Earnings Release • Mar 30, 2012
Earnings Release
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30 March 2012 – 6 p.m. CET – Regulated information
Antwerp – Thenergo (Euronext Brussels: THEB), a developer and operator of decentralised, sustainable energy projects, presents its results for 2011.
After the restructuring measures taken in 2010 that were continued into 2011, Thenergo hoped that better times would come in 2011 and the future. At the start of 2011, the capital increase announced in December 2010 was implemented by converting a portion of € 3.042 million of the loan from ParticipatieMaatschappij Vlaanderen. The remainder of € 4 million was converted into a new loan repayable no later than 30 June 2016. ParticipatieMaatschappij Vlaanderen can claim early repayment of the capital in specific circumstances, including divestment of assets. The annual interest rate was set at 6%.
Energy prices developed slightly favourably during the first quarter. The price of electricity produced by the Groeikracht and My Power segments increased. The gas price, on the other hand, only rose to a lesser extent, so that the difference between the two increased. However, this positive trend quickly came to an end, and prices fell back to their 2010 level with effect from the second quarter, which then changed very little during the course of 2011. At the same time, long-term agreements entered into in the energy markets showed that no significant improvements should to be expected.
It was already generally known in 2010 that the market for [CHP] certificates had dried up. The government also introduced no measure during 2011 that would bring liquidity back into the market. The result is that only the lowest price could be obtained for the certificates throughout the year.
Thenergo's partners in the CHP combined heat and power plants were confronted with two additional problems during 2011 in Thenergo's key Groeikracht segment. Extraordinarily good spring weather brought large quantities of vegetables onto the market. This phenomenon was reinforced by the late start of the vegetable season in Southern Europe. A second unexpected problem was the EHEC bacterium, and the closing of borders across Central Europe for foreign vegetables. The selling prices of vegetables dropped far below the grower's production cost. This situation put our partners under pressure, because the heat supplied by the Groeikracht plants could not or hardly be afforded.
The Board of Directors, after having been largely renewed at the General Meeting of Shareholders on 4 May 2011, analysed the situation and decided to adjust the strategy in the third quarter:
to obtain cash funds from investors for this purpose.
The cost savings and staff reductions were continued unabated in 2011, with the aim of adapting the workforce to the reduced activities and further decrease office costs. The cost savings will continue undiminished in 2012.
Negotiations were conducted with partners and banks, among others.
This has led to the divestment of Groeikracht entities, so that only 9 of the 22 power stations that were in the portfolio at the start of 2011 now remain in the portfolio as at 15 March 2012. This sharp contraction of the Groeikracht segment obviously has an effect on the financial situation of the Company, as will be clear later in this report.
In addition, revised arrangements have been made with ParticipatieMaatschappij Vlaanderen and the banks that grant loans to the Groeikracht entities. Thenergo was able to reduce its burden of debt even more. Thenergo's total consolidated gross debt for its continuing operations amounted to € 4.061 million as at 31 December 2011, compared to € 32.870 million as at 31 December 2010. The consolidated net debt was € 1.777 million as at 31 December 2011, including the PMV loan at holding company level.
As a result of selling Groeikracht entities and discussions with the banks, guarantees linked to the credit agreements at the level of the subsidiaries amounting to € 3.390 million as at 31 December 2010, decreased to € 1.976 million as at 31 December 2011.
As announced, Thenergo continued to expand its services segment during in the course of 2011. The focus for this is on:
This activity has now been placed in an independent, wholly owned subsidiary named Etrim NV. The customers positively received the trading platform that Etrim has put into the market. Etrim will relentlessly continue expanding its full energy services package, so that the most cost-effective solution can be achieved transparently for the customers.
Thenergo's cash position as at 31 December 2011 amounted to € 2.284 million. After careful consideration of all options, including that of dissolving the company, the Board believes that the strategy as outlined above has every opportunity to succeed. It is the intention to divest all assets of the Groeikracht segment such that Thenergo withdraws from this segment. It is in this context that Thenergo has decided to prepare its financial statements as a going concern and recognise the Groeikracht entities in discontinued operations. This
decision about the continuity is entirely in line with the decision of the General Meeting of Shareholders on 4 February 2011, in which the meeting voted in favour of the continuity of the company as a result of the question about this, pursuant to Section 633 of the Belgian Company Code.
Thenergo will intensify its search for strategic investors for Etrim during the course of 2012. It hopes it will be able to do this successfully, taking into account:
If these investors cannot be found in good time, this could lead to a decision to dissolve the company.
The Board of Directors is aware that the cost structure that ensues from the stock exchange listing is in contrast to a drastically reduced organisation and income model. In this context, consideration must be given to the usefulness of this listing.
As a result of the realised and/or planned divestments identified above, Thenergo makes the distinction between continuing operations and discontinued operations in the presentation of its results from 31 December 2011.
| in € 000 | 31 Dec. 2011 |
31 Dec. 2010 |
|---|---|---|
| Continued operations | ||
| Revenue | 2,105 | 2,025 |
| EBITDA | (2,092) | (4,728) |
| EBIT | (2,605) | (5,190) |
| Result (continued operations) | (4,097) | (6,570) |
| Discontinued Operations | ||
| Result (discontinued operations) | (8,393) | (23,702) |
| Result for the period (For details, please see appendix) |
(12,490) | (30,272) |
Because of the implementation of the strategic plan to divest the Groeikracht segment, the consolidated income statement for 2011 below the line revenue only shows revenue from continuing operations. Thenergo's continued operations include the 'My Power, 'Services' and 'Holding' segments. The realised revenue with third parties from these segments amounted to € 2.105 million in 2011, compared to € 2.025 million in 2010. The revenue is partly attributable to trading activities with green power and CHP (Combined Heat and Power) certificates. The revenue also includes a limited amount of sales of services as a result of putting the IT trading platform into operation. Other operating income decreased due to the sale of an industrial site in 2010 and the lack of rental income in 2011.
