AI assistant
Nordic Financials ASA — Interim / Quarterly Report 2016
May 31, 2016
3521_rns_2016-05-31_317b7827-c852-4789-9326-4d83eda5ae20.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
Aega ASA Q1 REPORT – 2016
Contents
| About Aega ASA | 3 | |
|---|---|---|
| Highlights from the reporting period | 3 | |
| Financial review | 4 | |
| Key risk factors | 5 | |
| Explanation of the accounting structure of the consolidated interim report | 6 | |
| Aega Portfolio as of Q1 2016 | 7 | |
| Financials | 8 | |
| Profit and loss | 8 | |
| Balance sheet | 9 | |
| Cash flow | 10 | |
| Change in equity | 11 | |
| Note 1: | Summary of significant accounting policies | 12 |
| Note 2: | Operational cost breakdown | 14 |
| Note 3: | Property plant and equipment | 15 |
| Note 4: | Group structure | 15 |
| Note 5: | Cash and cash equivalents | 15 |
| Note 6: | Purchase price allocations | 16 |
| Note 7: | Power Production | 17 |
| Note 8: | Related party transactions | 18 |
| Note 9: | Acquisitions and transaction cost | 18 |
| Note 10: Financing overview | 18 | |
| Note 11: Trade receivables and other current assets | 18 | |
| Note 12: Shareholders and number of shares | 19 | |
| Note 13: Events after the balance sheet date | 19 | |
| Investor contacts | 20 |
About Aega ASA
Aega ASA is a solar utility company acquiring and operating solar power plants. The company currently owns a portfolio of five individual solar parks in Italy with a combined production capacity of 5MW. The company focuses on acquisitions of smaller existing and operating solar parks (below 5MW capacity), meeting strict investment criteria defined by the company. It targets to reach a total production capacity of 50MW by the end of 2017 and intends to take advantage of the current attractive market for secondary solar parks. The company has its operating offices in Oslo, Norway, and Trento, Italy. The company's shares are listed on Oslo Axess.
HIGHLIGHTS FROM THE REPORTING PERIOD
Operation highlights
The cumulated gross revenues accrued in Q1 2016 from the portfolio came in above budget, due to better than expected production of the plants, particularly at Magnacavallo and Montalto, and despite issues negatively affecting one inverter at Montalto. Good uptime management, irradiation and a satisfactory performance have been the key factors of this trend, while the energy price has been generally below the expectations.
Acquisition of Aega Yieldco AS
On 20 January 2016 the company entered into a definitive agreement to purchase 100 per cent of the shares in Aega Yieldco AS from the existing shareholders for a consideration of approximately NOK 75.5 million. The settlement was made in shares in the company valued at NOK 3.00 per share. According to the resolutions passed at the extraordinary general meeting held on 18 January 2016, the company's share capital was increased by NOK 25 151 275 by issuing 25 151 275 new shares (the "Consideration Shares") subscribed for by Aega Yieldco AS' shareholders. As a result of the subscription of the Consideration Shares, ownership of all outstanding shares in Aega Yieldco AS were transferred to the company as contribution in kind. After completion of the transaction the share capital of the company is NOK 27 360 295 divided into 27 360 295 shares, each with a par value of NOK 1. Aega Yieldco AS currently owns a portfolio of five individual solar parks in the Umbria and Lazio regions in Italy with a combined energy capacity of 5MW.
Name change
Following the acquisition of Aega Yieldco AS, the business operated by Aega Yieldco AS constitutes the company's main activity. The general meeting therefore resolved to change the name to Aega ASA.
Change of reporting currency
Due to the change of business of the company AEGA decided to change the reporting currency to EURO with effect from 1 January 2016. The main revenues of Aega come from Italy and are denominated in EURO.
Dividend
On 22 February 2016, the extraordinary general meeting resolved to distribute a dividend from share premium of NOK 0.0265 per share. The dividend was paid on 29 February 2016. The company decided to distribute less than 2.5 per cent on invested capital, due to the exceptional one-off costs associated with the listing of the shares. However, the company has reaffirmed the dividend policy by resolving a quarterly distribution of NOK 0.075 per share at the annual general meeting held on 18 May 2016, to be paid on 31 May and 31 August 2016 respectively.
Proxy to the Board - capital increase
On 22 February 2016, the general meeting resolved to provide a proxy allowing the Board of Directors to increase the share capital by maximum NOK 13 680 147. The proxy expires at the annual general meeting to be held during spring 2017, 30 June 2017.
Proxy to the Board - repurchase of shares
On 22 February 2016, the general meeting resolved to provide a proxy allowing the Board of Directors to repurchase share capital by maximum NOK 2 736 029. The proxy allows for a purchase price between NOK 1 and NOK 20 per share. The proxy expires at the annual general meeting to be held during spring 2017, 30 June 2017 at the latest.
Key financials
| Unaudited | Unaudited | |
|---|---|---|
| (EUR 000') | Q1 2016 | Q1 2015 |
| Electricity production (MWh) | 1 244 | 230 |
| Total revenues | 390 | 68 |
| EBITDA | (599) | (17) |
| Other Operating profit (EBIT) | (801) | (56) |
| Profit before income tax | (897) | (17) |
| Profit/(loss) for the period | (898) | (16) |
| Total Assets | 16 853 | 6 125 |
| Equity (%) | 31% | 16% |
| Net interest bearing debt | 9 271 | 3 857 |
| Per share measures: | ||
| Earnings | (0.03) | - |
| Stock price end of quarter (NOK) | 2.76 | NA |
| Distribution to shareholders in the quarter (NOK) | 0.03 | 0.31 |
| Quaterly yield | 0.96% | NA |
| Non GAAP measures: | ||
| EBITDA adjusted | 39 | (17) |
| EBIT adjusted | (164) | (56) |
| Net income adjusted | (260) | (16) |
FINANCIAL REVIEW
On 20 January 2016,Aega ASA (Former Nordic Financials ASA) entered into a binding share purchase agreement with AEGA Yieldco AS. For accounting purposes Aega Yieldco AS has been identified as the acquiring party. Therefore, comparison figures are from Aega Yieldco AS's business in Q1 2015. It should be noted that the Aega group in Q1 2015 only had revenues from one solar park, while in Q1 2016 the company owns and operates five solar parks. This means that comparing financial figures quarter to quarter provides limited information on financial performance.
Revenues in Q1 2016 were EUR 390k compared to EUR 68k the same period last year. The first and fourth quarter have the least solar irradiation and therefore the lowest revenues. The total power production was 1 244 MWh 8.5 per cent higher the budgeted 1 147 MWh.
Total operating costs were EUR 60k compared to EUR 12k the same period last year. The company has had non-recurring cost related to the acquisition of Aega Yieldco AS, and subsequent listing of the consideration shares in the transaction. Transaction and other non-recurring costs are estimated to EUR 637k.
