Market Overview

Kenon Holdings Reports First Quarter 2016 Results and Additional Updates

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SINGAPORE, June 8, 2016 /PRNewswire/ -- Kenon Holdings Ltd. (NYSE: KEN, TASE: KEN) announces its results for the first quarter of 2016, as well as additional updates.

Key Highlights

IC Power

  • In the first quarter of 2016, IC Power's net income was $22 million (net income attributable to Kenon: $14 million) and its Adjusted EBITDA was $100 million.
  • From the date of acquisition of IC Power's distribution business (January 22, 2016) through March 31, 2016, IC Power's distribution business generated revenues of $101 million, net income of $3 million and Adjusted EBITDA of $16 million.
  • In April 2016, Kanan (a 92 MW HFO project in Panama) was completed and commenced full commercial operations.
  • In May 2016, Samay I (a 600 MW thermoelectric project in Peru) was completed and commenced commercial operations.
  • IC Power continued to develop its other key development project, CDA (a 510 MW hydro project in Peru). As of March 31, 2016, the CDA project was 94% complete and commercial operations are expected to commence in the second half of 2016.

Qoros

  • In April 2016, Kenon's major shareholder agreed to provide loans in an aggregate amount of up to $50 million, at its discretion, to Qoros. Ansonia and Wuhu Chery each funded approximately $25 million of these loans in May 2016, with remaining amounts expected to be funded subsequently, at the discretion of Ansonia and Wuhu Chery.

Discussion of Results for Q1 2016
Set forth below is a discussion of Kenon's results of operations. Kenon's consolidated results of operations from its operating companies essentially comprise the consolidated results of IC Power Pte. Ltd. ("IC Power").1 The results of Qoros Automotive Co., Ltd. ("Qoros") and ZIM Integrated Shipping Ltd. ("ZIM") are reflected under results from associates.

IC Power 
IC Power's reportable business segments are Generation and Distribution. IC Power's Generation business segment is further segmented by geography: Peru, Israel, Central America (which consists of Nicaragua, Guatemala, El Salvador and Panama) and Other (which consists of Bolivia, Chile, the Dominican Republic, Jamaica and Colombia).

See Appendix A for a summary of IC Power's unaudited consolidated financial information. See Appendix B for the definition of IC Power's Adjusted EBITDA, which is a non-IFRS financial measure, and for a reconciliation to IC Power's, and each of its segments', net income. See Appendix C for summary operational information for each of IC Power's generation businesses. See Appendix D for summary unaudited financial information for each of IC Power's businesses.

The following discussion of IC Power's results of operations below is derived from IC Power's consolidated financial statements.

1 In March 2016, Kenon announced an internal restructuring pursuant to which its subsidiary IC Power Pte. Ltd., which was a holding company with no material assets, acquired I.C. Power Asia Development Ltd. (formerly I.C. Power Ltd.), which held interests in power generation and distribution assets. As a result, IC Power Pte. Ltd. is now the parent holding company of I.C. Power Asia Development Ltd. and the results of IC Power for Q1 2016 are the results of IC Power Pte. Ltd.

Revenues
IC Power's revenues increased by $100 million, or 31%, to $422 million in Q1 2016 from $322 million in Q1 2015. This increase was primarily the result of the acquisition and consolidation in Q1 2016 of IC Power's distribution business, which contributed $101 million to IC Power's revenues in Q1 2016 from the date of consolidation on January 22, 2016.

IC Power's revenues from its generation business were $321 million in Q1 2016, as compared to $322 million in Q1 2015. See below a discussion of revenues for IC Power's generation business by geographical segment for Q1 2016, as compared to Q1 2015:

  • Peru$121 million, compared to $108 million in Q1 2015, reflecting a 12% YoY increase, primarily as a result of a $9 million increase in revenues from ancillary services as a result of an increase in toll tariffs (such tariffs are passed through to customers under power purchase agreements ("PPAs"), so the increase in revenues had a corresponding impact on cost of sales) and a $3 million increase in revenues from energy sales due to an increase in volume of energy sold from 1,599 GWh in Q1 2015 to 1,723 GWh in Q1 2016;
  • Israel$90 million, compared to $88 million in Q1 2015, reflecting a 2% YoY increase, primarily as a result of a $13 million contribution of revenues from AIE, which was consolidated from August 2015, offset by an $11 million decrease in OPC's revenues from energy sales due to a decline in the generation component tariff published by Israel's Electricity Authority (the "EA") (which forms the basis for the prices in OPC's PPAs);
  • Central America $75 million, compared to $78 million in Q1 2015, reflecting a 4% YoY decrease. The decrease was primarily the result of the reduction in revenues from Puerto Quetzal (Guatemala) of $8 million, Nejapa (El Salvador) of $8 million and ICPNH (Nicaragua) of $4 million, due to a decline in heavy fuel oil ("HFO") prices. The decline was partially offset by $15 million in revenues from Kanan (Panama), which partially commenced commercial operations in Q1 2016;
  • Other – $35 million, compared to $48 million in Q1 2015, reflecting a 27% YoY decrease, primarily as a result of (i) a $4 million reduction in revenues from CEPP (Dominican Republic) as a result of a decline in HFO prices and a decrease in capacity revenues due to the 2015 capacity payment recalculation made by the local market regulator, (ii) a $4 million reduction in revenues from Colmito (Chile), primarily as a result of a decline in energy prices and a decline in energy generation and (iii) a $4 million decrease in revenues from JPPC (Jamaica), as a result of a decline in HFO prices and a decrease in the volume of energy sold, due to lower plant availability.

Cost of Sales (excluding depreciation and amortization)
IC Power's cost of sales (excluding depreciation and amortization) increased by $78 million, or 35%, to $302 million in Q1 2016 from $224 million in Q1 2015. This increase was primarily the result of the acquisition and consolidation in Q1 2016 of IC Power's distribution business, which contributed $79 million to IC Power's cost of sales in Q1 2016 from the date of consolidation on January 22, 2016.

IC Power's cost of sales from its generation business were $223 million in Q1 2016, as compared to $224 million in Q1 2015. See below a discussion of cost of sales for IC Power's generation business by geographical segment for Q1 2016, as compared to Q1 2015:

  • Peru$79 million, compared to $72 million in Q1 2015, reflecting a 10% YoY increase, primarily as a result of a $9 million increase in transmission charges as a result of an increase in toll tariffs (with such increase in cost of sales corresponding to increased revenues of $9 million from transmission tolls) and a $4 million increase in intermediation fees as a result of a renewal of a PPA. The increase was partially offset by a $5 million reduction in maintenance expenses, due to major maintenance and inspection work which was conducted at Kallpa in Q1 2015;
  • Israel$65 million, compared to $56 million in Q1 2015, reflecting a 16% YoY increase, primarily as a result of an $11 million contribution to cost of sales from AIE, which was consolidated from August 2015. The increase was partially offset by a $2 million decline in the cost of natural gas purchases by OPC;
  • Central America $57 million, compared to $63 million in Q1 2015, reflecting a 10% YoY decrease, primarily as a result of a $10 million decline in each of Nejapa's and Puerto Quetzal's cost of sales due to a decline in HFO prices and a decrease in energy purchases. The decline was partially offset by $14 million in cost of sales from Kanan, which partially commenced commercial operations in Q1 2016;
  • Other – $22 million, compared to $33 million in Q1 2015, reflecting a 33% YoY decrease, primarily as a result of a $3 million and $4 million decrease in JPPC's and CEPP's cost of sales, respectively, due to a decline in HFO prices, and a $4 million decrease in Colmito's (Chile) cost of sales due to a decline in energy purchased by Colmito due to high hydrology levels in Chile in Q1 2016.

