TIDMIEL
RNS Number : 7930K
Indian Energy Limited
21 July 2011
Indian Energy Limited
Unaudited preliminary results for the year ended 31 March
2011
Indian Energy Limited (AIM: IEL.L) ("Company", "Group", "Indian
Energy" or "IEL"), the independent power producer that owns and
operates wind farms in India, announces its full year results for
the year ended 31 March 2011.
Highlights
-- Revenue increased by 55% to GBP3.43m (2010: GBP2.21m)
-- EBITDA profit (after exceptional items) of GBP0.33m (2010:
loss of GBP1.51m)
-- EBITDA profit (before exceptional items) of GBP0.66m (2010:
loss of GBP0.05m),
-- Adjusted loss from operations decreased to GBP0.73m (2010:
GBP0.92m)
-- Adjusted loss before tax of GBP2.90m (2010: GBP2.16m)
-- Loss after tax (unadjusted) decreased to GBP2.85m (2010:
GBP3.40m)
-- Total assets increased to GBP34.16m and net assets were
GBP11.23m (2010: GBP32.80m and GBP14.63m respectively)
-- Cash and cash equivalents of GBP1.52m and net debt of
GBP19.63m (2010: GBP3.68m and GBP7.76m respectively)
Notes:
"Adjusted" references to adjusted performance measures refer to
the exclusion of the exceptional costs of GBP0.33m (2010: GBP1.45m)
from that measure. "EBITDA" - means profit before tax, adding back
any interest, depreciation or amortisation deducted or credited in
arriving at such. "Net debt" - means cash less loans and
borrowings.
Rupert Strachwitz, Chief Executive, commented:
"We are delighted to deliver a year-on-year improvement in
Indian Energy's financials for the year to 31 March 2011. This is a
reflection of the commissioning of the Theni Project, which was
completed in August 2010. Despite missing the bulk of the monsoon
season at Theni, we are delighted that we can report a 55% increase
in revenue.
Having significantly reduced our overhead and with 41.3 MW of
capacity now fully operational, we look forward to the current
financial year with confidence."
For further information contact:
Rupert Strachwitz +44 20 3411 3640
Indian Energy Shantanu Bagchi +91 22 4208 6666
Arden Partners
(Nominated Adviser
and Broker) Chris Hardie +44 20 7614 5917
Pelham Bell Pottinger Archie Berens
(Public Relations) Clare Gilbey +44 20 7861 3889
Indian Energy Limited
Unaudited preliminary results for the year ended 31 March
2011
Chairman's Statement
________________________________________________________________________
___
I am pleased to report Indian Energy's second set of annual
results as a public company since joining AIM in September
2009.
The results for the year were in line with our trading statement
of 12 November 2010. The loss after tax was GBP2.85m, (2010:
GBP3.40m) including exceptional items of GBP0.33m.
We sought to raise additional funding from the capital markets
in early 2010 and later in that year; however, the markets have not
been kind to IEL and both attempts were unsuccessful. This was
despite the fact that IEL had successfully implemented its strategy
at Theni and created a pipeline of transactions for the future. In
particular, this was reflected in the option signed with Suzlon for
the construction of a 50.4 MW wind farm at Tejuva in the State of
Rajasthan, as announced on 15 October 2010, and various memoranda
of understanding for a range of projects entered into with Suzlon
and Regen Powertech, both manufacturers of wind turbines and
developers of wind projects.
Our first project at Gadag Plains in Karnataka had a tough year
last year due to the very weak monsoon, but seems now to be
fulfilling the hopes that IEL had for this farm when we acquired
it. It is currently generating at approximately P75. The Theni
project has performed well at all stages and is currently
generating at a level in excess of P75.
Returning to my comments about financing above, following IEL's
failure to raise further equity from institutional shareholders,
the Board began to consider alternative funding structures,
particularly with strategic investment partners. Given the size of
IEL and the necessary capital requirements, these were likely to
result in a change of control of the Company. In December 2010, IEL
was approached by a third party while discussions with potential
funders were still continuing. As a result, the Board decided that
a process should be conducted to determine whether an offer for IEL
could be obtained whilst it was still considering funding options.
This was referred to in the interim announcement on 23 December
2010.