Net financial income was negative EUR 73k in Q1, compared to negative EUR 15k in Q1 2015. Pre-tax profit was negative EUR 897k and the tax charge was EUR 1k, resulting in a net loss of EUR 898k in the quarter compared to a loss of EUR 16k one year ago.
Earnings per share (EPS) was negative EUR 0.03 for Q1, compared to negative EUR 0.003 in the same period last year.
The assets on the balance sheet consist of the portfolio of five individual solar parks in Italy, two remaining financial investments and cash bank deposits. The solar parks are financed with bank loans or leasing finance, where the assets of parks are registered as security. Each park has a separate loan financing (ring fenced).
The company had cash and short term deposits of EUR 944k at the end of Q1 2016 compared to EUR 391k one year earlier.
Comments to the remaining investment portfolio
The company holds shares in the listed company Wilson ASA. In accordance with the Norwegian Public Companies Act, requiring a majority owner with more than 90 per cent holding to make a compulsory offer to buy the remaining shares, the company has required that the majority owner of Wilson ASA buy the remaining shares. Court proceedings to determine fair value of the shares were held in April 2016 and the court's ruling concluded on a fair value of NOK 10.60 per share, and that the company shall bear its own and the other party's costs. The company disagrees with the court's ruling, both in terms of determining the fair value, and in terms of costs. The company is considering appealing the ruling,
The company is of the opinion that the fair value should be around NOK 22-23 per share, consistent with Wilson ASA's booked equity. In the accounts Aega ASA is using the value of NOK 10.60 per share and made a provision for potential case costs.
The company's other remaining investment, a fixed income bond issued by Polarcus, was initially bought in anticipation of a restructuring of the issuer. Polarcus was restructured in January 2016, and in February 2016 the company received shares and a new bond in exchange for the bond bought in 2015. The shares were subsequently sold.
The company will seek to exit both remaining investments, as investing in financial securities no longer is the company's main activity.
Investment opportunities – Investment process
The company is monitoring the market for solar parks in Italy, and recognise an extensive pipeline of new investment opportunities within the company's scope. The manager of the company's solar assets, Aega Solar AS, is currently in discussions on 17 parks with a combined capacity of 22.2 MW with 5 potential sellers. In addition, the company is in a due diligence process for a portfolio with capacity of 14 MW. This possible transaction is described under "Outlook" below.
Each investment opportunity is tested against the company's strict investment criteria. The investment focus can be summarised as targeting;
-
- High quality parks with low risks, as determined by the management company and external professional advisers.
-
- Smaller parks (1-5 MW) reaping economies of scale from being a professional and focused manager.
-
- Fixed ground mounted solar parks, representing lower technical and operational risk
-
- Projects with geographic focus in northern part of Italy, aiming at decreased business environment risks
-
- Projects offering adequate risk weighted yield and return potential
-
- Legally sound projects with no red flags.
-
- Projects with potential for performance improvements.
Outlook
Following the acquisition of Aega Yieldco AS, the company's main activity is investments in and operations of solar parks. The company currently owns a portfolio of five individual solar parks in the Umbria and Lazio regions in Italy with a combined production capacity of 5MW. The company's focus on acquisitions of smaller solar parks (below 5MW capacity), strictly with top level concessions, are deemed to offer lower risk investments. Aega ASA targets to reach a total production capacity of 50MW within Q4 2017 by taking advantage of the current attractive market for secondary solar parks meeting the company's strict investment criteria. The 50MW target will be the company's first milestone.
Growth in the solar project portfolio is important in order to increase economies of scale, and to provide a higher degree of predictability to the company's cash flow and dividend yield. Given the attractive longterm cash flows from the solar parks, the company intends to establish itself as a predictable investment opportunity for investors seeking stable and attractive dividends. The company intends to distribute a material part of the free cash flow from the operation as on a quarterly basis.
Although no assurances of success can be given, the previously announced intended transaction with a large clean energy private equity fund is in progress and is intended to close in June. The transaction would increase the company's energy capacity with 14 MW and the cash contributions contemplated as part of the transaction would provide the company with financial capacity to invest in further growth. If completed the transaction would be a major leap towards reaching the company's first milestone of size.
Successful completion private placement
The company has completed a private placement of new shares for a total consideration of NOK 25.5 million at a subscription price of NOK 3 per share.
The successful placement has provided the company financial strength to grow according to plan, regardless of success of the transaction mentioned above.
Dividend policy
The company invests in predictable cash yielding solar assets, and the dividend policy is to distribute a stable and attractive cash flow quarterly to the shareholders.
During the quarter Aega ASA paid NOK 0.0265 per share in distributions.
The general meeting has resolved a quarterly distribution of NOK 0.075 per share to be paid 31 May and 31 August 2016. The company aims to pay the same distribution to shareholders in November 2016.
KEY RISK FACTORS
All investments in financial instruments represent a risk of loss up to the full amount invested. Maximum potential loss is deemed to be limited to fair as per the company's balance sheet. Below is a summary of some of some of the key risk factors that may affect the company's business, operations, cash flows, financial condition and/or prospects.
Performance of the solar parks
The parks' performance is continuously monitored in order to rectify any downtime due to the malfunction of technical equipment. Aega ASA has local technical support staff that can be on site within hours. In most cases technical malfunctions can be rectified quickly and output can be maintained within the usual variations due to weather. However, there may be situations where a technical fault cannot be repaired quickly, and as a result the lower performance may have a negative impact on the company's revenues.
Solar park performance is dependent on weather and natural seasonal variations to solar irradiation, affecting the final output of the solar parks.
The company may suffer losses due to theft or vandalism, or be negatively affected by severe weather phenomena, corruption, bureaucratic inefficiencies, and human error.
Electricity prices and feed-in-tariffs
The production of the solar parks is sold to the grid. The revenue from the electricity sale consists of feed-in-tariff (about 80 per cent) and electricity price (about 20 per cent). The feed-in-tariff is fixed as part of the parks concession, whereas the electricity price varies with supply and demand for electricity. The variations in electricity prices represent a risk to the company's revenues, and the seasonal variations in irradiation will influence the periodic revenues throughout the year. The feed-in-tariff regime in Italy is a government incentive scheme. Although the company views the scheme as stable, the possibility of the government changing the scheme constitutes a risk to the company's revenues.
Financials risks
The company's growth strategy is dependent on acquiring additional solar parks. Although investment opportunities currently are deemed to be abundant, there is a risk that the company will not be able to make new investments at attractive terms in the future. There is also a risk that the company will not be able to find new financing alternatives at attractive terms or at all, and that this may jeopardize the intended growth strategy.
Increasing interest rates and/or increasing inflation could have a significant impact on the profitability of the company's investments in solar parks.
The company's investments and the revenues from the investments, are denominated in EUR. Loan financing is also made in EUR. The share price and potential distributions are quoted in NOK.
