Infigen Energy Full Year Results 12 months ended 30 June 2014 25 August 2014
• Performance Overview • Financial Result • Operational Review • Regulatory & Market Update • Outlook • Questions Presenters: Miles George Managing Director & Chief Executive Officer Chris Baveystock Chief Financial Officer For further information please contact: Richard Farrell, Investor Relations Manager +61 2 8031 9901 richard.farrell@infigenenergy.com
Performance Overview Solid performance of the business due to revenue growth, underpinned by higher production Operational Outcomes • Safety performance was steady with a Lost Time Injury Frequency Rate (LTIFR) of 1.2 • Group production up 1% to 4,670 GWh from higher production in both the US and Australia • Activity in the US increased to progress and originate attractive solar development opportunities Financial Outcomes • Revenue increased 6% to $303 million primarily driven by higher production and favourable FX • Operating costs were $118 million, within the market guidance ranges for each region • A net gain on sale of $4.4 million was recognised from the sale of US development projects • Lower net borrowing costs, unrealised FX gains and a positive allocation of return (interest) was more than offset by interest rate swap termination costs of $16.8 million (a significant item) • Net income from US institutional equity partnerships (IEPs) increased 65% to $48.4 million • Net loss of $8.9 million was an improvement of $71.1 million or 89% • Net profit after tax and before significant items was $7.9 million • Net operating cash flow increased 14% to $96.2 million and increased 34% to $113.0 million before significant items • Outperformed guidance of $80 million cash flow available for reduction of liabilities 3
Financial Performance Overview (Economic Interest) Net profit after tax and before significant items of $7.9 million Change % Year ended 30 June 2014 2013 F/(A) Comments • Production (GWh) 4,670 4,605 1 Better wind conditions in Australia and the US • Higher production and US REC revenue and favourable FX Revenue ($ million) 303.2 286.1 6 • Lower electricity prices, Australian LGC prices and compensated revenue • Restructure cost savings, lower legal costs and lower insurance costs • Higher turbine O&M costs for bonus and incentive payments (offset by higher revenue) and new Gamesa agreements, higher balance Operating costs ($ million) 117.7 109.3 (8) of plant maintenance and repairs and costs related to US Class A investment • Operating costs were within guidance ranges of US$73-76 million in the US and A$35-37 million in Australia • Higher costs for corporate and development Corporate, development & activity partially offset by restructure cost other costs and income 15.5 18.6 17 savings and gain on sale of US solar ($ million) developments EBITDA ($ million) 170.0 158.2 7 • Higher net income from US IEPs • Net loss ($ million) (8.9) (80.0) 89 Interest rate swap termination costs • Significant item (Impairment) in prior year 4 F = favourable; A = adverse
• Performance Overview • Financial Result • Operational Review • Regulatory & Market Update • Outlook • Questions
Summary Statutory P&L and Financial Metrics Year ended 30 June 2013 Change % ($ million) 2014 (restated) F/(A) Revenue 5 273.3 259.7 EBITDA 18 169.2 143.0 Depreciation & amortisation (9) (123.9) (114.1) Significant item - Impairment 100 - (39.4) EBIT 532 45.4 (10.5) Net borrowing costs, revaluation of financial instruments & 13 (71.4) (82.1) allocation of return (interest) Net income from US Institutional Equity Partnerships 280 31.2 8.2 Significant item - Interest rate swap termination costs n.m. (16.8) - Loss before tax 86 (11.6) (84.5) Tax benefit (40) 2.7 4.5 Net loss 89 (8.9) (80.0) 2013 Change % Year ended 30 June 2014 (restated) F/(A) Net operating cash flow per security (cps) # 12.5 11.7 7 EBITDA margin 61.9% 55.1% 6.8 ppts Book value / security (cps) 64 63 2 Book gearing 66.9% 65.9% 1.0 ppts # cps = cents per security 6 n.m. = not meaningful; ppts = percentage point change