Net Income

IC Power's net income (attributable to Kenon and non-controlling interest), as reported by IC Power, was $22 million in Q1 2016, compared to $21 million in Q1 2015.2 IC Power's distribution business contributed $3 million in net income from the date of consolidation on January 22, 2016. IC Power's net income from its generation business was $19 million in Q1 2016, as compared to $21 million in Q1 2015.

IC Power's net income remained flat in Q1 2016 as compared to Q1 2015, primarily as the result of the changes in revenue and cost of sales as discussed above as well as the following factors:

  • Depreciation and amortization (including depreciation and amortization expenses from general, selling and administrative expenses) of $36 million in Q1 2016, as compared to $29 million in Q1 2015, reflecting a 24% YoY increase, primarily as a result of the partial commencement of commercial operations of Kanan during Q1 2016, as well as the acquisition of IC Power's distribution business in Q1 2016;
  • General, selling and administrative expenses (excluding depreciation and amortization) of $22 million in Q1 2016, as compared to $13 million in Q1 2015, reflecting a 69% YoY increase, primarily as a result of the acquisition of IC Power's distribution business in Q1 2016, which contributed $8 million in administrative expenses from the date of consolidation on January 22, 2016;
  • Net finance expenses of $31 million in Q1 2016, as compared to $21 million in Q1 2015, reflecting a 48% YoY increase, primarily due to IC Power's distribution business contributing $7 million in finance expenses from the date of consolidation on January 22, 2016; and
  • Tax expense of $12 million in Q1 2016, as compared to $14 million in Q1 2015, reflecting a 14% decrease, primarily as a result of a decline in the tax rate in Israel (from 26.5% to 25%), which was offset in part by higher pretax income in Peru. IC Power's effective tax rate decreased to 36% in Q1 2016 from 40% in Q1 2015, primarily as a result of the lower applicable tax rate in Israel.

Adjusted EBITDA3 
IC Power's Adjusted EBITDA, as reported by IC Power, was $100 million in Q1 2016, as compared to $85 million for Q1 2015.2 The increase was primarily the result of the acquisition and consolidation in Q1 2016 of IC Power's distribution business, which contributed $16 million to IC Power's Adjusted EBITDA in Q1 2016 from the date of consolidation on January 22, 2016.

IC Power's Adjusted EBITDA from its generation business was $84 million in Q1 2016, as compared to $85 million in Q1 2015. Set forth below is a discussion of Adjusted EBITDA for IC Power's generation business by geographical segment for Q1 2016, as compared to Q1 2015:

  • Peru$39 million in Q1 2016, compared to $33 million in Q1 2015. The increase was primarily due to a $5 million reduction in maintenance expenses, due to major maintenance and inspection work which was conducted at Kallpa in Q1 2015;
  • Israel$22 million in Q1 2016, compared to $30 million in Q1 2015. The decline was primarily due to the lower power generation component tariff published by the EA in January 2015 and September 2015 (such tariff forms the basis for the prices in OPC's PPAs), without a similar reduction in OPC's gas prices;
  • Central America$15 million in Q1 2016, compared to $12 million in Q1 2015;
  • Other - $8 million in Q1 2016, compared to $10 million in Q1 2015.

2 IC Power's net income and Adjusted EBITDA, as reported to Kenon, in Q1 2015 were $16 million (only $10 million of which was attributable to Kenon as a result of the exclusion of non-controlling interests and intercompany expenses) and $80 million, respectively. These amounts differ from the respective amounts reported in IC Power's financial statements for the same period as a result of the revision of certain provisions at IC Power, which were adjusted in IC Power's Q1 2015 and 2014 financial statements, but were adjusted in Q2 2015 for Kenon. For further information, see "Decisions by the PUAE (Israel's Power Regulator)" in Kenon's 6-K, dated April 6, 2016, announcing Kenon's Full-Year 2015 Results.

3 For the periods covered in this release, IC Power defines "Adjusted EBITDA" as income before depreciation and amortization, financing expenses, net and income tax expenses. In prior periods, "Adjusted EBITDA", as defined by IC Power, has included additional adjustments, including asset-write off, share in income of associated companies and gain on bargain purchase, which adjustments are not applicable to IC Power in Q1 2015 and Q1 2016.

Capital Expenditures
IC Power's capital expenditures were $281 million in Q1 2016, primarily relating to expenditures on projects under development and acquisitions of $268 million, consisting of CDA ($27 million), Samay I ($53 million), Kanan ($6 million) and the acquisition of Energuate ($182 million, net of cash acquired of $60 million). During Q1 2016, IC Power's subsidiaries spent $10 million in capital expenditures for maintenance of existing facilities and a further $3 million for new projects, facility recovery and capitalized interest expense.

Liquidity and Capital Resources
As of March 31, 2016, IC Power had cash and cash equivalents of $367 million, plus short-term deposits and restricted cash of $84 million, interest bearing financial liabilities of $2,955 million (excluding debt owed to Kenon), and net interest bearing financial liabilities (a non-IFRS financial measure, which is defined as interest bearing financial liabilities minus cash and short-term deposits and restricted cash) of $2,504 million.

In May 2016, Kallpa issued $350 million senior unsecured notes, which mature in 2026 and bear an interest rate of 4.875%. The proceeds of the notes were principally used to repay certain existing indebtedness.

In May 2016, IC Power entered into a $100 million loan facility at the IC Power level. This facility is currently undrawn.

Business Developments

Acquisition of Energuate
In January 2016, IC Power completed its acquisition of Energuate (a Guatemalan energy distribution business) and two smaller, related businesses. The total consideration for the acquisition was $266 million, which IC Power paid using a combination of cash on hand and a $120 million loan facility entered into in December 2015 (Energuate's total financial debt and cash on hand as of January 22, 2016 were $284 million and $60 million, respectively). Energuate provides electricity distribution services to approximately 1.6 million customers in Guatemala (representing approximately 55% of Guatemala's distribution customers in 2014).

Commencement of Kanan's Commercial Operations
In April 2016, Kanan commenced full commercial operations. Kanan has a total capacity of 92 MW, comprised of HFO generation units in the form of a 55 MW power barge and a 37 MW power barge. The barges' relocation, installation and interconnection to the Panamian system was completed at an aggregate cost of approximately $87 million (including $40 million of intercompany expenses relating to Puerto Quetzal's and CEPP's sale of the barges to Kanan and additional $4 million of intercompany interest expenses).

Commencement of Samay I's Commercial Operations
In May 2016, Samay I commenced commercial operations. Samay I currently has a total capacity of 600 MW when operated with diesel fuel. However, the capacity of the facility may increase to approximately 720 MW once natural gas becomes available to the Samay I facility through the completion of a natural gas pipeline that is expected to be constructed by the end of 2018 and upon the completion of certain investments into the Samay I facility. Samay I is party to a PPA with the State of Peru that expires in 2035, and is expected to generate approximately $1 billion in revenues over the term of the agreement. As of March 31, 2016, Samay I had invested an aggregate of $387 million in the project.

