TIDMAPR
RNS Number : 7738K
APR Energy PLC
21 April 2015
21 April 2015
APR Energy plc
Financial results for the year ended 31 December 2014
-- Strong Operating Performance
o Revenue up 58% to $485.7m (2013: $308.3m)
o Operating cash flow up 170% to $154.4m (2013: $57.8m)
o Record renewals of approximately 1.7GW, with 85% renewal
rate
o 262MW of new contracts in Myanmar, South Pacific and
Australia
o Average contract utilisation stable at 72% (2013: 74%)
-- Offset by Libya challenges
o Profitability significantly impacted by challenges in
Libya
o One-off, non-cash impairment of $(717.4m)
o Provision for receivables of $47m
o Qualified audit opinion due, in large part, to the
difficulties of auditing assets in Libya and Yemen
-- Post-period relaxation of banking covenants for over a year,
with no change to overall five-year term of credit facility
APR Energy plc (LSE: APR) (the "Company and together with its
subsidiaries, "APR Energy" or the "Group"), a global leader in
fast-track power solutions, announces its results for the year
ended 31 December 2014.
Reported Reported Adjusted Adjusted
$ million unless otherwise stated 2014 2013 2014 2013
Revenue 485.7 308.3 485.7 308.3
Operating (loss)/profit (702.5) 69.0 38.3 77.8
(Loss)/profit before taxation (723.6) 27.5 12.1 56.0
(Loss)/profit for the year (750.6) 19.8 (7.4) 48.3
Basic (loss)/earnings per share $ (7.96) $ 0.24 $ (0.08) $ 0.60
Adjusted EBITDA 189.3 181.2
Adjusted EBITDA margins (%) 39% 59%
Laurence Anderson, Chief Executive Officer, said:
"2014 was a significant and challenging year for APR Energy.
While we made substantial progress in many key areas of our
business, the difficult decision to cease operations in Libya and
demobilise our plants there has had a significant impact on our
profitability and was a major contributing factor to our large
statutory write-off. Unfortunately, the security situation in Libya
and Yemen has prevented our auditors from physically verifying
assets in these jurisdictions, contributing to a qualified opinion
from our auditors regarding fixed assets.
"Despite the challenges and short-term setbacks, we had a number
of significant achievements in 2014. We provided customers with
over 1.7 gigawatts of capacity - enough to serve over 25 million
people - through 38 plants in 16 countries around the world. We
grew revenue by 58%, increased operational cash flow by 170% and
signed a record number of contract extensions. We also made
significant operational investments in a new global Enterprise
Resource Planning system, advanced telemetry for improved
diagnostics, maintenance and controls and our global supply chain
talent, all of which will be beneficial in 2015.
"As a result of the Libya impact, together with ongoing
geopolitical challenges in some of our markets, we expect full-year
net income to be at or slightly below market expectations. Despite
these short-term challenges, we believe the longer-term
fundamentals for market growth remain strong. We are confident in
our business model and strategy, and the investments we have made
in 2014 position us well for future growth as we evolve our
business as a global, fast-track power provider."
Outlook
Market fundamentals remain strong, with increasing customer
demand for larger-scale, longer-term multi-year contracts and good
contract renewal rates, as highlighted by post period contract
extensions of 456MW. Market interest is also improving, with
prospect enquiries up 300% over last six months. Libya
demobilisation is proceeding well, with an initial shipment of six
turbines out of the country.
However challenges persist due to geopolitical instability, the
oil price impact on government revenues, and the longer time
horizon required for approval of these larger-scale projects.
Consequently, full year 2015 net income is currently expected to be
at or below market expectations predicated upon timing of Libya
redeployment.
Enquiries:
APR Energy plc
Lee Munro + 1 904 404 4576
CNC Communications
Richard Campbell +44 (0) 20 3219 8800 / +44 (0) 7775 784 933
Michael Kinirons +44 (0) 20 3219 8816 / +44 (0) 7827 925 090
An analyst presentation will be held this morning at 9:00 am at
the offices of The London Stock Exchange Building, 10 Paternoster
Square, St Pauls, EC4M 7LT.
A webcast will be available on the APR Energy website:
http://view-w.tv/901-1205-15676/en
A conference call can be accessed via:
Conference call password: 'APR Energy'
UK Free-Call 0808 109 0700
US Dial-In: 1 866 966 5335
International Dial-In: 44 (0) 20 3003 2666
About APR Energy
APR Energy is the world's fast-track mobile turbine power
business. We provide large-scale, fast-track power, providing
customers with rapid access to reliable electricity when and where
they need it. APR combines state-of-the-art, fuel-efficient
technology with industry-leading expertise to provide turnkey power
plants that are rapidly deployed, customisable, and scalable.
Serving both utility and industrial segments, APR Energy provides
power generation solutions to customers and communities around the
world, with an emphasis on Africa, the Americas, Asia-Pacific, and
the Middle East. For more information, visit the Company's website
at www.aprenergy.com.
Certain statements included in this announcement constitute, or
may constitute, forward-looking statements. Any statement in this
announcement that is not a statement of historical fact (including,
without limitation, statements regarding the Company's future
expectations, operations, financial performance, financial
condition and business) is or may be a forward-looking statement.
Such forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially
from those projected or implied in any forward-looking statement.
These risks and uncertainties include, among other factors,
changing economic, financial, business or other market conditions.
Although any such forward-looking statements reflect knowledge and
information available at the date of this announcement, reliance
should not be placed on them. Without limitation to the foregoing,
nothing is this announcement should be constructed as a profit
forecast.
Chairman's Statement
We recognise this has been a difficult year for our
shareholders, as our share price and our underlying financial
performance was affected by the challenges we faced in Libya. Libya
was a significant contract for us, given the scale and importance
of the project to the country. We operated successfully there,
delivering critical power and having an excellent relationship with
our customer. It was an attractive contract financially that made a
significant contribution to our profitability and cash flow.
Consequently, the Board's decision to withdraw from the country,
following the failure of the Libyan Parliament to ratify the
awarded contract extension, was not taken lightly. This decision
has affected our profitability and share price during 2014, but it
was the right decision to take. Our focus now is on rebuilding
shareholder value by redeploying these assets rapidly to new
contracts.
Our strategy is to deliver shareholder value by focusing on
larger and longer-term power projects, moving us away from being
perceived as a 'power rental business'. We are formed of a team of
power experts, who are able to design, plan, deliver and operate
large-scale blocks of power.
We made good strategic progress during the year, integrating the
assets we acquired from GE, entering into key markets supported by
our regional hubs and achieving a record number of contract
renewals. Our entry into Myanmar exemplifies our ability to execute
our strategy. Our team of experts, utilising our Singapore office,
designed, mobilised and installed a power plant delivering power to
over six million people in just 90 days.
As a Board, we are absolutely focused on delivering shareholder
value by achieving sustainable growth. We have therefore decided to
move away from a regular dividend and instead pay a dividend if and
when the Board deems it appropriate. This will better align our
dividend policy with our growth strategy and support our financial
position.
We undertook a lot of change during the course of the year, both
in the make-up of our Board and Management Team, and operationally,
as we continue to mature and develop as a business.
At the Board level, in August, Mike Fairey announced his
decision to step down as Chairman. Under his leadership, Mike
oversaw significant growth and our increasing maturity as a public
company. I would like to thank him for his knowledge, experience
and judgement, combined with his commitment and hard work.
I was honoured to be selected by the Board to become Executive
Chairman, and recognise the significant responsibility this
entails. I will endeavour to provide the necessary guidance and
oversight of the business, as well as governance of the Board,
drawing upon my extensive knowledge of APR Energy and its markets.
I will continue to support our Management Team in the delivery of
our long-term vision and strategy, as well as spend time with our
customers.
In March 2015, we were informed of Baroness Denise Kingsmill's
decision to step down from her role as Senior Independent Director,
to attend to personal matters. Matthew Allen and Edward Hawkes also
resigned from their roles as Non-Executive Directors. I would like
to thank all three of them for the valuable contribution they have
made. As a result of these changes, we enter 2015 with a greater
balance of Independent Directors and we will continue to look to
add to this as appropriate.
During the year we also made a number of changes to strengthen
our Management Team. In May, we announced the appointment of Brian
Rich as Chief Operations Officer and, in August, Laurence Anderson
assumed the role of Chief Executive Officer and Lee Munro that of
Chief Financial Officer. These appointments recognise the
significant contribution that Brian, Laurence and Lee have made to
APR Energy, as well as the confidence the Board has in their
abilities to deliver our strategy.
We have made considerable strategic progress, with strong
revenue growth and cash generation, and have developed further our
Board and Management Team. There have been challenges too,
particularly the situation in Libya and the resulting significant
statutory loss we reported. We have learned from these challenges,
and enter 2015 with solid business fundamentals, strong operational
foundations and an intense focus on delivering our strategy.
Chief Executive Officer's Report
2014 was a significant year for APR Energy - one in which we
made many notable achievements but also faced challenges,
particularly in respect of our largest contract in Libya. Our
ongoing focus on addressing our customers' needs and our ability to
deliver operational excellence, resulted in record renewal rates,
some important contract wins, double-digit revenue growth and
continued strong cash generation. We made significant investment in
our systems and processes to support our ongoing sustainable growth
strategy, the benefits of which also enable us to better serve our
customers.
Towards the end of 2014, we made the difficult decision to
suspend operations in Libya, followed by our announcement in
January of this year to exit the country. The withdrawal has had a
significant, detrimental effect on the underlying profitability of
our business. However, with no certainty around having our contract
extension ratified, we believe this decision to be in the best
interests of the Company and its shareholders for the longer
term.