The management of IEL has engaged with a range of potential
investors since December 2010 and I am delighted that the process
has now concluded with your Board recommending an offer from
Infrastructure India plc as detailed in the separate announcement
released today.
John Wallinger
Non-Executive Chairman
Indian Energy Limited
Unaudited preliminary results for the year ended 31 March
2011
CEO's Report
________________________________________________________________________
___
Overview
Financial Review
In the year ended 31 March 2011, Indian Energy's revenues
increased to GBP3.43m (2010: GBP2.21m) which were derived 2/3rds
from the operations at Gadag Plains with the remaining revenue from
the Theni Project, which was fully commissioned on 13 August 2010.
The average operating capacity for the year was 36.8 MW (2010: 25.6
MW), and this reflects in the adjusted EBITDA turning profitable
for the year at GBP0.66m (2010: GBP0.05 loss). Loss after tax
reduced to GBP2.85m (2010: GBP3.40m), which, adjusted for
exceptional items, was GBP2.52m.
The Administrative Expenses for the year amounted to GBP2.54m
(2010: GBP3.41m), which included exceptional items of GBP0.33m
relating to the cost of the unsuccessful fundraising. As announced
in December 2010, the Board has taken steps in the last quarter of
the financial year to reduce further the Group's overhead. This
reduction will be reflected in the forthcoming financial year.
Operating Review
Gadag
The Gadag Project (24.8 MW), now in its second full year of
operation, experienced a much weaker than average monsoon. As a
result, the project generated 39.4 GWh of power, which is
approximately 6% lower than its long term forecast on a P90
basis.
However, the project's performance exceeded its technical
forecasts with machine availability of approximately 99.59%
(forecast 95-97%), grid availability of over 99.03% (forecast 98%)
and transmission loss of 2.89% (forecast 3.0%).
This was the second consecutive year that the project generation
was below the long term forecast. We have analysed the site's
historical data back to 1991 to establish whether or not the two
years' of generation reflect the future likely generation.
Historically, the site has experienced consecutive years of lower
than long-term average wind speeds with subsequent years returning
to or exceeding the long-term average. This is borne out by the
generation in the period April to June 2011 where a P75 generation
level has been achieved.
Indian Energy sells the power generated at Gadag to the
Bangalore Electricity Supply Company under a 20 year power purchase
agreement. The revenue earned is Rs. 3.40 per kWh for the first 10
years.
The Gadag Project is registered as a Clean Development Mechanism
under the Kyoto Protocol and is earning Certified Emission
Reductions ("CERs"). Indian Energy has forward sold the CERs to
Standard Bank plc at a price of EUR11.50 per CER. We are delighted
that the first batch of 24,344 CERs were issued by the UNFCCC on 20
July 2011 for the generation at the project up to 30 November
2009.
Theni
The Theni Project (16.5 MW) was fully commissioned on 13 August
2010 and as a result missed the bulk of the monsoon season.
However, the project has generated 20.7 GWh. From a technical
perspective the project has performed overall within budget with
machine availability of approximately 97.62% (forecast 95-97%),
grid availability of over 94.7% (forecast 97%) and transmission
loss of 2.05% (forecast 3.0%).
The power from the Theni Project is being sold to the Tamil Nadu
Electricity Board under a 20 year power purchase agreement at Rs.
3.39 per kWh. In addition, we are establishing the project as a
Clean Development Mechanism with the project having cleared the
first hurdle by obtaining Host Country Approval.
The project is also approved under the Generation Based
Incentive scheme introduced by the Government of India and thus
earns additional revenue of Rs. 0.5 per kWh.
We have achieved a reduction in the project finance costs for
the Theni project with our lender, State Bank of India, agreeing to
reduce the interest spread by 100bps to 3.75% over base rate (which
is currently 9.50%).
Outlook
The coming financial year will see both of our projects at full
capacity and the early signs indicate that the 2011 monsoon is
reverting to its long-term average. We believe this should result
in improved generation at both sites. Together with the cost
reductions achieved, the Group's aim is to be cash flow break-even
at a P75 generation level.
We are pleased with the outcome of the process of identifying a
strategic investor and look forward to building the business from
its existing 41.3 MW during the forthcoming financial year.