Assets Under Construction

CDA

  • As of March 31, 2016, CDA has invested an aggregate of $874 million in the project and has completed 94% of the project, with 99% of the dam construction and 100% of the tunnel drilling completed, respectively.
  • CDA has an estimated construction cost of $959 million and total installed capacity of 510 MW. IC Power expects the plant to be fully operational in the second half of 2016.
  • As of March 31, 2016, CDA has drawn the full amount of the $591 million available debt facilities for this project.

AIE

  • AIE currently operates an 18 MW co-generation steam turbine, and is planning to construct a 140 MW power plant, with construction expected to commence in mid-2016. IC Power expects that the total cost of completing the AIE plant (including the $16 million consideration for the acquisition of AIE and the construction of the power station) will be approximately $250 million. In January 2016, AIE entered into a $155 million EPC contract in connection with the project, and the AIE plant is expected to reach its commercial operation date in the second half of 2018.

Qoros4 
Kenon recognizes 50% of Qoros' results under "share in income from associates." The discussion below reflects 100% of Qoros' financial results.

See Appendix E for Qoros' unaudited consolidated financial information.

Revenues
Revenues increased by RMB219 million ($34 million) or 75% to RMB512 million ($80 million) in Q1 2016 compared to RMB293 million ($45 million) in Q1 2015, primarily resulting from an increase in vehicle sales to approximately 4,900 vehicles in Q1 2016 from approximately 2,500 vehicles in Q1 2015.

Cost of Sales
Cost of sales increased by RMB292 million ($45 million) or 92% to RMB611 million ($95 million) in Q1 2016 compared to RMB319 million ($50 million) in Q1 2015, primarily resulting from the increase in the number of vehicles sold in Q1 2016.

Selling and Distribution Expenses
Selling and distribution expenses decreased by RMB46 million ($7 million) or 46% to RMB54 million ($8 million) in Q1 2016 compared to RMB100 million ($16 million) in Q1 2015, primarily resulting from a reduction in advertising, marketing and promotion and consulting and personnel expenses due to changes in Qoros' marketing and sales strategy and cost-cutting efforts.

Administrative Expenses
Administrative expenses decreased by RMB45 million ($7 million) or 33% to RMB93 million ($14 million) in Q1 2016, compared to RMB138 million ($21 million) in Q1 2015, primarily resulting from a reduction in personnel fees, consulting fees and depreciation and amortization expenses in Q1 2016 as compared to Q1 2015.

Net Finance Costs
Net finance costs decreased by RMB34 million ($5 million) or 41% to RMB49 million ($8 million) in Q1 2016, compared to RMB83 million ($13 million) in Q1 2015, primarily reflecting a RMB23 million ($4 million) increase in finance income due to a net foreign exchange gain in Q1 2016 and an RMB11 million ($2 million) decrease in finance costs.

Loss for the Period
Loss for the period decreased by RMB134 million ($21 million) or 30% to RMB308 million ($48 million) in Q1 2016, compared to RMB442 million ($69 million) in Q1 2015.

4 Convenience translation of RMB amounts into USD use a rate of 6.44:1.

Liquidity

In the first quarter of 2016, Kenon made shareholder loans to Qoros of RMB275 million ($42 million), fulfilling Kenon's outstanding loan commitments to Qoros. Kenon's joint venture partner, Wuhu Chery, made shareholder loans to Qoros in the same amount and on similar conditions.

As of March 31, 2016, Qoros had total loans and borrowings (excluding shareholder loans) of RMB5.8 billion ($901 million). Also as of this date, Qoros had current liabilities (excluding shareholder loans) of RMB4.8 billion ($745 million), including trade and other payables of RMB3 billion ($466 million) and current assets of RMB1.7 billion ($280 million), including cash and cash equivalents of RMB223 million ($35 million). Qoros actively manages its trade payables, accrued expenses and other operating expenses in connection with the management of its liquidity requirements and available resources.

In April 2016, Ansonia Holdings Singapore B.V. ("Ansonia"), which owns approximately 46% of the outstanding shares of Kenon, entered into an agreement to provide loans in an aggregate amount of up to $50 million, at its discretion, to Quantum (2007) LLC ("Quantum") (a wholly-owned subsidiary of Kenon, which is the direct owner of Kenon's 50% interest in Qoros), and Quantum will provide these loans to Qoros. Ansonia and Wuhu Chery each funded approximately $25 million of these loans in May 2016, with remaining amounts expected to be funded subsequently, at the discretion of Ansonia and Wuhu Chery. In light of the investments that have been made by Kenon in Qoros, including guarantees provided by Kenon, and Kenon's strategy to refrain from material "cross-allocation" (i.e., investing returns from one business into another), Kenon did not make any loans or other investments in Qoros as part of this transaction. For further information on the structure and terms of Ansonia's agreement to provide loans to Qoros, see Exhibit 99.1 to Kenon's Report on Form 6-K, dated April 22, 2016.

Qoros' principal sources of liquidity are cash flows received from financing activities, including long-term loans, short-term facilities and inflows received in connection with the capital contributions (in the form of equity contributions, or convertible or non-convertible shareholder loans) as well as cash flows received from vehicle sales. Qoros has drawn substantially all of the available amounts under its existing long term credit facilities and will require additional financing, including the renewal or refinancing of its working capital facilities, to fund its continued development and operations. Qoros is continuing to seek additional financing for its operations.

Business Updates

Car Sales
In the first three months of 2016 (which includes the Chinese new year, a traditionally slower time for car sales), Qoros' sales increased by approximately 97% to approximately 4,900 vehicles, as compared to approximately 2,500 vehicles in Q1 2015.

In April 2016, Qoros' sales increased by approximately 29% to approximately 1,680 vehicles, as compared to approximately 1,300 vehicles in April 2015.

SUV and New Model Launches
In March 2016, Qoros launched the Qoros 5 SUV, a mid-sized SUV designed and produced with international standards of quality, safety and performance for the fast-growing SUV market in China.

Qoros has also launched the new 2016 model year versions of the Qoros 3 Sedan and the Qoros 3 Hatch. In addition, Qoros introduced two additional trims for each of the Qoros 3 Sedan and the Qoros 3 Hatch.

Dealerships
As of March 31, 2016, Qoros' dealerships included 86 fully operational points of sales, 7 additional points of sales under construction, and Memorandums of Understanding with respect to the potential development of 9 additional points of sales.

China Vehicle Market Conditions
According to China Passenger Car Association, cumulative passenger vehicle wholesales in Q1 2016 increased by 6% YoY, as compared to 11% YoY in Q1 2015. The SUV segment continued to be a high-growth segment, as sales increased by approximately 49% YoY in Q1 2016, as compared to 48% YoY in Q1 2015, while sedan sales decreased by approximately 12% YoY in Q1 2016.

The decline in the industry's overall growth rate that occurred in 2015 in connection with volatility in the Chinese financial markets and a slowdown in the Chinese economy resulted in increased competition in China's automotive market through price reductions. It is expected that dealers, OEMs, Qoros, and many of Qoros' competitors will continue to reduce prices and offer further inducements to purchase vehicles in 2016.

