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Arise

Annual Report Feb 18, 2011

3135_10-k_2011-02-18_34ab93ba-3b02-4173-83e0-abef51e9bf23.pdf

Annual Report

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Interim report for the period 1 January – 31 December 2010

Fourth quarter (1 October – 31 December 2010)

  • Net sales during the quarter were TSEK 21,205 (11,519).
  • The operating result before depreciation (EBITDA) was TSEK 10,302 (5,248).
  • The operating result (EBIT) was TSEK -1,709 (1,188).
  • Earnings after tax were TSEK -6,060 (-946), which corresponds to SEK -0.20 (-0.05) per share.
  • The average income per MWh was SEK 762 (733), of which SEK 431 (384) refers to electricity and SEK 331 (349) to electricity certificates.
  • A loan agreement has been concluded with DnB NOR for the funding of the Fröslida wind farm. The company now has loan agreements with three Nordic banks.

12 months (1 January – 31 December 2010)

  • Net sales during the period were TSEK 66,744 (27,023).
  • The operating result before depreciation (EBITDA) was TSEK 35,101 (1,727).
  • The operating result (EBIT) was TSEK -1,614 (-10,798).
  • Earnings after tax were TSEK -18,333 (-7,614), which corresponds to SEK -0.72 (-0.44) per share.
  • The average income per MWh was SEK 754 (751), of which SEK 429 (451) refers to electricity and SEK 325 (299) to electricity certificates.

Significant events after the end of the reporting period

  • A decision has been taken to begin construction of a further 12 MW, bringing the total capacity in operation or under construction to 136 MW.
  • Arise Windpower has concluded an agreement giving the company the right to acquire a project with existing permits and a total potential capacity of 200 MW. Construction will commence in summer 2011 at the earliest.

About Arise Windpower

Arise Windpower AB (publ), Box 808, SE-301 18 Halmstad, Sweden, tel. +46 (0)35 20 20 900, org.no. 556274-6726 E-mail: [email protected], www.arisewindpower.se

Arise Windpower is one of Sweden's leading companies in onshore wind power. Arise Windpower's business concept is to sell electricity generated at the company's own onshore wind turbines. The company is aiming to have about 300 wind turbines in operation or under construction by 2014. In a normal wind year these are expected to generate about 2 TWh of green electricity. Arise Windpower is listed on NASDAQ OMX Stockholm.

The CEO's comments on Q4 2010

In the fourth quarter Arise Windpower continued to expand its portfolio of wind farms according to plan, although the start of operations was delayed in some cases, mainly due to the early winter, which brought heavy snowfall and cold temperatures. After the end of the reporting period decisions have been taken to begin work on the construction of a further 12 MW, which means that the company now has 136 MW in operation or under construction. The company has also signed an agreement giving it the right to acquire a 200 MW project with existing permits.

The start of operations at the Idhult (16 MW), Fröslida (22.5 MW) and Kåphult (17.5 MW) projects were delayed due to the early and severe winter. The delay will result in an income shortfall of about SEK 5 million in the fourth quarter.

Wind-wise, the fourth quarter was somewhat weaker than normal, with an electricity production of about 96 per cent of a normal wind year. See the graph below, which shows output percentages in 2010 compared with normal electricity production based on Danish wind energy figures for the years 1979 – 2009 (www.vindstat.dk).

Total electricity production in 2010, according to the same index, was 84 per cent of normal, which is equivalent to a production shortfall of 17 GWh. As shown in the graph above, the correlation with the 30 year series gradually improved over the year.

Other positive factors include the further strengthening of the Swedish krona in relation to the euro and that forward electricity prices have remained robust.

The company's investment cost, calculated as SEK per generated kWh, continues to fall, partly on the back of the stronger Swedish currency and partly as a result of technological advances in the industry. Wind turbines are becoming taller and wingspans wider, making it possible to produce more kWh per invested krona. The cost of servicing and maintenance has also fallen following the company's decision to perform some supervisory and servicing activities inhouse. These refer mainly to daily supervision and routine tasks, which are best performed by inhouse and locally employed staff.

The company has concluded a loan agreement with DnB NOR for funding of the Fröslida wind farm (22.5 MW).

The expansion target (110 MW) for 2010 was achieved (outcome 124 MW).

Events after the reporting period:

A decision has been taken to begin work on a project comprising 6 wind turbines with a combined capacity of 12 MW. Work on roads etc. is scheduled to begin in March and the turbines are scheduled to be raised and go into operation in summer/autumn 2011.

