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Nordic Financials ASA Interim / Quarterly Report 2019
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Interim / Quarterly Report
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Aega ASA Q4 REPORT – 2019
Contents
| About Aega | 3 | |
|---|---|---|
| Fourth quarter report | 4 | |
| Fourth quarter in brief | 4 | |
| Highlights from the reporting period | 4 | |
| Financial review | 4 | |
| Structural changes | 5 | |
| Purchase of solar plant in Cori | 5 | |
| Loan to Bolshøyden AS | 5 | |
| Purchase of own shares | 5 | |
| Subsequent events | 5 | |
| Financial statement | 6 | |
| Profit and loss | 7 | |
| Balance sheet | 8 | |
| Cash flow | 9 | |
| Change in equity | 10 | |
| Notes | 11 | |
| Note 1: | Summary of significant accounting policies | 11 |
| Note 2: | Group structure | 11 |
| Note 3: | Cash and cash equivalents | 11 |
| Note 4: | Power generation | 12 |
| Note 5: | Shares and shareholder information | 13 |
| Note 6: | Tax issues | 13 |
| Note 7: | Subsequent events | 13 |
| Investor contact | 14 |
About Aega
Aega ASA is a solar utility company listed on the Oslo Axess exchange. It acquires and operates solar power plants, benefitting from government incentives in the form of feed-in tariffs. The company recently sold a portfolio of eight solar parks located in Italy, and has now started to establish a new portfolio. Aega ASA invests mainly in small operating solar parks (below 5MWp capacity) which meet its strict investment criteria. The company's head offices are in Oslo (NO) and Trento (IT).
Fourth quarter report
FOURTH QUARTER IN BRIEF
- The company had one solar parks during the quarter, total production was 187 086 kwh. 18 per cent below base case, due to poor irradiation in November.
- During the fourth quarter Aega closed the deal to purchase Produzioni Energia Cori for EUR 580 000 and in a separate transaction purchased the land where the park is located for EUR 40 000.
- Aega gave a loan to Bolshøyden AS of NOK 3 000 000 with first priority lien in a property of about 55 000 square meters positioned outside Molde on Bolsøya.
- Continued work on due diligences related to solar parks in pipeline.
HIGHLIGHTS FROM THE REPORTING PERIOD Outlook
The company is currently following several investment opportunities in the Italian solar market. Aega has the team and infrastructure on the ground in Italy to find and operate a solar portfolio up to 15 MWp.
Aega's operations are mainly in Italy. With regards to the Corona virus we have not had any material effects of the outbreak.
FINANCIAL REVIEW
In Q4 2018 Aega had 8 solar parks, these solar parks were sold with effect from 1 July 2019, these parks are classified as discontinued opearations. Aega had 1 solar park in Q4 2019. When comparing the numbers this should be taken into consideration.
Total revenues in the fourth quarter was EUR 80 000 compared to a 0 a year previous. Total power generation in the quarter was 187 MWh compared to 0 MWh for the continued portfolio in Q4 2018.
Operating costs for the business was 77 000 compared to EUR 0 in Q4 2018, it was high in the quarter due to upgrade works performed on the new solar park. The SG&A cost was EUR 121 000 in the fourth quarter of 2019 compared to EUR 230 000.
The company's non-recurring expenses came to EUR 29 000 in the fourth quarter of 2019, this is mainly related to the transaction cost for purchasing Produzioni Energia Cori and also for due diligence work related to potential future purchases. In the same quarter in 2018 the non-recurring cost was EUR 58 000.
The balance sheet contains now mainly cash from the proceed of the sale and some payables. The company has exchanged about EUR 3 million to NOK, however, it keeps the main cash balance in euro, since the plan is to reinvest it in new solar plants in Italy.
Portfolio Cumulated production vs. Base case
Aega ASA Q4 report 2019
STRUCTURAL CHANGES
Aega group has established of Norita Invest Srl, this is the intended Italian holding company for further solar expansion plans in Italy. Having an Italian holding company will make it easier to get a tax group in Italy and give taxable contributions between controlled subsidiaries.
