Velcan Holdings — Earnings Release 2006

Apr 17, 2014

VELCAN Energy

Paris, 10 April 2007

Velcan Energy: results of the first closing period

Confirmation of the economic model and continuation of the investment strategy

• A consolidated net loss limited to 0,5 million euros, following important investments having resulted yet in the acquisition of 124 MW of new electrical concessions in India and Brazil, the construction of which will begin in 2007
• The net profitability (24% of the revenues) of the 2 first operating powers plants (15 MW) demonstrates the solidity of the business model
• 53 million euros of net treasury and a portfolio of additional projects in development totalizing 830 MW

Velcan Energy, independent renewable electricity producer in emerging countries, has ended its first closing period on 31st December 2006 (duration 21 months) and publishes its consolidated results in accordance with the IFRS standards, audited by KMPG.

	M€
Total operating revenue	5,2
Net income	- 0,5
Net cash and cash equivalents	53
Shareholder's equity	67

The group's operations historically began in India, and were thereafter extended to Brazil. Consolidated scope includes 17 operating subsidiaries and sub-subsidiaries.

• Velcan Energy is currently in an investment phase, which equates to a net consolidated loss of 0,5 million euros. The first results of this investment phase are:

• The acquisition of two electrical power plants of 7.5 MW each, Satya Maharshi Power Corporation and Rithwik Power Projects.

• The acquisition of 124 MW of new electrical concessions, of which the construction will begin in 2007, with an objective of production in 2010
• A portfolio of additional projects being studied, totaling 830 MW

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The "first western comer" position enables the Velcan Energy group, in a context of increasingly keen competition due to the two emerging countries' growing appeal, to acquire today a portfolio of electrical concessions assuring for a period of 30 to 40 years a significant share of the power generation market, once the plants are constructed.

• The first 2 operational power plants (Satya Maharshi Power Corporation 7,5 MW : 9 months of revenue ; Rithwik Power Projects 7,5 MW : 2 months of revenue) have yet reached, for the first financial closing, a 24% net profitability and an EBITDA of 59,7%. This demonstrates the solidity of the economic model and reinforces the strategy of the group:

• The choice of emerging countries as priority investment targets in renewable-energy based electric power generation infrastructures (high growth of electricity price, huge hydro electrical potential)

• Harnessing the most competitive and profitable "green electricity" generation technologies which are biomass power plants and hydroelectric dams.

Overview of the portfolio of Velcan Energy, by steps of progress

	Operational plants	Concessions to build	Projects (studies in progress)
Electrical capacity	15 MW	124 MW (1) (2)	830 MW
Generation commissioning year	2006	2010	Not yet determined
12 month revenue (M€)	5,7 M€	40 M€ (3)
Profitability (% of revenue)	24%	27% (4)
EBITDA 12 month M€	2,8 M€	27 M€ (5)
Net income 12 month M€	1,36 M€	11 M€

(1) Of which 74 MW of hydroelectricity in Brazil, 45 MW of biomass in India and 5 MW of hydroelectricity in India.
(2) A later press release will give the details of the Brazilian hydro electrical concessions recently signed.
(3) Annual Revenue per MW hydro: 260 k €
Annual Revenue per MW biomass: 437 k€
(4) Net Income (hydro), 1st year of production: 32% of the revenue
Net Income (biomass), 1st year of production: 24% of the revenue
(5) EBITDA per MW hydro: 220 k€
EBITDA per MW Biomass: 210 k€

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Velcan Energy is an independent renewable electricity producer, using biomass combustion technologies and hydroelectric power plants. Velcan Energy has two sources of revenue: sale of electricity and sale of carbon credits.

Velcan Energy operates in Brazil through its subsidiary Velcan Desenvolvimento Energético do Brasil Ltda and in India through its subsidiary Velcan Renewable Energy Pvt Ltd.

Velcan Energy is listed on the Paris Stock Market (Euronext, MLVEL) and is a member of the Paris carbon credit exchange, Powernext Carbon.

Shareholders:

• Financière Saint Merri SA (leading shareholder Crédit Agricole)
• Private investment funds in France and UK

Sites:

• France: Paris (Velcan Energy SA)
• India: Bangalore (Velcan Renewable Energy Pvt Ltd)
• Brazil: Sao Paulo (Velcan Desenvolvimento Energético do Brasil Ltda)

Average payroll employees: 120

Contact details

Velcan Energy

Antoine Decitre
Managing Director
+33 (0)1 42 68 51 08

Velcan Energy

75 bd Haussmann, 75008 Paris, France – www.velcan.fr

Velcan Energy is an independent green electricity producer.
Velcan Energy is listed on the Euronext Paris stock market (code MLVEL).

Disclaimer

This press release contains prospective information about the potential of the projects in progress and/or of the projects of which the development has begun during the financial closing ended the 31st December 2006. These information constitute objectives attached to projects and shall, in any case, not be construed as direct or indirect net income forecast of the concerned year. Reader's attention is also drawn on the fact that the performance of these objectives depends on future circumstances and that it could be affected and/or delayed by risks, known or unknown, uncertainties, and various factors of any nature, notably related to economic, commercial or regulatory conjuncture, which occurrence could be likely to have a negative impact on future activity and performances of the Group.

This announcement does not constitute a public offering (appel public à l'épargne) nor an invitation to the public or to any qualified investor in connection with any offering. This announcement is not an offer of securities in the United States or in any other jurisdiction/country.