Transcript IP-Interims-August-2010-Presentation-FINAL-SCREEN

Interim Results
Six months ended 30 June 2010
Philip Cox
Chief Executive Officer
Highlights
Financial highlights
 Good financial performance
 Profit from operations of £524m (2009: £550m)
 EPS of 14.1 pence (2009: 15.4 pence)
– up 7% after adjusting for FX and the sale
of the Czech business
p
16
Czech
12
8
Underlying
EPS
 Strong free cash flow of £398m (2009: £326m)
– up 22%
4
 Interim dividend of 4.39 pence per share
(2009: 4.25 pence), up 3%
0
Net MW
Growth
 PPAs signed for 76MW of new wind generation
capacity in Canada
 Good progress at 815MW Paiton 3 project and
110MW Thai National Power 2 project
Underlying EPS – up 7%
2009
2010
Construction pipeline
1,600
HUBCO - Laraib
TNP2
1,200
Paiton 3
T-Power
800
Elecgas
IPR European
Wind Portfolio
 Total construction pipeline of 1,400MW (net)
400
Synergen
HUBCO - Narowal
0
3 Interim Results August 2010
Fujairah F2
2010
2011
2012
2013
International Power
Financial Review
Mark Williamson
Chief Financial Officer
Income statement
 Reduction in PFO reflects the
sale of Czech assets in H2 2009
 Excluding Czech assets, EPS
up 7%
 Reduced interest reflects
paydown of US debt
 Effective tax rate, at 22%,
includes:
– change in profit mix
across the Group
– resolution of historic tax
issues
Six months ended 30 June
2010
£m
2009
Restated
£m
Profit from operations
Interest
PBT
Tax
Non-controlling interests
Profit for the period
524
(191)
333
(64)
(54)
215
550
(216)
334
(59)
(41)
234
EPS
14.1p
15.4p
2009 restated for adoption of IFRIC 12 - Service Concession Arrangements
and change in policy relating to retirement benefit obligations
5 Interim Results August 2010
International Power
H1-on-H1 PFO change
£550m
£(59)m
7%
£13m
£8m
£25m
£491m
£(1)m
Asia
Australia
£(3)m
£524m
Corporate
Middle
East
£(9)m
Czech
North
America
H1 2009
15.4p
Europe
H1 2009
excl-Czech
12.4p
H1 2010
14.1p
 North America reflects lower gas prices and a reduced Coleto Creek provision release
 Europe higher following Rugeley FGD commissioning and ISAB return to service
 Middle East continues to perform well, delivering high availability
 Australia benefited from good performance at Loy Yang B and Simply Energy
 2010 also benefited from a 0.8p uplift on FX movements
6 Interim Results August 2010
International Power
Free cash flow
£18
£56
£326m
Maint.
Dividends capex
JV & assoc
£(11)
£398m
Net
interest
paid
Tax
paid
(net)
£33
£(26)
Working
capital
£300m
PFO
Czech
H1 2009
£6
£(4)
H1 2009
excl-Czech
H1 2010
 Free cash flow up 22%, or 33% excluding the Czech assets
 Working capital benefited from the settlement of hedges on the UK portfolio
 Interest lower following pay-down of US debt
7 Interim Results August 2010
International Power
Net debt structure
Cash/(Debt)
Project
£m
As at 30 June 2010
Cash and cash equivalents
Recourse debt
Convertible bond (2023)
Senior unsecured note (2017)
Convertible bond (2015)
Convertible bond (2013)
Non-recourse gross debt
IPM - acquisition debt
North America
Europe
Middle East
Australia
Asia
Total net debt
709
-
IPR Corp
£m
737
(152)
(198)
(493)
(170)
(1,013)
Total
£m
JVs and associates
off-balance sheet
Maturity
£m
1,446
355
(152)
(198)
(493)
(170)
(1,013)
2023
2017
2015
2013
2012 2013-2029
2013-2026
- 2025
2012-2019
- 2025
(276)
(877)
(2,528)
(362)
(1,182)
(43)
-
(276)
(877)
(2,528)
(362)
(1,182)
(43)
(5,268)
-
(5,268)
(2,274)
(4,835)
(1,919)
(4,559)
(276)
Maturity
(166)
(491)
(1,013)
(78)
(526)
2019
2035
2030
2012
2018
-
 No significant project debt refinancing in 2010 and 2011
Maturity indicates the first bullet and the last year of project debt amortisation within each region
8 Interim Results August 2010
International Power
Philip Cox
Chief Executive Officer
North America
 Power demand
– Texas: cold winter but mild summer, lower congestion in South Zone
– New England: strong demand in May, June and July
– PJM: positive weather impact June/July
 Gas prices
– some recent volatility but overall prices remain low
 Capacity auction
– New England: May 2013 to June 2014 auction cleared at $2.52,
consistent with previous auction
– PJM: 2013 to May 2014 capacity auction cleared at $27.73/MW day,
up from $16.46/MW day
 Operational cost savings
– good progress, savings of $5m to $10m expected
 IP Canada renewables
– PPAs signed for 76MW of additional capacity
– expected to be operational 2011
10 Interim Results August 2010
International Power
Europe - UK
 Jan to May power demand down slightly
 Rugeley, Saltend, Deeside heavily
contracted for 2010
 First Hydro impacted by lower volatility
and wholesale prices
– partially offset by ancillary services
including contracted reserve
 Government programme – some policy
areas of importance to IPR
– IPR fully involved in the
environmental policy development
process
11 Interim Results August 2010
GW
90
Headline Availability
80
70
60
Week Ahead Availability
Outturn
Availability
50
40
Weekday
Peak Demand
2008
2009
2010
International Power
Continental Europe
 Operationally plants performing well
 ISAB second unit returned to service as planned
 Italy remains committed to the renewables sector
– Government re-confirmed renewables target in July
– CV price support mechanism for 2010 maintained
– system operator reviewing 2011 CV support mechanism
 Construction of Elecgas and T-Power on track to commence operation
in H1 2011
 Development projects
– development agreement signed with GALP for 50% of 800MW
CCGT Sines project in Portugal
12 Interim Results August 2010
International Power
Middle East and Asia
 High commercial availability across all
assets
Fujairah F2
 Business performing well and in line
with expectations
 Fujairah F2 construction programme
progressing with full commercial
operation expected in 2010
 Paiton 3 and TNP 2 construction
progressing well
 New Developments
– Vietnam – IPR and partners
awarded the development of
1,200MW Son My project by the
Government
– Indonesia – Central Java 2,000MW
coal, pre-qualified, bid due
November
13 Interim Results August 2010
Paiton 3
International Power
Australia
 Good performance – no change to
pricing since year-end results in March
– maximum price increased to
$12,500/MWh
Kwinana
 Climate change policy under new PM
released in July
– CPRS delayed until after the end
of 2012
14 Interim Results August 2010
International Power
Outlook
 Good performance in the first half
 Merchant assets remain well positioned
– to capture value from recovery/volatility in market conditions
 Portfolio of long-term contracted assets continues to perform well
 Overall outlook for the year remains unchanged
15 Interim Results August 2010
International Power
Interim Results
Six months ended 30 June 2010