ContourGlobal earnings rise as it makes good portfolio progress

ContourGlobal reported a 23.5% improvement in its adjusted EBITDA for the first quarter of on Wednesday to $147.0m, which it put down to the acquisition of the 250 MW Concentrated Solar Power facilities in the southwest of Spain in May last year, as well as improved wind resource and availability, partially offset by foreign exchange movements in the euro and Brazilian real.

The FTSE 250 power generation business said that, as it had indicated during its annual results, the annual dividend was expected to be increased by 10% with the firm moving to a quarterly dividend payout.

On Wednesday, it declared a first quarterly dividend for 2019 of $24.75m, or 3.6901 US cents per ordinary share, which was expected to be paid on 21 June.

It reported a 36.9% increase in funds from operations compared to the prior year, driven by the acquisition of the Spanish CSP business, partially offset by a change in timing of Eurobond interest payment dates from June and December 2018 to August and February 2019.

ContourGlobal also said that, further to its announcements on 7 January and 5 April regarding the acquisition of natural-gas fired cogeneration plants in Mexico from Alpek, it could update shareholders on the transaction status and timing.

As it had previously announced, closing of the transaction remained conditional on the entry into commercial service of the asset under construction.

It said closing was now expected to occur in the third quarter, with the acquisition expected to make an adjusted EBITDA contribution of $110m in its first full year of operations.

On 3 May, the firm announced that it had reached a key milestone in the Kosova e Re Power Plant Project with a consortium of General Electric companies being selected as the preferred bidder in the tender for the turn-key engineering, procurement and construction and long term maintenance contracts.

Finally, and further to its announcement made on 6 December, ContourGlobal confirmed that on 20 May it completed the sale of a 49% interest in the Spanish CSP business to a fund advised by Credit Suisse Energy Infrastructure Partners, for a total consideration payable of €134m in cash.

Its adjusted EBITDA guidance remained unchanged for 2019 at between $720m and $770m.

“We have made a strong start to 2019 with growth in adjusted EBITDA in line with our expectations,” said ContourGlobal chief executive officer Joseph Brandt.

“During the quarter, we marked an important milestone in the development of the Kosova e Re project.

“Our mergers and acquisitions pipeline remains robust and other key projects such as our innovative hydroelectric refurbishment in Armenia and the modernization of our integrated renewable, storage and thermal generation facility on the island of Bonaire are on track.”