- First quarter performance ahead of expectations

- ‘Favourable’ outlook

- 72% of earnings enjoy inflation protection

The recent volatility in energy prices failed to knock ContourGlobal (GLO) off course as the international power generation business performed ahead of expectations in the first quarter and the company pointed to a ‘favourable’ outlook.

Revenue was up 52.6% to $652 million and the company confirmed a quarterly dividend of $0.049 cents per share, up 10% year-on-year. Adjusted earnings before interest, tax, depreciation were up 15% to $208 million and funds from operations (a measure of cash flow) up 9% to $112 million.

This increase in the dividend was underpinned by a strong cash flow performance, crucially amid rising prices the Contour was able to point to a high level of inflation protection with 72% of earnings being index-linked and 88% of its debt on fixed interest rates.

The shares are slightly lower year-to-date, outperforming the wider market, and are up 0.6% to 190.8p today.

OPERATIONAL SETBACKS

Operationally the company took a bit of a step back from the first quarter of 2021 with an average availability factor, the amount of time its power facilities were able to produce electricity, falling from 97.4% to 96.1%.

Contour blamed this on an unplanned outage at its Arrubal natural gas plant in Spain and scheduled outages at gas plants in Trinidad & Tobago and Vorotan hydro operation in Armenia.

The company is in the process of reshaping the portfolio, announcing that the disposal of its Brazilian hydro assets is on track for completion and it continues to progress the sale of its Brazilian wind assets. The proceeds are likely to be reinvested in other assets if the right opportunities are available or returned to shareholders.

CEO Joseph Brandt commented: ‘Our diversified business remains resilient and well positioned to perform well despite unprecedented turbulence in the global energy markets. The outlook for the rest of the year is favourable.’

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Issue Date: 13 May 2022