ZIM 
ZIM carried approximately 577 thousand TEUs in Q1 2016, representing 3% growth as compared to Q1 2015, in which ZIM carried approximately 560 thousand TEUs. In Q1 2016, ZIM's revenues were approximately $630 million, as compared to approximately $792 million in Q1 2015, reflecting an approximately 25% decline in ZIM's average revenue per TEU as a result of a decline in industry container freight rates. ZIM's net loss attributable to ZIM's owners in Q1 2016 was $58 million, compared to net income of $11 million in Q1 2015.

The container shipping industry has continued to experience an imbalance of supply and demand. Since the second half of 2015, freight rates have fallen sharply in most of the trade zones – reaching historical lows across major trades in Q1 2016 – mainly as a result of excess capacity. The impact to net income from the decline in freight rates has been offset, in part, by the current relatively low price of bunker, one of ZIM's significant costs, which also decreased during this period.

ZIM publishes its results on its website. For more information, see www.ZIM.com. This website, and any information referenced therein, is not incorporated by reference herein.

Kenon (Unconsolidated) Liquidity and Capital Resources
As of March 31, 2016, cash, gross debt, and net debt (a non-IFRS financial measure, which is defined as gross debt minus cash) at Kenon were $7 million, $162 million and $155 million, respectively.

As of March 31, 2016, the total drawings outstanding under Kenon's $200 million credit facility from Israel Corporation Ltd. amounted to $150 million. In April 2016, Kenon drew down the remaining $50 million under the credit facility, and as a result, $200 million, plus interest and fees of $14 million, is currently outstanding. The April drawing was intended to provide Kenon with additional cash resources in light of its liquidity position and its obligations under its indirect guarantees of Qoros' indebtedness.

Kenon has provided back-to-back guarantees to Chery in respect of Chery's guarantees of certain Qoros' indebtedness. Set forth below is an overview of the guarantees provided by Kenon in respect of Qoros' indebtedness:






Date Granted


Qoros Credit Facility


Kenon Guarantee Amount






Spin-Off / November 2015


RMB3 billion credit facility


RMB750 million ($116 million)1






May / November 2015


RMB700 million EXIM Bank loan facility


RMB350 million ($54 million) (plus interest and fees of up to RMB60 million ($9 million)2






Total




RMB1,100 million ($171 million) (plus certain interest and fees)

1. In the event that Chery's liability under its guarantee exceeds RMB1.5 billion, Kenon has committed to negotiate with Chery in good faith to find a solution so that Kenon's and Chery's liabilities for the indebtedness of Qoros under this credit facility are equal in proportion.

2. In the event that Chery is obligated under its guarantee of the EXIM Bank loan facility to make payments that exceed Kenon's obligations under the guarantee, Kenon and Chery have agreed to try to find an acceptable solution, but without any obligation on Kenon to be liable for more than the amounts set forth in the table above.

Investors' Conference Call

Kenon's management will host a conference call for investors and analysts on June 8, 2016. To participate, please call one of the following teleconferencing numbers:





US:

1-888-407-2553


UK:

0-800-917-9141


Israel:

03-918-0610


Singapore:

3158-3851


International:

+65-3158-3851

The call will commence at 9:00am Eastern Time, 6:00am Pacific Time, 2:00pm UK Time, 4:00pm Israel Time and 9:00pm Singapore Time.

About Kenon

Kenon is a holding company that operates dynamic, primarily growth-oriented businesses. The companies it owns, in whole or in part, are at various stages of development, ranging from established, cash-generating businesses to early stage development companies. Kenon's businesses consist of:

  • IC Power (100% interest) – a leading owner, developer and operator of power generation and distribution facilities in the Latin American, Caribbean and Israeli power markets;
  • Qoros (50% interest) – a China-based automotive company;
  • ZIM (32% interest) – an international shipping company; and
  • Primus Green Energy, Inc. (91% interest) – an early stage developer of alternative fuel technology.

Kenon's primary focus is to grow and develop its primary businesses, IC Power and Qoros. Following the growth and development of its primary businesses, Kenon intends to provide its shareholders with direct access to these businesses, when we believe it is in the best interests of its shareholders for it to do so based on factors specific to each business, market conditions and other relevant information. Kenon intends to support the development of its non-primary businesses, and to act to realize their value for its shareholders by distributing its interests in its non-primary businesses to its shareholders or selling its interests in its non-primary businesses, rationally and expeditiously. For further information on Kenon's businesses and strategy, see Kenon's publicly available filings, which can be found on the SEC's website at www.sec.gov. Please also see http://www.kenon-holdings.com for additional information.

Caution Concerning Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, (i) with respect to IC Power, the expected cost and expected timing of the commencement of construction and completion of IC Power's construction projects: CDA and AIE, the potential increase in the capacity of the Samay I facility and Samay I's expected revenues under its PPA with the State of Peru, (ii) with respect to Qoros, statements about Qoros' liquidity requirements and sources of funding, its plans to seek additional financing, the total amount of the loans that will be made to Qoros under its loan agreements, Qoros' and trends in China's vehicle market, (iii) with respect to ZIM, statements about expected trends in the container shipping industry, (iv) with respect to Kenon, its strategy, including its strategy to refrain from material cross allocation of returns from its businesses, and (v) other non-historical matters. These statements are based on Kenon's management's current expectations or beliefs, and are subject to uncertainty and changes in circumstances. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond Kenon's control, which could cause the actual results to differ materially from those indicated in such forward-looking statements. Such risks include (i) with respect to IC Power, risks relating to IC Power's failure to complete the construction of its various power plants under construction on a timely basis, within expected budget or at all, future developments in the power generation or distribution markets in which IC Power operates, (ii) with respect to Qoros, China's financial market and economic conditions and Qoros' ability to secure the funding it requires to meet its expenses and liquidity requirements and changes in government policies, (iii) with respect to ZIM, developments in the container shipping industry and freight rates, (iv) with respect to Kenon, changes in events and circumstances with respect to Qoros and Kenon and other, future events that could affect Kenon's strategy generally or in particular with respect to Qoros and (v) other risks and factors, including those risks set forth under the heading "Risk Factors" in Kenon's Annual Report on Form 20-F filed with the SEC and other filings. Except as required by law, Kenon undertakes no obligation to update these forward-looking statements, whether as a result of new information, future events, or otherwise.

Contact Info





Kenon Holdings Ltd.