Consolidated EBITDA from continuing operations increased from minus € 4.728 million in 2010 to minus € 2.092 million in 2011. Operating costs decreased as a result of the various restructurings, and this was with stable operating income.
The operating costs include staff costs and overhead costs that partly relate to the discontinued operations. However, because they are not directly attributable to these discontinued operations, they have been included under the result from continuing operations. The divestments in the Groeikracht segment resulted in these costs that were not directly attributable being further reduced in 2011. These costs will therefore decrease further in 2012 when the remaining Groeikracht entities have been divested.
Thenergo incurred a consolidated loss of minus € 12.490 million as at 31 December 2011. This loss includes minus € 8.393 million of the result of the discontinued operations.
Impairments were recognised on the assets held for sale to take account of their final expected recoverable value. The financial results include a charge of € 1.250 million, which is the difference between the fair value at issuance of the new loan and shares, on the one hand, and the carrying amount of the existing bond loan in favour of ParticipatieMaatschappij Vlaanderen on the other.
Based in Belgium, Thenergo is a fully integrated and independent developer and operator of sustainable energy projects using biogas. Thenergo supplies significant added value to its customers as a one-stop provider of sustainable energy solutions, transforming renewable fuels into electricity and heat.
Chris Beliën CEO T.: +32 3 292 96 96 [email protected]
Gateway House, Brusselstraat 59 B-2018 Antwerp Belgium
This press release and the associated accounts are available on our website www.thenergo.eu
If you want to be kept informed about press releases and financial information, please register on: www.thenergo.eu/en/press/alerts
| in € 000 | 2011 | % | 2010 | $\%$ |
|---|---|---|---|---|
| Continuing operations | ||||
| Operating income | 2.153 | 2.156 | ||
| Revenues | 2.105 | 100% | 2.025 | 100% |
| Other income | 48 | 131 | ||
| Operating expenses | $-4.758$ | $-7.346$ $-1.281$ |
||
| Raw materials and consumables Payroll expenses |
$-1.446$ $-1.592$ |
$-69%$ $-76%$ |
$-3.039$ | $-63%$ |
| Depreciation and amortisation | $-338$ | $-16%$ | $-393$ | $-150%$ $-19%$ |
| Impairment of assets | $-175$ | $-8%$ | $-69$ | $-3%$ |
| Costs discontinued projects | $\mathbf{0}$ | $0\%$ | $-107$ | $-5%$ |
| Share-based payment expense | $\mathbf{O}$ | 0% | $-149$ | $-7%$ |
| $-1.207$ | $-57%$ | $-2.308$ | $-114%$ | |
| Other operating expenses | ||||
| Operating result | $-2.605$ | $-5.190$ | ||
| Financial result | $-1.489$ | $-3.051$ | ||
| Interest income | 4 | $0\%$ | 24 | $1\%$ |
| Interest expense | $-234$ | $-11%$ | $-607$ | $-30%$ |
| Other finance income or expense | $-1.259$ | $-60%$ | $-2.468$ | $-122%$ |
| Result before tax | $-4.094$ | $-8.240$ | ||
| Income tax benefit/(expense) | -3 | 0% | 1.670 | 82% |
| Result from the year from continuing activities | $-4.097$ | $-6.570$ | ||
| Discontinued operations | $-8.393$ | $-23.702$ | ||
| Result of the year from discontinued operations | $-8.393$ | $-23.702$ | ||
| Result of the year | $-12.490$ | $-30.272$ | ||
| Result attributable to | ||||
| Owners of the company | ||||
| Results from the year from continuing operations ( $\in$ 000) | $-4.097$ | $-6.570$ | ||
| Results from the year from discontinued operations ( $\in$ 000) | $-6.505$ | $-22.272$ | ||
| Results from the year from continuing and discontinued operations ( $\epsilon$ 000) | $-10.602$ | $-28.842$ | ||
| Non-controlling interests | ||||
| Results from the year from continuing operations ( $\in$ 000) | $-1.888$ | |||
| Results from the year from discontinued operations $(\in 000)$ | $-1.430$ | |||
| Results from the year from continuing and discontinued operations ( $6000$ ) | $-1.888$ | $-1.430$ | ||
| Earnings/loss per share | ||||
| From continuing and discontinued operations: | ||||
| Basic loss per share $(\epsilon)$ | $-0,37$ | $-1,33$ | ||
| Diluted loss per share $(\epsilon)$ | $-0,37$ | $-1,33$ | ||
| From continuing operations | ||||
| Basic loss per share $(\epsilon)$ | $-0,14$ | $-0,30$ | ||
| Diluted loss per share $(\epsilon)$ | $-0,14$ | $-0,30$ |
The previous year's figures were restated in accordance with IFRS 5
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