EXPLANATION OF THE ACCOUNTING STRUCTURE OF THE CONSOLIDATED INTERIM REPORT
| Company: | 2015-01 | 2015-02 | 2015-03 | 2015-04 | 2015-05 | 2015-06 | 2015-07 | 2015-08 | 2015-09 | 2015-10 | 2015-11 | 2015-12 | 2016-01 | 2016-02 | 2016-03 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| AEGA Energy Prima AS | Founded 28.4.2014 | |||||||||||||||
| Photo-Volt One Srl | Purchased 14.8.14 | |||||||||||||||
| DT Srl | Consolidated from 1.4.15 | |||||||||||||||
| AEGA Yieldco AS | Consolidated from 1.11.15 | |||||||||||||||
| AEGA Energy Seconda AS | Consolidated from 1.11.15 | |||||||||||||||
| Collesanto Srl | Consolidated from 1.11.15 | |||||||||||||||
| AEGA Energy Terza AS | Consolidated from 1.11.15 | |||||||||||||||
| JER-12 Srl | Consolidated from 1.11.15 | |||||||||||||||
| AEGA ASA (NOFIN) | Consolidated from 20.1.16 |
Coloured marking signals that the company accounts is included in the group-consolidated accounts.
As illustrated in the Timeline above the Q1 report is based on Aega Energy Prima AS being identified as the acquirer of first Aega Yieldco AS and then Aega Yieldco AS as the acquirer of Nordic Financials ASA. This assessment is based on a substance over form consideration. The main argument for having Aega Energy Prima AS and later Aega Yieldco AS as the acquirer is that the shareholders in the acquired company actually gains a material stake in the acquiring company, and the business of the acquired company is the one that prevails. In addition Aega Energy Prima AS has the longest history in the segment of the "new" Aega ASA.
Aega Energy Prima AS was established 28 April 2014 and bought the first solar power park in August 2014, Photo-Volt One Srl. In the end of Q1 2015 it bought the second park DT Srl. In November 2015, Aega Yieldco AS purchased Aega Prima Energy AS, Aega Seconda Energy AS and Aega Terza Energy AS, with consideration in shares, for accounting purposes. In January 2016 Aega Yieldco AS was purchased by Nordic Financials ASA with consideration in shares (now Aega ASA). The transaction was considered a reverse takeover for accounting purposes.
AEGA PORTFOLIO AS OF Q1 2016
Photo-Volt One Srl:
| Plant Name: | Montalto | Power (kWp): | 997.5 |
|---|---|---|---|
| Company: | Photo-Volt One Srl | Connection date: | 12/8/2011 |
| Municipality: | Montalto di Castro | Type | Ground mounted |
| Council: | Lazio | Feed-in tariff (€/KWh): | 0.242 |
DT Srl:
| Plant Name: | DT | Power (kWp): | 995.22 |
|---|---|---|---|
| Company: | DT Srl | Connection date: | 8/4/2011 |
| Municipality: | Terni | Type | Ground mounted |
| Council: | Umbria | Feed-in tariff (€/KWh): | 0.318 |
Collesanto Srl:
| Plant Name: | Porchiano | Power (kWp): | 997.6 |
|---|---|---|---|
| Company: | Collesanto Srl | Connection date: | 29/4/2011 |
| Municipality: | Amelia | Type | Ground mounted |
| Council: | Umbria | Feed-in tariff (€/KWh): | 0.318 |
| Plant Name: | Collesanto Narni | Power (kWp): | 990 |
|---|---|---|---|
| Company: | Collesanto Srl | Connection date: | 11/1/2011 |
| Municipality: | Narni | Type | Ground mounted |
| Council: | Umbria | Feed-in tariff (€/KWh): | 0.318 |
JER-12 Srl:
| Plant Name: | Magnacavallo | Power (kWp): | 992.64 |
|---|---|---|---|
| Company: | Jer-12 Srl | Connection date: | 28/6/2012 |
| Municipality: | Magnacavallo | Type | Ground mounted |
| Council: | Lombardia | Feed-in tariff (€/KWh): | 0.167 |
Financials
Profit and loss
| Unaudited | Unaudited | ||
|---|---|---|---|
| (EUR) | Note | Q1 2016 | Q1 2015 |
| Feed-In Tariff revenue | 1, 7 | 326 454 | 55 614 |
| Sales of electricity | 1, 7 | 63 117 | 11 931 |
| Other revenue | - | - | |
| Revenues | 1, 7 | 389 571 | 67 545 |
| Cost of operations | 2 | (59 160) | (11 736) |
| Sales, general and administration expenses | 2, 8 | (291 652) | (72 757) |
| Acquisition and transaction costs | 2 | (637 375) | - |
| EBITDA | (598 616) | (16 949) | |
| Depreciation, amortizations and write downs | 3 | (202 633) | (38 858) |
| Other Operating profit before OGL (EBIT) | (801 249) | (55 807) | |
| Other gains and losses | (22 232) | 3 537 | |
| Finance income | 362 | 2 634 | |
| Finance costs | (73 421) | (17 655) | |
| Net foreign exchange gain/(losses) | (417) | 53 387 | |
| Profit before income tax | (896 957) | (17 442) | |
| Income tax gain/(expense) | (692) | 1 475 | |
| Profit/(loss) for the period | (897 649) | (15 967) | |
| Other comprehensive income | |||
| Translation differences | 1 663 | 1 | |
| Other comprehensive income net of tax | 1 663 | 1 | |
| Total comprehensive income | (895 986) | (15 966) | |
| Profit for the period attributable to: | |||
| Equity holders of the parent company | (897 649) | (15 967) | |
| Total comprehensive income attributable to: | |||
| Equity holders of the parent company | (895 986) | (15 966) | |
| Earnings per share | (0.03) | (0.003) | |
| No. Of shares | 12 | 27 360 295 | 5 421 210 |
Balance sheet
| Unaudited | Unaudited | Unaudited | ||
|---|---|---|---|---|
| (EUR) | Note | 31 Mar 2016 | 31 Mar 2015 | 31 Dec 2014 |
| ASSETS | ||||
| Property, plant and equipment | 3 | 12 494 001 | 4 751 420 | 2 100 152 |
| Intangible assets | 235 628 | 2 000 | 575 | |
| Deferred tax asset | - | 40 408 | - | |
| Other long term assets | 431 323 | 62 989 | - | |
| Non-current assets | 13 160 952 | 4 856 817 | 2 100 727 | |
| Receivables | 11 | 341 299 | 200 949 | 137 635 |
| Other current assets | 11 | 2 406 722 | 676 153 | 171 610 |
| 5 | ||||
| Cash and short term deposits Current assets |
944 141 3 692 162 |
391 114 1 268 216 |
885 880 1 195 125 |
|
| TOTAL ASSETS | 16 853 114 | 6 125 032 | 3 295 852 | |
| EQUITY AND LIABILITIES | ||||
| Share capital | 12 | 2 906 187 | 977 768 | 1 176 340 |
| Share premium | 12 | 5 266 079 | - | - |
| Other paid in equity | 49 211 | 23 382 | (94 782) | |
| Paid in capital | 8 221 477 | 1 001 149 | 1 081 558 | |
| Accumulated profit & loss | (3 216 508) | (46 842) | 6 959 | |
| Other equity | - | - | - | |
| Foreign Currency translation reserve | 225 389 | |||
| Other equity | (2 991 120) | (46 842) | 6 959 | |
| Total equity | 5 230 358 | 954 307 | 1 088 517 | |
