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Novera Energy Ltd (NVE)

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Friday 09 September, 2005

Novera Energy Ltd

Interim Results

Novera Energy Ltd
09 September 2005



                              ASX/RNS ANNOUNCEMENT
9 September 2005

         Novera Energy announces half year profit and strong cash flow

Highlights

   • Novera Energy Limited (AIM: NVE) announces a profit of A$0.617m
    (£0.255m) for the half year ended 30 June 2005, slightly ahead of the
    Company's expectations for the period.

   • After inclusion of the recently announced half-year cash distribution
    from NMRE of A$2.95m (£1.2m), Novera Energy achieved positive cash
    generation referable to the six-month period of A$1.9m (£0.8m).

Accounting results

Consolidated income statement                       2005              2004
                                                 A$       £        A$       £
                                               (000)    (000)    (000)    (000)
Revenue                                        5,398    2,230   14,669    5,925
EBITDA                                         1,485      614    2,982    1,204
Project development expenditure                 (556)    (230)  (1,560)    (630)
Share of profits / (losses) from NMRE        
(50% share)                                     (334)    (138)       -        -
Depreciation and financing costs                  22        9   (3,460)  (1,397)
Reported profit                                  617      255   (2,038)    (823)

Note: Novera's 2004 revenue represented the ownership (100%) of renewable asset
portfolio that was subsequently sold to NMRE in December 2004.

The key sources of income during the six month period were:

   • Biomass services business A$2.2m (£0.9m);
   • Development income A$2.6m (£1.1m) from the proceeds of the Mynydd Clogau
     wind farm to NMRE; and
   • Development income A$0.6m (£0.3m) from the acquisition of two German
     wind farms by NMRE and the East London Sustainable Energy Project.

Cash flow
After inclusion of the cash contribution from NMRE for the six months ended
June 2005 of A$2.9m (£1.2m) received in July 2005, the net cash generated
referable to the first six months of 2005 was A$1.9m (£0.8m). The NMRE cash
distribution will be included as part of the cash flow statement in the 2005
full year result.

Over the six months, the Company's cash flow from financing activities was A$16m
(£6.7m) representing successful placements earlier this year, predominantly
sourced from UK institutions. Proceeds will support the further acquisitions
being considered by the Company.

Cash held by the Company at 30 June 2005 was $14.2m (£6m) and at the end of
August was approximately A$17m (£7.1m).

Business update
Novera Macquarie Renewable Energy Limited
The half-year represents the first six months operation of the NMRE joint
venture which is performing in line with the Company's expectations, as
evidenced by the recent cash distribution received by the Company.

Novera Business Development
Novera Energy undertook a number of investment activities during the period,
most notably, a A$3.3m (£1.4m) investment in its share of NMRE's acquisition of
Prutzke and Rohlsdorf operational wind farms in Germany, as announced on 2 May
2005.

Novera also committed A$0.3m (£0.13m) to its UK wind development portfolio under
the joint development agreement with the RED Group and another A$0.3m (£0.13m)
to its sustainable energy project in East London. Details of the expenditure and
the progress being made with those projects are set out in the accompanying
Results Presentation.

Achievements by Novera's development team during the first half of 2005
included:

   • The sale to NMRE of the 14.5MW Mynydd Clogau wind farm development in
     Wales;
   • Completion of the Prutzke and Rohlsdorf wind farm acquisitions;
   • Positive progress with the development of wind farm sites in Scotland
     and North of England; and
   • Announcement of A$11.9m (£5m) of support from the UK Government towards
     development of the Company's East London Sustainable Energy Project with an
     estimated enterprise value of A$60m (£25m).

The total development expenditure in the half year was A$0.556m (£0.230m) in
progressing new projects and investments which are expected to be material to
Novera Energy's future revenue growth. Details of the potential value in each
project are contained in the Results Presentation which also provides an outline
of the current status of new investment activity.

Implementation of IFRS
In accordance with the requirements under International Financial Reporting
Standards (IFRS), the Company has addressed the impact of the introduction of
IFRS in relation to its investment held by NMRE in addition to other financial
activities undertaken by Novera. IFRS does not have a cash flow impact.

For further information please contact:
Ken Cronin / Janine Brewis, Gavin Anderson +44 (0)20 7554 1400

INTERIM FINANCIAL REPORT
A summary of Novera Energy's Interim Financial Report 30 June 2005 follows. To
view and download the full report and related documents, please paste the links
below into your web browser.

