TIDMGLO
RNS Number : 8802J
ContourGlobal PLC
05 April 2018
ContourGlobal plc
Preliminary Results Announcement
Strong operational and financial performance. On track to at
least double run-rate Adjusted EBITDA by 2022
ContourGlobal plc (the "Company"), an international operator of
contracted electricity generating plants, today announces its full
year results for the year ended 31 December 2017.
Joseph C. Brandt, President and Chief Executive Officer of
ContourGlobal, said:
"2017 was a year of strong operational and financial performance
for ContourGlobal and we delivered on the near-term operational,
financial and growth commitments we made during the IPO process.
We've achieved double-digit growth in revenue and Adjusted EBITDA
on the back of strong operational performance. Our recent
announcement of a sizable acquisition in the Spanish thermal solar
space as well as the successful commencement of the repowering of
the first two of our Austrian wind farms provides confidence in
both the development and acquisition prongs of our growth strategy
and moves forward our target of doubling adjusted run-rate EBITDA
within the next five years."
KEY HIGHLIGHTS
Strong financial performance
-- Consolidated revenue growth of 13% to $1,023m
-- Income from operations up 21% to $269m
-- Adjusted EBITDA up 17% to $513m, in line with expectations,
driven by acquisitions in 2017 and a full year of operations of the
power plants commissioned in 2016;
o Thermal energy adjusted EBITDA up 18% to $332m
o Renewable energy Adjusted EBITDA up 9% to $211m
-- Strong cashflow generation and balance sheet; funds from operations up 23% to $256m
-- $2.1bn Net Debt as of Dec 17 in line with expectations, with
Adjusted Net Debt:EBITDA ratio of 4.1x (2016: 4.8x)
-- Final dividend of 2.6 cents (USD) per share declared
In $ millions 2017 2016 Change
------------------------ ------ ----- -------
Revenue 1,023 905 +13%
------------------------ ------ ----- -------
Income from Operations 269 222 +21%
------------------------ ------ ----- -------
Adjusted EBITDA 513 440 +17%
------------------------ ------ ----- -------
Thermal Adj. EBITDA 332 282 +18%
------------------------ ------ ----- -------
Renewable Adj. EBITDA 211 193 +9%
------------------------ ------ ----- -------
Corporate and other
costs (30) (35) -14%
------------------------ ------ ----- -------
Profit before tax 41 43 -5%
------------------------ ------ ----- -------
Funds From Operations
(FFO) 256 208 +23%
------------------------ ------ ----- -------
(Adjusted EBITDA and Funds From Operations reconciled to profit
before tax and operating cash flow respectively in the Financial
Review)
Successful operational performance growing the portfolio and
integrating assets during 2017
-- Availability factors remain strong at 94.4% combined average
availability across fleet (2016: 93.7%)
o Thermal fleet availability factor in 2017 was lower than in
2014-16 primarily due to a higher amount of planned maintenance
works during the year - remains ahead of top decile of peers
o Renewable availability factor in line with targets at
97.6%
-- Total production increased 6% to 13,047GWh (2016: 12,351GWh)
-- Industry leader in Health and Safety with 0.03 LTI Rate
FY 2017 FY 2016 Change
------------------------------ -------- -------- -------
GWh produced Thermal 8,594 7,999 +7%
----------------- ----------- -------- -------- -------
Renewable 4,454 4,352 +2%
----------------------------- -------- -------- -------
MW in operation Thermal 2,640 2,564 +3%
----------------- ----------- -------- -------- -------
Renewable 1,518 1,368 +11%
----------------------------- -------- -------- -------
Availability
factor Thermal 92.6% 93.0% -0.4%
----------------- ----------- -------- -------- -------
Renewable 97.6% 95.0% +2.6%
----------------------------- -------- -------- -------
Delivered growth through developments and asset acquisitions
-- Successful integration of our recently constructed power
plants in Senegal (Cap des Biches I and II)
-- Completed the acquisition of a portfolio of assets in Brazil
in March 2017, which includes a total of 130 MW hydro plants and
thermal cogeneration plants totaling 76 MW
-- Continued to grow European solar portfolio and acquired 19 MW
PV portfolio in Italy from ErgyCapital S.p.A.
-- In December 2017, we signed the acquisition of a 23.4 MW
renewable portfolio; 10 photovoltaic plants in Italy (14.6 MW), one
photovoltaic plant in Romania (6.8 MW) and 2 biogas plants in Italy
(2 MW)
Continued delivery towards our strategy of doubling Adjusted
EBITDA by 2022
-- In December 2017, we signed an agreement with Kosovo's
government to build a 500 MW coal-fired power plant
-- In February 2018, we signed the acquisition of a 250 MW CSP
portfolio in Spain for a purchase price of approximately EUR806
million; closing expected in Q2 2018
-- Continuing to pursue M&A opportunities outlined at IPO
EPS
-- Profit attributable to ContourGlobal plc shareholders was
$19.4 million in 2017, resulting in basic EPS of 2.9 cents (USD)
per share
Dividend
-- The Board of Directors is recommending a final dividend of
2.6 cents (USD) per share, $17.5m in total, in respect of the year
ending 31 December 2017. The dividend will be paid on 31 May 2018
to shareholders on the register on 4(th) May 2018. The dividend
will be paid in UK pounds sterling.
-- Dividends ranging from $75m to $80m are expected to be
recommended for the full year ending on 31 December 2018.
-- Directors expect to increase the dividend by a minimum of
high single digits growth rate each year over the next five years
dependent upon ContourGlobal's ability to maintain its strategic
goals.
EGM
Further to its announcement on 27 February 2018, in which the
Company announced that it had reached agreement with Acciona
Energía, S.A.U. regarding the acquisition of Acciona Energía's 250
MW portfolio of five 50 MW Concentrated Solar Power plants in
South-West Spain, the Company will host an Extraordinary General
Meeting for Shareholders at the offices of Davis Polk &
Wardwell London LLP on Tuesday, 10 April 2018 at 11.00 a.m.
(London).
AGM
The Company will host an Annual General Meeting for shareholders
at the offices of Linklaters LLP, 1 Silk Street, London EC2Y 8HQ on
25 May 2018.
Presentation and conference call
The Company will host a presentation for analysts and investors
at 9.30 a.m. (UK time) at Goldman Sachs International, Peterborough
Court | 133 Fleet Street | London EC4A 2BB.
The meeting can also be accessed remotely via a live webcast and
dial-in, as detailed below. If connecting remotely, please connect
to both the webinar (visuals only) and dial-in (audio only).
1. Click here to access the webinar
2. Click here for dial in details
If you would like to attend the presentation in person, please
RSVP to Natasha Helms (natasha.helms@contourglobal.com).
A copy of the presentation will be made available online ahead
of the meeting on 5 April at:
http://www.contourglobal.com/reports.
ENQUIRIES
Investor Relations - ContourGlobal
Alice Heathcote
Tel: +1 646 386 9901 / +55 11 3147-7113
Laurent Hullo
Tel: +33 1 53 83 96 45 / +33 6 82 01 44 60
investor.relations@contourglobal.com
Media - Brunswick
Charles Pretzlik/Simon Maine
Tel: +44 (0) 207 404 5959
Contourglobal@brunswickgroup.com
Chairman Review
OVERVIEW
I am excited to introduce ContourGlobal's 2017 Annual Report,
our first as a public company. The IPO on the Main Market of the
London Stock Exchange in November 2017 was a significant milestone
for our business, and we were pleased to attract a strong,
high-quality investor base.
As this is my first Chairman's letter, I would like to highlight
two important aspects of our business approach. These have been
important contributors to ContourGlobal's success as a private
company and, I believe, will play an integral role in delivering
robust returns for ContourGlobal's public shareholders.
1. Disciplined, opportunistic approach to allocating capital
ContourGlobal has demonstrated operational and development
expertise across seven fuel types and four continents. This
capability allows us to focus exclusively on the most attractive
risk-adjusted growth projects, without narrowing our scope by
technology or geography.
We primarily look at transactions with long-term contracted cash
flows to creditworthy counterparties.
These transactions often have complexities that make it
difficult for other potential buyers to compete and create
opportunities for our operating team to realize material value
post-transaction.
In our short time as a public company, we have signed two
significant agreements. In December, we signed commercial
agreements with the Government of Kosovo for a 500 MW development
project. This milestone occurred because ContourGlobal's
technological expertise, credibility, and experience led us to be
the only company designated as the preferred developer to negotiate
with the government on this transformative project for the country.
In February, we signed an agreement to purchase a 250 MW
concentrated solar power (CSP) operating portfolio in Spain from
Acciona Energia, which was negotiated on a bilateral basis without
an auction process. I expect these projects to produce attractive
returns on equity and generate strong, contracted cash flows for 20
and 18 years, respectively.
Our pipeline of attractive, opportunistic projects is robust,
and we are excited about our accretive growth prospects over the
next several years. If we ever find ourselves in a position where
growth becomes unattractive, we will accelerate the return of
capital to shareholders.
2. Proven ability to create value post-acquisition
ContourGlobal's exceptional operating team has consistently
reduced costs at projects, while improving operating efficiency and
maintaining an excellent health and safety record. ContourGlobal
has benchmarked in the top decile of operating performance in the
global power industry over the past several years.
Our team has also demonstrated the ability to increase
contracted revenue through: (i) expansion opportunities, where
marginal economics are even more accretive due to the utilization
of existing infrastructure; (ii) repowering opportunities where
technology has improved dramatically; and (iii) contract extensions
which extract additional profitability from assets when their
useful lives extend beyond the original contracted period.
We have significant demand from financial investment partners
seeking to make passive, minority investments in some of our assets
on attractive terms for ContourGlobal. These "farm-downs"
significantly bolster our project returns.
BOARD APPOINTMENTS
In preparation for the IPO, we welcomed Dr. Alan Gillespie and
Alejandro Santo Domingo to the Board as Non-Executive Directors,
both of whom bring significant UK plc and relevant industry
experience. We were also delighted to appoint Ruth Cairnie as an
additional Non-Executive Director in January 2018. Ruth has
significant experience in the global energy sector and as a
Non-Executive Director of UK-listed companies. Following Ruth's
appointment, our Board (excluding me as Chairman) comprises a
majority of independent Directors, and we are confident that it has
the right balance of skills and experience to support the executive
team. More details on the Board and appointments can be found in
the Governance section.
CORPORATE GOVERNANCE
At IPO, the Company became subject to the corporate governance
requirements of the UK Listing Authority's Listing Rules, and the
UK Corporate Governance Code (the "Code"). In the months leading up
to the listing, much work was carried out to ensure that the Board
had constituted appropriate Committees and adopted relevant
policies and procedures to support the development of a robust
governance structure and compliance with the Code. This work is
described more fully in our Corporate Governance report. The Board
is satisfied that we have in place a robust governance structure,
which is fit for purpose and in line with our listed status, and we
will ensure that our governance arrangements will adapt if
appropriate in connection with the new UK Corporate Governance Code
anticipated to come into force in 2019.
DIVIDS
Our dividend policy is unchanged since the IPO. The Board is
pleased to propose a final dividend of 2.6 cents (USD) per Ordinary
share. The dividend will be paid, subject to shareholder approval
at our 2018 Annual General Meeting, on 31 May 2018 to shareholders
on the register A 4 May 2018.
2017 HIGHLIGHTS
2017 was a year of strong financial performance for the Company.
We delivered year-on-year Adjusted EBITDA growth of 16.5% and
achieved 2017 Adjusted EBITDA of $513.2 million and Net Debt /
Adjusted EBITDA of 4.1x, both consistent with our guidance. We
significantly progressed a number of major projects, successfully
integrated prior acquisitions, and ended the year on strong
financial footing with significant liquidity for growth.
ContourGlobal also achieved the lowest Health & Safety incident
rate in our history, demonstrating our commitment to providing a
safe working environment for employees, contractors and
sub-contractors.
2018 OUTLOOK
The global power industry continues to grow rapidly and is
experiencing significant change as nations pursue policies of
energy security, economic development and decarbonization. As
integrated power companies continue to rethink their global asset
mix, I believe ContourGlobal, as a leader in the contracted power
generation space, is well positioned to capitalize on our
disciplined, opportunistic growth strategy. Our focus on wholesale,
contracted power generation will continue to produce low-risk,
long-term cash flows, while our extraordinary operating team
continues to optimize and expand our portfolio.
2017 has been a significant year in the Company's history and I
feel privileged to be Chairman at this exciting time in
ContourGlobal's development. On behalf of the Board, I would like
to thank our management team and all of our nearly 2,000 employees
across 19 countries for their continued dedication and hard
work.
Craig A. Huff
Chairman
CEO Review
Introduction
Companies only IPO once and that's probably a good thing. The
effort required to prepare a company to enter successfully the
public markets requires an intensity and focus that is singularly
disruptive of normal corporate life, yet requires that core
business objectives be met as promised. This comes despite the
distraction and knowledge that the outcome of the IPO will
overwhelm normal measures of annual successes and failures.
Performance Review
As such, it is very pleasing, and somewhat relieving, for me to
report that 2017 saw both a successful listing on the premium
segment of the London Stock Exchange as well as a strong year of
performance, both operationally and financially, for ContourGlobal.
Moreover, 2017 was an extraordinary year for our most important
operating objective, our health and safety performance. We posted a
record year with our key lagging indicator, our Lost Time Incident
Rate[1], ending the year at 0.03 despite over nearly 6 million
hours worked in 19 countries. These results were even more
remarkable given that we acquired eight new businesses last year in
Brazil and Italy, each with dramatically different expectations
about safe operations and, as such, requiring intensive
restructuring to embrace the ContourGlobal way of health &
safety.
Despite this record setting achievement, we failed to achieve
"Target Zero," our health and safety goal adopted at the end of
December 2016[2]. We missed our target but came ever so close. The
cause of this miss was a tough blow-a car accident on an Armenian
mountain pass near our Vorotan hydroelectric facility-an accident
in which the other driver was conclusively "at fault." The cruel
realization even led some in the company to question whether this
was "really" a lost time incident which should count as an
LTI-particularly as the incident didn't occur in one of our power
plants.
We embraced the failure, learning that failure teaches us the
most when it is used to explain and not to blame. We launched a
Five Whys into the traffic accident to understand the root cause
and whether there was something that we could have done to either
avoid or minimize the risk to our people. This was a serious
incident, one which injured two of our people and caused one of
them to undergo a painful surgery and hospitalization.
The findings revealed that there was more that we could do. The
air bags did not deploy on our vehicle as they should have. It
turns out that the vehicle had been involved in a previous accident
in the years before we acquired the plant and the airbags had not
been replaced. Would air bags have made a difference in this
accident? Maybe, at least in terms of the severity of the
injury.
Despite this incident in Armenia, our health & safety
achievements globally were extraordinary and record setting. We
achieved a 0.03 LTIR and a 0.10 Total Recordable Incident Rate
(TRIR[3]). Missing Target Zero in its inaugural year taught us
much-to inspect all vehicles and vehicle histories when acquiring a
business. To obtain training records and introduce drivers'
training programs to encourage defensive driving and appropriate
risk assessment particularly in remote areas. Embracing failure
will make us better and safer. And with just a bit of luck, enable
us to achieve Target Zero in 2018.
We also had a very strong operating year with better than target
availabilities in our thermal fleet and most of our renewable
fleet. In our thermal business, we are paid mainly to be available
with virtually no volume risk. As a result, Equivalent Availability
Factor ("EAF") is the KPI that tells us how well we are operating
and maintaining our thermal plants. 2017 was a very good year in
all thermal technology clusters, namely reciprocating engines,
Combined Cycle Gas Turbines, Coal-fired plants and our Solutions'
quad-gen facilities. Thermal Fleet Equivalent Availability Factor
for 2017 was 92.6% for the year, which is better than target and in
line with recent performance.
In our renewable business, we need to maintain high
availabilities, but strong financial results also require the
cooperation of the weather to produce acceptable irradiation, wind
speeds and hydrology. As such we focus on two KPIs in our renewable
business: EAF as in the thermal business but also Capacity Factor
("CF"), which measures the percentage of the time that the asset is
generating electricity.
EAF in the renewable business was excellent in our solar fields,
hydroelectric facilities, and wind farms in Peru, Austria and the
Caribbean. The exception came in our Brazil wind farms, where early
post-construction teething challenges crystallized into something
that became more systemic later in the year. We react strongly to
failure and our approach to our Brazil wind farms has been no
exception. We've made significant organizational and people changes
in the country and inside the renewable division, and are starting
to see positive results from these measures in early 2018.
Capacity Factors were high in our solar fleet, which enjoyed
much higher irradiation levels than normal and overproduced by 11%,
while capacity factors in our hydroelectric facilities were below
plan and wind performance was close to plan in Peru, slightly above
plan in Austria and below plan in Brazil.
In 2017, our financial results were better than target and
displayed the resilience of an operations centric business model
that diversifies risk across multiple geographies and technologies.
By design, ContourGlobal's financial results do not depend upon any
one geography, technology or weather resource. We believe that this
resilience creates a higher quality risk adjusted cash flow for
shareholders. These diversification benefits were on display in
2017 as we were able to outperform our adjusted EBITDA target.
Financial results were strong in all areas: revenue topped $1
billion for the first time ever, an increase of 13% year-on-year.
Adjusted EBITDA and Funds from Operations ("FFO") were $513 million
and $256 million, an increase of 17% and 23% respectively. As
targeted, liquidity and year-end net leverage ratio (4.1x) were
within targeted levels.
Market Outlook and Growth
Our business is international with a concentration in three
primary regions: Europe, Latin America and, to a lesser extent,
Sub-Saharan Africa. We operate in the market for electricity
generation infrastructure and participate in that market through
our own development ("greenfield" development which involves
creating an asset by taking it through the permitting, financing
and construction processes) as well as the acquisition of existing
power plants. We operate, develop and acquire power plants using
conventional fuel-based technologies as well as those using
renewable technologies (currently wind, solar and hydro). Within
both categories, we focus on two broad categories of customers:
national grids and the utilities that supply these grids and
commercial, and industrial customers with substantial energy needs
who prefer to procure their electricity supply directly from
on-site facilities.
Today's electricity space is dynamic, with new technological and
commercial approaches creating opportunities and challenges in both
developed and developing markets. Within established markets such
as Western Europe, incumbents have embarked upon broad reviews of
strategy leading to a redefinition of their core businesses and
accompanying divestitures of power assets, many of which are in
markets that we know and like. Within developing markets, energy
demand growth continues to outstrip supply and in certain world
regions such as Sub-Saharan Africa energy supply remains woefully
inadequate, leaving most of the population without electricity and
its indirect benefits (such as clean water and stable
infrastructure).
Intriguingly, one of our early development initiatives has
become trendy. "Corporate PPAs" have been a recent focus of a
renewable industry in search of new credit worthy counterparties to
enter into long-term offtake contracts to facilitate the
development of new projects. These agreements are generally
financially settled long-term arrangements in which a corporate
buyer pays a renewable generator for electricity delivered to the
grid. Many corporations are increasingly procuring electricity with
such structures and have grown significantly in the past three
years. A decade ago, our ContourGlobal Solutions business was an
early pioneer of the corporate PPA market. Working with Coca-Cola
HBC ("CCHBC"), we first used thermal fuels and then renewable
generation technologies. We developed highly efficient and
innovative energy production facilities within Coca-Cola HBC's
bottling facilities in Europe and Africa that supply all of CCHBC's
energy needs for electricity, hot water, chilled water and, through
innovative Co2 capture technology incorporated into these power
stations, carbonation. Later we worked with CCHBC to install
substantial solar "fields" in Italy on the large rooftops housing
their production and storage facilities, installing approximately
4.5 MW in five locations, using what today would be known as a
"Corporate PPA".
Last year we extended our Solutions business into Latin America
where we acquired four cogeneration facilities in Brazil which
directly supply commercial customers. Through this acquisition, we
are extending this "what is old is new again" business from Europe
and Africa to Latin America.
As we explore new growth, we remain impressed with the number of
opportunities we see to make accretive acquisitions in Europe and
Latin America, while at the same time remaining cautious about the
prospects to build new generation in these same markets.
Historically low and extended interest rates has led to capital
deployment decisions in our industry that have driven returns on
new build below that of acquired assets, resulting in an historic
anomaly in the power sector. One should get paid more to take the
development, permitting and construction risk to build a new asset
than to acquire an already functioning business. Such anomalous
pricing between new build and acquisition, renewables and thermal,
is not justified by technology or cost improvements but rather
reflects other more strategic imperatives. We continue to believe
that this dynamic creates its own set of opportunities.
In Sub-Saharan Africa, where we have long been active and
successful, we are cautious outside of the industrial space.
Despite much of the continent making impressive strides in
governance and reform, the post financial crisis collapse in
commodity prices has pressured the continent despite helpful
interventions by the international development community. Although
headline investment in new electricity capacity seems promising,
projects across the continent struggle to make their way from
signing to closing to full operations and, once operational,
pressure on public finances challenges fragile states to meet their
contractual commitments. With such a market backdrop we are very
selective about new investment in this region.
Four important projects managed to reach critical milestones in
the past several months. In Austria, the repowering of our wind
farms began with two projects receiving feed-in-tariff approval
enabling them to begin repowering-a process that involves replacing
older wind towers and turbines with newer technology. These two
projects offer a startling illustration of the dramatic
improvements that have been achieved in wind turbine technology in
the thirteen years that have passed since these wind farms first
entered operations. Using the same physical footprint as before,
new tower and turbine technology will enable us to capture more
wind and thereby produce 80% more energy annually than what was
achievable just over a decade ago. We increasingly see the
opportunities of repowering as a way to add value to our own and
others' existing assets.
Elsewhere, across Austria's southern border in Italy, we made
good progress continuing to consolidate operating solar fields in
the market, adding 43 MW through two acquisitions. We've been
active in Italy for over eight years, seven of them in the solar
sector and have a strong operating team which has improved
availability, performance factor and fixed costs in every single
acquisition to date.
Finally, after many years of effort and close cooperation with
the Government of Kosovo and international stakeholders, we
achieved the critical milestone of "commercial close" for the
Kosovo E Re power plant, a critically needed infrastructure project
for a country that suffers with Europe's worst pollution from two
old lignite fueled power generation facilities. We will replace
these facilities with efficient facilities, which will provide the
necessary capacity to enable the Kosovarian energy market to
develop and thereby catalyze economic growth in this poor,
landlocked country. We do not take lightly our decision to sponsor
a coal fired power plant. It is not our preferred fuel. But the
needs and resources of Kosovo argue overwhelmingly in favor of
developing this plant with this fuel now. Kosovo is Europe's
poorest country and its current installed electricity generation
base is Europe's largest single source of pollution including dust,
other particulate matter, Nox, Sox and Co2.
ContourGlobal has always viewed itself as an investor
first-allocating capital to attractive opportunities in the
contracted wholesale power generation space. As such, our strategy
has been highly opportunistic, preferring to maximize risk-adjusted
returns rather than invest in assets or development projects that
meet some pre-defined, qualitative or strategic criteria. This has
served us well over the years and we continue to see significant
opportunities that will enable us to benefit from this approach. As
an established, and now public, operator that has managed investor
capital in the power business for over a decade, we have also
received interest from institutional investors to acquire stakes in
our existing assets. As we continue to grow our business, we see
increasing opportunities to be the asset manager of choice in the
global power sector.
Outlook
It is early days. Our year-end came just six weeks after our IPO
and as such we cannot say much other than that we are where we
expected to be at IPO and that 2017 continued a string of
successful years. I am encouraged by our ability to post such
strong results despite the major undertaking for the IPO. We are on
track with the commitments made to the market as part of the IPO
process-in health & safety, power plant operations and growth
through proprietary greenfield development and acquisitions. In the
new year, our announcement of the acquisition of a large portfolio
of Concentrating Solar Power assets in Spain reinforces our
expectation that we are ahead of our target to double EBITDA in
five years with no new share issuances and our pipeline of
greenfield and acquisition opportunities supports this expectation.
We move into our first full year of operating as a public company
with confidence about our ability to deliver promised results.
4 April 2018
Operational review
We continue to focus on Health and Safety, operation excellence
and delivering a strong financial performance.
As a high growth business, we're committed to financial and
operational excellence and continuous improvement. In 2017, we
gained extremely valuable experience from overcoming challenges at
some of our thermal and renewables power plants and applied this
experience to our Company globally to enhance performance.
Thermal
Maintaining consistent thermal availability
The technical availability of our thermal cluster was good and
in line with the budgeted targets for the year. Compared to
previous periods, the thermal fleet maintained consistent
availability levels, in line with the long-term Global Operations
and Maintenance (O&M) Strategy. The thermal fleet availability
factor in 2017 was lower than in 2014-2016 primarily due to a
higher amount of anticipated planned maintenance works performed in
the year, as required by the planned maintenance cycle program. In
particular, during the year maintenance campaigns were carried out
at the Arrubal, Maritsa, KivuWatt and Togo power plants with a
notable share of works performed by internal resources.
Renewable
Adding to our hydro portfolio
In 2017 we added another seven hydro power plants with 130 MW of
installed capacity to our hydro portfolio in Brazil. We have
successfully integrated them into our operating portfolio,
obtaining targeted operational synergies and facilitating internal
talent development and promotions to operate the portfolio.
Hydro portfolio II
In March 2017 we acquired our Brazil Hydro Portfolio II,
consisting of 130 MW of small hydropower plants. The acquisition
was part of our growth strategy in Brazil and increased our hydro
presence in the country to 167 MW.
Our main focus pre-acquisition was to make sure that the teams
in the plants received proper communication about ContourGlobal and
to reassure them about their importance in our operating strategy
for the country.
This led the way for the early implementation of ContourGlobal
procedures and policies. This started with Health and Safety
(H&S), compliance and internal control, but also focused on
reporting practices, continuous improvement techniques and
transferring the monitoring and
control of the newly acquired hydro plants to our centralized
control room.
In parallel to implementing our operations and maintenance
(O&M) practices, we applied our improvement plan, which focused
on managing water through automation. This led to a more efficient
use of water, as well as minimizing hydraulic losses and forced
outages, thus increasing performance.
Availability metrics for this portfolio increased from
pre-acquisition levels of 91% to 98% in 2017, while the H&S
target of Zero LTIs was successfully attained by all plants in the
portfolio.
Corporate Transactions
In 2017 we pursued our strategy of opportunistic acquisitions at
very competitive returns.
Acquisition of a thermal and a renewable portfolio in Brazil
On March 2017, we closed the acquisition of 80% of a 206 MW
Brazilian portfolio of hydro and thermal power plants. The
portfolio consists of seven hydroelectric plants totaling 130 MW in
the states of Bahia, Goiás and Rio de Janeiro and four
high-efficiency cogeneration facilities totaling 76 MW in Paraná,
Rio de Janeiro and São Paulo. The total consideration amounts to
BRL 576.8m (or $182.4m) including certain price adjustments.
Additional solar photovoltaic portfolio acquisition
In December 2017, we closed the acquisition of 19.1 MW of
operational solar photovoltaic plants in Italy from ErgyCapital
S.p.A. The plants, located in the regions of Puglia, Piemonte,
Lazio and Campania, are close to our existing Italian solar
photovoltaic portfolio and benefit from approximately 12 years of
Feed-in-Tariff. The total consideration for the shares amounted to
EUR9.6m (or $11.4m).
Acquisition of non-controlling interests which did not result in
a change of control
We completed the acquisition of 15% and 5% minority interests in
Chapada I and Chapada II projects in 2017 for a total consideration
for the shares of $9.8m. After this transaction, ContourGlobal owns
51% of those projects. We also completed the acquisition of 19.7%
minority interests in ContourGlobal Hydro Cascade CJSC (Vorotan
project) for a consideration of $16.3m. After this transaction, the
Company owns 100% of the Vorotan project.
Sale of Kramatorsk Ukrainian business
We decided to exit Ukraine by selling our Kramatorsk Ukrainian
power plant. The sale of the asset was closed in February 2018.
Health and Safety
Health and Safety is at the core of our Company. We are
committed to setting and meeting the same industry-leading
standards across all our operations wherever they may be. To this
end we have a global Target Zero - zero harm; zero injuries.
2017 Health and Safety Highlights:
-- All our operating sites achieved their targets for leading indicators - see KPIs below:
-- We achieved our lowest ever LTI (Lost Time Incident) rate, a 50% reduction from 2016.
-- TRIR (Total Recordable Incident Rate) well below the target
and also represents the historical low incidence achieved for the
Company.
-- We carried out a total of 11 Internal Health & Safety Audits in 2017.
-- We undertook three Safety Interventions, with positive results.
-- All sites implemented the Power for HSE Excellence program.
As a result, more robust procedures and policies are in place
consistently across the Company.
-- We rolled out mobile versions of our Incident and Hazard
reporting process, for iOS and Android devices.
Financial Review
In 2017, our consolidated revenue exceeded $1bn - for the first
time in the Company's history. At $1,023m, consolidated revenue was
$118m more than in 2016. Moreover, in 2017, we achieved a
significant improvement in Adjusted EBITDA - one of our key
financial profitability metrics. It went up from $440m in 2016 to
$513m in 2017. This 17% growth was primarily driven by acquisitions
in 2017 and a full year of operations of the power plants
commissioned in 2016.
