TIDMRUR
RNS Number : 6204K
Rurelec PLC
30 August 2019
30 August 2019
AIM: RUR
Rurelec PLC
("Rurelec" or "the Company")
Interim results for the six months ended 30 June 2019
Rurelec PLC (AIM: RUR), the owner, operator and developer of
power generation capacity internationally, today announces its
unaudited interim results for the six months ended 30 June
2019.
Financial Highlights:
-- Post tax (loss) / profit GBP0.45 million loss (2018: GBP1.11
million profit)
-- Profit / (loss) per share 0.08 pence loss (2018: 0.20 pence
profit)
-- Net asset value per share 4.3 pence (2018: 4.7 pence)
-- Net cash inflow before loan repayments GBP1.06 million (2018: GBP0.24 million)
Operational and Post Half-Year Highlights:
-- The main factor behind the change in operating profitability
from GBP0.52 million profit for 2018 to GBP0.43 million loss for
2019 is that the 2018 results included the GBP1.25 million one-off
gain on the sale of the Peruvian operations completed in the first
half of 2018.
-- Post half-year receipt of the final amounts due from the disposal of Peruvian operations.
-- A 26% reduction in administrative expenses from GBP0.73 million to GBP0.54 million.
-- A significant improvement in cashflow - net cash inflow
before repaying term loans increased from GBP0.24 million to
GBP1.06 million.
-- A reduction in Group receivables from GBP18.49 million to
GBP15.50 million due to debt repayments by the Argentinian
operations and foreign exchange movements.
-- Significant reduction in current liabilities from GBP2.41
million to GBP0.92 million due to a GBP1.37 million reduction in
borrowings and a GBP0.12 million reduction in trade payables.
-- Energia del Sur S.A.("EdS"), the Argentinian operating
business, settled outstanding secured group debts in full,
remitting GBP1.13 million of secured debt repayments (2018: GBP1.08
million) and GBP0.40 million of unsecured debt repayments (2018:
GBPnil).
-- A major reduction in Group borrowings from GBP1.52 million to
GBP0.15 million driven by the repayment of secured debt principal
and interest owed to Bridge Properties (Arena Central) Ltd
("BPAC").
-- Commensurate with the fall in indebtedness, the interest
costs of the Group fell to GBP50k (2018: GBP75k).
-- Chile -The Rurelec Board continues to explore options for the
Chilean operations and the Group's two 128 MW Turbines.
Commenting on the results, Simon Morris and Andy Coveney,
Rurelec's Executive Directors, said:
"The Board continues to pursue measures to restore value to the
Company and its shareholders through prioritisation of receiving
cash receipts from the power generation plant in Argentina, selling
or developing its assets in Chile and reviewing options for its
turbine assets, whilst pursuing cost savings at the head office in
London."
For further information please contact:
Rurelec PLC WH Ireland
Simon Morris Katy Mitchell
Executive Director Lydia Zychowska
Andrew Coveney
Executive Director
+44 (0)20 7549 2839 +44 (0)20 7220 1666
Executive Directors Statement
Review of Operations
Argentina
In January 2019, EdS, our 50%-owned operating entity, completed
the US$6 million major overhaul and repair of its steam turbine and
the refurbishment of one gas turbine. As a result, the combined
cycle plant was able to resume full power generation after having
run at reduced output for 17 months following the September 2017
steam turbine blade failure event and consequent plant
shutdown.
This resumption of output enabled EdS to make secured and
unsecured loan repayments to the UK, GBP1.63 million being remitted
during the period (2018: GBP1.08 million).
In May 2019, EdS successfully completed the repayment of all
outstanding secured debt principal and interest owed to the
Group.
At 30 June 2019, Patagonia Energy Limited ("PEL"), the joint
venture company which owns EdS and in which Rurelec has a 50%
share, had outstanding borrowings and interest of GBP14.52 million
(2018: GBP17.89 million) due to the Group after impairments. With
the EdS plant back up to full operation, EdS has projected that in
Q3/4 2019 it will commence the repayment of the unsecured debt it
owes to PEL.
Chile
In Chile, the necessary environmental consents and land leases
were maintained in order to extend the project and the Board
continues to review options in the light of the risks versus
rewards of undertaking this project.
Head office
A very tight rein continues to be maintained on overheads in the
UK and administration costs for the period fell to GBP0.54 million
(2018 - 0.73 million). On 1 August 2019, the Head Office relocated,
which will enable further cost savings to be achieved.
Debt repayments and Cash flow
In the period Rurelec received sufficient receipts from
Argentina to enable it to pay off most of the secured BPAC debt
which fell from GBP1.52 million at 30 June 2018 to GBP0.15 million
at 30 June 2019. As previously announced, in May 2019 the Group was
able to extend to 30 June 2020 its GBP0.15 million of remaining
debt facility with BPAC. The Board anticipates the achievement of
complete settlement of the BPAC debt by Rurelec by the end of Q4
2019.