This will bring the total capacity in operation or under construction to 136 MW. When fully operational in a normal wind year, these turbines will generate about 350 GWh, which is equivalent to about 14 per cent of Sweden's total wind power output in 2009.

Arise Windpower has concluded agreements with Bergvik Skog AB and Ownpower Projects AB giving the company the right to acquire permits and development rights for the construction of a major wind farm (Jädraås) located on three rock plateaus south of Ockelbo. The permits allow the company to build a wind farm with a total capacity of about 200 MW. An agreement for delivery of turbines, subject to the start of construction, has been concluded with Vestas. The total annual electricity production is estimated at 550 GWh, which is equivalent to about 22 per cent of Sweden's total wind energy output in 2009. The wind farm will be by far the largest onshore wind farm in the Nordic region. The next phases are detailed development planning and assessment of the application for a concession to connect the turbines to the grid. Construction work is expected to commence no earlier than summer 2011 and the turbines are scheduled to be raised and put into operation the following year. The right of acquisition is exclusive and applies during a specified period. Arise may opt to sell parts of the project.

Work on the detailed development plan for the project is expected to take about four months and will tie up some of the company's resources. During that period only a small number of other construction projects will be initiated,

But the company will continue to develop its own project portfolio at the same pace, applying for permits and working on detailed development plans.

The goal of having 260 MW in operation or under construction by the end of 2011 is unchanged. The company's financial capacity remains strong.

Halmstad, February 2011 Peter Nygren CEO Arise Windpower AB (publ)

Comments on Q4 2010

Summary of events

Winter storms and consequent late deliveries in December delayed the start of operations at the Fröslida and Kåphult wind farms by about one month. Six out of ten turbines are now operational and performance testing and handover from the supplier, GE Energy, will take place in February.

The turbines at the Idhult farm were put into operation only in the New Year due to the early and severe winter and because of certain delays in connection with voltage testing. All turbines are now in operation, and performance tests and the gradual handover from the supplier, Vestas, are underway.

A loan agreement has been concluded with DnB NOR for the Fröslida wind farm project in the municipality of Hylte.

Work has begun on the construction of two new wind farms, Blekhem in the municipality of Västervik and Södra Kärra in the municipality of Askersund. The two farms consist of six Vestas V100 turbines with a combined capacity of about 22 MW. The turbines are expected to go into operation in late spring 2011.

Net sales and earnings

Net sales in the second quarter were TSEK 21,205 (11,519). Work performed by the company for its use in the amount of TSEK 6,470 (2,266) was capitalised. Other income was TSEK 5,856 (1,218) can refers mainly to sales income from the crane rental business, which totalled SEK 4.9 million (-), and other income relating to electricity and electricity certificates of SEK 0.8 million (-), see Note 1 on page 9. The corresponding expenses for the crane rental business are recognised in Other external expenses.

The operating result before depreciation (EBITDA) was TSEK 10,302 (5,248). The operating result (EBIT) was TSEK -1,709 (1,188), which includes scheduled depreciation in the amount of TSEK -12,011 (-4,060).

The net financial expense was TSEK -5,647 (-2,396) and the loss before tax TSEK -7,356 (-1,208). Earnings after tax were TSEK -6,060 (-946), which corresponds to earnings per share of SEK -0.20 (-0.05).

Comprehensive income for the quarter was TSEK 5,107 (-4,661) after cash flow hedges of electricity, interest rates and currencies increased comprehensive income by a net TSEK 11,167.

Investments

Net investments for the quarter were TSEK 293,001 (180,126), all of which refers to planned construction of wind farms, except TSEK 60,597 (-), which refers to investments in a mobile crane and related equipment.

Cash flow

Arise Windpower's cash flow from operating activities was TSEK -13,230 (-63,313). Investments were TSEK -289,120 (-180,126), resulting in a cash flow after investing activities of TSEK -302,350 (-243,439). Long-term and current interest-bearing liabilities increased by 168,322 (130,000), while interest payments reduced the cash flow by TSEK -3,909 (5,193), resulting in a cash flow of TSEK -137,937 (-108,534).

Comments on the full year 2010

Summary of events

The company completed its IPO and has been listed on the main list of NASDAQ OMX Stockholm since 24 March 2010.

The company has also completed two share offerings, raising approximately SEK 554 million before issue costs.

