TIDMRAME
RNS Number : 4736A
Rame Energy PLC
29 September 2015
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.
(MORE TO FOLLOW) Dow Jones Newswires
September 29, 2015 02:02 ET (06:02 GMT)
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.
Rame Energy plc Tel: +44 (0) 1752 565638
Tim Adams (Chief Executive)
Kevin McNair (Finance Director)
Cantor Fitzgerald Tel: +44 (0) 20 7894
7000
Nominated Adviser and Broker
Andrew Craig
William Goode
St Brides Media & Finance Ltd Tel: +44 (0) 20 7236
1177
Elisabeth Cowell / Frank Buhagiar
Unaudited interim income statement
For the six months to 30 June 2015
Pro forma
Six Months Six Months Year
to to Ended
30-Jun-15 30-Jun-14 31-Dec-14
USD USD USD
(unaudited) (unaudited) (audited)
Revenue 2,950,664 397,944 2,163,318
Cost of sales (2,688,285) (198,530) (1,324,422)
------------ ------------ ------------
Gross profit 262,379 199,414 838,896
Administrative expenses (1,408,915) (1,309,702) (4,974,505)
------------ ------------ ------------
Operating loss (1,146,536) (1,110,288) (4,135,609)
Interest receivable - - -
Interest payable (37,773) (30,654) (59,302)
Share of gain/(loss) of an
associate 123,697 - (433,219)
Cost of listing - - (341,488)
------------ ------------ ------------
Loss before taxation (1,060,612) (1,140,942) (4,969,618)
Income tax (expense) / Income (4,486) (32,549) (4,433)
------------ ------------ ------------
(Loss)/profit after taxation
attributable to
owners of the Group (1,065,098) (1,173,491) (4,974,051)
Other comprehensive (expense)/income
(currency translation differences) 224,551 (52,525) (30,769)
------------ ------------ ------------
Total comprehensive loss for
the
financial year attributable
to owners of
the Group (840,547) (1,226,016) (5,004,820)
============ ============ ============
Loss per share attributable
to owners of the Group
- Basic ($0.083) ($0.014) ($0.055)
- Diluted ($0.083) ($0.014) ($0.055)
Unaudited interim consolidated balance sheet
As at 30 June 2015
30-Jun-15 30-Jun-14 31-Dec-14
USD USD USD
(unaudited) (unaudited) (audited)
Assets
Non-current assets
Property, plant and equipment 249,847 245,337 233,321
Investment in Associate 1,797,478 3,152,788 1,673,781
Intangible assets 2,335,376 2,623,506 2,064,384
Goodwill 505,750 - 505,750
Deferred tax assets 11,362 12,309 3,217
Other non-current asset 13,475 3,906 -
------------ ------------ ------------
4,913,288 6,037,846 4,480,453
Current assets
Trade receivables 2,654,961 228,788 471,193
Other receivables, deposits,
and prepayments 516,100 204,187 796,079
Amounts owing by related
parties 79,410 - 316,114
Tax recoverable 78,054 256,443 68,148
Cash and cash equivalents 146,124 1,384,689 230,033
Inventory 1,125,515 - 154,131
4,600,164 2,074,107 2,035,698
------------ ------------ ------------
Total Assets 9,513,453 8,111,953 6,516,151
============ ============ ============
Equity and liabilities
Stated Capital 6,977,839 5,969,040 6,977,839
Merger Reserve 1,941 2,042 1,553
Foreign exchange translation
reserve 307,791 61,484 83,240
Other Reserve 165,755 - 165,755
Retained profits (6,046,495) (1,180,840) (4,981,400)
------------ ------------ ------------
Total equity attributable
to the owners
of the Group 1,406,831 4,851,726 2,246,987
------------ ------------ ------------
Total equity 1,406,831 4,851,726 2,246,987
------------ ------------ ------------
Non-current liabilities
Convertible Loan 1,257,360 1,362,208 1,242,560
Unsecured Loan 471,510 - 465,960
Other non-current liabilities 4,684 - -
Finance lease greater than
one year 54,691 77,700 36,212
Other Payable - - 63,882
------------ ------------
1,788,245 1,439,908 1,808,614
Current liabilities
Trade and other payables
and accruals 4,905,449 773,390 1,855,170
Amounts owing to related
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parties 1,199,053 964,608 465,640
Finance lease due within
