H1 2014 EARNINGS CALL – Alkane Energy Plc

Alkane Energy Plc · Sep 10, 2014 · 28 slides

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Slides

ALKANE ENERGY PLC Interim results For the 6 months ended 30 June 2014 GAS GAS TO POWER TO POWER
Alkane Energy: Gas to Power Leading independent power producer: UKs No.1 in Coal Mine Methane (CMM) Power Response Design, Build & Operate (DBO) Increased scale; organic growth & acquisition Generating enough power for 75,000…
Gas to Power: What we do Baseload: CMM generation Power 24/7 base load running Response, 20% Power Response: DBO, 16% Natural gas generation Revenue STOR (National Grid) 7.1m Winter peak load running Base load Design, Build…
Strategy: Focussed Growth Acquisition of Wheldale power response site Installed capacity timeline from SSE (7.5MW) 150 140 Exposure to shale gas upside as a result of 130 transfer of onshore shale business to Egdon 120 110…
Shale Strategy Alkane positioning on shale: Existing acreage position In-house skills/resources Cash drain Timing/shale resource risk Egdon Resources selected partner: Long standing UK onshore operator Stronger exploration…
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H1 Financial Highlights H1 2014 H1 2013 Unaudited Unaudited Revenue 7.1m 11.1m Underlying EBITDA 2.5m 3.5m Published PBT 7.3m 1.0m Underlying PBT 0.5m 1.4m Published EPS 5.85p 1.05p Underlying EPS 0.43p 1.43p Dividend per…
Published Income statement H1 2014 H1 2013 % FY 2013 000 Unaudited Unaudited Change Audited Revenue 7,064 11,076 (36%) 20,571 Profit before interest 7,636 1,343 469% 3,333 Interest (379) (326) 16% (678) PBT 7,257 1,017 614%…
Exceptional Items H1 2014 H1 2013 FY 2013 000 Unaudited Unaudited Audited Profit on transfer of shale licences Gross consideration 10,500 - - Associated costs (510) - - 9,990 - - Exceptional administrative expenses Acquisition…
Underlying Results post Exceptional Items H1 2014 H1 2013 % FY 2013 000 Unaudited Unaudited Change Audited Revenue 7,064 11,076 (36%) 20,571 Profit before interest 908 1,747 (48%) 4,036 Interest (379) (326) 16% (678) PBT 529…
Segmental Analysis Unaudited Generation DBO Total 000 H1 2014 H1 2013 H1 2014 H1 2013 H1 2014 H1 2013 Revenue 5,934 6,390 1,130 4,686 7,064 11,076 Gross profit 2,094 2,750 152 848 2,246 3,598 Gross margin % 35% 43% 13% 18% 32%…
Balance Sheet H1 2014 H1 2013 FY 2013 000 Unaudited Unaudited % Change Audited Non-current assets Non-current assets 47,046 46,008 2% 49,206 47m 50 Investment in Egdon Resources 11,000 - - - 45 Cash 519 3,053 (83%) 838 Engines…
Cash Flow H1 2014 H1 2013 % FY 2013 Last 6 years 49m 000 Unaudited Unaudited Change Audited capex funded by 50 Operating activities 1,313 2,626 (50%) 5,558 45 Interest (278) (205) 36% (451) 40 Operating Cash 22m 35 Capital…
Electricity Prices 60 Contracts in place covering: 53 53 52 53 51 51 89% of expected output for 2014 at 52/MWh 44 65% of 2015 at 53/MWh 40 Power Response prices Average availability ranges from Nil/MW to 5/MW Average…
What is happening to selling price 2009 2015 (Post Carron Acquisition) Embedded Peak Gas Peak Gas STOR Benefits 14% Premium 1% 8% Winter Premium 9% 14% Peak 3% Wholesale 22% Baseload Baseload Wholesale Wholesale 83%…
Other Financial Headlines Debt Bank debt as at 30 June 2014: Lloyds term loan balance of 2.6m repayable in quarterly instalments of 375k Lloyds sale and leaseback facility of 1.9m repayable in monthly instalments of 37k Lloyds RCF…
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Energy Policy Result New nuclear Renewable tariffs De-rated Margins Disconnection probability of 1 in 4, 16% 14% or 1 in 31 with additional interim 12% measures De-rated capacity margin (%) 10% Greater instability in…
Closures Planned and Unplanned Didcot Power Station Tinsley Towers, Sheffield Ferrybridge Power Station Heysham 1 Power Station (unplanned shutdown) Ofgem appraisal already out of date 19
Power Response: Operating regime for engines running on purchased mains gas Premium payment for generating during the three highest periods of demand Triad season: November to February Winter Weekday evenings Premium Secured by…
Why is Alkane in Power Response More diverse gas to power portfolio Builds on Alkanes core skills Secondary life for existing base load assets Makes use of valuable spare grid capacity Increased requirement for stand-by…
Capacity Payments DSBR is an interim step to the introduction of the Capacity Market: Aimed at non-domestic electricity consumers and embedded generators Delivery during winter 2014/15 and winter 2015/16 Optional set up fee of…
Capacity Payment Timeline 2014 2015 2016 2017 2018 2019 330 1800 1300 800 DSBR MW MW MW MW Qualification Capacity 5/9/14 GO LIVE Mechanism Auction BUILDING Results 53GW 24/12/14 23
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Baseload CMM Production and Project Pipeline Maltby performing well after delayed mine closure Record levels of production from July Working on as many as 10 sites within existing project pipeline DECC 14th Licencing Round…
Power Response STOR & Winter Peak 93MW installed capacity following July acquisition of three sites Installed capacity more than doubled since year end 85MW contracted into STOR 11 year STOR contract at 25MW Leven site 60MW…
Design, Build & Operate DBO utilises Alkanes core expertise Project development CHP engine units Grid connections O&G industry Shale gas potential Anaerobic digestion External O&M contracts Strategic focus on Biogas investment…
Summary Transformational six months Strengthening position in Power Response market Project pipeline potential (existing & new post 14th Licencing Round) Market backdrop of looming UK energy gap 18% shareholding in Big 3 shale…

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