Arise Windpower began work on the construction of wind turbines with a total capacity of 77.6 MW, which means that the company now has 60 turbines with a total capacity of 124.1 MW in operation or under construction.

Loan agreements were signed with Nordea, DnB NOR and Swedbank.

Net sales and earnings

Net sales in 2010 were TSEK 66,744 (27,023). The company capitalised work performed for its own use in the amount of TSEK 18,569 (13,262). Other income was TSEK 22,070 (3,183) and refers mainly to sales income from the crane rental business, which totalled SEK 9.3 million (-), and other income relating to electricity and electricity certificates of SEK 7.2 million (2.6) as well as recognised capital gains of SEK 4.7 (-) million on the sale of property, plant and equipment, see Note 1 on page 9.

The operating result before depreciation (EBITDA) was TSEK 35,101 (1,727). Other external expenses include a one-off loss of approximately SEK 2.0 million on power trading.

The operating result (EBIT) was TSEK -1,614 (-10,798), which includes scheduled depreciation in the amount of TSEK -36,715 (-12,525). The net financial expense was TSEK -22,394 (-599) and the loss before tax TSEK -24,008 (-11,397). Earnings after tax were TSEK -18,333 (-7,614), which corresponds to earnings per share of SEK -0.72 (-0.44).

Comprehensive income for the year was a loss of TSEK -18,888 (-6,868) after cash flow hedges of electricity, interest rates and currencies reduced the total result by a net TSEK -555.

Investments

Net investments in 2010 were TSEK 899,602 (567,640), all of which refers to planned construction of wind farms, except TSEK 60,597 (-), which refers to investments in a mobile crane and related equipment. Sales of property, plant and equipment, relating mainly to the electrical installation in Knäred, were TSEK 87,800 (-).

Cash flow

Arise Windpower's cash flow from operating activities was TSEK 32,121 (-119,888). Investments were TSEK -899,602 (-567,640) while sales of property, plant and equipment totalled TSEK 87,800 (-), resulting in a cash flow after investing activities of TSEK -779,681 (-687,528). Long-term and current interest-bearing liabilities increased by TSEK 205,925 (310,000). Share offerings raised a net TSEK 525,407 (310,143) for the Group while interest payments reduced cash flow by TSEK -22,919 (-229). TSEK 20,400 (-) has been paid into frozen accounts, mainly under agreements on loan funding, resulting in a 12-month cash flow of TSEK -91,668 (-67,614).

Funding and liquidity

Interest-bearing net liabilities were TSEK 556,285, compared with TSEK 258,692 at the same date the year before. The equity/assets ratio at the end of the period was 57.6 per cent (50.5%).

Cash and cash equivalents were TSEK 249,640 (341,308), in addition to which the company had unused credits and grants at the end of the period in the amount of TSEK 387,600 (91,600).

Taxes

As Arise Windpower only has Swedish subsidiaries, tax has been calculated at the Swedish rate of corporate tax, 26.3 per cent.

Related-party transactions

During the period one Board Director has worked on a number of clearly specified tasks on a contract basis, receiving a market-based compensation of TSEK 1,760. There have been no other transactions with related parties.

Contingent liabilities

There have been no changes in the Group's contingent liabilities. These are described in Note 18 on page 35 of the annual report for 2009.

Outlook

The company's finances remain strong and the expansion is proceeding according to plan, despite a continued slow permit process, which is due to partly to local authorities' right to veto wind projects and the restrictions relating to air traffic, radar installations and the JAS fighter aircraft announced by the Swedish Armed Forces. The company has been able to continue its expansion by acquiring wind farms with existing permits, which, through the acquisition and consolidation process, has probably given the company a unique market awareness of factors of material significance for the construction of onshore wind farms. The company's long-term goal is to have 300 turbines under construction or in operation by the end of 2014, representing a total production capacity of about 700 MW.

Risks and uncertainties

The IPO in the spring and subsequent share offerings have raised new equity capital for the Group, which together with unused credit facilities and committed lines of credit from banks give the company the resources it requires to achieve its planned expansion. The target is to take into operation and/or start work on the construction of a further 135 MW in 2011, to be added to the existing 125 MW. Any changes in access to new equity and loan capital will need to be continuously monitored and assessed in order to secure the Group's adopted expansion plan, also after 2011.

