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Kenon Holdings Reports Third Quarter 2015 Results and Additional Updates

SINGAPORE, Dec. 1, 2015 /PRNewswire/ -- Kenon Holdings Ltd. (NYSE: KEN, TASE: KEN) announces its results for the third quarter in 2015 as well as additional updates.

Key Highlights

IC Power

  • IC Power's net income attributable to Kenon for the nine months and three months ended September 30, 2015 was $41 million and $8 million, respectively.1
  • IC Power's Adjusted EBITDA for the nine months and three months ended September 30, 2015 was $254 million and $79 million, respectively.1
  • IC Power's results of operations for the third quarter were impacted by lower profit margins at OPC compared to 2014 due in part to the lower tariffs published by the Israel Public Utilities Authority (Electricity) ("PUAE") in January 2015 and in August 2015.
  • IC Power continued to develop its key development projects, CDA (a 510 MW hydro project in Peru), Samay I (a 600 MW thermoelectric project in Peru) and Kanan (a 92 MW thermal generation project in Panama) with commercial operations at each of the plants targeted to commence between the end of 2015 and mid-2016.
  • In August 2015, IC Power acquired AIE from Hadera Paper Ltd. for NIS 60 million (approximately $16 million); AIE currently operates an 18 MW steam turbine and holds conditional licenses for the construction of a 120 MW cogeneration natural gas power plant.
  • On November 2, 2015, IC Power Pte. Ltd. filed Amendment No. 1 to its Registration Statement on Form F-1 with the Securities and Exchange Commission, following its initial filing on August 31, 2015.

1  IC Power's net income attributable to Kenon and Adjusted EBITDA for the nine months ended September 30, 2015, as reported by Kenon, differs from the amount reported by IC Power for the same period due to the timing of IC Power's and Kenon's accounting for revisions of certain provisions at IC Power. For further information, see "Business Developments – Decisions by the PUAE (Israel's Power Regulator)" in Kenon's Form 6-K, dated September 8, 2015, which reported Kenon's Q2 2015 results.

Qoros

  • In November 2015, Kenon and its JV partner Chery announced additional loans to Qoros and guarantees related to certain of its bank debt.
  • In November 2015, Qoros debuted the Qoros 5 SUV at the Guangzhou Auto Show in China. The Qoros 5 SUV is expected to commence commercial sales in early 2016.

Discussion of Results for the Three Months Ended September 30, 2015

Set forth below is a discussion of Kenon's results of operations.  Kenon's consolidated results of operations from its operating assets essentially comprise the consolidated results of I.C. Power Ltd. ("IC Power").  The results of Qoros Automotive Co., Ltd. ("Qoros") and ZIM Integrated Shipping Ltd. ("ZIM") are reflected under results from associates. For a summary of the net income contribution from Kenon's subsidiaries and associated companies, see Appendix A.

IC Power

IC Power has identified the following reportable segments for its consolidated financial statements: Peru, Israel, Central America (which consists of Nicaragua, Guatemala, El Salvador and Panama) and Other (which consists of Bolivia, Chile, the Dominican Republic, Jamaica and Colombia) and IC Power's share in income from associated companies and holding company results.

See Appendix B for IC Power's consolidated financial information. See Appendix C for the definition of IC Power's Adjusted EBITDA, which is a non-IFRS financial measure, and for a reconciliation to net income. See Appendix D for summary operational information regarding each of IC Power's operating companies. See Appendix E for summary financial information of IC Power's operating companies. See Appendix F for summary financial information of IC Power's segments.

The following discussion of IC Power's results of operations below is derived from IC Power's consolidated financial statements.

Revenues

IC Power's revenues were $336 million for the three months ended September 30, 2015, as compared to $373 million for the three months ended September 30, 2014, reflecting a 10% decrease.  See below a discussion of revenues by segment.

