Interim Results

29 September 2015

Rame Energy plc

("Rame", "Company" or the "Group")

Interim Results for the six months ended 30 June 2015

Rame Energy plc, the international power producer and project development company, is pleased to provide its interim results for the period ended 30 June 2015.

Highlights

· Strong growth with engineering contracts won across off-grid power generation and advancement of the on-grid portfolio

· On-grid power generation:

o Construction of the Raki and Huajache wind projects, totalling 15MW, were completed and power sales commenced in August

o The Company expanded the framework agreement with Santander for the development of wind farm projects throughout Chile to 133MW

o Sale process commenced for Raki and Huajache projects by Santander - Rame owns 20% of equity in these projects

o Completed first solar project in Chile, a rooftop mounted system for the Swiss School of Santiago with a 15 year power purchase agreement ("PPA")

· Off-grid power generation:

o Successful financing of the 1.8MW Cerro Coihue completed in May. Construction has commenced with commissioning expected for the end of Q1 2016

· Rame's UK subsidiary, Beco, announced the launch of its UK roof-top solar portfolio which now has a potential portfolio of 500kW which are either completed, under construction or in negotiation

· Revenue for the period of US$2,950,664 an increase of 641.4% over revenue in the same period (2014 US$397,944), and a loss of US$840,544 and a reduction of 31.4% (2014 US$1,226,016) - in line with the Board's expectations

Post Period End Highlights

Tim Adams, Rame's Chief Executive Officer, said, "Over the first six months of 2015 we have seen the completion of our first 15MW wind farm since the IPO, our first roof-top solar installation in Santiago, and the commencement of construction at the Cerro Bayo mine project. This combined with strong operating income in the UK has seen us return our engineering revenues to pre-IPO levels and this should continue through the second half of the year. We have shown we are able to monetise non-core assets from our project pipeline whilst continuing to progress and enhance the value of our near term targets for construction. We have also made significant progress on our first solar projects in Chile. Rame will continue to look to drive value from the delivery of our development pipeline and look for opportunistic generation projects that meet our criteria in terms of risk and return.

"Whilst the Chilean renewable energy market has grown rapidly over the past 12 months and has attracted many new entrants due to the attractive returns which can be achieved, our long term presence in the country, our track record and our quality project portfolio has ensured that we retain a strong market position. The increased interest in Chile provides us with numerous opportunities in terms of third party revenue generation and for partnering with international operators and investors for the development, sale or operation of assets as they move through the development cycle."

Chairman's Statement

During the period under review, Rame continued its transition into an Independent Power Producer ("IPP"). This was achieved through a number of different developments in Chile including on-grid and off-grid projects as well as an expansion of our activities in the UK.

In Chile, our largest achievement was the completion of two wind farms alongside our equity partner, Santander. Construction of the Raki and Huajache projects, which together comprise 15MW, commenced in May 2014 and was completed in August 2015 when we achieved our first power sales. Our partner in the Raki and Huajache projects, Santander, has decided to sell their stake and has received indicative offers for both. Rame has the option of selling their stake in the projects alongside Santander.

The market for operating renewable assets in Chile is very active right now with a number of international investors looking to enter the Chilean power market. As a result, asset prices have increased significantly over the past twelve to eighteen months. Although the offers for Raki and Huajache are only indicative at this stage, the Directors have decided to sell Rame's stake in both projects if that can be achieved at the current prices. Further announcements will be made in due course.

The Directors believe that this will demonstrate, once again, in a very clear and measurable way Rame's ability to develop projects through construction and then monetise them for a multiple of their investment. Additionally, it will allow the Group to recycle the proceeds into our project pipeline, further increasing its value as further milestones are achieved.

In May, Rame announced that it had completed the funding of the 1.8MW off-grid Cerro Coihue project in conjunction with Anden Re Capital SpA ("Anden Re"). Construction commenced shortly thereafter and the Group expects the first power sales to take place in Q4 2015. This project has a five year PPA with Mandalay Resources to provide power to their Cerro Bayo mine in southern Chile.

