Rurelec Regulatory News (RUR)

27 Sep 2007 07:02

Rurelec PLC27 September 2007 Rurelec PLC ("Rurelec") Interim results for the 6 months ended 30th June 2007 Rurelec PLC, the AIM quoted power developer and owner of power plants in LatinAmerica, today announces its interim results for the 6 months ended 30th June2007. Highlights: •Strong organic growth for power generation businesses •Operating profit £1.97 million (2006: £1.5 million), an increase of 31% •Guaracachi successfully commissioned 71 MW of open cycle capacity in Santa Cruz with the completion of GCH 11, Bolivia's newest power plant Post period highlights •Construction of the new CCGT capacity nearly two thirds complete •Currently establishing Rurelec Climate Change Finance ("RCCF") to securitise the revenue from the forward sale of United Nations CERs generated by both projects For further information please contact: Rurelec PLC Daniel Stewart Parkgreen CommunicationsPeter Earl, CEO Stewart Dick Clare Irvine / Lindsay Bancroft+44 (0)20 7793 7676 +44(0) 20 7776 6550 +44 (0) 20 7851 7480 Rurelec PLC ("Rurelec") Interim results for the 6 months ended 30th June 2007 Chairman's Statement I am pleased to report the results of Rurelec PLC for the half year to 30thJune, 2007. Rurelec recorded a profit after tax for the period of £0.94 million(2006: £6.9 million) on revenues of £10.5m (2006: £9.4m). Operating profit forthe period was £1.97 million compared to £1.5 million for the same period in2006. This represents an increase in operating profit over the previous periodof 31 per cent. in Sterling and of 47 per cent. at constant exchange ratesreflecting very strong underlying earnings growth. It should be noted that the comparable half year after tax figures for 2006included significant "negative goodwill" credited to income. While Rurelecexpects to report further continuing uplifts in the value of its portfolio ofLatin American power assets during the course of the full year as new capacityis constructed and commissioned, the results released today primarily underlinethe fact that to date 2007 has been a year of strong organic growth forRurelec's power generation businesses. In Bolivia, Guaracachi has continued its programme of power plant construction,successfully commissioning 71 MW of open cycle capacity in Santa Cruz in March2007 with the completion of GCH 11, Bolivia's newest power plant. I am delightedto report that this new General Electric 6 FA has performed faultlessly sincecommissioning and has provided an important reserve factor for Bolivia's powerindustry. Further organic growth in Guaracachi is expected in the second half of 2007 withthe commissioning of two more Jenbacher 616 gas engines in Sucre, scheduled totake place in November. The addition of nearly 100 MW of new combined cyclecapacity in Santa Cruz is expected to occur at the end of 2008. In Argentina, Energia del Sur has performed in line with expectations. Whilegeneration output has been high and revenues running at record levels, gasprices have risen to reflect the national shortage of natural gas andelectricity margins have been under pressure since gas providers have beenunwilling to enter into long term gas contracts at fixed prices. However,margins are expected to improve considerably at the end of the first quarter of2008 as a result of both increasing electricity tariffs at the generation leveland the planned commissioning of 60MW of new CCGT capacity. Construction of the new CCGT capacity is nearly two thirds complete. The largestsingle element of the project, the heat recovery steam generators or HRSGs,which are both the most expensive and longest lead time items, were shipped toArgentina from South Korea in August and will be assembled in the coming months. Rurelec has played an important role from its London headquarters in financingthe CCGT expansions in both Argentina and Bolivia. Rurelec is in the process ofestablishing Rurelec Climate Change Finance ("RCCF") to securitise the revenuefrom the forward sale of United Nations CERs generated by both projects. RurelecPLC intends to lock in high prices for CERs for the life of the Kyoto Protocoland to use the proceeds of securitisation to provide the capital needed for thedevelopment of new power plant capacity. RCCF is at the cutting