29th Sep 2009 07:00
ANDES ENERGIA PLC
("Andes" or the "Company" or with its subsidiaries the "Group")
ANDES ENERGIA PLC - UNAUDITED 2009 INTERIM RESULTS
Andes, the Latin American energy group, is pleased to announce its interim results for the six months ended 30 June 2009.
Financial highlights
Revenues up 22% to AR$252 million (US$69.2 million) from AR$206 million for the equivalent period last year
EBITDA US$7.2 million (H1 2008: US$ 8.8 million)
Loss per share US$0.01 (H1 2008: Earnings per share 0.07 cents)
Operational highlights
During the period
Successful renegotiation of secured US$5,000,000 loan facility.
Continuation of geophysical studies, seismic reprocessing and seismic acquisition.
After the period end
Decree issued on 22 July 2009 approving procedure for the calculation of the Empresa Distribuidora de Electricidad de Mendoza S.A. ("EDEMSA") tariff for the third review period.
Implementation of first new tariff increases for the third review period effective retrospectively to 1 August 2009. The increases equate to an average tariff increase of 12%.
Level 1 American Depositary Receipt ("ADR") program established in the US with Bank of New York Mellon as the depositary bank.
Luis Alvarez Poli, Chief executive Officer, said: "We are pleased with the progress we have made in the first six months of this year. The first new tariffs for the third review period have now been implemented and we continue to work towards advancing our oil and gas exploration interests and the development of our oil and gas exploration strategy. The ADR program has been established to broaden our existing shareholder base and increase the Company's visibility with investors in the US."
Enquiries:
|
Andes Energia |
Luis Alvarez Poli, Chief Executive Officer Nigel Duxbury, Finance Director |
T: 020 7495 5326 |
|
Arbuthnot Securities |
James Steel Antonio Bossi |
T: 020 7012 2000 |
|
Bishopsgate Communications |
Maxine Barnes Nick Rome |
T: 020 7562 3350 |
Note to Editors:
Andes is a Latin American energy group, with electricity distribution, hydro-electric power and oil and gas interests in Argentina. The Company's focus is on the Argentinean energy sector.
Chairman's review
First-half revenues increased to US$ 69.2 million compared to revenues of US$66.5 million for the equivalent period last year. EBITDA was US$7.2 million (6 months to 30 June 2008: US$8.8 million).
Although the gross profit has increased to US$17.8 million from US$16.1 million the increase in operating expenses resulted in an operating profit of US$3.2 million down from US$4.2 million for the equivalent period last year.
The finance costs for the year have been adversely impacted by the weakening of the AR$ against the US$, resulting in a non-cash exchange loss of US$6.7 million in EDEMSA for the period. The Company continues to evaluate all options available to it to minimise this currency risk. EDEMSA has established a trust with the objective of investing in US$ denominated assets and has secured shareholders' approval to issue up to an equivalent of US$80 million of debt instruments denominated in AR$ or other foreign currencies at the Board's discretion, which would give EDEMSA more flexibility to manage this currency risk.
After the period end EDEMSA completed the process for the implementation of the first new tariffs for the third review period. This follows the approval of the procedure for the calculation of the new tariffs, which was announced on 12 August 2009. The new electricity tariffs will result in an average increase of between 0% and 15% for residential users and between 12% and 22% for commercial users, representing an average total increase of approximately 12%, which will be effective retrospectively from 1 August 2009. As announced on 21 February 2008, the terms for the acquisition of the final 50 per cent. interest in Sodem S.A. included the possibility of an earn-out payment. The approval of the procedure for the calculation of the new tariffs might crystallise this earn-out payment, which may be satisfied in cash and/or through the issue of new Company shares. However, under the terms of the stock purchase agreement, certain elements of the earn-out are still open to interpretation and are being agreed with the seller. At this time no liability has been recognised in the balance sheet for an earn-out payment, due to the uncertainty of whether it will become due or not.
The results of Hidroelectrica Ameghino S.A. ("HASA") have benefited from the change in the regulations implemented in October 2008 that now allows HASA to sell all the electricity it generates to the wholesale market resulting in revenues increasing by over 100% for the six months compared to the equivalent period last year, with a resulting increase of 689% in EBITDA over the same period.