| Long term loans | 10 | 3 119 039 | 1 837 007 | 1 939 846 |
| Leasing | 10 | 6 151 827 | 2 019 885 | - |
| Other long term debt | 10 | 298 804 | 470 098 | - |
| Total non-current liabilities | 9 569 670 | 4 326 989 | 1 939 846 | |
| Trade payables and other payables | 731 116 | 195 780 | 124 436 | |
| Short term financing - interest bearing | 540 153 | 454 550 | 84 252 | |
| Derivative financial instruments | 781 817 | 193 405 | 55 303 | |
| Other current liabilities | - | - | 3 498 | |
| Total non-current liabilities | 2 053 086 | 843 735 | 267 489 | |
| Total liabilities | 11 622 756 | 5 170 724 | 2 207 335 | |
| TOTAL EQUITY AND LIABILITIES | 16 853 113 | 6 125 032 | 3 295 852 |
Oslo, 31 May 2016
CEO Chairman of the board Board member Board member Board member
Vegard Finstad Knut Øversjøen Grete Sønsteby Göran Mikael Schoultz Solveig Fagerheim Bugge
Cash flow
| Unaudited | Unaudited | ||
|---|---|---|---|
| (EUR) | Note | Q1 2016 | Q1 2015 |
| Ordinary profit before tax | (896 957) | (17 442) | |
| Paid income taxes | (10 389) | - | |
| Depreciation | 3 | 202 633 | 38 858 |
| Write down | 6 | 637 375 | |
| Changes in trade receivables and trade payable | (69 218) | 8 029 | |
| Changes in other accruals | (194 075) | (40 475) | |
| Cash flow from operations | (330 631) | (11 029) | |
| Acquisition of subsidiary, net of cash acquired | 6 | 93 551 | (366 970) |
| Cash flow from investments | 93 551 | (366 970) | |
| Proceeds from issue of share capital | - | - | |
| Dividends or shareholder distributions | 76 114 | (80 409) | |
| Proceeds from new loans | - | - | |
| Repayment of loans | (128 496) | - | |
| Cash flow from financing | (52 381) | (80 409) | |
| Cash at beginning of period | 1 387 494 | 885 880 | |
| Net currency translation effect | (1 663) | (36 359) | |
| Net increase/(decrease) in cash and cash equivalents | (289 461) | (458 408) | |
| Cash at end of period | 5 | 1 096 369 | 391 113 |
Change in equity
| Foreign | |||||
|---|---|---|---|---|---|
| Total | |||||
| capital | premium fund | paid in equity | equity | reserve | equity |
| 977 768 | - | 139 822 | (23 494) | - | 1 094 096 |
| (30 460) | (30 460) | ||||
| (15 967) | (15 967) | ||||
| - | |||||
| (85 980) | (7 381) | (93 361) | |||
| 977 768 | - | 23 382 | (46 842) | - | 954 309 |
| Share | Share | Other | Other | Currency translation |
| (EUR) | Share capital |
Share premium fund |
Other paid in equity |
Other equity |
Foreign Currency translation reserve |
Total equity |
|---|---|---|---|---|---|---|
| Equity as at 31 December 2015 | 60 442 | 5 232 154 | (260 655) | (364 555) | 223 726 | 4 891 112 |
| Acqusition NOFIN, inc. Increase denomination | 2 845 745 | 110 039 | 309 866 | (2 561 707) | 703 943 | |
| Dividends or distribution to shareholders | (76 114) | (76 114) | ||||
| Profit (loss) After tax | (897 649) | (897 649) | ||||
| Other comprehensive income | 1 663 | 1 663 | ||||
| Policy changes and other | 607 403 | 607 403 | ||||
| Equity as at 31 March 2016 | 2 906 187 | 5 266 079 | 49 211 | (3 216 508) | 225 389 | 5 230 357 |
Note 1: Summary of significant accounting policies
AegaASA is a public limited company, incorporated and domiciled in Norway. The registered office of Aega ASA is Munkedamsveien 35, NO-0250 Oslo, Norway. Aega Energy Prima AS was the first company in the group, and was founded on 28 April 2014.Aega ASA owns and operates 5 photovoltaic power plants in Italy, and has as its business to invest in photovoltaic power plants in Italy.
1.1 Basis for preparation of the interim financial statement
These condensed interim consolidated financial statements are prepared in accordance with recognition, measurement and presentation principles consistent with International Financing Reporting Standards as adopted by the European Union ("IFRS") for interim reporting under International Accounting Standard ("IAS") 34 Interim Financial Reporting. These condensed interim consolidated financial statements are unaudited.
This interim financial report is the first time the group reports on consolidated basis. Aega Energy Prima AS was established 28 April 2014 and bought the first solar power park in August 2014, Photo-Volt One Srl. In the end of Q1 2015 it bought the second park DT Srl. In November 2015, Aega Yieldco AS purchased Aega Prima Energy AS, Aega Seconda Energy AS and Aega Terza Energy AS, with consideration in shares, for accounting purposes. In January 2016 Aega Yieldco AS was purchased by Nordic Financials ASA with consideration in shares (now Aega ASA), the transaction was considered a reverse takeover for accounting purposes.
The group's presentation currency is the Euro (EUR) and the parent company's functional currency is the Norwegian Krone (NOK). Balance sheet items in the group companies with a functional currency other than EUR are converted to Euros by applying the currency rate applicable on the balance sheet date. Currency translation differences are booked against other comprehensive income. Income statement items are converted by applying the average currency rate for the period. The interim financial report are prepared under the assumption of going concern.
1.2 Consolidation principles
The consolidated interim financial statements comprise the financial statements of the group and its subsidiaries at 31 March 2016. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the group obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealised gains and losses resulting from intragroup transactions and dividends are eliminated in full. The acquisition method is applied when accounting for business combinations. A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity transaction. If the group loses control over a subsidiary, it:
- Derecognises the assets (including goodwill) and liabilities of the subsidiary
- Derecognises the carrying amount of any non-controlling interest
- Derecognises the cumulative transaction differences recorded in equity
- Recognises the fair value of any investment retained
- Recognises any surplus or deficit in profit or loss
- Reclassifies the parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.
