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ContourGlobal shares power up as it lifts dividend more than planned for first full year since IPO

Chairman Craig Huff said public equity markets have been challenging and the group is disappointed that its share price “does not reflect our view of the intrinsic value of the company and the progress we have made since our IPO”
wind farm
Poor wind resource from Brazilian and Austrian farms hit income last year

Power generator ContourGlobal PLC (LON:GLO) hiked its dividend by more than previously planned as earnings rose 19% in its first full year since its London stock market debut.  

The company, a global platform of contracted wind, solar, hydro and thermal power generation, had a sluggish start to trading in November 2017 after its shares were priced at the bottom of a previously announced range.

Share price does not reflect progress made and intrinsic value of company

Shares are still trading below the initial public offering price of 250p despite a 6% increase on Wednesday morning to 193p.

Chairman Craig Huff said public equity markets have been challenging and the group is disappointed that its share price “does not reflect our view of the intrinsic value of the company and the progress we have made since our IPO”.

“We remain confident that if we continue to execute value-creating projects, the share price will begin to reflect ContourGlobal's intrinsic value,” he added.

Earnings and revenues rise in 2018

Adjusted earnings (EBITDA) rose to US$610mln last year, boosted by growth from acquisitions and a US$20mln cash gain on the sell-down of 49% of the Italian and Slovakian photovoltaic portfolio.

Consolidated revenue rose 23% to US$1.24bn.

However, income from operations dipped 3% to US$262mln due to poor wind resource from farms in Brazil and Austria, restructuring costs and spending on acquisitions of solar plants in Spain and combined heat and power plants in Mexico.

Funds from operations rose 18% to US$302mln and cash flow from operations jumped 37% to US$578.2mln.

Net debt stood at US$2.9bn, up from US$2.1bn.

Last year, the company refinanced its corporate level debt, extended its tenor to 2023 and 2025 and decreased yearly corporate bond interest by more than US$9.8mln.

The group also refinanced its credit facility to increase the loan to €75mln from €50mln at a lower interest rate.

Dividend rises more than expected 

ContourGlobal raised its full-year dividend to US$13.4 per share from US$11.9 per share, 12.5% higher than previously guided.

The company said it expects to increase the dividend by 10% each year and will move to quarterly payments.

“We continue to make progress on our target to double run-rate 2017 adjusted EBITDA by 2022 through profitable, selective growth and high-performance operations,” said chief executive Joseph Brandt.

Separately, the group announced the appointment of Stefan Schellinger as chief financial officer.

Schellinger was finance director of plastic and fibre products firm Essentra PLC (LON:ESNT) from 2015 until 2018.

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