PURCHASE OF SOLAR PLANT IN CORI
On 10 October 2019 Aega purchased a 1 MWp solar park in Cori, Latina. The purchase price for the equity (inc. shareholder loan) was set at EUR 420 000 and EUR 160 000 for the working capital. The project has about EUR 3.4 million in loan financing. Aega also purchased the land of the solar park for EUR 40 000.
The solar park is a single axis tracker plant and has a second conto energia feed-in tariff and is ten years into its 20-year concession period.
Key figures
As Produzioni Energia Cori Srl is a special purpose company established in May 2018 through a transformation, there is only one annual report available for May 2018 until December 2018. The key figures below are estimates for the current year.
| 2019E | 20181 | |
|---|---|---|
| Operating revenue | € 530 000 | € 350 376 |
| Operating result (EBITDA) | € 460 000 | € 257 076 |
| Debt outstanding end of year | € 3 341 057 | € 3 527 721 |
| Total assets | € 3 782 731 | € 4 131 925 |
1 2018 from May to December
The revenue and EBITDA contribution from Produzioni Energia Cori Srl in 2019 to AEGA ASA's Revenue and the operating result is estimated to be around 16 per cent of the numbers indicated above since the plant is acquired with effect from Q4 2019. The interest on the loan if approximately 3M EURIBOR + a spread of 1.35 per cent.
Purchase price allocation
| Current assets & liabilities | 186 906 |
|---|---|
| Cash and cash equivalents | 242 960 |
| Receivables | 16 192 |
| Other current assets | - |
| Trade payables and other current liabilities | (5 574) |
| Tax and VAT outstanding | 65 531 |
| Other current liabilities | (132 203) |
| Long term positions | 396 883 |
| Deferred tax | - |
| Property, plant and equipment | 3 705 489 |
| Derivative agreement | - |
| Long term financing | (3 308 605) |
| Assets identified for acquisition | (583 789) |
| Paid for shareholder loan at closing | (90 000) |
| Paid for corporate capital at closing | (493 789) |
| Paid into escrow | - |
LOAN TO BOLSHØYDEN AS
On 16 October Aega loaned out NOK 3 million to Bolshøyden AS. The loan has a 12 per cent interest rate for the first year and can be prolonged with another year but then with an interest rate of 15 per cent.
The loan is secured with first priority lien in a property of about 55 000 square meters positioned outside Molde on Bolsøya (1502-19/59).
PURCHASE OF OWN SHARES
Aega ASA repurchased 133 784 shares in Q4 2019 at an average price of 1.05 per share. In total the company now owns 325 116 own shares.
SUBSEQUENT EVENTS
CEO change
On 23 October Markus Enge resigned from his role as CEO of Aega ASA. Mr. Enge has continue to work for Aega until the end of his resignation period, 31 January 2020.
The Board of Directors of Aega ASA has appointed Nils Petter Skaset as interim CEO of Aega ASA with effect from 1 February 2020. Mr. Skaset has been a member of the Board of Directors in Aega since the end of 2017. He has extensive experience from the investment and asset management industry.
Following his appointment, Mr. Skaset has resigned from the Board of Directors. The Board of Directors still has a quorum and there is not planned to call for an extraordinary general assembly at this time.
