Earnings Release • Mar 10, 2011
Earnings Release
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Embargoed until Thursday, 10 March at 8:00 am
PRESS RELEASE
Courbevoie, France 10 March 2011
On 9 March 2011, under the chairmanship of Mr Nordine Hachemi, the Board of Directors of Séchilienne-Sidec approved the Group's consolidated financial statements1 for the 2010 financial year.
| Consolidated data (€ millions) |
2010 | 2009 | % Chg. |
|---|---|---|---|
| Revenue | 304.8 | 244.6 | +24.6% |
| EBITDA2 | 107.8 | 100.8 | +7.0% |
| Net income (group share) | 40.5 | 40.8 | -0.7% |
| Consolidated data excluding tax benefit (€ millions) |
2010 | 2009 | % Chg. |
|---|---|---|---|
| EBITDA excluding tax benefit | 94.9 | 84.7 | +12.0% |
| Net income (group share) excl. tax benefit |
32.2 | 29.5 | +9.2% |
1 The consolidated financial statements have been audited. The auditor's certification report will be issued after verification of the management report and completion of the procedures required for filing the Registration Document.
2 Operating income before depreciation, amortisation and provisions for contingencies and losses
Commenting on these results, Nordine Hachemi said: "In 2010, generation capacity increased by almost 5%. This growth will exceed 10% in 2011 with the installation of 64 MW of additional capacity, including the commissioning in March of Caraïbes Energie in Guadeloupe.
"Our commitment to develop generation capacity and our insistence on profitability is prompting our interest in projects in emerging markets, in addition to the geographical regions in which we already operate. To pursue this growth, we are relying on our proven expertise as a base-load power producer that masters key production techniques and operates power plants in complex environments.
"The need for power generation capacity in emerging markets is such that we can be highly selective in the projects we study. We will continue to favour the business model on which Séchilienne-Sidec is built: long-term guaranteed purchase agreements that generate strong recurring cash flows.
"Our new projections for the medium term reflect both the increase in new generation capacity and the contribution of future projects to EBITDA growth."
| Revenue by business segment (€ millions) |
2010 | 2009 | % Chg. |
|---|---|---|---|
| Thermal | 264.3 | 223.8 | +18.1% |
| Photovoltaic | 33.1 | 13.2 | +150.8% |
| Operation | 14.5 | 7.7 +88.3% |
|
| Other sales (*) | 18.6 | 5.5 +238.2% |
|
| Wind | 5.8 | 6.1 | -4,9% |
| Holding | 1.7 | 1.5 | +13.3% |
| TOTAL | 304.8 | 244.6 | +24.6% |
(*) Sales of solar panels or turnkey solar installations to third parties
For the full year 2010, total power generation (excluding the Mauritius power plants, which are unconsolidated) stood at 2,102.7 GWh, up 8% compared to 2009. Thermal power accounted for 95% of this total.
Consolidated revenue came to €304.8 million, up 24.6% over 2009. Two-thirds of the annual increase is attributable to the Thermal business and the balance mainly to the Photovoltaic segment.
In 2010, the Group generated 1,997.2 GWh of thermal power (up 7.8% compared to 2009) with an unchanged installed capacity of 334 MW (excluding 195 MW by power plants in Mauritius, whose results were accounted for by the equity method). The effects of downtime at the power plants in H1 2010 were offset by the excellent operating performance of the second half. On an annual weighted average, the rate of technical availability of the Group's consolidated power plants stood at 88.7% in 2010, a 4-point increase over 2009.
This €40.5 million year-over-year increase is attributable in equal measure to:
the volume effect related to strong growth in power generation;
the increased cost in euros per tonne of buying coal, with the average price rising by almost 40% between 2009 and 2010. (Note that changes in the cost of coal are covered by an escalation clause on the sale price of electricity.)
In Guadeloupe, construction on the 38 MW Caraïbes Energie power plant continued on schedule. The first connection to the electricity grid was completed in December 2010. The plant will be commissioned in March, bringing the Group's installed thermal capacity, excluding Mauritius, to 372 MW.