Revenue
In 2017, ContourGlobal's revenue exceeded $1bn for the first
time, to reach $1,022.7m (+13%). This is another significant
milestone for the Company as we pursue our objective of continuous
growth. The rise in revenue was mainly the result of successfully
integrating our recently constructed power plants (Cap des Biches I
and II) and the businesses acquired in 2017, including the
Brazilian renewable and thermal portfolio as well as the new
Italian solar photovoltaic portfolio.
Income From Operations (IFO)
IFO is an IFRS measure derived from audited consolidated
statement of income. IFO has significantly increased during 2017,
to 2016 (+$47.2m). This performance was achieved despite the
expected increase of Depreciation and amortization expenses
(+$16.2m) resulting in particular from assets integrated to the
Group during the period. The IFO performance was primarily driven
by the full-year impact of assets which came into operation during
year 2016 and by new acquisitions closed in 2017, as well as our
close monitoring of fixed costs, in particular of employee costs,
operation and maintenance costs (excluding non-cash concession
construction costs recognized in 2016 under IFRS standards),
facility costs and professional fees which remain fairly stable
despite the growth of the Group.
Adjusted EBITDA
In 2017, we saw another year of strong growth of Adjusted
EBITDA, rising by 17% to $513.2m - above the middle of the range
announced during the listing process ($500 to $520m). Growth was
achieved in both thermal and renewables. Corporate and other costs
were reduced.
Thermal Adjusted EBITDA increased by $50.2m, or 18%, to $332.0m
for the year ended 31st December 2017, from $281.8m for the year
ended 31st December 2016. This growth was first the result of the
growth strategy, including the full-year effect of the COD of Cap
des Biches in Senegal (+$14.1m) and the acquisition of a Thermal
Solutions fleet in Brazil in March 2017 (+$12.2m). The growth in
thermal was also driven by organic growth (+$17.6m) including
revenue related to SO2 and NOX environmental investments in Maritsa
and the impact of a bad debt recovery following a positive second
instance judgment on French Caribbean assets (+$6.4m). This trend
is the result of nearly fully contracted thermal power generation
across different technologies and geographies, stable or lower
fixed costs and strong operational performance. The thermal fleet
reached an average annual availability of 92.6% in 2017, way above
the minimal contractual thresholds required for eligibility to
capacity payments. This structure allows Adjusted EBITDA to be
improved in periods of lower production by lowering fixed costs,
for instance in the Togo power plant in 2017. It also includes
recovery in the tariff of some significant environmental
investments such as an SO2 and NOX upgrade in Maritsa.
Renewable Energy Adjusted EBITDA increased by $18.0m, or 9%, to
$211.1m for the year ended 31st December 2017, from $193.1m for the
year ended 31st December 2016. Renewable fleet performance was also
positively impacted by the growth strategy after the acquisition of
seven hydro power plants in Brazil in March 2017, which contributed
$21.3m to Adjusted EBITDA growth in 2017. The change in scope also
included the full-year effect of the sale of Czech solar
photovoltaic assets in 2016, which negatively impacted Adjusted
EBITDA by $2.9m. Excluding these two acquisition and sale effects,
Renewable Adjusted EBITDA slightly decreased by $0.5m, impacted by
a combination of severe weather conditions in Peru in 1Q 2017
(flooding) and low wind and hydro conditions in Brazil combined
with technical issues in the summer in the Brazil wind fleet. This
was offset by a strong performance of the Inka wind farms from 2nd
to 4th quarters and by the strong performance of Austrian wind
farms and European solar photovoltaic farms (Italy and Slovakia)
throughout 2017. The combination of contracted revenue, diversified
energy type (solar photovoltaic, wind, hydro) and diversified
geographies allowed the Group to mitigate the lower than expected
wind and hydro resources in Brazil and, for the first quarter of
2017, in Peru.
Corporate and other costs decreased to $(29.9)m for the year
ended 31st December 2017, from $(34.6)m for the years ended 31st
December 2016. This reduction was achieved despite the continuous
growth of the company thanks to the reinforced monitoring of fixed
costs, including allocating a dedicated task force to growth
projects such as the Kosovo and Austria repowering projects, which
both reached significant milestones in 2017.
In addition, we continued to focus in 2017 on mitigating our
exposure to unexpected changes in Adjusted EBITDA. In
particular:
-- 75% of 2017 Adjusted EBITDA is denominated either in euros or
US dollars, and a portion of the Brazilian reals exposure is hedged
to US dollars.
-- No technology cluster represents more than 26% of 2017
Adjusted EBITDA and the current expected acquisition of a 250 MW
concentrated solar photovoltaic power (CSP) portfolio in Spain
would further diversify our technology profile.
-- Almost all of 2017 Adjusted EBITDA is generated under PPA
concluded with Investment Grade offtakers or non-Investment Grade
offtakers under political risk insurance. The expected acquisition
of the Spanish CSP portfolio would reinforce the Investment Grade
profile of our investments.
We believe the presentation of Adjusted EBITDA enhances investor
understanding of ContourGlobal's financial performance. It enables
investors to assess, from period to period, ContourGlobal's ability
to generate cash from operations sufficient to pay taxes, service
debt, undertake capital expenditures and pay dividends.
We use Adjusted EBITDA for business planning and to measure our
performance relative to competitors.
Adjusted EBITDA is defined as combined profit from continuing
operations for all controlled assets before income taxes, net
finance costs, depreciation and amortization, acquisition-related
expenses and specific items which have been identified and adjusted
by virtue of their size, nature or incidence, less ContourGlobal's
share of profit from unconsolidated entities accounted for on the
equity method, plus ContourGlobal's pro rata portion of Adjusted
EBITDA for such entities. In determining whether an event or
transaction is specific, we consider quantitative as well as
qualitative factors such as the frequency or predictability of
occurrence. Adjusted EBITDA is not a measurement of financial
performance under IFRS.
The following table reconciles net profit to Adjusted EBITDA for
each period presented:
Years ended December
31,
---------------------------------------------------------- ----------------------
In $ millions 2017 2016
---------------------------------------------------------- ---------- ----------
Total adjusted EBITDA 513.2 440.4
---------------------------------------------------------- ---------- ----------
Reconciliation to profit/(loss) before income tax
---------------------------------------------------------- ---------- ----------
Depreciation and Amortization (185.6) (169.4)
---------------------------------------------------------- ---------- ----------
Finance costs net (220.7) (201.9)
---------------------------------------------------------- ---------- ----------
Share of profit in joint ventures and associates 5.0 7.3
---------------------------------------------------------- ---------- ----------
Share of adjusted EBITDA in joint ventures and associates (21.6) (21.4)
---------------------------------------------------------- ---------- ----------
Acquisition related items (9.5) (12.3)
---------------------------------------------------------- ---------- ----------
Costs related to CG PLC IPO (12.7) -
---------------------------------------------------------- ---------- ----------
Other (27.5) 0.2
---------------------------------------------------------- ---------- ----------
Profit/(loss) before income tax 40.6 42.9
---------------------------------------------------------- ---------- ----------
The Company reports non-underlying items in the Income Statement
to show one-off items and to allow better interpretation of the
underlying performance of the business. In relation to the 2017 and
2016 financial years, these included one-off and non-cash items.
Adjusted EBITDA is a more accurate reflection of the business
performance of the Company and allows the Company's results to be
compared from period to period and with peer companies.
Funds from operations
Funds from operations is a non-IFRS measure that is calculated
as follows:
In $ million 2017 2016
--------------------------------- ------- -------
Cash flow from operations 420.6 532.6
--------------------------------- ------- -------
Change in Working Capital 39.4 (135.6)
--------------------------------- ------- -------
Interest paid (169.2) (154.3)
--------------------------------- ------- -------
Maintenance capital expenditure (18.7) (14.5)
--------------------------------- ------- -------
Cash distributions to minorities (16.2) (20.3)
--------------------------------- ------- -------
Funds From Operations (FFO) 255.9 207.9
--------------------------------- ------- -------
Cash conversion rate (%) 50% 47%
--------------------------------- ------- -------
Fund from operations (FFO) significantly improved in 2017,
growing by 23% compared to 2016. This performance is the
consequence of the continuous growth of Adjusted EBITDA discussed
earlier and an efficient capital structure implemented by
ContourGlobal through a mix of project level and corporate level
financing to lower its cost of capital. The cash conversion rate,
which compares FFO to Adjusted EBITDA, improved during the period
essentially as a result of the new acquisitions (new Brazilian
portfolio), the low leverage of certain highly cash generating
assets and the capacity to keep maintenance capital expenditures at
a low level despite the growth.
Leverage ratio
Year
----- ----
2016 4.8x
----- ----
2017 4.1x
----- ----
The Company leverage ratio is measured as total net indebtedness
(reported as the difference between Borrowings and Cash and Cash
Equivalent under IFRS statement of financial position) to Adjusted
EBITDA. Whenever significant, such a ratio is adjusted to reflect
the full-year impact of acquisitions or for financial debt of
projects under construction which do not generate EBITDA. No such
adjustment was made in 2017. ContourGlobal aims to maintain its
leverage ratio on the long-term in a range from 4.0x to 4.5x. As of
31st December 2017, the leverage ratio significantly dropped to
4.1x from 4.8x in the previous year. This change mainly resulted
from the primary proceeds following the listing of ContourGlobal
plc, net of costs, of approximately $368m and from the high level
of cash conversion during the period. As of 31st December 2017,
ContourGlobal has a total of $781.1m of cash and cash equivalents,
a significant portion of which sits at corporate level and is
available to finance the future growth of the Company.
One-off items
One-off items are reported under Acquisition related items and
Other income (expenses) - net in the IFRS Consolidated statement of
income. Acquisition related items essentially include
pre-acquisition costs and other incremental costs incurred as part
of completed or contemplated acquisitions. It represented a total
amount of $9.5m in 2017. The Company has mainly incurred such costs
in 2017 in relation to a number of acquisition projects in Brazil,
Mexico, Italy, Peru and Spain in particular. Other income
(expenses) of $(12.7) million are fully related in 2017 to the
non-capitalized portion of costs incurred as part of the listing of
ContourGlobal plc on the UK market. In 2016, a $15.6m income was
recognized and related to the impact of the sale of Solutions Kiev
power plant to Coca Cola Hellenic and the sale of three solar
photovoltaic energy plants in Czech Republic, representing a total
of 6.0 MW, in November 2016.
Finance costs - net
Finance costs - net increased from $201.9m in 2016 to $220.7m in
2017. Interest expenses remained relatively stable (+3.6%) at
$176.3m in 2017 despite the growth. This is mainly the result of
access to attractive project financing (for instance Cap des Biches
in 2016 and 2017) and refinancing of the corporate bond in June
2016 at a much lower cost. Other financing costs were mainly
impacted by the foreign exchange variations during the period
(Euro/US dollars and Brazilan Real/US dollar), which affected the
derivative fair value and revaluation of loans denominated in a
currency other than the functional currency at corporate level. The
increase related to foreign exchange was partially offset by
one-off costs in 2016, notably the called premium paid and
accelerated amortization of deferred financing costs following the
refinancing of ContourGlobal's $500m bond in June 2016.
Profit before tax
Profit before tax remained relatively stable at $40.6m in 2017
(-5%). Adjusted for the negative effect of listing costs and
realized and unrealized foreign exchange movements recognized in
the statement of income during the period, profit before tax would
have reached $84.3m (+94%) movement.
Taxation
The Company recognized a tax charge of $27.1m in 2017 as
compared to $22.1m in 2016 as a result of increasing taxes in
Brazil (extended portfolio), the French Caribbean and Bulgaria
(higher taxable profits).
Non-current assets
Non-current assets mainly comprise of Property, plant and
equipment and financial assets. The increase of noncurrent assets
by $284.1m to $3,203.5m as of 31st December 2017 was mainly due to
the acquisition of the Brazilian hydro and Solutions portfolio in
Brazil (+$230.7m) and solar assets in Italy (+$75.7m), as well as
change in foreign exchange, partially offset by normal depreciation
over the period.
Equity and non-controlling interests
Equity and non-controlling interests increased by $331.7m to
$773.5m as of 31st December 2017 mainly as the result of the
primary proceeds received following the listing process on the
London Stock Exchange, net of related costs recognized directly in
equity (+$382.4m), increased by profit of the period ($13.5m) and
contribution received in Brazil from non-controlling interests
($54.4m), partially offset by dividends paid to sole shareholder
prior to the listing ($75.5m), items directly recognized in Other
comprehensive income ($20.3m) and acquisition of non-controlling
interests ($9.8m).
Borrowings
Current and non-current borrowings increased by $360.2m to
$2,890.1m, mainly as a result of new or acquired borrowings
(+$367.9m, including bond tap in February 2017, financing acquired
or drawn for the acquisitions closed in Brazil in March and Italy
in December, and Cap des Biches final issuance), foreign exchange
changes (+$169.6m), partially offset by scheduled repayment
($160.5m) and early repayment of loan at Galheiros hydro plant
($13.4m).
Outlook
We remain heavily focused on developing, acquiring and operating
power generation facilities under long-term contracts providing
significant protection from the risks associated with volumes,
commodity prices or merchant energy prices. As we continue to
pursue our growth strategy, we are active on both construction and
acquisition projects. Recent developments include:
-- In December 2017, we signed an agreement with Kosovo's
government to build a 500 MW coal-fired power plant.
-- In December 2017, we signed the acquisition of a 23.4 MW
renewable portfolio consisting of 10 solar photovoltaic plants in
Italy (15 MW), one solar photovoltaic plant in Romania (7 MW) and 2
biogas plants in Italy (2 MW).
-- In February 2018, we signed the acquisition of a 250MW CSP
portfolio in Spain for a purchase price of approximately EUR806m.
The portfolio has an average remaining regulated tariff of
approximately 18 years.
Looking ahead, we will remain very active in developing and
acquiring new projects at attractive shareholder returns as we
focus on achieving the target fixed before the listing to at least
double Adjusted EBITDA by the end of 2022 without requiring new
equity.
Dividend
The declaration and payment by the Company of any future
dividends and the amounts of any such dividends will depend upon
ContourGlobal's ability to maintain its credit rating, its
investments, results, financial condition, future prospects,
profits being available for distribution, consideration of certain
covenants under the terms of outstanding indebtedness and any other
factors deemed by the Directors to be relevant at the time, subject
always to the requirements of applicable laws. The Directors expect
that dividends will be distributed bi-annually, with one-third of
expected dividends payable at the first bi-annual distribution, and
two-thirds payable at the second bi-annual distribution.
As at the date of this report, the Directors expect to pay (i) a
dividend of approximately $17.5m in May 2018 for the year ended
31st December 2017, to be approved at the 2018 annual general
meeting; and (ii) dividends totaling approximately $75.0m for the
year ending 31st December 2018, one-third of which is expected to
be paid in August 2018 and two-thirds of which is expected to be
paid in May 2019, after the 2019 annual general meeting. The
Directors also expect to increase the dividend by a minimum of high
single-digit growth rate each year over the next five years, in
line with ContourGlobal's operational scale.
Annual General Meeting (AGM)
The 2018 AGM will be held on 25th May 2018 in London. At the
AGM, shareholders will have the opportunity to ask questions of the
Board, including the Chairmen of the Board Committees.
Full details of the AGM, including explanatory notes, are
contained in the Notice of the AGM, which will be distributed at
least 20 working days before the meeting. The Notice sets out the
resolutions to be proposed at the AGM and an explanation of each
resolution.
All documents relating to the AGM are available on the Company's
website at www.ContourGlobal.com.
Financial Statements
ih
Consolidated statement of income and other comprehensive
income
Years ended December 31,
----------------------------------------------------------------------------------------- ---------------------------
In $ millions Note 2016 2017
---------------------------------------------------------------------------------- ----- ------------- ------------
Revenue 4.2 905.2 1,022.7
---------------------------------------------------------------------------------- ----- ------------- ------------
Cost of sales 4.3 (636.0) (716.3)
---------------------------------------------------------------------------------- ----- ------------- ------------
Gross profit 269.2 306.4
---------------------------------------------------------------------------------- ----- ------------- ------------
Selling, general and administrative expenses 4.3 (36.6) (31.9)
---------------------------------------------------------------------------------- ----- ------------- ------------
Other operating income - net 1.5 4.0
---------------------------------------------------------------------------------- ----- ------------- ------------
Acquisition related items 4.5 (12.3) (9.5)
---------------------------------------------------------------------------------- ----- ------------- ------------
Income from Operations 221.8 269.0
---------------------------------------------------------------------------------- ----- ------------- ------------
Other income (expenses) - net 4.6 15.6 (12.7)
---------------------------------------------------------------------------------- ----- ------------- ------------
Share of profit in associates 4.13 7.3 5.0
---------------------------------------------------------------------------------- ----- ------------- ------------
Finance income 4.7 6.9 9.8
---------------------------------------------------------------------------------- ----- ------------- ------------
Finance costs 4.7 (261.6) (186.0)
---------------------------------------------------------------------------------- ----- ------------- ------------
Realized and unrealized foreign exchange gains and (losses) and change in fair
value of derivatives 4.7 52.9 (44.5)
---------------------------------------------------------------------------------- ----- ------------- ------------
Profit before income tax 42.9 40.6
---------------------------------------------------------------------------------- ----- ------------- ------------
Income tax expenses 4.8 (22.1) (27.1)
---------------------------------------------------------------------------------- ----- ------------- ------------
Net profit 20.8 13.5
---------------------------------------------------------------------------------- ----- ------------- ------------
Profit / (Loss) attributable to
----------------------------------------------------------------------------------------------------------------------
- Group 37.5 19.4
---------------------------------------------------------------------------------- ----- ------------- ------------
- Non-controlling interests (16.7) (5.9)
---------------------------------------------------------------------------------- ----- ------------- ------------
Earnings per share (in $)
----------------------------------------------------------------------------------------------------------------------
- Basic 4.9 0.06 0.03
---------------------------------------------------------------------------------- ----- ------------- ------------
- Diluted 4.9 0.06 0.03
---------------------------------------------------------------------------------- ----- ------------- ------------
In $ millions Years ended December 31,
----------------------------------------------------------------------------------------- ---------------------------
2016 2017
----------------------------------------------------------------------------------------- ------------ -------------
Net profit for the period 20.8 13.5
----------------------------------------------------------------------------------------- ------------ -------------
Items that will not be reclassified subsequently to income statement (0.1) (0.6)
----------------------------------------------------------------------------------------- ------------ -------------
Changes in actuarial gains and losses on retirement benefit, before tax (0.1) (0.7)
----------------------------------------------------------------------------------------- ------------ -------------
Deferred taxes on changes in actuarial gains and losses on retirement benefit - 0.1
----------------------------------------------------------------------------------------- ------------ -------------
Items that may be reclassified subsequently to income statement 2.1 (19.7)
----------------------------------------------------------------------------------------- ------------ -------------
Gain on hedging transactions 2.5 5.9
----------------------------------------------------------------------------------------- ------------ -------------
Deferred taxes on gain on hedging transactions 0.7 0.6
----------------------------------------------------------------------------------------- ------------ -------------
Share of other comprehensive income of investments accounted for using the equity
method 1.1 0.5
----------------------------------------------------------------------------------------- ------------ -------------
Currency translation differences (2.2) (26.7)
----------------------------------------------------------------------------------------- ------------ -------------
Other comprehensive profit / (loss) for the period, net of tax 2.0 (20.3)
----------------------------------------------------------------------------------------- ------------ -------------
Total comprehensive profit / (loss) for the period 22.8 (6.8)
----------------------------------------------------------------------------------------- ------------ -------------
Attributable to
----------------------------------------------------------------------------------------- ---------------------------
- Group 24.4 2.8
----------------------------------------------------------------------------------------- ------------ -------------
- Non-controlling interests (1.6) (9.6)
----------------------------------------------------------------------------------------- ------------ -------------
Consolidated statement of financial position
In $ millions Note December 31, 2016 December 31, 2017
------------------------------------ ----- ------------------ ------------------
Non-current assets 2,919.4 3,203.5
------------------------------------ ----- ------------------ ------------------
Intangible assets and goodwill 4.10 118.7 137.1
------------------------------------ ----- ------------------ ------------------
Property, plant and equipment 4.11 2,114.0 2,350.3
------------------------------------ ----- ------------------ ------------------
Financial assets 4.12 604.8 617.7
------------------------------------ ----- ------------------ ------------------
Investments in associates 4.13 25.7 27.1
------------------------------------ ----- ------------------ ------------------
Other non-current assets 4.18 20.6 29.5
------------------------------------ ----- ------------------ ------------------
Deferred tax assets 4.8 35.6 41.8
------------------------------------ ----- ------------------ ------------------
Current assets 676.5 1,134.1
------------------------------------ ----- ------------------ ------------------
Inventories 4.19 31.7 54.1
------------------------------------ ----- ------------------ ------------------
Trade and other receivables 4.20 166.9 271.8
------------------------------------ ----- ------------------ ------------------
Derivative financial instruments 4.15 6.3 -
------------------------------------ ----- ------------------ ------------------
Other current assets 37.9 27.1
------------------------------------ ----- ------------------ ------------------
Cash and cash equivalents 4.21 433.7 781.1
------------------------------------ ----- ------------------ ------------------
Assets held for sale 4.11 - 13.7
------------------------------------ ----- ------------------ ------------------
Total assets 3,595.9 4,351.3
------------------------------------ ----- ------------------ ------------------
In $ millions Note December 31, 2016 December 31, 2017
-------------------------------------------------------------- ----- ------------------ ------------------
Issued capital 4.22 - 8.9
-------------------------------------------------------------- ----- ------------------ ------------------
Share premium - 380.8
-------------------------------------------------------------- ----- ------------------ ------------------
Retained earnings and other reserves (691.6) 187.3
-------------------------------------------------------------- ----- ------------------ ------------------
Invested capital 980.5 -
-------------------------------------------------------------- ----- ------------------ ------------------
Non-controlling interests 152.9 196.5
-------------------------------------------------------------- ----- ------------------ ------------------
Total equity and non-controlling interests 441.8 773.5
-------------------------------------------------------------- ----- ------------------ ------------------
Non-current liabilities 2,673.4 3,016.5
-------------------------------------------------------------- ----- ------------------ ------------------
Borrowings 4.23 2,372.6 2,672.6
-------------------------------------------------------------- ----- ------------------ ------------------
Derivative financial instruments 4.15 37.8 49.7
-------------------------------------------------------------- ----- ------------------ ------------------
Deferred tax liabilities 4.8 56.8 65.5
-------------------------------------------------------------- ----- ------------------ ------------------
Provisions 4.3 38.3 62.2
-------------------------------------------------------------- ----- ------------------ ------------------
Other non-current liabilities 4.24 167.9 166.5
-------------------------------------------------------------- ----- ------------------ ------------------
Current liabilities 480.7 548.4
-------------------------------------------------------------- ----- ------------------ ------------------
Trade and other payables 4.26 179.8 169.1
-------------------------------------------------------------- ----- ------------------ ------------------
Borrowings 4.23 157.3 217.5
-------------------------------------------------------------- ----- ------------------ ------------------
Derivative financial instruments 4.15 13.4 14.7
-------------------------------------------------------------- ----- ------------------ ------------------
Current income tax liabilities 20.1 23.7
-------------------------------------------------------------- ----- ------------------ ------------------
Provisions 4.25 33.5 10.8
-------------------------------------------------------------- ----- ------------------ ------------------
Other current liabilities 4.27 76.6 112.6
-------------------------------------------------------------- ----- ------------------ ------------------
Liabilities held for sale 4.11 - 12.9
-------------------------------------------------------------- ----- ------------------ ------------------
Total liabilities 3,154.1 3,577.8
-------------------------------------------------------------- ----- ------------------ ------------------
Total equity and non-controlling interests and liabilities 3,595.9 4,351.3
-------------------------------------------------------------- ----- ------------------ ------------------
Consolidated statement of changes in equity and non-controlling
interest
In $ millions Invested Share Share Currency Hedging Actuarial Retained Total Non-controlling Total
capital capital premium Translation reserve reserve earnings interests equity
Reserve and
other
reserves
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Balance as of
January
1, 2016 981.7 - - (16.4) (40.3) (0.9) (653.0) 271.1 146.2 417.3
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Profit / (loss)
for
the period - - - - - - 37.5 37.5 (16.7) 20.8
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Other
comprehensive
income (loss) - - - (16.5) 4.3 (0.1) (0.8) (13.1) 15.1 2.0
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Total
comprehensive
profit for the
period - - - (16.5) 4.3 (0.1) 36.7 24.4 (1.6) 22.8
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Change in
invested
capital (1.2) - - - - - - (1.2) - (1.2)
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Acquisition of
and
contribution to
non-controlling
interest not
resulting
in a change of
control - - - - - - (4.6) (4.6) 4.1 (0.5)
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Contribution
received
from
non-controlling
interest - - - - - - - - 4.3 4.3
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Other - - - - - (0.8) (0.8) (0.1) (0.9)
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Balance as of
December
31, 2016 980.5 - - (32.9) (36.0) (1.0) (621.7) 288.9 152.9 441.8
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Balance as of
January
1, 2017 980.5 - - (32.9) (36.0) (1.0) (621.7) 288.9 152.9 441.8
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Profit / (loss)
for
the period - - - - - - 19.4 19.4 (5.9) 13.5
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Other
comprehensive
loss - - - (23.0) 7.0 (0.6) - (16.6) (3.7) (20.3)
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Total
comprehensive
loss for the
period - - - (23.0) 7.0 (0.6) 19.4 2.8 (9.6) (6.8)
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Change in
invested
capital (12.8) - - - - - - (12.8) - (12.8)
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Group
restructure
as a result of
share
for share
exchange
(note 4.22) (967.7) 1,320.7 - - - - (353.0) - - -
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Capital
reduction
(note 4.22) (1,307.5) - - - - 1,307.5 - - -
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Cancellation of
deferred
shares (note
4.22) (5.9) - - - - 5.9 - - -
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Issue of shares
-
Listing on the
London
Stock Exchange
(note
4.22) - 1.6 380.8 - - - - 382.4 - 382.4
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Acquisition and
contribution
of
non-controlling
interest not
resulting
in a change of
control - - - - (1.0) - (8.0) (9.0) (0.8) (9.8)
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Acquisition of
and
contribution
received
from
non-controlling
interest - - - - - - - - 54.4 54.4
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Dividends - - - - - - (75.5) (75.5) - (75.5)
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Other - - - - - 0.2 0.2 (0.4) (0.2)
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Balance as of
December
31, 2017 - 8.9 380.8 (55.9) (30.0) (1.6) 274.8 577.0 196.5 773.5
----------------- --------- ---------- -------- ------------ -------- ---------- --------- ------- ---------------- -------
Consolidated statement of cash flows
In $ millions Note 2016 2017
------------------------------------------------------------------------------------- ------- ---------- ----------
CASH FLOW FROM OPERATING ACTIVITIES
----------------------------------------------------------------------------------------------------------------------
Net profit 20.8 13.5
------------------------------------------------------------------------------------- ------- ---------- ----------
Adjustment for:
------------------------------------------------------------------------------------- ------- ---------- ----------
Amortization, depreciation and impairment expense 4.3 169.4 185.6
------------------------------------------------------------------------------------- ------- ---------- ----------
Change in provisions (1.6) 3.8
------------------------------------------------------------------------------------- ------- ---------- ----------
Share of profit in associates 4.13 (7.3) (5.0)
------------------------------------------------------------------------------------- ------- ---------- ----------
Realized and unrealized foreign exchange gains and losses and change in fair
value of derivatives 4.7 (52.8) 44.5
------------------------------------------------------------------------------------- ------- ---------- ----------
Interest expenses - net 4.7 163.2 166.5
------------------------------------------------------------------------------------- ------- ---------- ----------
Other financial items 4.7 91.5 9.6
------------------------------------------------------------------------------------- ------- ---------- ----------
Income tax expense 4.8 22.1 27.1
------------------------------------------------------------------------------------- ------- ---------- ----------
Change in financial lease and concession assets 2.4 15.7
------------------------------------------------------------------------------------- ------- ---------- ----------
Acquisition related items 12.3 9.5
------------------------------------------------------------------------------------- ------- ---------- ----------
Other items (12.0) 6.0
------------------------------------------------------------------------------------- ------- ---------- ----------
Change in working capital 135.6 (39.4)
------------------------------------------------------------------------------------- ------- ---------- ----------
Income tax paid (14.8) (23.9)
------------------------------------------------------------------------------------- ------- ---------- ----------
Contribution received from associates 3.8 7.1
------------------------------------------------------------------------------------- ------- ---------- ----------
Net cash generated from operating activities 532.6 420.6
------------------------------------------------------------------------------------- ------- ---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
----------------------------------------------------------------------------------------------------------------------
Purchase of property, plant and equipment (58.0) (58.4)
------------------------------------------------------------------------------------- ------- ---------- ----------
Purchase of intangibles (1.5) (1.4)
------------------------------------------------------------------------------------- ------- ---------- ----------
Proceeds from the sale of property, plant and equipment 16.2 -
------------------------------------------------------------------------------------- ------- ---------- ----------
Governments grants 6.5 0.7
------------------------------------------------------------------------------------- ------- ---------- ----------
Acquisition of financial assets under concession agreements 4.12 (49.0) (35.4)
------------------------------------------------------------------------------------- ------- ---------- ----------
Acquisition of subsidiaries, net of cash received (92.2) (170.6)
------------------------------------------------------------------------------------- ------- ---------- ----------
Sale of subsidiaries, net of divested cash 9.4 -
------------------------------------------------------------------------------------- ------- ---------- ----------
Other investing activities 3.5 (15.5)
------------------------------------------------------------------------------------- ------- ---------- ----------
Net cash used in investing activities (165.0) (280.6)
------------------------------------------------------------------------------------- ------- ---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES
----------------------------------------------------------------------------------------------------------------------
Proceeds from issuance of ContourGlobal Plc. Shares 4.22 - 402.3
------------------------------------------------------------------------------------- ------- ---------- ----------
Dividends paid - (75.5)
------------------------------------------------------------------------------------- ------- ---------- ----------
Net repayment of amounts due from relating undertakings - 21.3
------------------------------------------------------------------------------------- ------- ---------- ----------
Proceeds from borrowings 889.0 310.9
------------------------------------------------------------------------------------- ------- ---------- ----------
Repayment of borrowings (845.9) (233.0)
------------------------------------------------------------------------------------- ------- ---------- ----------
Debt issuance costs - net (18.3) (1.1)
------------------------------------------------------------------------------------- ------- ---------- ----------
Interest paid (154.3) (169.2)
------------------------------------------------------------------------------------- ------- ---------- ----------
Cash distribution to non-controlling interests (20.3) (16.2)
------------------------------------------------------------------------------------- ------- ---------- ----------
Transactions with non-controlling interest holders 9.7 (9.6)
------------------------------------------------------------------------------------- ------- ---------- ----------
Other financing activities 4.7 (47.4) (69.0)
------------------------------------------------------------------------------------- ------- ---------- ----------
Net cash generated from (used in) financing activities (188.7) 160.9
------------------------------------------------------------------------------------- ------- ---------- ----------
Exchange gains (losses) on cash and cash equivalents (6.7) 46.4
------------------------------------------------------------------------------------- ------- ---------- ----------
Net change in cash and cash equivalents 172.2 347.4
------------------------------------------------------------------------------------- ------- ---------- ----------
Cash & cash equivalents at beginning of the period 261.5 433.7
------------------------------------------------------------------------------------- ------- ---------- ----------
Cash & cash equivalents at end of the period 433.7 781.1
------------------------------------------------------------------------------------- ------- ---------- ----------
Notes to the consolidated financial statements
1. General information
ContourGlobal plc (the 'Company') is a public listed company,
limited by shares, domiciled in the United Kingdom and incorporated
in England and Wales. It is the holding company for the group whose
principal activities during the period were the operation of
wholesale power generation businesses with thermal and renewables
assets in Europe, Latin America and Africa, and its registered
office is:
6th Floor
15 Berkeley Street
London
W1J 8DY
United Kingdom
Registered number: 10982736
ContourGlobal plc is listed on the London Stock Exchange.
