1 / 34

Interim Results

Interim Results. Six months ended 30 June 2008. Interim Results. Philip Cox, CEO. Highlights. Profit from operations £495m - up 19% EPS 14.3p - up 7% Interim dividend 3.56p per share up 29% Portfolio growth continues 3,105MW (net) new capacity additions announced

willem
Download Presentation

Interim Results

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Interim Results Six months ended 30 June 2008

  2. Interim Results Philip Cox, CEO

  3. Highlights • Profit from operations £495m - up 19% • EPS 14.3p - up 7% • Interim dividend 3.56p per share up 29% • Portfolio growth continues • 3,105MW (net) new capacity additions announced • five new projects - new build / acquisitions • embedded growth - four opportunities crystallised via existing projects • strong pipeline of further growth opportunities • One off issues impact Rugeley H2 profit by £45m • Locking in attractive spreads in the UK in 2009/2010

  4. All numbers in this presentation exclude exceptional items and specific IAS39 mark to market movements, unless stated otherwise Financial Review Mark Williamson, CFO

  5. Income statement 2008£m 2007£m change Six months ended 30 June North America Europe Middle East Australia Asia Corporate costs Profit from operations Interest PBT Tax Minority interest Profit for the year Reported EPS FX benefit UK tax reduction - deferred tax release 76 299 32 70 42 (24) 495 (182) 313 (63) (35) 215 14.3p (0.6)p 13.7p 42 268 29 46 55 (24) 416 (140) 276 (41) (34) 201 13.4p (1.2)p 12.2p 81% 12% 10% 52% (24%) 19% 13% 7% 7% 12%

  6. North America Texas • Coleto Creek dust emissions control equipment installed H1 2007 • Midlothian’s load factor reduced • cooler weather in April and May • increased wind generation • Hays benefited from: • warmer weather • congestion in South Zone New England • Higher peak and lower offpeak generation Profit from operationsup 81% £76m £61m £42m £29m £15m £13m H1 2007 H1 2008 Share of JVs and associates Subsidiaries

  7. Europe • Continued strong performance at First Hydro • First time contribution from Maestrale • Reduction in Rugeley’s contribution: • FGD installation at Rugeley • record achieved dark spreads in 2007 • Good performance from Saltend and Deeside Profit from operationsup 12% £299m £268m £239m £238m £60m £30m H1 2007 H1 2008 Share of JVs and associates Subsidiaries

  8. Middle East • All assets achieved high operational performance • Full contribution from Umm Al Nar in H1 2008 • Completed construction at Ras Laffan B in June • Hidd achieved full commercial operation in May 2008 Profit from operationsup 10% £32m £29m £20m £20m £12m £9m H1 2007 H1 2008 Share of JVs and associates Subsidiaries

  9. Australia • Improved contributions from Hazelwood and Loy Yang B • Unplanned outage at Hazelwood – £16m H1 impact • Synergen able to capture high spot prices Profit from operationsup 52% £70m £68m £46m £45m £1m £2m H1 2007 H1 2008 Share of JVs and associates Subsidiaries

  10. Asia • Malakoff sold in May 2007 for £249m (profit on disposal - £115m) • Planned outage at Paiton • Acquisition of additional 31% of Uch • Delayed payments by offtaker to Pakistan projects • no impact on earnings Profit from operationsdown 24% £55m £8m £42m £6m £47m £36m H1 2007 H1 2008 Share of JVs and associates Subsidiaries

  11. Interest cover and effective tax rate 2008 2007 £m £m Six months ended 30 June PFO JVs and associates Interest Tax PBIT Total interest Subsidiaries JVs and associates Interest cover Profit before total tax Total tax Subsidiaries JVs and associates Effective tax rate 495 47 26 73 568 (182) (47) (229) 339 (63) (26) (89)26% 416 47 27 74 490 (140) (47) (187) 303 (41) (27) (68)22% 2.5x 2.6x

  12. Free cash flow 2008 2007 £m £m Six months ended 30 June Operating cash flow from subsidiaries Dividends - JVs and associates Capex - maintenance Cash generated from operations Net interest paid Tax paid Free cash flow 503 39 (63) 479 (202) (49) 228 476 53 (34) 495 (155) (31) 309 (3%) (26%)