Adding to this complexity, the security situation in Libya and
Yemen has prevented our auditors from physically verifying certain
assets in this jurisdiction. This, together with some assets not
being found in their specified locations per the accounting records
- driven in part by stresses on our systems to handle the influx of
GE assets - has resulted in a qualified opinion from our auditors
regarding fixed assets and Libyan inventory.
Recognising the challenges of managing assets and operations
across a growing, global business, we made significant investments
during the year in our operational capabilities, developing and
deploying a new global ERP system, implementing new inventory
management processes and significantly upgrading our supply chain
capabilities and talent. We continue to expand our regional
presence, investing in our operational hubs, strengthening our
teams around the globe and putting in place robust standards,
procedures and reporting abilities. These investments, from which
we should begin seeing benefits in 2015, will help us grow
sustainably and cost effectively, and will enable us to be more
responsive to customers as we execute larger and longer-term
projects.
Focusing on our financial performance, APR Energy produced
strong revenue growth of 58% for the year, although this was
overshadowed by a statutory loss, driven by the ending of the Libya
contract and the associated provisions and write downs we have had
to take as a result. Notwithstanding this, we continued to make
significant progress in executing our strategy, strengthening our
operational capabilities and delivering outstanding value to our
customers, the results of which was reflected in a record number of
contract renewals. Our underlying business fundamentals remain
solid, with a demonstrated ability to generate strong operational
cash flows.
Operationally, APR Energy had a very solid year. We extended
over 1.7GW of contracts, won 262MW of new contracts and entered
into three new countries. We extended over 85% of our contracts,
reflecting the ongoing demand for electricity in the markets we
serve, the high level of loyalty we have with our customers and the
inherent longevity of the solutions we provide.
During 2014, APR Energy provided customers with over 1.7GW of
capacity - enough to serve over 25 million people - through 38
plants in 16 countries around the world. For our customers, we are
providing essential power to help their constituents, communities
and economies grow and thrive.
Market background
We have come a long way since our early years, evolving from a
power rental company to become a global fast-track power provider,
selling electricity directly to customers through our mobile,
large-scale plants. Much of what we do is unique and specialised
within our industry, integrating some of the most trusted names in
generation technology with our own proprietary plant designs,
highly-developed processes and skilled workforce to deliver enough
electricity, in just weeks, to run entire cities. Much of the
technology that serves as the 'brains' of our plants, including our
remote monitoring and controls capability, is designed and
assembled in house. During the year, we were awarded two patents
for modular systems that enable us install plants more rapidly and
efficiently.
2014 was a year of lower activity in our market, as a broad
range of factors combined to delay customer decision making
processes. These ranged from Ebola and elections, to the economic
climate and geopolitical instability in some of our regions. Also,
as the projects we compete for grow to be larger and longer term in
their nature, so does the time period required for contracts to
come to fruition. All things considered, we were still able to
achieve a 20% share of the new megawatts contracted in our space
during the year.
Longer term, we remain confident both in the scale of the
market, predicated upon a persistent and growing structural power
deficit, and the evolving nature of customer demand for bigger and
longer-term solutions. APR Energy is well positioned to deliver
this, and our strategy is designed to capture an increasing share
of the market. While the demand trajectory is strong, customers
have a number of other competing budgetary demands, and power needs
are often not addressed until the lights start going out. This
means that while the growth potential in our business is
compelling, this growth will not follow a smooth line.
Delivering our strategy
Our vision is to be the leading global provider of large-scale,
rapidly deployed power. By focusing on this, we will deliver growth
in long-term shareholder value, provide our customers and their
communities with sustainable solutions that directly help them
grow, and develop our business, people and capabilities to meet
expanding global market opportunities. During 2014, we continued to
invest to support this objective and the evolution of our business
model. This investment, and the changes it brings about, will help
support our strategy and enable us to scale our business cost
effectively, supporting the next stage of our growth.
It has been over a year since we acquired GE's power rental
business, and our strategic partnership with them continues to
provide benefits as we collaborate on a number of opportunities
around the globe. At the time of the acquisition, we said we would
look to move the former GE contracts onto higher margin 'turnkey'
ones in line with our model, or else, redeploy the assets to other
opportunities. We have delivered against this, successfully
renewing contracts in the US Virgin Islands and Iraq on favourable
terms, terminating our contract with Forge in Australia and signing
directly with the end user customer, terminating our Canadian
contract and redeploying assets to the South Pacific, and
demobilising our plant in Bangladesh for redeployment to more
attractive future opportunities.
We continue to invest in our infrastructure and systems to
support the delivery of our strategy. As part of this investment, a
key initiative we undertook during the course of the year was our
'APRe3' programme, a significant enterprise resource planning (ERP)
initiative covering all elements of our business. As part of this
programme, we have standardised our business processes globally
from procurement, finance and logistics to how we manage our fleet.
It will enable us to grow and scale our business cost effectively,
while providing improved visibility to our inventory and helping us
deliver even higher levels of customer service. Also, using
advanced data telemetry, it will allow us to run our fleet more
safely, for a longer time, and minimise unscheduled repair work.
Ultimately, this will increase our availability rates and uptime
while reducing our maintenance costs. I am particularly proud of
the work that has gone into the programme, one which exemplifies
our growing business maturity and commitment to operational
excellence.
Withdrawal from Libya
Our financial performance has been significantly affected by our
decision to stop operations in Libya. It was a very difficult
decision to make, but we took it to protect the long-term interests
of the business.
At the time we entered Libya, it was a historic contract to win
and a testament to our ability to deploy rapidly large blocks of
power in an incredibly challenging operational environment.
Operating across six sites, some in challenging desert conditions,
we were able to provide 450MW of much needed power to millions of
Libyans.
From the time we won the contract, we began producing power in
just 90 days. It was an attractive contract that produced
significant revenues, margin and cash flow for us, coupled with a
customer who greatly valued the power we produced. However, the
increasingly challenging political, social and security environment
within Libya, and the speed at which it deteriorated, caused our
renewed contract to be held up in the Libyan parliamentary review
process. With no line of sight towards a ratification date, the
Board made the difficult decision to demobilise the Group's plants
in the country.
Our focus now is the successful extraction of our assets and
their redeployment onto new projects as quickly as possible. The
nature of our business means that all of our projects have a finite
life cycle. We have a strong track record of being able to redeploy
assets when contracts come to their conclusion, and I feel
confident that we will be able to place the Libyan assets into new
opportunities. Despite its challenges, the demobilisation of our
plants is so far progressing according to schedule and our customer
has been supportive with the necessary paperwork as we prepare to
ship assets out of the country.
2014 financial performance
Our overall financial performance for 2014 was affected by our
decision to withdraw from Libya. Excluding the impact of this, our
underlying financial performance remained strong with significant
revenue growth and cash generation.
Driven by contract renewals, high utilisation rates and new
contract wins, we reported a 58% increase in revenues to $486
million (2013: $308 million).
Adjusted EBITDA grew by 4% to $189 million (2013: $181 million),
with a resulting margin of 39% (2013: 59%). The decline in overall
margin is again the consequence of our assets in Libya not
operating in the later part of the year. In addition, over the
longer term, the investments we have made in our operations during
the year are expected to have a positive effect on our overall
margins.
Adjusted basic (loss) per share was $(0.08) (2013: earnings of
60 cents), based on a weighted average number of shares of 94.3
million shares (2013: 81.0 million shares). No shares were issued
during the period, the weighted average increase reflecting the
full effects of the acquisition of GE's power rental business in
2013.
We generated $154 million (2013: $58 million) in cash flow from
operations, reflecting the overall cash generative nature of the
business. During the course of the year, we invested $155 million
in our fleet, the majority of which was associated with additional
generators and the associated equipment required to deploy them. As
a result, and despite the investment in our fleet, our net debt
position improved slightly. As at year end, we had $546 million of
net debt (2013: $556 million).
During the year we impaired the trade receivables balance by a
total of $47.0 million, which primarily consisted of a $34.1
million charge related to the Libyan trade receivables. We continue
to pursue vigorously collection of all impaired trade receivables,
however ultimately the Group may have to initiate additional
actions in order to recover such amounts. In light of this, we have
determined to provide for these amounts at 31 December 2014, given
the uncertainty around the timing or ultimate collectability of
such balances.
As a result of the suspension of operations in Libya at the end
of 2014, we have revised the value in use calculation, due to the
need to assess goodwill for impairment, to reflect lower future
growth and revenues to match current market expectations around the
redeployment of property, plant and equipment. This has resulted in
a valuation that is significantly below the prior year and, as a
result, there have been several impairments booked against
goodwill, intangible assets and certain items of property, plant
and equipment located in Libya in 2014, totalling $717.4 million,
with goodwill and intangible assets representing $676.4 million of
this amount.
Financing
In August, the Group successfully entered into a new, five year
$770 million credit facility which provides us with increased
liquidity and flexibility at a lower cost of capital. Comprising a
$450 million revolving credit facility and $320 million term loan,
the facility also includes an option to extend up to $1 billion,
subject to obtaining additional funding commitments and complying
with certain covenants. In March of 2015, the Group successfully
agreed to terms with our bank group to amend the financial
covenants under the facility as a result of the unforeseen early
termination of the Libya contract. The amended facility preserves
the core structural elements of the facility while giving us the
necessary temporary covenant flexibility to navigate through this
current business cycle and continue to execute on our business
model and strategy.
A year of operational investment
Operating a rapidly-growing business with 38 plants spread
across an expansive and diverse global footprint can have its
challenges. Our business involves rapid mobilisation and
demobilisation of plants, involving thousands of part numbers and
shipments, and must be managed and orchestrated carefully with a
balance between speed, efficiency and cost. Given this, the
operational investments we have made in our global ERP system,
inventory management processes and supply chain capabilities will
play a key role in helping us effectively execute our strategy
across all regions.