Barak Cohen

VP Business Development and IR

barakc@kenon-holdings.com

Tel: +65 6351 1780



Karen Koh

Director, Investor Relations and BD

karenk@kenon-holdings.com

Tel: +65 6351 1794





External Investor Relations

Ehud Helft / Kenny Green

GK Investor Relations

kenon@gkir.com

Tel: +1 646 201 9246




 

 

Kenon Holdings Ltd

Unaudited condensed consolidated statements of financial position

 






March 31
2016


December 31
2015


$ Thousands

Current assets




Cash and cash equivalents

388,523


383,953

Short-term investments and deposits

84,223


308,702

Trade receivables, net

234,759


123,273

Other current assets

61,378


45,260

Income tax receivable

4,620


3,926

Inventories

54,227


50,351





Total current assets

827,730


915,465





Non-current assets




Investments in associated companies

370,518


369,022

Deposits, loans and other receivables, including financial instruments

119,716


88,475

Deferred taxes, net

26,512


2,693

Property, plant and equipment, net

3,579,703


2,959,878

Intangible assets

352,979


147,244





Total non-current assets

4,449,428


3,567,312





Total assets

5,277,158


4,482,777





 


March 31
2016


December 31
2015


$ Thousands





Current assets




Loans and debentures

459,831


352,668

Trade payables

248,272


145,454

Other payables, including derivative

203,493


108,873

Provisions

2,223


41,686

Income tax payable

8,393


4,705





Total current liabilities

922,212


653,386





Non-current liabilities




Loans

2,172,618


1,709,063

Debentures

653,697


655,847

Derivative instruments

47,692


35,625

Deferred taxes, net

191,869


138,083

Other non-current liabilities

37,488


27,218





Total non-current liabilities

3,103,364


2,565,836





Total liabilities

4,025,576


3,219,222





Equity




Share capital

1,267,210


1,267,210

Translation reserve

(12,421 )


(16,916 )

Capital reserve

(4,636 )


2,212

Accumulated losses

(227,349 )


(191,292 )





Equity attributable to owners of the Company

1,022,804


1,061,214

Non-controlling interests

228,778


202,341





Total equity

1,251,582


1,263,555





Total liabilities and equity

5,277,158


4,482,777





 

Kenon Holdings Ltd.

Unaudited condensed consolidated statements of profit or loss






For the Three
Months ended


March 31
2016


March 31
2015


$ Thousands

Revenue

421,852


322,158

Cost of sales and services (excluding depreciation)

(301,655)


(230,364)

Depreciation

(32,882)


(25,615)





Gross Profit

87,315


66,179

Other income

2,257


524

Dilution gains from reductions in equity interest held in associates


32,425

Selling, general and administrative expenses

(30,918)


(26,108)

Other expenses

(301)


(473)





Operating profit

58,353


72,547





Financing expenses

(38,019)


(25,714)

Financing income

4,223


8,206





Financing expenses, net

(33,796)


(17,508)





Shares in losses of associated companies, net of tax

(40,938)


(33,701)





(Loss)/profit before income taxes

(16,381)


21,338

Income taxes

(11,821)


(12,548)





(Loss)/profit for the period

(28,202)


8,790





Attributable to:




Kenon's shareholders

(36,057)


3,277

Non-controlling interests

7,855


5,513





(Loss)/profit for the period

(28,202)


8,790





Basic/Diluted (loss) profit per share attributable to Kenon's shareholders (in dollars):




Basic/Diluted (loss) profit per share

(0.67)


0.06

 

 

 

Kenon Holdings Ltd.

Unaudited condensed consolidated statements of cash flows

 






For the Three Months ended


March 31 2016


March 31 2015


$ Thousands

Cash flows from operating activities




(Loss)/profit for the period

(28,202 )


8,790

Adjustments:




Depreciation and amortization

35,892


29,210

Financing expenses, net

33,796


17,508

Share in losses of associated companies, net of tax

40,938


33,701

Gain from changes in interest held in associates


(32,425 )

Other capital loss, net

4,123


144

Share-based payments

189


(653 )

Income taxes

11,821


12,548






98,557


68,823

Change in inventories

(2,510 )


(4,119 )

Change in trade and other receivables

(25,031 )


(18,652 )

Change in trade and other payables

(28,855 )


(13,801 )

Change in provisions and employee benefits

(39,626 )


11,423






2,535


43,674

Income taxes paid, net

(11,410 )


(9,323 )

Dividends received from investments in associates


637





Net cash (used in)/provided by operating activities

(8,875 )


34,988





 


 

For the Three Months ended


March 31 2016


March 31 2015


$ Thousands

Cash flows for investing activities




Proceeds from sale of property, plant and equipment

32


28

Short-term deposits and loans, net

225,408


31,581

Business combinations, less cash acquired

(182,309 )


Investment in associated company

(42,399 )


(64,360 )

Acquisition of property, plant and equipment

(97,261 )


(128,447 )

Acquisition of intangible assets

(2,008 )


(1,547 )

Interest received

1,715


1,310

Sale of securities held for trade and available for sale, net

5,894


Payment of deferred acquisition consideration

(1,448 )






Net cash used in investing activities

(92,376 )


(161,435 )





Cash flows from financing activities




Dividend paid to non-controlling interests

(3,005 )


(1,744 )

Proceeds from issuance of shares to holders of non-controlling interests in subsidiaries

1,684


Receipt of long-term loans and issuance of debentures

103,913


45,000

Repayment of long-term loans and debentures

(81,315 )


(26,142 )

Purchase of non-controlling interest


(20,000 )

Short-term credit from banks and others, net

107,156


(1,454 )

Contribution from former parent company


34,271

Interest paid

(23,388 )


(19,737 )





Net cash provided by financing activities

105,045


10,194





Increase (decrease) in cash and cash equivalents

3,794


(116,253 )

Cash and cash equivalents at beginning of the period

383,953


610,056

Effect of exchange rate fluctuations on balances of cash and cash equivalents

776


(6,996 )





Cash and cash equivalents at end of the period

388,523


486,807





 

 

Information regarding reportable segments

 

Information regarding activities of the reportable segments are set forth in the following table.

 





























I.C. Power*











Generation**


Distribution***


Qoros****


Other


Adjustments


Total



$ Thousands

For the three months ended March 31, 2016













Total sales


321,200


100,587



65



421,852














Adjusted EBITDA


84,588


15,067



(5,411 )



94,244














Depreciation and amortization


32,229


3,576



87



35,892

Financing income


(490 )


(1,493 )



(2,905 )


665


(4,223 )

Financing expenses


24,382


8,235



6,066


(665 )


38,018

Other items:













Share in (profits)/losses of associated companies


(199 )



25,812


15,325



40,938
















55,922


10,318


25,812


18,573



110,625














Profit/(loss) before taxes


28,666


4,749


(25,812 )


(23,984 )



(16,381 )

Income taxes


10,419


1,383



19



11,821














Profit/(loss) for the period from continuing operations


18,247


3,366


(25,812 )


(24,003 )



(28,202 )



























*     The total assets and liabilities of I.C. Power are $4.9 billion and $3.8 billion at March 31, 2016, respectively.
**    Includes holding company.
***   Operating since January 22, 2016.
****  Associated company.

 

 














I.C. Power










Generation*


Qoros**


Other


Adjustments


Total



$ Thousands

For the three months ended March 31, 2015











Sales to external customers


319,072



225



319,297

Intersegment sales


2,861






2,861














321,933



225



322,158

Elimination of intersegment sales


(2,861 )




2,861













Total sales


319,072



225


2,861


322,158












Adjusted EBITDA


79,504



22,253



101,757












Depreciation and amortization


29,079



131



29,210

Financing income


(1,560 )



(9,329 )


2,683


(8,206 )

Financing expenses


23,095



5,302


(2,683 )


25,714

Other items:











Share in losses (income) of associated companies


8


35,760


(2,067 )



33,701














50,622


35,760


(5,963 )



80,419












Profit/(loss) before taxes


28,882


(35,760 )


28,216



21,338

Income taxes


12,548





12,548












Profit/(loss) for the period from continuing operations


16,334


(35,760 )


28,216



8,790























*   The total assets and liabilities of I.C. Power are $3.8 billion and $2.8 billion at March 31, 2015, respectively.
**  Associated company.

