17th Dec 2007 07:00
Greenko Group plc17 December 2007 Greenko Group plc Interim results for the six months ended 30 September 2007 Greenko Group plc ("Greenko" or the "Group"), the Indian renewable energy ownerand operator, today announces its results for the six months ended 30 September2007. Highlights • Secured total production capacity of 90.5 MW capacity including o The acquisition of three biomass plants - currently operational o The acquisition of two hydroelectric plants - due to be operational from mid 2008• Development of essential supporting infrastructure• Secured €11 million pre-IPO funding• Ravi Kiran biomass plant awarded UNFCCC carbon credit registration• Total revenue of €3.92 million• EBITDA of €1 million Post period end • Greenko SA migrated its country of incorporation from Luxembourg to the Isle of Man and renamed Greenko Group plc• Successful IPO on AIM raising €45 million before expenses• Secured two further Hydro concessions, totalling 20 MW• Indian economic outlook and power demand continues to grow Anil Chalamalasetty, CEO and co-founder of Greenko, commented: "This has been a busy time for Greenko as we continue to make solid progress inour drive to become a leading Indian renewable energy owner and operator. Wehave grown our secured installed capacity from 19.5 MW at the start of theperiod under review to 90.5 MW through a combined process of acquisition ofexisting operating plants and those under construction. Following the end of the period, we successfully concluded an IPO on AIM,raising €45 million of new equity before expenses, and giving Greenko aninternational investor base from which we will have access to funding for futuregrowth. We have a strong pipeline of acquisitions in place and remain confidentin our growth prospects as well as our ability to meet expectations for the fullyear. We look forward to making further announcements of acquisitions early in 2008." Enquires: Greenko Group plcAnil Chalamalasetty +91 (0)98 4964 3333Mahesh Kolli +44 (0)7767 692729Tim Bowen +44 (0)7973 668818 Arden Partners plcChristopher Hardie +44 (0)20 7398 1600Adrian Trimmings Cardew GroupRupert Pittman +44 (0)20 7930 0777Jamie MiltonCatherine Maitland Chairman's Statement: I am very pleased to announce Greenko's first set of interim results for the sixmonth period ended 30 September 2007, following our successful IPO on AIM on 7November 2007. The business has made impressive strides forward during theperiod under review, significantly growing its installed capacity and developinga solid pipeline of new projects for acquisition. We strongly believe that theGroup's performance to date places us in an excellent position for continuedgrowth. Greenko was formally incorporated in January 2006 as a vehicle to take advantageof the opportunities for consolidation of the Indian renewable energy market andoperates in the two markets of renewable energy supply and Carbon EmissionReduction units ("CERs") provision. Greenko's growth proposition focuses onproviding solutions to the issues created by energy demand, energy security andemissions growth in India. In the months following the period under review, the Group completed asuccessful float on AIM, raising €45 million before expenses, part of which isbeing used to finalise the two biomass acquisitions and the two hydro projectswhich were secured in September 2007. The Board believes that the outlook for the Group remains firmly positive as wecontinue to grow our assets towards our medium term goal of 400 MW installedcapacity by the end of financial year 2010-2011. Following this period ofintense activity the Board would like to extend its thanks to the managementteam, Greenko staff and the Group's advisors for their hard work and support. Welook forward to working together in the future to continue to generate solidgrowth and value for our shareholders. Y. Harish Chandra PrasadChairman CEO REPORT Introduction I am pleased to present Greenko's first interim results as a public company. TheGroup made considerable progress during the period under review, having laid thegroundwork for the successful AIM flotation at the start of November 2007 andincreased contracted capacity from 19.5MW to 90.5MW. Greenko is focused on developing a portfolio of biomass, hydro and wind assetswithin India and intends to increase the installed capacity it operates througha combination of purchasing both existing assets and projects underconstruction, as well as the winning of concessions to develop new greenfieldassets. The Group's income is generated from receipts for power sold to stateelectricity boards and from sale of high margin carbon credits, CERs, which aregenerated from the Group's United Nations registered clean energy projects. Inthe future, the Directors believe that new opportunities, such as the directsale of electricity to large scale users and sales of CERs in the voluntarymarket, will broaden the income streams of the Group as well as further