The key focus of Rurelec's (RUR) first-half results was an update on the legal wrangle over the forced nationalisation in 2010 of its Bolivian assets, rather than the numbers themselves. Latin-America-focused power generator Rurelec took the government there to court in The Hague and the final hearing took place in April.
Rurelec anticipates a favourable outcome to the arbitration and is expecting the court to announce the amount of compensation to be paid to the company by the end of this year. Chief executive Peter Earl expects that the compensation should be no less than the assets' book value of $73m (£45m), with compensation for legal and interest costs on top of that. Broker xcap says that, if Rurelec was to be awarded $100m, this would represent a 3p per share uplift to asset value - that, in theory, could all be paid out as a special dividend.
With the loss of the Bolivian assets having left a huge hole in the company's operations, Rurelec has been busy building up its assets elsewhere in Latin America. Moreover, the company expects to complete its dual listing on Chile's Santiago Stock Exchange by the year-end - a move that it hopes will improve liquidity, allow it to tap Chilean debt markets and potentially benefit from the higher ratings that its listed Chilean peers enjoy.
RURELEC (RUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 12.1p | MARKET VALUE: | £67.1m | |
| TOUCH: | 11.6-12.3p | 12-MONTH HIGH: | 14p | LOW: 6.8p |
| DIVIDEND YIELD: | nil | PE RATIO: | NA | |
| NET ASSET VALUE: | 17p* | NET DEBT: | 17% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 6.92 | 0.46 | -0.03 | nil |
| 2013 | 6.07 | -0.04 | -0.05 | nil |
| % change | -12 | - | - | - |
Ex-div: - Payment: - | ||||