Financial risks have diminished compared with last year in line with the improvement in financial markets. The main focus is on monitoring fluctuations in electricity and certificate prices as well as exchange rates, especially against the euro.

Risks and uncertainties affecting the Group are described on page 16 of the company's 2009 annual report and financial risk management is presented on pages 30–33. No significant changes have taken place that affect the reported risks.

Project portfolio status at 31 December 2010

No. of pro
jects
No. of wind
turbines
Total capacity
(MW)
Average output per
turbine (MW)
Farms in operation and under construc
tion
In operation 3 22 47 2.1
Under construction 5 36 78 2.2
Project portfolio
Permits received/acquired 5 14 37 2.7
Permits pending 24 161 379 2.4
Project planning completed 22 186 430 2.3
Leases signed 3 25 58 2.3
Total portfolio 62 444 1 029 2.3

About 15 per cent (approx. 150 MW) of the above project portfolio is affected by the restrictions, which relate to the JAS 39 Gripen fighter aircraft, announced by the Swedish Armed Forces. However, the introduction of such restrictions do not affect the company's expansion plans, as the remaining projects are available for the planned expansion and the lease portfolio is continually replenished. Wind farms in operation or under construction are not affected. The total number of MW in the portfolio may increase and decrease over time, which is natural as the date for the start of the construction phase approaches and as poor wind locations are winnowed out along with locations where there are conflicting interests and obstacles. New leases are therefore continually added to the project portfolio. It should be noted that the right to acquire the Jädraås project (200 MW) is not included in the above project summary.

Projects are categorised based on the following criteria

In operation

Wind power projects where the wind farm has been taken into production after completion of test runs and is generating electricity. In the first three months the turbines are calibrated and serviced thoroughly for the first time. During this period the output has not yet been optimised. Full and normal production can be expected only after three months, following approval of test runs and handover.

Under construction

Refers to projects where the requisite permits have been obtained, an investment decision has been made by the company's Board of Directors, equity and loan funding is available and procurements have been made representing the majority of the project's total investment cost.

Permits received/acquired

Projects that have received the permits required to start construction but where construction has not yet begun. In some cases Arise Windpower will wait until sufficient wind data is available.

Permits pending

The first stage in a permit application is a process of consultation where the company applies for permits to build the wind farm from the relevant regional and local authorities. If the transmission network is to be built by Arise Elnät the company will also apply for a concession to operate the network from the Swedish Energy Markets Inspectorate. This stage is concluded when all requisite permits have been obtained or if a permit application has been rejected.

Project planning completed

After signing land lease agreements Arise Windpower begins project planning work on the site's precise wind power characteristics. The area is carefully analysed and the exact coordinates of the planned turbines are determined.

The initial wind studies are based on theoretical maps but at a later stage actual wind measurements are made using the company's wind measuring equipment.

Leases signed

Land lease agreements have been signed after negotiations between landowners and Arise Windpower. Longterm land leases have been concluded for the entire project portfolio, giving the company the right, but not an obligation, to build wind turbines on the leased properties. For most of the projects, project planning has been initiated but has not yet been completed. The feasibility studies performed by the company before a lease is signed result in a preliminary specification of the siting of the new wind turbines.

Parent company

In 2010 the parent company continued to build up the Group, performed most of the project planning for suitable wind locations, concluded leases, produced impact assessments and detailed development plans, obtained building permits, procured products and services, handled the Group's power and certificate trading activities, and performed central services in the Group.

The parent company handles the Group's production plans and electricity hedges in accordance with the adopted financial policy. The electricityproducing subsidiaries (the Arise Wind Farm companies) sell all generated electricity to the parent company at contracted prices.

The parent company then sells the electricity to customers based on bilateral agreements or in the spot market, and the net result of the trades is recognised in net sales.

_________________________________________________________________________________________________________

The gross result in the parent company, which also comprises expenses billed within the Group, including work performed by the company for its own use and capitalised, was TSEK 23,557 (26,713) in 2010. The net result after tax was TSEK -5,447 (5,470). The parent company has paid advances for some investments on behalf of subsidiaries. Net investments during the period were TSEK 213,420 (29,560). Subsidiaries were capitalised in the amount of TSEK 248,400 (32,950).

Shareholders

A list of major shareholders of Arise Windpower is presented on the company's website (www.arisewindpower.se).

Annual General Meeting

The company's Annual General Meeting will be held in Halmstad on 27 April 2011. The annual report will be available on the company's website from the middle of April. The Board of Directors and Chief Executive Officer propose that no divided be paid for 2010 (SEK 0).