  • Peru –  $114 million, compared to $105 million in the three months ended September 30, 2014, reflecting a 9% increase, primarily as a result of an increase in the volume of energy sold by Kallpa in the quarter to 1,575 GWh from 1,459 GWh in the three months ended September 30, 2014 and an increase in Kallpa's revenue from transmission tolls by $6 million;
  • Israel $89 million, compared to $117 million in the three months ended September 30, 2014, reflecting a 24% decrease, primarily resulting from declines in Israel's PUAE generation component tariff in January 2015 and August 2015, which forms the basis of OPC's energy prices, and the strengthening of the U.S. Dollar against the New Israeli Shekel. OPC's average price of energy sold decreased from $114 per MWh in the three months ended September 30, 2014 to $87 per MWh in the current quarter. AIE, which was acquired and consolidated in August 2015, contributed $3 million in revenue in the three months ended September 30, 2015;
  • Central America $92 million, compared to $83 million in the three months ended September 30, 2014, reflecting an 11% increase, primarily a result of the acquisition and consolidation of Puerto Quetzal (Guatemala) in September 2014, which increased its revenue contribution to $31 million in the quarter from $4 million in the three months ended September 30, 2014. This increase was substantially offset by (i) a decline in Nejapa's (El Salvador) sales from $37 million in the three months ended September 30, 2014 to $26 million in the three months ended September 30, 2015, primarily as a result of a decline in heavy fuel oil ("HFO") prices, to which Nejapa's sales prices are linked and (ii) a decline in sales of ICPNH (Nicaragua) from $40 million in the three months ended September 30, 2014 to $29 million in the three months ended September 30, 2015, primarily as a result of a decline in HFO prices, to which sales prices are linked; and
  • Other $41 million, compared to $68 million in the three months ended September 30, 2014, reflecting a 40% decrease, primarily as a result of (i) a $11 million decline in revenues due to the expiration of a PPA of CEPP (Dominican Republic), which reduced CEPP's volumes and the prices at which it sold its energy and (ii) a decline in sales of JPPC (Jamaica) from $20 million in the three months ended September 30, 2014 to $11 million in the three months ended September 30, 2015, primarily due to a decline in HFO prices which decreased sales prices.

Cost of Sales

IC Power's cost of sales (excluding depreciation and amortization) was $242 million for the three months ended September 30, 2015, as compared to $263 million in the three months ended September 30, 2014, reflecting an 8% decrease. See below a discussion of cost of sales by segment.

  • Peru$71 million, compared to $61 million in the three months ended September 30, 2014, reflecting a 16% increase, primarily as a result of a $4 million increase in spot energy purchases to address higher consumption by Kallpa's customers and a $6 million increase in transmission charges as a result of higher tariffs during the quarter, as compared to the previous year, with such increase in cost of sales corresponding to increased revenue of $6 million from transmission tolls);
  • Israel$68 million, compared to $81 million in the three months ended September 30, 2014, reflecting a 16% decrease, primarily as a result of (i) $13 million in diesel oil surcharge provisions in the three months ended September 30, 2014 (as compared to none in the three months ended September 30, 2015), (ii) an $11 million decline in energy purchases due to an increase in OPC's generation and (iii) the strengthening of the U.S. Dollar against the New Israeli Shekel. These reductions were partially offset by a $10 million increase in transmission costs as a result of higher system management service charges and by $3 million in cost of sales at AIE as a result of the acquisition and consolidation of AIE in August 2015;
  • Central America$74 million, compared to $72 million for the three months ended September 30, 2014, reflecting a 3% increase, primarily as a result of (i) the acquisition of Puerto Quetzal in September 2014, which had cost of sales of $28 million in the three months ended September 30, 2015, compared to $4 million in the three months ended September 30, 2014 and (ii) a $4 million increase in the cost of sales of Cenergica (El Salvador), primarily due to an increase in its energy purchases as a result of higher energy trading. These increases were partially offset by a $16 million and $10 million decline in ICPNH's and Nejapa's cost of sales, respectively, primarily as a result of a decline in HFO prices; and
  • Other – $29 million, compared to $49 million for the three months ended September 30, 2014, reflecting a 41% decrease, primarily as a result of (i) an $8 million decline in CEPP's cost of sales as a result of a decrease in spot energy purchases and fuel costs, (ii) a $7 million decline in JPPC's cost of sales primarily as a result of a decline in HFO prices and (iii) a $4 million decline in cost of sales of Colmito (Chile) as a result of a decline in the cost of its energy purchases due to reduced spot market prices than in the three months ended September 30, 2014.