Whilst the international economic turmoil has had an impact on oil companies and in particular exploration projects, we continue to gather and interpret seismic data and are looking to conduct further geochemical surveys and if necessary further 3D seismic work towards the end/beginning of this/next year. As announced on 29 June 2009, meetings have been held with the Chubut regulator to discuss a possible extension of the first exploration period and possible changes to exploration commitments. We will be looking to continue these discussions with the regulator over the coming months.
As announced on 25 June 2009, Juan Carlos Esteban, Chief Executive Officer of the Group's oil and gas interests was appointed to the Board. His appointment significantly strengthens the Board, particularly given the focus on the development of the group's oil and gas interests.
During the period the Company successfully completed the renegotiation of its secured US$5,000,000 loan facility, which carries a 12.75 per annum coupon and defers the principal repayment until March 2013.
Your Company continues to grow and develop and has made significant steps in putting the Company on a solid financial footing in these difficult markets. We are confident that our efforts throughout 2009 will allow us to make further progress in the development of our energy businesses and we are grateful to shareholders for their continued support and look forward to updating you on developments in the near future.
Neil Bleasdale
Chairman
29 September 2009
Consolidated income statement for the six months ended 30 June 2009
|
30-Jun-09 |
30-Jun-08 |
31-Dec-08 |
|
|
US$ |
US$ |
US$ |
|
|
Revenue (see note2) |
69,205,678 |
66,478,155 |
138,087,122 |
|
Cost of sales |
(51,378,117) |
(50,365,155) |
(105,837,484) |
|
Gross profit |
17,827,561 |
16,113,000 |
32,249,638 |
|
Other operating income |
320,116 |
793,686 |
420,367 |
|
Distribution costs |
(5,771,274) |
(5,492,556) |
(11,628,516) |
|
Administrative expenses |
(9,157,008) |
(7,213,540) |
(20,091,895) |
|
Operating profit |
3,219,395 |
4,200,590 |
949,594 |
|
Finance income |
2,347,865 |
412,528 |
1,203,496 |
|
Finance costs |
(9,587,650) |
(1,478,127) |
(14,675,946) |
|
(Loss)/profit before taxation |
(4,020,390) |
3,134,991 |
(12,522,856) |
|
Taxation |
1,394,647 |
(1,594,688) |
1,839,144 |
|
(Loss)/profit for the year |
(2,625,743) |
1,540,303 |
(10,683,712) |
|
Attributable to: |
|||
|
Equity holders of the parent |
(1,450,580) |
77,256 |
(9,620,280) |
|
Minority interests |
(1,175,163) |
1,463,047 |
(1,063,432) |
|
|
(2,625,743) |
1,540,303 |
(10,683,712) |
|
(Loss)/earnings per ordinary share (see note 3) |
US$ |
Cents |
US$ |
|
Basic |
(0.01) |
0.07 |
(0.08) |
|
Diluted |
(0.01) |
0.07 |
(0.08) |
Consolidated statement of financial position as at 30 June 2009
|
30-Jun-09 |
30-Jun-08 |
31-Dec-08 |
|
|
US$ |
US$ |
US$ |
|
|
Non-current assets |
|||
|
Intangible assets |
89,907,621 |
110,159,992 |
90,559,507 |
|
Property, plant and equipment |
136,830,013 |
165,901,448 |
150,710,046 |
|