enhanceprofitability. Financial review For the six months ended 30 September 2007, Greenko's gross revenue was€3,924,299 and profit after tax was €84,854. The Company generated EBITDA of€992,703, which represents an EBITDA margin of 31%. The electricity revenue during the period was €3.18 million which represents thefollowing plant generation: +------------------+------------------+-----------------------+----------------+| Plant Name | Acquisition | No. of months | Amount || | Date | Contribution | (• Millions) |+------------------+------------------+-----------------------+----------------+| Sri Balaji | FY 2007 | 6.0 | 1.06 |+------------------+------------------+-----------------------+----------------+| KMS | FY 2007 | 6.0 | 1.05 |+------------------+------------------+-----------------------+----------------+| Roshni | June 2007 | 3.2 | 0.56 |+------------------+------------------+-----------------------+----------------+| ISA | September 2007 | 1 | 0.28 |+------------------+------------------+-----------------------+----------------+| Ecofren | September 2007 | 1 | 0.23 |+------------------+------------------+-----------------------+----------------+| Total | | | 3.18 |+------------------+------------------+-----------------------+----------------+ In the month of September 2007 the Group had electricity sales of approximately€1 million which represents the current run rate. During the period under review the company recognised CER revenue of €744,827having sold 56,121 CERs at an average price of €13.27. The Board does not propose to pay an interim dividend. Operational review During the period under review, in addition to securing €11 million of pre-IPOfunding and preparing the Company for its flotation on AIM, Greenko undertookthe following developments: Biomass assets The period has seen a significant expansion of biomass assets operated, fromthree to six plants. Five of these plants are 100% owned by Greenko, with thesixth, Ravi Kiran, 50% owned. It is anticipated that this will rise to 100% inthe near future. The Group acquired Roshni in June 2007 and also acquired ISAand Ecofren biomass plants with effect on 1 September 2007. This brought thetotal secured installed capacity from biomass assets to 40.5MW. Hydro assets During the period under review Greenko secured two Hydro projects, AMR andRithwik, with a combined installed capacity of 49MW. These will start operatingearly in the second half of 2008 and are currently reaching the final stages ofconstruction. Post the period end the Group has secured two further Hydroconcessions to build plants totalling a further 20MW of capacity. Wind assets Wind power continues to attract much investment in the subcontinent andparticularly Southern India such as in the state of Tamil Nadu due to fiscalincentives and the climatic advantages offered. Greenko is currently evaluatinga number of projects and will seek to acquire wind assets which offer superiorreturns to the Company. CER activity During the period under review, Greenko sold CERs generated from two of itsplants at prices of €12 per CER (as per the forward contract signed in 2006) andat €14.6 per CER. Subsequent to the period end the CER spot prices haveincreased above these levels and the Directors are confident that favourablepricing should be achievable for the Group's current stock of CERs. Outlook Following the end of the period under review, Greenko raised €45 million beforeexpenses through its flotation on AIM. This will allow the Group to finalise theacquisition of ISA and Ecofren biomass assets and AMR and Rithwik hydro plants.We expect these projects to contribute considerably to revenue generation in thefuture through the sale of both electricity and CERs. The balance of the fundsraised will be used to continue to roll out the Company strategy and acquireadditional plants. Negotiations are currently underway to secure a number of further assets acrossour chosen sectors of biomass, hydro and wind, and as installed capacity grows,so too will the potential of direct power sales to end users. With thegovernment of India's economic growth projections for the country atapproximately 9% on an annual basis, we anticipate excellent market conditionsfor future growth and the Board remains confident of the outcome for the fullyear. It is anticipated that further announcements regarding increased capacity willbe made in early 2008. Anil ChalamalasettyCEO Balance Sheet As at 30 September 2007 • •___________________________________________________________________________ 30 September 2007 31 March 2007 Unaudited Audited___________________________________________________________________________ASSETSNon-current assetsProperty, plant and equipment 23,754,406 7,851,871Capital work in progress 107,182 60,712Intangible assets 2,586,173 345,871Investment in associates 1,025,955 901,691Available for sale financial assets 46,694 -Restricted Asset 322,824 -Other Assets 15,568 419Sundry deposits 404 4,187 _______________________________ 27,859,206 9,164,751 _______________________________Current assetsInventories 613,975 463,392Trade receivables 1,927,376 387,496Other assets 5,405,903 135,454Short term investments in bank 3,552 19,633depositsRestricted asset 536,412 519,436Loans to associates 1,130,671 667,150Cash and cash equivalents 2,756,368 1,195,139 _______________________________ 12,374,257 3,387,700 _______________________________Total assets 40,233,463 12,552,451___________________________________________________________________________ EQUITYOrdinary shares 44,900 32,000Share warrants 235,414 235,414Series A Preferred shares 68,000 68,000Share premium 2,923,383 2,864,883___________________________________________________________________________Reserves 107,256 6,165Retained earnings 73,488 -___________________________________________________________________________Profit for the period 84,854 73,488___________________________________________________________________________Total equity 3,537,295 3,279,950___________________________________________________________________________ LIABILITIESNon-current liabilitiesBorrowings 26,374,538 6,718,460Deferred income tax liabilities 1.089,477 510,552Retirement benefit obligations 16,586 7,191Trade and other payables 669 2,306 _______________________________ 27,481,270 7,238,509Current liabilitiesTrade and other payables 5,055,078 755,786Current income tax liabilities, net 171,536 44,573Borrowings 3,988,284 1,233,633 _______________________________ 9,214,898 2,033,992Total liabilities 36,696,168 9,272,501___________________________________________________________________________Total equity and liabilities 40,233,463 12,552,451___________________________________________________________________________ Income Statement For the six months ended 30 September 2007 • •___________________________________________________________________________ Six months to 30 Period from 12 September 2007 January 2006 to 31 March 2007___________________________________________________________________________ Sale of power 3,179,472 1,607,083Sale of CER 744,827 1,933,419Total revenue 3,924,299 3,540,502Other operating income 40,031 1,071Cost of materials (2,341,261) (1,678,932)Personnel expenses (167,281) (87,928)Depreciation and amortisation (343,651) (179,887)Negative goodwill on business - 60,399acquisitionOther operating expenses (559,505) (1,113,375)___________________________________________________________________________Operating profit 552,632 541,850___________________________________________________________________________Finance income 366,740 217,241Finance cost (758,721) (517,382)Finance costs (net) (391,981) (300,141)Share of profit of associate 96,420 23,205___________________________________________________________________________Profit before income tax 257,071 264,914___________________________________________________________________________Income tax expense (172,217) (191,426)___________________________________________________________________________Profit for the year 84,854 73,488___________________________________________________________________________Attributable to:Attributable to equity holders of the Company 84,854 73,488___________________________________________________________________________Earnings per share for profitattributable to the equity holdersof the Company during the period___________________________________________________________________________- basic (in cents) 0.40 0.38___________________________________________________________________________- diluted (in cents) 0.33 0.33___________________________________________________________________________ Unaudited Statement of Changes in Equity For the period ended 30 September 2007 Greenko Group plcConsolidated statement of changes in equity(All amounts in Euro) Attributable to equity holders of the Company ________________________________________________________________________ Share Share Preferred Additional Reserves Retained Total Minority Total equity As at capital warrants stock capital earnings interest as at 31 March 30 September 2007 2007 ________________________________________________________________________________________________________ Balance as at 32,000 235,414 68,000 2,864,883 6,165 73,488 3,279,950 - 3,279,950 -1 April 2007Currency translation differences - - - - 94,768 - 94,768 - 94,768 6,165Net income/(expense) recognised directlyin equity - - - - 6,323 - 6,323 - 6,323 -Profit for the period - - - - - 84,854 84,854 - 84,854 73,488Issuance of ordinary share 6,500 - - 58,500 - - 65,000 - 65,000 32,000Preferred Shares - - - - - - - - 3,000,000Direct Cost relating to issue of Series A Preferred Shares - - - - - - - - (67,117)Share warrants - - - - - - - - - 235,414Share application pending allotment 6,400 - - - - - 6,400 - 6,400 - ________________________________________________________________________________________________________ Balance at 30 September 2007 44,900 235,414 68,000 