ContourGlobal lifts guidance after strong first half

by | Aug 6, 2021

Power generation company ContourGlobal raised its full-year earnings guidance on Friday, after a strong first-half performance across its fleet of 115 power plants.
The FTSE 250 firm said consolidated revenue was up 38% to $935m in the six months ended 30 June, as adjusted EBITDA rose 16% to $406m.

That, the company said, was driven by the acquisition of Western Generation, a stronger operational performance in renewables mainly at its Brazilian wind assets, and a net positive foreign exchange impact of $13.6m, mainly driven by euro-dollar appreciation.

Income from operations was ahead 15% over the first half of 2020, to $181m.

Funds from operations totalled $219m, a 27% increase year-on-year, with a “significantly improved” cash conversion of 54%.

The board confirmed an increase in the company’s full-year guidance for adjusted EBITDA, to between $780m and $810m.

It declared a second quarter dividend of 4.465 US cents per share, equivalent to 3.203p, to be paid on 10 September.

ContourGlobal said the outlook was “positive” for future growth, value realisation and the return of capital to shareholders.

“We performed very well in the first half of 2021 with better-than-plan operating and financial performance across the entire fleet,” said president and chief executive officer Joseph Brandt.

“We are raising our full-year 2021 guidance to $780m to $810m, and are pleased to confirm that we will pay a second quarter dividend in line with our 10% year-on-year dividend growth policy.

“In combination with prior share buybacks, the company has returned more than $411m to our shareholders since the initial public offering, and continues to focus on unlocking value in the portfolio including through farm downs and the divestitures of our Brazilian renewable portfolio which is currently underway, progressing well and expected to be announced later this year.”

Moreover, Brandt said the firm’s renewables portfolio contributed $226m of proportionate adjusted EBITDA in the past 12 months, representing 36% of total proportionate adjusted EBITDA.

“Applying current private market transaction and public market trading multiples for comparable companies, the implied valuation of our renewables fleet is close to ContourGlobal’s entire market capitalisation.

“We are actively evaluating transactions to realize this value and close the discrepancy between our stock price and our underlying value.

“I am particularly pleased that this performance has been achieved while maintaining our primary focus, as always, on the safety and wellbeing of our people.”

ComtourGlobal was continuing to pursue ‘target zero, Joseph Brandt said, with nil lost time incidents in the 2.2 million hours worked across the 115 assets in the first six months of the year.

“The integration of our 1.5 GW Western Generation acquisition continues to advance in line with our expectations and the acquired assets are performing well operationally and financially.

“Impressively, our 604 MW Hobbs flagship CCGT in New Mexico achieved its best operational performance in 13 years, despite the asset being actively integrated at the same time.

“We also have successfully onboarded all on-site employees in the United States and Trinidad and Tobago.”

In Europe, the company continued to drive its solar roll-up strategy in Italy with the announcement of the 18 MW solar acquisition in June, which Brandt said was expected to close in the second half.

“We will continue to execute on operationally led acquisition opportunities in the low carbon power generation space.

“Looking forward to the second half of 2021, we remain confident and committed to unlocking value and delivering further attractive risk adjusted returns for our shareholders.”

At 0909 BST, shares in ContourGlobal were up 1.43% at 198.8p.

Related articles

Ryanair passenger numbers jump 9% in December

Ryanair passenger numbers jump 9% in December

(Sharecast News) - Budget airline Ryanair reported a 9% jump in December passenger numbers on Wednesday. Traffic rose to 12.54 million from 11.52m in the same month a year earlier, while the load factor - which gauges how full the planes are - ticked down to 91% from...

Wizz Are passenger numbers soar in December

Wizz Are passenger numbers soar in December

(Sharecast News) - Hungary-based budget airline Wizz Air reported a strong rise in December passenger numbers as demand continued to rebound from the Covid pandemic. The company on Wednesday said it carried 4,964,857 passengers, an 18.8% increase year on year. For the...

Trending stories

Join our mailing list

Subscribe to our mailing list to receive regular updates!

x