Interim Financial Report 30 June 2005
http://www.asx.com.au/asxpdf/20050909/pdf/3s7k5d108x9p0.pdf

Appendix 4D Half year report
http://www.asx.com.au/asxpdf/20050909/pdf/3s7k5d108x9p0.pdf

Company presentation
http://www.noveraenergy.com/images/stories/pdf/announcement/
nve%209%20sept%2005%20company%20presentation.pdf


DIRECTORS' REPORT
The Directors present their report on the consolidated entity consisting of
Novera Energy Limited and the entities it controlled at the end of, or during,
the half-year ended 30 June 2005.

1. Directors

The following persons were Directors of the Company during the half-year and up
to the date of this report:

   • Dr Don Stammer (Appointed 29 August 2001)
   • John Brown (Appointed 10 June 2005)
   • Donald Farrands (Appointed 22 September 1998)
   • Shane Gannon (Appointed 4 March 2004)
   • Mark Hardgrave (Appointed 14 March 2001)
   • David Scaysbrook (Re-appointed 28 January 2005)

2. Review of operations

2.1 Overview

Since the Company established the Novera Macquarie Renewable Energy ('NMRE')
joint venture with Macquarie Bank in December 2004, it has concentrated on:

   • Delivering performance and value from the assets owned by Novera Energy,
     equal to or better than the investment case. NMRE currently owns and
     operates 137 MW of diversified renewable energy assets consisting of
     landfill gas, hydro, wind and industrial power generators. The assets are
     located in UK and Germany.

   • Enhancing the value of Novera Energy's pipeline of new assets, notably
     the development of new wind power sites in Scotland and Northern England
     and the Company's waste biomass business.

Further information on the Company's performance can be accessed from the Novera
Energy web site and the ASX/RNS announcement accompanying this report.

2.2 AIM Listing

The Company was admitted to the Alternative Investment Market (AIM) of the
London Stock Exchange on 10 June 2005. The Company raised $11.2 million after
costs through a placing of 9 million ordinary shares at $1.40 per share. The
Directors believe that listing on the AIM will provide the Company with a source
of equity finance that will allow the Company to pursue growth opportunities
within the renewable energy sector in Europe.

2.3 Development Approach

The Company's main asset is its interest in NMRE. Its development team is
focussed on adding projects and assets to NMRE following development/acquisition
appraisal including relevant financial and other due diligence, generally in
consultation with Macquarie. Projects developed/identified by the Company will
either be offered to NMRE for investment (depending upon location and asset
type) or pursued by the Company, either alone or in conjunction with others.

Acquisitions for the six month period by NMRE, comprising 9MW of operating wind
farms in Germany.

Development expenditure of $0.3 million during the six months to June 2005
related to the Company's development of wind farms in Scotland and Northern
England, which is expected to result in formal applications being made for
planning approval for at least five sites in early 2006. The results of the
development applications should be known by late 2006. The successful
development of these sites would contribute significant income to the Company in
future years.

The Company's recently announced waste biomass project, East London Sustainable
Energy Facility, also incurred expenditure of $0.3m during the six months to 30
June. Subject to contract, the costs are to be recovered as part of the UK
Government's agreement to purchase $11.9m of services from Novera related to the
development, construction and operation of the facility.

3. Financial Performance

A summary of the consolidated financial performance for the half-year is
included in this report. The company's operations and the results from
operations are outlined below:

3.1 Income Statement

Novera Energy had three sources of revenue/income during the six month period
ended June 2005:

      I.   Income of $2.6m derived from the sale to
           NMRE of the Mynydd Clogau wind farm development project;

      II.  Advisory fees totalling $0.6m for the acquisition of two German wind
           farms and development of the East London waste project;

      III. Revenue of $2.2m from the Company's Biomass Services business in
           the UK.

Depicted in the table below are the key contributions to the Company's profit
for the six months ended June 2005.

Consolidated income statement                       A$m
     EBITDA (before development expenditure)        1.5
     Development expenditure during the            
     six-month period.                             (0.6)
     Share of profits / (losses) from Novera       
     Macquarie joint venture (50% share).          (0.3)
     Reported profit before tax.                    0.6

3.2 Cash flow

During the six-month period Novera Energy undertook two capital raisings
totalling A$16.1m (net) for the purposes of funding current project
opportunities. The Company held cash of $14.2m at 30 June 2005.

After inclusion of the cash contribution from NMRE for the six months ended June
2005 of $2.9m (received in July 2005), the net cash generation referable to the
first six months of 2005 was $1.9m. The NMRE cash distribution will be included
as part of the cash flow statement in the 2005 full year result.

