13 May 2011 07:00
Andes Energia plc ("Andes")
(AIM:AEN)
Unaudited results for
Empresa Distribuidora de Electricidad de Mendoza Sociedad Anonima ("EDEMSA")
for the quarter ended 31 March 2011
EDEMSA, the electricity distributor for the province of Mendoza in which Andes has a 51 per cent. indirect interest, has published its financial results for the quarter ending 31 March 2011. This information, which has been prepared under Argentine GAAP and in Spanish, is available from the web-site of the Argentine Comision Nacional de Valores at www.cnv.gob.ar. This announcement sets out the unaudited financial information of EDEMSA for the same period prepared under IFRS in Argentine Pesos (AR$).
Financial Overview of EDEMSA
In the first quarter of 2011 EDEMSA reported a profit of AR$7 million, compared to a profit of AR$11 million in the first quarter of 2010.
Sales for the first quarter of 2011 increased by AR$7 million over the first quarter 2010, representing an increase of 4%. This increase is mainly due to the pass through of increases in energy costs and reduced energy losses that were offset by a slight decline in the demand for energy
Inflationary pressure resulted in a drop in gross profits from AR$57 million in the first quarter 2010 to AR$55 million in the first quarter 2011, with operating profit dropping from AR$31 million to AR$17 million, but should be considered in the context of the fact that current tariffs are those based on 2008 cost values. The main increases in costs arose in salaries and other employee related costs and the costs of third party services. The company recorded EBITDA of AR$24 million for the first quarter of 2011 compared to AR$38 million for the corresponding period last year.
The benefits from the restructure of the debt can also been seen with a AR$7 million reduction in finance costs and exchange losses quarter on quarter. The debt buy-back program has changed the long-term financial profile of the company, improving and reducing credit and foreign risk exposure and reducing future uncertainty.
Neil Bleasdale, EDEMSA President commented, "Whilst the results for the quarter show a drop in performance quarter on quarter, we are pleased with the results given the fact that the introduction of a polynomial formula that recognises increases in costs due to inflation is still pending, which will allow us to continue to invest in and improve the quality of the service we provide whilst providing long term financial stability and sustainability".
(Current rate of exchange AR$4.054 to US$1.00)
balance sheet
(All amounts in Argentine Pesos)
31 March 2011 | 31 March 2010 | 31 December 2010 | |
ASSETS |
|
|
|
Non-current assets |
|
|
|
Property, plant and equipment | 541,164,325 | 529,396,443 | 537,461,019 |
Intangible assets | 156,705,087 | 156,705,087 | 156,705,088 |
Available for sale investments | 29,197 | 1,756,460 | 29,197 |
Other investments | 669,328 | 61,376,786 | 676,395 |
Deferred income tax assets and other credits | 1,502,443 | 26,276,932 | 1,502,442 |
| 700,070,380 | 775,511,708 | 696,374,141 |
Current assets |
|
|
|
Inventories | 19,713,847 | 15,528,445 | 17,390,876 |
Trade and other receivables | 119,970,735 | 125,844,779 | 109,680,389 |
Available for sale investments | 2,520,544 | 3,850,000 | - |
Cash and cash equivalents | 21,024,856 | 17,732,005 | 21,611,103 |
| 163,229,982 | 162,955,229 | 148,682,368 |
|
|
| |
Total assets | 863,300,362 | 938,466,937 | 845,056,509 |
| EQUITY | |||
Capital and reserves | |||
Share capital | 462,585,254 | 462,585,254 | 462,585,254 |
Fair value and other reserves | - | 606,923 | - |
Retained earnings and other reserves | 24,616,939 | (6,418,862) | 18,094,400 |
Legal reserve | 16,856,263 | 16,856,263 | 16,856,263 |
Total equity | 504,058,456 | 473,629,578 | 497,535,917 |
LIABILITIES | |||
Non-current liabilities | |||
Deferred income tax liabilities | 7,326,417 | - | 5,273,378 |