Financial statement
| Profit and loss | 7 | |
|---|---|---|
| Balance sheet | 8 | |
| Cash flow | 9 | |
| Change in equity | 10 | |
| Notes | 11 | |
| Note 1: Summary of significant accounting policies | 11 | |
| Note 2: Group structure | 11 | |
| Note 3: Cash and cash equivalents | 11 | |
| Note 4: Power generation | 12 | |
| Note 5: Shares and shareholder information | 13 | |
| Note 6: Tax issues | 13 | |
| Note 7: Subsequent events | 13 |
Aega ASA Q4 report 2019
Profit and loss
Continued operations
| (EUR) | Q4 2019 | Q4 2018 | FY 2019 | FY 2018 |
|---|---|---|---|---|
| Feed-In tariff revenue | 62 647 | - | 62 647 | - |
| Sales of electricity | 9 479 | - | 9 479 | - |
| Other revenue | 8 057 | - | 8 057 | 500 |
| Revenues | 80 183 | - | 80 183 | 500 |
| Operating costs | (77 418) | - | - | - |
| Sales, general and administrative expenses | (121 333) | (166 540) | (735 843) | (563 183) |
| Acquisition and transaction costs | (29 105) | (58 391) | (122 722) | (129 678) |
| EBITDA | (147 673) | (224 931) | (778 381) | (692 361) |
| Depreciation, amortisations and write downs | (84 739) | (190) | - | (190) |
| Other operating profit before OGL (EBIT) | (232 411) | (225 121) | (778 381) | (692 551) |
| Finance income | 55 138 | (3 628) | 17 216 | 290 |
| Finance costs | (23 423) | (11 096) | - | (11 096) |
| Mark to market adjustment derivatives | (4) | - | - | - |
| Net foreign exchange gain/(losses) | 7 370 | 44 395 | (51 065) | (14 040) |
| Profit before income tax | (193 330) | (195 450) | (812 231) | (717 397) |
| Income tax gain/(expense) | - | - | - | - |
| Profit/(loss) Continued operations | (193 330) | (195 450) | (812 231) | (717 397) |
| Discontinued operations | ||||
|---|---|---|---|---|
| (EUR) | Q4 2019 | Q4 2018 | FY 2019 | FY 2018 |
| Profit/loss from discontinued operations | - | (50 998) | 3 843 863 | 560 565 |
| Profit/loss for the period | (193 330) | (246 448) | 3 031 632 | (156 832) |
Other comprehensive income
| (EUR) | Q4 2019 | Q4 2018 | FY 2019 | FY 2018 |
|---|---|---|---|---|
| Currency translation differences | (424 019) | 89 894 | (978 374) | 301 926 |
| Other comprehensive income net of tax | (424 019) | 89 894 | (978 374) | 301 926 |
| Total comprehensive income | (617 349) | (156 555) | 2 053 258 | 145 094 |
| Profit for the period attributable to: | ||||
| Equity holders of the parent company | (617 349) | (156 555) | 2 053 258 | 145 094 |
| Total comprehensive income attributable to: | ||||
| Equity holders of the parent company | (617 349) | (156 555) | 2 053 258 | 145 094 |
| Earnings per share | (0.013) | (0.003) | 0.043 | 0.003 |
| Avgerage no of shares | 48 375 949 | 47 975 949 | 48 189 282 | 46 090 037 |
Balance sheet
| (EUR) | Note | 31 Dec 2019 | 31 Dec 2018 |
|---|---|---|---|
| ASSETS | |||
| Property, plant and equipment | 3 370 262 | - | |
| Other long-term assets | 550 000 | - | |
| Non-current assets | 3 920 262 | - | |
| Receivables | 115 777 | (504) | |
| Other current assets | 907 062 | - | |
| Cash and short-term deposits | 3 | 7 332 238 | 60 088 |
| Assets held for sale | - | 21 709 116 | |
| Current assets | 8 355 077 | 21 768 699 | |
| TOTAL ASSETS | 12 275 338 | 21 768 699 | |
| EQUITY AND LIABILITIES | |||
| Share capital | 5 | 5 162 292 | 5 255 029 |
| Share premium | 5 | 7 237 469 | 8 208 942 |
| Paid-in capital | 12 399 761 | 13 463 970 | |
| Accumulated profit and loss | (3 886 606) | (6 897 327) | |
| Other equity | (19 397) | (19 809) | |
