Preliminary Results Year End

RNS Number : 0435V

Rurelec PLC

22 May 2008

 

22nd May 2008

PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2007 (unaudited)

 

Highlights

• Guaracachi added 79MW of new gas fired capacity in Bolivia - a 25% increase in 12 months

• 160 MW of new combined cycle projects in Argentina and Bolivia under development and financed during the year

• Group turnover in year to 31 December 2007 - £22.6m 

• Operating profit - £2.3m, Guaracachi contribution increases to £3.4m

• Net Asset Value per share 47p at 31.12.07

• Dividend of 2.5p per share proposed, an increase of 11 per cent.

Post year end highlights

• Approval and registration of 148,019 tonnes per year of C02 reductions in the form of CER for EdS

• Preliminary agreement with BNP Paribas for a forward purchase of CERs for the life of the Kyoto Protocol

Jimmy West, Chairman, said: '2007 was a year of considerable progress for Rurelec. Our operating subsidiaries have been able to make solid progress which will underpin future earnings.  The markets in which we operate have continued to grow over the past year and are expected to continue to do so and the Board is confident that the Group will be in a position to reap the benefits of growth over the coming years.' 

For further information please contact:           Peter Earl, CEO, Rurelec PLC	020 7793 5610
Paul Shackleton, Daniel Stewart	020 7776 6550
Ana Ribeiro, Parkgreen Communications	020 7851 7480

For a copy of the full results please log on to: www.rurelec.com

CHAIRMAN'S STATEMENT

The Group's strategy is to own and operate modern, low emission power generation plants in Latin America, paying dividends to shareholders based on strong cash flows and at the same time, developing and constructing new power generation capacity with judicious use of project and local subsidiary company debt.

I am pleased to report 2007 was a year of considerable progress for Rurelec. Our operating subsidiaries have been able to make solid progress which underpins future earnings. In Bolivia, Empresa Electrica Guaracachi S.A. ('Guaracachi') recorded its highest profit since its privatisation in 1995, while 160 MW of combined cycle conversion projects in Argentina and Bolivia were financed during the year.  

In the twelve months ended 31st December 2007, Rurelec is reporting an after tax loss, excluding minority interests, of £0.6m (2006 earnings, excluding negative goodwill, were £1.1m). 

However, operating profits remained stable at £2.3m, with Guaracachi showing an improvement at £3.4m (2006 £2.6m) and Energia del Sur ('EdS') showing a slight deterioration to a loss of £0.3m (2006 £0.1m profit) pending commissioning of the combined cycle conversion project later in 2008. Total reported equity for the Group at the end of the year under review was £62.9m (£64.2m at 31st December 2006) including minority interests.

The Group is reporting a basic, diluted and underlying loss per share of 0.85p (earnings per share at 31st December 2006 were 21.17p and underlying earnings per share were 1.68p).

The Group consolidated results mask the tangible progress made, particularly evident in Bolivia, where Guaracachi reported after tax profits of US$9.6m under Bolivian GAAP (Rurelec's share £2.4m). EdS reported a loss after tax of Ar$9.6m (Rurelec's share is a loss of £0.8m).

The Board will be proposing a dividend of 2.5p per share (2006 - 2.25p per share), an increase of 11%.

In 2007 Guaracachi added 79 MW of new gas-fired capacity in Santa Cruz and Sucre in Bolivia, increasing its capacity by nearly one quarter in just one year. EdS made considerable progress on its combined cycle conversion project adding 60 MW of additional steam turbine capacity at Comodoro Rivadavia in Argentina, due to be commissioned in August 2008. At the same time Guaracachi started construction in Sucre of a further 6 MW of Jenbacher gas engine capacity which is currently being commissioned while successfully completing financing of the combined cycle conversion project which is adding 96 MW of steam turbine capacity in Santa Cruz, for operation in the middle of 2009.

Since 2004, Rurelec has completed or begun construction of 245 MW of new generation capacity compared with the 436 MW of existing capacity acquired through EdS and Guaracachi. Few power companies worldwide have increased their gross power plant capacity by 56 per cent in under three years.

We have announced two important developments since the year end.  The first is the approval and registration of 148,019 tonnes per year of CO2 reductions in the form of Certified Emission Reductions certificates ('CERs') for EdS.  This was granted by the Executive Board of the United Nations Framework Convention on Climate Change ('UNFCCC') in early May 2008. The registration is valid for three separate crediting periods of seven years each. 

Based on the registration of EdS's CERs, Rurelec has negotiated a preliminary agreement with BNP Paribas for a forward sale of CERs for the life of the Kyoto Protocol.  This will give EdS, subject to contract, CER income of around US$3 million a year until the end of 2012 from the moment that the EdS CCGT plant in Comodoro Rivadavia enters full commercial operation in August 2008.  Rurelec is also finalising terms for a securitisation of the income from the CER forward sale which is a ground-breaking transaction intended to pay down a significant amount of project debt at EdS. 

CHAIRMAN'S STATEMENT

I am proud of the hard work that the management teams in London, Bolivia and Argentina have put in over the year to ensure that the Group has a sound basis on which to expand. The increase in capacity under our control is a key driver for adding value for our shareholders and this year has seen a remarkable increase. 

We maintain good relations with the electricity sector in general and with the regulators in particular. The markets in which we operate have continued to grow over the past year and are expected to continue to do so and the Board is confident that the Group will be in a position to reap the benefits of growth over the coming years.

Jimmy West

Chairman

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