1.3 Use of estimates in the financial statements
Management has used estimates and assumptions that have affected assets, liabilities, incomes, expenses, deferred tax asset and information on potential liabilities. Future events may lead to estimates being changed, and estimates and their underlying assumptions are reviewed on a regular basis. Changes in accounting estimates are recognised during the period when the changes take place. If the changes also apply to future periods, the effect is accounted for prospectively.
1.4 Foreign currency
The group's consolidated interim financial statements are presented in EUR. Each entity in the group determines its own functional currency, and items included in the financial statements of each entity are measured using that functional currency if this currency is other than NOK by converted back to EUR.
Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in a foreign currency are translated into the functional currency using the exchange rate applicable at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchanges at the date when the fair value is determined. Change in exchange rates are recognised in the statement of comprehensive income as they occur during the accounting period. Foreign operations on consolidation, the assets and liabilities of operations with a functional currency other than the EUR are translated to EUR at the rate of exchange prevailing at the reporting date and their statements of comprehensive income are translated at exchange rates prevailing at the dates of the transactions. The average exchange rates are used as an approximation of the transaction exchange rate. The exchange differences arising on translation for consolidation are recognised in other comprehensive income. On disposal of a foreign operation, the accumulated translation differences relating to the subsidiary are recognised in the statement of comprehensive income. Translation differences arising from the translation of a net investment in foreign operations are specified as translation differences in the statement of equity.
1.5 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.
The Group has two main sources of revenue:
Feed-in Tariff (FiT)
The Feed-in Tariff is a fixed nominal fee that is paid to the operator of a solar power plant for each kWh of produced electricity over the 20 year contract period. Payment of FiT is managed by Gestore dei Servizi Energetici ("GSE"), which is a governmental agency with the purpose of promoting and supporting renewable energy sources in Italy. The fixed Feed-in Tariff received from GSE typically represents approximately 80-90 per cent of the solar power plant revenues. Since 6 July 2013, FiTs are no longer available to newly permitted PV projects.
The incentive is paid in equal instalments each month based on 90 per cent of a basis production set out by GSE. In June/July the following year the Group receives the difference between the payments received by GSE and the actual production multiplied by the Feed-in Tariff.
From an accounting perspective Aega recognises full Feed-in Tariff when the electricity is produced.
Market price
The actual wholesale price of electricity is paid to the operator of a solar power plant for each kWh of produced electricity the system feeds into the grid. The system operator can decide whether to sell the electricity on the spot market or agree on a fixed contract. The operator's dependency on the market price will primarily depend on the level of fixed FiT relative to variable wholesale price.
The wholesale power price in Italy has been fairly volatile since 2004, and the price increased from just above 30 EUR/MWh in 2004 to the peak level of 80-90 EUR/MWh in 2008. In recent years, the price has dropped to around 50 EUR/MWh.
Revenue from the sale of electricity is recognised in the statement of compre-
hensive income once delivery has taken place and the risk and return have been transferred. Interest income For all financial instruments measured at amortised cost, interest income or expense is recorded using the effective interest rate (EIR), which is the rate which exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. Interest income is included in finance income in the statement of comprehensive income.
1.6 Segments
Aega owns and group's business is to operate solar power plants in Italy. For management purposes, the group is only organised into one segment, the Italian solar power business. All Italian Companies in the group owns one solar power plant except for Collesanto Srl that owns two. Financial information operates five solar power plants in Italy, which generate electricity.
Since the company only has one segment it does not publish separate segment reporting.
1.7 Income tax
Income tax consists of tax payable and changes to deferred tax. Deferred tax liability/tax asset is calculated on all differences between the carrying and tax value of assets and liabilities, with the exception of temporary differences related to investments in subsidiaries where the group controls when the temporary differences are to be reversed and this is not expected to take place in the foreseeable future. Deferred tax assets are recognised when it is probable that the company will have a sufficient profit for tax purposes in subsequent periods to utilise the deferred tax asset. The company recognise previously unrecognised deferred tax assets to the extent it has become probable that the company can utilise the deferred tax asset. Similarly, the company will reduce a deferred tax asset to the extent that the company no longer regards it as probable that it can utilise the deferred tax asset. Deferred tax liability and deferred tax asset are measured on the basis of the expected future tax rates applicable to the companies in the group where temporary differences have arisen. Deferred tax liability and deferred tax asset are recognised at their nominal value and classified as non-current asset investments (longterm liabilities) in the balance sheet. Tax payable and deferred tax are recognised directly in equity to the extent that they relate to equity transactions.
1.8 Property, plant and equipment
All property, plant and equipment (including solar power plants) are valued at their cost less accumulated depreciation and impairment. When assets are sold or disposed of, the carrying amount is derecognised and any gain or loss is recognised in the statement of comprehensive income. The cost of tangible non-current assets is the purchase price, including taxes/duties and costs directly linked to preparing the asset for its intended use. Costs incurred after the asset is in use, such as regular maintenance costs, are recognised in the statement of comprehensive income as incurred, while other costs expected to provide future financial benefits are capitalised.
Depreciation is calculated using the straight-line method over the following useful lives. Aega has assessed the useful life to be 20 years from the start of the Feed-In Tariff period. Some components like the inverter have shorter guarantee periods however; the group insures the remaining risk. On leased solar power plants the group has estimated a certain value at the end of the leasing period.
The depreciation period and method are assessed each year. A residual value is estimated at each year-end, and changes to the estimated residual value are recognised as a change in an estimate.
1.9 Leases
The group leases certain property, plant and equipment, mainly solar power plants. Leases of property, plant and equipment where the group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease's commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset and the lease term.
1.10 Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition-date fair value and at the amount of any noncontrolling interest in the acquired company. For each business combination, the group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree's identifiable net assets.
Acquisition costs incurred are expensed. When the group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. If the business combination is achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit and loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability will be recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured.
Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of IAS 39, it is measured in accordance with the appropriate IFRS. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised as profit or loss.
After initial recording, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the group's cash-generating units which are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss of the operation.
Goodwill disposed of in this circumstance is measured on the basis of the relative value of the operation disposed of and the portion of the cash-generating unit retained.
Bargain purchase transactions
If the net of the acquisition-date fair values of identifiable assets acquired and the liabilities assumed exceeds the aggregate of the consideration transferred (measured at acquisition-date fair value), the excess amount is recognised as a gain in the statement of comprehensive income on the acquisition date. Having done so, the company has reviewed the procedures used to measure all of the following:
- the identifiable assets acquired and liabilities assumed
- the non-controlling interest in the acquiree, if any
- the consideration transferred.