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as endorsed by and adopted for use by the European Union (EU), IFRS
Interpretation Committee (IFRS IC) interpretations and with those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS. The consolidated financial statements have been
prepared on the going concern basis under the historical cost
convention, as modified by the revaluation of financial assets and
financial liabilities (including derivative instruments) at fair
value through profit or loss.
The preparation of the IFRS financial statements requires the
use of estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during
the year. Although these estimates are based on management's best
knowledge of the amount, event or actions, actual results may
differ from those estimates, as noted in the critical accounting
estimates and judgements in note 2.4.
The principal accounting policies applied in the preparation of
the consolidated financial statements are set out in note 2.3.
These policies have been consistently applied to the periods
presented, unless otherwise stated. The financial information
presented is at and for the financial years ended 31 December 2017
and 31 December 2016. Financial year ends have been referred to as
31 December throughout the consolidated financial statements as per
the accounting reference date of ContourGlobal plc. Financial years
are referred to as 2017 and 2016 in these consolidated financial
statements.
On 17 October 2017, the Company obtained control of the entire
share capital of ContourGlobal Worldwide Holdings S.a.r.l from
ContourGlobal L.P. via a share-for-share exchange. The principal
operating subsidiary undertakings of the group are owned directly
or indirectly by ContourGlobal Worldwide Holdings S.a.r.l. There
were no changes in rights or proportion of control exercised as a
result of this transaction. Although the share-for-share exchange
resulted in a change of legal ownership, this was a common control
transaction and therefore outside the scope of IFRS 3. In
substance, these financial statements reflect the continuation of
the pre-existing group and the financial statements have been
prepared by applying the principles of predecessor accounting. As a
result, and because the Company was incorporated in 2017, the
comparatives presented in these financial statements are the
consolidated results of ContourGlobal Worldwide Holdings S.a.r.l.
In each period, the financial statements have been prepared by
applying the principles underlying the consolidation procedures of
IFRS 10 'Consolidated Financial Statements' ("IFRS 10").
The prior year balance sheet reflects the constituent parts of
equity required to be separately disclosed under IAS 1, based upon
the consolidated position prior to the capital reorganization, and
Non-Controlling Interests. As it is not meaningful to show the
share capital for the predecessor group, the remaining equity of
the predecessor group is represented by the cumulative investment
of ContourGlobal L.P. in the group (shown as "Invested Capital").
The current period balance sheet presents the legal change in
ownership of the group, including the share capital of the Company
and the capital reorganization described in note 4.22. The revised
capital structure is also presented in the current period statement
of changes in equity, which reflects the share for share exchange,
capital reduction and cancellation of deferred shares that occurred
during the year.
As the capital reorganization occurred in 2017, it is not
meaningful to measure earnings per share based on the invested
capital of the predecessor group. In order to comply with the
requirements of IAS 33 'Earnings per Share' however, a proforma
calculation of earnings per share as at 31 December 2016 has been
disclosed, using the weighted average number of shares in issue at
31 December 2017 (note 4.9).
The financial information is prepared in accordance with IFRS
under the historical cost convention, as modified for the
revaluation of certain financial instruments. The financial
information is presented in millions of US dollars, with one
decimal. Thus numbers may not sum precisely due to rounding.
2. Summary of significant accounting policies
2.1. Application of new and revised International Financial Reporting Standards (IFRS)
No new standards were applied for the first time from 1 January
2017. There were only a few amendments of standards applying
mandatorily to periods beginning in 2017:
- Amendments to IAS 7 "Statement of Cash Flows";
The adoption of IAS7 amendment has resulted in additional
disclosures as included on note 4.23.
- Amendments to IAS 12 "Income Tax"- Recognition of Deferred Tax Assets for Unrealised Losses.
These amendments clarify how an entity should evaluate whether
there will be sufficient taxable profits against which it can
utilize a deductible temporary difference. The group already
assesses the sufficiency of future taxable profits in a manner
consistent with these amendments and hence the adoption of this
amendment has had no impact.
2.2. New standards and interpretations not yet mandatorily applicable
The Group has not applied early the following standards and
interpretations that could impact the Group and of which
application was not mandatory at 1 January 2017:
- IFRS 9 "Financial Instruments";
- IFRS 15 "Revenue from Contracts with Customers";
- IFRS 16 "Leases";
- IFRIC 22 "Foreign Currency Transactions and Advance Consideration".
- IFRIC 23 "Uncertainty over income tax treatments".
Among the above mentioned standards, the following might affect
the ContourGlobal's future consolidated financial information:
Standard/Interpretation Description
(application
date for the
Group)
IFRS 9 IFRS 9, Financial Instruments IFRS
Financial instruments 9 is effective from 1 January 2018.
(January 1, In summary, it has an impact on three
2018) areas:
- Classification and measurement
- the rules based approach of IAS
39 is replaced by principles based
approach with refers to the asset's
cash flow characteristics and the
business model in which it is held.
- Impairment of financial assets
- this moves to a more forward looking
expected loss model.
- Hedge accounting - the changes
align the accounting treatment with
the Company's risk management activities.
As a result of the adoption of this
standard, the measurement basis for
most of the Group's financial assets
is unchanged, although the classification
and corresponding disclosures of
financial assets in the 2018 Annual
Report and Accounts will be impacted.
The changes to impairment and hedge
accounting are not expected to have
a material impact on the results
of the Group.
IFRS 15 IFRS 15, Revenue from Contracts with
Revenue from Customers and clarifications. The
Contracts with Group will adopt IFRS 15, Revenue
Customers from Contracts with Customers, from
(January 1, 1 January 2018. IFRS 15 introduces
2018) a five-step model to be applied to
all contracts with customers. In
addition, a number of new disclosures
will be required. When IFRS 15 is
adopted in 2018, the Group will use
the modified retrospective approach.
To determine the impact of IFRS 15
on the Group, management grouped
power purchase agreements with similar
contractual terms, and performed
a detailed revenue accounting assessment
for each group. This exercise identified
the following main impacts for the
Group as being:
i) An increase in revenue from grossing
up certain costs that are currently
being netted down, which will result
in higher revenue and a corresponding
increase in cost of sales;
ii) An additional performance obligation
being identified for service concession
contracts; and
iii) A minor modification to a contract
in Maritsa that will be recognized
prospectively.
The impact of IFRS 15 on revenue
in 2018 is expected to be an increase
of between $14m and $20m, the vast
majority of which is driven by the
grossing up of certain costs on the
Arrubal contract in Spain, for which
costs will be grossed up for the
same amount. IFRS 15 is not expected
to have a material impact on the
profitability (adjusted EBITDA, income
from operations or profit before
tax) of the Group.
IFRS 16 This standard relates to the accounting
Leases for leases and will be compulsory
(January 1, applicable from January 1, 2019.
2019) This standard will mainly change
the lease accounting for lessees
with the recognition of an asset
and a liability which represents
the right of use granted by the lessor.
ContourGlobal is still assessing
the impacts where it acts as lessee
or lessor.
IFRIC 22 This standard relates to purchase
Foreign currency or sale transactions that must be
transactions translated at the exchange rate prevailing
and advance on the date the asset or liability
consideration is initially recognized. In practice,
(January 1, this is usually the date on which
2018) the advance payment is paid or received.
In the case of multiple advances,
the exchange rate must be determined
for each payment and collection transaction.
The interpretation is mandatory for
financial years beginning on or after
January 1, 2018, subject to its adoption
by the European Union. Its implementation
is not expected to have a significant
impact on the Group's consolidated
financial statements.
IFRIC 23 This standard clarifies the recognition
Uncertainty and valuation principles applicable
over income to income
tax treatments tax risks. These risks arise when
(January 1, there is uncertainty related to a
2019) tax
position adopted by the Group that
could be challenged by the
tax administration.
This interpretation is applicable
for financial years beginning on
January 1, 2019, subject to its
adoption by the European Union and
subject to retrospective application,
with or without comparative
information restatement for the
first year of application. ContourGlobal
is still assessing the impacts.
2.3. Summary of significant accounting policies
Principles of consolidation
The consolidated financial statements include both the assets
and liabilities, and the results and cash flows, of the Group and
its subsidiaries and the Group's share of the results and the
Group's investments in associates.
Inter-company transactions and balances between Group companies
are eliminated.
(a) Subsidiaries
Entities over which the Group has the power to direct the
relevant activities so as to affect the returns to the Group,
generally through control over the financial and operating
policies, are accounted for as subsidiaries. Interests acquired in
entities are consolidated from the date the Group acquires
control.
(b) Associates
Where the Group has the ability to exercise significant
influence over entities, generally accompanying a shareholding of
between 20% and 50% of the voting rights, they are accounted for as
associates. The results and assets and liabilities of associates
are incorporated into the consolidated financial statements using
the equity method of accounting. The Group's investment in
associates includes goodwill identified on acquisition.
The Group determines at each reporting date whether there is
objective evidence that the investment in the associate is
impaired. If there is evidence, the Group calculates the amount of
impairment as the difference between the recoverable amount of the
investment in the associate and its carrying value and recognizes
this amount in 'share of profit of associates' in the consolidated
statement of income.
Business combinations
The acquisition consideration is measured at fair value which is
the aggregate of the fair values of the assets transferred, the
liabilities incurred or assumed and the equity interests in
exchange for control. The consideration transferred includes the
fair value of any asset or liability resulting from a contingent
consideration arrangement. Any contingent consideration to be
transferred by the Group is recognized at fair value at the
acquisition date. Subsequent changes to the fair value of the
contingent consideration are recognized in the statement of income.
Where the consideration transferred, together with the
non-controlling interest, exceeds the fair value of the net assets,
liabilities and contingent liabilities acquired, the excess is
recorded as goodwill. Acquisition related costs are expensed as
incurred and classified as "Acquisition related items" in the
consolidated statement of income.
Goodwill is capitalized as a separate item in the case of
subsidiaries and as part of the cost of investment in the case of
associates. Goodwill is denominated in the currency of the
operation acquired.
Changes in ownership interests in subsidiaries without change of
control
Transactions with non-controlling interests that do not result
in a gain or loss of control are accounted for as equity
transactions - that is, as transactions with the owners in their
capacity as owners. The difference between fair value of any
consideration paid and the relevant share acquired of the carrying
value of net assets of the subsidiary is recorded in equity.
Functional and presentation currency and currency
translation
The assets and liabilities of foreign undertakings are
translated into US dollars, the Group's presentation currency, at
the year-end exchange rates. The results of foreign undertakings
are translated into US dollars at the relevant average rates of
exchange for the year. Foreign exchange differences arising on
retranslation are recognized directly in the currency translation
reserve.
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies are
recognized at period end exchange rates in the statement of income
line which most appropriately reflects the nature of the item or
transaction.
The following table summarizes the main exchange rates used for
the preparation of the consolidated financial statements of
ContourGlobal:
CLOSING RATES AVERAGE RATES
------------- -------------------------- --------------------------
Year ended December 31, Year ended December 31,
------------- -------------------------- --------------------------
Currency 2016 2017 2016 2017
------------- ------------ ------------ ------------ ------------
EUR / USD 1.0517 1.2005 1.1070 1.1299
------------- ------------ ------------ ------------ ------------
BRL / USD 0.3069 0.3024 0.2884 0.3134
------------- ------------ ------------ ------------ ------------
BGN / USD 0.5377 0.6138 0.5658 0.5774
------------- ------------ ------------ ------------ ------------
Operating and Reportable Segments
Operating segments are reported based on the organizational
structure and financial information provided to the Chief Executive
Officer, who represents the chief operating decision-maker
("CODM"). The Group's organizational structure reflects the
different electricity generation methods, being Thermal and
Renewables. A third category, Corporate & Other, primarily
reflects costs for certain centralized functions including
executive oversight, corporate treasury and accounting, legal,
compliance, human resources, IT, political risk insurance and
facilities management and certain technical support costs that are
not allocated to the segments for internal management reporting
purposes.
Revenue recognition
Revenue represents amounts receivable for goods or services
provided in the normal course of business excluding amounts
collected on behalf of third parties such as sales taxes, goods and
services taxes and value added taxes.
Revenue is recognized when it is probable that future economic
benefits will flow to the entity and these benefits can be measured
reliably. Revenue is measured at the fair value of the
consideration received or receivable.
The Group revenue is mainly generated from the following:
(i) revenue from power sales;
(ii) revenue from operating leases;
(iii) revenue from financial assets (concession and finance
lease assets); and
(iv) construction revenue from concession arrangements.
Certain Group power plants sell their output under Power
Purchase Agreements ("PPAs") and other long-term arrangements.
Under such arrangements it is usual for the Group to receive
payment for the provision of electrical capacity or availability
whether or not the offtaker requests the electrical output
(capacity payments) and for the variable costs of production
(energy payments). In such situations, revenue is recognized in
respect of capacity payments as:
a) Service income in accordance with the contractual terms, to
the extent that the capacity has been made available to the
contracted offtaker during the period. This income is recognized as
part of revenue from power sales;
b) Financial return on the operating financial asset where the
PPA is considered to be or to contain a finance lease or where the
contract is considered to be a financial asset under interpretation
IFRIC 12: "Service Concession Arrangements".
Under finance lease arrangements, those payments which are not
included within minimum lease payments are accounted for as service
income (outlined in (a) above).
Energy payments under PPAs are recognized in revenue in all
cases as the contracted output is delivered.
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
asset to that asset's net carrying amount on initial
recognition.
Acquisition related items
Acquisition related items include notably pre-acquisition costs
such as various professional fees and due diligence costs,
earn-outs and other related incremental costs incurred as part of
completed or contemplated acquisitions.
Finance income and finance costs
Finance income primarily consists of interest income on funds
invested. Finance costs primarily comprise interest expense on
borrowings, unwinding of the discount/step up on financial assets
and provisions, interests and penalties that arise from late
payments of suppliers or taxes, swap margin calls, bank charges,
changes in fair value of the debt payable to non-controlling
interests in our Bulgarian power plant, changes in the fair value
of derivatives not qualifying for hedge accounting and unrealized
& realized foreign exchange gains and losses.
Property, plant and equipment
Initial recognition and subsequent measurement
Property, plant and equipment are stated at historical cost,
less depreciation, or at fair value if acquired in the context of a
business combination. Historical cost includes an initial estimate
of the costs of dismantling and removing the item and restoring the
site on which it is located, when the entity has a present legal or
constructive obligation to do so.
Property, plant and equipment acquired under finance leases is
carried at the lower of market value and the present value of the
related minimum lease payments.
Costs relating to major inspections and overhauls are
capitalized. Minor replacements, repairs and maintenance, including
planned outages to our power plants that do not improve the
efficiency or extend the life of the respective asset, are expensed
as incurred.
The Group capitalizes certain direct preconstruction costs
associated with its power plant project development activities when
it has been determined that it is more likely than not that the
opportunity will result in an operating asset. Factors considered
in this determination include (i) the availability of adequate
funding, (ii) the Group is likely to be awarded with the project or
the barriers are not likely to prohibit closing the project, and
(iii) there is an available market and the regulatory,
environmental and infrastructure requirements are likely to be met.
Capitalized costs include initial engineering, environmental and
technical feasibility studies, legal costs, permitting and
licensing and direct internal staff salary and travel costs, among
others. Capitalized costs are charged to expense if a project is
abandoned or if the conditions stated above are not met.
Construction work in progress ("CWIP") assets are transferred out
of CWIP when construction is substantially completed and the power
plant achieves its commercial operations date ("COD"), at which
point depreciation commences.
Depreciation
Property, plant and equipment are depreciated using the
straight-line method over the following estimated useful lives:
Generating plants and equipment Useful lives as of December 31, 2016 and 2017
---------------------------------------------------- ----------------------------------------------
Lignite, coal, gas, oil, biomass power plants 12 to 40 years
---------------------------------------------------- ----------------------------------------------
Hydro plants and equipment 25 to 75 years
---------------------------------------------------- ----------------------------------------------
Wind farms 16 to 25 years
---------------------------------------------------- ----------------------------------------------
Tri and quad-generation combined heat power plants 15 years
---------------------------------------------------- ----------------------------------------------
Solar plants 14 to 22 years
---------------------------------------------------- ----------------------------------------------
Other property, plant and equipment 3 to 10 years
---------------------------------------------------- ----------------------------------------------
The range of useful lives is due to the diversity of the assets
in each category.
The asset residual values and useful lives are reviewed at least
annually and if expectations differ from previous estimates.
Intangible assets and goodwill
Goodwill
For the purpose of impairment testing, goodwill acquired in a
business combination is allocated to each of the cash generating
units ("CGUs"), or groups of CGUs that is expected to benefit from
the synergies of the combination. Each unit or group of units
represents the lowest level within the entity at which the goodwill
is monitored for internal management purposes.
The reporting units (which generally correspond to power plants)
or group of reporting units have been identified as its
cash-generating units.
Goodwill impairment reviews are undertaken at least
annually.
Intangible assets
Intangible assets include licenses and permits when specific
rights and contracts are acquired. Intangible assets acquired in a
business combination are recognized at fair value at the
acquisition date. When the power plant achieves its commercial
operations date, the related intangible assets are amortized using
the straight-line method over the life of the PPA, generally over
20 years (excluding software). Software is amortized over 3 years.
A different amortization method may be used if it better reflects
the pattern of economic benefits derived from the asset over
time.
Impairment of non-financial assets
Assets that are subject to amortization are reviewed for
impairment whenever events or changes in circumstances indicate
that carrying values may not be recoverable. An impairment loss is
recognized for the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset's fair value less costs of disposal (market
value) and value in use determined using estimates of discounted
future net cash flows of the asset or group of assets to which it
belongs. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units).
Financial assets
Classification of financial assets
The Group classifies its financial assets in the following
categories: at fair value through statement of income and loans and
receivables. The classification depends on the purpose for which
the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.
(a) Financial assets at fair value through statement of
income
Financial assets have been acquired principally for the purpose
of selling, or being settled, in the short term. Financial assets
at fair value through statement of income are "Restricted cash",
"Cash and cash equivalents" and derivatives held for trading unless
they are designated as hedges.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except those that
mature greater than 12 months after the end of the reporting
period, which are classified in non-current assets. The Group's
loans and receivables comprise "Trade and other receivables" and
"Financial assets" in the consolidated statement of financial
position.
Recognition and measurement of financial assets
Regular purchases and sales of financial assets are recognized
on the trade-date, which is the date on which the Group commits to
purchase or sell the asset. Financial assets carried at fair value
through statement of income are initially recognized at fair value,
and transaction costs are expensed in the statement of income.
Financial assets are derecognized when the rights to receive cash
flows from the investments have expired or have been transferred
and the Group has transferred substantially all risks and rewards
of ownership. Loans and receivables are subsequently carried at
amortized cost using the effective interest method.
Impairment of financial assets
The Group assesses loans and receivables at the end of each
reporting period to determine whether there is objective evidence
that a financial asset is impaired.
The amount of the loss is measured as the difference between the
asset's carrying amount and the present value of estimated future
cash flows (excluding future credit losses that have not been
incurred) discounted at the financial asset's original effective
interest rate. The carrying amount of the asset is reduced and the
amount of the loss is recognized in the consolidated statement of
income. If a loan or held-to-maturity investment has a variable
interest rate, the discount rate for measuring any impairment loss
is the current effective interest rate determined under the
contract.
Unless otherwise stated carrying value approximates to fair
value for all financial assets.
Derivative financial instruments and hedging activities
As part of its overall foreign exchange and interest rate risk
management policy, the Group enters into various hedging
transactions involving derivative instruments.
In connection with the Group's hedging policy, the Group uses
forward exchange contracts for currency risk management as well as
foreign exchange options, interest rate swap contracts for interest
rate risk management in order to hedge certain forecasted
transactions and to manage its anticipated cash payments under its
variable rate financing by converting a portion of its variable
rate financing to a fixed rate basis through the use of interest
rate swap agreements, and a cross currency swap contract for both
currency and interest rate risk management.
Items qualifying as hedges
The Group formally documents all relationships between hedging
instruments and hedged items, as well as its risk management
objectives and strategies for undertaking hedge transactions and
the method used to assess hedge effectiveness. Hedging transactions
are expected to be highly effective in achieving offsetting changes
in cash flows and are regularly assessed to determine that they
actually have been highly effective throughout the financial
reporting periods for which they are implemented.
When derivative instruments qualify as hedges for accounting
purposes, as defined in IAS 39 "Financial instruments: recognition
and measurement", they are accounted for as follows:
- The effective portion of the gain or loss on an outstanding
hedge is recognized directly in the consolidated statement of other
comprehensive income ("OCI"), while any ineffective portion is
recognized immediately in the consolidated statement of income.
- Amounts recognized directly in OCI are reclassified to the
consolidated statement of income when the hedged transaction
affects the consolidated statement of income.
- If a forecast transaction or firm commitment is no longer
expected to occur, amounts previously recognized in OCI are
reclassified to the consolidated statement of income as Finance
income or Finance costs.
If a hedging instrument expires or is sold, terminated or
exercised without replacement or rollover, or if its designation as
a hedge is revoked, amounts previously recognized in OCI remain in
accumulated OCI until the forecast transaction or firm commitment
occurs, at which point they are reclassified to the consolidated
statement of income.
Concession arrangements
The interpretation IFRIC 12 governs accounting for concession
arrangements. An arrangement within the scope of IFRIC 12 is one
which involves a private sector entity (known as 'an operator')
constructing infrastructure used to provide a public service, or
upgrading it (for example, by increasing its capacity) and
operating and maintaining that infrastructure for a specified
period of time.
IFRIC 12 applies to public-to-private service concession
arrangements if:
(a) The 'grantor' (i.e. the public sector entity - the offtaker)
controls or regulates what services the operator must provide with
the infrastructure, to whom it must provide them, and at what
price, and
(b) The grantor controls through ownership, beneficial
entitlement or otherwise any significant residual interest in the
infrastructure at the end of the term of the arrangement.
Infrastructure used in a public-to-private service concession
arrangement for its entire useful life (a whole of life asset) is
within the scope of IFRIC 12 if the conditions in a) are met.
The Group entered into three concession arrangements under the
scope of IFRIC 12 in Rwanda, Senegal and Togo, which comply with
the 'financial asset' model requirements. Under this model, the
operator recognizes a financial asset, attracting interest in
consideration for the services it provides (design, construction,
etc.). This model is based on input assumptions such as budgets and
cash flow forecasts. Any change in these assumptions may have a
material impact on the measurement of the recoverable amount and
could result in reducing the value of the asset. Such financial
assets are recognized in the Statement of Financial Position in an
amount corresponding to the fair value of the infrastructure on
first recognition and subsequently at amortized cost. The
receivable is settled by means of the grantor's payments received.
The financial income calculated on the basis of the effective
interest rate, equivalent to the project's internal rate of return,
is reflected within the 'Revenue from concession and finance lease
assets' line in the note 4.2 'Revenue' to the consolidated
financial statement. Cash outflows relating to the acquisition of
financial assets under concession agreements are presented as part
of Cash flow from investing activities. Net cash inflows generated
by the financial assets' operations are presented as part of Cash
Flow from operating activities.
The Group acquired a concession arrangement under the scope of
IFRIC 12 in Brazil which complies with the 'intangible asset' model
requirements. Under this model, the operator recognizes an
intangible asset in accordance with IAS 38 to the extent that it
has a right to charge users of the public service. Such intangible
asset is recognized in the Statement of Financial Position at cost
on first recognition and subsequently measured over its useful
economic life at cost less accumulated amortization and impairment
losses. Net cash inflows generated by the intangible asset's
operations are presented as part of Cash Flow from operating
activities.
Leases
The determination of whether an arrangement is, or contains, a
lease is based on the substance of the arrangement and requires an
assessment of whether the fulfilment of the arrangement is
dependent on the use of a specific asset or assets and whether the
arrangement conveys the right to use the asset, or assets.
Accounting for arrangements that contain a lease as lessee
(i) Accounting for finance leases as lessee
Leases of property, plant and equipment where the Group holds
substantially all the risks and rewards of ownership are classified
as finance lease and such assets are capitalized at the
commencement of the lease term at the lower of the present value of
the minimum lease payments or the fair value of the leased asset.
The asset is depreciated over the shorter of the useful life of the
asset and the lease term. The obligations relating to finance
leases, net of finance charges in respect of future periods, are
recognized as liabilities. Leases are subsequently measured at
amortized cost using the effective interest method.
(ii) Accounting for operating leases as lessee
Leases where a significant portion of the risks and rewards are
held by the lessor are classified as operating leases. Rentals are
charged to the statement of income on a straight line basis over
the period of the lease.
Accounting for arrangements that contain a lease as lessor -
Power purchase arrangements ("PPA") and other long-term contracts
may contain, or may be considered, leases where the fulfilment of
the arrangement is dependent on the use of a specific asset such as
a power plant and the arrangement conveys to the customer the right
to use that asset. Such contracts may be identified as either
operating leases or finance leases.
(i) Accounting for finance leases as lessor
Where the Group determines that the contractual provisions of a
long-term PPA contain, or are a lease and result in the offtaker
assuming the principal risks and rewards of ownership of the power
plant, the arrangement is a finance lease. Accordingly, the assets
are not reflected as PP&E and the net investment in the lease,
represented by the present value of the amounts due from the lessee
is recorded as a Financial asset as a finance lease receivable.
The capacity payments as part of the leasing arrangement are
apportioned between minimum lease payments (comprising capital
repayments relating to the provision of the plant and finance
income) and service income. The finance income element is
recognized as revenue, using a rate of return specific to the plant
to give a constant rate of return on the net investment in each
period. Finance income and service income are recognized in each
accounting period at the fair value of the Group's performance
under the contract.
(ii) Accounting for operating leases as lessor
Where the Group determines that the contractual provisions of
the long-term PPA contain, or are, a lease, and result in the Group
retaining the principal risks and rewards of ownership of the power
plant, the arrangement is an operating lease. For operating leases,
the power plant is, or continues to be, capitalized as property,
plant and equipment and depreciated over its useful economic life.