2,923,383 107,256 158,342 3,537,295 - 3,537,295 3,279,950 ======================================================================================================== Additional capital represents the premium paid by irredeemable preferenceshareholders & ordinary shareholders on issue of shares. Cash flow statement For the period to 30 September 2007 • • Six month Period from 12 period ended January 2006 to 30 September 31 March 2007 2007A. Cash flows from operating activities Profit before income tax 257,071 264,914 Adjustments for: Depreciation 343,651 179,887 Loss on sale of Assets 235 Foreign exchange losses on operating activities 948 (70,001) Interest income (332,185) (30,293) Dividends received (34,556) Interest expense 758,721 517,382 Negative goodwill on business acquisition (60,399) Changes in working capital Inventories 73,306 (74,828) Trade and other receivables (930,489) (8,428) Other Current assets (5,044,796) (47,332) Trade and other payables 3,038,046 (210,672) ______________________________ Cash generated from operations (1,870,283) 460,465 Taxes paid (28,997) (42,701) ______________________________ Net cash generated from operating activities (1,899,280) 417,764 ______________________________ B. Cash flows from investing activities Purchase of property, plant and equipment (PPE) (104,608) (211,516) Proceeds from sale of PPE - 6,328 Purchase of investments including advances (172,490) (1,478,196) Acquisition of business, net of cash acquired (5,567,051) (2,169,308) Loans to associates (455,858) (670,235) Interest received 198,603 30,293 Dividends received 34,556 - ______________________________ Net cash used in investing activities (6,066,848) (4,492,634) ______________________________ C. Cash flows from financing activities Proceeds from issue of A Series a Ordinary Shares 65,000 32,000 Proceeds from issue of A Preferred Shares - 2,932,883 Proceeds from borrowings 11,177,733 2,811,938 Repayments of borrowings (1,151,220) (394,450) Proceeds from Share Warrants - 235,414 Proceeds from Share application money pending 6,400 - allotment Interest Paid (553,885) (361,594) ______________________________ Net cash used in financing activities 9,544,028 5,256,191 ______________________________ Net increase/(decrease) in cash and cash equivalents 1,577,900 1,181,321 Effect of exchange rate changes on cash and cash equivalents (16,671) 13,818 Cash and cash equivalents at the beginning of the period 1,195,139 - Cash and cash equivalents at the end of the period 2,756,368 1,195,139 ______________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Basis of preparation The interim consolidated financial statements of the Group for the six monthperiod ended 30 September 2007 were approved by the Board of Directors on 14December 2007. The interim consolidated financial statements have been prepared in accordancewith International Financial Reporting Standards (IFRS) issued by theInternational Accounting Standards Board (IASB) and the interpretations issuedby the International Financial Reporting Interpretations Committee (IFRIC). In the opinion of the Directors, the financial statements for the six months to30 September 2007 presents fairly the financial position of operations and cashflows in conformity with IFRS other than for the treatment of pre-IPOconvertible loans which were entered into during the period under review andconverted into ordinary shares at the Group's Aim IPO in November 2007. Anyadjustment for fair value for these instruments will be considered in theGroup's financial statements for the year to 31 March 2008. These interim consolidated financial statements have been prepared under thehistorical cost convention as modified by the revaluation of financial assets,and financial liabilities at fair value through profit or loss. The preparationof financial statements in conformity with IFRS requires the use of certaincritical accounting estimates. It also requires management to exercise itsjudgment in the process of applying the Group's accounting policies. The areasinvolving a higher degree of judgment or complexity, or areas where assumptionsand estimates are significant to the consolidated financial information aredisclosed in these notes. The company has not early adopted IAS-34 (Interim Financial Reporting Standardsas developed and published by the International Accounting Standards Board).Thecompany has chosen to present the consolidated balance sheet, condensed incomestatement, condensed statement of cash flows and condensed statement of changesin shareholders' equity along with selected explanatory notes. Comparative results for the period to 30 September 2006 are not shown, as in2006 the Group was effectively a start up operation and the Directors do notbelieve any such comparative would be meaningful. The Group's audited resultsfor the period to 31 March 2007, as shown in the Admission Document for theGroup's Aim IPO, are used a comparative covering the period from 12 January 2006to 31 