In the UK, our solar subsidiary, Beco, has had a good six months and the order book for the remainder of 2015 and on into 2016 looks very healthy. What is less clear, however, is what the future will look like following the UK Government's consultation process as part of a review of the feed-in tariffs for solar projects. The Government's opening position at the time of this announcement was that the feed-in tariffs would face substantial reductions for certain sizes of installation which would affect the level of underlying investment security provided by the tariff. However, for commercial power consumers the deployment of rooftop solar generation still offers very substantial savings and price security and so the position and business implications will not become clear until the outcome of the consultation process is known. The Directors are monitoring this situation closely and will respond accordingly.

The period under view has, therefore, been one of progress and development and has undoubtedly placed Rame in a stronger position to achieve our goals for the future. The results for the period are in line with our expectations and indicative of improved performance in both our Chilean and UK businesses. They also reflect the operational costs associated with positioning Rame to achieve our long term strategic objectives. 

Additionally, considering the solid relationships we have with an array of potential providers of finance, both internationally and in Chile, and customers for our on-grid and off-grid energy, our proven ability to develop commercial power projects and mature project portfolio places Rame ideally to continue its growth in Chile, the UK and beyond. 

Power Generation

On-Grid Power Generation (Large Scale)

Following the completion of all system certification to permit commencement of dispatch of power from its 15MW Raki / Huajache wind project in Chile, power sales commenced in August. The project is operating well and as set out above is now being sold by Rame's partner Santander as set out above. The Directors are focussed on delivering further projects from its development pipeline to meet demand from Santander and other potential investment partners as it seeks to deliver against its strategy of developing 300MW of generating assets in Latin America within the next three years.

Off Grid Power Production (Smaller Scale)

In March the Company announced the Anden Re, an investment group, would finance the 1.8MW wind farm (the "Project") at the Cerro Bayo mine in Chile. It provided US$4.7m facility which covers the total estimated cost of the Project in exchange for a 75% equity interest in the Project at commercial operations date ("COD") with Rame retaining a 25% equity interest.

Rame is acting as engineering, procurement and construction ("EPC") contractor on the Project with construction having begun in Q2. It is expected the project will be completed by the end of 2015, with power being supplied to the isolated grid system which will incorporate diesel and wind to power the Cerro Bayo mining project in Chile owned by TSX listed Mandalay Resources Limited ("Mandalay").

Engineering Services

Solar

Beco saw a steady first half of 2015, with a number of larger projects being completed in the period, including the first two phases of the TRESOC, Totnes Renewable Energy Society, and South Devon Rural Housing Association ("SDRHA") solar installation which provides power to businesses and residents in Totnes. Over the period Beco installed a total 550KW across 33 projects. In February Beco, in conjunction with our Chilean operations installed the first net metered solar development at the Swiss College School which provides power to the school under a 15 year PPA between Rame and the school.

Building on Beco's experience in the UK roof top solar market Rame launched a wholly owned subsidiary established as the holding company to own and operate up to four UK rooftop photovoltaic ("PV") projects with a total potential capacity of 120kW by October, and the Company has identified a number of new projects that are being considered for inclusion in the operating portfolio.

Outlook

The year to date has been an eventful period for the Group. We completed our first large scale production projects as a public company, Raki and Huajache, and commenced selling energy; we designed and constructed our first solar project in Chile, having taken the skills of our UK solar business and re-deployed them in our core market; we completed the financing of our next off-grid project, Cerro Coihue, with a new funding partner, Anden Re; and, in the UK, we completed the integration of Beco and began building roof-top solar assets for our own portfolio.

Despite the drop in commodity prices, demand for energy in Chile continues to grow. The market, actively supported by the Chilean Government, continues to demand that increasing proportions of this new energy is delivered via renewable means without tariff subsidy. This has led many commentators to suggest that Chile is currently one of the most attractive markets for renewable energy in the world. Rame continues to develop new ways in which to commercialise the production of energy from its current and future assets, working closely with industry specialists and its customers.