Europe, Middle East and Africa
We continue to make solid progress in the EMEA region, in
particular within Africa, supported by our hub in Dubai. In Q2 we
commenced operations of our new 40MW power plant in Angola, one of
the first-ever fast-track mobile turbine projects in sub-Saharan
Africa and our first turbine deal following the GE strategic
alliance. The project represents another example of APR Energy's
ability to both extend and expand contracts in strategic markets -
in this case extending our original diesel power module contract
and doubling our capacity to 80MW through the execution of the
mobile turbine plant.
Asia Pacific
We had a very strong year in Asia Pacific as we grew our total
generation capacity in the region to over 400MW through our
presence in Myanmar, the South Pacific and Australia, and across
multiple sites in Indonesia.
In May, we successfully commissioned a new power plant in
Myanmar. With a contract of 82MW and the generation capacity to
deliver up to 100MW, the gas-fired plant is one of the largest
thermal power plants in the country, providing power to more than
six million people. In March of 2015, we expanded our Myanmar plant
by an additional 20MW of capacity.
Building upon our experience in industrial applications, we
began operations on our largest industrial contract to date,
serving a mining company in the South Pacific. Totalling 60MW, and
using mobile turbine technology, APR Energy's solution was able to
meet strict EU emission requirements as well as having a compact
footprint to fit within the challenging space constraints at the
mine site.
In August, we announced the signing of a new four-turbine,
gas-fired power plant in Australia. Signed directly with the
end-customer, Horizon Power, the contract replaced APR Energy's
earlier contract with Forge, assumed through the acquisition of the
GE power rental business. The power plant, which came online in
late Q4, will run for a term of at least 30 months. This contract
win, together with our success in the South Pacific, highlights how
our turbines are able to meet the strictest emission standards,
enabling them to be used anywhere in the world, including developed
markets.
The Americas
APR Energy operates multiple sites in Uruguay and Argentina, in
addition to plants in the US Virgin Islands and Guatemala. We
successfully renewed all of our mobile gas turbine contracts in
Uruguay, totalling 300MW, as well as our 25MW turbine contract in
the US Virgin Islands through late 2016. In Argentina, we continue
to have a strong relationship with our customer, to whom we have
been providing power for over seven years.
We continue to invest in our employees
Our people are our most important asset, and they are the key to
our ability to rapidly deploy large power projects to meet our
customers' needs. We are fortunate to have a team of highly
skilled, motivated and entrepreneurial individuals located around
the globe.
I would like to thank all our people for their hard work and
dedication, especially for the significant strides we have made
this year in our operational execution, systems and infrastructure.
The accomplishments of our people have helped make APR Energy a
leader in its space, and continue to position the Company well for
its future.
Outlook
The loss of revenues from Libya will have a significant impact
on our income statement and we are focused on rapidly deploying
these assets to new geographies. All of our projects have a finite
life cycle, for which we always prepare through contingency
planning and by keeping an active pipeline. We remain very
confident in our market and we continue to see increasing need on
the part of customers. We believe that the strength of our
relationship with our strategic partner, GE, will help enable
effective conversion of current pipeline opportunities. Right now,
we are actively engaged in a number of opportunities in EMEA, Asia
Pacific and the Americas.
We see continued market growth, although we expect lumpiness in
our business as geopolitical and economic uncertainty in some of
our markets may further delay customer decision making. The focus
for the year ahead is securing a number of new key contracts,
diversifying our global footprint and continuing to improve our
operational and financial performance.
Conclusion
I feel honoured to be taking on the role of CEO of the company I
co-founded and have helped to grow for over 14 years. I am excited
about the prospect of leading APR Energy forward in the delivery of
our strategy as we continue to mature into a business that is
capable of tackling some of the largest energy challenges
globally.
For those factors within our control, we have continued to
deliver effectively and as leaders in our field, but there is no
doubt that 2014 has been a challenging year for us. As a management
team, we recognise the significant impact the decision to withdraw
from Libya has had on our financial performance and our share
price. Our efforts now are to ensure the rapid redeployment of
these assets. We are confident in our ability to do this, and have
a strong track record of redeploying assets to new projects. The
significant strides we have made in our operations, systems and
infrastructure during the course of 2014 will help us be more
nimble and efficient, and position us well for 2015.
Financial Review
Reported Reported Adjusted Adjusted
2014 2013 2014 2013
$ million (Audited) (Audited) (Unaudited) (Unaudited)
----------------------------- --- ------------------- ------------------- ------------------- -------------------
Revenue 485.7 308.3 485.7 308.3
Cost of sales (400.3) (197.3) (359.3) (197.3)
Amortisation of intangible assets (23.4) (8.8) - -
---------------------------------- ------------------- ------------------- ------------------- -------------------
Gross profit 62.0 102.2 126.4 111.0
Doubtful accounts expense (47.0) - (47.0) -
Impairments (676.4) - - -
Selling, general and
administrative expenses (41.1) (33.2) (41.1) (33.2)
---------------------------------- ------------------- ------------------- ------------------- -------------------
Operating (loss)/profit (702.5) 69.0 38.3 77.8
Integration and acquisition
related costs (4.6) (14.4) - -
Founder securities revaluation 18.5 (3.3) - -
Foreign exchange loss (0.8) (0.4) (0.8) (0.4)
Finance income 1.6 0.2 1.6 0.2
Finance costs (35.8) (23.6) (27.0) (21.6)
---------------------------------- ------------------- ------------------- ------------------- -------------------
(Loss)/profit before taxation (723.6) 27.5 12.1 56.0
Taxation (27.0) (7.7) (19.5) (7.7)
---------------------------------- ------------------- ------------------- ------------------- -------------------
(Loss)/profit for the year (750.6) 19.8 (7.4) 48.3
---------------------------------- ------------------- ------------------- ------------------- -------------------
Total comprehensive (loss)/profit
for the
year (750.6) 19.8 (7.4) 48.3
---------------------------------- ------------------- ------------------- ------------------- -------------------
(Loss)/Earnings per share
----------------------------- --- ------------------- ------------------- ------------------- -------------------
Basic (loss)/earnings per share $ (7.96) $ 0.24 $ (0.08) $ 0.60
Diluted (loss)/earnings per share $ (7.96) $ 0.24 $ (0.08) $ 0.60
---------------------------------- ------------------- ------------------- ------------------- -------------------
Adjusted financial results and performance review
To provide investors with greater clarity on the performance of
the Group, adjusted unaudited financial information has been
prepared to show the results, excluding certain items: amortisation
of intangibles, impairments, Founder securities revaluation,
integration and acquisition related costs, acquisition and related
finance costs and certain tax costs. The adjusted unaudited
financial information has been prepared as follows:
Revenue Operating (loss)/ Loss for
$ million profit the year
--------------------------------------------------- ------------------ ------------------ ------------------
12 month statutory results to 31 December 2014 485.7 (702.5) (750.6)
Cost of sales - 41.0 41.0
Amortisation of intangible assets - 23.4 23.4
Impairments - 676.4 676.4
Founder securities revaluation - - (18.5)
Integration and acquisition related costs - - 4.6
Acquisition and refinancing related finance costs - - 8.8
Tax costs - - 7.5
----------------------------------------------------- ------------------
12 month adjusted results to 31 December 2014 485.7 38.3 (7.4)
----------------------------------------------------- ------------------ ------------------ ------------------
Revenue Operating Profit for
$ million profit the year
--------------------------------------------------- ------------------ ------------------ ------------------
12 month statutory results to 31 December 2013 308.3 69.0 19.8
Amortisation of intangible assets - 8.8 8.8
Founder securities revaluation - - 3.3
Integration and acquisition related costs - - 14.4
Acquisition related finance costs - - 2.0
----------------------------------------------------- ------------------
12 month adjusted results to 31 December 2013 308.3 77.8 48.3
----------------------------------------------------- ------------------ ------------------ ------------------
Revenue for the year increased 58% to $485.7 million (2013:
$308.3 million), driven primarily by a full year's results of the
GE business, contract extensions and high utilisation levels on an
enlarged fleet for the majority of the year, following the
commissioning of four new contracts during the year.
Revenue included $32.7 million in 2014 arising from the finance
lease accounting in connection with the planned disposal of assets
in Uruguay and Senegal, resulting in $nil gain/loss (2013: $14
million in revenue in the connection with the disposal of assets in
Botswana). Adjusted operating profit decreased 51% to $38.3 million
(2013: profit of $77.8 million), reflecting bad debt provisions for
Libya and other contracts and additional selling, general and
administrative expenses. The depreciation charge as a percentage of
revenue remains in line with the previous year and reflects capital
expenditure on the fleet during the year.
Adjusted finance costs for the year were $27.0 million (2013:
$21.6 million), reflecting drawings made on the credit facility for
fleet capital expenditures offset by lower interest rates. Adjusted
finance costs exclude in 2014 the write-off of capitalised finance
costs associated with the August 2014 refinancing and additional
interest in 2014 and 2013 related to the cash consideration of $73
million for the GE acquisition in 2013.
The 2014 tax charge on an adjusted basis was $19.5 million
(2013: $7.7 million) which excludes the reversal of the deferred
tax asset for UK losses associated with the Libya contract.
Adjusted loss for the year was $(7.4) million (2013: profit of
$48.3 million) reflecting the increased allowance for doubtful
accounts, higher selling general and administrative expenses,
finance costs and tax charges.
Adjusted basic earnings per share were a loss of $(0.08) (2013:
earnings of $0.60), based on a weighted average number of shares of
94.3 million (2013: 81.0 million shares).