Photovoltaic power generation more than doubled in 2010, from 17.9 GWh to 36.8 GWh. This sharp increase reflects the first full-year operation of installations commissioned in 2009 as well as the commissioning of 23.9 MW of new installations in 2010. The business also benefited from good sun-cover conditions in the Indian Ocean and the Caribbean.
Photovoltaic division operating revenues soared 88,3% to €14.5 million. A further €18.6 million was achieved through the sale of solar panels, up from €5.4 million in 2009.
At 31 December 2010, the Group had 49.8 MW of installed capacity and 10.2 MW of capacity under construction in Kourou, French Guyana, for a total of 60 MW, versus 38.6 MW at the end of 2009. In June and November of 2010, the Group commissioned two open-field solar farms in mainland France with a total capacity of 8.2 MW, and in December, a 4 MW open-field solar farm in Lassalle, Martinique. The first generating unit (1.8 MW) of the 12 MW Kourou project was also commissioned in late 2010, as was the first Italian power plant with a capacity of 1.0 MW.
Wind power generation totalled 68.7 GWh in 2010, down nearly 5% compared to 2009 (72.2 GWh), despite an increase of 18.8% in installed capacity (from 42.5 MW to 50.5 MW). As with all wind farms in France, the Group's wind power generation suffered from extremely unfavourable wind conditions in 2010. The 8 MW installation at Porte de France was connected on schedule in December 2010.
Revenue from the Wind business totalled €5.8 million in 2010, compared to €6.1 million in 2009.
Including the 6 MW Heninel project under construction since November 2010, the Group had 56.5 MW of installed capacity and capacity under construction at 31 December 2010, versus 42.5 MW at the end of 2009.
In 2010, EBITDA stood at €107.8 million, up 7% from the €100.8 million achieved in 2009. Excluding tax benefits on the Photovoltaic business, which totalled €12.9 million in 2010 versus €16.0 million in 2009, EBITDA in 2010 came to €94.9 million, an increase of 12% compared to €84.7 million in 2009.
The year-over-year EBITDA growth of €10.2 million excluding tax benefit is equally attributable to the Thermal and Photovoltaic segments.
The Thermal business generated EBITDA of €83.3 million, up 8% compared to 2009. This €6.3 million increase primarily reflects the positive impact of higher coal prices on stocks and power plant performance in terms of availability and volumes, offset by the non-recurrence of insurance proceeds received in 2009.
The Photovoltaic business generated operating EBITDA of €11.1 million, up sharply from 2009 (€6.1 million) through increased operating capacity, good equipment performance and excellent sun-cover conditions.
EBITDA related to tax benefits was down €3.1 million in 2010 to €12.9 million, from €16 million in 2009.
Lastly, the sale of solar panels contributed €1.9 million to EBITDA in 2010, an increase of €0.9 million over 2009.
In Wind power, EBITDA stood at €4.0 million in 2010, down from €4.9 million euros in 2009, mainly as a result of poor wind conditions, despite an increase of 8 MW in capacity late in the year.
Depreciation stood at €27.9 million, up compared to 2009 where they stood at €24.9 million. The trend will continue in 2011 because of the construction and commissioning in 2010 and 2011 of significant new capacities.
The total cost of debt and other financial income and expenses came to a negative €17.7 million, unchanged from 2009. This stability masks the continuing decline in the cost of net debt, which fell from €19.2 million to €18.3 million year-over-year, partly as a result of lower interest rates. In 2011, total cost of debt will reflect the commissioning of new capacities.
The share of net income of associates amounted to €2.8 million, against €2.5 million in 2009. This growth is the result of the strong performance of the Mauritius power plants.
Tax expense came to €15 million in 2010, compared to €13.6 million in 2009. The effective tax rate was 24.7% in 2010, versus 22.7% in 2009.
Consolidated net income stood at €48.6 million and net income (Group share) came to €40.5 million. This represents €1.42 per share based on a diluted weighted average of 28,456,536 shares, compared with €1.45 per share in the first half of 2009 (28,095,802 shares).
Funds from operations amounted to €87.5 million in 2010, compared to €123.9 million in 2009. In addition to the increase in cash flow from €102.8 million to €112.4 million, both WCR and tax paid increased.
