July 2018 leading to lower interest expense.

·; Our cash conversion rate defined as FFO / Adjusted EBITDA continued to be strong at 54% in Q3 YTD 2019.

·; Income from operations up 10% from $210.3 million to $231.0 million as a result of Adjusted EBITDA growth (excluding gain on sell down of minority stakes) and lower acquisition costs.

·; Continued industry leading Health and Safety performance with 0.00 Lost Time Incident Rate ("LTIR") in the first 9 months of 2019.

·; Operational performance remains strong with Availability factors at 93.5% combined average availability across both the thermal and renewable fleets.

Delivering on our growth strategy

Mexico CHP

On November 25, the Company has announced that it had closed the acquisition of two natural gas-fired combined heat and power ("CHP") plants, together with development rights and permits for a third plant (the "Acquisition") from Alpek S.A.B. de C.V, ("Alpek").

The Acquisition was signed on January 6, 2019 for a Purchase Price of $724 million subject to customary adjustments such as for working capital. There is a further payment of $77 million payable to Alpek representing the Value Added Tax (VAT) assessed for the Acquisition which is expected to be refunded in full within 12 months of closing. The acquired portfolio consists of 518 MW of operational capacity located on Alpek's petrochemical sites in the Mexican states of Tamaulipas and Veracruz-the 414 MW plant known as CGA1 and the 104 MW plant known as CELCSA, respectively.

When the Acquisition was signed in January 2019, CGA1 was still under construction and as announced at the time, closing of the Acquisition and transfer of ownership of the facilities to ContourGlobal would only occur when construction of CGA1 was complete and all commissioning and verification tests had been successfully passed. By conditioning closing upon CGA1's successful entry into commercial operations, ContourGlobal avoided taking construction and commissioning risk for the power plant, which has an anticipated 40-year asset life. The CHP assets are fully contracted such that as of the closing date approximately 98% of their power plus all of the steam generation is under long-term contract, greater than the 90% announced at signing.As previously announced, the Mexico CHP business is expected to generate approximately $110 million of Adjusted EBITDA on a full-year basis which is not subject to seasonal variation. To finance the Acquisition, ContourGlobal entered into a $535 million amortizing non-recourse project financing on attractive terms.Kosovo

In regards to ContourGlobal's Kosova e Re Power Plant Project, while the finalization of the EPC contract and development work has progressed to plan, the overall timing of the Project continues to be impacted by the calling of a general election that was held in October 2019 and the inability to date to form a government. As previously noted in our Interim Results Announcement, this continues to cause delay and increases uncertainty with regards to the project. 

We continue focusing on external growth opportunities and our M&A pipeline is robust.

*Non-IFRS metrics

OutlookAs highlighted in our November 25 Mexico CHP business closing announcement, at the Interim Results Announcement on 8 August 2019, the Company expected 2019 full year Adjusted EBITDA to be in the lower half of the previously announced guidance range of $720-770 million. While underlying trading remains inline with expectations, consistent with the delay in closing from Q3 into Q4 of the acquisition of the CHP business, the Company now expects the 2019 full year Adjusted EBITDA to be modestly below the bottom end of the previous range.

Enquiries

Investor Relations - ContourGlobal

John Smelt

+44 203 62690 47

john.smelt@contourglobal.com

investor.relations@contourglobal.com

About ContourGlobal

ContourGlobal is listed on the premium segment of the London Stock Exchange (TKR: GLO). ContourGlobal is an international owner and operator of contracted wholesale power generation businesses with approximately 4,841 MW in operation in 18 countries. ContourGlobal operates a portfolio of 107 thermal and renewable power plants across Europe, Latin America, and Africa utilizing a wide range of technologies.