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