one year 25,540 55,861 52,434
Short-term borrowings 139,154 - 67,974
Provision for taxation,
Other Short-term provision 49,181 26,460 19,332
------------ ------------ ------------
6,318,377 1,820,319 2,460,550
------------ ------------ ------------
Total liabilities 8,106,622 3,260,227 4,269,164
Total equity and liabilities 9,513,453 8,111,953 6,516,151
============ ============ ============
Unaudited interim consolidated cash flow statement
For the six months to 30 June 2015
Pro forma
Six Months Six Months Year Ended
to to
30-Jun-15 30-Jun-14 31-Dec-14
USD USD USD
(unaudited) (unaudited) (audited)
Cash flows from operating activities
(Loss)/profit for year before
tax (1,060,610) (1,140,942) (4,969,618)
Adjustments for:
Amortisation
Depreciation of property, plant
and equipment 3,717 8,612 104,249
Share-based payment expense - - 94,618
Disposal of development assets - - 575,004
Foreign Exchange gain/(loss) 224,551 - -
Share of loss/(gain) an associate (123,697) - 433,219
(956,038) (1,132,330) (3,762,528)
------------ ------------ ------------
Movements in working capital:
Increase/(decrease) in trade
and other receivables (1,698,611) 774,692 511,415
Decrease/(increase) in inventory (971,384) - (2,178)
Decrease/(Increase) in trade
and other payables 3,766,277 118,275 671,475
------------ ------------ ------------
Cash used in / generated from
operations 1,096,282 892,967 1,180,712
Income tax paid (4,486) (32,549) -
------------ ------------
Net cash generated by operating
activities 135,758 (271,912) (2,581,817)
============ ============ ============
Cash flows from investing activities
Interest received
Purchases of property, plant
and equipment (16,526) (39,719) (192,257)
Proceeds from the sale of property
plant and equipment - (48,843) 48,518
Development expenditure (270,992) (27,409) (720,539)
Investment in wind energy projects - (3,152,788) (2,107,000)
Acquisition of a subsidiary,
net of cash - - 28,027
------------ ------------ ------------
Net cash used in investing activities (287,518) (3,268,759) (2,943,251)
Cash flows from financing activities
Proceeds from issuance of ordinary
shares - 3,415,628 4,410,519
Transaction costs on the issue
of shares - - (609,181)
Financing Lease (8,415) (26,782) 3,605
Repayment of borrowings (145,093) (77,119)
Proceeds from borrowings 71,180 1,362,208 1,708,520
------------
Net cash generated from in financing
activities 62,765 4,605,961 5,436,344
Net increase/(decrease) in cash
and cash equivalents (88,995) 1,065,289 (88,724)
Cash and cash equivalents at
the beginning of the year 230,033 319,400 319,400
Exchange differences on cash
and cash equivalents 5,086 - (644)
Cash and cash equivalents at
the end of the year 146,124 1,384,689 230,032
============ ============ ============
Unaudited interim consolidated statement of changes in
equity
For the six months to 30 June 2015
Foreign
exchange
Stated Merger translation Other Retained Total
capital reserve reserve reserve profits equity
USD USD USD USD USD USD
Balance at 31 December
2014 6,977,839 1,553 83,240 165,755 (4,981,400) 2,246,987
------------------------------ ---------- -------- ------------ -------- ------------ ------------
Profit after
taxation - - - (1,065,095) (1,065,095)
(currency translation
differences) - - 224,551 - - 224,551
Share Issue
Cost - - - - - -
Movement in Merger Reserve - 388 - - - 388
Total comprehensive income
for the period - 388 224,551 - (1,065,095) (840,156)
------------------------------ ---------- -------- ------------ -------- ------------ ------------
Balance at 31 December
2014 6,977,839 1,941 307,791 165,755 (6,046,495) 1,406,831
------------------------------ ---------- -------- ------------ -------- ------------ ------------
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).
(MORE TO FOLLOW) Dow Jones Newswires
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