Rupert Strachwitz
Chief Executive Officer
Note on reference to probability performance forecasts:
The reference to P90, P75 and P50 are references to the
probability of exceedance percentages of the generation forecasts
for the wind farms. P90, for example, is a 90% probability of a
given generation being derived. P50 represents the long-term mean.
A more detailed note on the use of the forecast is available on the
Indian Energy website at
http://www.indian-energy.com/investors/reports-and-legal-documents.aspx.
Consolidated statement of comprehensive income for the year
ended 31 March 2011 (unaudited)
________________________________________________________________________
___
2011 2010
Notes GBP GBP
REVENUE 2 3,432,705 2,212,397
Cost of sales (1,947,690) (1,175,087)
------------ ------------
Gross profit 1,485,015 1,037,310
Administrative expenses (including
exceptional item) (2,542,367) (3,412,889)
------------ ------------
LOSS FROM OPERATIONS BEFORE EXCEPTIONAL
ITEM (727,579) (923,061)
Exceptional item 3 (329,773) (1,452,518)
----------------------------------------- ------ ------------ ------------
LOSS FROM OPERATIONS (1,057,352) (2,375,579)
Finance income 98,828 100,644
Finance expense (2,273,024) (1,336,214)
LOSS BEFORE TAX (3,231,548) (3,611,149)
Taxation 377,121 207,605
LOSS AFTER TAX
------------ ------------
attributable to equity holders of
the parent (2,854,427) (3,403,544)
OTHER COMPREHENSIVE INCOME
Gain on revaluation of intangible
asset 109,773 -
Exchanges differences arising on
translating foreign operations (936,631) 1,292,921
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR
attributable to equity holders of
the parent - Loss (3,681,285) (2,110,623)
============ ============
Basic and diluted loss per share 4 GBP0.11 GBP 0.20
======== =========
Consolidated statement of financial position as at 31 March 2011
(unaudited)
________________________________________________________________________
___
2011 2010
GBP GBP
ASSETS
Non-current assets
Property, plant and equipment
(including payments on account and
assets under construction) 28,690,582 28,178,742
Intangible assets 778,904 322,738
Deferred tax asset 446,776 76,347
Investment in fixed deposit with
bank 816,042 -
------------ ------------
30,732,304 28,577,827
Current assets
------------ ------------
Trade and other receivables 1,915,867 538,865
Cash and cash equivalents 1,515,954 3,679,308
------------ ------------
3,431,821 4,218,173
Total assets 34,164,125 32,796,000
------------ ------------
LIABILITIES
Current liabilities
Trade and other payables 1,121,901 6,664,402
Derivative financial liability 97,733 -
Taxation payable 69,583 70,742
Loans and borrowings 3,111,533 751,895
4,400,750 7,487,039
Non-current liabilities
------------ ------------
Loans and borrowings 18,039,823 10,682,969
Other liabilities 491,782 -
Deferred tax liability 63 -
------------ ------------
18,531,668 10,682,969
Total liabilities 22,932,418 18,170,008
------------ ------------
Net assets 11,231,707 14,625,992
============ ============
EQUITY
Share capital 255,090 253,477
Share premium 18,345,260 18,296,873
Revaluation reserve 109,773 -
Foreign currency translation reserve 1,067,101 2,003,732
Retained deficit (8,545,517) (5,928,090)
------------ ------------
Total equity 11,231,707 14,625,992
============ ============
Net asset value per ordinary share GBP0.44 GBP0.58
============ ============
Consolidated statement of changes in equity for the year ended
31 March 2011 (unaudited)
________________________________________________________________________
____________________________________________
Foreign
Share Share exchange Revaluation Retained Total
capital premium reserve reserve deficit equity
GBP GBP GBP GBP GBP GBP
Balance at 1
April 2010 253,477 18,296,873 2,003,732 - (5,928,090) 14,625,992
Changes in
equity for the
year
Total
comprehensive
income - - (936,631) 109,773 (2,854,427) (3,681,285)
Share based
payment -
options - - - - 84,000 84,000
Issue of
ordinary
share
capital 1,613 48,387 - - - 50,000
Issue of
warrants - - - - 153,000 153,000
Balance at 31