Investments |
16,198,843 |
4,701,644 |
10,452,546 |
|
Available for sale financial assets |
297,123 |
546,972 |
300,543 |
|
Trade and other receivables |
142,284 |
31,117 |
121,466 |
|
Deferred income tax assets |
35,223,910 |
4,520,333 |
36,612,211 |
|
Total non-current assets |
278,599,794 |
285,861,506 |
288,756,319 |
|
Current assets |
|||
|
Inventories |
3,393,143 |
5,169,935 |
4,678,243 |
|
Available for sale financial assets |
1,614,263 |
1,004,324 |
724,793 |
|
Trade and other receivables |
28,793,159 |
30,147,474 |
32,088,564 |
|
Cash and cash equivalents |
5,679,723 |
10,863,399 |
2,547,841 |
|
Total current assets |
39,480,288 |
47,185,132 |
40,039,441 |
|
Current liabilities |
|||
|
Trade and other payables |
42,275,139 |
36,296,635 |
38,522,363 |
|
Financial liabilities |
11,391,207 |
4,780,178 |
5,289,176 |
|
Provisions |
8,211,304 |
7,863,862 |
8,690,809 |
|
Current tax liabilities |
49,490 |
59,988 |
43,491 |
|
Total current liabilities |
61,927,140 |
49,000,663 |
52,545,839 |
|
Non-current liabilities |
|||
|
Trade and other payables |
1,602,842 |
2,943,963 |
1,511,958 |
|
Financial liabilities |
74,689,783 |
76,299,141 |
79,244,243 |
|
Deferred income tax liabilities |
25,364,365 |
- |
28,391,542 |
|
Total non-current liabilities |
101,656,990 |
79,243,104 |
109,147,743 |
|
Net assets |
154,495,952 |
204,802,871 |
167,102,178 |
|
Capital and reserves |
|||
|
Called up share capital |
23,418,920 |
23,418,920 |
23,418,920 |
|
Share premium account |
28,692,270 |
28,779,259 |
28,692,270 |
|
Profit and loss account |
(48,703,204) |
(38,073,013) |
(47,332,067) |
|
Merger reserve |
66,195,556 |
66,195,556 |
66,195,556 |
|
Reverse acquisition reserve |
42,045,342 |
42,045,342 |
42,045,342 |
|
Translation reserve |
(20,919,132) |
- |
(17,516,645) |
|
Fair value reserve |
119,916 |
175,019 |
76,178 |
|
Equity attributable to equity holders of the parent |
90,849,668 |
122,541,083 |
95,579,554 |
|
Minority interest |
63,646,284 |
82,261,788 |
71,522,624 |
|
Total equity |
154,495,952 |
204,802,871 |
167,102,178 |
Consolidated statement of changes in equity as at 30 June 2009
|
Share |
Share |
Profit and |
Other |
Minority |
Total |
|
|
|
capital |
premium |
loss |
reserves |
interest |
|
|
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
|
|
At 1 January 2008 |
23,418,920 |
28,949,260 |
(42,308,581) |
108,458,522 |
118,865,465 |
237,383,586 |
|
Profit for the period |
- |
- |
77,256 |
- |
1,463,047 |
1,540,303 |
|
Fair value adjustment |
- |
- |
- |
(42,605) |
- |
(42,605) |
|
Total comprehensive income for the period |
- |
- |
77,256 |
(42,605) |
1,463,047 |
1,497,698 |
|
Share issue costs |
- |
(170,001) |
- |
- |
- |
(170,001) |
|
Exercise of option to acquire minority interest in Sodem S.A. |
- |
- |
4,158,312 |
- |
(38,066,724) |
(33,908,412) |
|
At 30 June 2008 |
23,418,920 |
28,779,259 |
(38,073,013) |
108,415,917 |
82,261,788 |
204,802,871 |
|
Loss for the period |
- |
- |
(9,697,536) |
- |
(2,526,479) |
(12,224,015) |
|
Fair value adjustments |
- |
- |
- |
(98,841) |
(133,427) |
(232,268) |
