9.8.2007: Meldung: International Power schreibt im Halbjahr rote Zahlen
Sir Neville Simms, Chairman of International Power, said, "EPS(i) is up 12.6% and free cash flow(ii) is up 15.3% on the same period last year. Overall the business continues to perform in line with our expectations and we remain confident that 2007 will be a year of further growth. The Board is also pleased to announce that it is introducing an interim dividend."
- Excluding exceptional items and specific IAS 39 mark to market movements(i)
- Profit from operations(i) of £416 million (2006: £392 million) – up 6.1% (9.7% at constant exchange rates)
- EPS(i) of 13.4p (2006: 11.9p) – up 12.6% (16.8% at constant exchange rates)
- Free cash flow(ii) of £309 million (2006: £268 million) – up 15.3%
- Including exceptional items and specific IAS 39 mark to market movements(i)
- Loss from operations of £53 million (2006: profit of £458 million)
- EPS of 13.1p (2006: 14.9p) – down 12.1%
- Interim dividend equivalent to 35% of the 2006 full year dividend, making this year’s interim dividend 2.77 pence per share
- Awarded the 2,000 MW and 130 MIGD Fujairah F2 power and desalination project in the UAE
- Signed agreement to acquire 648 MW Trinergy wind portfolio located in Italy and Germany
All reference to financial performance in this commentary is on a pre-exceptional and pre-specific IAS 39 mark to market movements basis (unless stated otherwise).
(i) Excluding exceptional items and specific IAS 39 mark to market movements. For analysis and explanation of exceptional items and specific IAS 39 mark to market movements, please see notes 1 and 3 to this statement.
(ii) Free cash flow is set out in note 4 to this statement.
Profit from operations in North America at £42 million was up from £28 million last year principally due to the acquisition of Coleto Creek. Coleto Creek operated for four out of six months, with the asset returning to service in May following a two month planned outage for both general maintenance and the commissioning of dust emission control equipment. Planned outages were successfully completed at our contracted assets, namely EcoEléctrica, Hartwell and Oyster Creek. Our contracted assets all continue to perform well and improved availability resulted in higher profitability at EcoEléctrica.
In Texas, demand levels were lower than for the same period last year due to mild weather. This impacted the load factor and spark spread at Midlothian which were flat on H1 2006 at 55% and $12/MWh respectively. The load factor at Hays, which had an extended outage to repair defective welds on high pressure steam pipes, was down from 55% to 35%. The direct cost of this extension to the outage was a charge of £5 million in the first quarter. We are currently seeking to recover these costs through warranty claims on the original EPC contractor. Due to the timing of the extended outage Hays’ achieved spark spread fell to $7/MWh from $12/MWh in the first half of 2006. All four units at Hays are currently operational, and we will complete the remedial works on two units during a planned outage in Q4 this year.
In New England, profitability benefited from the introduction of the forward capacity market which more than offset the reduction in load factor, from 60% to 50%. The lower load factor is principally due to the mild weather in the first quarter.
For 2007 we have forward contracted 80% of our expected merchant CCGT output in Texas and New England and 95% of our expected output at Coleto Creek.
Profit from operations in Europe increased to £268 million from £242 million last year, reflecting strong contributions from Rugeley, Deeside and First Hydro. Rugeley and Deeside benefited from higher spreads, achieved as a result of our decision to forward contract Rugeley at higher price levels during 2006, and from improving spark spreads at our largely uncontracted Deeside plant. First Hydro’s earnings were up as the plant benefited from increased demand for reserve capacity. At Saltend, earnings have fallen as expected, due to lower spark spreads as a result of higher gas costs under the Gas Supply Agreement (GSA), and the accelerated amortisation of the GSA in the first quarter. For 2007, we have contracted 95% of expected output at Rugeley and Saltend and 55% at Deeside.