March 2011 255,090 18,345,260 1,067,101 109,773 (8,545,517) 11,231,707
======== =========== ========== ============ ============ ============
Redeemable Foreign
Share Share debt exchange Retained Total
capital premium reserve reserve deficit equity
GBP GBP GBP GBP GBP GBP
Balance at 1
April 2009 113,462 4,533,870 1,321,700 710,811 (2,657,171) 4,022,672
Changes in
equity for the
year
Total
comprehensive
income - - - 1,292,921 (3,403,544) (2,110,623)
Share based
payment -
options - - - - 22,000 22,000
Issue of
ordinary
share
capital 190,015 15,011,213 - - - 15,201,228
Issue of
warrants - (110,625) - - 110,625 -
Redemption of
preference
shares (50,000) - (1,321,700) - - (1,371,700)
Share issue
expenses - (1,137,585) - - - (1,137,585)
Balance at 31
March 2010 253,477 18,296,873 - 2,003,732 (5,928,090) 14,625,992
========= ============ ============ ========== ============ ============
Consolidated statement of cash flows for the year ended 31 March
2011 (unaudited)
________________________________________________________________________
___
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES GBP GBP
Loss before tax (3,231,548) (3,611,149)
Unrealised CER income (375,317) (287,457)
Share option scheme charge 84,000 22,000
Ratchet shares - 451,228
Depreciation 1,390,385 867,457
Finance income (98,828) (100,644)
Finance expense 2,273,024 1,336,214
Unrealised loss on forward contract 99,618 -
Loss on disposal of fixed assets 2,480 -
Foreign exchange movements 7,818 3,936
------------ ------------
Net cash flow from operations, before
movements in working capital 151,632 (1,318,415)
Taxes paid (6,197) -
Change in receivables (1,479,786) (359,280)
Change in payables (4,655,489) 465,702
Net cash flows from operations (5,989,840) (1,211,993)
INVESTING ACTIVITIES
------------ ------------
Payments to acquire property, plant
and equipment (3,883,168) (4,607,025)
Investment in fixed deposit with
bank (816,042) -
Interest received 102,878 20,170
------------ ------------
Net cash outflow from investing activities (4,596,332) (4,586,855)
FINANCING ACTIVITIES
Net proceeds from issue of ordinary
shares and redemption of preference
shares 50,000 8,612,415
Proceeds from borrowings 11,407,232 569,567
Repayments of borrowings (724,376) (719,702)
Interest paid (2,048,107) (1,901,105)
------------ ------------
Net cash inflow from financing activities 8,684,749 6,561,175
NET (DECREASE)/ INCREASE IN CASH
AND CASH EQUIVALENTS (1,901,423) 762,327
Cash and cash equivalents at start
of period 3,679,308 2,647,508
Effect of foreign exchange rates (261,931) 269,473
CASH AND CASH EQUIVALENTS AT END
OF YEAR 1,515,954 3,679,308
Notes to the preliminary results for the year ended 31 March
2011 (unaudited)
________________________________________________________________________
___
1 Basis of preparation
These unaudited consolidated preliminary financial statements
('preliminary financial statements') have been prepared using the
recognition and measurement principles of International Accounting
Standards, International Financial Reporting Standards and
Interpretations issued by the International Accounting Standards
Board ('IASB') as adopted for use in the European Union
(collectively 'EU IFRS'). However, it should be noted that these
preliminary financial statements are neither required, nor
themselves contain sufficient information, to comply fully with EU
IFRS.
The principal accounting policies are unchanged from those
disclosed in the Group's financial statements for the year ended 31
March 2010.
The financial information for the year ended 31 March 2011 is
unaudited and does not constitute the Group's statutory financial
statements for the year. However, the comparative financial
information for the full year ended 31 March 2010 has been derived
from the statutory financial statements for that period. The
auditors' report on those accounts was unqualified, did not include
references to any other matters to which the auditors drew
attention by way of emphasis without qualifying their report and
did not contain a statement under section 262 of the Companies
(Guernsey) Law, 2008.