|
Translation differences |
- |
- |
- |
(17,516,645) |
(8,099,266) |
(25,615,911) |
|
Total comprehensive income for the period |
- |
- |
(9,697,536) |
(17,615,486) |
(10,759,172) |
(38,072,194) |
|
Share issue costs |
- |
(86,989) |
- |
- |
- |
(86,989) |
|
Fair value of share based payments |
- |
- |
458,490 |
- |
- |
458,490 |
|
Exercise of option to acquire minority interest |
- |
- |
(20,008) |
- |
20,008 |
- |
|
At 31 December 2008 |
23,418,920 |
28,692,270 |
(47,332,067) |
90,800,431 |
71,522,624 |
167,102,178 |
|
Loss for the period |
- |
- |
(1,450,580) |
- |
(1,175,163) |
(2,625,743) |
|
Fair value adjustments |
- |
- |
- |
43,738 |
42,023 |
85,761 |
|
Translation differences |
- |
- |
- |
(3,402,487) |
(6,529,670) |
(9,932,157) |
|
Total comprehensive income for the period |
- |
- |
(1,450,580) |
(3,358,749) |
(7,662,810) |
(12,472,139) |
|
Fair value of share based payments |
- |
- |
79,443 |
- |
- |
79,443 |
|
Dividends |
- |
- |
- |
- |
(213,530) |
(213,530) |
|
At 30 June 2009 |
23,418,920 |
28,692,270 |
(48,703,204) |
87,441,682 |
63,646,284 |
154,495,952 |
|
Analysis of other reserves: |
Merger |
Reverse |
Translation |
Fair value |
Total |
|
|
reserve |
acquisition |
reserve |
reserve |
other |
||
|
reserve |
reserves |
|||||
|
US$ |
US$ |
US$ |
US$ |
US$ |
||
|
At 1 January 2008 |
66,195,556 |
42,045,342 |
- |
217,624 |
108,458,522 |
|
|
Profit for the period |
- |
- |
- |
- |
- |
|
|
Fair value adjustment |
- |
- |
- |
(42,605) |
(42,605) |
|
|
Total comprehensive income for the period |
- |
- |
- |
(42,605) |
(42,605) |
|
|
Share issue costs |
- |
- |
- |
- |
- |
|
|
Exercise of option to acquire minority interest in Sodem S.A. |
- |
- |
- |
- |
- |
|
|
At 30 June 2008 |
66,195,556 |
42,045,342 |
- |
175,019 |
108,415,917 |
|
|
Loss for the period |
- |
- |
- |
- |
- |
|
|
Fair value adjustments |
- |
- |
- |
(98,841) |
(98,841) |
|
|
Translation differences |
- |
- |
(17,516,645) |
- |
(17,516,645) |
|
|
Total comprehensive income for the period |
- |
- |
(17,516,645) |
(98,841) |
(17,615,486) |
|
|
Share issue costs |
- |
- |
- |
- |
- |
|
|
Fair value of share based payments |
- |
- |
- |
- |
- |
|
|
Exercise of option to acquire minority interest |
- |
- |
- |
- |
- |
|
|
At 31 December 2008 |
66,195,556 |
42,045,342 |
(17,516,645) |
76,178 |
90,800,431 |
|
|
Loss for the period |
- |
- |
- |
- |
- |
|
|
Fair value adjustments |
- |
- |
- |
43,738 |
43,738 |
|
|
Translation differences |
- |
- |
(3,402,487) |
- |
(3,402,487) |
|
|
Total comprehensive income for the period |
- |
- |
(3,402,487) |
43,738 |
(3,358,749) |
|
|
Fair value of share based payments |
- |
- |
- |
- |
- |
|
|
Dividends |
- |
- |
- |
- |
- |
|
|
At 30 June 2009 |
66,195,556 |
42,045,342 |
(20,919,132) |
119,916 |
87,441,682 |
Consolidated cash flow statement for the six months ended 30 June 2009
|
30-Jun-09 |
30-Jun-08 |
31-Dec-08 |
|
|
US$ |
US$ |
US$ |
|
|
(Loss)/profit for the year before taxation |
(4,020,390) |
3,134,991 |
(12,522,856) |
|
Adjustments for: |
|||
|
Depreciation |
3,885,088 |
4,435,700 |