Borrowings | 74,345,556 | 238,307,374 | 78,904,216 |
Trade and other payables | 458,909 | 520,782 | 474,377 |
82,130,882 | 238,828,156 | 84,651,971 | |
Current liabilities | |||
Trade and other payables | 185,389,085 | 155,497,281 | 170,933,306 |
Borrowings | 60,398,502 | 27,024,739 | 58,896,390 |
Provisions | 31,323,437 | 43,487,183 | 33,038,925 |
277,111,024 | 226,009,203 | 262,868,621 | |
| |||
Total liabilities | 359,241,906 | 464,837,359 | 347,520,592 |
|
|
| |
Total equity and liabilities | 863,300,362 | 938,466,937 | 845,056,509 |
income statement
(All amounts in Argentine Pesos)
| Quarter ended | Quarter ended | Year ended |
| 31 March 2011 | 31 March 2010 | 31 December 2010 |
Sales | 177,918,823 | 170,976,626 | 647,117,106 |
Cost of sales | (123,367,889) | (114,029,266) | (442,055,978) |
Gross profit | 54,550,934 | 56,947,360 | 205,061,128 |
Selling and marketing costs | (16,457,161) | (12,579,132) | (57,503,368) |
Administrative expenses | (22,203,280) | (13,980,237) | (69,935,320) |
Other operating income | 1,065,896 | 828,735 | 11,963,752 |
Operating profit | 16,956,389 | 31,216,726 | 89,586,192 |
Finance costs | (6,820,809) | (13,888,376) | (12,968,010) |
Profit before tax | 10,135,580 | 17,328,350 | 76,618,182 |
Income tax | (3,613,041) | (6,451,557) | (41,228,127) |
Profit for the period | 6,522,539 | 10,876,793 | 35,390,055 |
|
statement of changes in shareholders' equity
(All amounts in Argentine Pesos)
| Share Capital | Fair value and other reserves | Retained earnings | Legal reserve | Total equity |
Balance at 1 January 2010 | 462,585,254 | 581,435 | (17,295,655) | 16,856,263 | 462,727,297 |
Net expense recognised directly in equity | - | 25,488 | - | - | 25,488 |
Profit for the period | - | - | 10,876,793 | - | 10,876,793 |
Balance at 31 March 2010 | 462,585,254 | 606,923 | (6,418,862) | 16,856,263 | 473,629,578 |
|
|
|
|
|
|
Balance at 1 January 2011 | 462,585,254 | - | 18,094,400 | 16,856,263 | 497,535,917 |
Net income recognised directly in equity | - | - | - | - | - |
Profit for the period | - | - | 6,522,539 | - | 6,522,539 |
Balance at 31 March 2011 | 462,585,254 | - | 24,616,939 | 16,856,263 | 504,058,456 |
cash flow statement
(All amounts in Argentine Pesos)
| Quarter ended | Quarter ended | Year ended |
| 31 March 2011 | 31 March 2010 | 31 December 2010 |
Cash flows from operating activities |
|
|
|
Net cash generated from operating activities | 16,405,966 | 15,302,649 | 102,591,316 |
| |||
Cash flows from investing activities | |||
Purchases of property, plant and equipment | (8,124,171) | (5,422,508) | (24,677,374) |
(Purchase)/sale of financial assets | (2,513,477) | (1,802,411) | 63,868,320 |
Grant received | 2,803,074 | - | - |
Net (cash used in)/generated from investing activities | (7,834,574) | (7,224,919) | 39,190,946 |
| |||
Cash flows from financing activities | |||
Debt | (9,157,639) | (6,758,279) | (136,583,713) |
Net cash used in financing activities | (9,157,639) | (6,758,279) | (136,583,713) |
| |||
Net increase in cash and cash equivalents | (586,247) | 1,319,451 | 5,198,549 |
Cash and bank overdrafts at beginning of the period | 21,611,103 | 16,412,554 | 16,412,554 |
Cash and cash equivalents at the period end | 21,024,856 | 17,732,005 | 21,611,103 |
1. Basis of preparation
The report for the quarter ended 31 March 2011 is unaudited and has been prepared in accordance with International Financial Reporting Standards ("IFRS") on a basis consistent with the accounting policies used in the preparation of the financial information of the ultimate parent company, Andes Energia plc, for the year ended 31 December 2010.
Enquiries:
Andes Energia plc Tel: +44 207 495 5326
Luis Alvarez Poli, Chief Executive Officer
Nigel Duxbury, Finance Director
Arbuthnot Securities Tel: +44 207 012 2000
Antonio Bossi
Buchanan Tel: +44 207 466 5000
Tim Thompson
Ben Romney