South American power generator Rurelec has steadied its business after last year's shock nationalisation of key assets in Bolivia.
An independent valuation of its former Bolivian assets is being prepared to present to an arbitration panel before the year-end. Management maintains that its share of the Guaracachi assets there is likely to be valued at more than the $75m (£47m) book value that sits on its balance sheet.
Meanwhile, Rurelec's partly-owned Energia del Sur (EdS) business in Argentina, which operates a 138 megawatt power plant in Patagonia, has performed well and marked its highest ever peak output in August. Inflation has pushed operating costs up, but increased tariffs have offset this. Earlier this year, Rurelec bought out the debt holders in EdS and is being paid $2m a quarter in repayments. The company is exploring a refinancing in local markets.
That, and the prospect of a substantial compensation payment from the Bolivian government, will generate significant funds - probably in the early months of 2012, and management intends to pay a special dividend at that time. It is also lining up investments in Peru and Chile. A dual listing in Santiago is being considered for 2012, too, which would allow access to local bond markets.
RURELEC (RUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 7.8p | MARKET VALUE: | £32.8m | |
| TOUCH: | 7.5-8p | 12-MONTH HIGH: | 16p | LOW: 6.13p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 20p | NET CASH: | £0.69m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 4.72 | 1.04 | 0.42 | nil |
| 2011 | 7.21 | 0.04 | -0.18 | nil |
| % change | +53 | -96 | - | - |
Ex-div: - Payment: - | ||||