| Foreign currency translation reserve | (424 019) | 554 355 | |
| Other equity | (4 330 022) | (6 362 781) | |
| Total equity | 8 069 739 | 7 101 189 | |
| Long-term loans | 2 900 000 | - | |
| Leasing | - | - | |
| Other long-term debt | 319 557 | - | |
| Total non-current liabilities | 3 219 557 | - | |
| Trade payables and other payables | 491 691 | 104 802 | |
| Short-term financing – interest-bearing | 275 291 | - | |
| Other current liabilities | 219 059 | 1 568 | |
| Liabilities held for sale | - | 14 561 141 | |
| Total current liabilities | 986 041 | 14 667 511 | |
| Total liabilities | 4 205 599 | 14 667 511 | |
| TOTAL EQUITY AND LIABILITIES | 12 275 338 | 21 768 700 |
Oslo, 28 February 2020
Halldor Christen Tjoflaat Chair
Kathrine Breistøl Director
Kristine Larneng Director
Nils Petter Skaset Chief Executive Officer
Cash flow
| (EUR) | Q4 2019 | Q4 2018 |
|---|---|---|
| Ordinary profit before tax | (193 330) | (301 350) |
| Paid income taxes | - | - |
| Depreciation | 84 739 | 335 155 |
| Changes in trade receivables and payables | 42 803 | 42 477 |
| Changes in other accruals | (323 486) | 130 207 |
| Cash flow from operations | (389 274) | 206 490 |
| Acquisition net of cash acquired | (340 829) | - |
| Cash flow from investments | (340 829) | - |
| Proceeds from issue of share capital | - | - |
| Dividends or shareholder distributions | - | - |
| Purchase of own shares | (133 784) | - |
| Proceed from loan | - | - |
| Repayment of loans | - | (240 171) |
| Cash flow from financing | (133 784) | (240 171) |
| Cash at beginning of period | 8 196 125 | 919 758 |
| Net currency translation effect | - | 89 894 |
| Net increase/(decrease) in cash and cash equivalents | (863 887) | (33 681) |
| Locked cash | - | 200 000 |
| Cash at end of period | 7 332 238 | 975 971 |
Change in equity
| (EUR) | Share capital |
Share premium fund |
Other equity |
Foreign currency translation reserve |
Total equity |
|---|---|---|---|---|---|
| Equity 2018 | 5 255 029 | 8 208 942 | (6 917 136) | 554 355 | 7 101 189 |
| Profit (loss) after tax | - | - | 3 031 632 | - | 3 031 632 |
| Other comprehensive income | - | - | - | (978 374) | (978 374) |
| Capital increase | 41 048 | - | - | - | 41 048 |
| Capital repayment | - | (971 473) | - | - | (971 473) |
| Own shares acquired | (133 784) | - | - | - | (133 784) |
| Adjustment | - | - | (20 499) | - | (20 499) |
| Equity 31 December 2019 | 5 162 293 | 7 237 469 | (3 906 003) | (424 019) | 8 069 740 |
| Share | Share | Other | Foreign Currency | Total | |
|---|---|---|---|---|---|
| (EUR) | capital | premium fund | equity | translation reserve | equity |
| Equity 2017 | 4 842 179 | 8 208 942 | (7 073 968) | 252 429 | 6 229 582 |
| Loan conversion | 432 082 | - | - | - | 432 082 |
| Other comprehensive income | - | - | - | 301 926 | 301 926 |
| Profit (loss) after tax | - | - | 156 832 | - | 156 832 |
| Own shares acquired | (19 233) | - | - | - | (19 233) |
| Equity 31 December 2018 | 5 255 029 | 8 208 942 | (6 917 136) | 554 355 | 7 101 189 |
Notes
Note 1: Summary of significant accounting policies
Aega ASA is a public limited company, incorporated and domiciled in Norway. The registered office of Aega ASA is Thunes vei 2, NO-0274 Oslo, Norway. Aega Energy Prima AS was the first company in the group, founded on 28 April 2014. Aega ASA sold eight photovoltaic power plants in Italy in August 2019, and its business is to find and invest in new photovoltaic power plants in Italy.
