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LONDON, November 11 /PRNewswire/ --
- Six-month revenue from continuing operations up 12.0% to $87.3 million
(+15.0% at constant exchange rates)
- Six-month EBITDA from continuing operations up 5.1% to $33.4 million
(+8.6% at constant exchange rates)
- Six-month EPS from continuing operations up 150% to $0.35
Cascal N.V. (NYSE: HOO) (the "Company"), a leading provider of water and
wastewater services in seven countries, today announced unaudited financial
results for the six months and the second quarter ended September 30, 2008.
Cascal N.V. results are presented in U.S. dollars.
Year-to-date Fiscal 2009 Results
Revenue from continuing operations for the six months ended September 30,
2008 increased by 12.0% to $87.3 million, compared to $77.9 million for the
same period last year. Of the $9.4 million increase, approximately $7.8
million was contributed by the historical portfolio (through a combination of
rate increases, additional customers and higher volumes) and $3.6 million
contributed by the new acquisitions, offset by $2.0 million of exchange rate
movements.
-- Revenue in China increased by $3.8 million, compared to the same
period last year, of which $3.3 million was principally the result of the
acquisitions of the Yancheng joint venture on April 29, 2008 and the
Zhumadian subsidiary on July 23, 2008, with the remainder due to rate and
volume increases of the Company's pre-existing operations in China. Revenue
in China also benefited by $0.5 million due to exchange rate movements.
-- Revenue in South Africa increased by $1.3 million, compared to the
same period last year, as a result of $2.2 million or 23% additional revenue
due to rate increases in Nelspruit and Siza Water implemented in July 2008,
together with continued growth of the customer base, as well as the full six
months contribution from Siza Water in 2008, compared to five months in 2007.
These increases were offset in part by $0.9 million due to exchange rate
movements.
-- Revenue in Chile increased by $1.0 million, compared to the same
period last year, as a result of $0.8 million or 19% additional revenue due
to a combination of rate increases and higher volumes sold. Revenue in Chile
also benefited by $0.2 million due to exchange rate movements. The
contributions from the two businesses acquired in Chile on June 27, 2008 will
be consolidated into the Company's results from October 1, 2008 due to a
three month lag in reporting the results of the Chilean segment.
-- Revenue in Indonesia increased by $1.5 million or 27%, compared to the
same period last year, primarily as a result of a 20% rate increase
implemented in December 2007, together with increased water demand caused by
continued population growth.
-- Revenue in Panama increased by $1.2 million or 27% due to $0.5 million
of additional revenue recognized following the approval of a rate increase
applied for in May 2007, along with the impact of a further $0.7 million from
rate increases that took effect on April 1, 2008 and September 1, 2008.
-- Revenue in the UK increased by $0.7 million, compared to the same
period last year, as a result of $2.5 million or 5.5% additional revenue,
primarily due to a scheduled rate increase of 3.68% implemented in April 2008
and increased revenue from our non-regulated business, partly offset by lower
demand due to a relatively cool and wet summer period. These increases were
offset in part by $1.8 million in exchange rate movements.
For the six months ended September 30, 2008, EBITDA from continuing
operations increased by $1.6 million to $33.4 million compared to the same
period last year. Of the $1.6 million increase, approximately $1.2 million
was contributed by new projects and $2.3 million came from organic growth of
the historical portfolio, offset by $0.9 million of additional corporate
overhead and $1.0 million due to exchange rate movements. The increase in
EBITDA was mainly the result of positive advancements in China, South Africa,
Indonesia, Chile and Panama, partially offset by a reduction in the U.K. due
notably to higher electricity prices. The increased corporate overhead is
mainly the result of higher costs related to insurance, the board of
independent directors, salaries and recruitment and tax, legal and accounting
advisors. Please read "Use of Non-GAAP Financial Measures" for a description
of EBITDA.
Commenting on the Company's results, Stephane Richer, Cascal Chief
Executive Officer, stated, "In the face of what has been an extremely
volatile period, I am very pleased by our performance during the first two
quarters of our fiscal year. We have established a geographically diverse
portfolio of projects that is proving to be very resilient to the major
changes happening around the world. We remain committed to increasing value
for our shareholders by making strategic acquisitions and diligently managing
operations."
Overall, net financial income and expense from continuing operations
improved by $10.6 million for the six months ended September 30, 2008,
compared to the same period last year. This result was comprised of a $7.3
million favorable movement in foreign exchange results, combined with a $3.3
million decrease in net interest expense. The foreign exchange gain reported
for the six months ended September 30, 2008 is the result of revaluing a
British Pound-denominated current account balance outstanding at September
30, 2008 between the Company and its subsidiary, Cascal Services Limited. The
decrease in net interest expense is mainly due to the repayment of borrowings
in February 2008 out of the proceeds of the initial public offering, which
have been partially and progressively replaced with cheaper borrowings from
the Company's revolving loan facility.