Our focus over the next six months will be to progress our most advanced on-grid projects to the point of financial close. We have identified a list of priority projects with strong financial returns that are in the late stages of development. We intend to progress these projects to the point of being shovel ready in 2016. The anticipated sale of Raki and Huajache will allow us to recycle the cash generated back into our priority projects. At Cerro Coihue, the construction programme is well under way and we hope to begin producing power there by Q4 2015.

In the UK, the second half of 2015 will be a strong one for Beco. The Government's announcement of a consultation process regarding subsidies for solar projects means there is significant uncertainty over the shape of the UK solar market going forward although the inherent benefits to commercial consumers from the deployment of rooftop mounted solar technology in particular remains strong. The Company is monitoring developments in this sector closely and will take swift action in response to any regulatory or legislative changes that come into play.

As we have stated previously, our challenge continues to be not the developing and constructing of projects but the financing of them on attractive terms. Rame will continue to employ a variety of innovative financing structures to progress its project pipeline to create and capture value for shareholders. We will actively monitor the appropriate time, given market pricing, to realise value in projects to allow capital to be recycled for reinvestment in new projects for further value creation.

Rame continuously evaluates alternative sources of capital to fund existing and future projects. We believe that one of our strengths going forward will be our ability to access a wide variety of sources of capital to match the specific requirements of individual projects and the Group's ability to fund projects from its existing cash resources.

Over the past six months, we have made significant progress towards our goal of developing multiple revenue streams. Our focus continues to be supplying stable, commercially attractive energy directly to major industrial users both on and off grid by combining the optimal generating technology and plant design with efficient financing and the proven ability to execute. The range of our services in Chile has expanded and we are moving quickly towards a blend of income streams that includes a baseline income from our billable services with strong incremental inflows from development activities and the long term stable revenue attributable to a growing IPP position. We look forward to continuing this progress for the benefit of our customers, shareholders, employees and local communities.

For further information, please call one of the contacts below or visit the Company's website, www.rame-energy.com.

Unaudited interim income statement

For the six months to 30 June 2015

Unaudited interim consolidated balance sheet

As at 30 June 2015

Unaudited interim consolidated cash flow statement

For the six months to 30 June 2015

Unaudited interim consolidated statement of changes in equity

For the six months to 30 June 2015

Notes to the unaudited interim consolidated financial information

1. General information

The principal activity of the Group is of an international energy consultant, engineer and power generator for the on and off-grid energy market. The registered office is at PO Box 207, 13-14 Esplanade, St Helier, Jersey, JEI 1BD.

2. Statement of compliance

While the financial information included in this unaudited interim financial information has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRSs"), this announcement does not itself contain sufficient information to comply with IFRS.

The Group does not anticipate any change in these accounting policies for the year ended 31 December 2015. As permitted, this interim report has been prepared in accordance with the AIM rules and not in accordance with IAS 34 "Interim financial reporting".

3. Accounting policies

The same accounting policies, presentation and methods of computation are followed in this condensed consolidated financial information as were applied in the preparation of the Company's annual audited financial statements for the year ended 31 December 2014 , and also the following accounting policy has been adopted.

Scope and methods of consolidation

The consolidation methods used by the Group consist of the following:

- Subsidiaries (entities over which the Group exercises exclusive control) are fully consolidated;

- Entities over which the Group exercises joint control are consolidated using the proportionate method, based on the Group's percentage interest;

- The equity method is used for all associate entities over which the Group exercises significant influence. In accordance with this method, the Group recognises its proportionate share of the investee's net income or loss on a separate line of the consolidated income statement under 'share in net income of associates'.

The Group analyses what type of control exists on a case-by-case basis, taking into account the situations illustrated in IFRS.

All intra-group balances and transactions are eliminated on consolidation.

The presentational currency of the Group is US dollars.

4. Earnings per share - basic and diluted

The calculation of earnings per share is based on a loss of $ 840,544 for the 6 months ended 30 June 2015 (6 months ended 30 June 2014: loss $1,226,016) and the weighted average number of shares in issue in the period to 30 June 2015 of 101,097,444 (30 June 2014: 84,204,535).

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The warrants in issue during the period to 30 June 2014 are anti-dilutive and, therefore, are not included in the above calculation.

5. Stated Capital Account

6. Investment in associate

7. Intangible assets