8,720,842 |
|
Movement in debt |
9,667,719 |
839,671 |
13,077,587 |
|
Revaluation of investments |
- |
- |
101,362 |
|
Profit on sale of property, plant and equipment |
76,447 |
19,086 |
1,475 |
|
Increase in inventories |
(936,448) |
(4,227,711) |
(9,011,621) |
|
(Increase)/decrease in trade and other receivables |
(2,225,201) |
3,406,685 |
(10,875,326) |
|
Increase in creditors and other payables |
6,218,059 |
6,407,816 |
10,777,973 |
|
Increase in provisions for liabilities and charges |
1,371,512 |
1,262,283 |
4,518,354 |
|
Profit on disposal of investments |
- |
- |
(34,091) |
|
Movement in tax provisions |
(285,525) |
- |
(248,283) |
|
Impairment write down |
141,892 |
182,213 |
317,449 |
|
Share based payments |
79,443 |
- |
458,490 |
|
Net cash generated from operating activities |
13,972,596 |
15,460,734 |
5,281,355 |
|
Cash flows from investing activities |
|||
|
Purchase of property, plant and equipment |
(1,945,606) |
(1,539,591) |
(3,716,132) |
|
Purchase of exploration assets |
18,044 |
- |
(345,174) |
|
Purchase of investments and minority interests |
(7,787,372) |
- |
(32,465,984) |
|
Proceeds from available for sale shares |
- |
448,263 |
458,725 |
|
Proceeds from grants |
1,473,515 |
- |
809,214 |
|
Acquisition of subsidiary |
- |
(34,123,403) |
- |
|
Net cash used in investing activities |
(8,241,419) |
(35,214,731) |
(35,259,351) |
|
Cash flows from financing activities |
|||
|
Repayments of borrowings |
(2,827,642) |
(1,334,698) |
(2,681,160) |
|
Funds from borrowing |
804,765 |
8,774,864 |
14,059,253 |
|
Share issue costs |
- |
(170,001) |
(256,990) |
|
Dividends |
(213,530) |
- |
- |
|
Net cash (used in)/generated from financing activities |
(2,236,407) |
7,270,165 |
11,121,103 |
|
Net increase/(decrease) in cash and cash equivalents |
3,494,770 |
(12,483,832) |
(18,856,893) |
|
Cash and cash equivalents at the beginning of the year |
2,547,841 |
23,347,231 |
23,347,231 |
|
Effect of foreign exchange rate changes |
(362,888) |
- |
(1,942,497) |
|
Cash and cash equivalents at the end of the year |
5,679,723 |
10,863,399 |
2,547,841 |
Notes
1. Basis of preparation
These interim financial statements set out in this announcement do not constitute statutory accounts and are unaudited.
These condensed financial statements have been prepared using policies based on the International Financial Reporting Standards ("IFRS"), as adopted by the European Union, which will be applied in the Group's statutory financial statements for the year ended 31 December 2009. As is currently permissible under the rules of the AIM market, this report does not comply with the full requirements of IAS 34: "Interim Financial Reporting".
The financial information for the year ended 31 December 2008 set out in this interim report does not constitute the Group's statutory accounts for that period. The statutory accounts for the year ended 31 December 2008 have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985 and did not include references to any matters to which the auditor drew attention by way of emphasis.