The audit report for the year ended 31 March 2011 has not yet
been signed and is expected to be unqualified but it is expected to
contain an emphasis of matter in respect of the Group's ability to
continue as a going concern.
The emphasis of matter will refer to the need for additional
working capital facilities or share capital to replace the Utilico
loan before it falls due for repayment in January 2012 and
therefore the ability of the Group to continue as a going concern
is dependent on such facilities or capital being available by that
date as discussed further below.
These preliminary financial statements consolidate the accounts
of the parent company and all its subsidiary undertakings drawn up
to the relevant period end and have been prepared on a going
concern basis, as in the opinion of the directors at the time of
their approval, there is a reasonable expectation that the Group
will continue its operations for the foreseeable future.
In forming this opinion, the Directors have taken into account
the following:
-- The Company has been engaging with a number of parties
regarding the future of the business. Two parties have carried out
extensive due diligence with a view to considering a potential
offer for the acquisition of the entire ordinary share capital. In
addition, the Company has received a number of approaches from
other interested parties. The Company has separately announced that
the Board of the Company is recommending an offer from
Infrastructure India plc. This will give long term visibility and
support to the business as fresh capital (either by way of new
equity investment or the provision of short term funding) can be
infused into the Company as needed. Further, the acquirer may
provide further capital required for the short term growth plans of
the Company and to repay the Utilico loan as mentioned below.
-- Management has prepared detailed cash flow forecasts until
December 2012. The cash flow forecasts indicate that the Group will
have surplus cash flows after meeting the project related
operational costs, overheads and debt service for its Indian
subsidiaries. These forecasts also assume that the new acquirer or
investor will provide sufficient additional funds to repay the
Utilico loan in January 2012 and will also settle any transaction
costs pertaining to the refinancing.
2 Revenue
2011 2010
GBP GBP
Sales of electricity 2,860,108 1,922,342
Generation based incentives 145,162 2,598
Certified emission reductions 375,317 287,457
Generation compensation 52,118 -
3,432,705 2,212,397
========== ==========
Generation compensation is on account of the guaranteed
generation shortfall receivable from the supplier of the Wind
Energy Converters (WECs) under the supply contract.
The Group has entered into two 20 year power purchase agreements
with Indian power distribution companies under which the
counterparty will purchase all the electricity generated by the
Group's turbines for the duration of the contract period. The price
under one contract is fixed for a period of 10 years from when
generation commenced, after which the price will be reviewed and
determined by the state regulator. The price under the other
contract is fixed throughout.
3 Exceptional item
During the year, the Company attempted a further equity raise as
part of its plans as set out at the IPO to expand the business. In
connection with the capital raising exercise, the Group has
incurred an amount of GBP329,773 in professional fees, travelling
and other related expenses during the year, which have been debited
to the comprehensive income.
In the prior year the company listed on AIM and issued shares in
an Initial Public Offering ('IPO'). Expenses relating to the IPO of
GBP1,405,518 together with expenses associated with professional
fees relating to further fundraising initiatives of GBP47,000, had
been expensed as an exceptional items.
4 Loss per share
The loss per share has been calculated by dividing the net loss
after taxation for the relevant period attributable to equity
shareholders by the weighted average number of equity shares
outstanding during the period. The basic and diluted loss per share
is as follows:
2011 2010
GBP GBP
Net loss attributable to equity
shareholders (2,854,427) (3,403,544)
Weighted average number of equity
shares outstanding 25,426,346 17,330,604
============ ============
Loss per share - basic and diluted: GBP0.11 GBP0.20
============ ============
The net loss attributable to equity shareholders utilised within
the basic and diluted loss per share calculation is the
consolidated loss after tax.
The above calculations exclude the effects of: the share option
scheme, cumulative redeemable convertible preference shares,
warrants and the ratchet shares, which are anti-dilutive.
5 Post balance sheet events
Since the year-end, State Bank of India, the project finance
lender to a Group company for the Theni project, agreed to reduce
the interest spread on the project loan by 100 basis points to
3.75% over base rate.
On 20 July 2011, Indian Energy was issued with 24,344 Certified
Emission Reductions by the Executive Board of the United Nations
Framework Convention on Climate Change relating to the generation
from the Gadag Project for the period to 30 November 2009.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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