Adjusted Adjusted
$ million 2014 2013
-------------------------------------------- ------------------ ------------------
Adjusted operating profit 38.3 77.8
Depreciation 145.7 99.0
Equity-settled share-based payment expense 5.3 4.4
----------------------------------------------- ------------------ ------------------
Adjusted EBITDA 189.3 181.2
----------------------------------------------- ------------------ ------------------
Adjusted EBITDA increased 4% to $189.3 million (2013: $181.2
million), resulting in an adjusted EBITDA margin of 39% (2013:
59%). This reflects lower gross margin from higher costs associated
with Libya operations ceasing in 4Q 2014.
As at 31 December 2014, total fleet capacity was 2,108MW (2013:
2,074MW.)
Fleet capital expenditure of $155 million (2013: $294 million
excluding assets acquired through the GE acquisition) reflected
continued fleet investment to support the commissioning of power
plants in Myanmar, Angola and the South Pacific, and ongoing
maintenance of the fleet.
Adjusted Return on Capital Employed
Adjusted Return on Capital Employed (ROCE) is a key performance
metric for the business. Given the significant increase in net
operating assets associated with the growth of the business,
adjusted ROCE decreased to 3% (2013: 8%), primarily reflecting the
lower EBIT margin and lower utilisation in the second half of 2014
as the result of Libya ceasing operations in 4Q 2014.
Currencies
Nearly all operating costs are matched with corresponding
revenues of the same currency and as such there is minimal
transactional currency risk in the Group.
Statutory financial results and performance review
The statutory results for APR Energy covers the year ended 31
December 2014.
Revenue
Revenue for the year was $485.7 million (2013: $308.3 million),
as described above.
Depreciation (included in cost of sales)
The Group reassessed its maintenance regime as a result of the
GE acquisition and concluded that the residual values employed
previously should be updated. This change in estimate led to a
reduction in fleet depreciation of $17m in 2014.
Impairments
In performing its annual assessment of goodwill impairment,
assumptions were contemplated in the forecast such as the
suspension of Libya operations in the end of 2014. Also in the
assessment other assumptions such as future growth and discount
rates were contemplated resulting in the Group recognising
impairments of $717m ($623m related to goodwill, $54m related to
intangibles and $41m related to property, plant and equipment).
$41m of this was included in cost of sales.
Operating (loss)/profit
Reported operating loss was $(702.5) million (2013: profit of
$69.0m), reflecting the impairment of goodwill, intangible assets
and property, plant and equipment of $717 million, doubtful
accounts expense and lower gross profit and higher selling, general
and administrative expenses.
Integration and acquisition related costs
Expenses of $4.6 million (2013: $14.4 million) were recognised
in respect of integration and acquisition related costs associated
with the GE acquisition in late 2013.
Doubtful accounts expense
The Group provided $47.0m of doubtful accounts expense in 2014
primarily related to Libyan receivables of $34.1m.
Share-based payments
In accordance with IFRS 2, a non-cash charge of $5.3 million
(2013: $4.4 million) was recognised related to equity-settled
share-based payment transactions. This expense relates to equity
grants made under the Company's Performance Share Plans.
Interest and finance cost
Net interest expense for the year was $34.2 million (2013 $23.4
million), reflecting drawings made on the credit facility for fleet
capital expenditure, the timing of receipt of receivables and the
write off or the previously capitalised financing fees as a result
of the refinancing in August 2014.
Taxation
The Group's reported tax charge for the year was $27.0 million
(2013: $7.7 million). This included derecognition (recognition) of
losses of $7.6 million (2013: $(7.4 million)), withholding taxes of
$5.6 million (2013: $3.2 million) and income taxes of $21.1 million
(2013: $4.5 million).
(Loss) profit
The Group reported a loss for 2014 of $750.6m and a profit of
$19.8m for 2013.
(Loss)/earnings per share
Basic and diluted loss per share was $(7.96) (2013: earnings per
share of $0.24), based on a weighted average number of shares of
94.3 million (2013: 81.0 million shares).
Liquidity and capital resources
Net debt (excluding capitalised finance fees of $9.5 million) as
at 31 December 2014 was $546 million (2013: $556 million). This
reflects the Group's continued investment in its fleet. A summary
analysis of cash flows is set out in the table below.
$ million 2014 2013
---------------------------------------------------- ------------------ ------------------
Net cash from operating activities 154.4 57.8
Net cash used in investing activities (118.0) (410.8)
Net cash from financing activities 48.5 365.9
------------------------------------------------------- ------------------ ------------------
Net increase in cash and cash equivalents 85.0 12.9
Cash and cash equivalents at beginning of the year 33.9 21.0
------------------------------------------------------- ------------------ ------------------
Cash and cash equivalents at end of the year 118.9 33.9
------------------------------------------------------- ------------------ ------------------
During the period, net cash flow from operating activities
totalled $154.4 million (2013: $57.8 million).
Cash flow used in investing activities primarily comprised
continued investments in the fleet and mobilisation costs arising
from projects commencing operations during the year. The reduction,
year on year, reflects the timing of the purchase of property,
plant and equipment and the mobilisation of the Libyan contract,
prior to commencement of operations in the second half of 2013.
Cash from financing activities totalled $48.5 million
(2013:$365.9 million) and included proceeds of the $770 million
refinancing offset by the repayment of the old facilities in August
2014.
Statement of financial position
As at 31 December 2014, the Group had goodwill of $nil (2013:
$622.6 million) as a result of fully impairing goodwill in
2014.
Property, plant and equipment
As at 31 December 2014, the Group held property, plant and
equipment of $1,139.3 million (2013: $1,194.3 million), reflecting
additions of $173.4 million (2013: $394.8 million) and disposals of
$52.5 million primarily related to the finance lease sale of
certain assets in Uruguay.
Equity
As at 31 December 2014, the Group's total equity decreased 54%
to $635.7 million (31 December 2013: $1,396.6 million) principally
as a result of the goodwill and intangible assets impairments
booked during the year.
Treasury policies and risk management
The Group's activities give rise to a number of financial risks,
particularly market risk (foreign exchange and interest rate risk),
credit risk, liquidity risk, and capital risk management.
Interest rate risk
The Group is primarily exposed to interest rate risk on its
borrowings. Borrowings issued at variable rates expose the Group to
cash flow interest rate risk. Borrowings issued at fixed rates
expose the Group to fair value interest rate risk. When applicable,
the Group may elect to hedge interest rate risk associated with
debt or borrowings under the credit facility by purchasing
derivative instruments. As at 31 December 2014 the Group had a five
year interest rate swap on the notional amount of $80 million,
which swapped variable one month LIBOR rate for fixed rate. At 31
December 2013 there was no interest rate hedge in place.
Credit risk
Credit risk arises from cash and cash equivalents, deposits with
banks and financial institutions, as well as exposures to
outstanding receivables from customers. Due to the nature of the
Group's business in emerging markets, management believes the most
significant of these to be exposures to outstanding receivables
from customers.
To minimise the risk of a significant impact on the business due
to a customer defaulting on its commitments, the Group closely
monitors trade receivables. In addition, the Group uses letters of
credit, contract insurance policies and up front deposits to
mitigate this risk.
Liquidity risk
Liquidity risk results from insufficient funding being available
to meet the Group's funding requirements as they arise. The Group
manages liquidity risk by maintaining adequate reserves of cash and
available committed facilities to meet the Group's short and
long-term funding requirements. The Group monitors the short-term
forecast and actual cash flows on a daily basis and medium- and
long-term requirements in line with the Group's long-term planning
processes.
Financing and bank facilities
The Group has successfully completed an amendment to its new
senior syndicated credit facilities, comprising a $450 million
revolving credit facility and a $320 million Term Loan. The
amendment to the facilities provides the Group with additional
flexibility around certain financial covenants, notably an
increased leverage profile and the inclusion of a Fixed Charge
Coverage Ratio, which will replace the previous Interest Coverage
Ratio covenant for the remainder of the facilities' term.
The facilities provide for the funding of capital expenditures,
working capital requirements and letters of credit. Key financial
covenants include a Total Leverage Ratio (adjusted EBITDA/total
indebtedness) and a Fixed Charge Coverage Ratio (adjusted EBITDA
less certain non-discretionary capital expenditures and tax
payments/interest payments, Term Loan quarterly repayments and
dividend payments). The LIBOR spread on the facilities is dependent
on the Total Leverage Ratio and the Term Loan requires quarterly
repayments of between 1.25%-3.75% throughout the term.
The facilities are secured with the equity and assets of the
majority of the Group's subsidiary undertakings.
As at 31 December 2014, the Group had gross debt of $665 million
(excluding capitalised finance costs) (31 December 2013: $590
million) and cash of $119 million (31 December 2013: $34 million),
resulting in a net debt of $546 million (31 December 2013: $556
million). This net debt position partially reflects the continued
investment in fleet capital expenditures offset by the timing of
the receipt of receivables. As previously communicated, Management
continues to focus on cash management and balance sheet
efficiency.
Going concern
The Group has committed, secured credit facilities of $770
million comprising a $450 million revolving credit facility and a
$320 million term-loan which matures in August 2019.
To ensure it remains within the terms of this facility
(including covenant requirements), the Group regularly produces
cash flow statements, and runs forecasts and sensitivities for
different scenarios including, but not limited to, changes to
contract start dates, pricing and expected contract duration. On 31
March 2015, the Group amended certain terms and conditions related
to these credit facilities. The Group's forecasts and projections
show that these amended facilities are anticipated to be sufficient
for meeting the Group's operating requirements.
In the event of unexpected adverse changes to the Group's cash
flows, the Directors are confident that the Group could manage its
financial affairs, optimizing portfolio management and deferring of
non-essential capital expenditure, so as to ensure that sufficient
funding remains available for the next twelve months.
