MISSION STATEMENT AND CORPORATE STRATEGYCOMPANY OVERVIEW
OVERVIEW OF BUSINESS OPERA TIONS AND PROJECTSCORPORATE GOVERNANCE STATEMENTMISSION STATEMENT AND CORPORATE STRATEGYCOMPANY OVERVIEW OVERVIEW OF BUSINESS OPERA
TIONS AND PROJECTSCORPORATE GOVERNANCE STATEMENT
The non current assets mainly consist of assets under operation (split over the balance sheet items
“Land & buildings”, “Installations, machinery & equipment” and “Leasing & similar rights”) and assets under development/construction booked in the statement of financial position item “Assets under Construction”. As long as a project is not yet in commercial operation or impaired, the project is booked under “Assets under Construction”.
The net increase (after depreciation of the assets Amel I and II) in non-current assets mainly reflects the significant increase in assets under development/construction. The BioCoal production project (Amel III) is currently in phase of hot commissioning and the cogeneration project in Ham is scheduled to enter into commercial operation during quarter 3 2011 .
Assets under development/construction equal € 31.8 million at end 2010 (€ 16.0 million at end 2009) and reflect the investments and activated expenses on the following projects:
• Amel III (net of investment subsidies granted for € 1.3 million ): € 14.0 million (€ 10.9 million at end 2009)
• Ham cogeneration project: € 17.6 million (€ 3.9 million at end 2009);
• Pontrilas cogeneration project: € 0.0 million (€ 1.0 million at end 2009);
• Reisbach BioCoal project: € 0.2 million (€ 0.1 million at end 2009);
• Other projects: € 0.0 million (€ 0.1 million at end 2009).
The decision by Pontrilas Group Ltd. to withdraw from the cogeneration project in Pontrilas (UK) resulted in an impairment of goodwill for € 0.3 million and an impairment of property, plant and equipment for
€ 0.85 million.
The deferred tax assets have evolved from € 3.4 million in 2009 to € 5.5 million in 2010. Management continues to believe that the projects under operation and under construction will eventually allow the Group to recover the deferred tax assets position outstanding at end 2010.
The other non current assets have reduced significantly as the Debt Service Reserve Account provisioned for € 1.6 million in the framework of the financing of the Amel facilities has been used in the framework of the delay incurred in bringing Amel III to operation and the significant extra investments that had to be made to make the installation operational.
The inventories have further increased in 2010 as additional wood biomass has been stored on site in Amel, both for the cogeneration units to secure supply during the winter/end of year period and the creation of the initial stock for the operation of the BioCoal production unit.
The outstanding other receivables position at 31 December 2010 reflects half of the investment subsidies granted to the Amel III project for € 0.6 million and the amounts to be received under the insurance claims related to the fire in the BioCoal production unit in Amel as agreed by the respective insurance companies.
5.4.2 EQUITY AND LIABILITIES
The equity of 4Energy Invest decreased from € 27.5 million in 2009 to € 26.7 million in 2010 as a result of the negative result for the period.
The interest bearing loans and borrowings increased with € 9.9 million to € 42.4 million and reflect the following changes in the amounts outstanding under the different credit facilities of 4Energy Invest;
2010 2009
€’000 €’000
Renogen facilities Amel I 11,908 13,788
Renogen facility Amel II 8,835 9,975
Renogen facility Amel III 9,650 6,589
Amel Bio leasing facilities (Amel I and Amel II) 748 897
Renogen straight loan 0 929
Repayments under the Renogen bank facilities for Amel I, II and III and the leasing facilities of Amel Bio (Amel I and Amel II) equaled € 3.2 million over 2010.
Repayments under the Renogen bank and lease facilities for Amel I, II and III and the Amel Bio leasing facilities are scheduled for a total amount of € 4.1 million over 2011. No repayments are scheduled under the 4HamCogen facilities structured with ING-KBC and LRM over 2011.
In the framework of the credit facilities structured for the Amel operations (through Renogen), the following had been agreed with KBC Bank for the commitments of Renogen towards the bank. The debt service ratio (EBITDA/
debt service) had to be at least 1.2 over fiscal year 2010 and the following fiscal years, which are tested each year by yearly report approved by the board of directors of Renogen at the latest on June 30. The debt service comprises all capital and interest reimbursements on the short- and long term financial liabilities, subordinated loan included. Based on the financial statements ended 31 December 2010, Renogen did not respect this covenant, as a result of which Renogen applied for a waiver on this covenant to KBC Bank. KBC Bank in its writing of 24 December 2010 confirmed that the credit committee of the bank agreed to waive this covenant for the year 2010 in the framework of the low electricity prices experienced in the market over 2010 and the delay in commercial operation of Amel III.
KBC Bank and Renogen also agreed on changes to the credit contracts of the affiliates Renogen and Amel Bio. The changes to the credit contracts include a postponement of the start of redemption of the lease facility structured for the Amel III torrefaction project till June 30th 2011 and the structuring of an additional working capital facility at Amel Bio level for 300,000 Euro to fund the increase in biomass inventory related to Amel III. The changes also include a softening of the covenants at Renogen level: (1) the debt service ratio (EBITDA/debt service) covenant for Renogen for the years 2011 and 2012 is reduced to a factor 1.1 instead of 1.2; (2) the calculation of the
MISSION STATEMENT AND CORPORATE STRATEGYCOMPANY OVERVIEW
OVERVIEW OF BUSINESS OPERA TIONS AND PROJECTSCORPORATE GOVERNANCE STATEMENTMISSION STATEMENT AND CORPORATE STRATEGYCOMPANY OVERVIEW OVERVIEW OF BUSINESS OPERA
TIONS AND PROJECTSCORPORATE GOVERNANCE STATEMENT
II over the first months of the year 2011.
4Energy Invest (through its affiliate 4HamCogen) has € 20.3 million unused credit facilities available at 31 December 2010 in the framework of its cogeneration project in Ham as follows;
• € 18.1 million under senior credit facilities with ING Belgium and KBC Bank;
• € 2.2 million under a subordinated credit facility with the Investment Company LRM.
This amount should be sufficient to finalize the construction of the cogeneration project in Ham and bring the project into operation during quarter 3 2011.
5.5 AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2010, 31 DECEMBER 2009 AND 31 DECEMBER 2008
31-12-10 31-12-09 31-12-08
€’000 €’000 €’000
Cash flow from operating activities
Net profit (loss) after taxes -1,095 8 505
Adjustment for non-cash or non operating items
Deferred taxes -2,134 -1,278 -528
Depreciation, amortization and provisions 3,108 2,813 2,420
Impairment of properties, plant and equipment 1,774 51 113
Share options 220 428 282
Unrealised loss on financial instruments 526 164 378
Financial result 1,079 1,048 1,389
Cash Flow from operating activities
before changes in working capital and provisions
3,478 3,234 4,559
Decrease/(increase) in other long term receivables 1,564 -116 -1,022
Decrease/(increase) in inventories -204 -424 6
Decrease/(increase) in trade receivables 1,487 471 -565
Decrease/(increase) in other receivables 796 -723 -109
(Decrease)/increase in trade payables 87 1,296 -817
(Decrease)/increase in other payables -718 755 237