1.11 Financial instruments
Financial instruments are classified in the following categories: at fair value with changes in value through profit or loss, held to maturity, loans and receivables, available for sale and other liabilities. The group has financial instruments in the form of trade receivables and trade payables, recognised at amortised cost. Trade receivables are initially recognised at fair value plus any transaction costs. Trade receivables are subsequently carried at amortised cost using the effective interest method, if the amortisation effect is material. The carrying amount is subsequently reduced by any impairment losses. Provisions for impairment are made when there are objective indicators that the group will not receive their contractual payments. The carrying amount of trade receivables and trade payables is approximately equal to fair value, as they are agreed at "normal" conditions and normally have a short period to maturity.
1.12 Cash and cash equivalents
Cash includes cash in hand or at the bank. Cash equivalents are short-term liquid investments which can be immediately converted into a known amount of cash and have a maximum term to maturity of three months.
1.13 Equity
Equity and liabilities
Financial instruments are classified as liabilities or equity in accordance with the underlying economical realities. Interest, dividend, gains and losses relating to a financial instrument classified as a liability will be presented as an expense or income. Amounts distributed to holders of financial instruments that is categorized as equity, will be recorded directly in equity.
Costs of equity transactions
Transaction costs directly related to an equity transaction are recognised directly in equity after deducting tax expenses.
Translation differences
Translation differences arise in connection with exchange-rate differences for consolidated entities with a functional currency other than the EUR. If an entity with a different functional currency than the EUR is sold, the accumulated translation difference linked to the entity is reversed and recognised in the statement of comprehensive income in the same period as the gain or loss on the sale is recognised.
1.14 Provisions:
A provision is recognised when the group has an obligation (legal or constructive) as a result of a previous event, it is probable (more likely than not) that a financial settlement will take place as a result of this obligation, and the size of the amount can be measured reliably. If the effect is considerable, the provision is calculated by discounting estimated future cash flows using a discount rate before tax which reflects the market's pricing of the time value of money and, if relevant, risks specifically linked to the obligation. Restructuring provisions are recognised when the group has approved a detailed, formal restructuring plan and the restructuring has either started or been publicly announced. Provisions for loss-making contracts are recognised when the group's estimated revenues from a contract are lower than unavoidable costs that were incurred to meet the obligations pursuant to the contract.
1.15 Contingent liabilities and assets:
Contingent liabilities are not recognised in the annual accounts. Significant contingent liabilities are disclosed, with the exception of contingent liabilities that are unlikely to be incurred. Contingent assets are not recognised in the annual accounts but are disclosed if there is a certain probability that a benefit will be added to the group.
1.16 Current/non-current classification
All assets and liabilities related to the operating cycle are classified as current/short-term. For receivables and liabilities outside the operating cycle, the current/non-current distinction is determined on the basis of a one-year maturity rule from the acquisition date.
1.17 Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The group has derivatives classified as cash flow hedge. The group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The group also documents its assessment, both at hedge inception and on an on-going basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The full fair value of a hedging derivative is categorized as a non-current asset or liability when the remaining hedged item is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income.
1.18 Earnings per share
Earnings per share are calculated by dividing the majority shareholders' share of the profit/loss for the period by the weighted average number of ordinary shares outstanding over the course of the period. When calculating diluted earnings per share, the average number of shares outstanding is adjusted for all share options that have a potential dilutive effect. Options that have a dilutive effect are treated as shares from the date they are issued.
1.19 Impairment of non-financial assets
Intangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to amortisation and are tested annually for impairment.
1.20 Events after the reporting period
New information on the company's financial position at the end of the reporting period, which becomes known after the reporting period, is recorded in the annual accounts. Events after the reporting period which do not affect the company's financial position at the end of the reporting period but which will affect the company's financial position in the future are disclosed if significant. Seenote 13.
Note 2: Operational cost breakdown
| AEGA | AEGA | |
|---|---|---|
| (EUR) | Q1 2016 | Q1 2015 |
| Revenues | 389 571 | 67 545 |
| Cost of operations | (59 160) | (11 736) |
| Land rent | (1 750) | (1 750) |
| Insurance | (13 048) | (2 250) |
| Operation & Maintenance | (33 175) | (5 167) |
| Other operations costs | (11 187) | (2 570) |
| Sales, General & Administration | (291 652) | (72 757) |
| Commercial management | (13 186) | - |
| Accounting, audit & legal fees | (27 966) | (18 301) |
| IMU tax | (11 124) | (2 221) |
| AEGA Solar management fee | (117 548) | (4 763) |
| Other administrative costs | (121 828) | (47 471) |
| Acquisition & financing cost | (275 713) | - |
| Acquisition transaction costs | - | - |
| Funding & IPO costs | (275 354) | - |
| Other non-recurring items | (359) | - |
| EBITDA | (236 954) | (16 949) |
Note 3: Property plant and equipment
| (EUR) | ||||||
|---|---|---|---|---|---|---|
| Q1 2015 | Photo-Volt One S.r.l | DT S.r.l | Other | Total | ||
| Power plant 31 Dec 2015 | 1 980 573 | - | 153 194 | 2 133 767 | ||
| Additions | - | 2 656 511 | - | 2 656 511 | ||
| Depreciation | (37 023) | - | (1 835) | (38 858) | ||
| Value at 31 March 2015 | 1 943 550 | 2 656 511 | 151 359 | 4 751 420 | ||
| (EUR) | ||||||
| Q1 2016 | Photo-Volt One S.r.l | DT S.r.l | Collesanto S.r.l | JER-12 S.r.l | Other | Total |
| Power plant 31 Dec 2015 | 1 854 346 | 2 544 709 | 5 239 877 | 1 374 978 | 1 682 724 | 12 696 634 |
| Additions | - | - | - | - | - | - |
| Depreciation | (30 924) | (37 268) | (78 190) | (29 705) | (26 546) | (202 633) |
| Value at 31 March 2016 | 1 823 422 | 2 507 441 | 5 161 687 | 1 345 273 | 1 656 178 | 12 494 001 |
Power plants are depreciated over the feed- in tariff period of 20 years.
Note 4: Group structure
Note 5: Cash and cash equivalents
| (EUR) | Q1 2016 | Q1 2015 |
|---|---|---|
| Cash Norway | 333 281 | 3 162 |
| Cash Italy | 510 860 | 287 952 |
| Restricted cash Italy | 100 000 | 100 000 |
| Total cash | 944 141 | 391 114 |
Note 6: Purchase price allocations
Purchase price allocation Photo- Volt One S.r.l
| EUR (unaudited figures) | Fair value recognised on Acquisition |
|---|---|
| Current assets & liabilities | 317 644 |
| Cash, bank & securities | 199 979 |
| Receivables | 23 029 |
| Inventories, advances to suppliers etc. | 8 178 |
| Accounts Payable and Accrued Liabilities | (3 562) |
| Tax withholdings, public fees, payroll tax, etc. | 165 188 |
| Other current liabilities | (75 168) |
| Long term positions | 27 848 |
| Deferred tax | (16 421) |
| Powerplant, equipment and land | 2 128 406 |
| Derivative agreement | (60 040) |
| Long term financing | (2 024 097) |
| Assets identified for acquisition | 345 492 |
| Paid for shareholder loan at closing | (152 427) |
| Paid for corporate capital at closing | (153 065) |
| Paid at release of escrow 31 Mar 2015 | (40 000) |
| Consideration not allocated | - |
Acquisition of Photo-Volt One S.r.l
Aega Prima AS, acquired 100 per cent of the shares in Photo-Volt One S.r.l in its entirety on 14 August 2014. The acquisition amount was EUR 193 thousand for the corporate capital in addition to purchase of a shareholder loan at book value EUR 152 thousand. The payment for the corporate capital was divided in to payments EUR 153 thousand at closing and EUR 40 thousand as a finial settlement 31 March 2015.