During the period, the Company undertook a number of investment activities,
including development expenditure for its pipeline of renewable projects,
notably the wind farms in Scotland and Northern England, of $0.3m, and
investment in NMRE for 50% of the equity in further renewable assets, German
wind farms, of $3.3m.

The Company's cash flow from financing activities of $16.0m represents
successful placements earlier this year, predominantly sourced from UK
institutions. Proceeds will support further acquisitions being considered by the
Company.

Cash held by the Company at the date of this Directors' Report is approximately
$17m.

3.3 Balance sheet

The financial activities of Novera during the past six months have strengthened
the current position of the Group, with total assets at 30 June of $60.4m,
represented by cash $14.2m, an investment in NMRE of $40.7m, receivables of
$5.2m and other of $0.3m. Total liabilities, including deferred revenues, were
$10.9m.

4. Implementation of IFRS

In accordance with the requirements under International Financial Reporting
Standards (IFRS), the company has addressed the impact of the introduction of
IFRS in relation to its investment held by NMRE in addition to other financial
activities undertaken by Novera. Note 8 of the Interim Financial Report provides
a reconciliation of the impact caused by IFRS to Novera's results. IFRS does not
have a cash flow impact.

5. Foreign Currency Translation

In accordance IFRS requirements, the Company has adopted UK pounds as its main
functional currency given that most of its activities are in the UK. As a
consequence, transactions are recorded in pounds and converted to Australian
dollars (the reporting currency) as follows: for the income statement, on an
average exchange rate for the six month reporting period; and for the balance
sheet, the exchange rate as at period end. The British Pound depreciated against
the Australian Dollar during the six months under review. The exchange rate at
30 June 2005 was 0.4222, a fall in the British Pound of 4% against the exchange
rate at 31 December 2004 of 0.4047. As a consequence, an adjustment has been
made to the balance sheet of $1.8 million against the Foreign Currency
Transaction Reserve (FCTR).

6. Dividend

No dividend was declared during the half year ended 30 June 2005.

7. Auditor's Independence Declaration

A copy of the Auditor's independence declaration as required under section 307C
of the Corporations Act 2001 is set out on page 5.

7. Rounding of amounts to nearest thousand dollars

The Company is of a kind referred to in Class Order 98/0100 issued by the
Australian Securities & Investments Commission, relating to the 'rounding off'
of amounts in the directors' report and financial report. Amounts in the
directors' report and financial report have been rounded off to the nearest
thousand dollars in accordance with that Class Order.


Novera Energy Limited and controlled entities
Consolidated income statement
For the half-year ended 30 June 2005
                                                                 Half-year
                                                            2005        2004
                                                           $'000        $'000

Revenue from continuing operations                        2,631        14,669
Other income                                              2,767             -
                                                          --------------------
                                                          5,398        14,669
                                                         ---------------------

Cost of sales from continuing operations                       -       (7,398)
Employee benefits expense                                 (2,939)      (4,409)
Depreciation and amortisation expenses                       (29)      (2,289)
Development costs                                           (556)        (110)
Finance costs-net                                             51       (1,171)
Other expenses                                              (974)        (131)
Share of net profits (losses) of associates and             
joint ventures accounted for using the equity method        (344)         (24)
Profit on sale of investment                                   -          275
                                                            ------------------
Profit/(Loss) before income tax expense                      617         (588)
Income tax expense                                             -            -
                                                            ------------------
Profit/(Loss) from continuing operations                     617         (588)

Loss from discontinued operations                             -         (1,450)
                                                            -------------------
Profit/(Loss) for the half-year                              617        (2,038)
                                                            --------------------
Profit/(Loss) attributable to members of Novera             
Energy Limited                                               617        (2,038)
                                                            ====================
 
                                                           Cents        Cents
Earnings per share for profit /(loss) from
continuing operations attributable to the ordinary
equity holders of the company

Basic earnings per share                                    1.40         (0.2)
Diluted earnings per share                                  1.39         (0.2)

                                                           Cents        Cents
Earnings per share for loss from discontinued
operations attributable to the ordinary equity
holders of the company
Basic earnings per share                                      -          (0.7)
Diluted earnings per share                                    -          (0.7)

                                                          Cents         Cents
Earnings per share for profit/(loss) attributable to
the ordinary equity holders of the company
Basic earnings per share                                   1.40          (0.9)
Diluted earnings per share                                 1.39          (0.9)

The above consolidated income statement should be read in conjunction with
the notes accompanying the Interim Report.