 

 

Information Regarding Associated Companies

 

A. Carrying amounts of investments in associated companies










As at
March 31,
2016


As at
March 31,
2015


(US$ millions)

ZIM

186


201

Qoros

176


159

Others

9


9






371


369





B. Equity in the net earnings (losses) of associate companies






For the three months ended


March 31,
2016


March 31,
2015


(US$ millions)

ZIM

(16 )


5

Tower


(3 )

Qoros

(26 )


(35 )

Others

1


(1 )






(41 )


(34 )





Contributions of Principal Operations to Profit (loss) (Attributable to Kenon's Shareholders)






Three Months Ended
March 31,


2016


2015


(US$ millions)

IC Power

14


10

Qoros

(26 )


(35 )

ZIM

(16 )


5

Tower


(3 )

Gain from changes in interest held in associate


32

Other

(8 )


(9 )





Profit / (loss) attributable to Kenon's shareholders

(36 )


3





 

Appendix A

 

IC Power's Unaudited Consolidated Statement of Income

 








For the three months period ended
March 31



2016


2015



US$ millions

Sales


422


322

Cost of sales (excluding depreciation and amortization)


(302 )


(224 )

Depreciation and amortization


(33 )


(26 )






Gross profit


87


72

General, selling and administrative expenses


(25 )


(16 )

Other income


2







Operating income


64


56






Financing expenses


33


23

Financing income


(2 )


(2 )






Financing expenses, net


31


21






Income before taxes


33


35






Taxes on income


(11 )


(14 )






Net income for the period


22


21






Attributable to:





Equity holders of the Company


14


15

Non-controlling interest


8


6






Net income for the period


22


21






 

Summary Data from IC Power's Unaudited Consolidated Statement of Cash Flows






Three Months Ended March 31,


2016


2015


(in millions of USD)

Cash flows provided by (used in) operating activities

(3 )


44

Cash flows (used in) investing activities

(56 )


(97 )

Cash flows provided by (used in) financing activities

65


(69 )





Increase (decrease) in cash and cash equivalents

6


(122 )





Cash and cash equivalents at end of the period

367


455

Investments in property, plant and equipment*

99


128

Total depreciation and amortization

36


29





1.  Not including business combination

 

Summary Data from IC Power's Unaudited Consolidated Statement of Financial Position








As at


March 31, 2016


December 31, 2015


(in millions of USD)

Total financial liabilities1

2,955


2,565

Total monetary assets2

451


662

Total equity attributable to the owners

616


826

Total assets

4,895


4,091





1.     Including loans from banks and others and debentures
2.     Including cash and cash equivalents, short-term deposits and restricted cash

 

Appendix B

IC Power's Adjusted EBITDA

This press release, including the financial tables, presents IC Power's Adjusted EBITDA, a financial metric considered to be "non-IFRS." Non-IFRS financial measures should be evaluated in conjunction with, and are not a substitute for, IFRS financial measures. The non-IFRS financial information presented herein should not be considered in isolation from or as a substitute for operating income, net income or per share data prepared in accordance with IFRS.

IC Power defines "Adjusted EBITDA" for the periods covered in this report for each entity as income, before depreciation and amortization, financing expenses, net and income tax expense. Adjusted EBITDA is not recognized under IFRS or any other generally accepted accounting principles as measures of financial performance and should not be considered as a substitute for net income or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. Adjusted EBITDA is not intended to represent funds available for dividends or other discretionary uses because those funds may be required for debt service, capital expenditures, working capital and other commitments and contingencies. Adjusted EBITDA presents limitations that impair its use as a measure of IC Power's profitability since it does not take into consideration certain costs and expenses that result from IC Power's business that could have a significant effect on IC Power's net income, such as financial expenses, taxes, depreciation, capital expenses and other related charges.

Set forth below is a reconciliation of IC Power's, and each of its segments', net income to Adjusted EBITDA for the periods presented. Other companies may calculate Adjusted EBITDA differently, and therefore this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.

 






 

Three Months Ended March 31, 2016





(in USD millions) (unaudited)



Generation


Distribution


Adjustments




Total



Peru


Israel


Central
America


Other







Net income (loss) for the period


16


13


2


(14 )


3


2


22

Depreciation and amortization1


12


6


7


9


4


(2 )


36

Financing expenses, net


5


2


4


13


7



31

Income tax expense


6


1


2



2



11
















Adjusted EBITDA


39


22


15


8


16



100







1.        Includes depreciation and amortization expenses from general, selling and administrative expenses.

 
















Three Months Ended March 31, 2015



(in USD millions) (unaudited)



Generation


Adjustment


Total



Peru


Israel


Central
America


Other





Net income (loss) for the period


5


17


3


(6 )


2


21

Depreciation and amortization1


13


6


5


7


(2 )


29

Financing expenses, net


10


1


2


8



21

Income tax expense


5


6


2


1



14














Adjusted EBITDA


33


30


12


10



85














1.        Includes depreciation and amortization expenses from general, selling and administrative expenses.

 

 

Appendix C

Summary of IC Power's Operating Generation Assets

The following table sets forth summary operational information regarding each of IC Power's operational generation companies as of May 31, 2016 by geographical segment:

 

Segment


Country


Entity


Ownership
Percentage
(Rounded)


Fuel


Installed
Capacity
(MW)
1


Proportionate
Capacity
2


Type of Asset

Peru


Peru


Kallpa


75 %


Natural Gas


        1,063 3


797


Greenfield3


Peru


Samay I


75 %


Natural Gas and Diesel


600


450


Greenfield

Israel


Israel


OPC


80 %


Natural Gas and Diesel


440


352


Greenfield


Israel


AIE


100 %


Steam4


18


18


Acquired

Central America


Nicaragua


Corinto


65 %


HFO


71


46


Acquired


Nicaragua


Tipitapa Power


65 %


HFO


51


33


Acquired


Nicaragua


Amayo I


61 %


Wind


40


24


Acquired


Nicaragua


Amayo II


61 %


Wind


23


14


Acquired


Guatemala


Puerto Quetzal


100 %


HFO


179


179


Acquired


El Salvador


Nejapa


100 %


HFO


140


140


Original Inkia Asset


Panama


Kanan


100 %


HFO


92


92


Greenfield

Other


Bolivia


COBEE


100 %


Natural Gas


228


228


Original Inkia Asset


Chile


Central Cardones


87 %


Diesel


153


133


Acquired


Chile


Colmito


100 %


Natural Gas and Diesel


58


58


Acquired


Dominican Republic


CEPP


97 %


HFO


67


65


Original Inkia Asset


Jamaica


JPPC


100 %


HFO


60


60


Original Inkia Asset


Colombia


Surpetroil


60 %


Natural Gas


20


12


Acquired



Panama


Pedregal5


         21 %6


HFO


54


11


Original Inkia Asset
















Total Operating Capacity





3,357


2,702

















1.     Reflects 100% of the capacity of each of IC Power's assets, regardless of IC Power's ownership interest in the entity that owns each such asset.

