26th March 2007
Bolivian Subsidiary Guaracachi: Record Results for Year to 31 December 2005. Rurelec to Receive US$3.3 million in Net Dividend
Rurelec today announces that its Bolivian power generation subsidiary, Empresa Guaracachi SA ("Guaracachi"), has released record financial results to the La Paz Stock Exchange for the year ended 31st December 2005. In its 2005 financial year, Guaracachi reported net income before extraordinary items of US$8.41 million. After an extraordinary write down of deferred tax, net income for the period was US$7.92 million, in line with analysts' forecasts. This is Guaracachi's best financial performance since the company was privatised in 1995.
At the same time Guaracachi has announced that its shareholders have approved a gross distribution of some US$7.53 million of dividends for the period.
On 6 January 2006, Rurelec completed the purchase of a controlling stake of 50.001 per cent. in Guaracachi. Therefore while Rurelec will receive a gross dividend from Guaracachi of US$3.75 million (US$3.295 million after Bolivian remittance tax), the earnings of Guaracachi will not be consolidated in Rurelec's 2005 results since Rurelec did not own its controlling position in Guaracachi during 2005; nor will the earnings attributable from Guaracachi contribute to Rurelec's 2005 distributable reserves.
Guaracachi has begun 2006 strongly with continued demand growth for electricity in the Bolivian national inter-connected system, where Guaracachi is the market leader. In the second and third quarters of 2006 Guaracachi will be commissioning 79 MW of new capacity at its Sucre and Santa Cruz plants, a 22 per cent. increase from its current plant capacity.
Rurelec is expecting to announce its own consolidated results under IFRS for the six month period ended 31st December 2005 in the second half of May. At the time of the Guaracachi acquisition, which was considered a reverse takeover under the AIM Rules, Rurelec changed its accounting reference date from 30th June to 31st December. The first full year under the new accounting reference date will be up to 31st December 2006, in line with the reporting dates of Rurelec's two principal power generation businesses, Guaracachi and Energia del Sur in Patagonia, Argentina.
Peter Earl, Managing Director of Rurelec PLC, said: "These results on their own fully vindicate our decision to invest in Bolivia. 2006 has started promisingly both in Bolivia and in our Argentine operations and we look forward to sharing the successes of 2006 with our shareholders."
For further information contact:
Managing Director, Rurelec PLC
Tel: +44 (0)20 7793 7676
Notes to Editors
Rurelec PLC is a British company established to develop rural electrification and power generation projects in Latin America. It is managed by a team with a strong track record in developing power projects worldwide and with considerable experience in the electricity sector in Latin America.
Rurelec has two principal businesses:
Rurelec has existing power assets in Argentina and Bolivia.
In Argentina it owns a fifty per cent. stake in Energia del Sur, a 76 MW gas fired plant which Rurelec is converting to combined cycle operation to add a further 50 MW in 2007.
In Bolivia, it owns a 50.001 per cent. stake in Guaracachi, Bolivia's largest power generation company which has a 29 per cent. national market share. In 2006 Guaracachi installed capacity will increase from 360 MW nominal capacity to 439 MW nominal capacity. In 2007 Guaracachi expects to bring into production 120 MW of dedicated export capacity serving Northern Argentina and 80 MW of combined cycle capacity serving the Bolivian domestic market. All Guaracachi's power capacity is gas fired.
Rurelec floated on the AIM market of the London Stock Exchange in August 2004. Guaracachi is independently listed on the Bolsa Boliviana de Valores.
Daniel Stewart & Co. PLC which is authorised by the Financial Services Authority is acting as nominated adviser to Rurelec and for no one else in connection with the transactions described herein and will not be responsible to any person other than Rurelec for providing the protection afforded to its customers or for advising any other person in relation to the transactions described herein.