Novera Energy Limited and controlled entities
Consolidated balance sheet
As at 30 June 2005
                                                           30 June   31 December
                                                              2005         2004
                                                             $'000        $'000
ASSETS
Current assets
Cash and cash equivalents                                   14,175        2,856
Receivables                                                  3,170        1,821
Prepayments                                                    170           49
                                                           --------------------
Total current assets                                        17,515        4,726
                                                           ---------------------

Non-current assets
Receivables                                                 2,023         2,412
Investments accounted for using the equity method          40,727        39,750
Property, plant and equipment                                 165           125
                                                           ---------------------
Total non-current assets                                   42,915        42,287
                                                           ---------------------
                                                                                
                                                           ---------------------
Total assets                                               60,430        47,013
                                                           ---------------------

LIABILITIES
Current liabilities
Payables                                                    2,594         2,059
Deferred revenue                                              369         2,316
Provisions                                                    289            81
Other                                                         287           428
                                                           ---------------------
Total current liabilities                                   3,539         4,884
                                                           ---------------------

Non-current liabilities
Deferred revenue                                            7,371         7,637
                                                           ---------------------
Total non-current liabilities                               7,371         7,637
                                                           ---------------------
                                                                                
                                                           ---------------------
Total liabilities                                           10,910       12,521
                                                           ---------------------
                                                                                
                                                           ---------------------
Net assets                                                  49,520       34,492
                                                           ---------------------

EQUITY
Contributed equity                                          77,039       60,784
Reserves                                                    (3,108)      (1,264)
Retained losses                                            (24,411)     (25,028)
                                                           ---------------------

Total equity                                                49,520       34,492
                                                           =====================


The above consolidated balance sheet should be read in conjunction with the
notes accompanying the Interim Report.


Novera Energy Limited and controlled entities
Consolidated statement of changes in equity
For the half-year ended 30 June 2005

                                                                  Half-year
                                                               2005        2004
                                                              $'000       $'000

Total equity at the beginning of the half-year                34,492     32,482
                                                             -------------------
(2005:refer note 8 (1) (c))

Exchange differences on translation of foreign operations     (1,876)     2,978
Employee share options                                            32          -
                                                              ------------------
Net income recognised directly in equity                      (1,844)     2,978
Profit/(Loss) for the half-year                                  617     (2,038)
                                                              ------------------
Total recognised income and expense for the half-year         (1,227)       940
                                                              ------------------

Transactions with equity holders in their capacity as equity
holders:
Contributions of equity, net of transaction costs (note 5)    16,255        440
                                                              ------------------

Total equity at the end of the half-year                      49,520     33,862
                                                              ------------------

Total recognised income and expenses for the half-year is
attributable to:
Members of Novera Energy Limited
                                                              (1,227)       940
                                                              ------------------

The above consolidated statement of changes in equity should be read in
conjunction with the notes accompanying the Interim Report.


Novera Energy Limited and controlled entities
Consolidated statement of cash flows
For the half-year ended 30 June 2005

                                                                 Half-year
                                                            2005          2004
                                                           $'000         $'000

Cash flows from operating activities
Receipts from customers (inclusive of goods and services   
tax)                                                       1,736         14,544
Payments to suppliers and employees (inclusive of goods   
and services tax)                                         (2,825)       (14,085)
                                                          ----------------------
                                                          (1,089)           459
Interest received                                             51             14
Borrowing costs                                                -         (1,168)
                                                          ----------------------
Net cash inflow/(outflow) from operating activities       (1,038)          (695)
                                                          ----------------------

Cash flows from investing activities
Payments for property, plant and equipment                   (69)        (2,125)
Payment of development costs                                (300)           (45)
Payments for investments                                  (3,281)             -
Proceeds from vending of NEEL and other activities          (663)         6,639
Proceeds from sale of assets                                   6              -
Proceeds of loans from related parties                       515        758,766
                                                          ----------------------
Net cash inflow (outflow) from investing activities       (3,792)         5,227
                                                          ----------------------

Cash flows from financing activities
Repayment of borrowings                                       -          (2,228)
Proceeds from issues of shares and other equity           
securities                                                16,090            662
                                                          ----------------------
Net cash inflow (outflow) from financing activities       16,090         (1,566)
                                                          ----------------------

Net increase (decrease) in cash and cash equivalents      11,260          2,966
Cash and cash equivalents at the beginning of the         
half-year                                                  2,856          1,710
Effects of exchange rate changes on cash and cash         
equivalents                                                   59            279
                                                           =====================
Cash and cash equivalents at the end of the half-year      14,175         4,955
                                                           =====================


The above consolidated cash flow statement should be read in conjunction with
the notes accompanying the Interim Report.

ENDS.




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