2.     Reflects the proportionate capacity of each of IC Power's assets, as determined by IC Power's ownership interest in the entity that owns each such asset.

3.     Kallpa's plants were developed as greenfield projects in four different stages between 2005 and 2012, resulting in 870 MW of installed capacity. In addition, Kallpa acquired Las Flores' power plant in 2014, adding 193 MW to Kallpa's capacity.

4.     AIE also holds a conditional license for the construction of a cogeneration power station in Israel. This station will be developed as a greenfield project (at an expected cost of $250 million, including the acquisition price of AIE), based upon a plant with 140 MW of capacity. Construction is expected to commence in mid-2016 and COD is expected in the second half of 2018.

5.     Although Pedregal is located in Central America, it is a minority investment. Therefore, from an income statement perspective, it is not part of IC Power's Central America segment and Pedregal is only reflected in IC Power's share in income of associated companies.

6.     Although IC Power has a non-controlling interest in Pedregal, IC Power is party to a management services agreement, which designates IC Power as the administrator responsible for the day-to-day management of Pedregal.

 

 

 

Appendix D

Summary Unaudited Financial Information of IC Power's Subsidiaries and Associated Company
















 

 

Three Months Ended March 31, 2016

Entity


Ownership
Interest
(%)


Sales


Cost of
Sales


Adjusted
EBITDA
1


Outstanding
Debt
2


Net
Debt
3





($ millions)

GENERATION













Peru segment













Kallpa


75


$    121


$        79


$             39


$              401


$       379

Assets in advance stages of construction












CDA


75





582


544

Samay I


75





333


309

Israel segment












OPC


80


77


54


22


387


282

AIE


100


13


11




(4 )

Central America segment












ICPNH4


          61-65


23


13


10


97


82

Puerto Quetzal5


100


15


13


2


17


10

Nejapa6


100


17


13


4



(14 )

Cenergica


100


4


3




(2 )

Guatemel


100


1


1




(1 )

Assets in advance stages of construction












Kanan


100


15


14



61


60

Other segment












COBEE


100


12


4


7


67


48

Central Cardones


87


2



2


40


39

Colmito


100


6


5



17


15

CEPP


97


6


5



11


7

JPPC7


100


7


7



4


1

Surpetroil8


60


2


1



3


3

RECSA


100





3


2

DISTRIBUTION













DEORSA


93


58


45


8


107


84

DEOCSA


91


43


34


8


164


149

HOLDINGS













IC Power Distribution Holdings


100





118


118

Inkia & Other9


100




(1 )


448


362

IC Power & Other10


100




(1 )


95


31














TOTAL




$    422


$      302


$           100


$          2,955


$    2,504














 

1.     "Adjusted EBITDA" for each entity for the period is defined as income (loss) before depreciation and amortization, finance expenses, net and income tax expense (benefit).

2.     Includes short-term and long-term debt.

3.     Net debt is defined as total debt attributable to each of IC Power's subsidiaries, minus the cash and short term deposits and restricted cash of such companies. Net debt is not a measure of liabilities in accordance with IFRS. The tables below set forth a reconciliation of net debt to total debt for IC Power's subsidiaries.

4.     Through ICPNH, IC Power indirectly holds 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.

5.     Figures include Puerto Quetzal and Poliwatt Limited (one of IC Power's subsidiaries that performs administrative functions and maintains certain licenses on behalf of Puerto Quetzal).

6.     Figures include amounts related to Nejapa's branch and main office.

7.     Figures include JPPC and Private Power Operator Ltd. (IC Power's subsidiary that employs JPPC's employees and performs administrative-related functions).

8.     Figures include Surpetroil and Surenergy S.A.S ESP (IC Power's subsidiary that performs administrative functions and maintains certain licenses on behalf of Surpetroil).

9.     Outstanding debt includes Inkia for $448 million.

10.   Includes $38 million of IC Power's outstanding debt and $57 million of ICPI debt.

 

 

The following tables set forth a reconciliation of net income (loss) to Adjusted EBITDA for IC Power's subsidiaries for the three months ended March 31, 2016:

 


















Kallpa


CDA


Samay I


OPC


AIE


ICPNH


Puerto
Quetzal



($ millions)

Net income (loss)


$        14


$               1


$               1


$            13


$              —


$              4


$            (1 )

Depreciation and amortization


12




6



3


1

Finance expenses (income), net


6



(1 )


2



2


1

Income tax expense (benefit)


7


(1 )



1



1


1
















Adjusted EBITDA


$        39


$           —


$           —


$            22


$             —


$            10


$             2

































Nejapa


Cenérgica


Kanan


Guatamel


COBEE


Central
Cardones


Colmito



($ millions)

Net income (loss)


$          2


$          —


$              (3 )


$          —


$                  4


$          —


$         —

Depreciation and amortization


1



2



1


1


Finance expenses, net




1



1


1


Income tax expense


1





1


















Adjusted EBITDA


$          4


$          —


$          —


$         —


$                  7


$              2


$        —

































CEPP


JPPC


Surpetroil


RECSA


IC Power
Distribution
Holdings


Inkia &
Other


IC
Power &
Other



($ millions)

Net income (loss)


$         (1 )


$              (1 )


$          —


$         —


$                 (2 )


$             (8 )


$            (4 )

Depreciation and amortization


1


1





3


Finance expenses, net






2


6


3

Income tax expense (benefit)







(2 )

















Adjusted EBITDA


$      —


$          —


$          —


$         —


$             —


$             (1 )


$            (1 )
















 








DEOCSA


DEORSA


IC Power
Total


($ millions)

Net income

$                 1


$                 2


$              22

Depreciation and amortization

2


2


36

Finance expenses, net

4


3


31

Income tax expense

1


1


11







Adjusted EBITDA

$                 8


$                 8


$            100







The tables below set forth a reconciliation of net debt to total debt for IC Power's subsidiaries as of March 31, 2016.

 










































Kallpa


CDA


Samay I


OPC


AIE


ICPNH


Puerto
Quetzal


Nejapa


Cenérgica


Kanan


($ millions)

Total debt

$          401


$        582


$          333


$       387


$    —


$         97


$             17


$     —


$            —


$         61

Cash

22


38


24


105


4


15


7


14


2


1





















Net Debt

$          379


$        544


$          309


$       282


$      (4 )


$         82


$             10


$      (14 )


$               (2 )


$         60










































Guatemel


COBEE


Central
Cardones


Colmito


CEPP


JPPC


Surpetroil


RECSA


IC Power
Distribution
Holdings


Inkia &
Other


($ millions)

Total debt

$         —


$          67


$             40


$         17


$       11


$           4


$               3


$            3


$             118


$       448

Cash

1


19


1


2


4


3



1



86





















Net Debt

$           (1 )


$          48


$             39


$         15


$          7


$           1


$               3


$            2


$             118


$       362





















 

 












IC Power
& Other


DEOCSA


DEORSA


Total IC
Power



($ millions)

Total debt


$              95


$            164


$             107


2,955

Cash


64


15


23


451










Net debt


31


149


84


2,504










 

 
















Three Months Ended March 31, 2015

Entity


Ownership
Interest
(%)


Sales


Cost of
Sales


Adjusted
EBITDA
1


Outstanding
Debt
2


Net
Debt
3



($ millions)

Peru segment













Kallpa


75


$    108


$        72


$             35


$              446


$       427

Assets in advance stages of construction













CDA


75




(1 )


462


406

Samay I


75




(1 )


145


80

Israel segment













OPC


80


88


56


30


399


199

Central America segment













ICPNH4


          61-65


27


16


9


106


91

Puerto Quetzal5


100


23


23



26


20

Nejapa6


100


25


23


2



(24 )

Cenergica


100


3


1


1



(3 )

Assets in advance stages of construction













Kanan


100






(2 )

Other segment













COBEE


100


11


4


5


80


42

Central Cardones


87


4



2


47


44

Colmito


100


10


9



19


18

CEPP


97


10


9


1


30


25

JPPC7


100


11


10



7


3

Surpetroil8


60


2


1


(1 )


3


1

Inkia & Other9


100




2


447


287

IC Power & Other10


100




1


105


77














Total




$    322


$      224


$             85


$          2,322


$    1,691














 

1.     "Adjusted EBITDA" for each entity for the period is defined as income (loss) before depreciation and amortization, finance expenses, net and income tax expense (benefit).