March 2007. b. Revenue and revenue recognition (i) Sale of electricity Income from sale of electricity is recognised on the basis of number of units ofpower exported in accordance with joint meter reading done on monthly basis bythe representatives of the buyer and the Company at the rates prevailing as onthe date of export. (ii) Sale of Certified Emission Reductions ("CERs") Revenue is recognised when CERs have been generated and sold to an end user. (iii) Interest income Interest income is recognised as the interest accrues. Taxes Current tax provisions represent the amount that would be payable based oncomputation of tax as per prevailing taxation laws in respective jurisdictions. Deferred income tax is provided, using the liability method, on all temporarydifferences at the balance sheet date between the tax bases of assets andliabilities and their carrying amounts for financial reporting purpose. Deferredincome tax liabilities are recognised for all taxable temporary differences. c. Use of estimates The preparation of financial statements requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities,disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. On an ongoing basis, management evaluates its estimates and judgments, includingthose relating to revenue recognition, fair value valuations, allowance fordoubtful amounts, associates and financial assets, property, plant andequipment, goodwill, intangible assets, income taxes, financial instruments,self-insurance, employee benefits, contingencies and litigation. Management bases its estimates and judgments on historical experience and onvarious other factors that are believed to be reasonable under thecircumstances, the results of which form the basis for making judgments aboutthe carrying value of assets and liabilities that are not readily available fromother sources. Actual results may differ from these estimates under differentassumptions and conditions. d. Segment reporting A business segment is a group of assets and operations engaged in providingproducts or services that are subject to risks and returns that are differentfrom those of other business segments. The Group considers that it operates in asingle geography being India and in a single business segment being theproduction and sale of electricity and related CER's. 3. Share capital As at 30 September 2007 •Authorised3,200 Series A ordinary shares of • 10 each 32,0006,800 Irredeemable preferred shares of • 10 each 68,00010,650 Ordinary shares of €10 each 106500 206,500 As at 30 September 2007 •Issued and fully paid3,200 Series A ordinary shares 32,0006,800 irredeemable preferred shares 68,000650 ordinary shares of €10 each 6,500 106,500 4. Earnings per share The following is the reconciliation of the weighted average number of equityshares and equity equivalents used in the computation of basic and diluted EPSfor the period ended 30 September 2007 For the half year ended 30 September 2007Weighted average number of shares outstanding used in computing basic EPS 21,136,612Dilutive effect of shares warrants & SIB Options 4,699,376Weighted average number of equity and equity 25,835,988equivalent shares outstanding used in computingdiluted EPSProfit for the period 84,854Basic earnings per share (in cents) 0.40Diluted earnings per share (in cents) 0.33 5. Post balance sheet events The authorised share capital of the Company was increased to €375,000 duringOctober 2007. At the same time the following transactions took place: • Warrants were exercised and 1,000 ordinary shares of €10 each were issued • A further 1,000 ordinary shares of €10 each were issued In preparation for the Group's IPO on London Stock Exchange's AlternativeInvestment Market (AIM), the authorised capital and paid up capital wererestructured and the authorised capital was split on the basis of 2000:1 andrestated as 75,000,000 Ordinary shares of €0.005 each. The paid up capitalbefore the public issue was 25,300,000 ordinary shares of €0.005 each. During October 2007 Greenko SA migrated from Luxembourg to the Isle of Man as acompany under the Isle of Man Companies Act 2006 with registration number001805V and was renamed Greenko Group plc. As per the terms of the Convertible Loan Notes issued to Aloe Fund-II, the loanof €8.0 million along with accrued interest was converted into 7,714,980 equityshares of €0.005 each. Provision was also made for the issue of 2,830,246ordinary shares of €0.005 each to the Small is Beautiful fund in pursuance ofthe options issued in their favour for subscribing to the shares of the Companyas per the terms of Share Subscription Agreement entered into for theirinvestment of Rs.180 million in Preference shares in the Company's Indiansubsidiary, Sri Balaji Biomass Power Pvt. Ltd. Following the IPO placing of 32,144,011 ordinary shares there were 67,989,237ordinary shares of €0.005 each in issue. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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