The excess value has been allocated to the solar power plant and the Feed-In tariff contract. The excess value is depreciated linear over the remaining life of the Feed-In tariff period. The deferred tax on the gross excess value has been estimated to 24 per cent.
Purchase price allocation DT S.r.l
| Fair value recognised | |
|---|---|
| EUR (unaudited figures) | on Acquisition |
| Current assets & liabilities | 780 031 |
| Cash, bank & securities | 252 867 |
| Receivables | 136 365 |
| Inventories, advances to suppliers etc. | 61 744 |
| Accounts Payable and Accrued Liabilities | (107 741) |
| Tax withholdings, public fees, payroll tax, etc. | 436 796 |
| Other current liabilities | - |
| Long term positions | 210 869 |
| Deferred tax advantage | 56 466 |
| Powerplant, equipment and land | 2 671 589 |
| Operational machinery | 13 000 |
| Derivative agreement | (141 639) |
| Leasing | (2 388 548) |
| Assets identified for acquisition | 990 900 |
| Paid for shareholder loan at closing | (375 422) |
| Paid for corporate capital at closing | (466 978) |
| Expeted payment release of escrow | (148 500) |
| Consideration not allocated | - |
Acquisition of DT S.r.l
Aega Prima AS, acquired 100 per cent of the shares in DT S.r.l in its entirety on 29 March 2015. The acquisition amount was EUR 615 thousand for the corporate capital in addition to purchase of a shareholder loan at book value EUR 375 thousand. The payment for the corporate capital was divided in to payments EUR 467 thousand at closing and EUR 149 thousand as a finial settlement.
The excess value has been allocated to the solar power plant and the Feed-In tariff contract. The excess value is depreciated linear over the remaining life of the Feed-In tariff period. The deferred tax on the gross excess value has been estimated to 24 per cent.
Purchase price allocation Aega Yieldco AS
| Fair value recognised | |
|---|---|
| EUR (unaudited figures) | on Acquisition |
| Current assets & liabilities | 2 043 992 |
| Cash, bank & securities | 531 769 |
| Intergroup receivables | 455 146 |
| Receivables | 601 437 |
| Inventories, advances to suppliers etc. | (818 890) |
| Accounts Payable and Accrued Liabilities | 63 449 |
| Tax withholdings, public fees, payroll tax, etc. | 1 211 080 |
| Other current liabilities | - |
| Long term positions | 2 082 030 |
| Other long tern assets | 525 452 |
| Deferred tax | (185 317) |
| Powerplant, equipment and land | 8 207 193 |
| Derivative agreement | (590 570) |
| Long term financing | (5 874 728) |
| Assets identified for acquisition | 4 126 022 |
| Value of consideration shares | (4 126 022) |
| Consideration not allocated | - |
Acquisition of Aega Energy Prima AS, Aega Seconda AS and Aega Terza AS
On 28 October 2015 Aega Yieldco AS acquired Prima, Seconda and Terza the consideration has paid by issuance of consideration shares in Aega Yieldco AS. For accounting purposes Aega Energy Prima AS is considered the acquirer. The total value of the consideration shares are estimated to EUR 4 126 thousand.
The excess value has been allocated to the solar power plant and the Feed-In tariff contract. The excess value is depreciated linear over the remaining life of the Feed-In tariff period. The deferred tax on the gross excess value has been estimated to 24 per cent.
Purchase price allocation Nordic Financials ASA
| Fair value recognised |
|---|
| on Acquisition |
| 327 293 |
| 93 551 |
| 153 392 |
| 1 720 |
| 112 677 |
| (34 045) |
| - |
| - |
| - |
| - |
| 327 293 |
| (688 955) |
| 361 662 |
Acquisition of Aega Yieldco AS
On 20 January 2016 Nordic Financial ASA (Now Aega ASA) signed the final share purchase agreement with Aega Yieldco AS. The consideration has been paid by issuance of consideration shares in Aega ASA. For accounting purposes Aega Yieldco AS is considered the acquirer. The total value of the consideration shares is estimated to EUR 6.890 thousand.
The difference between identified assets for acquisition and the consideration is related to values of the listing. Aega management's evaluation is that this cost should be expensed at the date of the acquisition. See note 9 for further details.
Note 7: Power Production
| Power production kWh | Q1 2016 | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | FY 2015 |
|---|---|---|---|---|---|---|
| Photo-Volt One S.r.l | 253 638 | 229 809 | 406 535 | 448 461 | 213 074 | 1 297 879 |
| DT S.r.l | 242 808 | - | 429 523 | 442 588 | 219 652 | 1 091 763 |
| Collesanto S.r.l | 505 938 | - | 905 599 | 923 160 | 477 666 | 2 306 425 |
| JER-12 S.r.l | 241 261 | - | - | - | 85 995 | 85 995 |
| Total | 1 243 645 | 229 809 | 1 741 657 | 1 814 209 | 996 386 | 4 782 062 |
| Base Case 1 Power production kWh |
Q1 2016 | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | FY 2015 |
| Photo-Volt One S.r.l | 178 512 | 179 409 | 397 646 | 452 761 | 174 361 | 1 204 177 |
| DT S.r.l | 256 599 | - | 416 093 | 429 321 | 231 275 | 1 076 689 |
| Collesanto S.r.l | 561 427 | - | 863 242 | 906 644 | 468 422 | 2 238 308 |
| JER-12 S.r.l | 150 287 | - | - | - | 85 217 | 85 217 |
| Total | 1 146 824 | 179 409 | 1 676 981 | 1 788 726 | 959 275 | 4 604 391 |
1 The base case: Normalized historical production also consistent with investment case analysis is foundation for the base case . The company estimates that the production is reduced by 0.5 per cent yearly due to degradation of the solar modules.
Note 8: Related party transactions
Aega Solar AS owns approximately 16.75 per cent of Aega ASA.
Aega ASA has a management agreement with Aega Solar AS. The current management agreement was signed on 11 April 2016. The general assembly of Aega ASA approved the agreement on 18 May 2016. The agreement covers operations of the solar park portfolio, sourcing of new investments, due diligence and other services related to the solar plant business.