Although there were improvements in the Group's finances in the
period, liquidity has remained a significant issue for the Group.
However, the Group has been able to cope with variability in the
timing and quantum of cash receipts from Argentina due to
significant reductions in Group operating costs. The cash position
is expected to recover further in line with the stabilisation of
remittances from EdS and PEL and when sales of certain assets are
achieved by the Group.
Given the progress on the sale of certain assets of the Group
and the expected cash remittances from our Argentine operation, the
directors continue to adopt the going concern basis of
accounting.
Review of future strategy
The strategy of the Group continues to be focussed on
stabilising the financial position, keeping costs under tight
control, whilst certain assets are sold. The underlying strategy is
to preserve the value of the Group assets, which will in turn
enable all creditors of Rurelec to be repaid and will maximise
returns to shareholders.
Simon Morris and Andy Coveney
Executive Directors
RURELEC PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited)
for the half year ended 30 June 2019
(expressed in thousands of pounds)
_________
Audited
Notes 6 months 6 months 12 months
to to to
30/06/19 30/06/18 31/12/18
GBP'000 GBP'000 GBP'000
------------------------------------- ------ --------- ----------- ----------
Administrative expenses (541) (731) (1,510)
Other income 107 1,250 1,250
Other expense - - (2,665)
Operating (loss) / profit (434) 519 (2,925)
Foreign exchange gains 30 661 1,724
Finance income - - 756
Finance expense (50) (75) (177)
------------------------------------- ------ --------- ----------- ----------
(Loss) / Profit before tax (454) 1,105 (622)
Tax expense - - -
------------------------------------- ------ --------- ----------- ----------
(Loss) / Profit for the period (454) 1,105 (622)
(Loss) / Profit per share 3 (0.08p) 0.20p (0.11p)
------------------------------------- ------ --------- ----------- ----------
Other comprehensive income
Items that will be subsequently
reclassified to Profit & Loss:
Exchange differences on translation
of foreign operations 595 80 215
Total other comprehensive
income 595 80 215
Total comprehensive profit
/ (loss) for the period 141 1,185 (417)
------------------------------------- ------ --------- ----------- ----------
RURELEC PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(unaudited)
at 30 June 2019
(expressed in thousands of pounds)
___
Audited
30/6/19 30/6/18 31/12/18
Notes GBP'000 GBP'000 GBP'000
------------------------------- -------- ------------------------- -------------------------- ---------
Assets
Non-current assets
Property, plant and equipment 10,048 9,922 10,038
Current assets
Trade and other receivables 15,503 18,485 16,394
Cash and cash equivalents 310 398 351
15,813 18,883 16,745
------------------------------- -------- ------------------------- -------------------------- ---------
Total assets 25,861 28,805 26,783
------------------------------- -------- ------------------------- -------------------------- ---------
Equity and liabilities
Shareholders' equity
Share capital 11,228 11,228 11,228
Share premium account 22,754 22,754 22,754
Foreign currency reserve 1,382 652 787
Other reserve 4 45,000 45,000 45,000
Profit and loss reserve (55,421) (53,240) (54,967)
------------------------------- -------- ------------------------- -------------------------- ---------
Total equity 24,943 26,394 24,802
Current liabilities
Trade and other payables 762 879 774
Current tax liabilities 5 8 7
Borrowings 151 1,524 1,200
918 2,411 1,981
------------------------------- -------- ------------------------- -------------------------- ---------
Total liabilities 918 2,411 1,981
------------------------------- -------- ------------------------- -------------------------- ---------
Total equity and liabilities 25,861 28,805 26,783
------------------------------- -------- ------------------------- -------------------------- ---------
RURELEC PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited)
for the half year ended 30 June 2019
(expressed in thousands of pounds)
_
Share Share Foreign Retained Other Total
capital premium currency earnings reserve equity
GBP'000 GBP'000 reserve GBP'000 GBP'000 GBP'000
GBP'000
---------------------- ----------- ------------ ----------- ----------- ----------- ------------
Balance at 01.01.18 11,228 22,754 572 (54,345) 45,000 25,209
Gain for the first
6 months - - - 1,105 - 1,105
Exchange differences
on translation - - 80 - - 80
---------------------- ----------- ------------ ----------- ----------- ----------- ------------
Total comprehensive
profit - - 80 1,105 - 1,185
---------------------- ----------- ------------ ----------- ----------- ----------- ------------
Balance at 30.06.18 11,228 22,754 652 (53,240) 45,000 26,394
Loss for the Period - - - (1,727) - (1,727)
Exchange differences
on translation - - 135 - - 135
---------------------- ----------- ------------ ----------- ----------- ----------- ------------
Total comprehensive
loss - - 135 (1,727) - (1,593)
---------------------- ----------- ------------ ----------- ----------- ----------- ------------