Adjusted EBITDA

IC Power's Adjusted EBITDA was $79 million for the three months ended September 30, 2015, as compared to $108 million for the three months ended September 30, 2014, reflecting a 27% decrease. Set forth below is a discussion by segment.

  • Peru$39 million for both the three months ended September 30, 2015 and 2014, as higher revenues in the three months ended September 30, 2015, primarily due to higher volumes of energy sold by Kallpa, were offset by higher cost of sales, primarily due to spot energy purchases to satisfy the higher volumes of energy sold;
  • Israel $20 million, compared to $34 million in the three months ended September 30, 2014, primarily reflecting a $31 million decline in OPC´s revenues and a $16 million decline in OPC's cost of sales in the three months ended September 30, 2015.  IC Power's results of operations for the third quarter were impacted by lower profit margins at OPC due in part to the lower power generation component published by the Israel Public Utilities Authority (Electricity) ("PUAE") in January 2015 which were further reduced in September 2015.  The PUAE power generation component forms the basis for OPC's prices under its PPAs, so the decline in prices resulted in a decline in revenues. The price OPC pays for natural gas under its gas supply agreement is indexed to the PUAE's generation component tariff, but due to a floor mechanism in the gas supply agreement, the decreases in the PUAE tariff did not result in a corresponding decrease in gas prices for OPC, which reduced margins in the third quarter of 2015, as compared to the prior year.  OPC also incurred higher system management service charges in the quarter following a decision by the PUAE in August 2015. A strengthening of the U.S. Dollar against the New Israeli Shekel also affected Adjusted EBITDA in the quarter as compared to the three months ended September 30, 2014;
  • Central America$17 million, compared to $8 million in the three months ended September 30, 2014, primarily as a result of the acquisition of Puerto Quetzal, which increased Adjusted EBITDA by $4 million, and ICPNH, which increased Adjusted EBITDA by $4 million; and
  • Other - $2 million, compared to $27 million in the three months ended September 30, 2014, primarily as a result of a $15 million post-sale dividend received in respect of its sale of Generandes in the three months ended September 30, 2014 with the remaining decline due to a decline in Adjusted EBITDA for CEPP from the expiration of a PPA, JPPC from a decline in HFO prices and Inkia from higher legal expenses.

Net Income

IC Power's net income was $13 million for the three months ended September 30, 2015, as compared to $135 million in the three months ended September 30, 2014, reflecting a 90% decrease, primarily as a result of the factors discussed above and the following:

  • $121 million in net income from discontinued operations, net of tax in the three months ended September 30, 2014 (none in the three months ended September 30, 2015), as a result of the sale of Edegel, which occurred in September 2014;
  • a $20 million gain on bargain purchase recognized by IC Power from the acquisition of Puerto Quetzal in the three months ended September 30, 2014; and
  • a $35 million impairment charge in the three months ended September 30, 2014.

Capital Expenditures

IC Power's capital expenditures were $100 million in the three months ended September 30, 2015, primarily relating to the expenditures of CDA ($22 million), Samay I ($38 million), Kanan ($11 million) and the acquisition of AIE ($16 million, including $9 million of business combination expenses).  

Qoros

Kenon recognizes 50% of Qoros' results under "share in income from associates." The discussion below reflects 100% of Qoros' financial results and contains conversions of certain RMB amounts into U.S. Dollars at a rate of 6.4 RMB/U.S. Dollar.

See Appendix G for a summary of Qoros' consolidated financial information.

Revenues

Qoros had revenues of RMB393 million ($61 million) for the three months ended September 30, 2015, as compared to RM236 million ($37 million) for the three months ended September 30, 2014, reflecting a 67% increase. Qoros sold 3,667 vehicles during the quarter, compared to 1,849 vehicles sold in the three months ended September 30, 2014, representing a 98% increase.

Cost of Sales

Qoros' cost of sales were RMB445 million ($70 million) for the three months ended September 30, 2015, as compared to RMB315 million ($49 million) for the three months ended September 30, 2014, reflecting a 41% increase, as a result of the increase in the number of vehicles sold.

