25 October 2021
ContourGlobal plc
Trading Update
ContourGlobal plc (the "Company"), an international owner and operator of contracted wholesale power generation businesses, today issues a trading update for the period from 1 January 2021 to 30 September 2021.
Joseph Brandt, Chief Executive Officer, said, "Safety first. The Health & Safety of our employees and contractors is our highest goal and included in our value statement. We had two unacceptable health and safety failures in the third quarter: a fatality of one our contractors at a wind farm in Brazil, our first in nine years, and a Lost Time Incident at one of our CSPs in Spain. We will learn from these failures and improve and recommit to Target Zero.
Our business performed well financially during the third quarter and I am pleased to confirm the third quarter dividend payment of 4.465 cents per share, representing a 10% year-on-year growth in line with our dividend policy. This is underpinned by strong operating cash flows and 14% year-on-year growth in 9M 2021 Adjusted EBITDA to $622 million. We continue to focus on operationally led low-carbon growth opportunities in our key geographies and our pipeline of attractive opportunities remains robust.
At the end of September, we successfully completed the financing of our 277MW portfolio of Caribbean power plants, leading to a cash distribution to the parent company of $110 million received at the beginning of October. The Caribbean portfolio, consisting of assets in Trinidad and Tobago, Bonaire and Saint Martin, was significantly under levered and the financing was completed at attractive terms. In addition, we refinanced our Brazilian Asa Branca Wind assets in Q3 as well as our Brazilian Hydro assets in October. The financing was at attractive terms, leading to a total cash distribution to the parent company of approximately BRL200 million of which BRL55 million were received in Q3 and the remaining amount is expected to be received in Q4."
Strong operating and financial performance
· With the exception of our health & safety performance noted above, our Operational performance remained strong although slightly below 9M 2020 with an average availability factor of 93.9% in the first 9 months of 2021 combined across the thermal and renewable fleets (9M 2020: 94.6%).
· Adjusted EBITDA was up 14.4% from $542.8 million to $622.2 million, mainly reflecting the contribution (+$64 million) from the Western Generation Portfolio acquisition completed on 18 February 2021 and a positive FX variance of $14 million.
· Strong cash flow generation with Funds from Operations ("FFO") reaching $349 million in 9M 2021, an 11% increase over 9M 2020, mainly explained by growth in Adjusted EBITDA (+$79 million) partially offset by higher distributions to non-controlling shareholders (-$22 million) and lower distributions from associates (-$12 million).
· Cash conversion (FFO / Adjusted EBITDA) of 56% in 9M 2021, compared to 58% in 9M 2020, largely driven by higher distribution to non-controlling shareholders.
· Cash flows and overall business continue to be well protected from potential inflation increases. 79% of Adjusted EBITDA is inflation protected, while 84% of total debt is with fixed interest rates providing a significant hedge against potential rising interest rates. Assets with inflation linked revenues have an average contract life of 10 years. Assets without inflation linkages have long-term fixed interest rate financing.
· The Company will pay a dividend for Q3 2021 of 4.465 cents per share / 3.2333 pence per share[1], equivalent to $29.3 million[2] to be paid on 19 November 2021. This is in line with the Company's commitment to an annual 10% increase in dividend per share.
· The process to monetize the renewables business in Brazil is progressing and the Company continues to explore other transactions that unlock intrinsic value for shareholders.
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| 9M 2021 | 9M 2020 | Change |
| GWh produced | Thermal | 11,644 | 7,627 | +52.7% |
| Renewable | 3,913 | 3,644 | +7.4% | |
| MW in operation | Thermal | 4,494 | 2,992 | +50.2% |
| Renewable | 1,799 | 1,813 | -0.8% | |
| Availability factor | Thermal | 93.1% | 93.5% | -0.4% |
| Renewable | 95.7% | 96.4% | -0.7% | |
| Financial highlights |
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| In $ millions | 9M 2021 | 9M 2020 | Change |
| Revenue | 1,484 | 1,017 | +46.0% |
| Income from Operations | 282 | 246 | +17.2% |
| Adjusted EBITDA* | 622 | 543 | +14.4% |
| Thermal Adj. EBITDA | 388 | 308 | +25.8% |
| Renewable Adj. EBITDA | 258 | 259 | -0.4% |
| Corporate and other costs | (24) | (24) | -2.9% |
| Proportionate Adjusted EBITDA* | 502 | 422 | 19.1% |
| Funds from Operations (FFO)* | 349 | 314 | 11.1% |
| Net Profit | 75 | 86 | -12.0% |
| Adjusted Net Profit* | 51 | 81 | -37.1% |
*Non-IFRS metrics
Outlook
ContourGlobal's business model is highly resilient with stable and predictable cashflows. We reiterate our guidance for 2021 Adjusted EBITDA in the range of $780 million - $810 million[3] and maintain our dividend policy of a 10% annual increase in dividend per share.
Enquiries
Investor Relations - ContourGlobal
Jose Cano
+44 203 626 9062
investor.relations@contourglobal.com
Media - Brunswick
Charles Pretzlik / Will Medvei
Tel: +44 (0) 207 404 5959
Contourglobal@brunswickgroup.com
About ContourGlobal
ContourGlobal is listed on the premium segment of the London Stock Exchange (TKR: GLO). ContourGlobal is an international owner and operator of contracted wholesale power generation businesses with approximately 6.3 GW in operation in 20 countries. ContourGlobal operates a portfolio of 114 thermal and renewable power plants across Europe, North America, Latin America, and Africa utilizing a wide range of technologies.
Cautionary note regarding forward-looking statements
These results include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout these results and the information incorporated by reference into these results and include statements regarding the intentions, beliefs or current expectations of the directors or the Company concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy of the Company and the industry in which it operates.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company's ability to control or predict. Forward-looking statements are not guarantees of future performance. The Company's actual results of operations, financial condition, liquidity, dividend policy and the development of the industry in which it operates may differ materially from the impression created by the forward-looking statements contained in these results and/or the information incorporated by reference into these results. In addition, even if the results of operations, financial condition, liquidity and dividend policy of the Company and the development of the industry in which it operates, are consistent with the forward-looking statements contained in these results and/or the information incorporated by reference into these results, those results or developments may not be indicative of results or developments in subsequent periods.
Other than in accordance with its legal or regulatory obligations, the Company does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.
[1] Based on fixed FX rate GB£1= US$1.3809243
[2] Based on 656,140,855 shares in issue as at October 22 2021, excluding shares held in Treasury.
[3] Assuming 2021 exchange rates of EUR/USD 1.19 and BRL/USD 0.18
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