Basis for preparing the interim financial statements
These condensed interim consolidated financial statements are prepared in accordance with recognition, measurement and presentation principles consistent with the International Financing Reporting Standards (IFRS) as adopted by the European Union for interim reporting under the International Accounting Standard (IAS) 34 Interim Financial Reporting. These condensed interim consolidated financial statements are unaudited.
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 group companies with a functional currency other than the EUR are converted to EUR 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 has been prepared on the assumption that the company is a going concern.
See the 2018 annual report for a full overview of the accounting principles applied by Aega ASA.
Key risk factors
No significant change has occurred in risk exposures or risks and uncertainties as described in the second quarter report, compared with those described in the annual report. However, after the quarter all the solar parks was sold which has changed the risks somewhat. After the sale the main asset in the company is cash held in NOK and EUR, so the currency development of this will change the underlying values, also the currency risk described in the annual report is more substantial. Also the availability of good solar parks at attractive prices are now more important to the company to be able to secure future returns on capital.
Note 2: Group structure 1
SPV structure minimizes financial and operational risk
Note 3: Cash and cash equivalents
| (EUR) | 2019 | 2018 |
|---|---|---|
| Cash continued operations | 7 332 238 | 60 088 |
| Cash discontinued operations | - | 715 883 |
| Escrow amount | 550 000 | - |
| Locked DSRA | - | 200 000 |
| Total cash | 7 882 238 | 975 971 |
Note 4: Power generation
| Power generation kWh | Q4 2019 | Q3 2019 | Q2 2019 | Q1 2019 | YTD 2019 |
|---|---|---|---|---|---|
| Photo-Volt One S.r.l | - | - | 393 995 | 304 806 | 698 801 |
| DT S.r.l | - | - | 384 948 | 304 776 | 689 724 |
| Collesanto S.r.l | - | - | 804 718 | 623 607 | 1 428 325 |
| JER-12 S.r.l | - | - | 410 140 | 302 542 | 712 681 |
| Piano Mulino S.r.l | - | - | 409 314 | 294 257 | 703 571 |
| Casale S.r.l | - | - | 359 764 | 286 054 | 645 818 |
| Solar Park Luino S.r.l | - | - | 272 242 | 189 773 | 462 015 |
| Produzioni Energia Cori S.r.l | 187 086 | - | - | - | 187 086 |
| Total | 187 086 | - | 3 035 121 | 2 305 815 | 5 528 021 |
| Base Case 1 Power generation kWh |
Q4 2019 | Q3 2019 | Q2 2019 | Q1 2019 | YTD 2019 |
| Photo-Volt One S.r.l | - | - | 389 752 | 175 847 | 565 600 |
| DT S.r.l | - | - | 407 834 | 252 769 | 660 602 |
| Collesanto S.r.l | - | - | 846 106 | 553 047 | 1 399 153 |
| JER-12 S.r.l | - | - | 421 455 | 148 044 | 569 499 |
| Piano Mulino S.r.l | - | - | 433 755 | 241 257 | |
| Casale S.r.l | - | - | 415 642 | 222 470 | 675 012 |
| Solar Park Luino S.r.l | - | - | 238 779 | 146 263 | 638 112 385 042 |
| Produzioni Energia Cori S.r.l | 229 145 | - | - | - | 229 145 |
1 Base case generation is based on the forecast Aega made for the solar plant before acquisition.
Note 5: Shares and shareholder information
| 31 Dec 2019 | |
|---|---|
| Aega ASA Shares | 48 375 949 |
| Aega ASA warrants 1 | 2 000 000 |
| Own shares | 325 116 |
| 31 Dec 2018 | |
| Aega ASA Shares | 47 975 949 |
| Aega ASA warrants 1 | 2 000 000 |
| Aega ASA warrants 2 | 400 000 |
| Own shares | 191 332 |
Warrants 1
The warrants are freely tradable non-listed warrants, each of which entitles the holder to subscribe for one share in Aega at an exercise price of NOK 3.10 per share. The exercise price for each warrant is adjusted downwards on a NOK-for-NOK basis by any dividend per share paid by Aega in excess of an annual dividend of seven per cent on NOK 3.10 in the period from 31 January 2017 until the exercise of the warrant.