Net capital expenditures totalled €108.6 million, an increase of over 40% compared to 2009. This reflects gross capital expenditures of €122.3 million to increase the Group's thermal, photovoltaic and wind energy capacity. This major investment, made on the basis of strict profitability criteria, increases the outlook for EBITDA growth in the years to come.
Cash flow from financing activities amounted to €27.9 million in 2010 against a negative €15.4 million in 2009, an increase of €43.3 million.
Overall, the net increase (decrease) in cash and cash equivalents for the full year was €6.8 million, and cash and cash equivalents at year-end stood at €106.5 million.
At 31 December 2010, equity capital amounted to €344.2 million compared, to €321.6 million at the end of 2009.
Net debt stood at €531.3 million, reflecting the launch of new projects in 2010. Excluding corporate debt of €102 million, this figure reflects project finance debt for installations that are in operation or under construction.
Lastly, the Group raised €118 million in new financing in 2010, one-half for the Photovoltaic business and one-third for the Thermal segment. At 31 December 2010, all projects under construction had received their funding.
The Group's commitment to develop generation capacity and its insistence on profitability is prompting its interest in projects in emerging markets, in addition to the geographical regions in which it already operates. To pursue this growth, it is relying on its proven expertise as a base-load power producer which has built a business model based on long-term guaranteed purchase agreements that generate recurring and highly predictable cash flows.
In the Thermal business, the Group will pursue growth both in the French overseas departments, where demand for electricity is not yet saturated, and in emerging markets, where the need for generation capacity is such that it can be highly selective in the projects studied.
In the Photovoltaic segment, authorities in several European countries are re-examining the rates charged for the purchase of photovoltaic power. This impacts the viability of future projects under the group criteria of profitability and visibility into future cash flows.
As such, the Group has decided to limit its Photovoltaic objectives to projects covered by guaranteed purchase agreements. Thus, by the end of 2011 it expects to have an installed base of 69,4 MW, of which 60 MW were already installed or under construction by late 2010, all benefitting from former tariffs. The remaining 9.4 MW will come from the Matoury (French Guyana) and Bethléem (Réunion) projects.
These combined projections have led Séchilienne-Sidec to revise its medium-term outlook, expressed in terms of estimated EBITDA growth.
The new guidance for 2015 calls for 50% to 70% growth in EBITDA compared to 2010 EBITDA excluding tax benefit (€94.9 million). This projection is based in equal measure on growth from installed base at end 2011 and on new projects, both in the traditional areas of activity of the group and in new geographical markets.
Lastly, for the 2011 financial year, the Group expects an increase of about 10% in EBITDA excluding tax benefit, under stable economic conditions.
At the next Annual General Meeting scheduled for 25 May 2011, the Board of Directors will propose a dividend of €0.70 per share.
Founded 30 years ago, Séchilienne-Sidec is an independent energy producer specialising in electricity generation in mediumsized coal/biomass, photovoltaic and wind power plants. With its technical expertise, its project management experience and the quality of its teams of engineers, the Group manages all stages of a power plant's life cycle: design, finance, construction and operation, all over the world, including in complex environments. ISIN: FR0000060402 – SECH
Contacts
Séchilienne-Sidec +33 (0)1 41 16 82 00 Comalto +33 (0)1 44 94 96 30
Jean-François Carminati - [email protected]
| Millions of euros | 2010 | 2009 |
|---|---|---|
| Revenues | 304.8 | 244.6 |
| EBITDA* | 107.8 | 100.8 |
| o/w excluding tax benefit | 94.9 | 84.7 |
| o/w tax benefit | 12.9 | 16.0 |
| D&A | (29.3) | (23.1) |
| Operating profit | 78.5 | 77.6 |
| Net financial expenses | (17.7) | (17.7) |
| Share of profits from associates | 2.8 | 2.5 |
| Taxes | (15.0) | (13.6) |
| Net profit | 48.6 | 48.8 |
| Net profit (group share) | 40.5 | 40.8 |
| Earnings per share (€/sh) |
1.42€/sh | 1.45€/sh |
| Cash flow | 112.5 | 102.8 |
| Cash – end of period |
106.5 | 99.7 |
| Shareholders equity | 344.2 | 321.6 |
| Net debt | 531.3 | 459.9 |
* Operating income before depreciation, amortisation and provisions for contingencies and losses
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