Rental income from operating leases is recognized on a
straight-line basis over the term of the arrangement.
Inventories
Inventories consist primarily of power generating plant fuel and
spare parts that are held by the Group for its own use. Inventories
are stated at the lower of cost, using a first-in, first-out
method, and net realizable value, which is the estimated selling
price in the ordinary course of business, less applicable selling
expenses.
Emission quotas
Some companies of the Group emit CO2 and have as a result
obligations to buy emission quotas on the basis of local
legislation. The emissions made by the company emitting CO2 which
are in excess of any allocated quotas are purchased at free market
and shown as inventories before their effective use. If emissions
are higher than allocated quotas, the company recognizes an expense
and respective liability for those emissions. At the end of each
reporting period, CO2 quotas that remain available to the company
are revalued based on available market prices.
Trade receivables
Trade receivables are recognized initially at fair value, which
is usually the invoiced amount, and subsequently carried at
amortized cost using the effective interest method, less provision
for impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and current
balances with banks and similar institutions and short-term
investments, all of which are readily convertible to cash and are
subject to insignificant risk of changes in value and have an
original maturity of three months or less. Bank overdrafts are
included within current Borrowings.
Share capital and share premium
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction from the proceeds.
The premium received on the issue of shares in excess of the
nominal value of shares is credited to the share premium account
and included within shareholders' equity.
Restricted cash
Restricted cash includes cash balances which have restrictions
as to withdrawal or usage of funds. In particular, maintenance
reserves held for the purpose of covering long-term major
maintenance and long-term deposits kept as collateral to cover
decommissioning obligations are excluded from cash and cash
equivalents and included in non-current assets.
Provisions
Provisions principally relate to decommissioning, maintenance,
environmental, tax and legal obligations and which are recognized
when there is a present obligation as a result of past events; it
is probable that an outflow of resources will be required to settle
the obligation; and the amount has been reliably estimated.
Provisions are re-measured at each statement of financial
position date and adjusted to reflect the current best estimate.
Any change in present value of the estimated expenditure
attributable to changes in the estimates of the cash flow or the
current estimate of the discount rate used are reflected as an
adjustment to the provision. The increase in the provisions due to
passage of time are recognized as finance costs in the Consolidated
statement of income.
Financial liabilities
a) Borrowings
Borrowings are recognized initially at fair value of amounts
received, net of transaction costs. Borrowings are subsequently
measured at amortized cost using the effective interest method; any
difference between the proceeds (net of transaction costs) and the
redemption value is recognized in the statement of income over the
period of the borrowings using the effective interest method.
b) Trade and other payables
Financial liabilities within trade and other payables are
initially recognized at fair value, which is usually the invoiced
amount, and subsequently carried at amortized cost using the
effective interest method.
Unless otherwise stated carrying value approximates to fair
value for all financial liabilities.
Government grants
Grants from the government are recognized where there is a
reasonable assurance that the conditions associated with the grants
have been complied with and the grants will be received.
Current and deferred income tax
The tax expense for the period comprises current and deferred
tax. Tax is recognized in the statement of income, except to the
extent that it relates to items recognized in other comprehensive
income. In this case, the tax is also recognized in other
comprehensive income.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the statement of
financial position date in the countries where the Group and its
subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognized on temporary differences
arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. However,
deferred tax liabilities are not recognized if they arise from the
initial recognition of goodwill; deferred income tax is not
recognized if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantively enacted by
the statement of financial position date and are expected to apply
when the related deferred income tax asset is realized or the
deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilized.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
2.4. Critical accounting estimates and judgments
The preparation of the consolidated financial statements in line
with the Group's accounting policies set out in note 2.3 involves
the use of judgment and/or estimation. These judgments and
estimates are based on management's best knowledge of the relevant
facts and circumstances, giving consideration to previous
experience, and are regularly reviewed and revised as necessary.
Actual results may differ from the amounts included in the
consolidated financial statements. The estimates and judgments that
have the most significant effect on the carrying amounts of assets
and liabilities are presented below.
Critical accounting estimates
Recoverable amount of property, plant and equipment
Where an impairment trigger has been identified (see critical
accounting judgements section), the Group makes significant
judgments in its impairment evaluations of long-lived assets. The
determination of the recoverable amount is typically the most
judgmental part of an impairment evaluation. The recoverable amount
is the higher of (i) an asset's fair value less costs of disposal
(market value), and (ii) value in use determined using estimates of
discounted future net cash flows ("DCF") of the asset or group of
assets to which it belongs.
The Group generally uses value in use to derive the recoverable
amount of property, plant and equipment. Management applies
considerable judgment in selecting several input assumptions in its
DCF models, including discount rates and capacity / availability
factors. These assumptions are consistent with the Group's internal
budgets and forecasts for such valuations. Examples of the input
assumptions that budgets and cash-flow forecasts are sensitive to
include macroeconomic factors such as growth rates, inflation,
exchange rates, and, in the case of renewables plants,
environmental factors such as wind, solar and water resource
forecast. Any changes in these assumptions may have a material
impact on the measurement of the recoverable amount and could
result in impairing the tested assets. See note 4.11 for further
information on the impairment tests performed.
Provisions
The Group makes provisions when an obligation exists, resulting
from a past event and it is probable that cash will be paid to
settle it, but the exact amount of cash required can only be
estimated on a reliable basis. Major provisions are detailed in
note 4.25. The main estimates relate to site decommissioning and
maintenance costs, and environmental remediation for various sites
owned.
Site decommissioning, maintenance and environmental provisions
are recognized based on management's assessment of future costs
which would need to be incurred in accordance with existing
legislation or contractual obligations to restore the sites or make
good any environmental damage. These costs are measured at the
present value of the future expenditures expected to be required to
settle the obligation using a pre-tax discount rate which reflects
current market assessments of the time value of money and the risks
specific to the obligation. Management apply judgement in the
estimation of future cash flows to settle these obligations and in
the estimation of an appropriate pre-tax discount factor. The
pre-tax discount rate used varies from 5.0% to 11.0%. If this was
to decrease by 1% it would increase decommissioning, environmental
and maintenance provisions by $3.2 million.
Fair value of assets acquired and liabilities assumed in a
business combination
Business combinations are recorded in accordance with IFRS 3
using the acquisition method. Under this method, the identifiable
assets acquired and the liabilities assumed are recognized at their
fair value at the acquisition date.
Therefore, through a number of different approaches and with the
assistance of external independent valuation experts for
acquisitions as considered appropriate by management, the Group
identifies what it believes is the fair value of the assets
acquired and liabilities assumed at the acquisition date. These
valuations involve the use of judgement and include a number of
estimates. Judgement is exercised in identifying the most
appropriate valuation approach which is then used to determine the
allocation of fair value. The group typically uses one of the cost
approach, the income approach and the market approach.
Each of these valuation approaches involve the use of estimates
in a number of areas, including the determination of cash flow
projections and related discount rates, industry indices, market
prices regarding replacement cost and comparable market
transactions. While the Group believes that the estimates and
assumptions underlying the valuation methodologies are reasonable,
different assumptions could result in different fair values.
Taxes
Significant judgment is sometimes required in determining the
accrual for income taxes as there are many transactions and
calculations for which the ultimate tax determination is uncertain
during the ordinary course of business. The Group recognizes
liabilities based on estimates of whether additional taxes will be
due. These areas include, but are not limited to, the deductibility
of interest on certain borrowings used to finance acquisitions made
by the Group and the price at which goods and services are
transferred between Group companies. Where the final tax outcome of
these matters is different from the amounts that were recorded,
such differences will impact the current and deferred income tax
provisions, results of operations and possibly cash flows in the
year in which such determination is made.
Deferred tax assets are recognized on tax loss carry-forwards
when it is probable that taxable profit will be available against
which the tax loss carry-forwards can be utilized. Estimates of
taxable profits and utilizations of tax loss carry-forwards are
prepared on the basis of profit and loss forecasts as included in
the medium-term business plan and, if necessary, on the basis of
additional forecasts.
Critical accounting judgements
Assessing property, plant and equipment for impairment
triggers
The Group's property, plant and equipment are reviewed for
indications of impairment (an impairment "trigger"). Judgement is
applied in determining whether an impairment trigger has occurred,
based on both internal and external sources. External sources may
include: market value declines, negative changes in technology,
markets, economy, or laws. Internal sources may include:
obsolescence or physical damage, or worse economic performance than
expected, including from adverse weather conditions for renewable
plants. In the current year, impairment triggers were noted for
Brazilian wind power plants and Brazilian hydro power plants (see
note 4.11).
Accounting for long-term power purchase agreements and related
revenue recognition
When power plants sell their output under long-term power
purchase agreements ("PPA"), it is usual for the operator of the
power plant to receive payment (known as a capacity payment) for
the provision of electrical capacity whether or not the offtaker
requests electrical output. There is a degree of judgement as to
whether a long-term contract to sell electrical capacity
constitutes a service concession arrangement, a form of lease, or a
service contract. This determination is made at the inception of
the PPA, and is not required to be revisited in subsequent periods
under IFRS, unless the agreement is renegotiated.
Given that the fulfilment of the PPAs is dependent on the use of
a specified asset, the key judgement in determining if the PPA
contains a lease is the assessment of whether the PPA conveys a
right for the offtaker to use the assets. In practice, the key
criteria in assessing if that right exists is the judgement whether
there is only a remote possibility that parties other than the
offtaker will take more than an insignificant amount of the power
output and the price the offtaker will pay is neither fixed nor at
market price rates.
In assessing whether the PPA contains a service concession, the
Group considers whether the arrangement (i) bears a public service
obligation; (ii) has prices that are regulated by the offtaker; and
(iii) the residual interest is transferred to the offtaker at an
agreed value.
All other PPAs are determined to be service contracts.
Concession arrangements - For those agreements which are
determined to be a concession arrangement, there are judgements as
to whether the infrastructure should be accounted for as an
intangible asset or a financial asset depending on the nature of
the payment entitlements established in the agreement.
Concession arrangements determined to be a financial asset - The
Group recognizes a financial asset when demand risk is assumed by
the grantor, to the extent that the contracted concession holder
has an unconditional right to receive payments for the asset. The
asset is recognized at the fair value of the construction services
provided. The fair value is based on input assumptions such as
budgets and cash flow forecasts. The inputs include in particular
the budget for fixed and variable costs. Any change in these
assumptions may have a material impact on the measurement of the
recoverable amount and could result in reducing the value of the
asset. The financial asset is subsequently recorded at amortized
cost calculated according to the effective interest rate method.
Revenue for operating and managing the asset is recorded as revenue
in each period.
Leases - For those arrangements determined to be or to contain
leases, further judgment is required to determine whether the
arrangement is finance or operating lease. This assessment requires
an evaluation of where the substantial risks and rewards of
ownership reside, for example due to the existence of a bargain
purchase option that would allow the offtaker to buy the asset at
the end of the arrangement for a minimal price.
3. Major events and changes in the scope of consolidation
3.1. 2016 transactions
Sale of Czech assets
On November 14, 2016, the Group sold 100% of its stake in Czech
solar assets representing a total of 6.0 MW. The sale resulted in a
gain in the statement of income of $3.0 million.
The cession contributed to consolidated revenue and net result
for respectively $3.4 million and $1.2 million.
Termination of CG Solutions Kiev
In August 2016, Coca Cola Beverages Ukraine, the offtaker of the
Ukrainian Solutions power plant under the master agreement signed
with Coca-Cola Hellenic, terminated the local agreement between
ContourGlobal Solutions Ukraine LLC and Coca Cola Beverages Ukraine
resulting in the transfer of the ownership of the power plant and
spare parts to Coca Cola Beverages Ukraine. Consequently, and as
contractually agreed in such situation, ContourGlobal Solutions
Ukraine LLC sold the related assets to the offtaker and received
the remaining discounted cash flows due under the Power Purchase
Agreement, resulting in a gain in the statement of income of $12.1
million.
The cession contributed to consolidated revenue and net result
for respectively $2.7 million and $(2.7) million.
3.2. 2017 transactions
Acquisition of a thermal and a renewable portfolio in Brazil
On March 17, 2017, the Group closed the acquisition of 80% of a
206 MW Brazilian portfolio. The portfolio consists of seven
hydroelectric plants totaling 130 MW in the states of Bahia, Goiás
and Rio de Janeiro and four high-efficiency cogeneration facilities
("Solutions") totaling 76 MW in Paraná, Rio de Janeiro and São
Paulo. The total consideration amounts to BRL 576.8 million (or
$182.4 million) including certain price adjustments. A total of BRL
547.3 million (or $173.1 million) was paid in cash at the closing
date.
On a consolidated and annualized basis, had this acquisition
taken place as of January 1, 2017, the Group would have recognized
2017 consolidated revenue of $1,037.9 million and consolidated net
profit of $18.5 million.
Determination of fair value of assets acquired and liabilities
assumed at acquisition date:
In $ millions Hydro Brazil Solutions Brazil Total Brazilian portfolio acquired
-------------------------------------------- ------------- ----------------- -----------------------------------
Intangible assets 28.4 - 28.4
-------------------------------------------- ------------- ----------------- -----------------------------------
Property, plant and equipment 160.0 38.1 198.1
-------------------------------------------- ------------- ----------------- -----------------------------------
Other assets 17.9 10.8 28.7
-------------------------------------------- ------------- ----------------- -----------------------------------
Cash and cash equivalents 17.9 15.3 33.2
-------------------------------------------- ------------- ----------------- -----------------------------------
Total assets 224.2 64.2 288.4
-------------------------------------------- ------------- ----------------- -----------------------------------
Borrowings 61.1 - 61.1
-------------------------------------------- ------------- ----------------- -----------------------------------
Other liabilities 19.6 11.5 31.1
-------------------------------------------- ------------- ----------------- -----------------------------------
Total liabilities 80.7 11.5 92.2
-------------------------------------------- ------------- ----------------- -----------------------------------
Total net identifiable assets 143.5 52.7 196.2
-------------------------------------------- ------------- ----------------- -----------------------------------
Total net identifiable assets % acquired 129.7 52.7 182.4
-------------------------------------------- ------------- ----------------- -----------------------------------
Net purchase consideration 129.7 52.7 182.4
-------------------------------------------- ------------- ----------------- -----------------------------------
Goodwill - - -
-------------------------------------------- ------------- ----------------- -----------------------------------
The acquisition contributed to consolidated revenue and net
result for respectively $57.8 million and $18.9 million.
Additional solar portfolio acquisition
In December 2017, the Group closed the acquisition of 100% of a
19.1 MW operational solar photovoltaic plants in Italy from
ErgyCapital S.p.A. The plants, located in the regions of Puglia,
Piemonte, Lazio and Campania, are in close proximity to
ContourGlobal's existing Italian solar portfolio and benefit from
approximately 12 years of Feed-in-Tariff. The total consideration
amounts to EUR9.6 million (or $11.4 million) corresponding to
acquisition of shares.
Subsequent to the closing the Group refinanced the portfolio and
issued new facilities for a total of EUR55.8 million (or $66.4
million), of which EUR38.8 million (or $46.2 million) has been
drawned in 2017, at an interest rate of Euribor 6M+2.35% per annum,
70% of which is swapped at 0.653%+2.35% per annum, maturing on June
30, 2028.
On a consolidated and annualized basis, had this acquisition
taken place as of January 1, 2017, the Group would have recognized
2017 consolidated revenue of $1,032.9 million and consolidated net
profit of $14.3 million.
Preliminary determination of fair value of assets acquired and
liabilities assumed at acquisition date:
In $ millions Solar portfolio
--------------------------------- ----------------
Intangible assets 0.1
--------------------------------- ----------------
Property, plant and equipment 75.7
--------------------------------- ----------------
Other assets 11.4
--------------------------------- ----------------
Cash and cash equivalents 3.6
--------------------------------- ----------------
Total assets 90.7
--------------------------------- ----------------
Borrowings 70.6
--------------------------------- ----------------
Other liabilities 8.8
--------------------------------- ----------------
Total liabilities 79.4
--------------------------------- ----------------
Total net identifiable assets 11.4
--------------------------------- ----------------
Net purchase consideration 11.4
--------------------------------- ----------------
Goodwill -
--------------------------------- ----------------
The acquisition contributed to consolidated revenue and net
result for respectively $0.5 million and $0.6 million.
Acquisition of non-controlling interests which did not result in
a change of control
The Group also completed in 2017 the acquisition of 19.7%
minority interests in ContourGlobal Hydro Cascade CJSC (Vorotan
project) for a consideration of $9.8 million. After this
transaction, the Group owns 100% of the Vorotan project.
This transaction did not result in a change of control and have
therefore been accounted for within shareholder's equity as
transactions with owners without change of control acting in their
capacity of owners.
4. Notes to the consolidated financial statements
4.1. Segment reporting
The Group's reportable segments are the operating segments
overseen by distinct segment managers responsible for their
performance with no aggregation of operating segments.
Thermal Energy for power generating plants operating from coal,
lignite, natural gas, fuel oil and diesel. Thermal plants include
Maritsa, Arrubal, Togo, Kramatorsk, Cap des Biches, KivuWatt,
Energies Antilles, Energies Saint-Martin, Bonaire and our equity
investees (primarily Termoemcali and Sochagota). Our thermal
segment also includes plants which provide electricity and certain
other services to beverage bottling companies.
Renewable Energy for power generating plants operating from
renewable resources such as wind, solar and hydro in Europe and
South America. Renewables plants include Asa Branca, Chapada I, II,
III, Inka, Vorotan, Austria Portfolio 1 & 2 and our other
European and Brazilian plants.
The Corporate & Other category primarily reflects costs for
certain centralized functions including executive oversight,
corporate treasury and accounting, legal, compliance, human
resources, IT, political risk insurance and facilities management
and certain technical support costs that are not allocated to the
segments for internal management reporting purposes.
The CODM assesses the performance of the operating segments
based on Adjusted EBITDA which is defined as profit for the period
from continuing operations before income taxes, net finance costs,
depreciation and amortization, acquisition related expenses and
specific items which have been identified and adjusted by virtue of
their size, nature or incidence. In determining whether an event or
transaction is specific, management considers quantitative as well
as qualitative factors such as the frequency or predictability of
occurrence.
The CODM does not review nor is presented a segment measure of
total assets and total liabilities.
All revenue is derived from external customers.
Geographical information
The Group also presents revenue in each of the geographical
areas in which it operates as follows:
- Europe (including our operations in Austria, Armenia, Northern
Ireland, Italy, Romania, Poland, Bulgaria, Slovakia, Czech
Republic, Spain and Ukraine)
- Latin America (including Brazil, Peru and Colombia)
- Africa (including Nigeria, Togo, Senegal and Rwanda)
- Caribbean islands (including Dutch Antilles and French Territory)
In $ millions Years ended December 31,
------------------------- ---------------------------
2016 2017
------------------------- ------------ -------------
Revenue
------------------------- ------------ -------------
Thermal Energy 659.5 730.2
------------------------- ------------ -------------
Renewable Energy 245.7 292.5
------------------------- ------------ -------------
Total revenue 905.2 1,022.7
------------------------- ------------ -------------
Adjusted EBITDA
------------------------------------------------------
Thermal Energy 281.8 332.1
------------------------- ------------ -------------
Renewable Energy 193.1 211.1
------------------------- ------------ -------------
Corporate & Other (1) (34.6) (29.9)
------------------------- ------------ -------------
Total adjusted EBITDA 440.4 513.2
------------------------- ------------ -------------
Reconciliation to profit / (loss) before income tax
----------------------------------------------------------------------------------------
Depreciation and Amortization (note 4.3) (169.4) (185.6)
---------------------------------------------------------------- ---------- ----------
Finance costs net (note 4.7) (201.9) (220.7)
---------------------------------------------------------------- ---------- ----------
Share of profit in associates 7.3 5.0
---------------------------------------------------------------- ---------- ----------
Share of adjusted EBITDA in associates (2) (21.4) (21.6)
---------------------------------------------------------------- ---------- ----------
Acquisition related items (12.3) (9.5)
---------------------------------------------------------------- ---------- ----------
Gain on termination of Solutions - Kiev plant (note 4.6) (3) 12.1 -
---------------------------------------------------------------- ---------- ----------
Gain on sale of Czech assets (note 4.6) (4) 3.0 -
---------------------------------------------------------------- ---------- ----------
Costs related to CG Plc IPO (note 4.6) (5) - (12.7)
---------------------------------------------------------------- ---------- ----------
Non-cash major overhaul provision (6) (3.1) (9.8)
---------------------------------------------------------------- ---------- ----------
Government grants (7) (6.5) -
---------------------------------------------------------------- ---------- ----------
Other (8) (5.3) (17.7)
---------------------------------------------------------------- ---------- ----------
Profit / (loss) before income tax 42.9 40.6
---------------------------------------------------------------- ---------- ----------
(1) Includes Corporate costs for $29.7 million (December 31,
2016: $33.4 million) and other costs for $0.2 million (December 31,
2016: $1.2 million). Corporate costs correspond to SG&A before
depreciation and amortization (December 31, 2017: $2.2 million,
December 31, 2016: $2.9 million).
(2) Corresponds to our share of Adjusted EBITDA of plants
accounted for under the equity method (Sochagota, Termoemcali and
Productora de Energia de Boyaca) which are reviewed by our CODM as
part of our Thermal Energy segment.
(3) Corresponds to the gain resulting from the sale of Solutions
Kiev power plant to Coca Cola Hellenic occurred in August 2016.
(4) Corresponds to the gain resulting from the sale of three
solar energy plants in Czech Republic representing a total of 6.0
MW in November 2016.
(5) The Group successfully completed the Initial Public Offering
in the United Kingdom of ContourGlobal Plc. Costs associated with
this project were separately analyzed by our CODM.
(6) Represents the accretion for the year in respect of our
long-term overhaul provision in relation to our Togo and Senegal
power plants under a concession arrangement. The overhaul program
is expected to start in 2021 in Togo and 2019 in Senegal.
(7) Represents the Spanish long-term capacity incentives payable
in relation to our Arrubal power plant. These incentives, which
ended in February 2017, were granted for the construction of the
plant with payment from authorities.
(8) Mainly reflects the non-cash impact of finance lease and
financial concession payments. 'Other' increased mainly as a result
of the full commercial operations in 2017 of our Cap des Biches I
and II power plants in Senegal.
Capital expenditures
In $ millions Years ended December 31,
------------------------------ ---------------------------
2016 2017
------------------------------ ------------- ------------
Thermal Energy 19.3 28.6
------------------------------ ------------- ------------
Renewable Energy 38.7 29.8
------------------------------ ------------- ------------
Total capital expenditures 58.0 58.4
------------------------------ ------------- ------------
Geographical information
The geographic analysis of revenue, based on the country of
origin in which the group's operations are located, and Adjusted
EBITDA is as follows:
In $ millions Years ended December 31,
--------------------- ---------------------------
2016 2017
--------------------- ------------ -------------
Europe (1) 523.2 627.9
--------------------- ------------ -------------
South America (2) 152.1 214.0
--------------------- ------------ -------------
Africa 184.2 140.3
--------------------- ------------ -------------
Caribbean islands 45.7 40.4
--------------------- ------------ -------------
Total revenue 905.2 1,022.7
--------------------- ------------ -------------
(1) Revenue generated in 2017 in Bulgaria and Spain amounted to
$298.2 million and $178.7 million respectively (December 31, 2016:
$244.5 million and $131.2 million respectively).
(2) Revenue generated in 2017 in Brazil amounted to $180.5
million (December 31, 2016: $113.1 million).
In $ millions Years ended December 31,
------------------------- ---------------------------
2016 2017
------------------------- ------------- ------------
Europe 254.8 268.1
------------------------- ------------- ------------
South America 140.8 170.1
------------------------- ------------- ------------
Africa 58.4 78.2
------------------------- ------------- ------------
Caribbean islands 21.0 26.8
------------------------- ------------- ------------
Corporate & Other (34.6) (29.9)
------------------------- ------------- ------------
Total adjusted EBITDA 440.4 513.2
------------------------- ------------- ------------
The geographic analysis of non-current assets, excluding
derivative financial instruments and deferred tax assets, based on
the location of the assets, is as follows:
In $ millions Years ended December 31,
---------------------------- ---------------------------
2016 2017
---------------------------- ------------- ------------
Europe 1,072.2 1,174.2
---------------------------- ------------- ------------
South America 1,179.4 1,347.1
---------------------------- ------------- ------------
Africa 558.6 572.1
---------------------------- ------------- ------------
Caribbean islands 70.0 64.3
---------------------------- ------------- ------------
Other 3.7 3.9
---------------------------- ------------- ------------
Total non-current assets 2,883.9 3,161.6
---------------------------- ------------- ------------
4.2. Revenue
Years ended December 31,
--------------------------------------------------------- ---------------------------
In $ millions 2016 2017
--------------------------------------------------------- ------------ -------------
Revenue from power sales 623.8 757.3
--------------------------------------------------------- ------------ -------------
Revenue from operating leases 86.0 96.8
--------------------------------------------------------- ------------ -------------
Revenue from concession and finance lease assets 74.3 89.9
--------------------------------------------------------- ------------ -------------
Construction revenue from concession arrangements (1) 74.3 -
--------------------------------------------------------- ------------ -------------
Other revenue (2) 46.7 78.8
--------------------------------------------------------- ------------ -------------
Total revenue 905.2 1,022.7
--------------------------------------------------------- ------------ -------------
(1) Construction revenue from concession arrangements
corresponds to revenue generated in accordance with IFRIC 12 for
the construction of our plants in Cap des Biches, Senegal in
2016.
(2) Other revenue primarily relates to environmental,
operational and maintenance services rendered to offtakers in our
Maritsa, Togo, Kivuwatt and Cap des Biches power plants. Other
revenue increased mainly as a result of the full commercial
operations of Cap des Biches I and II in 2017.
Years ended December 31,
-------------- ---------------------------
2016 2017
-------------- ------------- ------------
Customer A 26.7% 29.2%
-------------- ------------- ------------
The Group has one customer contributing more than 10% of Group's
revenue.
4.3. Expenses by nature
Years ended December 31,
----------------------------------------------------------------------- ---------------------------
In $ millions 2016 2017
----------------------------------------------------------------------- ------------- ------------
Fuel costs 163.5 234.0
----------------------------------------------------------------------- ------------- ------------
Depreciation, amortization and impairment 169.4 185.6
----------------------------------------------------------------------- ------------- ------------
Operation and maintenance costs 138.3 67.0
----------------------------------------------------------------------- ------------- ------------
Employee costs (1) 63.9 67.5
----------------------------------------------------------------------- ------------- ------------
Emission allowance utilized (2) 15.5 47.1
----------------------------------------------------------------------- ------------- ------------
Professional fees 16.2 9.0
----------------------------------------------------------------------- ------------- ------------
Purchased power 28.4 48.2
----------------------------------------------------------------------- ------------- ------------
Insurance costs 18.3 18.5
----------------------------------------------------------------------- ------------- ------------
Other expenses (3) 59.0 71.3
----------------------------------------------------------------------- ------------- ------------
Total cost of sales and selling, general and administrative expenses 672.5 748.2
----------------------------------------------------------------------- ------------- ------------
(1) Operation and maintenance costs include costs associated
with the construction phase of a plant under service concession
arrangements as well as on going costs associated with the
operation and maintenance of all plants.
(2) Emission allowance utilized corresponds mainly to the costs
of CO2 quotas in Maritsa which are passed through to its offtaker
as well as changes in fair value of CO2 quotas in the period.
(3) Other expenses include operating consumables and supply
costs for $14.0 million in December 31, 2017 (December 31, 2016:
$14.8 million) and facility costs for $14.6 million in December 31,
2017 (December 31, 2016: $14.2 million).
4.4. Employee costs and numbers
Years ended December 31,
---------------------------------------------------------- ---------------------------
In $ millions 2016 2017
---------------------------------------------------------- ------------- ------------
Wages and salaries (50.1) (52.4)
---------------------------------------------------------- ------------- ------------
Social security costs (10.4) (10.7)
---------------------------------------------------------- ------------- ------------
Share-based payments - -
---------------------------------------------------------- ------------- ------------
Pension and other post-retirement benefit costs (0.8) (0.8)
---------------------------------------------------------- ------------- ------------
Other (2.8) (3.5)
---------------------------------------------------------- ------------- ------------
Total employee costs (64.0) (67.5)
---------------------------------------------------------- ------------- ------------
Annual average number of full-time equivalent employees 1,855 1,873
---------------------------------------------------------- ------------- ------------
* Thermal 1,415 1,441
---------------------------------------------------------- ------------- ------------
* Renewable 280 265
---------------------------------------------------------- ------------- ------------
* Corporate 160 167
---------------------------------------------------------- ------------- ------------
4.5. Acquisition related items
Years ended December 31,
----------------------------- ---------------------------
In $ millions 2016 2017
----------------------------- -------------- -----------
Acquisition costs (1) (12.3) (9.5)
----------------------------- -------------- -----------
Acquisition related items (12.3) (9.5)
----------------------------- -------------- -----------
(1) Acquisition costs include notably pre-acquisition costs such
as due diligence costs and professional fees, earn-outs and other
related incremental costs incurred as part of completed or
contemplated acquisitions. In 2017, costs incurred primarily
related to contemplated acquisition projects in Brazil, Spain,
Peru, Mexico, Austria and Italy. In 2016, cost incurred primarily
related to contemplated acquisition projects in Brazil, Mexico,
Spain, Peru, Austria and Italy, and to abandoned projects in
Africa.