Balance at 31.12.18 11,228 22,754 787 (54,967) 45,000 24,802
Loss for the first
6 months - - - (454) - (454)
Exchange differences
on translation - - 595 - - 595
---------------------- ----------- ------------ ----------- ----------- ----------- ------------
Total comprehensive
loss - - 595 (454) - 141
---------------------- ----------- ------------ ----------- ----------- ----------- ------------
Balance at 30.06.19 11,228 22,754 1,382 (55,241) 45,000 24,943
---------------------- ----------- ------------ ----------- ----------- ----------- ------------
RURELEC PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
for the half year ended 30 June 2019
(expressed in thousands of pounds)
_
Audited
6 months 6 months 12 months
to to to
30/06/19 30/06/18 31/12/18
GBP'000 GBP'000 GBP'000
-------------------------------------- --------- --------- ----------
Result for the period before
tax (454) 1,105 (622)
from operations
Net finance income (50) (75) (579)
Adjustments for:
Unrealised exchange (gains)
/ losses (30) (661) (1,735)
Write down of loans - - 2,429
Gain on disposal - (1,250) (1,250)
Impairment of Assets - - 236
Change in trade and other
receivables 78 158 23
Change in trade and other
payables (118) (57) 157
-------------------------------------- --------- --------- ----------
Cash used in operating activities (574) (780) (1,341)
-------------------------------------- --------- --------- ----------
Taxation paid - - -
-------------------------------------- --------- --------- ----------
Net cash used in operating
activities (574) (780) (1,341)
-------------------------------------- --------- --------- ----------
Cash flows from investing
activities
Proceeds from sale of subsidiary - 132
Repayments from joint venture
company 1,633 1,082 2,029
Settlement of Deferred Consideration - (67) (232)
-------------------------------------- --------- --------- ----------
Net cash generated from investing
activities 1,633 1,015 1,929
-------------------------------------- --------- --------- ----------
Net cash inflow before
financing activities 1,059 235 588
-------------------------------------- --------- --------- ----------
Cash flows from financing
activities
Loan Principal Repayments (1,050) - -
Loan Interest Repayments (50) - (400)
-------------------------------------- --------- --------- ----------
Net cash used in financing
activities (1,100) - (400)
-------------------------------------- --------- --------- ----------
(Decrease) / Increase in cash
and cash equivalents (41) 235 188
--------------------------------------
Cash and cash equivalents
at start of period 351 163 163
-------------------------------------- --------- --------- ----------
Cash and cash equivalents
at end of period 310 398 351
-------------------------------------- --------- --------- ----------
RURELEC PLC
Notes to the Interim Statement
for the six months ended 30 June 2019
1. Basis of preparation
These condensed consolidated interim financial statements do not
constitute statutory accounts within the meaning of Section 435 of
the Companies Act 2006. The comparative figures for the year ended
31 December 2018 were derived from the statutory accounts for that
year which have been delivered to the Registrar of Companies. Those
accounts were qualified. The financial information contained in
this interim statement has been prepared in accordance with all
relevant International Reporting Standards as adopted by the
European Union and expected to apply to the Group's results for the
year ending 31 December 2019 and on interpretations of those
Standards released to date.
2. Accounting policies
These condensed consolidated interim financial statements have
been prepared in accordance with the accounting policies set out in
the Group's financial statements for the year ended 31 December
2018.
3. Earnings per share 6 months 6 months 12 months
to to to
30/6/19 30/6/18 31/12/18
----------- --------- -----------
Basic and diluted
Average number of shares
in issue during the period 561m 561m 561m
(Loss) / Profit attributable
to equity holders of the parent
from continuing operations (GBP0.46m) GBP1.11m GBP(0.62m)
Basic and diluted (loss) /
profit per share on continuing
operations (0.08p) 0.20p (0.11p)
----------- --------- -----------
4. Other Reserve
The Capital Reduction that took place during December 2014
resulted in the creation of a non-distributable reserve. The
condition for this reserve to become distributable is for the
outstanding creditors in December 2014 to be settled. At the date
of approval of these accounts there are some GBP0.09 million of
these creditors outstanding. The Board of Directors consider that
these amounts will be settled in the short term and therefore the
GBP45 million remains within the Other Reserve, which is
non-distributable until these settlements have occurred.
5. The Board of Directors approved this interim statement on 30
August 2019. This interim statement has not been audited.
6. Copies of this statement are available at the Company's
website www.rurelec.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR KMGZRKLDGLZM
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