  • Financial calendar First quarter (1 Jan – 31 Mar):
  • 9 May 2011.
  • Second quarter (1 Apr 30 Jun): 11 Aug 2011.
  • Third quarter (1 Jul 30 Sep): 7 Nov 2011.
  • Fourth quarter (1 Oct 31 Dec): February 2012.

This interim report has not been audited by the company's auditor.

Halmstad, 18 February 2011

Arise Windpower AB (publ)

Peter Nygren CEO

CONSOLIDATED INCOME STATEMENT

2010 2009 2010 2009
Amounts in TSEK Q4 Q4 12 mth 12 mth
Net sales 21,205 11,519 66,744 27,023
Work performed by the company for its own use and capitalised 6,470 2,266 18,569 13,262
Other operating income
Note 1
5,856 1,218 22,070 3,183
Total income 33,531 15,003 107,383 43,468
Staff costs -9,497 -6,445 -30,995 -23,353
Other external expenses
Note 2
-13,732 -3,310 -41,287 -18,388
Operating result before depreciation (EBITDA) 10,302 5,248 35,101 1,727
Depreciation of property, plant and equipment -12,011 -4,060 -36,715 -12,525
Operating result (EBIT) -1,709 1,188 -1,614 -10,798
Financial income 499 1,736 2,144 7,402
Financial expense -6,146 -4,132 -24,538 -8,001
Profit/loss before tax -7,356 -1,208 -24,008 -11,397
Income tax 1,296 262 5,675 3,783
Net result -6,060 -946 -18,333 -7,614
Earnings per share before dilution, SEK -0.20 -0.05 -0.72 -0.44
Earnings per share after dilution, SEK -0.20 -0.05 -0.72 -0.44

Treasury shares have not been included in calculating earnings per share.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2010 2009 2010 2009
Amounts in TSEK Q4 Q4 12 mth 12 mth
Net result -6,060 -946 -18,333 -7,614
Other comprehensive income
Income/expenses recognised directly in equity
Cash flow hedges, unrealised changes in value 15,151 -5,040 -753 1,012
Income tax attributable to components of other comprehensive
income
-3,984 1,325 198 -266
Other comprehensive income, net after tax 11,167 -3,715 -555 746
Total comprehensive income 5,107 -4,661 -18,888 -6,868

The comprehensive income is 100 per cent attributable to the shareholders of the parent.

CONSOLIDATED BALANCE SHEET

2010 2009
- In summary, amounts in TSEK 31 Dec 31 Dec
Property, plant and equipment 1,677,858 898,061
Financial assets 56,585 20,214
Other current assets 90,448 88,544
Cash and cash equivalents 249,640 341,308
TOTAL ASSETS 2,074,531 1,348,127
Shareholders' equity 1,194,808 680,273
Non-current liabilities 776,304 590,260
Current liabilities 103,419 77,594
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 2,074,531 1,348,127

CONSOLIDATED CASH FLOW STATEMENT

2010 2009 2010 2009
- In summary, amounts in TSEK Q4 Q4 12 month 12 mth
Cash flow from operating activities before changes in working
capital
6 965 5 199 27 954 1 530
Cash flow from changes in working capital -20,195 -68,512 4,167 -121,418
Cash flow from operating activities -13,230 -63,313 32,121 -119,888
Acquisition of property, plant and equipment -289,120 -180,126 -899,602 -567,640
Sale of property, plant and equipment - - 87,800 -
Cash flow after investing activities -302,350 -243,439 -779,681 -687,528
Change in interest-bearing liabilities 168,322 130,000 205,925 310,000
Interest paid and received -3,909 5,193 -22,919 -229
Deposits into frozen accounts - - -20,400 -
Issue of new shares - -288 525,407 310,143
Cash flow from financing activities 164,413 134,905 688,013 619,914
Cash flow for the period -137,937 -108,534 -91,668 -67,614
Cash and cash equivalents at beginning of period 387,577 449,842 341,308 408,922
Cash and cash equivalents at end of period 249,640 341,308 249,640 341,308
Interest-bearing liabilities at end of period -805,925 -600,000 -805,925 -600,000
Interest-bearing net liabilities (-) / assets (+) -556,285 -258,692 -556,285 -258,692