4.6. Other income (expenses) - net
In $ millions Years ended December 31,
--------------------------------------------------- -----------------------------
2016 2017
--------------------------------------------------- ------------ ---------------
Gain on termination of Solutions Kiev plant (1) 12.1 -
--------------------------------------------------- ------------ ---------------
Gain on sale of Czech assets (2) 3.0 -
--------------------------------------------------- ------------ ---------------
Costs related to CG Plc IPO (3) - (12.7)
--------------------------------------------------- ------------ ---------------
Other 0.5 -
--------------------------------------------------- ------------ ---------------
Other income (expenses) - net 15.6 (12.7)
--------------------------------------------------- ------------ ---------------
(1) Corresponds to the gain resulting from the sale of Solutions
Kiev power plant which occurred in August 2016 (note 3.1).
(2) Corresponds to the gain resulting from the sale of three
solar energy plants in Czech Republic representing a total of 6.0
MW in November 2016 (note 3.1).
(3) Represents costs recognized in the statement of income
resulting from the Initial Public Offering ("IPO") in the United
Kingdom of ContourGlobal Plc in November 2017. An additional $19.9
million of IPO costs was recognized as a deduction of share
premium. Cash outflows for $19.2 million related to these costs are
disclosed in the "other financing activities" line of the statement
of cash-flows.
4.7. Finance costs - net
In $ millions Years ended December 31,
------------------------------------------------------------- ---------------------------
2016 2017
------------------------------------------------------------- ------------- ------------
Finance income 6.9 9.8
------------------------------------------------------------- ------------- ------------
Interest expenses on borrowings (170.1) (176.3)
------------------------------------------------------------- ------------- ------------
Net change in fair value of derivatives (1) 4.3 (13.5)
------------------------------------------------------------- ------------- ------------
Net realized foreign exchange differences (0.3) (38.0)
------------------------------------------------------------- ------------- ------------
Net unrealized foreign exchange differences (2) 48.7 7.0
------------------------------------------------------------- ------------- ------------
Finance charges related to corporate bond refinancing (3) (29.2) -
------------------------------------------------------------- ------------- ------------
Other (4) (62.3) (9.6)
------------------------------------------------------------- ------------- ------------
Finance costs - net (201.9) (220.7)
------------------------------------------------------------- ------------- ------------
(1) Change in fair value of derivatives relates primarily to
interest rate swaps, interest rate options and a EUR / USD forward
contract which has also generated realized foreign exchange
differences.
(2) Unrealized foreign exchange differences primarily relate to
loans in subsidiaries that have a functional currency different to
the currency in which the loans are denominated.
(3) In conjuction with the refinancing of our initial $500
million bond in June 2016, we paid a call premium of $18.3 million
to prior bondholders (classified as 'other financing activities' in
the Consolidated statement of cash-flows) and recognized the
accelerated amortization of the related deferred financing costs
for $10.9 million.
(4) Other mainly includes costs associated with other financing,
the unwinding effect of certain liabilities as well as income and
expenses related to interests and penalties for late payments.
4.8. Income tax expense and deferred income tax
Income tax expense
Years ended December 31,
---------------------------------- ---------------------------
In $ millions 2016 2017
---------------------------------- ------------- ------------
Current tax expense (23.1) (27.7)
---------------------------------- ------------- ------------
Deferred tax (expense) benefit 1.1 0.6
---------------------------------- ------------- ------------
Income tax expense (22.0) (27.1)
---------------------------------- ------------- ------------
The main jurisdictions contributing to the income tax expense
for the year ending December 31, 2017 are i) Brazil, ii) Bulgaria,
iii) Spain and iv) French Caribbean. The tax on the group's income
/ (loss) before tax differs from the theoretical amount that would
arise using the statutory tax rate of the parent company applicable
to profits of the consolidated entities as follows:
Effective tax rate reconciliation
Years ended December 31,
------------------------------------------------------------------------------------ ---------------------------
In $ millions 2016 2017
------------------------------------------------------------------------------------ ------------- ------------
Profit before income tax 42.8 40.6
------------------------------------------------------------------------------------ ------------- ------------
Share of profit in associates 7.3 5.0
------------------------------------------------------------------------------------ ------------- ------------
Profit before income tax and share of profit in associates 35.6 35.6
------------------------------------------------------------------------------------ ------------- ------------
Profit before income tax and share of profit in associates at statutory tax rate (7.1) (6.9)
------------------------------------------------------------------------------------ ------------- ------------
Statutory tax rate (UK) (1) 20.0% 19.25%
------------------------------------------------------------------------------------ ------------- ------------
Tax effects of:
-----------------------------------------------------------------------------------------------------------------
Differences between statutory tax rate and foreign statutory tax rates 8.9 5.7
------------------------------------------------------------------------------------ ------------- ------------
Changes in unrecognized deferred tax assets (2) (22.3) (40.1)
------------------------------------------------------------------------------------ ------------- ------------
Reduced rate and specific taxation regime 2.2 6.6
------------------------------------------------------------------------------------ ------------- ------------
Change in tax laws & rates 0.3 (0.7)
------------------------------------------------------------------------------------ ------------- ------------
Non deductible expenses (5.8) (4.3)
------------------------------------------------------------------------------------ ------------- ------------
Impact of foreign currencies on deferred tax basis (3) 6.8 1.6
------------------------------------------------------------------------------------ ------------- ------------
Permanent differences and other (5.0) 11.0
------------------------------------------------------------------------------------ ------------- ------------
Income tax expense (22.0) (27.1)
------------------------------------------------------------------------------------ ------------- ------------
Effective rate of income tax 51.4% 66.7%
------------------------------------------------------------------------------------ ------------- ------------
(1) On 26 October 2015, Finance (No.2) Act 2015 was
substantively enacted, reducing the main rate of corporation tax in
the UK from 20% to 19% from 1 April 2017. On 6 September 2016,
Finance Act 2016 was substantively enacted, further reducing the
rate to 17% from 1 April 2020. Deferred taxes have been measured
using tax rates substantively enacted at the balance sheet
date.
(2) Mainly relates to tax losses in Luxembourg and Brazil where
deferred tax assets are not recognized.
(3) Relates to entities which have a functional currency
different from their local currency.
Net deferred tax movement
The gross movements of net deferred income tax assets
(liabilities) were as follows:
Years ended December 31,
------------------------------------------------------------------ ---------------------------
In $ millions 2016 2017
------------------------------------------------------------------ ------------- ------------
Net deferred tax assets (liabilities) as of January, 1 (24.6) (21.2)
------------------------------------------------------------------ ------------- ------------
Statement of income 1.1 0.6
------------------------------------------------------------------ ------------- ------------
Deferred tax recognized directly in other comprehensive income 1.0 0.7
------------------------------------------------------------------ ------------- ------------
Acquisitions 2.3 (1.4)
------------------------------------------------------------------ ------------- ------------
Currency translation differences and other (1.0) (2.4)
------------------------------------------------------------------ ------------- ------------
Net deferred tax assets (liabilities) as of December, 31 (21.2) (23.7)
------------------------------------------------------------------ ------------- ------------
Analysis of the net deferred tax position recognized in the
consolidated statement of financial position
The net deferred tax positions and their movement can be broken
down as follows:
In $ millions As of January Statement of Other Acquisitions Currency As of
1, 2016 income comprehensive translations December 31,
income and other 2016
----------------- ---------------- --------------- --------------- ------------- --------------- ---------------
Tax losses 20.1 (4.3) - - 0.6 16.4
----------------- ---------------- --------------- --------------- ------------- --------------- ---------------
Long term
assets (45.1) (0.1) - 2.3 (0.5) (43.4)
----------------- ---------------- --------------- --------------- ------------- --------------- ---------------
Derivative
financial
instrument 7.6 (0.2) 1.0 - (0.2) 8.2
----------------- ---------------- --------------- --------------- ------------- --------------- ---------------
Other (1) (7.2) 5.7 - - (0.9) (2.4)
----------------- ---------------- --------------- --------------- ------------- --------------- ---------------
Total net
deferred tax
assets
(liabilities) (24.6) 1.1 1.0 2.3 (1.0) (21.2)
----------------- ---------------- --------------- --------------- ------------- --------------- ---------------
In $ millions As of Statement of Other Acquisitions Currency As of
January 1, income comprehensive translations December 31,
2017 income and other 2017
----------------- --------------- ---------------- --------------- ------------- --------------- ---------------
Tax losses 16.4 0.3 - 1.5 1.4 19.7
----------------- --------------- ---------------- --------------- ------------- --------------- ---------------
Long term
assets (43.4) (6.4) - (5.2) (4.0) (58.9)
----------------- --------------- ---------------- --------------- ------------- --------------- ---------------
Derivative
financial
instrument 8.2 (0.3) 0.7 0.4 (0.7) 8.3
----------------- --------------- ---------------- --------------- ------------- --------------- ---------------
Other (1) (2.4) 7.0 - 1.8 0.9 7.2
----------------- --------------- ---------------- --------------- ------------- --------------- ---------------
Total net
deferred tax
assets
(liabilities) (21.2) 0.6 0.7 (1.4) (2.4) (23.7)
----------------- --------------- ---------------- --------------- ------------- --------------- ---------------
(1) Other mainly relate to deferred interest and to foreign
currency differences.
Analysis of the deferred tax position unrecognized in the
consolidated statement of financial position
Unrecognized deferred tax assets amount to $187.7 million as of
December 31, 2017 (December 31, 2016: $139.4 million) and can be
broken down as follows:
Years ended December 31,
------------------------------------------------------------------------ ---------------------------
In $ millions 2016 2017
------------------------------------------------------------------------ ------------- ------------
Unrecognized deferred tax assets on tax losses 122.7 167.7
------------------------------------------------------------------------ ------------- ------------
Unrecognized deferred tax assets on deductible temporary differences 16.7 20.0
------------------------------------------------------------------------ ------------- ------------
Total unrecognized deferred tax assets 139.4 187.7
------------------------------------------------------------------------ ------------- ------------
Main tax losses and deductible temporary differences not
recognized reside in i) Luxembourg, ii) Brazil, iii) Colombia, iv)
UK and v) Poland. The related deferred tax assets were not
recognized as sufficient taxable profit is not expected to be
generated in the foreseeable future.
4.9. Earnings per share
Years ended December 31,
------------------------------------------------------------------------ --------------------------------------
2016 (1) 2017 (1)
------------------ ------------------
Basic Diluted Basic Diluted
------------------------------------------------------------------------ -------- -------- -------- --------
Profit attributable to CG plc shareholders (in $ millions) 37.5 37.5 19.4 19.4
------------------------------------------------------------------------ -------- -------- -------- --------
Number of shares (in millions)
------------------------------------------------------------------------ -------- -------- -------- --------
Weighted average number of shares outstanding 614.2 614.2 614.2 614.2
------------------------------------------------------------------------ -------- -------- -------- --------
Potential dilutive effects related to share-based compensation - -
------------------------------------------------------------------------ -------- -------- -------- --------
Adjusted weighted average number of shares - 614.2 - 614.2
------------------------------------------------------------------------ -------- -------- -------- --------
Profit / (Loss) attributable to CG plc shareholders per share (in $) 0.06 0.06 0.03 0.03
------------------------------------------------------------------------ -------- -------- -------- --------
(1) For both years, the Adjusted weighted average number of
shares has been calculated starting from the date of incorporation
through to 31 December 2017.
4.10. Intangible assets and goodwill
In $ millions Goodwill Project Software Total
development and Other
rights
----------------------------- --------- ------------- ----------- ---------
Cost 0.5 105.6 12.7 118.8
----------------------------- --------- ------------- ----------- ---------
Accumulated amortization
and impairment - (2.8) (7.2) (10.0)
----------------------------- --------- ------------- ----------- ---------
Carrying amount as
of December 31, 2015 0.5 102.8 5.5 108.8
----------------------------- --------- ------------- ----------- ---------
Additions - 0.5 1.4 1.9
----------------------------- --------- ------------- ----------- ---------
Currency translation
differences - 15.3 - 15.3
----------------------------- --------- ------------- ----------- ---------
Reclassification - 0.7 0.8 1.5
----------------------------- --------- ------------- ----------- ---------
Amortization charge - (6.5) (2.3) (8.8)
----------------------------- --------- ------------- ----------- ---------
Closing net book amount 0.5 112.8 5.4 118.7
----------------------------- --------- ------------- ----------- ---------
Cost 0.5 121.7 14.6 136.8
----------------------------- --------- ------------- ----------- ---------
Accumulated amortization
and impairment - (8.9) (9.2) (18.1)
----------------------------- --------- ------------- ----------- ---------
Carrying amount as
of December 31, 2016 0.5 112.8 5.4 118.7
----------------------------- --------- ------------- ----------- ---------
Additions - 0.5 0.9 1.4
----------------------------- --------- ------------- ----------- ---------
Acquired through business
combination - 29.2 - 29.2
----------------------------- --------- ------------- ----------- ---------
Currency translation
differences 0.1 (2.9) 0.3 (2.5)
----------------------------- --------- ------------- ----------- ---------
Reclassification - - 0.1 0.1
----------------------------- --------- ------------- ----------- ---------
Amortization charge - (8.0) (1.8) (9.8)
----------------------------- --------- ------------- ----------- ---------
Closing net book amount 0.6 131.6 4.9 137.1
----------------------------- --------- ------------- ----------- ---------
Cost 0.6 166.2 16.7 183.5
----------------------------- --------- ------------- ----------- ---------
Accumulated amortization
and impairment - (34.6) (11.7) (46.3)
----------------------------- --------- ------------- ----------- ---------
Carrying amount as
of December 31, 2017 0.6 131.6 4.9 137.1
----------------------------- --------- ------------- ----------- ---------
The project development rights mainly relate to the fair value
of licenses acquired from the initial developers for our wind parks
in Peru and Brazil. Acquisitions in 2017 relate to the acquisition
of an intangible asset related to a concession arrangement in the
thermal and renewable portfolio in Brazil.
For the years ended December 31, 2016, and 2017, certain
triggering events were identified, and the related intangible
assets were tested for impairment. These impairment tests did not
result in any impairment.
4.11. Property, plant and equipment
Assets acquired through business combinations are explained in
Note 3 Major events and changes in the scope of consolidation.
The power plant assets predominantly relate to wind farms,
natural gas plants, fuel oil or diesel plants, coal plants, hydro
plants, solar plants and other buildings.
Other assets mainly include IT equipment, furniture and
fixtures, facility equipment, asset retirement obligations and
vehicles, and project development costs.
In $ millions Land Power Construction Other Total
plant work in
assets progress
---------------------------- -------- ---------- ------------- --------- ----------
Cost 19.4 2,474.2 191.8 102.7 2,788.1
---------------------------- -------- ---------- ------------- --------- ----------
Accumulated depreciation
and impairment (0.3) (580.6) - (44.1) (625.0)
---------------------------- -------- ---------- ------------- --------- ----------
Carrying amount
as of January
1, 2016 19.1 1,893.6 191.8 58.6 2,163.1
---------------------------- -------- ---------- ------------- --------- ----------
Additions - 11.6 12.9 10.3 34.8
---------------------------- -------- ---------- ------------- --------- ----------
Disposals (1.4) (14.7) - (2.3) (18.4)
---------------------------- -------- ---------- ------------- --------- ----------
Reclassification 0.1 188.9 (203.8) 8.6 (6.1)
---------------------------- -------- ---------- ------------- --------- ----------
Currency translation
differences (0.3) 78.5 20.0 4.0 102.1
---------------------------- -------- ---------- ------------- --------- ----------
Depreciation charge (0.1) (151.7) - (9.7) (161.5)
---------------------------- -------- ---------- ------------- --------- ----------
Closing net book
amount 17.5 2,006.2 20.9 69.5 2,114.0
---------------------------- -------- ---------- ------------- --------- ----------
Cost 17.8 2,706.1 20.9 123.4 2,868.1
---------------------------- -------- ---------- ------------- --------- ----------
Accumulated depreciation
and impairment (0.3) (699.9) - (53.9) (754.1)
---------------------------- -------- ---------- ------------- --------- ----------
Carrying amount
as of December
31, 2016 17.5 2,006.2 20.9 69.5 2,114.0
---------------------------- -------- ---------- ------------- --------- ----------
Construction work in progress in 2016 predominantly relates to
our Maritsa project.
Additions in 2016 mainly relate to the construction of Chapada
II and III projects in Brazil and Maritsa.
Depreciation included in 'cost of sales' in the consolidated
statement of income amount to $160.6 million in the period ended
December 31, 2016 whereas depreciation included in 'selling,
general and administrative expenses' amount to $0.9 million in the
year ended December 31, 2016.
In 2016, the group did not capitalize borrowing costs on
qualifying assets in relation to project financing costs.
In $ millions Land Power Construction Other Total
plant work in
assets progress
---------------------------- -------- ------------ ------------- --------- ------------
Cost 17.8 2,706.1 20.9 123.4 2,868.1
---------------------------- -------- ------------ ------------- --------- ------------
Accumulated depreciation
and impairment (0.3) (699.9) - (53.9) (754.1)
---------------------------- -------- ------------ ------------- --------- ------------
Carrying amount
as of January
1, 2017 17.5 2,006.2 20.9 69.5 2,114.0
---------------------------- -------- ------------ ------------- --------- ------------
Additions - 8.4 16.6 22.7 47.7
---------------------------- -------- ------------ ------------- --------- ------------
Disposals (0.1) (4.0) (0.6) (0.6) (5.3)
---------------------------- -------- ------------ ------------- --------- ------------
Reclassification - 11.8 (12.2) (0.9) (1.3)
---------------------------- -------- ------------ ------------- --------- ------------
Acquired through
business combination 8.1 216.0 1.0 52.0 277.1
---------------------------- -------- ------------ ------------- --------- ------------
Currency translation
differences 1.7 95.9 0.9 (0.3) 98.2
---------------------------- -------- ------------ ------------- --------- ------------
Depreciation charge - (161.4) - (11.0) (172.4)
---------------------------- -------- ------------ ------------- --------- ------------
Impairment charge - (2.7) - (0.6) (3.3)
---------------------------- -------- ------------ ------------- --------- ------------
Transferred to
disposal group
classified as
held for sale
(1) - (3.5) (0.1) (0.7) (4.3)
---------------------------- -------- ------------ ------------- --------- ------------
Closing net book
amount 27.2 2,166.7 26.5 130.1 2,350.3
---------------------------- -------- ------------ ------------- --------- ------------
Cost 27.7 3,194.9 26.5 216.6 3,465.6
---------------------------- -------- ------------ ------------- --------- ------------
Accumulated depreciation
and impairment (0.5) (1,028.2) - (86.6) (1,115.3)
---------------------------- -------- ------------ ------------- --------- ------------
Carrying amount
as of December
31, 2017 27.2 2,166.7 26.5 130.1 2,350.3
---------------------------- -------- ------------ ------------- --------- ------------
(1) The Group decided to sell its Kramatorsk Ukrainian power
plant and signed a share purchased agreement on December 22, 2017.
The Group classified the asset as Assets held for sale in
conformity with IFRS 5 and tested the asset for impairment on the
basis of the share purchase price less costs to sell. As a result,
the Group recorded an impairment charge of $3.3 million in
2017.
In relation to this, as at 31 December 2017, $13.7m of assets
were classified as Assets held for sale and $12.9m of liabilities
were classified as Liabilities held for sale. Of the $13.7m, $4.3m
related to Property, plant and equipment.
Construction work in progress in 2017 predominantly relates to
our Maritsa plant and Austria Wind project repowerment.
Depreciation included in 'cost of sales' in the consolidated
statement of income amount to $171.8 million in the year ended
December 31, 2017 whereas depreciation included in 'selling,
general and administrative expenses' amount to $0.7 million in the
year ended December 31, 2017.
Assets acquired through business combination relate to the
acquisition of a thermal and renewable portfolio in Brazil and
Italy are detailed in Note 3.2.
In 2017, the Group did not capitalize any borrowing costs in
relation to project financing.
Construction work in progress in 2016 predominantly relates to
our Maritsa project.
Additions in 2016 mainly relate to the construction of Chapada
II and III projects in Brazil and Maritsa.
Impairment tests on tangible and intangible assets
For the years ended December 31, 2016 and 2017 certain
triggering events were identified primarily driven by lower
performance of the assets, change of regulation and local
environment, requiring an impairment test of the relevant
assets.
The recoverable amount is determined as the higher of the value
in use determined by the discounted value of future cash flows
(discounted cash flow method or "DCF", determined by using cash
flows projections consistent with the following year budget and the
most recent forecasts prepared by management) and the fair value
(less costs to sell), determined on the basis of market data
(comparison with the value attributed to similar assets or
companies in recent transactions).
For the year ended December 31, 2016 impairment tests were
performed in relation with Brazilian wind power plants, Bonaire
(financial asset) and Ukrainian power plant and confirmed the
carrying value of the assets.
Impairment tests were performed for the year ended December 31,
2016 using the following assumptions and related sensitivity
analysis.
In $ Net Valuation Discount Capacity Sensitivity analysis
million book approach rates factor
value
------------- ------- ---------- --------- -------------- ---------------------
Discount rate
Brazilian increased by
wind 1%
power Wind scenario Wind scenario
plants 843.6 DCF 13% at P50 (1) at P75
------------- ------- ---------- --------- -------------- ---------------------
Discount rate
increased by
1%
5% cut in operating
Kramatorsk 8.4 DCF 21.9% n.a cash-flows
------------- ------- ---------- --------- -------------- ---------------------
Discount rate
increased by
Bonaire 1%
(financial 5% cut in operating
assets) 45.2 DCF 6.5% n.a cash-flows
------------- ------- ---------- --------- -------------- ---------------------
The sensitivity calculations show that an increase by 1% of the
discount rate and a wind scenario at P75 for Brazilian wind power
plants assets or a 5% cut in operating cash-flows for Bonaire and
Kramatorsk assets would not have a material impact on the results
of impairment tests or, therefore, on the Group's consolidated
financial statements as of December 31, 2016.
For the year ended December 31, 2017, in relation to the share
purchase agreement of its Ukrainian power plant, the Group
conducted an impairment test which resulted in an impairment charge
of $3.3 million.
For the year ended December 31, 2017 impairment tests were
performed in relation with Brazilian wind and hydro power plants
and confirmed the carrying value of the assets.
Impairment tests were also performed for the year ended December
31, 2017 using the following assumptions and related sensitivity
analysis.
In $ Net Valuation Discount Capacity factor Sensitivity analysis
million book approach rates
value
----------- ------- ---------- --------- ---------------- ---------------------
Discount rate
Brazilian increased by
wind 1%
power Wind scenario Wind scenario
plants 801.6 DCF 11% at P50 at P75
----------- ------- ---------- --------- ---------------- ---------------------
Discount rate
Brazilian increased by
hydro 1%
power Hydro scenario 5% cut in Ebitda
plants 255.8 DCF 11% at P75 margin
----------- ------- ---------- --------- ---------------- ---------------------
The sensitivity calculations show that an increase by 1% of the
discount rate and a wind scenario at P75 for Brazilian wind power
plants assets or a 5% cut in Ebitda margin for Brazilian hydro
power plants would not have a material impact on the results of
impairment tests or, therefore, on the Group's consolidated
financial statements as of December 31, 2017.
The P-factor quantifies the uncertainty of annual energy yield
predictions. P75 is the energy level that wind turbines are 75%
likely to produce over an average year, given the uncertainties in
the measurement, analysis and wind turbines operation. P50 is the
average annual energy yield predicted for wind farms, which
corresponds to the annual energy output that wind farms are most
likely to achieve.
Changes to be made to the key impairment test assumptions to
reduce the value in use to net book value would not correspond to
the definition of a reasonable change as defined by IAS 36.
4.12. Financial assets
Years ended December 31,
-------------------------------------------------- ---------------------------
In $ millions 2016 2017
-------------------------------------------------- ------------- ------------
Financial assets - Concession arrangements (1) 536.2 550.0
-------------------------------------------------- ------------- ------------
Financial lease receivables (2) 63.0 62.0
-------------------------------------------------- ------------- ------------
Other 5.6 5.7
-------------------------------------------------- ------------- ------------
Total financial assets 604.8 617.7
-------------------------------------------------- ------------- ------------
(1) The Group operates plants in Togo, Rwanda and Senegal which
are in the scope of the financial model of IFRIC 12 'Service
Concession Arrangements'.
Our Togo power plant was commissioned in 2010 and is operated
under a power purchase agreement with a unique offtaker, Compagnie
Energie Electrique du Togo ("CEET") which has an average remaining
contract life of approximately 17.8 years as of December 31, 2017
(December 31, 2016: 18.8 years). At expiration, the Togo plant,
along with all equipment necessary for the operation of the plant,
will be transferred to the Republic of Togo. This arrangement is
accounted for as a concession arrangement and the value of the
asset is recorded as a financial asset. The all-in base capacity
tariff under the Togo power purchase agreement is adjusted annually
for a combination of U.S., Euro and local consumer price index
related to the cost structure.
Our Rwanda power plant consists of the development, construction
and operation of Gas Extraction Facilities ("GEF") and an
associated power plant. The GEF is used to extract methane and bio
gas from the depths of Lake Kivu in Rwanda and deliver the gas via
submerged gas transport pipelines to shore-based power production
facilities totaling 26 MW of gross capacity. The PPA runs for 25
years starting on the commercial operation date and ending in
2040.
Our Cap des Biches power plant in Senegal consists of the
development, construction and operation of five engines with some
with a flexi-cycle system technology based on waste heat recovery
totaling about 86MW. A PPA integrating all the Cap des Biches
requirements and agreements on price was signed for 20 years
starting on the commercial operation date of the project and ending
in 2036.
(2) Relates to financial leases where the Group acts as a
lessor, and includes our Bonaire plant in the Dutch Caribbean and
our Saint Martin plant in the French Territory. Bonaire has an
average remaining contract life of approximately 7.6 years as of
December 31, 2017 (December 31, 2016: 8.6 years); Saint Martin has
an average remaining contract life of approximately 5.3 years as of
December 31, 2017 (December 31, 2016: 6.3 years).
No losses from impairment of contracted concessional assets and
financial lease receivables in the above projects were recorded
during the years ended December 31, 2017 and 2016 (refer to note
4.11).
Cash outflows relating to the acquisition of financial assets
under concession agreements amounted to $35.4 million as of
December 31, 2017 (December 31, 2016: $49.0 million). Net cash
inflows generated by the financial assets' operations amounted to
$52.7 million as of December 31, 2017 (December 31, 2016: $47.2
million).
4.13. Investments in associates
Set out below are the associates of the Group as of December 31,
2017:
Operational plant Country of incorporation Ownership interests Date of acquisition
----------------------------------------------- ------------------------- -------------------- --------------------
Sochagota Associate Colombia 49.0% 2006 and 2010
--------------------------------- ------------ ------------------------- -------------------- --------------------
Termoemcali Associate Colombia 37.4% 2010
--------------------------------- ------------ ------------------------- -------------------- --------------------
Productora de Energia de
Boyaca Associate Colombia 50.0% 2016
--------------------------------- ------------ ------------------------- -------------------- --------------------
The Group is currently analyzing the feasibility of an extension
of the Sochagota power plant through a newly formed entity,
Productora de Energia de Boyaca. The entity did not have
significant activity in 2016 and 2017.
Set out below is the summarized financial information for the
investments which are accounted for using the equity method
(presented at 100%):
In $ millions Current assets Non-current assets Current Non-current Revenue Net
liabilities liabilities income
------------------- --------------- ------------------- ------------------- ------------------ -------- --------
Years ended
December 31, 2016
------------------- -------------------------------------------------------------------------------------------------
Sochagota 56.8 26.2 20.9 19.7 42.0 5.4
------------------- --------------- ------------------- ------------------- ------------------ -------- --------
Termoemcali 29.7 51.0 19.1 36.7 87.5 13.7
------------------- --------------- ------------------- ------------------- ------------------ -------- --------
Productora de
Energia de
Boyaca 0.2 - 0.0 - - (0.9)
------------------- --------------- ------------------- ------------------- ------------------ -------- --------
Years ended December 31, 2017
----------------------------------------------------------------------------------------------------------------------
Sochagota 70.0 4.4 22.1 8.2 35.1 5.8
------------------- --------------- ------------------- ------------------- ------------------ -------- --------
Termoemcali 24.6 49.5 15.6 32.1 32.9 6.2
------------------- --------------- ------------------- ------------------- ------------------ -------- --------
Productora de
Energia de
Boyaca 0.0 - 0.0 0.0 - (0.3)
------------------- --------------- ------------------- ------------------- ------------------ -------- --------
The reconciliation of the investments in associates for each
year is as follows:
In $ millions Years ended December 31,
------------------------------- ---------------------------
2016 2017
------------------------------- ------------- ------------
Balance as of January 1, 19.0 25.7
------------------------------- ------------- ------------
Share of profit 7.3 5.0
------------------------------- ------------- ------------
Capital increase (decrease) 0.5 -
------------------------------- ------------- ------------
Dividends (3.8) (4.3)
------------------------------- ------------- ------------
Other comprehensive income 0.9 0.6
------------------------------- ------------- ------------
Scope changes 1.8 -
------------------------------- ------------- ------------
Balance as of December 31, 25.7 27.1
------------------------------- ------------- ------------
4.14. Management of financial risk
The Group's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimize
potential adverse effects on the Group's financial performance. The
Group uses derivative financial instruments to hedge certain risk
exposures.