2.     Includes short-term and long-term debt.

3.     Net debt is defined as total debt attributable to each of IC Power's subsidiaries, minus the cash and short term deposits and restricted cash of such companies. Net debt is not a measure of liabilities in accordance with IFRS. The tables below set forth a reconciliation of net debt to total debt for IC Power's subsidiaries.

4.     Through ICPNH, IC Power indirectly holds 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.

5.     Figures include Puerto Quetzal and Poliwatt Limited (one of IC Power's subsidiaries that performs administrative functions and maintains certain licenses on behalf of Puerto Quetzal).

6.     Figures include amounts related to Nejapa's branch and main office.

7.     Figures include JPPC and Private Power Operator Ltd. (IC Power's subsidiary that employs JPPC's employees and performs administrative-related functions).

8.     Figures include Surpetroil and Surenergy S.A.S ESP (IC Power's subsidiary that performs administrative functions and maintains certain licenses on behalf of Surpetroil).

9.     Outstanding debt includes Inkia for $447 million.

10.   Includes $12 million of IC Power's outstanding debt and $93 million of ICPI debt.

 

 

 

 

The following tables set forth a reconciliation of net income (loss) to Adjusted EBITDA for IC Power's subsidiaries for the three months ended March 31, 2015:

 


















Kallpa


CDA


Samay I


OPC


ICPNH


Puerto
Quetzal


Nejapa



 

($ millions)

Net income (loss)


$          8


$       (3 )


$        —


$     17


$           5


$           (2 )


$      —

Depreciation and amortization


13




6


2


1


1

Finance expenses, net


10




1


2



Income tax expense (benefit)


4


2


(1 )


6



1


1
















Adjusted EBITDA


$        35


$       (1 )


$           (1 )


$     30


$           9


$        —


$          2
















 
















Cenérgica


Kanan


COBEE


Central
Cardones


Colmito


CEPP



($ millions)

Net income


$               1


$      —


$            2


$               1


$        —


$     —

Depreciation and amortization




1


1



1

Finance expenses, net




1




Income tax expense




1

















Adjusted EBITDA


$               1


$     —


$            5


$               2


$       —


$         1














 














JPPC


Surpetroil


Inkia &
Other


IC Power &
Others


Total



($ millions)

Net income (loss)


$        (1 )


$              (1 )


$          (6 )


$              —


$     21

Depreciation and amortization


1



2



29

Finance expenses, net




6


1


21

Income tax expense






14












Adjusted EBITDA


$      —


$              (1 )


$           2


$                  1


$     85












The tables below set forth a reconciliation of net debt to total debt for IC Power's subsidiaries as of March 31, 2015.

 






















Kallpa


CDA


Samay I


OPC


ICPNH


Puerto
Quetzal


Nejapa


Cenérgica


Kanan



($ millions)

Total debt


$        446


$          462


$        145


$    399


$      106


$             26


$       —


$           —


$        —

Cash


19


56


65


200


15


6


24


3


2




















Net Debt


$        427


$          406


$          80


$    199


$         91


$             20


$        (24 )


$              (3 )


$          (2 )









































COBEE


Central
Cardones


Colmito


CEPP


JPPC


Surpetroil


Inkia &
Other


ICP&
Other


Total



($ millions)

Total debt


$          80


$             47


$          19


$      30


$           7


$               3


$       447


$          105


$    2,322

Cash


38


3


1


5


4


2


160


28


631




















Net Debt


$          42


$             44


$          18


$      25


$           3


$               1


$       287


$             77


$    1,691




















 

Appendix E

Summary of Qoros' Unaudited Condensed Consolidated Statement of Profit or Loss for the Three Months ended 31 March

 








For the three months ended

In thousands of RMB


31 March 2016


31 March 2015

Revenue


511,677


293,493

Cost of sales


(610,848 )


(319,315 )






Gross profit


(99,171 )


(25,822 )

Other income


20,109


5,531

Research and development expenses


(30,138 )


(78,962 )

Selling and distribution expenses


(54,047 )


(100,183 )

Administrative expenses


(92,846 )


(138,276 )

Other expenses


(3,226 )


(21,770 )






Loss from operation


(259,319 )


(359,482 )

Finance income


26,802


4,438

Finance costs


(75,736 )


(87,063 )






Net finance costs


(48,934 )


(82,625 )






Share of loss of equity-accounted investee, net of nil tax


(106 )


(13 )






Loss before tax


(308,359 )


(442,120 )

Income tax expense


(66 )


(148 )






Loss for the year


(308,425 )


(442,268 )






 

Summary of Qoros' Unaudited Condensed Consolidated Statement of Financial Position

 






In thousands of RMB


At 31 March
2016


At 31 December
2015

Assets





Property, plant and equipment


4,455,514


4,275,167

Intangible assets


4,778,426


4,656,474

Prepayments for purchase of equipment


29,242


59,276

Lease prepayments


202,613


203,716

Trade and other receivables


92,052


92,202

Equity-accounted investee


1,926


2,032






Non-current assets


9,559,773


9,288,867

Inventories


478,535


244,854

VAT recoverable


829,357


832,503

Available-for-sale financial assets


26,000


Trade and other receivables


134,888


42,645

Prepayments


9,679


36,431

Pledged deposits


52,262


113,167

Cash and cash equivalents


222,684


257,270






Current assets


1,753,405


1,526,870






Total assets


11,313,178


10,815,737






Equity





Paid-in capital


9,331,840


8,331,840

Reserves


(14 )


(44 )

Accumulated losses


(8,444,422 )


(8,135,997 )






Total equity


887,404


195,799

Liabilities





Loans and borrowings


4,740,022


4,659,718

Deferred income


166,749


169,396

Provisions


30,064


20,964






Non-current liabilities


4,936,835


4,850,078

Loans and borrowings


2,132,467


2,829,470

Trade and other payables


3,039,246


2,615,541

Deferred income


317,226


324,849






Current liabilities


5,488,939


5,769,860






Total liabilities


10,425,774


10,619,938






Total equity and liabilities


11,313,178


10,815,737






To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/kenon-holdings-reports-first-quarter-2016-results-and-additional-updates-300281535.html

SOURCE Kenon Holdings Ltd.

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