edge of carboncredit finance. I am proud of the hard work which has gone into this effort, theeffects of which will be reflected in Rurelec's profitability from 2008 onward. Further expansion is expected from Rurelec companies' efforts to export powerfrom their home countries. Bolivia in particular has the capacity to exportpower to its neighbours and Guaracachi continues to finalise its 120 MW Yacuibaexport project to supply power to northern Argentina. Domestically too,Guaracachi is exploring further turbine upgrade and expansion options based onits fleet of Frame 5 gas turbines in Santa Cruz. By 2008 Rurelec will have a high market share in terms of the installed powergeneration capacity of Bolivia. For this reason the Directors are now looking atways to expand the group's portfolio of power plants into other neighbouringcountries to include Chile and Peru. Rurelec is also making advances in the areaof isolated generation in Latin America, taking advantage of technologydevelopments in the use of renewable fuels for small power plants situated offthe grid which benefit from carbon credits and concessionary finance. The outlook for Rurelec is therefore bright indeed and we expect to maintain ourpolicy of progressive dividend payments linked to the Company's continuinggrowth. Jimmy WestChairman RURELEC PLC CONSOLIDATED INCOME STATEMENT (unaudited)for the half year ended 30 June 2007 6 months 6 months to 30/6/07 to 30/6/06 Notes £'000 £'000 Revenue 10,521 9,361 Cost of sales (7,291) (6,461) Gross profit 3,230 2,900 Administrative expenses (1,261) (1,397) Operating profit 1,969 1,503 Negative goodwill 3 - 5,572 Finance income 33 169Finance expense (443) (238) Profit before tax 1,559 7,006 Tax expense (618) (78) Profit for the period 941 6,928 Attributable to minority interest 843 749Attributable to shareholders of 98 6,179 Rurelec PLC Earnings per share (basic) 4 0.14p 9.05pEarnings per share (diluted) 4 0.14p 9.05p Other financial information: Underlying earnings per share 4 0.14p 0.99p (basic and diluted) Net asset value per share 6 47.5p 42.1p CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE(unaudited) for the half year ended 30 June 2007 Profit for the period attributable to 98 6,179 shareholders of Rurelec plcExchange differences on translation (686) (1,791) of overseas operationsTotal recognised income and expense 5 (588) 4,388 for the period RURELEC PLC CONSOLIDATED BALANCE SHEET (unaudited)at 30 June 2007 30/6/07 31/12/06 30/6/06 Notes £'000 £'000 £'000 AssetsNon-current assets Property, plant and equipment 75,063 70,886 58,950 Investments 1 3 18 Trade and other receivables 441 442 535 Deferred tax assets 460 359 311 75,965 71,690 59,814Current assets Inventories 2,985 3,146 2,972 Trade and other receivables 8,448 8,530 8,063 Cash and cash equivalents 5,104 3,179 5,361 16,537 14,855 16,396 Total assets 92,502 86,545 76,210 Equity and liabilitiesEquity attributable to shareholders ofRurelec PLC: Share capital 1,466 1,366 1,366 Share premium 23,983 21,303 21,299 Translation reserve (5,634) (4,948) (2,175) Retained earnings 15,027 16,542 8,263 5,6 34,842 34,263 28,753Minority interest 28,434 29,985 23,437 Total equity 63,276 64,248 52,190 Non-current liabilities Trade and other payables 246 247 491 Deferred tax liabilities 723 739 - Borrowings 13,596 10,522 13,959 14,565 11,508 14,450 Current liabilities Trade and other payables 8,029 5,935 9,360 Borrowings 6,632 4,854 210 14,661 10,789 9,570 Total liabilities 29,226 22,297 24,020 Total equity and liabilities 92,502 86,545 76,210 RURELEC PLC STATEMENT OF CONSOLIDATED CASH FLOWS (unaudited)for the half year ended 30 June 2007 6 months 6 months to 30/6/07 to 30/6/06 £'000 £'000 Net cashflow from operating activities Result for the period before tax 1,559 7,006 Adjustments 1,796 (4,620) Taxation paid (1,002) (263) Change in inventories 88 (209) Change in trade and other (486) (2,604) receivables Change in trade and other 2,999 718 payables Net cash inflow from operating activities 4,954 28 Investing activities Additions to plant, property (7,105) (2,781) and equipment Deferred consideration paid - (431) Acquisition of 50.00125% of - (7,913) Empresa Electrica Guaracachi S.A. (net of cash) Interest received 33 169 Net cash outflow from investing activities (7,072) (10,956) Financing activities Net increase / (decrease) in loans 4,962 (521) Proceeds from share issue 2,780 18,670 Interest paid (372) (238) Dividend paid to shareholders (1,613) - Dividend paid to minority shareholders of Empresa Electrica Guaracachi S.A. (1,714) (2,046) Net cash inflow from financing activities 4,043 15,865 Increase in cash and 1,925 4,937 cash equivalents during periodCash and cash equivalents at 3,179 424 beginning of periodCash and cash equivalents at 5,104 5,361 end of period RURELEC PLC Notes to the Interim Statementfor the six months ended 30 June 2007 1. Basis of preparation This interim statement is unaudited and does not constitute Statutory Accountswithin the meaning of Section 240 of the Companies Act 1985. Statutory Accountsfor the year ended 31 December 2006 have been filed with the Registrar ofCompanies. The auditors have made a report on those Statutory Accounts underSection 235 of the Companies Act 1985. The auditors' reports were unqualifiedand did not contain a statement under Section 237 (2) of the Companies Act 1985.The financial information contained in this interim statement has been preparedin accordance with the Listing Rules of the Financial Services Authority and allInternational Reporting Standards ('IFRS') in force and expected to apply to theGroup's results for the year ended 31 December 2007 and on interpretations ofthose Standards released to date. 2. Accounting policies This interim statement has been prepared in accordance with the Group's IFRSaccounting policies. These policies were set out in the Group's FinancialStatements for the year ended 31 December 2006. 3. Negative goodwill In the period to 30 June 2006, Negative Goodwill represented the excess of theprovisional fair values of the Group's share of the assets less the liabilitiesacquired in the acquisition of the 50.00125% interest in Empresa ElectricaGuaracachi S.A. over the cost of acquiring that interest. 4. Earnings per share a) Basic and diluted 30/6/07 30/6/06 Weighted average number of shares '000 '000Basic earnings 69,072 68,289Diluted earnings 69,072 68,289 Profit for the period £98,000 £6,179,000Basic and diluted EPS 0.14p 9.05p The profit figure used in the calculation of the basic and diluted earnings pershare for the 6 months period ended 30 June 2006 included £5.572m of NegativeGoodwill as set out in note 3 above. b) Underlying earnings per share excluding the one-off adjustment for NegativeGoodwill (see note 3 above) Underlying profit for the period £98,000 £607,000Underlying EPS 0.14p 0.88p RURELEC PLC Notes to the Interim Statementfor the six months ended 30 June 2007 (continued) 5. Consolidated statement of changes in equity 30/6/07 30/6/06 £'000 £'000 Opening shareholders' funds 34,263 5,695Proceeds from issue of shares 2,780 18,670Total recognised income and expense (588) 4,388Dividend paid (1,613) -Closing equity shareholders' funds 34,842 28,753 On 21 May 2007, the company issued 3,400,000 Ordinary 2p shares at 59.25p pershare and on 29 June 2007, the company issued 1,600,000 Ordinary 2p shares at57p per share, raising £2.78m net of expenses. 6. Net asset value Based on the number of shares in issue at 30 June 2007 and the equityattributable to the shareholders of the company, the net asset value per shareat 30 June 2007 was 47.5p (30 June 2006 - 42.1p). 7. The Board of Directors approved this interim statement on 24 September 2007.This interim statement has not been audited. 8. Copies of this statement are being sent to all shareholders. Copies may beobtained from the company's registered office, 5th Floor, Prince Consort House,Albert Embankment, London SE1 7TJ. For further information contact: Rurelec PLC Daniel Stewart Parkgreen CommunicationsPeter Earl, CEO Stewart Dick Clare Irvine / Lindsay Bancroft+44 (0)20 7793 7676 +44(0) 20 7776 6550 +44 (0) 20 7851 7480 Rurelec PLC is an AIM listed British company established to develop ruralelectrification projects in South America. It is managed by a team with a strongtrack record in developing power projects worldwide. Since the company's flotation on AIM in August 2004, the company has acquiredpower generation operations in Bolivia and Argentina. This information is provided by RNS The company news service from the London Stock Exchange