Accordingly, the Directors believe that the Group's forecasts
and projections, taking account of reasonable possible changes in
assumptions and market uncertainties show that the Group will be
able to operate within the terms of its financing and bank
facilities for the foreseeable future, being twelve months from the
date of this report.
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the Annual Report and consolidated financial
statements.
Dividends
The Group paid an interim dividend of 3.3 pence in 2014 (2013:
3.3 pence). No final dividend is proposed for 2014 (2013: 6.6
pence), as a result of the Libya operations ceasing in 4Q 2014.
The Board will continue to maintain a regular review of its
dividend policy.
Responsibility statement of the Directors on the Annual
Report
The responsibility statement below has been prepared in
connection with the Company's Annual Report for the year ending 31
December 2014. Certain parts thereof are not included within this
announcement.
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with
International Financial Reporting Standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole;
-- the strategic report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face; and
-- the Annual Report and financial statements, taken as a whole,
are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's performance,
business model and strategy.
This responsibility statement was approved by the Board of
Directors on 20 April 2015 and signed on its behalf by:
Laurence Anderson
Chief Executive Officer
20 April 2015
Condensed Consolidated Statement of Comprehensive Income
For the year ended 31 December
$ million (except per share amounts) Notes 2014 2013
------------------------------------------------ ------ ----------------------- -----------------------
Revenue 485.7 308.3
Cost of sales (400.3) (197.3)
Amortisation of intangible assets 6 (23.4) (8.8)
------------------------------------------------- ------ ----------------------- -----------------------
Gross profit 62.0 102.2
Doubtful accounts expense (47.0) -
Impairments 5,6 (676.4) -
Selling, general and administrative expenses (41.1) (33.2)
------------------------------------------------- ------ ----------------------- -----------------------
Operating (loss)/profit (702.5) 69.0
Integration and acquisition related costs 10 (4.6) (14.4)
Founder securities revaluation 8 18.5 (3.3)
Foreign exchange loss (0.8) (0.4)
Finance income 1.6 0.2
Finance costs (35.8) (23.6)
------------------------------------------------- ------ ----------------------- -----------------------
(Loss)/profit before taxation (723.6) 27.5
Taxation 3 (27.0) (7.7)
------------------------------------------------- ------ ----------------------- -----------------------
(Loss)/profit for the year (750.6) 19.8
------------------------------------------------- ------ ----------------------- -----------------------
Total comprehensive (loss)/profit for the year (750.6) 19.8
------------------------------------------------- ------ ----------------------- -----------------------
(Loss)/earnings per share
Basic (loss)/earnings per share 4 $ (7.96) $ 0.24
Diluted (loss)/earnings per share 4 $ (7.96) $ 0.24
------------------------------------------------- ------ ----------------------- -----------------------
Condensed Consolidated Statement of Financial Position
As at 31 December
$ million Notes 2014 2013
------------------------------- ------ ----------------------- -----------------------
Assets
Non-current assets
Goodwill 5 - 622.6
Intangible assets 6 - 70.3
Property, plant and equipment 7 1,139.3 1,194.3
Deferred tax asset 3 0.2 7.8
Other non-current assets 3.8 5.5
Total non-current assets 1,143.3 1,900.5
-------------------------------- ------ ----------------------- -----------------------
Current assets
Inventories 79.5 43.0
Trade and other receivables 127.4 183.1
Cash and cash equivalents 118.9 33.9
Income tax receivable 0.2 3.9
Deposits 3.8 7.3
Total current assets 329.8 271.2
-------------------------------- ------ ----------------------- -----------------------
Total assets 1,473.1 2,171.7
-------------------------------- ------ ----------------------- -----------------------
Liabilities
Current liabilities
Trade and other payables 111.1 83.4
Income tax payable 15.6 10.8
Deferred revenue 5.7 27.5
Borrowings 9 16.0 50.0
Decommissioning provisions 28.9 18.0
Total current liabilities 177.3 189.7
-------------------------------- ------ ----------------------- -----------------------
Non-current liabilities
Founder securities 8 - 18.5
Derivative liability 0.5 -
Deferred tax liability 3 2.0 6.5
Borrowings 9 639.5 529.3
Decommissioning provisions 18.1 31.1
Total non-current liabilities 660.1 585.4
-------------------------------- ------ ----------------------- -----------------------
Total liabilities 837.4 775.1
-------------------------------- ------ ----------------------- -----------------------
Equity
Share capital 15.2 15.2
Share premium 674.9 674.9
Other reserves 770.0 770.0
Equity reserves 12.2 6.9
Accumulated losses (836.6) (70.4)
Total equity 635.7 1,396.6
-------------------------------- ------ ----------------------- -----------------------
Total liabilities and equity 1,473.1 2,171.7
-------------------------------- ------ ----------------------- -----------------------
Condensed Consolidated Statement of Changes in Equity
For the years ended 31 December 2014 and 2013
$ million Share Share Other Equity Accumulated Total
capital premium reserves reserves losses
---------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Balance at 1
January 2013 12.6 668.1 485.9 4.5 (79.3) 1,091.8
----------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Profit for the
year - - - - 19.8 19.8
----------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Total
comprehensive
income for the
year - - - - 19.8 19.8
----------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Acquisition of
subsidiaries 2.5 - 284.1 - - 286.6
Exercise of
equity-settled
share-based
payments 0.1 6.8 - (2.0) 2.0 6.9
Credit to equity
for
equity-settled
share-based
payment expense - - - 4.4 - 4.4
Dividends - - - - (12.9) (12.9)
----------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Balance at 31
December 2013 15.2 674.9 770.0 6.9 (70.4) 1,396.6
----------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Loss for the
year - - - - (750.6) (750.6)
----------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Total
comprehensive
loss for the
year - - - - (750.6) (750.6)
----------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Credit to equity
for
equity-settled
share-based
payment expense - - - 5.3 - 5.3
Dividends - - - - (15.6) (15.6)
----------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Balance at 31
December 2014 15.2 674.9 770.0 12.2 (836.6) 635.7
----------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Condensed Consolidated Cash Flow Statement
For the years ended 31 December
$ million Notes 2014 2013
--------------------------------------------------- -------- ----------------------- -----------------------
Cash flows from operating activities
(Loss)/profit for the year before taxation (723.6) 27.5
Adjustments for:
Depreciation and amortisation 6, 7 169.1 107.8
Impairments 5, 6, 7 717.4 -
Loss/(profit) on sale or disposal of fixed assets 6.0 (2.4)
Doubtful accounts expense 47.0 -
Equity-settled share-based payment expense 5.3 4.4
Founder securities revaluation (18.5) 3.3
Loss/(gain) on foreign exchange derivative
financial instruments 0.6 (0.3)
Finance income (1.6) (0.2)
Finance costs 35.3 23.6
Movements in working capital:
Decrease/(increase) in trade and other receivables 43.0 (100.3)
Increase in inventories (36.5) (26.5)
Decrease/(increase) in other current and
non-current assets 1.7 (0.4)
(Decrease)/increase in trade and other payables (24.5) 48.9
Settlement of decommissioning provisions (5.6) (10.7)
(Decrease)/increase in other liabilities (21.9) 9.6
---------------------------------------------------- -------- ----------------------- -----------------------
193.1 84.3
Interest paid (23.2) (15.5)
Interest received 0.1 0.2
Income taxes paid (15.5) (11.2)
---------------------------------------------------- -------- ----------------------- -----------------------
Net cash from operating activities 154.4 57.8
---------------------------------------------------- -------- ----------------------- -----------------------
Cash flows from investing activities
Purchases of property, plant and equipment (116.8) (358.4)
Purchases of intangible assets (6.9) -
Proceeds on sale or disposal of property, plant and
equipment 2.2 2.8
Decrease in deposits 3.5 17.9
Acquisition of subsidiaries 10 - (73.1)
---------------------------------------------------- -------- ----------------------- -----------------------
Net cash used in investing activities (118.0) (410.8)
---------------------------------------------------- -------- ----------------------- -----------------------
Cash flows from financing activities
Cash from borrowings 715.0 567.8
Repayment of borrowings (640.0) (182.8)
Dividends paid 11 (15.6) (12.9)
Debt issuance costs (10.9) (11.3)
Proceeds from the issue of ordinary shares (net of
transaction costs) - 5.1
---------------------------------------------------- -------- ----------------------- -----------------------
Net cash from financing activities 48.5 365.9
---------------------------------------------------- -------- ----------------------- -----------------------
Net increase in cash and cash equivalents 85.0 12.9
Cash and cash equivalents at beginning of the year 33.9 21.0
---------------------------------------------------- -------- ----------------------- -----------------------
Cash and cash equivalents at end of the year 118.9 33.9
---------------------------------------------------- -------- ----------------------- -----------------------
Notes to the Condensed Consolidated Financial Statements
For the year ended 31 December 2014
1. Basis of accounting and presentation of financial information
Whilst the financial information in this preliminary
announcement has been prepared in accordance with International
Financial Reporting Standards (IFRS) and International Financial
Reporting Interpretation Committee (IFIRIC) interpretations adopted
for use by the European Union, with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS and with
requirements of the United Kingdom Listing Authority (UKLA) Listing
Rules, this announcement does not contain sufficient information to
comply with IFRS. The Group will publish full financial statements
that Comply with IFRS in April 2015.