Indian Queens, which was acquired in the second half of 2006, delivered a first time half year contribution and our contracted assets in Iberia and Turkey continue to deliver good operational and financial performance. As anticipated, earnings are down at ISAB in Italy following a planned outage in the period and a revised fuel indexation methodology.
The Czech Republic experienced very mild weather during the first half of the year and as a consequence heat sales were lower than for the same period last year. In August, International Power Opatovice signed a new three year contract with the existing offtaker to secure 1.3 TWh per annum (65% of our expected output), until the end of 2010.
Levanto made a first time half year contribution following its acquisition in the second half of 2006. An additional 51 MW of wind farms that were under construction at acquisition started commercial operation during 2007, with a total of 412 MW currently in operation. On 4 August, International Power agreed to acquire the 648 MW Trinergy wind portfolio, located in Italy and Germany, for an enterprise value of €1,839 million (£1,243 million). The transaction, which includes 581 MW in operation and 67 MW currently under construction, is expected to reach financial close by the end of the third quarter 2007.
International Power signed an agreement in June to acquire the development rights for an 8 MW wind farm in Germany, which is scheduled to be commissioned in the first half of 2008. An additional 14 MW operational wind farm, located at Delfzijl-Zuid in the Netherlands, was acquired in July. Following the completion of these acquisitions, International Power will have 1,053 MW of operational wind turbines and a further 99 MW under construction.
Our 800 MW greenfield CCGT project at Pego, in Portugal, and our partnership with Eneco, for the construction of an 800 MW CCGT plant in the port of Rotterdam, continue to make good progress.
In June, International Power completed the joint venture with Mitsui to create a common ownership platform for its UK(i) assets (held 75% International Power and 25% Mitsui), and equalised its returns from Paiton Indonesia with the returns of Mitsui(ii).
(i)Ownership in Derwent Cogeneration Limited, 33% held jointly by International Power and Mitsui, is unchanged as a result of this transaction.
(ii)This transaction has equalised the returns for International Power and Mitsui from Paiton (at 40% each) via the acquisition of an economic interest from Mitsui but has not entailed any transfer of shares or change of management structure.
In the Middle East, profit from operations increased to £29 million (2006: £24 million), reflecting a full half year contribution from Tihama in Saudi Arabia and additional capacity coming online in the region, principally at Umm Al Nar in Abu Dhabi and Ras Laffan B in Qatar. Underlying profit growth in the region was strong given that first half 2006 profits benefited from a one-off development fee from the Hidd acquisition in Bahrain.
At Umm Al Nar, a further 460 MW of power entered commercial operation in April and the final 458 MW came online in July 2007. The plant, which now has an overall capacity of 2,200 MW and 143 MIGD, is operating under the first year of its 20-year Power and Water Purchase Agreement (PWPA). 650 MW and 48 MIGD of the original plant will be decommissioned in 2010. This decommissioning date was extended, at the request of the Abu Dhabi Water and Electricity Company (ADWEC), by an additional two years due to the good operational performance of the plant. After 2010 the plant will have a capacity of 1,550 MW and 95 MIGD until the end of the PWPA in 2027.
At Ras Laffan B, in Qatar, the second phase of construction has been completed with an additional two steam turbines providing 300 MW of capacity reaching commercial operation in June 2007. This brings the capacity of the plant to 900 MW and 15 MIGD, with completion of the final 125 MW and 45 MIGD expected in H1 2008.
At Hidd in Bahrain, construction of the 60 MIGD desalination extension continues to make good progress, and this additional capacity is expected to be operational by the end of the year.
In June, the non-recourse debt facility at Tihama was successfully refinanced for a total of US$550 million, achieving improved debt amortisation terms, lower margins and an increased distribution to International Power plc.
International Power (in a 50:50 partnership with Marubeni of Japan) was successful in its bid for a 40% interest in the 2,000 MW and 130 MIGD greenfield Fujairah F2 independent water and power project in the United Arab Emirates. A long-term PWPA has been signed with ADWEC for the sales of power and water. The project is expected to achieve financial close by the end of 2007 and be fully operational by the end of 2010.