As consideration for the services provided Aega ASA will pay:
- A fixed base fee of NOK 3 Million a year, until the time AEGA ASA has made equity investments of at least NOK 500 Million
- A variable fee of 2.5 per cent of invested equity in projects acquired after the signing of the management agreement
- A success fee of 23 per cent of cash flow exceeding 7.5 per cent of invested equity
- For the investments already made at date of signing of the management agreement 1 per cent of the enterprise value should be the management fee
According to the agreement the parties should renegotiate the agreement when the first of the following occur: (i) AegaASA has made equity investments of more than NOK 1 Billion or (ii) 31 December 2017.
| EUR | Management fee Q1 2016 |
Management fee Q1 2015 |
|---|---|---|
| AEGA Solar managment fee | (38 814) | (4 763) |
| AEGA Solar basefee | (78 734) | - |
| Others | - | - |
| Total | (117 548) | (4 763) |
| Outsanding | Outsanding | |
| balance | balance | |
| EUR | 31 Mar 2016 | 31 Mar 2015 |
| AEGA Solar | 339 901 | 43 988 |
| Total | 339 901 | 43 988 |
As of 31 Mar 2016 Aega ASA has a receivable of EUR 340 thousand towards Aega Solar AS, this amount is related to coverage of cost related to listing of Aega Yieldco AS and spilt of other fees related to capital raising.
Note 9: Acquisitions and transaction cost
| AEGA Q1 2016 |
AEGA Q1 2015 |
|
|---|---|---|
| Acquisition & financing cost | (637 375) | - |
| Acquisition transaction costs | (361 662) | - |
| Funding & IPO costs | (275 354) | - |
| Other non-recurring items | (359) | - |
In the first quarter of 2016 the group had a cost of EUR 362k related to the value of consideration of the purchase of Nordic Financials ASA and the identified assets in the transaction. This value is mainly related to the listing on Oslo Axess, and therefore classified as a cost in the period. Funding & IPO cost of EUR 275k in the period relates mainly to cost of the Information memorandum published 26 February 2016 and costs of listing due diligence.
Note 10: Financing overview
| Financial liabilities at |
Financial liabilities at |
|
|---|---|---|
| Financial liabilities: | 31 Mar 2016 | 31 Mar 2015 |
| Secured long term loans | 3 119 039 | 1 837 007 |
| Obligations under finance leases | 6 151 827 | 2 019 885 |
| Other long term debt | 298 804 | 470 098 |
| Trade and other payables | 731 116 | 195 780 |
| Current interest bearing loans and | ||
| borrowings | 159 098 | 85 887 |
| Current leasing | 381 055 | 368 663 |
| Other current loans | 781 817 | 193 405 |
| Total | 11 622 756 | 5 170 724 |
| Total current | 2 053 086 | 843 735 |
| Total non-current | 9 569 670 | 4 326 989 |
Long-term loans are secured with a pledge on the solar power plants. Italian banks finance all of the leasing and long-term loans.
Note 11: Trade receivables and other current assets
Trade receivables are mainly towards GSE, they normally pay within 60 days. The difference between 90 per cent of the basis calculation set out by GSE and actual period production are paid in June/July in the following year. See point 1.5 for further detail.
EUR 1.8m of other current assets are outstanding tax and VAT receivables.
Note 12: Shareholders and number of shares
| 31 Mar 2015 | |
|---|---|
| A Shares AEGA Prima Energy AS | 3 000 |
| B Shares AEGA Prima Energy AS | 1 060 000 |
| Equal in AEGA ASA shares | 5 421 210 |
| 31 Mar 2016 | |
| AEGA ASA Shares | 27 360 295 |
| Shareholders | Shares | Percentage |
|---|---|---|
| AEGA AS | 4 582 534 | 16.7% |
| BEARHILL INC AS | 1 615 034 | 5.9% |
| THORVALD MORRIS HARALDSEN | 1 605 333 | 5.9% |
| JAN STEINAR NEREM | 919 724 | 3.4% |
| TORSTEIN SØLAND | 668 890 | 2.4% |
| TORE SÆTREMYR | 610 360 | 2.2% |
| RACCOLTA AS | 595 840 | 2.2% |
| CLEAR THOUGHT AS | 551 833 | 2.0% |
| OLAV VESAAS | 543 474 | 2.0% |
| FIN SERCK-HANSSEN | 468 224 | 1.7% |
| JAN P HARTO AS | 457 841 | 1.7% |
| ROALD ARNOLD NYGÅRD | 451 500 | 1.7% |
| ALF GERVIN | 384 610 | 1.4% |
| BETONGCONSULT EIENDOM AS | 384 610 | 1.4% |
| LILL INVEST AS | 384 610 | 1.4% |
| NYE LÅSHUSET AS | 376 250 | 1.4% |
| LJM AS | 367 890 | 1.3% |
| MOGER INVEST AS | 367 890 | 1.3% |
| TROND ARNE REIERSTAD | 367 890 | 1.3% |
| Total 20 largest investors | 15 704 337 | 57.4% |
Note 13: Events after the balance sheet date
Following the acquisition of Aega Yieldco AS, the company's main activity is investments in and operations of solar parks. The company currently owns a portfolio of five individual solar parks in the Umbria and Lazio regions in Italy with a combined production capacity of 5MW. The company's focus on acquisitions of smaller solar parks (below 5MW capacity), strictly with top level concessions, are deemed to offer lower risk investments. Aega ASA targets to reach a total production capacity of 50MW within Q4 2017 by taking advantage of the current attractive market for secondary solar parks meeting the company's strict investment criteria. The 50MW target will be the company's first milestone.
Growth in the solar project portfolio is important in order to increase economies of scale, and to provide a higher degree of predictability to the company's cash flow and dividend yield. Given the attractive longterm cash flows from the solar parks, the company intends to establish itself as a predictable investment opportunity for investors seeking stable and attractive dividends. The company intends to distribute a material part of the free cash flow from the operation as on a quarterly basis.
Although no assurances of success can be given, the previously announced intended transaction with a large clean energy private equity fund is in progress and is intended to close in June. The transaction would increase the company's energy capacity with 14 MW and the cash contributions contemplated as part of the transaction would provide the company with financial capacity to invest in further growth. If completed the transaction would be a major leap towards reaching the company's first milestone of size.
Successful completion private placement
The company has completed a private placement of new shares for a total consideration of NOK 25.5 million at a subscription price of NOK 3 per share.
The successful placement has provided the company financial strength to grow according to plan, regardless of success of the transaction mentioned above.
Investor contacts
Vegard Finstad CEO Mob: +47 911 92 132 E-mail: [email protected] Web: www.aega.no
Munkedamsveien 35 N-0250 Oslo
Håvard Lillebo CEO Mob: +47 996 24 140 E-mail: [email protected] Web: www.aega.solar.no
Oscars gate 52 N-0258 Oslo