CONSOLIDATED SHAREHOLDERS' EQUITY

2010 2009
- In summary, amounts in TSEK 31 Dec 31 Dec
Opening balance 680,273 373,587
Total comprehensive income -18,888 -6,868
Issue of new shares incl. income tax 532,823 313,554
Use of treasury shares in connection with acquisition of assets 600 -
Closing balance 1,194,808 680,273
KEY RATIOS FOR THE GROUP 2010 2009 2010 2009
Q4 Q4 12 mth 12 mth
Operational key ratios
Capacity in operation at end of period, MW 46.5 34.0 46.5 34.0
Electricity production during period, GWh 27.8 15.7 88.5 36.0
No. of employees at end of period 27 21 27 21
Financial key ratios
EBITDA margin, % 48.6% 45.6% 52.6% 6.4%
Operating margin, % neg 10.3% neg neg
Return on capital employed, % 2.6% 2.6% 2.8% 0.3%
Return on equity, % neg neg neg neg
Capital employed, TSEK 1,751,093 938,965 1,751,093 938,965
Average capital employed, TSEK 1,595,502 822,839 1,265,006 597,174
Shareholders' equity, SEK '000 1,194,808 680,273 1,194,808 680,273
Average shareholders' equity, TSEK 1,192,347 683,414 1,093,237 496,410
Interest-bearing net liabilities (-) / assets (+) -556,285 -258,692 -556,285 -258,692
Equity/assets ratio, % 57.6% 50.5% 57.6% 50.5%
Interest coverage ratio, times neg neg neg neg
Debt/equity ratio, times 0.7 1.0 0.7 1.0
Equity per share, SEK 39 33 47 39
Equity per share after dilution, SEK 38 31 45 36
No. of shares at end of period excl. treasury shares 30,635,570 20,488,570 30,635,570 20,488,570
Average no. of shares 30,635,570 20,488,570 25,562,070 17,502,478
Average no. of shares after dilution 31,620,570 21,639,570 26,510,820 18,832,878

Definitions

EBITDA margin Operating result before depreciation (EBITDA) / net sales Operating margin Operating result (EBIT) / net sales Return on capital employed EBITDA / average capital employed Return on equity Net result / average shareholders' equity Equity per share Shareholders' equity / average number of shares Interest-bearing net liabilities Interest-bearing liabilities less cash Interest coverage ratio Result after financial income / financial expense

Debt/equity ratio Liabilities / shareholders' equity
Equity/assets ratio Shareholders' equity / total assets
Capital employed Shareholders' equity plus interest-bearing net liabilities
Note 1 - Other operating income 2010 2009 2010 2009
Amounts in TSEK Q4 Q4 12 mth 12 mth
Other income relating to electricity and certificates 835 799 7,211 2,629
Income from crane rental 4,922 - 9,313 -
Gain on sale of property, plant and equipment - - 4,710 -
Other items 99 419 836 554
5,856 1,218 22,070 3,183

Note 2 - Other external expenses for 12 mth-10 refer to a net loss of SEK 2.0 million (-) on power trading, of which SEK 0.4 million (-) refers to the fourth quarter.

THE GROUP'S SEGMENT REPORTING

Q4 Wind power opera
tions
Wind power devel
opment
Eliminations Group
Amounts in TSEK Q4 -10 Q4-09 Q4 -10 Q4-09 Q4 -10 Q4-09 Q4 -10 Q4-09
Net sales, external 21,205 11,519 - - - - 21,205 11,519
Net sales, internal
Work performed by the company for its own use and
- - -2,631 15,466 2,631 -15,466 - -
capitalised
Other operating income
Note 3
-
834
-
799
6,470
5,022
2,266
419
-
-
-
-
6,470
5,856
2,266
1,218
Total income 22,039 12,318 8,861 18,151 2,631 -15,466 33,531 15,003
Operational result 17,708 9,832 8,747 18,013 2,630 -14,886 29,085 12,959
Operating result before depreciation (EBITDA) 17,594 9,969 -11,599 10,525 4,306 -15,246 10,301 5,248
Operating result (EBIT) 8,257 5,082 -12,340 9,565 2,373 -13,459 -1,710 1,188
Assets 1,770,941 411,411 971,933 1,163,069 -668,343 -226,353 2,074,531 1,348,127