Interest Rate Risk
Interest rate risk arises primarily from our long-term
borrowings. Interest cash flow risk arises from borrowings issued
at variable rates, partially offset by cash held at variable rates.
Interest rate risk is managed through entering into interest rate
swap agreements, entered into with commercial banks and other
institutions. The interest rate swaps qualify as cash flow hedges.
Their duration matches the duration of the debt instruments.
Approximately 30.7% the Group's existing debt obligations carry
variable interest rates in 2017 (2016: 28.9%) (taking into account
the effect of interest rate swaps).
These agreements involve the receipt of variable payments in
exchange for fixed payments over the term of the agreements without
the exchange of the underlying principal amounts. The main interest
rates exposure for the Group relates to the floating rates with the
TJLP, EURIBOR and LIBOR (refer to note 4.23). A change of 0.5% of
those floating rates would result in an increase in interest
expenses by $4.5 million in the year ended December 31, 2017 (2016:
$3.7 million).
Foreign Currency Risk
Foreign exchange risk arises from various currency exposures,
primarily with respect to the Euro, Brazilian Real and Bulgarian
Lev. Currency risk comprises (i) transaction risk arising in the
ordinary course of business, including certain financial debt
denominated in a currency other than the currency of the
operations; (ii) transaction risk linked to investments or mergers
and acquisitions; and (iii) translation risk arising on the
consolidation in US dollars of the consolidated financial
statements of subsidiaries with a functional currency other than
the US dollar.
To mitigate foreign exchange risk, (i) most revenues and
operating costs incurred in the countries where the Group operates
are denominated in the functional currency of the project company,
(ii) the external financial debt is mostly denominated in the
currency that matches the currency of the revenue expected to be
generated from the benefiting project, thereby reducing currency
risk, and (iii) the Group enters into various foreign currency sale
/ forward and / or option transactions at a corporate level. The
analysis of financial debt by currency is presented in note
4.23.
Potential sensitivity on the post-tax net result for the year
linked to financial instruments is as follows:
- if the US dollar had weakened/strengthened by 10% against the
Euro, post-tax loss for the year ended December 31, 2017 would have
been $0.5 million higher/lower (2016: $1.0 million
higher/lower).
- if the US dollar had weakened/strengthened by 10% against the
Brazilian Real, post-tax loss for the year ended December 31, 2017
would have been $2.2 million higher/lower (2016: $4.6 million
higher/lower).
Commodity pricing risk
The Group's current and future cash flows are generally not
impacted by changes in the prices of electricity, gas, oil and
other fuel prices as most of the Group's non-renewable plants
operate under long-term power purchase agreements and fuel purchase
agreements. These agreements generally mitigate against significant
fluctuations in cash flows as a result in changes in commodity
prices by passing through changes in fuel prices to the
offtaker.
Credit risk
Credit risk relates to risk arising from customers, suppliers,
partners, intermediaries and banks on its operating and financing
activities, when such parties are unable to honor their contractual
obligations. Credit risk results from a combination of payment
risk, delivery risk (failure to deliver services or products paid
for) and the risk of replacing contracts in default (known as mark
to market exposure - i.e. the cost of replacing the contract in
conditions other than those initially agreed). The Group analyzes
the credit risk for each new client prior to entering into an
agreement. In addition, in order to minimize risk, we contract
Political Risk Insurance policies from multilateral organizations
or commercial insurers which usually provide us with insurance
against government defaults. Such policies cover our project
companies in Armenia, Bulgaria, Colombia, Nigeria, Peru, Rwanda,
Togo, Senegal and Slovakia.
We restrict exposure to any one counterparty by setting credit
limits based on the credit quality as defined by Moody's and
S&P and by defining the types of financial instruments which
may be entered into. The minimum credit ratings the Group generally
accepts from banks or financial institutions are BBB- (S&P) and
Baa3 (Moody's). For offtakers, where credit rating are CCC+ or
below, the Group generally hedges its counterparty risk by
contracting Political Risk Insurance.
If there is no independent rating, the Group assesses the credit
quality of the customer, taking into account its financial
position, past experience and other factors.
Trade receivables can be due from a single customer or a few
customers who will purchase all or a significant portion of a power
plant's output under long-term power purchase agreements. This
customer concentration may impact the Group's overall exposure to
credit risk, either positively or negatively, in that the customers
may be affected by changes in economic, industry or other
conditions.
Ageing of trade receivables - net are analyzed below:
In $ millions Years ended December
31,
---------------------------------- -----------------------
2017
---------------------------------- ---------- -----------
Trade receivables not overdue 59.6 105.7
---------------------------------- ---------- -----------
Past due up to 90 days 7.2 31.1
---------------------------------- ---------- -----------
Past due between 90 - 180 days 3.1 1.9
---------------------------------- ---------- -----------
Past due over 180 days 1.1 3.0
---------------------------------- ---------- -----------
Total trade receivables 71.0 141.7
---------------------------------- ---------- -----------
As of December 31, 2017, $65.4 million (December 31, 2016: $12.2
million) of trade receivables and $27.2 million (December 31, 2016:
$17.4 million) of CO2 quotas receivables were outstanding in
connection with our Bulgarian power plant, Maritsa East 3 of which
$16.8 million was overdue as of December 31, 2017 and fully paid in
January 2018.
Past due up to 90 days also included $8.4 million from Cap de
Biches project which were fully paid in January 2018.
The Group deems the associated credit risk of the trade
receivables not overdue to be suitably low.
Liquidity risk
Liquidity risk arises from the Group not being able to meet its
obligations. The Group mainly relies on long-term debt obligations
to fund its acquisitions and construction activities. All
significant long-term financing arrangements are supported locally
and covered by the cash flows expected from the power plants when
operational. The Group has, to the extent available at acceptable
terms, utilized non-recourse debt to fund a significant portion of
the capital expenditures and investments required to construct and
acquire its electric power plants and related assets.
On September 6, 2017, the Group also entered into a EUR50
million revolving credit facility available for general corporate
purposes, maturing in September 2020, and which remains undrawn as
of December 31, 2017.
A rolling cash flow forecast of the Group's liquidity
requirements is prepared to confirm sufficient cash is available to
meet operational needs and to comply with borrowing limits or
covenants. Such forecasting takes into consideration the future
debt financing strategy, covenant compliance, compliance with
internal statement of financial position ratio targets and, if
applicable external regulatory or legal requirements - for example,
cash restrictions.
The subsidiaries are separate and distinct legal entities and,
unless they have expressly guaranteed any of the holding company
indebtedness, have no obligation, contingent or otherwise, to pay
any amounts due pursuant to such debt or to make any funds
available whether by dividends, fees, loans or other payments. Some
of the Group's subsidiaries guarantee indebtedness under one or
more credit facilities and certain of the holding company
outstanding debt securities.
The table below analyses the Group's financial liabilities into
relevant maturity groupings based on the remaining period to the
contractual maturity date:
In $ millions Less than 1 year Between 1 and 5 years Over 5 years Total
------------------------------------- ----------------- ---------------------- ------------- ----------
Year ended December 31, 2016 347.3 1,396.3 1,147.8 2,891.4
------------------------------------- ----------------- ---------------------- ------------- ----------
Borrowings (1) 141.8 1,321.1 1,104.4 2,567.3
------------------------------------- ----------------- ---------------------- ------------- ----------
Trade and other payables 179.8 - - 179.8
------------------------------------- ----------------- ---------------------- ------------- ----------
Derivative financial instruments 13.4 27.3 10.5 51.2
------------------------------------- ----------------- ---------------------- ------------- ----------
Other non-current liabilities (2) 12.3 47.9 32.9 93.1
------------------------------------- ----------------- ---------------------- ------------- ----------
Year ended December 31, 2017 398.4 1,766.6 1,079.6 3,244.6
------------------------------------- ----------------- ---------------------- ------------- ----------
Borrowings (1) 200.1 1,690.1 1,035.9 2,926.1
------------------------------------- ----------------- ---------------------- ------------- ----------
Trade and other payables 169.1 - - 169.1
------------------------------------- ----------------- ---------------------- ------------- ----------
Derivative financial instruments 14.7 27.9 21.8 64.4
------------------------------------- ----------------- ---------------------- ------------- ----------
Other non-current liabilities (2) 14.5 48.6 21.9 85.0
------------------------------------- ----------------- ---------------------- ------------- ----------
(1) Borrowings represent the outstanding nominal amount (note
4.23). Short-term debt of $200.1 million as of December 31, 2017
relate to the short-term portion of long term financings that
mature within the next twelve months, that we expect to repay using
cash on hand and cash received from operations.
(2) This corresponds to the debt to non-controlling interest
that is described in note 4.24
The table below analyses the Group's forecasted interests to be
paid into relevant maturity groupings based on the interests
maturity date:
Year ended December 31, 2017 Less than 1 year Between 1 and 5 years Over 5 years Total
---------------------------------------- ----------------- ---------------------- ------------- ----------
In $ millions
---------------------------------------- ----------------- ---------------------- ------------- ----------
Forecast interest expense to be paid 170.2 492.7 342.0 1,004.9
---------------------------------------- ----------------- ---------------------- ------------- ----------
The Group's forecasts and projections, taking into account
reasonably possible changes in operating performance, indicate that
the Group has sufficient financial resources, together with assets
that are expected to generate free cash flow to the Group. As a
consequence, the Group has reasonable expectation to be well placed
to manage its business risks and to continue in operational
existence for the foreseeable future (at least for the twelve-month
period from the approval date of these financial statements).
Accordingly, the Group continues to adopt the going concern basis
in preparing the consolidated financial statements.
Capital risk management section
The Company considers its capital and reserves attributable to
equity shareholders to be the Company's capital.
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern while providing
adequate returns for shareholders and benefits for other
stakeholders and to maintain a capital structure to optimize the
cost of capital.
In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce
debt. It may also increase debt provided that the funded venture
provides adequate returns so that the overall capital structure
remains supportable.
4.15. Derivative financial instruments
The Group uses interest rate swaps to manage its exposure to
interest rate movements on our borrowings, a foreign exchange
forward contract to mitigate its currency risk and cross currency
swap contracts in Cap des Biches project in Senegal to manage both
currency and interest rate risks. The fair value of derivative
financial instruments are as follows:
Year ended December 31,
----------------------------- ----------------------------------------------------
2016 2017
----------------------------- ------------------------- -------------------------
In $ millions Assets Liabilities Assets Liabilities
----------------------------- --------- -------------- --------- --------------
Interest rate swaps
- Cash flow hedge (1) - 41.2 - 35.4
----------------------------- --------- -------------- --------- --------------
Interest rate swaps
- Trading - 0.3 - -
----------------------------- --------- -------------- --------- --------------
Cross currency swaps
- Cash flow hedge (3) - 4.3 - 20.9
----------------------------- --------- -------------- --------- --------------
Foreign exchange forward
contracts - Trading
(3) 0.5 2.6 - 3.0
----------------------------- --------- -------------- --------- --------------
Foreign exchange option
contracts - Trading
(3) - 2.8 - 5.1
----------------------------- --------- -------------- --------- --------------
Acquisition hedge -
Trading (2) 5.8 - - -
----------------------------- --------- -------------- --------- --------------
Total 6.3 51.2 - 64.4
----------------------------- --------- -------------- --------- --------------
Less non-current portion:
----------------------------- --------- -------------- --------- --------------
Interest rate swaps
- Cash flow hedge - 29.4 - 23.8
----------------------------- --------- -------------- --------- --------------
Cross currency swaps
- Cash flow hedge - 4.3 - 20.8
----------------------------- --------- -------------- --------- --------------
Foreign exchange forward
contracts - Trading - 1.2 - -
----------------------------- --------- -------------- --------- --------------
Foreign exchange option
contracts - Trading - 2.9 - 5.1
----------------------------- --------- -------------- --------- --------------
Total non-current portion - 37.8 - 49.7
----------------------------- --------- -------------- --------- --------------
Current portion 6.3 13.4 - 14.7
----------------------------- --------- -------------- --------- --------------
(1) Interest rate swap - cash flow hedge relates to the hedging
of the variable elements for certain project financing.
(2) Upon execution of the share purchase agreement in November
2016 for the expected acquisition of the new Brazilian portfolio
described in note 3.2, the Group entered into a forward exchange
contract to hedge against increases (caused by any future
appreciation of the BRL against the U.S. Dollar) in the total
expected cash investment to be paid at closing of the acquisition.
The nominal value of this acquisition hedge was $164.0 million as
of December 31, 2016; hedge accounting has not been applied. On
March 17, 2017, at acquisition date, the Group settled the
acquisition hedge which resulted in a net gain of $11.7 million
recognized in the income statement, of which $5.7 million in
2017.
(3) The Group has also executed a series of offsets to protect
the value, in USD terms, of the BRL-denominated expected
distributions from the new Brazilian portfolio. The first two years
of BRL-denominated distributions have been hedged using a series of
forward exchange contracts and the distributions expected in years
three to five have been protected against material depreciation of
the BRL using option contracts. Hedge accounting does not apply,
change in fair value is recognized in the consolidated statement of
income.
The notional principal amount of:
- the outstanding interest rate swap contracts and cross
currency swap qualified as cash-flow hedge amounted to $572.0
million as of December 31, 2017 (December 31, 2016: $475.1
million).
- the outstanding foreign exchange forward and option contracts
amount to $92.8 million as of December 31, 2017 (December 31, 2016:
$225.7 million).
The Group also entered in 2015 into a cross currency swap in our
Cap des Biches project in Senegal. The fair value of the instrument
as of December 31, 2017 amounts to $20.9 million (December 31,
2016: $4.3 million). The accounting and risk management policies,
and further information about the derivative financial instruments
that we use, are set out in note 4.14.
The cross-currency swap subscribed for 2016 to protect the Group
from a change of interest rates and foreign exchange rates on the
Cap des Biches project before project financing disbursement which
occurred in January 2017 was settled in January 2017 and had a
notional value of $21.8 million as of December 31, 2016.
The Group recognized a loss of $12.1 million in December 31,
2017 in relation with its interest rate and cross currency swaps
within Finance costs net (December 31, 2016: income of $5.5
million).
4.16. Fair value measurements
The level in the fair value hierarchy within which a fair value
measurement in its entirety falls is based on the lowest level
input that is significant to the fair value measurement in its
entirety as defined below:
- Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the Group has the
ability to access at the measurement date.
- Level 2 inputs are inputs other than quoted prices included
within level 1 that are observable for the asset or liability,
either directly or indirectly.
- Level 3 inputs are unobservable inputs for the asset or liability.
There were no transfers between fair value measurement levels
between December 31, 2016 and 2017.
When measuring our interest rate, cross currency swaps and
foreign exchange forward and option contracts at fair value on a
recurring basis at both December 31, 2017 and 2016, we have
measured these at level 2 in the fair value hierarchy with the
exception of the debt to non-controlling interests which is level
3. The fair value of those financial instruments is determined by
using valuation techniques. These valuations techniques maximize
the use of observable data where it is available and rely as little
as possible on entity specific estimates.
The Group uses a market approach as part of their available
valuation techniques to determine the fair value of derivatives.
The market approach uses prices and other relevant information
generated from market transactions.
The Group's finance department performs valuation of financial
assets and liabilities required for financial reporting purposes as
categorized at level 2. The Group's only derivatives are interest
rate swaps, foreign exchange forward contracts, foreign exchange
option contracts and cross currency swap contracts in our Cap des
Biches project in Senegal.
4.17. Financial instruments by category
In $ millions Financial asset category
---------------------- --------------------------------------------------------------------------------------------
Loans and receivables Assets at fair value Derivative used for Total net book value
Years ended December through profit and hedging per balance sheet
31, 2016 loss
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Derivative financial
instruments - 6.3 - 6.3
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Financial assets -
Concession
arrangements,
financial lease
receivables and
other 604.8 - - 604.8
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Trade and other
receivables 128.4 - - 128.4
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Other non-current
assets (1) 6.5 0.6 - 7.1
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Cash and cash
equivalents - 433.7 - 433.7
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Total 739.7 440.6 - 1,180.3
---------------------- ---------------------- --------------------- ---------------------- ---------------------
In $ millions Financial asset category
---------------------- --------------------------------------------------------------------------------------------
Loans and receivables Assets at fair value Derivative used for Total net book value
Years ended December through profit and hedging per balance sheet
31, 2017 loss
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Derivative financial
instruments - - - -
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Financial assets -
Concession
arrangements,
financial lease
receivables and
other 617.7 - - 617.7
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Trade and other
receivables 215.4 - - 215.4
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Other non-current
assets (1) 18.4 0.7 - 19.1
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Cash and cash
equivalents - 781.1 - 781.1
---------------------- ---------------------- --------------------- ---------------------- ---------------------
Total 851.5 781.8 - 1,633.3
---------------------- ---------------------- --------------------- ---------------------- ---------------------
In $ millions Financial liability category
----------------------- ---------------------------------------------------------------------------------------------
Liabilities at fair Other financial Derivative used for Total net book value
Years ended December value through profit liabilities at hedging per balance sheet
31, 2016 and loss amortized cost
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Borrowings - 2,529.9 - 2,529.9
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Derivative financial
instruments 5.7 - 45.5 51.2
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Trade and other
payables - 179.8 - 179.8
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Other current
liabilities (1) - 50.1 - 50.1
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Other non-current
liabilities 93.1 74.8 - 167.9
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Total 98.8 2,834.6 45.5 2,978.9
----------------------- --------------------- ---------------------- ---------------------- ----------------------
In $ millions Financial liability category
----------------------- ---------------------------------------------------------------------------------------------
Liabilities at fair Other financial Derivative used for Total net book value
Years ended December value through profit liabilities at hedging per balance sheet
31, 2017 and loss amortized cost
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Borrowings - 2,890.1 - 2,890.1
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Derivative financial
instruments 8.1 - 56.3 64.4
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Trade and other
payables - 169.1 - 169.1
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Other current
liabilities (1) - 67.5 - 67.5
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Other non-current
liabilities 85.0 81.5 - 166.5
----------------------- --------------------- ---------------------- ---------------------- ----------------------
Total 93.1 3,208.2 56.3 3,357.6
----------------------- --------------------- ---------------------- ---------------------- ----------------------
(1) These balances exclude receivables and payables balances in
relation to taxes disclosed in notes 4.18 and 4.27
respectively.
4.18. Other non-current assets
Years ended December 31,
---------------------------------- ---------------------------
In $ millions 2016 2017
---------------------------------- ------------- ------------
CO2 quotas receivable (1) 6.3 3.6
---------------------------------- ------------- ------------
VAT receivables (2) 13.4 10.3
---------------------------------- ------------- ------------
Advance to supplier (3) - 9.5
---------------------------------- ------------- ------------
Restricted cash 0.6 0.7
---------------------------------- ------------- ------------
Other 0.3 5.4
---------------------------------- ------------- ------------
Total other non-current assets 20.6 29.5
---------------------------------- ------------- ------------
(1) Long term receivables relating to our Maritsa power plant
and to be received through a pass-through mechanism agreed with its
offtaker. A similar liability is presented in note 4.24.
(2) VAT receivables mainly relate to the Vorotan project. The
amount is expected to be recovered over a five-year period from the
acquisition date in 2015 and was discounted using a rate of 10.0%.
A current portion of $4.7 million is presented in "trade and other
receivables" in the consolidated statement of financial position as
of December 31, 2017 ($4.9 million as of December 31, 2016).
(3) Advance payment to supplier relate to Vorotan EPC contract
as part of the refurbishment program.
4.19. Inventories
Years ended December 31,
--------------------- ---------------------------
In $ millions 2016 2017
--------------------- ------------- ------------
Fuel 10.8 12.8
--------------------- ------------- ------------
Spare parts 18.3 25.3
--------------------- ------------- ------------
Other 7.1 21.0
--------------------- ------------- ------------
Total 36.2 59.1
--------------------- ------------- ------------
Provision (4.5) (5.0)
--------------------- ------------- ------------
Total inventories 31.7 54.1
--------------------- ------------- ------------
4.20. Trade and other receivables
In $ millions Years ended December 31,
------------------------------------------------- ---------------------------
2016 2017
------------------------------------------------- ------------- ------------
Trade receivables - Gross 78.6 144.1
------------------------------------------------- ------------- ------------
Accrued revenue (unbilled) 41.6 57.4
------------------------------------------------- ------------- ------------
Provision for impairment of trade receivables (7.6) (2.4)
------------------------------------------------- ------------- ------------
Trade receivables - Net 112.6 199.1
------------------------------------------------- ------------- ------------
Other receivables 54.3 72.7
------------------------------------------------- ------------- ------------
Trade and other receivables 166.9 271.8
------------------------------------------------- ------------- ------------
All trade and other receivables are short term and the net
carrying value of trade receivables is considered a reasonable
approximation of the fair value. The ageing of trade receivables -
net is presented in note 4.14.
All trade and other receivables are pledged as security in
relation with the Group's project financings.
Other receivables primarily correspond to indirect tax
receivables, mainly in our power plants in Rwanda, Senegal and
Armenia.
4.21. Cash and cash equivalents
Certain restrictions on our cash and cash equivalents have been
primarily imposed by financing agreements or long-term obligations.
They mainly include short-term security deposits kept as collateral
and debt service reserves that cover short-term repayments and
which meet the definition of cash and cash equivalents. 41.0% of
our cash and cash equivalents as of December 31, 2017 is pledged as
security in relation with the Group's project financings (December
31, 2016: 50.0%); cash and cash equivalents also includes $107.2
million as of December 31, 2017 (December 31, 2016: $95.6 million)
of cash balances relating to debt service reserves required by
project finance agreements.
4.22. Issued capital and reserves
Issued capital of the Company amounted to $8.9 million as at 31
December 2017, with changes as follows:
Alloted, called up and fully paid Number Nominal value GBP million $ million
-------------------------------------------------------- ---------------- -------------- ------------ ------------
As at 26 September 2017 100 1.00 - -
-------------------------------------------------------- ---------------- -------------- ------------ ------------
Issue of shares - 17 October 2017 1,002,000,000 1.00 1,002.0 1,320.7
-------------------------------------------------------- ---------------- -------------- ------------ ------------
As at 17 October 2017 1,002,000,100 1.00 1,002.0 1,320.7
-------------------------------------------------------- ---------------- -------------- ------------ ------------
Share capital reduction - 19 October 2017 1,002,000,100 (0.99) (992.0) (1,307.5)
-------------------------------------------------------- ---------------- -------------- ------------ ------------
As at 19 October 2017 1,002,000,100 0.01 10.0 13.2
-------------------------------------------------------- ---------------- -------------- ------------ ------------
Issue of ordinary shares - Listing on the London Stock
Exchange 122,399,020 0.01 1.2 1.6
-------------------------------------------------------- ---------------- -------------- ------------ ------------
Issue of ordinary shares - Management 712,920 0.01 - -
-------------------------------------------------------- ---------------- -------------- ------------ ------------
Share reorganization - cancellation of deferred shares (454,399,120) 0.01 (4.5) (5.9)
-------------------------------------------------------- ---------------- -------------- ------------ ------------
As at 31 December 2017 670,712,920 0.01 6.7 8.9
-------------------------------------------------------- ---------------- -------------- ------------ ------------
On incorporation, 26 September 2017, the Company issued 100
ordinary shares with a nominal value of GBP1.00 to its Parent
Company, ContourGlobal LP. The amount due was settled through an
intercompany receivable.
On 17 October 2017, the Company issued to its Parent Company,
ContourGlobal L.P. 1,002,000,000 ordinary shares with a nominal
value of GBP1.00 each as payment for its acquisition of
ContourGlobal Worldwide Holdings S.à r.l.
On 19 October 2017, the Company passed a special resolution
supported by a solvency statement to reduce its share capital under
s641(a) of the Companies Act 2006 by reducing the share capital of
the Company of $1,320,736,335 divided into 1,002,000,100 ordinary
shares of GBP1.00, each fully paid, to $13,207,366 divided into
1,002,000,100 ordinary shares of GBP0.01, each fully paid, by the
cancellation of the paid up share capital to the extent of GBP0.99
per share upon each of the 1,002,000,100 ordinary shares reducing
the nominal amount of all such shares from GBP1.00 to GBP0.01.
On 8 November 2017, the Company passed a resolution to
consolidate the 1,002,000,100 ordinary shares of GBP0.01 each in
the share capital of the Company into 1 ordinary share of
GBP10,020,001 and the sub-division of that share into 547,600,980
ordinary shares and 454,399,120 deferred shares each of
GBP0.01.
On 14 November, the Company completed the pricing of its initial
public offering of ordinary shares at GBP2.50 per share, comprising
122,399,020 new shares and 54,026,083 existing shares. The Company
also issued additional 712,920 new shares subscribed by its
management. The issuance of these new shares resulted in the
recognition of a share premium of GBP306.5 million ($400.7
million), net of listing costs deducted of $19.9 million, resulting
in total share premium of $380.8 million.
The Group restructure resulted in a $353.0 million debit to
retained earnings and other reserves, which represents a capital
reorganization structure reserve.
Finally, the Company cancelled all existing 454,399,120 deferred
shares, resulting in a total net ordinary shares of 670,712,920
shares as of 31 December 2017.
Retained earnings and other reserves comprise retained earnings
of ($7.9m) (2016: ($621.7m)) and capital reorganization reserve of
$353.0m (2016: nil).
During the year the Group paid dividends of $54.2m on 19th April
2017 and $21.3m on 8th November 2017 to ContourGlobal L.P. Due to
the fact that both of these were paid out prior to the IPO and full
restructuring of the shares, dividends per share in relation to
each payment has not been disclosed as it would not be relevant to
the user of the accounts.
4.23. Borrowings
Certain power plants have financed their electric power
generating projects by entering into external financing
arrangements which require the pledging of collateral and may
include financial covenants as described below. The financing
arrangements are generally non-recourse (subject to certain
guarantees) and the legal obligation for repayment is limited to
the borrowing entity.
The Group's principal borrowings amount to $2,926.1 million in
total as of December 31, 2017 (December 31, 2016: $2,567.4 million)
and primarily relate to the following:
Type of borrowing Currency Project Financing Issue Maturity Outstanding nominal amount 12.31.16 Outstanding nominal amount 12.31.17 Rate
($ million) ($ million)
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Corporate
Corporate bond (1) EUR Indenture 2016 2021 631.0 840.4 5.125%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Loan Agreement EUR Arrubal 2011 2021 206.0 207.9 4.9%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
EURIBOR +
Loan Agreement EUR Maritsa 2006 2023 200.9 200.8 0.125%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Loan Agreement / TJLP + 2.18% /
Debentures (2) BRL Chapada I 2015 2032 2029 205.5 198.7 IPCA + 8%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Project bond USD Inka 2014 2034 193.0 189.0 6.0%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Loan Agreement (2) BRL Chapada II 2016 2032 177.2 165.1 TJLP + 2.18%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Loan Agreement USD Vorotan 2016 2034 140.0 137.3 LIBOR + 4.625%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Loan Agreement (2) BRL Asa Branca 2011 2030 130.5 120.1 TJLP+ 1.92%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
USD-LIBOR BBA
Loan Agreement USD Cap des Biches 2015 2033 76.3 110.1 (ICE)+3.20%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Loan Agreement /
Corp. Financing Mix of fix and
(3) EUR Solar Italy 2017 2024-2028 62.7 125.4 variable rates
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
7.16% (Weighted
Loan Agreement USD Togo 2008 2028 109.3 102.9 average)
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Loan Agreement EUR Austria Wind 2013 2027 98.1 98.7 EURIBOR 6M +
2.45% and
4.305% /
EURIBOR
3M+1.95% and
4.0%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Bridge loan BRL Hydro Brazil 2017 2020 - 83.1 CDI + 5%
Portfolio II and
Solutions Brazil
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
LIBOR plus
5.50% and mix
Loan Agreement USD KivuWatt 2011 2026 89.0 82.0 of fixed rates
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Hydro Brazil
Debentures BRL portfolio I 2013 2027 56.2 53.0 8.8%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Loan Agreement (2) BRL Hydro Brazil 2007 - 2024 - 52.5 TJLP + 1.92%,
(4) Portfolio II 2009 2.28 and 2.27%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
2009 - 2023 - Mix of fix and
Loan Agreement EUR Solar Slovak 2015 2026 50.5 50.4 variable rates
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Loan Agreement (2) BRL Chapada III 2015 2032 52.7 49.1 TJLP + 2.18%
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
Other Credit
facilities
(individually < 2012 - 2016 -
$40 million) Various Various 2013 2034 88.5 59.6
------------------- ---------- ------------------- ------- ----------- ------------------------------------ ------------------------------------ ----------------
(1) Corporate bond issued by ContourGlobal Power Holdings in May
2014 ($400 million) and November 2015 ($100 million) was fully
refinanced in June 2016. A new EUR550 million corporate bond was
issued in June 2016, with two additional EUR50 million and EUR100
million taps in July 2016 and February 2017. This bond bears a
fixed interest of 5.125% and matures in June 2021.