The financial information for the year ended 31 December 2014
does not constitute statutory accounts as defined in section 435
(1) and (2) of the Companies Act 2006, but has been extracted from
those accounts. Statutory accounts for the year ended 31 December
2013 have been delivered to the Registrar of Companies and those
for 2014 will be delivered following the Company's Annual General
Meeting. The auditor has reported on these accounts; their report
was qualified due to: 1) the unstable security situation in Libya
leading to the auditor being unable to observe the existence and
condition of the Group's Property, Plant and Equipment of $300.6
million and inventory of $24.7 million in Libya; and 2) limitations
in the level of detail within the group's accounting records
leading to the auditor being unable to obtain sufficient
appropriate audit evidence as to the location and existence of
certain of the group's assets, predominantly relating to the
records in three warehouses. In total, the auditor estimates that
there are $97.9 million assets for which the location could not be
adequately determined from the accounting records. The auditor did
not include a reference to matters in which the auditor drew
attention by way of emphasis of matter and did not contain a
statement under 498 (2) or (3) of the Companies Act 2006.
The accounting policies applied are consistent with those
adopted and disclosed in the Group's financial statements for the
year ended 31 December 2014. There have been a number of amendments
to accounting standards and new interpretations issued by the
International Accounting Standards Board which were applicable from
1 January 2014; however these have not had a material impact on the
accounting policies, methods of computation or presentation applied
by the Group.
2. Geographical information
The Group's revenue from continuing operations from external
customers by location of operations and information about its
non-current assets (excluding any applicable deferred tax balances)
by location of assets is detailed below.
Libya and Uruguay revenues represent single individual customers
which individually form more than 10% of total revenues. Of these
revenues, there was $16.5 million and $34.7 million of unimpaired
trade receivables outstanding at 31 December 2014 (2013: $65.3
million and $15.4 million).
Revenue by geographic location
$ million 2014 2013
--------------------- ----------------------- -----------------------
Libya 165.5 78.5
Uruguay 109.8 66.4
Other Asia Pacific 64.7 5.1
Angola 31.2 21.9
Senegal 30.7 16.7
Other South America 26.8 25.3
Iraq 24.9 4.1
Middle East 15.5 16.6
Caribbean 9.2 9.9
Other Africa 1.3 9.8
Botswana 1.0 35.6
Japan - 9.0
Other 5.1 9.4
485.7 308.3
--------------------- ----------------------- -----------------------
There was no revenue generated in the United Kingdom in 2014
(2013: $nil)
Non-current assets by geographic location
$ million 2014 2013
--------------------- ----------------------- -----------------------
Libya 306.2 376.1
Uruguay 167.5 213.1
Other Asia Pacific 94.6 41.9
Australia 74.1 76.4
Myanmar 68.3 1.0
Slovenia 66.9 -
Indonesia 65.2 93.7
Middle East 63.5 108.7
Angola 56.4 24.8
Iraq 51.7 64.4
Senegal 48.3 69.0
Other South America 34.4 80.2
Caribbean 11.0 26.5
Other Africa 5.5 2.6
Botswana - 0.6
Other 25.7 26.7
Corporate 3.8 687.1
1,143.1 1,892.8
--------------------- ----------------------- -----------------------
The corporate and other non-current assets in 2013 primarily
relate to the goodwill and intangible assets that arose on
acquisitions.
3. Income and deferred taxes
The Group's tax expenses are summarised in the following
tables:
$ million 2014 2013
-------------------------- ----------------------- -----------------------
Current tax
Current tax expense 21.6 14.5
----------------------------- ----------------------- -----------------------
Prior year adjustments 2.3 (0.2)
----------------------------- ----------------------- -----------------------
23.9 14.3
-------------------------- ----------------------- -----------------------
Deferred tax
Deferred tax expense 3.1 (6.6)
----------------------------- ----------------------- -----------------------
3.1 (6.6)
-------------------------- ----------------------- -----------------------
Total tax expense 27.0 7.7
----------------------------- ----------------------- -----------------------
The tax expense for the year can be reconciled to the accounting
profit/(loss) as follows:
$ million 2014 2013
---------------------------------------------------------------------------------- -------------- ---------------
(Loss)/profit before tax on continuing operations (723.6) 27.5
Tax at the UK Corporation tax rate of 21.5% (2013: 23.3%) (155.6) 6.4
Withholding taxes 5.6 3.2
Derecognition / (recognition) of losses 7.6 (7.4)
Effect of different tax rates of subsidiaries operating in other jurisdictions 12.9 5.7
Impairments with no applicable tax deductions 154.2 -
Prior year adjustments 2.3 (0.2)
27.0 7.7
---------------------------------------------------------------------------------- -------------- ---------------
The Group is not taxable in certain jurisdictions where either
the jurisdictions do not impose an income tax or the entity is
treated as a flow-through entity for local country tax purposes.
The difference between the statutory rate and the effective tax
rate is a result of impairments, withholding taxes and taxes in
foreign jurisdictions as shown above.
The structure of the Group generally results in each entity or
branch operating within only one tax jurisdiction. In general,
income tax is imposed on taxable income earned in the applicable
tax jurisdiction. Withholding taxes are imposed based upon local
country tax laws. In the jurisdictions where the Group operates,
these taxes may be imposed on cross border payments to related
parties. In general, withholding taxes are imposed on payments such
as rents, dividends, and certain service payments or gross receipts
from customers.
Deferred income taxes
The deferred tax assets and liabilities as of 31 December 2014
and 2013 respectively and the associated movements were as
follows:
Credit/(charge) to
the statement of
31 December comprehensive 31 December
$ million 2013 income 2014
----------------- --------------------------- ----------------------------------- -----------------------------
Deferred tax
assets
Decommissioning
provisions 0.2 (0.2) -
Depreciation in
excess of
capital
allowances - 0.2 0.2
Losses recognised 7.6 (7.6) -
------------------ --------------------------- ----------------------------------- -----------------------------
7.8 (7.6) 0.2
----------------- --------------------------- ----------------------------------- -----------------------------
Deferred tax
liabilities
Withholding taxes (2.9) 1.7 (1.2)
Other timing
differences (2.0) 1.2 (0.8)
Capital
allowances in
excess of
depreciation (1.6) 1.6 -
(6.5) 4.5 (2.0)
----------------- --------------------------- ----------------------------------- -----------------------------
1.3 (3.1) (1.8)
----------------- --------------------------- ----------------------------------- -----------------------------
Losses carried forward that have not been recognised are $33.0
million (2013: $nil) due to a lack of future anticipated profits in
that jurisdiction, which have no expiry date. During the year the
Group derecognised the UK losses that had been previously
recognised as a result of the flow of profits from
the Libyan contract into the UK, due to the lack of future
anticipated profits from that jurisdiction.
4. Earnings per share
From continuing operations
The calculation of the basic and diluted earnings per share is
based on the following data:
$ million (except per share amounts) 2014 2013
--------------------------------------- -------------------------------- -----------------------------------------
(Loss)/profit for the purposes of
basic/diluted (loss)/earnings per
share being net (loss)/profit
attributable to the owners of the
Company (750.6) 19.8
--------------------------------------- -------------------------------- -----------------------------------------
Weighted average number of ordinary
shares for the purpose
of basic (loss)/earnings per share
(number of shares) 94,251,622 81,044,059
--------------------------------------- -------------------------------- -----------------------------------------
Weighted average number of ordinary
shares for the
purpose of diluted (loss)/earnings
per share(1) (number of shares) 94,251,622 81,844,709
--------------------------------------- -------------------------------- -----------------------------------------
(Loss)/earnings per ordinary share
Basic (loss)/earnings per share $(7.96) $0.24
Diluted (loss)/earnings per share $(7.96) $0.24
--------------------------------------- -------------------------------- -----------------------------------------
(1) Founder securities are not considered dilutive for the years
ended 31 December 2014 and 2013 as the exercise price was above the
year end share price. The Founder securities are also not
considered dilutive as the associated performance conditions had
not been met at 31 December 2014 or 2013.
5. Goodwill
$ million 2014 2013
----------------------------- ----------------------- -----------------------
Opening 622.6 547.1
Impairment (622.6) -
Acquisition of subsidiaries - 75.5
-------------------------------- ----------------------- -----------------------
Balance at 31 December - 622.6
-------------------------------- ----------------------- -----------------------
Goodwill acquired in a business combination is allocated, at
acquisition, to the cash generating units (CGU's) that are expected
to benefit from that business combination. The Directors have
determined the business to have one CGU focusing on the deployment,
generation and sale of fast-track power solutions. Goodwill is
allocated to this unit.
The Group tests goodwill annually for impairment or more
frequently if there are indications that goodwill might be
impaired. The recoverable amount of the CGU is determined from a
value in use calculation. The key assumptions for the value in use
calculation are:
-- Revenue - Management uses current contract portfolio pricing
for the relevant portion of the forecast period and pricing
guidelines for expected future contract wins for the remainder of
the 5 year projections. The timing and size of forecasted contracts
is based on historic data and also the sales and opportunities
pipeline. The downtime between contracts and contract duration is
based on Management's best expectations using historical data,
whilst factoring in recent developments in creating our proprietary
modular building system.
-- Costs - Management has a good understanding of historic
realised margins and use this to estimate expected future margins
achievable, which are used to drive direct costs in the model.
Corporate and administrative overheads are then factored in and
adjusted for expected future growth where applicable. Also included
in the model is the forecasted capital expenditure, which is based
off supplier schedules from contractual arrangements and the growth
rate.
-- Growth rate - Short-term growth rates are based on
management's internal forecasts. Following Management's initial 5
year projections, a terminal cash flow was calculated using a
long-term growth rate of 2.0% (2013: 3.0%) which is based on
long-term economic growth and industry forecasts.
-- Discount rate - Management estimates discount rates using
pre-tax rates that reflect current market assessments of the time
value of money and the risks specific to the CGU. The assumed
discount rate used was 15.7% (2013: 14.3%) before tax which in the
view of management best reflects the premium the market would
require for such cash flows.