For the six months ended September 30, 2008, net profit from continuing
operations was $10.8 million, or $0.35 per share, compared to net profit of
$3.1 million, or $0.14 per share, for the same period last year. Including
discontinued operations, net profit was $11.0 million, or $0.36 per share,
compared to $0.16 per share for the same period in 2007.
The effective tax rate incurred by continuing operations was 41.6%
compared to 53.8% in the same period last year. The U.K. project company
incurred a charge to deferred tax of $1.6 million, or one-third of a total
charge of $4.8 million for the year ending March 31, 2009, with respect of a
change to U.K. tax legislation that was introduced on July 21, 2008. Without
this one-time charge, the effective tax rate for the period falls to
approximately 34%. The other significant factor impacting the effective tax
rate is the extent to which the parent company incurs costs in excess of its
taxable income in The Netherlands.
As previously communicated, the Company is introducing changes to the tax
attributes of certain group companies to address the underlying
inefficiencies within the current tax structure. These changes will
eventually enable the effective tax rate of the group to align with the
statutory rates of 25.5% and 28% in The Netherlands and United Kingdom,
respectively.
The Company's operating cash flow increased by $14.5 million during the
six months ended September 30, 2008 relative to last year's comparable
period.
As of September 30, 2008, the consolidated balance sheet shows cash and
cash equivalents of $41.9 million.
Results for the Three Months Ended September 30, 2008
For the three months ended September 30, 2008, revenue from continuing
operations increased by 11.9% to $44.3 million, compared to $39.6 million for
the same period last year. The $4.7 million increase was the result of
approximately $4.6 million contributed by the historical portfolio (through a
combination of rate increases, additional customers and higher volumes)
together with $2.2 million contributed by the new acquisitions, offset by
$2.1 million in exchange rate movements.
For the three months ended September 30, 2008, EBITDA from continuing
operations increased by $0.8 million to $16.6 million compared to the same
period last year. Of the $0.8 million increase, approximately $0.8 million
was contributed by new projects and $1.8 million coming from organic growth
of the historical portfolio, offset by $0.8 million of additional corporate
overhead and $1.0 million due to exchange rate movements. Please read "Use of
Non-GAAP Financial Measures" for a description of EBITDA.
For the three months ended September 30, 2008, net profit from continuing
operations was $5.4 million, or $0.17 per share, compared to net profit of
$1.4 million, or $0.07 per share, for the same period last year. Including
discontinued operations, net profit was $5.5 million, or $0.18 per share,
compared to $0.08 per share for the same period last year.
Recent Business Highlights and Updates
-- Capital markets have for several months been operating under severe
restrictions and in some cases hardly at all. However, Cascal has sufficient
internally generated resources through its operating cash flow to meet its
obligations in terms of capital expenditure, debt service and dividend
payments. In addition, it has unutilized capacity within some of its credit
lines as well as some surplus cash deposits above and beyond what is needed
for day-to-day operations. These resources will be used, where appropriate,
to enable business development initiatives to continue to progress. The
Company is currently involved in discussions for projects in Central America,
Central Europe, China, Spain and India.
-- The dispute initiated by the Company's APSA subsidiary over the
compensation payable under the early termination provision of its contract in
Panama is progressing. Recently the Company's client, IDAAN, submitted a
request for arbitration to the Centre of Conciliation and Arbitration of
Panama. The arbitration will be conducted with three arbitrators. Each party
has a right to appoint one arbitrator, with the third arbitrator appointed by
the first two, who will serve as the Chairman. The termination compensation
has been calculated at approximately $23 million by IDAAN and approximately
$59 million by APSA. Once commenced, it is anticipated that the arbitration
process will take approximately six months.
-- On September 30, 2008 the Company paid its first post-initial public
offering dividend to shareholders of $0.18 per share.
-- On September 15, 2008, Cascal announced that its wholly owned South
African subsidiary, Cascal Operations (Pty) Limited, had purchased the
remaining 10 percent of its Greater Nelspruit Utility Company (Pty)
("Nelspruit") water/wastewater concession project from Sivukile Investments
(Pty) Limited.
Conference Call
The Company will host a conference call at 9 a.m. Eastern Time/ 2 p.m.