(2) Taxa de Juros de Longo Prazo ("TJLP") represents the Brazil
Long Term Interest Rate, which was approximately 7.0% at December
31, 2017 (December 31, 2016: 7.5%).
(3) On December 4, 2017, the Group acquired a renewable
portfolio in Italy representing a total of 19.1 MW and subsequently
to the closing the Group refinanced the portfolio. Refer to Note 3
Major events and changes in the scope of consolidation.
(4) On March 17, 2017, the Group acquired a thermal and
renewable portfolio in Brazil representing a total of 205.6 MW.
Refer to Note 3.2 Major events and changes in the scope of
consolidation.
With the exception of our corporate bond and revolving credit
facility, all external borrowings relate to project financings.
Such project financings are generally non-recourse (subject to
certain guarantees).
The carrying amounts of the Group's borrowings are denominated
in the following currencies:
In $ millions Years ended December 31,
------------------- ---------------------------
2016 2017
------------------- ------------- ------------
US Dollars 631.2 645.4
------------------- ------------- ------------
Euros 1,250.7 1,525.1
------------------- ------------- ------------
Brazilian Reals 645.1 719.6
------------------- ------------- ------------
Other 2.9 -
------------------- ------------- ------------
Total 2,529.9 2,890.1
------------------- ------------- ------------
The carrying amounts and fair value of the current and
non-current borrowings are as follows:
In $ millions Carrying amount Fair Value
--------------------- ----------------------- -----------------------
Years ended December Years ended December
31, 31,
--------------------- ----------------------- -----------------------
2016 2017 2016 2017
--------------------- ----------- ---------- ----------- ----------
Credit facilities 1,634.5 1,787.0 1,704.4 1,861.5
--------------------- ----------- ---------- ----------- ----------
Bonds 895.4 1,103.1 953.9 1,175.9
--------------------- ----------- ---------- ----------- ----------
Total 2,529.9 2,890.1 2,658.3 3,037.4
--------------------- ----------- ---------- ----------- ----------
Net debt as of December 31, 2016 and 2017 is as follows:
In $ millions Years ended December
31,
----------------------------------------- --------------------------
2016 2017
----------------------------------------- ------------ ------------
Cash and cash equivalents 433.7 781.1
----------------------------------------- ------------ ------------
Borrowings - repayable within
one year (141.8) (200.1)
----------------------------------------- ------------ ------------
Borrowings - repayable after
one year (2,425.5) (2,726.0)
----------------------------------------- ------------ ------------
Interests payable, deferred financing
costs and other 37.4 36.0
----------------------------------------- ------------ ------------
Net debt (2,096.2) (2,109.0)
----------------------------------------- ------------ ------------
Cash and cash equivalents 433.7 781.1
----------------------------------------- ------------ ------------
Borrowings - fixed interest rates (1,825.4) (2,028.1)
----------------------------------------- ------------ ------------
Borrowings - variable interest
rates (741.9) (898.0)
----------------------------------------- ------------ ------------
Interests payable, deferred financing
costs and other 37.4 36.0
----------------------------------------- ------------ ------------
Net debt (2,096.2) (2,109.0)
----------------------------------------- ------------ ------------
In $ millions Cash and cash equivalents Borrowings Total net debt
----------------------------------------------- -------------------------- ------------ ---------------
As of January 1,2016 261.5 (2,413.1) (2,151.6)
----------------------------------------------- -------------------------- ------------ ---------------
Cash-flows 178.9 - 178.9
----------------------------------------------- -------------------------- ------------ ---------------
Change in scope - 13.6 13.6
----------------------------------------------- -------------------------- ------------ ---------------
Proceeds of borrowings - (889.0) (889.0)
----------------------------------------------- -------------------------- ------------ ---------------
Repayments of borrowings - 845.9 845.9
----------------------------------------------- -------------------------- ------------ ---------------
Currency translations differences and other (6.7) (87.3) (94.0)
----------------------------------------------- -------------------------- ------------ ---------------
As of December 31,2016 433.7 (2,529.9) (2,096.2)
----------------------------------------------- -------------------------- ------------ ---------------
Cash-flows 263.5 - 263.5
----------------------------------------------- -------------------------- ------------ ---------------
Change in scope 37.4 (116.0) (78.6)
----------------------------------------------- -------------------------- ------------ ---------------
Proceeds of borrowings - (310.9) (310.9)
----------------------------------------------- -------------------------- ------------ ---------------
Repayments of borrowings - 233.0 233.0
----------------------------------------------- -------------------------- ------------ ---------------
Currency translations differences and other 46.4 (166.2) (119.8)
----------------------------------------------- -------------------------- ------------ ---------------
As of December 31,2017 781.1 (2,890.1) (2,109.0)
----------------------------------------------- -------------------------- ------------ ---------------
Debt Covenants and restrictions
The main long term financial debts include certain financial
covenants, of which the principal ones are as follows:
- debt Service Coverage Ratio greater than 1.05, 1.10, 1.15,
1.20, 1.30 depending on borrowings,
- net debt/EBITDA lower than 7.5 (Santa Cruz),
- decreasing Senior Debt and Total Debt (Arrubal),
- debt / Equity ratio: 85/15, 80/20, 75/25, 64.16/35.84 depending on borrowings,
- equity / Asset ratio above 12%, 15%, 25% or 30% depending on borrowings,
- loan Life Coverage Ratio greater than 1.10 (Solar Italy and
Trinity) or 1.35 (Projected - Kivuwatt).
Non-financial covenants includes the requirement to maintain
proper insurance coverage, enter into hedging agreements, maintain
certain cash reserves, restrictions on dispositions, scope of the
business, and mergers and acquisitions.
These covenants are monitored appropriately to ensure that the
contractual conditions are met.
As of December 31, 2017, the Group and its subsidiaries did not
breach any financial covenant which would trigger early mandatory
repayment.
Securities given
The Group typically grants securities in relation with the
issuance of project financing. The table below provides an overview
of the main guarantees provided under existing project financing as
of December 31, 2017:
Project Facility Maturity Security / Guarantee given
financing
----------- ------------- --------- ---------------------------------------
Arrubal Arrubal 2021 Pledge of (i) the shares of
Term CG La Rioja, (ii) project
Loan accounts, (iii) insurance
policies, (iv) receivables
on project documents (PPA,
Operations & Maintenance,
Gas Supply Agreement...),
(v) mortgage over the power
station and industrial items.
----------- ------------- --------- ---------------------------------------
Asa Branca Credit 2030 Pledge of shares of Asa Branca
facility Holding SA, pledge of the
receivables under the Asa
Branca PPA, pledge on certain
project accounts, mortgage
of assets of the Asa Branca
Windfarm Complex, assignment
of credit rights under project
contracts (EPC, land leases,
O&M...).
----------- ------------- --------- ---------------------------------------
Sunburn Letter 2021 On December 22, 2010, a EUR2.4
of Credit million letter of credit facility
Agreement was entered into to fund obligations
under the debt service reserve
account (in accordance with
the Saint Martin loan agreement).
This letter of credit expires
in June 2021. No amounts have
been recognized in relation
to letter of credit in either
period.
----------- ------------- --------- ---------------------------------------
Togo Loan 2028 ContourGlobal Plc guarantee
agreement on cash shortfall for Debt
service, and (i) a pledge
of CG Togo LLC and CG Togo
SA capital stock, (ii) a charge
on equipment, material and
assets of CG Togo SA, (iii)
the assignment of receivables
of CG Togo SA, (iv) the assignment
of insurance policies, and
(v) a pledge on the project
accounts.
----------- ------------- --------- ---------------------------------------
Inka Senior 2034 Pledge of shares of Energia
secured Eolica SA, EESA assets, accounts,
notes assignment of receivables
of the project contracts and
insurances.
----------- ------------- --------- ---------------------------------------
Inka Letter 2019 $8.5m ContourGlobal Plc guarantee
of Credit to Credit Suisse.
Agreement
----------- ------------- --------- ---------------------------------------
Energie Credit 2023-28 Pledge of the shares, assets,
Europe Facilities cash accounts and receivables.
Wind EUR10.3m CG Solar Holdings
& Solar guarantee for the benefit
of UBI and Natixis covering
a Primavera plant potential
adverse impact on FiT further
to a GSE inspection.
----------- ------------- --------- ---------------------------------------
Maritsa Credit 2023 Pledge of the shares, any
Facility dividends on the pledged shares
and the entire commercial
enterprise of ME-3, including
the receivables from the ME-3
PPA.
----------- ------------- --------- ---------------------------------------
Kivuwatt Financing 2026 - Secured by, among others,
Arrangement (i) KivuWatt Holdings' pledge
of all of the shares of KivuWatt
held by KivuWatt Holdings,
(ii) certain of KivuWatt's
bank accounts and (iii) KivuWatt's
movable and immovable assets.
- ContourGlobal Plc $1.2
million guarantee for the
benefit of KivuWatt under
the PPA and Gas
Concession to the Government
of Rwanda and to Electrogaz
(outside of the loan guarantee).
- ContourGlobal Plc guarantee
of $55 million to fund any
cost overruns up to $25 million
and $30 million debt buydown.
- $8.5million UK Plc guarantee
to cover DSRA as of December
31,2017.
----------- ------------- --------- ---------------------------------------
Cap des Credit 2033 Pledge over CG Senegal and
Biches Facility CG Cap des Biches Sénégal
shares, pledge over the project
accounts, charge over the
assets of CG Cap des Biches
Sénégal, assignment
of receivables of CG Cap des
Biches Sénégal and
the insurance policies, direct
agreement on the project contracts.
----------- ------------- --------- ---------------------------------------
Vorotan Long 2034 Pledge of shares of ContourGlobal
Term HydroCascade CSJC assets and
Facility project accounts, assignment
of receivables arising from
the project contracts and
insurances.
----------- ------------- --------- ---------------------------------------
Chapada Long 2032 Pledge of shares of Chapada
I Term I SPVs and Holding, SPVs assets,
Facility accounts, assignment of receivables
of the project contracts and
insurances.
----------- ------------- --------- ---------------------------------------
Chapada Long 2032 Pledge of shares of Chapada
II Term II SPVs and Holding, SPVs
Facility assets, accounts, assignment
of receivables of the project
contracts and insurances.
----------- ------------- --------- ---------------------------------------
Chapada Long 2032 Pledge of shares of Chapada
III Term III SPVs and Holding, SPVs
Facility assets, accounts, assignment
of receivables of the project
contracts and insurances.
Corporate guarantee from
ContourGlobal do Brazil Holding
Ltda until Financial Completion.
----------- ------------- --------- ---------------------------------------
Hydro Bridge 2020 First ranking security interest
Brazil Facility in the shares of all the entities
Portfolio in the borrower group (ex-minorities)
II and plus pledge of receivables.
Solutions
Brazil
----------- ------------- --------- ---------------------------------------
4.24. Other non-current liabilities
In $ millions Years ended December 31,
----------------------------------------- ---------------------------
2016 2017
----------------------------------------- ------------- ------------
Debt to non-controlling interest (1) 93.1 85.0
----------------------------------------- ------------- ------------
Deferred payments on acquisitions (2) 61.1 52.4
----------------------------------------- ------------- ------------
CO2 quotas payables (3) 6.3 3.7
----------------------------------------- ------------- ------------
Other (4) 7.4 25.4
----------------------------------------- ------------- ------------
Total other non-current liabilities 167.9 166.5
----------------------------------------- ------------- ------------
(1) Debt to non-controlling interests: in 2011, the Group
purchased a 73% interest in Maritsa power plant. NEK owns the
remaining 27% of Maritsa power plant. The shareholders' agreement
states that all distributable results available should be
distributed to their shareholders, with no unconditional right to
avoid dividends. Consequently and in accordance with IAS 32
'Financial Instruments: presentation', shares held by NEK do not
qualify as equity instruments and are recorded as a liability to
non-controlling interests in the Group's Statement of Financial
Position. The fair value of the debt to non-controlling interest is
determined using a discounted cash flow method based on
management's current best estimate of the future distributable
profits to the minority shareholder NEK over the PPA period. This
debt is discounted using a European risk free rate and adding the
credit default swap ("CDS") spread for Bulgaria.
The change in the debt to Maritsa non-controlling interest is
presented below:
In $ millions Years ended December
31,
------------------------------------ -----------------------
2016 2017
------------------------------------ ----------- ----------
Beginning of the period 117.2 93.1
------------------------------------ ----------- ----------
Dividends (20.3) (16.2)
------------------------------------ ----------- ----------
Change in fair value recognized
in profit and loss (1.2) (3.8)
------------------------------------ ----------- ----------
Currency translation adjustments (2.6) 11.9
------------------------------------ ----------- ----------
End of the period 93.1 85.0
------------------------------------ ----------- ----------
(2) As of December 31, 2017, deferred payments and earn-outs on
acquired entities mainly relate to deferred payments to be made to
initial developers and earn-out payment of Inka due four years
after the Commercial Operational Date.
(3) CO2 quotas are described in note 4.18.
(4) The increase is primarily related to contractual obligations
in Brazil.
4.25. Provisions
In $ millions Decommissioning / Environmental / Legal and other Total
Maintenance provision
-------------------------------------------- ------------------------------------------- ---------------- ---------
As of January 1, 2016 28.9 44.9 73.8
-------------------------------------------- ------------------------------------------- ---------------- ---------
Additions 5.3 3.0 8.3
-------------------------------------------- ------------------------------------------- ---------------- ---------
Unused amounts reversed - (5.4) (5.4)
-------------------------------------------- ------------------------------------------- ---------------- ---------
Amounts used during the period - (2.6) (2.6)
-------------------------------------------- ------------------------------------------- ---------------- ---------
Currency translation differences and
other (0.4) (1.9) (2.3)
-------------------------------------------- ------------------------------------------- ---------------- ---------
As of December 31, 2016 33.8 38.0 71.8
-------------------------------------------- ------------------------------------------- ---------------- ---------
Acquired through business combination 2.8 5.3 8.1
-------------------------------------------- ------------------------------------------- ---------------- ---------
Additions 15.5 6.0 21.5
-------------------------------------------- ------------------------------------------- ---------------- ---------
Unused amounts reversed (0.5) (24.4) (24.9)
-------------------------------------------- ------------------------------------------- ---------------- ---------
Amounts used during the period - (3.3) (3.3)
-------------------------------------------- ------------------------------------------- ---------------- ---------
Currency translation differences and
other 1.8 (2.0) (0.2)
-------------------------------------------- ------------------------------------------- ---------------- ---------
As of December 31, 2017 53.4 19.6 73.0
-------------------------------------------- ------------------------------------------- ---------------- ---------
Site decommissioning provisions are recognized based on
assessment of future decommissioning costs which would need to be
incurred in accordance with existing legislation to restore the
sites. Environmental provisions primarily relate to obligations of
our Spanish power plant. Maintenance provisions mainly relate to
our maintenance obligations under our concession agreement contract
in Togo and Senegal.
Legal and other provisions include amounts arising from claims,
litigation and regulatory risks which will be utilized as the
obligations are settled and includes sales tax and interest or
penalties associated with taxes.
Other than the provision in Togo and Senegal for the overhaul
which are expected to start respectively in 2021 and 2019, the
other provisions have some uncertainty over the timing of cash
outflows.
4.26. Trade and other payables
In $ millions Years ended December
31,
---------------------------- -----------------------
2016 2017
---------------------------- ----------- ----------
Trade payables 87.6 53.9
---------------------------- ----------- ----------
Accrued expenses 92.2 115.2
---------------------------- ----------- ----------
Trade and other payables 179.8 169.1
---------------------------- ----------- ----------
4.26. Other current liabilities
In $ millions Years ended December
31,
----------------------------------- -------------------------
2016 2017
----------------------------------- ----------- ------------
Deferred revenue 11.9 6.0
----------------------------------- ----------- ------------
Deferred payment on acquisition
(1) - 1.8
----------------------------------- ----------- ------------
Other taxes payable 26.5 45.1
----------------------------------- ----------- ------------
Other (2) 38.2 59.7
----------------------------------- ----------- ------------
Other current liabilities 76.6 112.6
----------------------------------- ----------- ------------
(1) Relates to the deferred payment of the thermal and renewable
portfolio in Brazil as of December 31, 2017.
(2) The increase is primarily related to contractual obligations
in Brazil partially offset by the completion of the acquisition of
15% and 5% minority interests in Chapada I and Chapada II projects
in 2017 for a total consideration of $21.3 million. After this
transaction, the Group owns directly 51% of those projects.
4.28. Group undertakings
ContourGlobal PLC United 15 Berkeley Street
Kingdom 6th Floor, London,
W1J 8DY
------------------------------------------------ ------------------ -----------------------------
Consolidated subsidiaries Ownership Country Registered address
of incorporation
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Hydro 100% Armenia AGBU building; 2/2
Cascade CJSC Meliq-Adamyan str.,0010
Yerevan, Armenia
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal erneuerbare 100% Austria Fleischmarkt 1, Top
Energie Europa 01, Vienna 1010,
GmbH Austria
------------------------------------ ---------- ------------------ -----------------------------
Windpark HAGN GmbH 95% Austria Fleischmarkt 1, Top
& Co KG 01, Vienna 1010,
Austria
------------------------------------ ---------- ------------------ -----------------------------
Windpark Deutsch 62% Austria Fleischmarkt 1, Top
Haslau GmbH 01, Vienna 1010,
Austria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Windpark 100% Austria Fleischmarkt 1, Top
Zistersdorf Ost 01, Vienna 1010,
GmbH Austria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Windpark 100% Austria Fleischmarkt 1, Top
Berg GmbH 01, Vienna 1010,
Austria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Windpark 100% Austria Fleischmarkt 1, Top
Scharndorf GmbH 01, Vienna 1010,
Austria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Windpark 100% Austria Fleischmarkt 1, Top
Trautmannsdorf 01, Vienna 1010,
GmbH Austria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Windpark 100% Austria Fleischmarkt 1, Top
Velm GmbH 01, Vienna 1010,
Austria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Management 100% Austria Fleischmarkt 1, Top
Europa GmbH 01, Vienna 1010,
Austria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Wind 100% Austria Fleischmarkt 1, Top
Holding GmbH 01, Vienna 1010,
Austria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Development 100% Austria Fleischmarkt 1, Top
GmbH 01, Vienna 1010,
Austria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Maritsa 73% Bulgaria 48 Sitnyakovo Blvd;
East 3 AD 9-th fl., Sofia 1505,
Bulgaria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Operations 73% Bulgaria TPP ContourGlobal
Bulgaria AD Maritsa East 3, Mednikarovo
village 6294, Galabovo
District, Stara Zagora
Region, Bulgaria
------------------------------------ ---------- ------------------ -----------------------------
ContourGlobal Management 100% Bulgaria 48 Sitnyakovo Blvd;
Sofia EOOD 9-th fl., Sofia 1505,
Bulgaria
------------------------------------ ---------- ------------------ -----------------------------
Galheiros Geração 77% Brazil Rua Leopoldo Couto
de Energia Elétrica Magalhães Junior,
S.A. 758, 3 andar, São
Paulo 04542-000,
Brazil
------------------------------------ ---------- ------------------ -----------------------------
Santa Cruz Power 72% Brazil Rua Leopoldo Couto
Corporation Usinas Magalhães Junior,
Hidroelétricas 758, 3 andar, Itaim
S.A. Bibi, São Paulo
04542-000, Brazil
------------------------------------ ---------- ------------------ -----------------------------
Contour Global 100% Brazil Rua Leopoldo Couto
Do Brasil Holding Magalhães Júnior,
Ltda 758, 3 andar, Sao
Paulo 04542-000,
Brazil
------------------------------------ ---------- ------------------ -----------------------------
Contour Global 80% Brazil Rua Leopoldo Couto
Do Brasil Participações Magalhães Júnior,
Ltda 758, 3 andar, Sao
Paulo 04542-000,
Brazil
------------------------------------ ---------- ------------------ -----------------------------
Abas Geração 100% Brazil Rua Leopoldo Couto
de Energia Ltda. Magalhães Junior,
758, 3 andar, São
Paulo 04542-000,
Brazil
------------------------------------ ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rodovia Dr. Mendel
Joana IX Energias Steinbruch, S/N -
Renováveis Km, 08 Sala 182 -
S.A. Distrito Industrial
- Maracanaú
- CE
------------------------------------ ---------- ------------------ -----------------------------
Calcedônia 100% Brazil Rua Leopoldo Couto
Geração Magalhães Junior,
de Energia Ltda. 758, 3 andar, São
Paulo 04542-000,
Brazil
------------------------------------ ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rua Leopoldo Couto
Joana X Energias de Magalhães
Renováveis Jr., 758 - cj. 31,
S.A. São Paulo 04542-000,
Brazil
------------------------------------ ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rua Leopoldo Couto
Joana XI Energias de Magalhães
Renováveis Jr., 758 - cj. 31,
S.A São Paulo 04542-000
------------------------------------ ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rua Leopoldo Couto
Joana XII Energias de Magalhães
Renováveis Jr., 758 - cj. 31,
S.A. São Paulo 04542-000,
Brazil
------------------------------------ ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rua Leopoldo Couto
Joana XIII Energias de Magalhães
Renováveis Jr., 758 - cj. 31,
S.A. São Paulo 04542-000,
Brazil
------------------------------------ ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rua Leopoldo Couto
Joana XV Energias de Magalhães
Renováveis Jr., 758 - cj. 31,
S.A. São Paulo 04542-000,
Brazil
------------------------------------ ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rua Leopoldo Couto
Joana XVI Energias de Magalhães
Renováveis Jr., 758 - cj. 31,
S.A. São Paulo 04542-000,
Brazil
------------------------------------ ---------- ------------------ -----------------------------
Consolidated subsidiaries Ownership Country Registered address
of incorporation
----------------------------- ---------- ------------------ -----------------------------
Asa Branca Holding 100% Brazil Rua Leopoldo Couto
S.A. de Magalhães
Jr., 758 - cj. 31,
São Paulo 04542-000,
Brazil
----------------------------- ---------- ------------------ -----------------------------
Tespias Geração 80% Brazil Rua Leopoldo Couto
de Energia Ltda. de Magalhães
Jr., 758 - cj. 31,
São Paulo 04542-000,
Brazil
----------------------------- ---------- ------------------ -----------------------------
Asa Branca IV 100% Brazil Rua Leopoldo Couto
Energias Renováveis de Magalhães
SA Jr., 758 - cj. 31,
São Paulo 04542-000,
Brazil
----------------------------- ---------- ------------------ -----------------------------
Asa Branca V Energias 100% Brazil Rua Leopoldo Couto
Renováveis de Magalhães
SA Jr., 758 - cj. 31,
São Paulo 04542-000,
Brazil
----------------------------- ---------- ------------------ -----------------------------
Asa Branca VI 100% Brazil Rua Leopoldo Couto
Energias Renováveis Magalhães Júnior,
SA 758, 3 andar, Sao
Paulo 04542-000,
Brazil
----------------------------- ---------- ------------------ -----------------------------
Asa Branca VII 100% Brazil Rua Leopoldo Couto
Energias Renováveis Magalhães Júnior,
SA 758, 3 andar, Sao
Paulo 04542-000,
Brazil
----------------------------- ---------- ------------------ -----------------------------
Asa Branca VIII 100% Brazil Rua Leopoldo Couto
Energias Renováveis Magalhães Júnior,
SA 758, 3 andar, Sao
Paulo 04542-000,
Brazil
----------------------------- ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rodovia Dr. Mendel
Joana I Energias Steinbruch, S/N
Renováveis - Km, 08 Sala 182
S.A. - Distrito Industrial
- Maracanaú
- CE
----------------------------- ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rodovia Dr. Mendel
Joana III Energias Steinbruch, S/N
Renováveis - Km, 08 Sala 182
S.A. - Distrito Industrial
- Maracanaú
- CE
----------------------------- ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rodovia Dr. Mendel
Joana IV Energias Steinbruch, S/N
Renováveis - Km, 08 Sala 182,
S.A. Distrito Industrial
- Maracanaú
- CE
----------------------------- ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rodovia Dr. Mendel
Joana V Energias Steinbruch, S/N
Renováveis - Km, 08 Sala 182
S.A. - Distrito Industrial
- Maracanaú
- CE
----------------------------- ---------- ------------------ -----------------------------
Ventos de Santa 51% Brazil Rodovia Dr. Mendel
Joana VII Energias Steinbruch, S/N
Renováveis - Km, 08 Sala 182
S.A. - Distrito Industrial
- Maracanaú
- CE
----------------------------- ---------- ------------------ -----------------------------
Ventos de Santo 51% Brazil Rodovia Dr. Mendel
Augusto IV Energias Steinbruch, S/N
Renováveis - Km, 08 Sala 182
S.A. - Distrito Industrial
- Maracanaú
- CE
----------------------------- ---------- ------------------ -----------------------------
Chapada do Piauí 51% Brazil Rua Leopoldo Couto
I Holdings S.A. de Magalhães
Jr., 758 - cj. 31,
São Paulo 04542-000
----------------------------- ---------- ------------------ -----------------------------
Ventos de Santo 100% Brazil Rodovia Dr. Mendel
Augusto III Energias Steinbruch, S/N
Renováveis - Km, 08 Sala 182
S.A. - Distrito Industrial
- Maracanaú
- CE
----------------------------- ---------- ------------------ -----------------------------
Ventos de Santo 100% Brazil Rua Leopoldo Couto
Augusto V Energias de Magalhães
Renováveis Jr., 758 - cj. 31,
S.A. São Paulo 04542-000,
Brazil
----------------------------- ---------- ------------------ -----------------------------
ContourGlobal 100% Brazil Rua Leopoldo Couto
Desenvolvimento de Magalhães
S.A. Jr., 758 - cj. 31
São Paulo 04542-000,
Brazil
----------------------------- ---------- ------------------ -----------------------------
Chapada do Piauí 51% Brazil Rua Leopoldo Couto
II Holding S.A. de Magalhães
Jr., 758 - cj. 31,
São Paulo 04542-000
----------------------------- ---------- ------------------ -----------------------------
Chapada do Piauí 100% Brazil Rua Leopoldo Couto
III Holding S.A. de Magalhães
Jr., 758 - cj. 31,
São Paulo 04542-000
----------------------------- ---------- ------------------ -----------------------------
Energyworks Do 80% Brazil Praia do Flamengo,
Brasil Ltda 70 - 10 andar, parte.
Rio de Janeiro -
RJ
----------------------------- ---------- ------------------ -----------------------------
Capuava Energy 80% Brazil Av. Presidente Costa
Ltda e Silva, 1178, parte,
Santo André/
----------------------------- ---------- ------------------ -----------------------------
Afluente Geração 79% Brazil Praia do Flamengo,
de Energia Eletrica 70 - 1 andar Rio
S.A. de Janeiro - RJ
----------------------------- ---------- ------------------ -----------------------------
Goias Sul Geração 80% Brazil Praia do Flamengo,
De Energia S.A. 70 - 2 andar, parte.
Rio de Janeiro -
RJ
----------------------------- ---------- ------------------ -----------------------------
RIO PCH I S.A. 56% Brazil Praia do Flamengo,
70 - 4 andar Rio
de Janeiro - RJ
----------------------------- ---------- ------------------ -----------------------------
Bahia PCH I S.A. 80% Brazil Praia do Flamengo,
70 - 6 andar, parte.
Rio de Janeiro -
RJ
----------------------------- ---------- ------------------ -----------------------------
ContourGlobal 100% Swiss
Swiss Holdings
GmBH
----------------------------- ---------- ------------------ -----------------------------
ContourGlobal 100% Colombia Carrera 7 No. 74-09,
LATAM S.A. Bogota, Colombia
----------------------------- ---------- ------------------ -----------------------------
ContourGlobal 100% Cyprus Capital Center,
Solutions Holdings 2-4 Arch, Makarios
Ltd III Avenue, 9th
Floor, Nicosia 1065,
Cyprus
----------------------------- ---------- ------------------ -----------------------------
ContourGlobal 100% Cyprus Capital Center,
Solutions Ltd 2-4 Arch, Makarios
III Avenue, 9th
Floor, Nicosia 1065,
Cyprus
----------------------------- ---------- ------------------ -----------------------------
ContourGlobal 80.0 Cyprus Capital Center,
Aguila Holdings 2-4 Arch, Makarios
Ltd III Avenue, 9th
Floor, Nicosia 1065,
Cyprus
----------------------------- ---------- ------------------ -----------------------------
Hamachi Limited 100% Cyprus Capital Center,
2-4 Arch, Makarios
III Avenue, 9th
Floor, Nicosia 1065,
Cyprus
----------------------------- ---------- ------------------ -----------------------------
Selenium Holdings 100% Cyprus Capital Center,
Ltd 2-4 Arch, Makarios
III Avenue, 9th
Floor, Nicosia 1065,
Cyprus
----------------------------- ---------- ------------------ -----------------------------
Consolidated subsidiaries Ownership Country Registered address
of incorporation
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal 100% Spain Arrúbal Power
La Rioja, S.L Plant, Polígono
Industrial El Sequero,
26150 Arrúbal,
La Rioja, Spain.