  13. Movement in net debt 2008 2007 Six months ended 30 June £m £m Free cash flow Growth capex Acquisitions and investments Disposals Dividend paid FX & other Payment to minorities Change in net debt Opening net debt Closing net debt 228 (80) (167) - (112) (122) (19) (272) (4,662) (4,934) 309 (99) (140) 417 (118) (18) (31) 320 (3,575) (3,255)

  14. Balance sheet 30 June 2008 31 December2007 £m £m Non-current assets Goodwill and intangibles PP&E Investments Other long-term assets Net current liabilities Non-current liabilities Net debt Net assetsGearing Debt capitalisationNet debt of JVs and associates 991 5,961 1,480 1,626 10,058 (601) (1,516) (4,934) 3,007 164% 62%(1,336) 901 5,721 1,292 1,530 9,444 (355) (1,420) (4,662) 3,007 155% 61%(1,297)

  15. Net debt structure JVs and associatesoff-balance sheetnet debt (1) Project cash/(debt) (1) IPRCorporate Total Maturity Maturity As at 30 June 2008 £m £m £m £m Cash and cash equivalents Recourse debt IPR facility (revolver) Convertible bond (2023)(2) Convertible bond (2015)(2) Convertible bond (2013)(2) Non recourse debt IPM - acquisition debt IPM - Mitsui preferred equity North America Europe Middle East Australia Asia Total net debt 1,129 - - - (243) (151) (888) (2,927) (305) (1,120) (34) (5,668) (4,539) 357 (29) (117) (453) (153) (752) - - - - - - - - (395) 1,486 (29) (117) (453) (153) (752) (243) (151) (888) (2,927) (305) (1,120) (34) (5,668) (4,934) 2023 2015 2013 2012 2008 2010-2013 2010-2026 2017-2025 2010-2019 2020 - - (145) (210) (604) (68) (309) (1,336) (1,336) 2013-2019 2009-2020 2021-2030 2009-2012 2008-2018 (1) Project debt is secured solely on the assets and cash flow of the project concerned (non recourse) (2) The convertible bonds are shown at their final maturity date although they can be converted earlier

  16. Financial summary • PFO up 19% • all regions up, except Asia • Asia reflects sale of Malakoff in 2007 • EPS up 7% • Interim dividend of 3.56 pence per share • Free cash flow remains strong • Funding of growth continues • Convertible bond – May 2008 • US peaking plants – July 2008

  17. Interim Results Philip Cox, CEO

  18. US - Texas • Load continues to grow • little signs of economic downturn in Texas • economy benefiting from oil industry / demographics • Shift in supply balance between Texas Zones • STP nuclear plant moved to Houston Zone resulting in congestion in South Zone • increased wind generation resulted in extra offpeak supply to North Zone • Pricing environment • strong prices in South Zone in H1 • late start to North Zone peak season, lower off peak pricing Full Year (1) Coleto Creek 2008 2007 (2) Achieved dark spread ($/MWh) Load factor Forward contracted 30 95% 95% 29 75% n/a (3) Full Year (1) Midlothian 2008 2007 Achieved spark spread ($/MWh) Load factor Forward contracted 15 40% 80% 14 55% n/a (3) Full Year (1) Hays 2008 2007 Achieved spark spread ($/MWh) Load factor Forward contracted 21 70% 80% 10 45% n/a (3) (1) IPR forecast Excludes SO2 costs % of anticipated output for the full year (2) (3)

  19. US - New England Full Year (1) New England 2008 2007 (2) Achieved spark spread ($/MWh) Load factor Forward contracted 27 40% 85% 16 60% n/a (3) (1) IPR forecast Includes FCM receipts % of anticipated output for the full year (2) (3) • Fundamentals remain strong • capacity market provides stable earnings • energy prices remain strong on peak • off peak pricing affected by increased imports from Canada and New York • Load growth continues at modest levels • new supply from demand resources should increase energy margins • new peakers planned in Connecticut will have little effect on IPR plant energy margins • Regional Greenhouse Gas Initiative (RGGI) • CO2 rules take effect January 2009 • quarterly auction of credits beginning in September • not all RGGI State ready in time – may cause price volatility • IPR CCGT plants well positioned