2. Segmental analysis
|
Revenue |
Segment profit |
|||||
|
30-Jun-09 |
30-Jun-08 |
31-Dec-08 |
30-Jun-09 |
30-Jun-08 |
31-Dec-08 |
|
|
Analysis of revenue and profit: |
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
|
Electricity distribution |
66,860,324 |
65,104,335 |
134,883,349 |
3,472,596 |
5,191,198 |
7,920,823 |
|
Electricity generation |
2,345,354 |
1,373,820 |
3,203,773 |
857,667 |
(66,057) |
292,729 |
|
69,205,678 |
66,478,155 |
138,087,122 |
4,330,263 |
5,125,141 |
8,213,552 |
|
|
Central administration costs |
(1,110,868) |
(924,551) |
(7,263,958) |
|||
|
Finance income |
2,347,865 |
412,528 |
1,203,496 |
|||
|
Finance costs |
(9,587,650) |
(1,478,127) |
(14,675,946) |
|||
|
(Loss)/profit before tax |
(4,020,390) |
3,134,991 |
(12,522,856) |
|||
|
30-Jun-09 |
30-Jun-08 |
31-Dec-08 |
||
|
Analysis of total assets: |
US$ |
US$ |
US$ |
|
|
Electricity distribution |
259,282,386 |
261,940,641 |
273,160,720 |
|
|
Electricity generation |
16,664,660 |
24,672,361 |
18,260,956 |
|
|
Oil and gas interests |
33,755,115 |
41,100,569 |
29,882,775 |
|
|
Total segment assets |
309,702,161 |
327,713,571 |
321,304,451 |
|
|
Unallocated assets |
8,377,921 |
5,333,067 |
7,491,309 |
|
|
Consolidated total assets |
318,080,082 |
333,046,638 |
328,795,760 |
|
30-Jun-09 |
30-Jun-08 |
31-Dec-08 |
||
|
Analysis of total liabilities: |
US$ |
US$ |
US$ |
|
|
Electricity distribution |
143,041,849 |
109,959,710 |
141,889,769 |
|
|
Electricity generation |
4,428,486 |
3,821,944 |
4,818,047 |
|
|
Oil and gas interests |
11,072 |
425,017 |
8,432 |
|
|
Total segment liabilities |
147,481,407 |
114,206,671 |
146,716,248 |
|
|
Unallocated liabilities |
16,102,723 |
14,037,096 |
14,977,334 |
|
|
Consolidated total liabilities |
163,584,130 |
128,243,767 |
161,693,582 |
|
30-Jun-09 |
30-Jun-08 |
31-Dec-08 |
||
|
Analysis of total capital expenditure: |
US$ |
US$ |
US$ |
|
|
Electricity distribution capital expenditure |
3,960,277 |
4,833,372 |
12,004,318 |
|
|
Electricity generation capital expenditure |
1,976 |
1,355 |
21,911 |
|
|
Oil and gas interests |
- |
- |
345,174 |
|
|
Total segment capital expenditure |
3,962,253 |
4,834,727 |
12,371,403 |
|
|
Other capital expenditure |
- |
- |
4,701 |
|
|
Consolidated total capital expenditure |
3,962,253 |
4,834,727 |
12,376,104 |
|
30-Jun-09 |
30-Jun-08 |
31-Dec-08 |
||
|
Analysis of total depreciation: |
US$ |
US$ |
US$ |
|
|
Electricity distribution depreciation |
3,838,300 |
4,383,226 |
8,616,586 |
|
|
Electricity generation depreciation |
45,896 |
50,710 |
100,718 |
|
|
Total segment depreciation |
3,884,196 |
4,433,936 |
8,717,304 |
|
|
Other depreciation |
892 |
1,764 |
3,538 |
|
|
Consolidated total depreciation |
3,885,088 |
4,435,700 |
8,720,842 |
3. (Loss)/earnings per share
(Loss)/earnings per share is presented on two bases: basic (loss)/earnings per share and diluted (loss)/earnings per share. Basic (loss)/earnings per share is in respect of all activities and diluted (loss)/earnings per share takes into account the dilution effects which would arise on conversion or vesting of warrants in issue.
|
30-Jun-09 |
30-Jun-08 |
31-Dec-08 |
||
|
Cents |
Cents |
Cents |
||
|
Basic (loss)/earnings per share |
(1.24) |
0.07 |
(8.22) |
|
|
Diluted (loss)/earnings per share |
(1.24) |
0.07 |
(8.22) |
|
|
US$ |
US$ |
US$ |
||
|
(Loss)/profit for the financial year attributable to equity holders |
(1,450,580) |
77,256 |
(9,620,280) |
|
|
No. |
No. |
No. |
||
|
Weighted average number of shares |
117,094,598 |
117,094,598 |
117,094,598 |
|
|
Effect of dilutive warrants |
- |
- |
- |
|
|
Diluted weighted average number of shares |
117,094,598 |
117,094,598 |
117,094,598 |
|
|
No. |
No. |
No. |
||
|
Potential number of dilutive warrants |
31,300,000 |
31,300,000 |
31,300,000 |
|
|
31,300,000 |
31,300,000 |
31,300,000 |
||
Related Shares:
PGR.L