--------------------------- ---------- ------------------ ---------------------------------
Energies Antilles 100% France 8, Avenue Hoche 75008
Paris
--------------------------- ---------- ------------------ ---------------------------------
Energies Saint-Martin 100% France 8, Avenue Hoche 75008
Paris
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal Saint-Martin 100% France 5 Rue du Gal de Gaulle,
SAS 8 Immeuble le Colibri
Marigot,97150 Saint-Martin
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal Management 100% France Immeuble Imagine
France SAS 20-26 boulevard
du Parc 92200 Neuilly-sur-Seine
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal Worldwide 100% Gibraltar Hassans, Line Holdings
Holdings Limited Limited, 57/63 Line
Wall Road, Gibraltar
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal Helios 100% Italy Via Cusani 5, Milan
S.r.l. 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal Solar 100% Italy Via Cusani 5, Milan
Holdings (Italy) 20121, Italy
S.r.l.
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal Oricola 100% Italy Via Cusani 5, Milan
S.r.l. 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal Solutions 100% Italy Via Cusani 5, Milan
(Italy) S.R.L. 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Portoenergy S.r.l. 100% Italy Via Cusani 5, Milan
20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Officine Solari 100% Italy Via Cusani 5, Milan
Barone S.r.l. 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Officine Solari 100% Italy Via Cusani 5, Milan
Camporeale S.r.l. 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Contourglobal Mediterraneo 100% Italy Via Cusani 5, Milan
S.r.l 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
PVP 2 S.R.L. 100% Italy Via Cusani 5, Milan
20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal Sarda 100% Italy Via Cusani 5, Milan
S.r.l 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Officine Solari 100% Italy Via Cusani 5, Milan
Kaggio S.r.l. 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Officine Solari 100% Italy Contrada Piana del
Aquila S.r.l. Signore s.n.c.
93012 Gela (CL)
--------------------------- ---------- ------------------ ---------------------------------
CONTOURGLOBAL 100% Italy Via Cusani 5, Milan
ENERGETICA S.R.L. 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Ergyca Eight Srl 100% Italy Via Cusani 5, Milan
20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Ergyca Green Srl 100% Italy Via Cusani 5, Milan
20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Ergyca Industrial 100% Italy Via Cusani 5, Milan
Srl 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Ergyca Light Srl 100% Italy Via Cusani 5, Milan
20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Ergyca One Srl 100% Italy Via Cusani 5, Milan
20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Ergyca Sole Srl 100% Italy Via Cusani 5, Milan
20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
Ergyca Tracker 100% Italy Via Cusani 5, Milan
Srl 20121, Italy
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal Solutions 100% Kenya LR NO 209 311 5 9th
Kenya Ltd floor williamson
House 4th Ngong avenue,
PO box 40111-00100,
Nairobi, Kenya
--------------------------- ---------- ------------------ ---------------------------------
ContourGlobal Luxembourg 100% Luxembourg 35-37 Avenue de la
S.àr.l. Liberté L-1931
Luxembourg, Grand
Duchy of Luxembourg
--------------------------- ---------- ------------------ ---------------------------------
Consolidated subsidiaries Ownership Country Registered address
of incorporation
-------------------------- ---------- ------------------ ---------------------------
Kani Lux Holdings 80% Luxembourg 35-37 Avenue de la
S.à r.l. Liberté L-1931
Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Africa 100% Luxembourg 35-37 Avenue de la
Holdings S.à Liberté L-1931
r.l. Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Bulgaria 100% Luxembourg 35-37 Avenue de la
Holding S.à Liberté L-1931
r.l. Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Spain 100% Luxembourg 35-37 Avenue de la
Holding S.à Liberté L-1931
r.l. Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Latam 100% Luxembourg 35-37 Avenue de la
Holding S.à Liberté L-1931
r.l. Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
Vorotan Holding 100% Luxembourg 35-37 Avenue de la
S.à r.l. Liberté L-1931
Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Terra 100% Luxembourg 35-37 Avenue de la
2 S.à r.l. Liberté L-1931
Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Terra 100% Luxembourg 35-37 Avenue de la
3 S.à r.l. Liberté L-1931
Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Terra 100% Luxembourg 35-37 Avenue de la
4 S.à r.l. Liberté L-1931
Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Terra 100% Luxembourg 35-37 Avenue de la
5 S.à r.l. Liberté L-1931
Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Terra 100% Luxembourg 35-37 Avenue de la
6 S.à r.l. Liberté L-1931
Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Solutions 100% Luxembourg 35-37 Avenue de la
Holdings S.a.r.l. Liberté L-1931
Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Senegal 100% Luxembourg 35-37 Avenue de la
Holdings S.à Liberté L-1931
r.l. Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal Terra 100% Luxembourg 35-37 Avenue de la
Holdings S.à Liberté L-1931
r.l Luxembourg, Grand
Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% Luxembourg 35-37 Avenue de
Power Holdings la Liberté
S.A. L-1931 Luxembourg,
Grand Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% Luxembourg 35-37 Avenue de
Worldwide Holdings la Liberté
S.à r.l. L-1931 Luxembourg,
Grand Duchy of Luxembourg
-------------------------- ---------- ------------------ ---------------------------
Aero Flash Wind, 75% Mexico Mexico City, Mexico
S.A.P.I. DE C.V. / Tax Address: Ciudad
de Tecate, Baja
California
-------------------------- ---------- ------------------ ---------------------------
KivuWatt Holdings 100% Mauritius 4th Floor, Tower
A, 1CyberCity, c/o
Citco (Mauritius)
Limited, Ebene,
Mauritius
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% Nigeria St. Nicholas House,
Solutions (Nigeria) 10th Floor, Catholic
Ltd Mission Street,
Lagos, Nigeria
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% Netherlands Keplerstraat 34,
Solutions Nigeria Badhoevedorp 1171CD,
Holdings B.V. Netherlands
-------------------------- ---------- ------------------ ---------------------------
Contourglobal 100% Netherlands Kaya Carlos A. Nicolaas
Bonaire B.V. 3, Bonaire, Netherlands
-------------------------- ---------- ------------------ ---------------------------
Energía Eólica 100% Peru Av. Ricardo Palma
S.A. 341, Office 306,
Miraflores, Lima
18, Peru
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% Peru Av. Ricardo Palma
Peru SAC 341, Office 306,
Miraflores, Lima
18, Peru
-------------------------- ---------- ------------------ ---------------------------
Energía Renovable 100% Peru Av. Ricardo Palma
Peruana S.A. 341, Office 306,
Miraflores, Lima
18, Peru
-------------------------- ---------- ------------------ ---------------------------
Energía Renovable 100% Peru Av. Ricardo Palma
del Norte S.A. 341, Office 306,
Miraflores, Lima
18, Peru
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% Poland ul. Przemyslowa
Solutions (Poland) 2A, Radzymin 05-250
Sp. Z o.o. - Poland
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% Paraguay Simon Bolivar, #
Paraguay Holdings 914 casi Parapiti,
SA Asuncion, Paraguay
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% Romania Ploeisti, 285 Gheorge
Solutions (Ploiesti) Grigore, Cantacuzino
S.R.L. street, Prahova
County, Ploeisti,
Romania
-------------------------- ---------- ------------------ ---------------------------
Kivu Watt Ltd 100% Rwanda Plot 9714, Nyarutarama,
P. O. Box 6679,
Kigali, Rwanda
-------------------------- ---------- ------------------ ---------------------------
RENERGIE Solarny 100% Slovak 25 Pribinova Str.,
Park Holding SK Republic Bratislava 811 09,
I a.s. Slovakia
-------------------------- ---------- ------------------ ---------------------------
PV Lucenec S.R.O. 100% Slovak Pribinova 25, 811
Republic 09 Bratislava, Slovakia
-------------------------- ---------- ------------------ ---------------------------
Consolidated subsidiaries Ownership Country Registered address
of incorporation
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Rimavské Republic 09 Bratislava, Slovakia
Jánovce s.r.o.
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Dulovo s.r.o. Republic 09 Bratislava, Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Gemer s.r.o. Republic 09 Bratislava, Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Hodejov s.r.o. Republic 09 Bratislava, Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Jesenské Republic 09 Bratislava, Slovakia
s.r.o.
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Ni ná Republic 09 Bratislava, Slovakia
Pokoradz s.r.o.
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Riečka Republic 09 Bratislava, Slovakia
s.r.o.
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Rohov s.r.o. Republic 09 Bratislava, Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Star a s.r.o. Republic 09 Bratislava, Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Včelince Republic 09 Bratislava, Slovakia
2 s.r.o.
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak Pribinova 25, 811
park Hurbanovo Republic 09 Bratislava, Slovakia
s.r.o.
-------------------------- ---------- ------------------ -------------------------
AlfaPark s.r.o. 100% Slovak Pribinova 25, 811
Republic 09 Bratislava, Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Druhá 100% Slovak Pribinova 25, 811
slnečná Republic 09 Bratislava, Slovakia
s.r.o.
-------------------------- ---------- ------------------ -------------------------
SL03 s.r.o. 100% Slovak 25 Pribinova Str.,
Republic Bratislava 811 09,
Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Bánovce Republic Bratislava 811 09,
nad Ondavou s.r.o. Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Bory s.r.o. Republic Bratislava 811 09,
Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Budulov s.r.o. Republic Bratislava 811 09,
Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Kalinovo Republic Bratislava 811 09,
s.r.o. Slovakia
-------------------------- ---------- ------------------ -------------------------
ZetaPark Lefantovce 100% Slovak 25 Pribinova Str.,
s.r.o. Republic Bratislava 811 09,
Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
Lefantovce s.r.o. Republic Bratislava 811 09,
Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Michalovce Republic Bratislava 811 09,
s.r.o. Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Ni ný Republic Bratislava 811 09,
Skálnik s.r.o. Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Otročok Republic Bratislava 811 09,
s.r.o. Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Pa ovce s.r.o. Republic Bratislava 811 09,
Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Gomboš Republic Bratislava 811 09,
s.r.o. Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Rimavská Republic Bratislava 811 09,
Sobota s.r.o. Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Horné Republic Bratislava 811 09,
Turovce s.r.o. Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Uzovská Republic Bratislava 811 09,
Panica s.r.o. Slovakia
-------------------------- ---------- ------------------ -------------------------
RENERGIE Solárny 100% Slovak 25 Pribinova Str.,
park Zemplínsky Republic Bratislava 811 09,
Branč s.r.o. Slovakia
-------------------------- ---------- ------------------ -------------------------
Consolidated subsidiaries Ownership Country Registered address
of incorporation
-------------------------- ---------- ------------------ ---------------------------------
ZetaPark s.r.o. 100% Slovak 25 Pribinova Str.,
Republic Bratislava 811 09,
Slovakia
-------------------------- ---------- ------------------ ---------------------------------
ContourGlobal 100% 2, Place de L'Indépendance,
Cap des Biches Dakar, BP 23607,
Senegal S.à Senegal
r.l. Senegal
-------------------------- ---------- ------------------ ---------------------------------
80% Route D'Aného,
ContourGlobal Baguida, BP 3662,
Togo S.A. Togo Lomé - Togo
-------------------------- ---------- ------------------ ---------------------------------
ContourGlobal 100% Togo Immeuble SCI - Direction
Services Africa de l'administration
S. à r.l. pénitentiaire
& de la réinsertion
- Angle Rue Agbata,
Boulevard du 13
Janvier - 01 BP
3662, Lomé
-TOGO
-------------------------- ---------- ------------------ ---------------------------------
Mega-resurs CJSC 51% Ukraine 84301, Donetsk oblast,
Kramatorsk city,
26 19th Partsiezda
str, Ukraine
-------------------------- ---------- ------------------ ---------------------------------
Kramatorskteploenergo 60% Ukraine 5 Ordjonikidze Street,
LLC Kramatorsk city,
Donetsk region,
Ukraine 84305
-------------------------- ---------- ------------------ ---------------------------------
Co-Generation 38% Ukraine 77701 51 Schevchenko
Technologies B1 Street, Bogorychany
LLC city, Ivano-Frankivsk
region, Ukraine
-------------------------- ---------- ------------------ ---------------------------------
99% 5/2c Yaroslavska
ContourGlobal Street, 4th Floor,
Ukraine LLC Ukraine Kyiv 04071, Ukraine
-------------------------- ---------- ------------------ ---------------------------------
75% 02125 ,1 Prospect
Vyzvolyteliv, Kiev,
AMC Energy LLC Ukraine Ukraine
-------------------------- ---------- ------------------ ---------------------------------
ContourGlobal 100% United 6th Floor Lesley
Solutions (Northern Kingdom Tower, 42-26 Fountain
Ireland) Limited Street, Belfast
BT1 5EF, Ireland
-------------------------- ---------- ------------------ ---------------------------------
ContourGlobal 100% United Oceana House, 39-49
Europe Limited Kingdom Commercial Road,
Southampton SO15
1 GA, United Kingdom
-------------------------- ---------- ------------------ ---------------------------------
ContourGlobal 100% United Jordans Limited,
Yield Limited Kingdom 20-22 Bedford Row,
London WC1R4JS,
United Kingdom
-------------------------- ---------- ------------------ ---------------------------------
Contour Global 100% US 1209 Orange Street,
LLC Corporation Trust
Center, Wilmington,
Delaware 19801
-------------------------- ---------- ------------------ ---------------------------------
Contour Global 100% US 1209 Orange Street,
Management Inc Corporation Trust
Center, Wilmington,
Delaware 19801
-------------------------- ---------- ------------------ ---------------------------------
ContourGlobal 100% US 650 Fifth Ave -
Services Brazil 17th Fl., New York,
LLC New York 10019
-------------------------- ---------- ------------------ ---------------------------------
ContourGlobal 100% US 2711 Centerville
Togo LLC Road, Suite 400,
Wilmington, Delaware
19808
-------------------------- ---------- ------------------ ---------------------------------
Consolidated subsidiaries Ownership Country Registered address
of incorporation
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% US 1209 Orange Street,
A Funding LLC Corporation Trust
Center, Wilmington,
Delaware 19801
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% US 2711 Centerville
Senegal Holdings Road, Suite 400,
LLC Wilmington, Delaware
19808
-------------------------- ---------- ------------------ ---------------------------
ContourGlobal 100% US 1209 Orange Street,
Senegal LLC Corporation Trust
Center, Wilmington,
Delaware 19801
-------------------------- ---------- ------------------ ---------------------------
CG Solutions Global 100% US Corporation Trust
Holding Company Center, 1209 Orange
LLC Street, Corporation
Trust Center, Wilmington,
Delaware 19801
-------------------------- ---------- ------------------ ---------------------------
Investments in Ownership Country Registered address
associates accounted of incorporation
under the equity
method:
---------------------- ---------- ------------------ -----------------------
TermoemCali I 37% Colombia Carrera 5A N 71-45,
S.A. E.S.P. Bogotá, Colombia
---------------------- ---------- ------------------ -----------------------
Compañía 49% Colombia Carrera 14 No. 20-21
Eléctrica Local 205A, Plaza
de Sochagota S.A. Real, Tunja, Colombia
E.S.P.
---------------------- ---------- ------------------ -----------------------
Productora de 50% Colombia Cr. 9 No. 74-08 Of.
Energía de 105, Bogotá,
Boyacá S.A.S. Colombia
E.S.P
---------------------- ---------- ------------------ -----------------------
4.29. Related party disclosure
ContourGLobal L.P. and Reservoir Capital Group
As of December 31, 2017 we have no significant financial
relationship with the Group's main shareholder, ContourGlobal L.P.,
and Reservoir Capital Group which ultimately controls ContourGlobal
L.P.
ContourGlobal L.P.
ContourGlobal L.P. had intercompany relations with the Group
which are reflected in the consolidated statement of financial
position as related parties within "Other current assets". The net
position was an asset receivable by the Group which amounted to
$19.2 million as of December 31, 2016 and to $21.3 million as of
November 8, 2017. At this date, prior to the listing, ContourGlobal
Plc distributed a dividend in cash of $21.3 million to
ContourGlobal L.P. which was used to repay in full the assets
receivable to ContourGlobal L.P. As a result, there are no related
party positions remaining as of December 31, 2017 with
ContourGlobal L.P.
Key management personnel
Compensation paid to key management (executive committee
members) amounted to $8.7 million in December 31, 2017 (December
31, 2016: $9.7 million).
In $ millions Years ended December 31,
--------------------------------------------- ---------------------------
2016 2017
--------------------------------------------- ------------- ------------
Salaries and short-term employee benefits 5.9 4.8
--------------------------------------------- ------------- ------------
Termination benefits - 0.8
--------------------------------------------- ------------- ------------
Post-employment benefits 0.2 0.2
--------------------------------------------- ------------- ------------
Profit-sharing and Bonus schemes 3.6 2.9
--------------------------------------------- ------------- ------------
Total 9.7 8.7
--------------------------------------------- ------------- ------------
4.30. Financial commitments and contingent liabilities
a/ Commitments
The Group has contractual commitments with, among others,
equipment suppliers, professional service organizations and EPC
contractors in connection with its power projects under
construction that require payment upon reaching certain milestones.
As of December 31, 2017, the Group has completed all its
construction projects and had $3.5 million of firm purchase
commitments of property plant and equipment outstanding in
connection with its Maritsa facilities. The Group has also
contractual arrangements with Operating and Maintenance (O&M)
providers and transmission operators as it relates to certain of
its operating assets.
Maritsa has a long-term Lignite Supply Agreement (LSA) with
Maritsa Iztok Mines (MMI) for the purchase of lignite. According to
the agreement, Maritsa has to purchase minimum monthly quantities,
amounting to 6,187 thousand standard tons per calendar year. The
total commitment through the remaining term of the LSA (February
2024) is 37,638 thousand standard tons, equal to $381.2 million at
December 2017 prices ($10.13 per standard ton), as compared to
43,825 thousand standard tons equal to $388.8 million at the end of
2016 ($8.87 per standard ton). In the event of a failure on the
part of CG Maritsa East 3 AD (ME-3) to take a minimum monthly
quantity in any month, ME-3 shall, except in cases caused by Force
Majeure and certain actions of Bulgarian authorities as described
in the contract, pay to MMI an amount equal to the difference
between (i) the aggregate amount paid or payable in respect of
lignite delivered during such month and (ii) the aggregate amount
that would have been payable had the minimum monthly quantity been
taken during such month.
Pursuant to Vorotan acquisition, the Group has agreed to
refurbish the hydro power plants and intends to invest
approximately $70 million over six years in a refurbishment program
started in 2017 to modernize Vorotan and improve its operational
performance, safety, reliability and efficiency. As of December 31,
2017 Vorotan disbursed $9.8 million of which $9.5 million advance
payment to EPC contractor.
b/ Contingent liabilities
The Group has contingent liabilities in respect of legal claims
arising in the ordinary course of business. The Group reviews these
matters in consultation with internal and external legal counsel to
make a determination on a case-by-case basis whether a loss from
each of these matters is probable, possible or remote. These claims
involve different parties and are subject to substantial
uncertainties.
Operation & Maintenance contractor litigation (Energies
Antilles)
In 2011, Energies Antilles ("EA") was forced to pay to EDF, the
offtaker under the PPA, a EUR5 million penalty in relation to
damages following labor strikes by the operator's employees and
related disruptions. EA subsequently raised a claim against the
power plant's operation and maintenance ("O&M") contractor for
the same amount and collected certain amounts under related
performance bonds. On June 5, 2015, EA received a favorable
judgment in its proceeding against the O&M contractor, as the
court awarded EA substantially all of the amounts claimed,
including both the unpaid portion of the performance bond and all
other penalty amounts not covered by the performance bonds. The
O&M contractor appealed the decision. In April 2017, the Court
of Appeal confirmed the first instance favorable judgment. The
O&M contractor brought the claim to the Supreme Court in May
2017. No decision from the Supreme Court is expected before
2018.
In 2010, a EUR5 million legal claim was brought against EA by
the O&M contractor in relation to cost overruns following
changes in French labor laws ("IEG status" - Industries Electriques
et Gazières). Last briefs have been filed in January 2017. On
February 22, 2018, the Paris Commercial Tribunal fixed the pleading
hearings on May 24, 2018.
Minority shareholder litigation (ContourGlobal Latam S.A.)
In July 2015, CG Latam S.A. received a notice of arbitration
under International Chamber of Commerce rules from a minority
shareholder in the Inka project alleging fraud in the negotiation
and performance of that project's investment agreement and
shareholder agreement, seeking nullification of those agreements
and return of the majority shareholding in Energía Eólica S.A.
("EESA"), the entity that owns the project, or, in the alternative,
restitution of an amount equivalent to the value of EESA. CG Latam
S.A. received the claimant's statement of claim in January 2017 and
filed its statement of defense on August 14, 2017. An evidentiary
hearing of fact witnesses was held in early February 2018, and the
tribunal will schedule a second hearing for expert witnesses. The
Group expect the second hearing to be scheduled for the second
quarter of 2018.
No provision has been recorded as of December 31, 2017 in
relation to the above claims as the Group considers that it is less
than probable that liabilities will arise from these claims.
The Group from time to time is involved in disputes in relation
to ongoing tax matters in a number of jurisdictions around the
world. Where appropriate, provisions are recorded, based on the
assessment of each case.
c/ Lease commitments
Operating lease as a lessee
The Group is lessee under non-cancelable operating leases,
primarily for office space and land to conduct its business. The
future aggregate minimum lease payments under non-cancellable
operating leases are as follows
In $ millions Years ended December 31,
----------------------------------------------- ---------------------------
2016 2017
----------------------------------------------- ------------- ------------
No later than 1 year 5.5 5.9
----------------------------------------------- ------------- ------------
Later than 1 year and no later than 5 years 21.0 21.0
----------------------------------------------- ------------- ------------
Later than 5 years 283.5 243.3
----------------------------------------------- ------------- ------------
Total 310.0 270.2
----------------------------------------------- ------------- ------------
In $ millions Years ended December
31,
---------------------------------- -----------------------
2016 2017
---------------------------------- ----------- ----------
Minimum lease payments
---------------------------------- ----------- ----------
No later than 1 year 0.3 0.3
---------------------------------- ----------- ----------
Later than 1 year and no later
than 5 years 1.3 1.3
---------------------------------- ----------- ----------
Later than 5 years 3.7 3.4
---------------------------------- ----------- ----------
Gross investment in the lease 5.4 5.0
---------------------------------- ----------- ----------
Future finance interest (2.1) (1.9)
---------------------------------- ----------- ----------
Present value of financial
lease obligation 3.3 3.1
---------------------------------- ----------- ----------
Financing lease as a lessee
The future aggregate minimum lease payments under
non-cancellable financing leases (Inka project) are as follows:
In $ millions Years ended December
31,
---------------------------------- -----------------------
2016 2017
---------------------------------- ----------- ----------
Minimum lease payments
---------------------------------- ----------- ----------
No later than 1 year 0.3 0.3
---------------------------------- ----------- ----------
Later than 1 year and no later
than 5 years 1.3 1.3
---------------------------------- ----------- ----------
Later than 5 years 3.7 3.4
---------------------------------- ----------- ----------
Gross investment in the lease 5.4 5.0
---------------------------------- ----------- ----------
Future finance interest (2.1) (1.9)
---------------------------------- ----------- ----------
Present value of financial
lease obligation 3.3 3.1
---------------------------------- ----------- ----------
Operating lease as a lessor
The Group is lessor under non-cancelable operating leases. The
future aggregate minimum lease payments under non-cancellable
operating leases are as follows:
Years ended December 31,
----------------------------------------------- ---------------------------
In $ millions 2016 2017
----------------------------------------------- ------------- ------------
Minimum lease payments
----------------------------------------------- ------------- ------------
No later than 1 year 43.8 62.0
----------------------------------------------- ------------- ------------
Later than 1 year and no later than 5 years 188.5 249.4
----------------------------------------------- ------------- ------------
Later than 5 years 622.5 577.5
----------------------------------------------- ------------- ------------
Total 854.8 888.9
----------------------------------------------- ------------- ------------
Finance lease as a lessor
The future aggregate minimum lease payments under
non-cancellable finance leases (relating to our operation of
Energies Saint Martin and Bonaire) are as follows:
In $ millions Years ended December 31,
----------------------------------------------- ---------------------------
2016 2017
----------------------------------------------- ------------- ------------
Minimum lease payments
----------------------------------------------- ------------- ------------
No later than 1 year 11.3 12.0
----------------------------------------------- ------------- ------------
Later than 1 year and no later than 5 years 44.5 47.2
----------------------------------------------- ------------- ------------
Later than 5 years 48.4 38.1
----------------------------------------------- ------------- ------------
Gross investment in the lease 104.2 97.3
----------------------------------------------- ------------- ------------
Less: unearned finance income (30.6) (26.1)
----------------------------------------------- ------------- ------------
Total 73.6 71.2
----------------------------------------------- ------------- ------------
In $ millions Years ended December 31,
----------------------------------------------- ---------------------------
2016 2017
----------------------------------------------- ------------- ------------
Analyzed as:
----------------------------------------------- ------------- ------------
Present value of minimum lease payment
----------------------------------------------- ------------- ------------
No later than 1 year 10.7 11.4
----------------------------------------------- ------------- ------------
Later than 1 year and no later than 5 years 34.5 36.4
----------------------------------------------- ------------- ------------
Later than 5 years 28.4 23.4
----------------------------------------------- ------------- ------------
Total 73.6 71.2
----------------------------------------------- ------------- ------------
4.31. Guarantees and letters of credit
The Group and its subsidiaries enter into various contracts that
include indemnification and guarantee provisions as a routine part
of the Group's business activities. Such contracts generally
indemnify the counterparty for tax, environmental liability,
litigation, and other matters, as well as breaches of
representations, warranties, and covenants set forth in the
agreements. In many cases, the Group's maximum potential liability
cannot be estimated, since some of the underlying agreements
contain no limits on potential liability.
The Group also acts as guarantor to certain of its subsidiaries
and obligor with respect to some long-term arrangements contracted
at project level.
For the financial guarantees and letters of credit, refer to
note 4.23 Borrowings.
4.32. Statutory Auditors fees
In $ millions Years ended December 31,
----------------------------------------------------------------------------------------- ---------------------------
2016 2017
----------------------------------------------------------------------------------------- ------------- ------------
Fees payable to the Group's auditor for the audit of the Group's annual accounts and
consolidated
financial statements 0.9 1.3
Fees payable to the Group's auditor and its associates for other services:
- The audit of the Group's subsidiaries 0.9 1.1
- Other assurance services 0.7 6.6
- Tax compliance services - -
- Tax advisory services - -
- Other non-audit services 0.2 0.1
Total 2.7 9.1
The increase in other assurance services relate to exceptional
events of the period which includes the Initial Public Offering in
the United Kingdom of ContourGlobal Plc ($5.7 million) in November
2017 and February 2017 bond issuance ($0.3 million).
4.33. Subsequent events
Acquisition of a renewable portfolio in Italy
On December 23, 2017, the Group signed the acquisition of a 24
MW renewable portfolio consisting of 10 photovoltaic plants in
Italy (15 MW), one photovoltaic plant in Romania (7 MW) and 2
biogas plants in Italy (2 MW).
The transaction closed in March 2018.
Acquisition of a renewable portfolio in Spain
On February 27, 2018, the Group signed the acquisition of
Acciona Energia's 250 MW portfolio of five 50 MW Concentrating
Solar Power plants in South-West Spain. The total enterprise value
amounts to EUR962 million, including an amount payable to Acciona
Energía of approximately EUR806 million and existing net debt
(including adjustment for working capital) of EUR156 million. The
Group has also agreed to make earn-out payments to Acciona Energía
of up to EUR27 million.
The acquisition combines the Group's solar and Spanish thermal
operating expertise into a sizable portfolio of assets enabling
synergies with existing European operations.
The acquisition is expected to close in the second quarter of
2018 and is subject to various conditions.
Sale of Ukrainian assets
On February 26, 2018, the Group sold 100% of its stake in
Ukrainian power plant Kramatorsk representing a total of 120
MW.
[1] "LTIR" measures recordable lost time incident ("LTI") rates
on the basis of 200,000 working hours.
"LTI" is an employment related incident that results in serious
injury or illness which results in one or more days away from
work.
[2] Meridith Armstrong Whitney, Charles J. Bennett, "Driving
Toward "0": Best Practices in Corporate Safety and Health, The
Conference Board Research Report R-1334-03-RR (2003)
[3] "TRIR" measures amount of the total number of all
work-related cases (restricted work days, medical treatment, and
lost time incidents).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EADLSESAPEEF
(END) Dow Jones Newswires
April 05, 2018 02:00 ET (06:00 GMT)
Contourglobal (LSE:GLO)
Historical Stock Chart
From Apr 2024 to May 2024
Contourglobal (LSE:GLO)
Historical Stock Chart
From May 2023 to May 2024