The warrants are exercisable during exercise periods which last for four weeks from the date of publication of Aega's annual financial statements for the 2017, 2018, 2019 and 2020 fiscal years, provided, however, that the last exercise period ends no later than 30 June 2021. Any unexercised warrants will expire without compensation to Solex on 30 June 2021.
Warrants 2
The warrants was freely tradable non-listed warrants, each of which entitles the holder to subscribe for one share in Aega at an exercise price of NOK 1.00 per share. The deadline for exercising the subscription was 14 days after the AGM in 2019. All the warrants was used during Q2, increasing the share capital with NOK 400 000.
Largest 20 shareholders at 31 December 2019
| Shareholders | Shares | Percentage |
|---|---|---|
| BEARHILL INC AS | 3 359 034 | 6.9% |
| AFT DEVELOPMENT AS | 2 250 152 | 4.7% |
| HARALDSEN THORVALD MORRIS | 1 627 119 | 3.4% |
| LJM AS | 1 471 926 | 3.0% |
| PENTHOUSE MIRADORES AS | 1 420 237 | 2.9% |
| SÆTREMYR TORE | 1 277 694 | 2.6% |
| MOGER INVEST AS | 1 134 890 | 2.3% |
| RYBO NOR AS | 1 085 055 | 2.2% |
| JAN STEINAR NEREM | 1 032 069 | 2.1% |
| MORO AS | 933 667 | 1.9% |
| GN POWER INVEST AS | 922 818 | 1.9% |
| VESAAS OLAV | 877 141 | 1.8% |
| STRØM-RASMUSSEN FINN | 779 012 | 1.6% |
| JAN P HARTO AS | 770 566 | 1.6% |
| FIN SERCK-HANSSEN | 740 780 | 1.5% |
| MAGNOLIA SYSTEM AS | 715 357 | 1.5% |
| RACCOLTA AS | 708 186 | 1.5% |
| TORSTEIN SØLAND | 668 890 | 1.4% |
| KÅRE REIDAR JOHASEN | 644 722 | 1.3% |
| C - BY - C AS | 593 208 | 1.2% |
| Total 20 largest shareholders | 23 012 523 | 47.6% |
| Aega ASA outstanding shares | 48 375 949 | 100.0% |
Note 6: Tax issues
Tax dispute in Italy
The group is currently involved in a tax dispute with the Italian tax authorities with respect to two of the group's Italian subsidiaries. The Italian tax authorities have claimed repayment from the group of about EUR 1 500 000. The group has disputed this claim in court, and won in the court of first and second instance related to the year 2012. The Italian tax authorities have appealed for the supreme court.
Should the outcome be unfavourable, the group's view is that any liability deriving from the said claims is covered by the warrants provided for in the share purchase agreements signed with the seller of the relevant plants, as the (potential) tax due dates from the period before Aega purchased the assets, and the warrants in the purchase agreements place liability for any tax claims prior to the acquisition solely on the seller. The company has deemed it necessary to pay instalments on the tax claim until a final ruling is made. So far, the group has paid about EUR 120 000 related to this case to the tax authorities.
As mentioned in the Q3 report following the sale of the solar plants the risk is now carried by the Buyer of the solar parks. However, there is an escrow amounting to EUR 550 000 will be held by the Buyer to cover potential future damages.
Note 7: Subsequent events
CEO change, Nils Petter Skaset has been appointed as new CEO. See page 5.
Investor contact
Nils Petter Skaset Chief Executive Officer
E-mail: [email protected]
Aega ASA Thunes vei 2 N-0274 Oslo Norway