Reconciliation of Statutory to Economic Interest Add: Allocate share of Less: Non- Year ended 30 June 2014 profit of controlling Economic ($ million) Statutory associates Interest Interest Revenue 273.3 47.6 (17.7) 303.2 Operating EBITDA 171.1 26.3 (11.9) 185.5 Other costs and income (15.5) - - (15.5) Share of net profits of associates and JVs 13.7 (13.7) - - EBITDA 169.2 12.6 (11.9) 170.0 Depreciation & Amortisation (123.9) (26.7) 8.9 (141.7) EBIT 45.4 (14.1) (3.0) 28.3 Net borrowing costs, revaluation of financial (71.4) (0.2) 0.2 (71.4) instruments & allocation of return (interest) Net income from US Institutional Equity Partnerships 31.2 14.4 2.8 48.4 Significant item - Interest rate swap termination costs (16.8) - - (16.8) Loss before tax (11.6) 0.1 - (11.5) Tax benefit 2.7 (0.1) - 2.6 Net loss (8.9) - - (8.9) The slides that follow are presented on an economic interest basis 7
Summary Economic Interest Financial Metrics Year ended 30 June Change % ($ million) 2014 2013 F/(A) Revenue 303.2 286.1 6 Operating EBITDA 185.5 176.8 5 Other costs and income (15.5) (18.6) 17 EBITDA 170.0 158.2 7 Depreciation & amortisation (9) (141.7) (130.3) Significant item - Impairment 100 - (58.4) EBIT 193 28.3 (30.4) Net borrowing costs, revaluation of financial instruments & 14 (71.4) (83.3) allocation of return (interest) Net income from US Institutional Equity Partnerships 65 48.4 29.3 Significant item - Interest rate swap termination costs n.m. (16.8) - Loss before tax 86 (11.5) (84.5) Tax benefit / (expense) (42) 2.6 4.5 Net Loss 89 (8.9) (80.0) Change % Year ended 30 June 2014 2013 F/(A) Net operating cash flow per security (cps) 12.6 11.0 15 EBITDA margin 56.1% 55.3% 0.8 ppts Book value / security (cps) 64 63 2 Book gearing 66.9% 65.9% 1.0 ppts n.m. = not meaningful; ppts = percentage point change 8
Revenue Higher production, favourable FX and higher US REC prices offset by lower prices in Australia Revenue (A$M) 303.2 16.0 (2.3) 12.4 (5.5) (3.5) 286.1 USA USA USA +1.9m (0.6m) +1.2m (0.5m) 157.8 139.8 Australia +10.5m (1.7m) (6.7m) (3.0m) Australia Australia 145.4 146.3 FY13 Revenue Production Electricity LGC and REC Compensated FX FY14 Revenue price price revenue & other 9
Operating EBITDA One-off transaction costs and incentive payments offset by revenue gains and restructure savings Operating EBITDA (A$M) 17.1 (1.0) (1.0) 2.1 (8.4) 185.5 176.8 USA USA USA 66.8 76.2 +1.3m +1.3m (0.4m) (1.0m) Australia Australia Australia +0.8m +0.8m (0.6m) 109.3 110.0 FY13 Operating Revenue Operating O&M incentive Class A FX on Costs FY14 Operating EBITDA costs payments costs transaction EBITDA costs 10
Operating Cash Flow Higher EBITDA and lower financing costs were offset by interest rate swap termination costs Year ended 30 June Change % ($ million) 2014 2013 F/(A) Operating EBITDA 185.5 176.8 5 Corporate, development & other costs (15.5) (18.6) 17 Movement in working capital & non-cash items (4.2) (2.0) (110) Financing costs & taxes paid (69.2) (72.1) 4 Distributions from financial assets (US Class A interests) 16.4 - n.m. Net operating cash flow before significant items 113.0 84.2 34 Significant item - Interest rate swap termination costs (16.8) - n.m. Net operating cash flow 96.2 84.2 14 Operating cash flow (A$M) (15.5) (4.2) USA 76.2 Corporate (13.6m) (69.2) Development (6.3m) 16.4 (16.8) Gain on sale 4.4m Australia Interest Payable (68.1m) 96.2 109.3 Bank Fees & Charges (2.2m) Interest Income 1.1m FY14 Operating Corporate & Working capital & Financing costs Distribution received Significant item FY14 Net operating EBITDA development costs non cash items from financial assets (Interest rate swap cash flow (US Class A) termination costs) 11
Cash Flow – Cash Movement Lower cash balance largely attributable to investment in US Class A interests (A$M) Sources Uses 51.7 8.3 (93.0) 62.2 (41.4) 96.2 (100.0) Old Woodlawn Facility 54m (15.7) Global Facility 35m (9.4) Union Bank Facility 4m Operating Cash Flow (OCF) 96.2m 124.0 Significant items 16.8m OCF before significant items 113.0m 82.9 30 June 2013 Net operating Union Bank Proceeds New Debt Distributions Acquisition Capex FX and 30 June 2014 cash flow Facility from sale of Woodlawn repayment to Class A of Class A others drawdown US assets Facility members interests drawdown Comments • 30 June 2014 closing cash balance included $61m of ‘Excluded Company’ cash • Excluded Company cash movements included equity investment in Class A interests, operating and capital expenditure related to development in the US and Australia, income from the investment in Class A interests, the proceeds from the sale of US solar PV development projects and the net income from Woodlawn after refinancing costs • Capex included Gamesa fleet transitional make good related items, balance of plant equipment and development expenditure 12
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