  20. US peaking plant acquisition • Four peaking plants totalling 1,857MW • Location: PJM, MISO • attractive long term supply demand fundamentals • Modern, efficient plant at significant (over 30%) discount to new build • Attractive return on investment - underpinned by capacity payments • Opportunity for further expansion • large sites allow conversion to CCGT and/or additional peaking units Armstrong Calumet Troy MISO PJM Pittsburgh Chicago Columbus Pleasants Charleston Plant Capacity Fuel type Location ArmstrongPleasantsCalumetTroy 625MW313MW303MW616MW Dual - gas/oilDual - gas/oilGasDual - gas/oil Pennsylvania, PJMWest Virginia, PJMIllinois, PJMOhio, MISO

  21. Europe - UK 2008 • Significant overhaul and construction work (FGD) at Rugeley during 2008 • final FGD commissioning – phased in December 2008/early 2009 • LCPD sulphur limits to be met via use of low sulphur coal and derogated hours running • extended outage at Rugeley - failure of a new component on recommissioning on one unit • Total PFO impact £45m in H2 2008 • Spark spreads holding up despite sharp recent decline in spot market gas • short-term benefit for Deeside un-contracted capacity • Strong performance at First Hydro • tight market conditions due to supply shortfalls • strong performance in balancing mechanism and short term markets • continued demand for reserve capacity Rugeley Deeside Saltend (1) (1) (1) 2008 2007 2008 2007 2008 2007 Full Year (2) Spread £/MWh Load factor Forward contracted 18 45% 95% 34 65% n/a 28 70% 55% 23 50% n/a n/a 90% 99% n/a 90% n/a (3) (1) (2) (3) IPR forecast Pre cost of CO2 % of anticipated output for the full year

  22. Europe - UK outlook • Locking in attractive dark spreads in the UK in 2009/2010 • Rugeley: • 2009: 6.7TWh contracted @ spread £29/MWh • 2010: 4.3TWh contracted @ spread £28/MWh • Saltend: • 2009: 75% forward contracted • 2010: 45% forward contracted • Deeside: • fundamentals not fully reflected in forward spark spreads • UK market fundamentals remain strong

  23. Europe - continental assets • Elecgas construction programme on track • commercial operation in 2011 • Building on existing platform of wind portfolio • 55 new MW added year to date • pipeline of further projects across Europe / UK • Maestrale, Levanto operating well • All long term contracted assets performing well • good performances in Iberia/Turkey • particularly strong performances at ISAB, Czech Republic Elecgas - Schematic

  24. Middle East - construction programme Ras Laffan B - Qatar • Key elements constructed ahead of time and on budget • three of four desalination units entered commercial operation ahead of schedule • High plant availability and output • Another excellent project delivery adds to strong track record in region Hidd - Bahrain • Build programme successfully completed: • now fully available with full power 1,006MW (gross) and water 90 MIGD • strong plant availability 92.4% Fujairah F2 - UAE • Construction programme underway • Full commercial operation - 2010 Fujairah F2 - Schematic The facility will be constructed by an EPC consortium of Alstom and SIDEM.

  25. Australia • Significant improvement in achieved prices • Availability at Hazelwood in H1 constrained by boiler issues - now fixed • Some softening of forward pricing (approximately 10% down on last month): • mild winter weather • high plant availability • main hydro-electric reservoirs remain at low levels in Victoria and Tasmania • Hazelwood 2008 average achieved price estimated at A$44MWh • Long term fundamentals attractive • record demand in March 2008 Full Year (1) Victoria, Hazelwood 2008 2007 Achieved average price ($/MWh) 44 32 Hazelwood Loy Yang B Pelican Point (1) (1) (1) 2008 2007 2008 2007 2008 2007 Full Year Load factor Forward contracted 75% 85% 80% n/a 99% 85% 95% n/a 80% 99% 75% n/a (2) (1) (2) IPR forecast % of anticipated output for the full year

  26. Australia - emissions trading update • Emissions trading scheme planned for implementation July 2010 • Government consultation Green Paper published in July 2008 • Proposes emissions reduction (carbon pollution reduction scheme) across multiple sectors • wider burden sharing - covering 77% of emissions • 5 year time horizons for annual emission limits • ultimate target: 60% reduction from 2000 levels by 2050 • Government recognises importance of coal fired generation (brown and black) • security of supply • benefit to Australian economy • Green paper proposes specific assistance • Detailed consultation process continues • IPR closely involved at all levels • Further clarification on scheme expected via White Paper by December 2008