GMT on November 12, 2008. On the call, Stephane Richer, CEO of Cascal, and
Steve Hollinshead, CFO, will discuss the Company's results, and review
operational highlights and other business developments. The Company invites
you to participate on the call at the following telephone numbers:
1-877-375-4189 (local), +1-404-665-9923 (international), (0800)-032-3836 (UK
Freephone). The access code for all callers is 71279538. The call will also
be available via webcast at www.cascal.co.uk. Please allow extra time prior
to the call to visit the site and to download any necessary software to
listen to the Internet broadcast. An online archive of the webcast will be
available on the Company's website for 30 days following the call. A replay
of the call will be available from November 12, 2008 at 9.45 a.m., ET/2.45
p.m. GMT through December 12, 2008 at 11.59 p.m. ET/ December 13, 2008 at
4.59 a.m. GMT. To access the replay, please call +1-800-642-1687 (local) or
+1-706-645-9291 (international) and enter the following code: 71279538.
About Cascal N.V.
Cascal provides water and wastewater services to its customers in seven
countries: the United Kingdom, South Africa, Indonesia, China, Chile, Panama
and The Philippines. Cascal's customers are predominantly homes and
businesses representing a total population of approximately 4 million.
Forward-looking statements
This release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are not guarantees of future performance. There are important
factors, many of which are outside of our control, that could cause actual
results to differ materially from those expressed or implied by such forward-
looking statements including: general economic business conditions,
unfavorable weather conditions, housing and population growth trends, changes
in energy prices and taxes, fluctuations with currency exchange rates,
changes in regulations or regulatory treatment, changes in environmental
compliance and water quality requirements, availability and the cost of
capital, the success of growth initiatives, acquisitions and our ability to
successfully integrate acquired companies and other factors discussed in our
filings with the Securities and Exchange Commission, including under Risk
Factors in our Form 20-F for the fiscal year ended March 31, 2008, filed with
the SEC on June 25, 2008. We do not undertake and have no obligation to
publicly update or revise any forward-looking statement.
Use of Non-GAAP Financial Measures
In evaluating its business, the Company uses EBITDA as a supplemental
measure of its operating performance. The Company defines EBITDA as earnings
before interest, taxes, depreciation and amortization. The term EBITDA is not
defined under generally accepted accounting principles, or GAAP, and is not a
measure of operating income, operating performance or liquidity presented in
accordance with GAAP. EBITDA has limitations as an analytical tool, and when
assessing the Company's operating performance, investors should not consider
EBITDA in isolation, or as a substitute for net income (loss) or other
consolidated income statement data prepared in accordance with GAAP.
Investor Contacts:
KCSA Strategic Communications
Jeffrey Goldberger / Yemi Rose
+1-212-896-1249 / +1-212-896-1233
jgoldberger@kcsa.com / yrose@kcsa.com
Tables follow
Consolidated Statements of Income
Three months ended September 30, 2008
Amounts, except shares Continuing Discontinued
and per share amounts, operations operations Total
expressed in thousands of Unaudited Unaudited Unaudited
USD
Revenue 44,294 - 44,294
Operating Expenses
Raw and auxiliary materials
and other external costs 10,498 - 10,498
Staff costs 9,531 - 9,531
Depreciation and
amortization of intangible
and tangible fixed assets
and negative goodwill 6,441 - 6,441
(Profit)/loss on disposal
of intangible and tangible
fixed assets (4) - (4)
Other operating charges 7,669 - 7,669
Incremental offering-
related costs - - -
34,135 - 34,135
Operating Profit 10,159 - 10,159
Gain on disposal of
subsidiary - 248 248
Net Financial Income and
Expense
Exchange rate results 3,443 - 3,443
Interest income 1,554 - 1,554
Interest expense (4,410) - (4,410)
587 - 587
Profit before Taxation 10,746 248 10,994
Taxation (5,067) (69) (5,136)
Profit after taxation 5,679 179 5,858
Minority Interest (310) - (310)
Net Profit 5,369 179 5,548
Earnings per share -
Basic and Diluted 0.17 0.01 0.18
Weighted average number
of shares - Basic and
Diluted 30,566,007 30,566,007 30,566,007
Three months ended September 30, 2007
Amounts, except shares Continuing Discontinued
and per share amounts, operations operations Total
expressed in thousands of Unaudited Unaudited Unaudited
USD
Revenue 39,588 650 40,238
Operating Expenses
Raw and auxiliary materials
and other external costs 8,176 166 8,342
Staff costs 8,723 193 8,916
Depreciation and
amortization of intangible
and tangible fixed assets
and negative goodwill 5,685 13 5,698
(Profit)/loss on disposal
of intangible and tangible
fixed assets 18 - 18
Other operating charges 6,852 213 7,065
Incremental offering
-related costs 75 - 75
29,529 585 30,114
Operating Profit 10,059 65 10,124
Gain on d |
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