In Botswana, the development of the Mmamabula power station (Phase One – up to 2,500 MW) with CIC Energy Corp. is proceeding well. Negotiations for the power purchase agreements with Eskom Holdings Limited (for the majority of Mmamabula’s output) and Botswana Power Corporation are progressing alongside the EPC tender process.
Profit from operations fell from £64 million in 2006 to £46 million. In the first quarter, earnings were impacted by a transmission constraint in Victoria, caused by a bushfire. In the second quarter earnings fell due to planned outages at Pelican Point, some short-term unplanned outages at both Loy Yang B and Hazelwood and increased inter-regional pricing differences. This meant that our portfolio had to purchase power on occasions to satisfy our contracted position, and this coincided with high electricity spot prices driven by the continuing drought.
The forward price curve has continued to increase throughout the period, for both peak and off peak prices principally due to the drought. As we are largely forward contracted for 2007, we expect the principal benefit from this price improvement to be realised from 2008 onwards. We entered 2007 with some 60% of Hazelwood’s 2008 expected output forward contracted and we have continued to forward contract into this improved market for 2008 and 2009. At present 2008 is around 75% contracted and we would expect the average achieved price for the year to be in the order of A$45 per MWh. In spite of the severity of the drought, we remain confident that Hazelwood and Loy Yang B can generate at full load throughout 2008 and into 2009.
In May, we exercised our option to acquire the remaining 50% of the Australian retail partnership. The transaction is expected to close in August 2007 with a payment of A$142 million (£59 million) to EnergyAustralia. Since the retail partnership was formed in July 2005, the number of power and gas accounts has increased from 175,000 to 435,000.
Hazelwood continues to make progress finalising the terms of the A$80 million grant from the Federal and Victorian Governments, to develop and retrofit innovative low emission technology to one of its 200 MW coal-fired generating units. The project includes coal drying, turbine and boiler efficiency improvements, and a pilot CO2 extraction scheme.
Profit from operations in Asia was broadly flat at £55 million (2006: £56 million). Strong operational and financial performances at Thai National Power, HUBCO and Uch were offset by lower earnings at KAPCO, due to the expiry of its tax holiday at the end of June 2006.
The sale of the Malakoff wholesale power generation business to MMC Corporation was completed and proceeds of £249 million were received during the period.
We continue to actively pursue the Paiton 3 and the Tanjung Jati A greenfield opportunities in Indonesia.
Net interest expense has increased by £28 million to £140 million for the period, primarily reflecting the Coleto Creek and Levanto acquisitions, which took place in the second half of 2006, and an increased interest expense at Tihama as the assets became fully operational in Q4 2006. Interest cover was 2.6x for the six months ended 30 June 2007 (2006: 3.0x).
The impact of the strengthening of sterling on the results of our overseas operations, compared to the same period in 2006, is a reduction in EPS of 0.5p. The majority of this impact relates to the translation of US dollar denominated operations.
The Group tax charge for the first six months has reduced by £23 million to £41 million (2006: £64 million). This includes the impact of reducing UK deferred tax balances, following the lowering of the standard rate of UK corporation tax from 30% to 28% with effect from 1 April 2008. Minority interests in our UK assets also benefit from this change in tax rate. The effective tax rate, excluding this impact, is 30% (2006: 30%).
Exceptional items and specific IAS 39 mark to market movements
Exceptional items for the first six months of 2007 produced a gain before tax of £259 million (2006: gain before tax of £19 million). This includes the following items:
- Profit on the sale of Malakoff of £115 million
- Profit on the partial disposal of UK subsidiaries to Mitsui of £153 million
- Provision against the investment in BioX of £9 million
The specific IAS 39 mark to market movements reported in the period amount to a charge before tax of £479 million (2006: gain of £51 million), £433 million of which relates to significant increases in forward prices in Australia.