  27. Asia - Paiton 3 expansion • 815MW expansion at existing Paiton site • super-critical coal fired plant • IPR ownership 40.5%* • location: Java-Bali grid with high power demand • 30 year PPA signed with PLN, state utility • Commercial operation targeted for 2012 • equipment supplier - MHI • fixed price contract • shared infrastructure with existing plant • Total project cost £732m • funding structure in line with long term PPA projects • financing underway and expected to close in early 2009 • Excellent embedded growth opportunity *includes holding via 9.2% economic interest

  28. Portfolio growth continues • Multiple sources of growth • new build expansion at existing assets • increased ownership of existing assets • greenfield development projects • acquisitions • Five new projects totalling 3,105MW (net) announced year to date • across North America, Europe and Asia • continued growth in line with investment criteria despite tightening EPC market and the credit crunch • Five investments total over £1billion in enterprise value • all projects financed on attractive terms • and expected to deliver good returns Project Country Net Capacity Fuel Contract (MW) Type Peaking plants x 4 US 1,857 Gas/Oil Merchant Uch Pakistan 177 Gas/Oil Contracted Turbogas Portugal 403 Gas Contracted Elecgas Portugal 415 Gas Contracted Paiton 3* Indonesia 253 Coal Contracted 3,105 * In addition to the above holding International Power also has the rights to additional returns from Paiton equivalent to a further 9.2% ~ which would equate to a 40.5% interest and 331MW net

  29. Update on growth opportunities North America • Acquired four US peaking plants - 1,857MW - in targetted market • Coleto expansion - Texas environmental permit application submitted • Construction at Elecgas, 830MW CCGT on track • Acquired additional 40% of Turbogas • Renewables - 55MW of wind projects brought online, further pipeline of projects • Eneco 840MW CCGT - EPC and offtake negotiations continue • New markets - ongoing Europe

  30. Update on growth opportunities Middle East • Three bids submitted in H1 2008 • outcome on one awaited • Strong medium and long term project pipeline • four further bids in 2008 - totalling 3,300MW/35 MIGD (gross) - Saudi Arabia, Abu Dhabi, Morocco • longer term outlook remains very strong • Exploring alternative options for Mmamabula

  31. Update on growth opportunities Australia • Full consents for • 300MW expansion consent at Pelican Point (South Australia) • 120MW peaking site in NSW • Wind development opportunities • Signed long term PPA for 815MW Paiton III expansion • Development projects in existing markets - Indonesia, Pakistan and Thailand - remain active and continue to progress • West Java 1,320MW coal-fired, Indonesia • Pakistan - Kapco 450MW CCGT, Hubco 225MW oil, Uch 400MW gas/oil • TNP 2 Cogeneration (120MW gas), Thailand • Vietnam • pre-qualified to bid for Nghi Son 2 (1,200MW IPP) • progressing development of two other coal-fired plants Asia

  32. Summary • Solid H1 2008 financial performance • Performance in 2008 impacted by Rugeley and Hazelwood outages • Fundamentals in our markets remain attractive • UK: locking in attractive dark spreads for 2009/2010 • US: our markets remain attractive • Australia: market fundamentals remain robust • Middle East and Asia: strong demand growth and multiple growth opportunities • Well positioned to finance and deliver on growth opportunities

  33. Appendix

  34. Exceptional items and specific IAS 39 MTM Six months ended 30 June 2008 2007 SpecificIAS 39MTM SpecificIAS 39MTM Exceptional Items Exceptional Items Total Total £m £m £m £m £m £m North America Europe Middle East Australia Asia Regional total Corporate PFO Disposals - Malakoff sale - Disposal to Mitsui Net finance expense (Loss)/profit before tax Income tax credit (Loss)/profit for the period (93) (269) - 62 - (300) - (300) - - (25) (325) 61 (264) - - - - - - - - - - - - - - (93) (269) - 62 - (300) - (300) - - (25) (325) 61 (264) (3) (24) - (433) - (460) - (460) - - (19) (479) 143 (336) - (9) - - - (9) - (9) 115 153 - 259 - 259 (3) (33) - (433) - (469) - (469) 115 153 (19) (220) 143 (77)

More Related