Note 3 - Other operating income

Other income relating to electricity and certificates 834 799 - - - - 834 799
Income from crane rental - - 4,922 - - - 4,922 -
Gain on sale of property, plant and equipment - - - - - - - -
Other items - - 100 419 - - 100 419
834 799 5,022 419 - - 5,856 1,218
12 months Wind power opera
tions
Wind power devel
opment
Eliminations Group
Amounts in TSEK 2010 2009 2010 2009 2010 2009 2010 2009
Net sales, external 66,744 27,023 - - - - 66,744 27,023
Net sales, internal
Work performed by the company for its own use and
- - 17,617 19,507 -17,617 -19,507 - -
capitalised - - 18,569 13,262 - - 18,569 13,262
Other operating income
Note 4
7,211 2,629 14,860 554 - - 22,070 3,183
Total income 73,955 29,652 51,046 33,323 -17,617 -19,507 107,383 43,468
Operational result 56,439 21,862 50,001 32,757 -16,563 -17,707 89,876 36,912
Operating result before depreciation (EBITDA) 55,193 20,851 -9,145 -4,068 -10,948 -15,056 35,100 1,727
Operating result (EBIT) 22,275 8,713 -12,357 -6,838 -11,533 -12,673 -1,615 -10,798

Note 4 - Other operating income

Other income relating to electricity and certificates 7,211 2,629 - - - - 7,211 2,629
Income from crane rental - - 9,313 - - - 9,313 -
Gain on sale of property, plant and equipment - - 4,710 - - - 4,710 -
Other items - - 837 554 - - 837 554
7,211 2,629 14,860 554 - - 22,070 3,183

PARENT COMPANY INCOME STATEMENT

2010 2009 2010 2009
Amounts in TSEK Q4 Q4 12 mth 12 mth
Net sales 945 8,330 10,357 18,086
Work performed by the company for its own use and capitalised 4,788 6,073 13,200 8,627
Total income 5,733 14,403 23,557 26,713
Staff costs -7,079 -4,559 -22,322 -15,869
Other external expenses -3,630 -3,442 -13,164 -9,825
Operating result before depreciation (EBITDA) -4,976 6,402 -11,929 1,019
Depreciation of property, plant and equipment -558 -87 -963 -260
Operating result (EBIT) -5,534 6,315 -12,892 759
Financial income 3,108 1,645 6,090 5,588
Financial expense 1,088 - -467 -9
Profit/loss before tax -1,338 7,960 -7,269 6,338
Income tax 262 -2,136 1,822 -868
Net result and comprehensive income -1,076 5,824 -5,447 5,470

PARENT COMPANY BALANCE SHEET

2010 2009
- In summary, amounts in TSEK 31 Dec 31 Dec
Property, plant and equipment 254,181 41,724
Financial assets 539,867 323,041
Other current assets 413,914 134,747
Cash and cash equivalents 37,561 234,531
TOTAL ASSETS 1,245,523 734,043
Restricted equity 2,526 1,715
Unrestricted equity 1,223,918 696,564
Current liabilities 19,079 35,764
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 1,245,523 734,043

PARENT COMPANY SHAREHOLDERS' EQUITY

2010 2009
- In summary, amounts in TSEK 31 Dec 31 Dec
Opening balance 698,279 377,854
Total comprehensive income -5,447 5,470
Issue of new shares 533,012 314,963
Use of treasury shares in connection with acquisition of assets 600 -8
Closing balance 1,226,444 698,279

Accounting policies

Accounting policies

Arise Windpower applies the International Financial Reporting Standards (IFRS), as adopted by the EU, and the interpretations of these (IFRIC). This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The parent company's financial statements have been prepared in accordance with the Swedish Annual Accounts Act and Recommendation RFR 2 of the Swedish Financial Reporting Board. Unless otherwise stated, the accounting policies are the same as those applied in the latest annual report.

New accounting policies in 2010

New and revised IFRS and interpretations from IFRIC that are applicable for the Group as of 1 January 2010 have not had any significant impact on consolidated earnings or on the Group's financial position.

New or revised IFRS and interpretations are not deemed to have had any significant impact on Arise Windpower's financial statements, with the exception of IFRS 3 Business Combinations, which states that transaction costs incurred in connection with acquisitions should not be included in the cost of the acquisition but should be expensed in the income statement. Additional descriptions of new and amended accounting policies are found in the latest annual report.

For more information, please contact:

Peter Nygren, CEO Tel. +46 (0)706-300 680 Thomas Johansson, CFO Tel. +46 (0)768-211 115

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