PGR.L Regulatory News (PGR)

13 May 2009 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 2009

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 2009. 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 ("CNV") at www.cnv.gov.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

EDEMSA reported a loss for the quarter of AR$9.6 million compared to a profit of AR$0.9 million for the equivalent quarter in 2008. 

Sales increased by 27% over the 2008 equivalent quarter, to AR$125.7 million. This increase resulted from an increase in tariffs in recognition of cost inflation, which became effective 1 February 2008, together with an increase in the demand for energy and the pass through of an increase in the cost of energy purchased

Although the gross profit increased by AR$8.4 million over the 2008 equivalent quarter, the increase in operating expenses resulted in an operating profit of AR$7.8 million compared to AR$8.1 million, with EBITDA of AR$14.7 million (quarter ending 31 March 2008: AR$14.9 million).

The finance costs for the quarter have been adversely impacted by the weakening of the AR$ against the US$, resulting in a non-cash exchange loss of AR$19 million for the quarter. We continue to enter into short term contracts to hedge this risk when contracts are available and in our opinion the associated cost is not uneconomic. The Board has secured shareholders and CNV approval to issue debt instruments denominated in AR$ or other foreign currencies up to an equivalent of US$80 million, which could give the company more flexibility to manage this currency risk. 

As announced on 11 March 2009, EDEMSA expects the next tariff review for the third pricing period to take effect from 1 February 2009 but at the date of this announcement the provincial government law decree has not yet been issued. The Board remains confident that the new tariff regime will be forthcoming and will update the market as appropriate.

  balance sheet

(All amounts in Argentine Pesos)

	31 March 2009	31 March 2008
ASSETS
Non-current assets
Property, plant and equipment	517,498,762	509,722,143
Intangible assets	156,705,089	156,705,089
Available for sale investments	659,004	1,841,226
Other investments	30,463,181	-
Deferred income tax assets and other credits	38,806,915	21,695,801
	744,132,951	689,964,259
Current assets
Inventories	13,714,115	11,334,314
Trade and other receivables	107,027,907	81,206,768
Available for sale investments	-	441,099
Cash and cash equivalents	17,999,595	16,032,861
	138,741,617	109,015,042
Total assets	882,874,568	798,979,301
EQUITY
Capital and reserves
Share capital	462,585,254	462,585,254
Fair value and other reserves	(468,765)	657,188
Retained earnings and other reserves	(35,882,090)	(34,476)
Legal reserve	16,856,263	3,004
Total equity	443,090,662	463,210,970
LIABILITIES
Non-current liabilities
Borrowings	246,854,400	207,762,657
	246,854,400	207,762,657
Current liabilities Trade and other payables	141,064,079	93,781,312
Borrowings	19,832,929	10,061,912
Provisions	32,032,498	24,162,450
	192,929,506	128,005,674
Total liabilities	439,783,906	335,768,331
Total equity and liabilities	882,874,568	798,979,301

  income statement

(All amounts in Argentine Pesos)

	Quarter ended	Quarter ended
	31 March 2009	31 March 2008
Sales	125,742,285	99,169,170
Cost of sales	(94,876,379)	(76,709,503)
Gross profit	30,865,906	22,459,667
Selling and marketing costs	(10,349,226)	(8,079,222)
Administrative expenses	(13,800,321)	(8,260,285)
Other operating income	1,064,163	2,016,335
Operating profit	7,780,522	8,136,495
Finance costs	(22,598,982)	(6,719,408)
(Loss)/profit before tax	(14,818,460)	1,417,087
Income tax	5,191,201	(512,530)
(Loss)/profit for the period	(9,627,259)	904,557

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 2008	462,585,254	674,635	(939,033)	3,004	462,323,860
Net expense recognised directly in equity	-	(17,447)	-	-	(17,447)
Gain for the period	-	-	904,557	-	904,557
Balance at 31 March 2008	462,585,254	657,188	(34,476)	3,004	463,210,970
Balance at 1 January 2009	462,585,254	(301,905)	(26,254,831)	16,856,263	452,884,781
Net expense recognised directly in equity	-	(166,860)	-	-	(166,860)
Loss for the period	-	-	(9,627,259)	-	(9,627,259)
Balance at 31 March 2009	462,585,254	(468,765)	(35,882,090)	16,856,263	443,090,662

cash flow statement

(All amounts in Argentine Pesos)

	Quarter ended	Quarter ended
	31 March 2009	31 March 2008
Cash flows from operating activities
Net cash generated from operating activities	29,413,429	9,645,425
Cash flows from investing activities
Purchases of property, plant and equipment	(4,153,898)	(3,592,898)
Purchases of available-for-sale financial assets	(8,365,991)	(441,099)
Grant received	-	2,565,209
Net cash used in investing activities	(12,519,889)	(1,468,788)
Cash flows from financing activities
Debt	(5,011,845)	2,117,406
Net cash (used in)/from financing activities	(5,011,845)	2,117,406
Net increase in cash and cash equivalents	11,881,695	10,294,043
Cash and bank overdrafts at beginning of the period	6,117,900	5,738,818
Cash and cash equivalents at the period end	17,999,595	16,032,861

1. Basis of preparation

The report for the quarter ended 31 March 2009 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 2007.

Enquiries:

Andes Energia plc Tel :020 7495 5326

Luis Alvarez Poli, Chief Executive Officer

Nigel Duxbury, Finance Director

Arbuthnot Securities Tel: 020 7012 2000

James Steel

Antonio Bossi

Bishopsgate Communications Tel: 020 7562 3350

Nick Rome

Michael Kinirons 

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