Unaudited 2009 Interim Results
Published Tuesday 29th, September 2009.
Article Category: Reports
ANDES ENERGIA PLC – UNAUDITED 2009 INTERIM RESULTS Article Content ANDES ENERGIA PLC (Andes or the Company or with its subsidiaries the Group) Andes, the Latin American energy group, is pleased to announce its interim results for the six months ended 30 June 2009. Financial highlights Revenues up 22% to AR$252 million (US$69.2 million) from AR$206 million for the equivalent period last year EBITDA US$7.2 million (H1 2008: US$ 8.8 million) Loss per share US$0.01 (H1 2008: Earnings per share 0.07 cents) Operational highlights During the period Successful renegotiation of secured US$5,000,000 loan facility. Continuation of geophysical studies, seismic reprocessing and seismic acquisition. After the period end Decree issued on 22 July 2009 approving procedure for the calculation of the Empresa Distribuidora de Electricidad de Mendoza S.A. (EDEMSA) tariff for the third review period. Implementation of first new tariff increases for the third review period effective retrospectively to 1 August 2009. The increases equate to an average tariff increase of 12%. Level 1 American Depositary Receipt (ADR) program established in the US with Bank of New York Mellon as the depositary bank. Luis Alvarez Poli, Chief executive Officer, said: “We are pleased with the progress we have made in the first six months of this year. The first new tariffs for the third review period have now been implemented and we continue to work towards advancing our oil and gas exploration interests and the development of our oil and gas exploration strategy. The ADR program has been established to broaden our existing shareholder base and increase the Company\’s visibility with investors in the US.” Enquiries: Andes Energia Luis Alvarez Poli, Chief Executive Officer Nigel Duxbury, Finance Director T: 020 7495 5326 Arbuthnot Securities James Steel Antonio Bossi T: 020 7012 2000 Bishopsgate Communications Maxine Barnes Nick Rome T: 020 7562 3350 Note to Editors: Andes is a Latin American energy group, with electricity distribution, hydro-electric power and oil and gas interests in Argentina. The Company\’s focus is on the Argentinean energy sector. Chairman\’s review First-half revenues increased to US$ 69.2 million compared to revenues of US$66.5 million for the equivalent period last year. EBITDA was US$7.2 million (6 months to 30 June 2008: US$8.8 million). Although the gross profit has increased to US$17.8 million from US$16.1 million the increase in operating expenses resulted in an operating profit of US$3.2 million down from US$4.2 million for the equivalent period last year. The finance costs for the year have been adversely impacted by the weakening of the AR$ against the US$, resulting in a non-cash exchange loss of US$6.7 million in EDEMSA for the period. The Company continues to evaluate all options available to it to minimize this currency risk. EDEMSA has established a trust with the objective of investing in US$ denominated assets and has secured shareholders\’ approval to issue up to an equivalent of US$80 million of debt instruments denominated in AR$ or other foreign currencies at the Board\’s discretion, which would give EDEMSA more flexibility to manage this currency risk. After the period end EDEMSA completed the process for the implementation of the first new tariffs for the third review period. This follows the approval of the procedure for the calculation of the new tariffs, which was announced on 12 August 2009. The new electricity tariffs will result in an average increase of between 0% and 15% for residential users and between 12% and 22% for commercial users, representing an average total increase of approximately 12%, which will be effective retrospectively from 1 August 2009. As announced on 21 February 2008, the terms for the acquisition of the final 50 per cent. interest in Sodem S.A. included the possibility of an earn-out payment. The approval of the procedure for the calculation of the new tariffs might crystallize this earn-out payment, which may be satisfied in cash and/or through the issue of new Company shares. However, under the terms of the stock purchase agreement, certain elements of the earn-out are still open to interpretation and are being agreed with the seller. At this time no liability has been recognized in the balance sheet for an earn-out payment, due to the uncertainty of whether it will become due or not. The results of Hidroelectrica Ameghino S.A. (HASA) have benefited from the change in the regulations implemented in October 2008 that now allows HASA to sell all the electricity it generates to the wholesale market resulting in revenues increasing by over 100% for the six months compared to the equivalent period last year, with a resulting increase of 689% in EBITDA over the same period. Whilst the international economic turmoil has had an impact on oil companies and in particular exploration projects, we continue to gather and interpret seismic data and are looking to conduct further geochemical surveys and if necessary further 3D seismic work towards the end/beginning of this/next year. As announced on 29 June 2009, meetings have been held with the Chubut regulator to discuss a possible extension of the first exploration period and possible changes to exploration commitments. We will be looking to continue these discussions with the regulator over the coming months. As announced on 25 June 2009, Juan Carlos Esteban, Chief Executive Officer of the Group\’s oil and gas interests was appointed to the Board. His appointment significantly strengthens the Board, particularly given the focus on the development of the group\’s oil and gas interests. During the period the Company successfully completed the renegotiation of its secured US$5,000,000 loan facility, which carries a 12.75 per annum coupon and defers the principal repayment until March 2013. Your Company continues to grow and develop and has made significant steps in putting the Company on a solid financial footing in these difficult markets. We are confident that our efforts throughout 2009 will allow us to make further progress in the development of our energy businesses and we are grateful to shareholders for their continued support and look forward to updating you on developments in the near future. Neil Bleasdale Chairman Consolidated income statement in attached document
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