Although the goodwill balance has been fully written-off in the
year, the Group has conducted a sensitivity analysis on the
impairment test of the CGU carrying value and has determined that
reasonably possible changes in both the long-term growth and
discount rates utilised in the impairment calculations would give
rise to an increase/decrease in the impairment charge booked. An
increase/decrease in the long-term growth rate of 1% would
decrease/increase the impairment charge by $68.0 million and a 1%
increase/decrease in the discount rate would increase/decrease the
impairment charge by $96.0 million.
6. Intangible assets
The intangible assets shown in the table below have arisen
through fair value accounting for the GE Power Rental Business in
2013, the APR Group in 2011 and the purchase of software in
2014.
$ million Customer
contracts Trademark Brand Software Total
--------------- --------------------------- --------------------------- --------------------------- --------------------------- ---------------------------
Cost:
At 1 January
2013 106.4 - 38.1 - 144.5
Acquisition of
subsidiaries 23.2 16.1 - - 39.3
--------------- --------------------------- --------------------------- --------------------------- --------------------------- ---------------------------
At 31 December
2013 129.6 16.1 38.1 - 183.8
Additions - - - 6.9 6.9
At 31 December
2014 129.6 16.1 38.1 6.9 190.7
--------------- --------------------------- --------------------------- --------------------------- --------------------------- ---------------------------
Accumulated
amortisation:
At 1 January
2013 102.4 - 2.3 - 104.7
Charge for the
year 7.0 0.3 1.5 - 8.8
--------------- --------------------------- --------------------------- --------------------------- --------------------------- ---------------------------
At 31 December
2013 109.4 0.3 3.8 - 113.5
Charge for the
year 20.2 1.7 1.5 - 23.4
Impairments - 14.1 32.8 6.9 53.8
--------------- --------------------------- --------------------------- --------------------------- --------------------------- ---------------------------
At 31 December
2014 129.6 16.1 38.1 6.9 190.7
--------------- --------------------------- --------------------------- --------------------------- --------------------------- ---------------------------
Net book
value:
31 December
2014 - - - - -
--------------- --------------------------- --------------------------- --------------------------- --------------------------- ---------------------------
31 December
2013 20.2 15.8 34.3 - 70.3
--------------- --------------------------- --------------------------- --------------------------- --------------------------- ---------------------------
Customer contracts are amortised over the contract term. The
brand, trademark and software are amortised over their estimated
useful economic lives of 25 years, 10 years and 3 years
respectively.
Due to the suspension of the Libya operations at the end of
2014, the Group has performed a goodwill impairment test. The
result of this was the write down of goodwill, intangible assets
and certain items of property, plant and equipment located in
Libya.
7. Property, plant and equipment
$ million Other
Machinery and equipment Mobilisation Demobilisation equipment Total
--------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- --------------------------
Cost:
At 1 January
2013 697.4 43.4 12.2 2.8 755.8
Acquisition of
subsidiaries 242.3 - - - 242.3
Additions 293.9 67.9 31.3 1.7 394.8
Disposals (25.3) (24.1) (8.0) (0.1) (57.5)
--------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- --------------------------
At 31 December
2013 1,208.3 87.2 35.5 4.4 1,335.4
Additions 146.9 17.7 8.2 0.6 173.4
Disposals (41.3) (6.3) (4.9) - (52.5)
--------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- --------------------------
At 31 December
2014 1,313.9 98.6 38.8 5.0 1,456.3
--------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- --------------------------
Accumulated
depreciation:
At 1 January
2013 55.4 21.4 6.6 0.9 84.3
Charge for the
year 67.3 21.3 10.6 0.7 99.9
Disposals (11.0) (24.1) (8.0) - (43.1)
--------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- --------------------------
At 31 December
2013 111.7 18.6 9.2 1.6 141.1
Charge for the
year 97.4 37.5 9.2 1.6 145.7
Disposals (6.2) (4.5) - - (10.7)
Impairments 8.5 21.5 11.0 - 41.0
--------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- --------------------------
At 31 December
2014 211.4 73.1 29.4 3.2 317.1
--------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- --------------------------
Net book
value:
31 December
2014 1,102.5 25.5 9.5 1.8 1,139.3
--------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- --------------------------
31 December
2013 1,096.6 68.6 26.3 2.8 1,194.3
--------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- --------------------------
* Impairment charges are shown within cost of sales in the
statement of comprehensive income.
Due to the suspension of the Libya operations at the end of
2014, the Group has performed a goodwill impairment test. The
result of this was the write down of goodwill, intangible assets
and certain items of property, plant and equipment located in
Libya.
Depreciation is presented within the cost of sales in the
statement of comprehensive income.
During the year, assets with a cost of $36.4 million were sold
under finance leases.
During the year, the Group has reassessed the fleet maintenance
programmes to align with standard practice as utilised by mature
industrial companies and also to reflect the maturing of the
businesses capabilities following the acquisition of the GE Power
Rental Business in October 2013.
This change in estimate of residual value has led to a reduction
in fleet depreciation recognised in the year of $16.9 million. The
expected future annual depreciation reduction related to the diesel
power modules is $9.9 million. It is impracticable to estimate the
future effect of the change in the mobile gas turbines as the
depreciation is calculated using machine run hours, which vary
dependent on customer requirements.
8. Founder securities
$ million 2014 2013
---------------------- ------------------------ ---------------------
Founder securities - 18.5
------------------------- ---------------------- ---------------------
- 18.5
------------------------- --------------------- ---------------------
Subject to the satisfaction of the performance condition
referred to below, the holders of the Founder securities have the
right to require the Company to acquire the Founder securities in
exchange for the issue to the holders of the Founder securities of
such number of ordinary shares as have a value equal to 15% of the
difference between (1) the share price at that time multiplied by
the number of ordinary shares at the time of transaction 78,215,164
(plus the aggregate value created for those parties with
outstanding options or convertible securities (over or in respect
of ordinary shares) which have an exercise (or subscription or
conversion) price of less than the market price for an ordinary
share at that time) and (2) a deemed market capitalisation of the
Company which is the product of the number of ordinary shares in
issue at the time of the transaction (meaning the Placing Price
GBP10.00 as adjusted appropriately for matters such as any
subsequent consolidation, subdivision of the ordinary shares or
allotment of ordinary shares or effects of a rights issue or any
value paid by the Company to ordinary shareholders).
The performance condition is satisfied:
(a) once the price per ordinary share has reached (for any 20
Business Days out of 30 successive Business Days) a closing price
equal to the greater of
(i) an equivalent of a compound rate of return from Admission on
the Adjusted Issue Price equal to 8.3% per annum accrued daily and
compounded quarterly and an amount equal to a 25% increase in the
Adjusted Issue Price (such closing price, the "Threshold Price").
At 31 December 2014 the performance condition was GBP13.31 (2013:
GBP12.50); or
(b) on the occurrence of a Change of Control in relation to the
Company, subject (where the Change of Control results from an offer
to holders of the ordinary shares) to that offer being at an
equivalent price per ordinary share equal to (or greater than) the
Threshold Price.
Following any exercise by a holder of the Founder securities of
its exchange rights, the Company will have the option to pay cash
equivalent to the holder of such Founder securities, in lieu of
issuing ordinary shares. In the event that the performance
condition has not been satisfied by the date falling 5 years from
the date of the Acquisition (13 June 2011), the Company will be
able to acquire all of the Founder securities for nil
consideration.
The Founder securities are not exchangeable for a fixed number
of ordinary equity shares. The number of ordinary shares issued in
respect of these instruments is governed by various factors
including the share price at the date of conversion.
The Group continues to value the Founder securities using a
bespoke Monte Carlo simulation model, which incorporates a binomial
tree to value the instruments as of the date of the performance
condition being achieved within the Monte Carlo simulation. This
model simulates the future Company share price, on a daily basis,
using a Geometric Brownian Motion in a risk-neutral framework.
The valuation output of the model described above is then
discounted to reflect the lack of marketability of the Founder
securities using a protective put option method.
In accordance with IAS 32 and IAS 39, the Founder securities
were measured at fair value upon recognition and subsequently at
each balance sheet date, the inputs used were as follows:
31 December 2014 31 December 2013
-------------------------------- ----------------- -----------------
Balance sheet date share price $ 2.90 $ 15.74
Expected volatility 26% 31%
Remaining life 530 days 894 days
Lack of marketability period 0 days 730 days
Risk-free rate 1.2% 1.3%
Expected dividend yield 5.1% 1.2%
The credit for the year was $(18.5) million (2013: charge of
$3.3 million). A change in the expected volatility by 1% would have
a $nil (2013: $0.7 million) impact on the reported fair value.
The expected volatility used for 2014 and 2013 was determined by
calculating the historical and implied volatilities of the Company
and several comparable listed entity share prices over the previous
3 years.
9. Borrowings
$ million Revolving credit Total
facility Term-loan
-------------------- -------------------------------- --------------------------- ---------------------------
At 1 January 2014 340.0 250.0 590.0
Cash from borrowings 395.0 320.0 715.0
Repayment of
borrowings (390.0) (250.0) (640.0)
---------------------- -------------------------------- --------------------------- ---------------------------
At 31 December 2014 345.0 320.0 665.0
Capitalised debt
issuance costs (9.5)
---------------------- -------------------------------- --------------------------- ---------------------------
655.5
Current 16.0 - 16.0
Non-current 329.0 320.0 649.0
---------------------- -------------------------------- --------------------------- ---------------------------
In 2011, the Group entered into a committed, secured revolving
credit facility of $400 million with a group of international
banks, with a maturity date of 28 November 2016.
In May 2013, the Group entered into a committed, secured term
loan of $150 million with several of the existing group of
international banks involved with the revolving credit facility.
This term loan was then subsequently extended in October 2013 by an
additional $100 million to $250 million, with a maturity date of 1
January 2015, with quarterly repayments of $12.5 million commencing
on 31 March 2014.
In August 2014, the Group announced that it had closed and
funded a new syndicated credit facility for the Group. The expanded
$770 million facility, comprising a $450 million revolving credit
facility and $320 million term loan, replaced the Group's previous
$400 million revolving credit facility and $250 million term
loan.
This five-year facility provides the Group with financing
through August 2019, expands available funding by $120 million. Key
financial covenants include a Total Leverage Ratio (Net
Debt/Adjusted EBITDA) and an Interest Coverage Ratio (Adjusted
EBITDA/Net Interest), which have been updated subsequent to the
year end as a result of an amendment to the facility agreement. The
new facility also contains an accordion feature that would allow
the total facility to expand further, up to $1 billion, subject to
the Group obtaining additional funding commitments and complying
with leverage covenants. The LIBOR spread on the facilities is
dependent on the Total Leverage Ratio and the Term Loan requires
quarterly repayments of between 1.25%-3.75% throughout the
term.
Underwritten by a syndicate led by Bank of America Merrill Lynch
and HSBC, the facility broadens and diversifies the Group's bank
relationships with both existing and new lenders.
As of 31 December 2014, $60.0 million (31 December 2013: $9.8
million) of letters of credit have been drawn against the revolving
credit facility. As of 31 December 2014, the available amount of
the undrawn facilities was $45.0 million (31 December 2013: $50.2
million).
The revolving credit facility and term loan are secured with the
equity and assets of the majority of the Group's subsidiary
undertakings. The Directors believe that the carrying value of
borrowings approximate their fair value.
If the interest rates had been 50 basis points higher/lower and
all other variables were held constant, the Group's total
comprehensive income would have increased/decreased by $2.9 million
(2013: $1.5 million). This is mainly due to the Group's exposure to
interest rates on its variable rate borrowings.
Bid/performance bonds
The Group has a need to post bid or performance bonds associated
with customer contracts. These bonds are typically issued from the
Group's revolving credit facility or backed by a cash deposit. As
of 31 December 2014 the Group had $9.9 million (31 December 2013:
$8.9 million) backed by cash deposits.
10. Acquisition of subsidiaries
On 28 October 2013, the Group acquired 100% of the issued share
capital and obtained control of the following companies (comprising
the "GE Power Rental Business"):
-- Power Rental Op Co One LLC,
-- Power Rental Op Co Australia LLC,
-- Power Rental Asset Co One LLC,
-- Power Rental Asset Co Two LLC,
-- Power Rental Op Co Canada ULC, and
-- Power Rental Op Co Bangladesh Limited.
The acquisition advanced APR Energy towards its stated strategic
goals, creating the world's leading fast-track mobile turbine fleet
of 1.2GW, significantly strengthening and diversifying APR Energy's
business, and creating a long-term strategic alliance with GE. The
final amounts recognised in respect of the identifiable assets
acquired and liabilities assumed are as set out in the table
below:
$ million Final fair value
------------------------------------------------------------------ -----------------------
Property, plant and equipment 242.3
Intangible assets 39.3
Trade and other receivables 15.8
Inventory 7.2
Trade and other payables (0.3)
Deferred tax liability (1.4)
Decommissioning provisions (7.9)
Deferred revenue (9.0)
Total identifiable assets 286.0
----------------------------------------------------------------------- -----------------------
Goodwill 75.5
Total consideration 361.5
----------------------------------------------------------------------- -----------------------
Satisfied by:
Cash 73.1
Equity instruments (15,453,129 ordinary shares of the Company) 288.4
----------------------------------------------------------------------- -----------------------
Total consideration 361.5
----------------------------------------------------------------------- -----------------------
The total consideration for the acquisition was $361.5 million
payable in cash ($73.1 million) on completion and 15,453,129
ordinary shares allotted and issued credited as fully paid up to
the sellers.
The fair value of this share issue was $288.4 million which was
equal to the share price on the closing date of the transaction,
multiplied by the number of shares issued. Integration and
acquisition related costs amounted to $4.6 million (2013: $14.4
million) and were primarily related to legal and professional fees
and early termination fees and were charged to the statement of
comprehensive income.
The goodwill of $75.5 million arising from the acquisition was
reflective of the expected strong growth prospects of the GE Power
Rental Business at the time of the acquisition. None of the
goodwill is expected to be deductible for income tax purposes.
In 2013, the GE Power Rental Business contributed $9.2 million
revenue and $2.4 million to the Group's profit for the period
between the date of acquisition and the 31 December 2013. If the
acquisition of the GE Power Rental Business had been completed on
the first day of the 2013 financial year, Group revenues for the
period to 31 December 2013 would have been $376.6 million and
profit would have been $45.1 million.
11. Dividends
$ million 2014 2013
----------------------------------------------------------------- ----------------------- -----------------------
Declared and paid during the year
Final dividend for 2013: 6.7 pence (2012: 6.7 pence) per
ordinary share 10.6 7.9
Interim dividend for 2014: 3.3 pence (2013: 3.3 pence) per
ordinary share 5.0 5.0
-----------------------------------------------------------------
Dividends paid 15.6 12.9
----------------------------------------------------------------- ----------------------- -----------------------
Proposed for approval by the shareholders at the AGM
-----------------------------------------------------------------
Final dividend for 2014: nil pence (2013: 6.7 pence) per
ordinary share - 9.9
----------------------------------------------------------------- ----------------------- -----------------------
12. Events after the balance sheet date
On 26 January 2015, APR announced that the ratification of its
contract by the Libyan parliament had still not been secured and
that the Board therefore approved reassignment of those assets to
new opportunities. At the date of this report these assets are in
the process of being demobilised and
redeployed, which is expected to take several months.
On 3 February 2015, APR announced that it had signed 115MW of
extensions on two of its power generation contracts in Indonesia,
one of the world's largest markets for distributed power and grid
stability projects. Additionally, APR Energy has been awarded a
contract extension and 5MW expansion on a third site, bringing its
total capacity in the country to 135MW.
On 18 February 2015, APR announced that it had signed a contract
renewal for its power generation contract in Iraq, taking the term
through the end of 2015. The power plant has been in operation
since 2012 and comprises six GE TM2500 mobile gas turbines capable
of generating more than 120MW of electricity.
On 26 February 2015, APR announced that it had signed 106MW of
contract extensions in Sub-Saharan Africa including, an extension
on its 40MW Morro Bento power contract in Angola, taking its term
into early 2016; a term extension through the end of 2015 for its
40MW cross-border contract supplying electricity to Mali; as well
as a term extension into Q3 of 2015 for its 26MW of generation
capacity in Senegal.
On 5 March 2015, APR announced that it had agreed to extend 75MW
of power generation projects in Argentina. Two of the projects,
representing 50MW, have extended through late 2016, while a third,
representing 25MW will continue through late 2017. APR has operated
in Argentina, one of South America's largest markets for
distributed power, since 2008. APR Energy's distributed solution
provides a total of 93MW of electricity capacity, dispersed across
five rural sites.
On 31 March 2015, the Group has successfully completed an
amendment to its new senior syndicated credit facilities,
comprising a $450 million revolving credit facility and a $320
million Term Loan through August 2019. The amendment to the
facilities provides the Group with additional flexibility around
certain financial covenants, notably an increased leverage profile
and the inclusion of a Fixed Charge Coverage Ratio, which will
replace the previous Interest Coverage Ratio covenant for the
remainder of the facilities' term.
The facilities provide for the funding of capital expenditures,
working capital requirements and letters of credit. Key financial
covenants include a Total Leverage Ratio (adjusted EBITDA/total
indebtedness) and a Fixed Charge Coverage Ratio (adjusted EBITDA
less certain non-discretionary capital expenditures and tax
payments/interest payments, Term Loan quarterly repayments and
dividend payments). The LIBOR spread on the facilities is dependent
on the Total Leverage Ratio and the Term Loan requires quarterly
repayments of between 1.25% - 3.75% throughout the term.
On April 9, 2015, APR announced that it had ceased operations in
Yemen due to escalating conflict in the country. APR Energy had
operated in Yemen since 2012, providing 60MW of power capacity. APR
Energy also announced that its customer in the South Pacific has
provided notice to terminate its 60MW contract in Q3 2015, three
months earlier than the original termination date.
Key financial definitions:
Adjusted EBITDA
Operating profit adjusted to add back depreciation of property,
plant and equipment, equity-settled share-based payment expense,
amortisation of intangible assets, impairments and exceptional
items. Exceptional items are those items believed to be exceptional
in nature by virtue of size and/or incidence.
Adjusted EBITDA margin
Adjusted EBITDA divided by adjusted revenue.
Adjusted earnings per share
Adjusted net income divided by the weighted average number of
ordinary shares. The weighted average number of ordinary shares
used to calculate the 2013 adjusted basic earnings per share was
81,044,059. Adjusted net income is net income adjusted to add back
amortisation of intangible assets, integration and acquisition
related costs, impairments, Founder securities revaluation and
exceptional items. Exceptional items are those items believed to be
exceptional in nature by virtue of size and/or incidence
Adjusted ROCE (return on capital employed)
Operating profit for the previous twelve months adjusted to add
back amortisation of intangible assets, impairments and exceptional
items divided by the average of the net operating assets at the
previous three balance sheet dates (for 31 December 2014 this
comprises the 31 December 2014, 30 June 2014 and 31 December 2013
and for 31 December 2013 this comprises the 31 December 2013, 30
June 2013 and 31 December 2012). "Net operating assets" is defined
as total equity adjusted to exclude goodwill, intangible assets,
borrowings, Founder securities, deferred tax assets and liabilities
and current tax assets and liabilities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GMGZDLGKGKZM
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