Research and Development Expenses

Qoros continues to invest in the research and development of its next vehicle model, the Qoros 5 SUV, which is scheduled for launch in early 2016, and the 2016 model year versions of the Qoros 3 Sedan, the Qoros 3 Hatch and the Qoros 3 City SUV. Qoros' research and development expenses increased to RMB51 million ($8 million) in the three months ended September 30, 2015 from RMB8 million ($1 million) in the three months ended September 30, 2014, due to the capitalization of certain research and development costs incurred in the three months ended September 30, 2014.

Selling and Distribution Expenses

Qoros had selling and distribution expenses of RMB108 million ($17 million) in the three months ended September 30, 2015, as compared to RMB267 million ($42 million) in the three months ended September 30, 2014, reflecting a 60% decrease, due to different marketing strategies employed by Qoros in 2014 and 2015, which resulted in differences in the timing of selling and distribution expenses in 2014, as compared to 2015, as most such expenses for 2015 are expected to be incurred in the fourth quarter.

Administration Expenses

Qoros had administration expenses of RMB160 million ($25 million) in the three months ended September 30, 2015, as compared to RMB157 million ($25 million) in the three months ended September 30, 2014, reflecting a 2% increase.

Finance Costs, Net

Qoros had finance costs, net, of RMB136 million ($21 million) in the three months ended September 30, 2015, as compared to RMB67 million ($10 million) in the three months ended September 30, 2014 primarily due to an increase in total debt outstanding.

Loss for the Period

As a result of the above, Qoros had a loss of RMB502 million ($78 million) in the three months ended September 30, 2015, as compared to RMB590 million ($92 million) in the three months ended September 30, 2014.

Capital Expenditures

Qoros continues to invest in its new vehicle models, and had capital expenditures of RMB544 million ($85 million) in the three months ended September 30, 2015, compared to RMB1,283 million ($200 million) in the three months ended September 30, 2014. In the three months ended September 30, 2015, Qoros made investments in its new SUV model and the 2016 model year versions of the Qoros 3 Sedan, the Qoros 3 Hatch, and the Qoros 3 City SUV.

ZIM

ZIM had revenues of $749 million in the three months ended September 30, 2015, as compared to $854 million in the three months ended September 30, 2014, reflecting a 12% decrease, primarily as a result of a decline in ZIM's average revenue per TEU (twenty foot equivalent unit). ZIM recorded operating income and net income attributable to the owners of ZIM of $34 million and $11 million, respectively, as compared to an operating loss and net loss attributable to the owners of ZIM of $251 million and $65 million, respectively, in the three months ended September 30, 2014. ZIM's improved results, following its restructuring in July 2014, are primarily the result of a decrease in operating expenses (resulting, in part, from a decrease in bunker expenses) and an increase in other operating income, net. The increase in other operating income, net was mainly attributable to a capital gain on investment in associated company during the three months ended September 30, 2015 and an impairment of vessels and a capital loss, mainly on vessels as a result of the restructuring, which were recorded during the three months ended September 30, 2014.

Freight rates fell sharply in most of the trade zones due to excess capacity, with most all of the declines experienced during the third quarter of 2015. The impact from the decline in freight rates was partially compensated by the current relatively low price of bunker, one of the most significant costs for the company, which also decreased during the third quarter.

ZIM publishes its results on its website. For more information, see www.ZIM.com. This website, and any information referenced therein, is not incorporated by reference herein.   

Tower

On July 23, 2015, Kenon completed the pro rata distribution of 18,030,041 ordinary shares of Tower, marking one of the key steps in the implementation of Kenon's strategy. The 18,030,041 ordinary shares distributed by Kenon represented all of the shares in Tower owned by Kenon, excluding the 1,669,795 shares in Tower underlying certain warrants held by Kenon.

As a result of this distribution, the Kenon group recognized a $210 million gain, reflecting the fair value of Tower on the date of distribution.

Liquidity and Capital Resources

Kenon (Unconsolidated)

As of September 30, 2015, cash, gross debt, and net debt (a non-IFRS financial measure, which is defined as gross debt minus cash) at Kenon (parent company) were $16 million, $116 million and $100 million, respectively.

As of September 30, 2015, the total drawings outstanding under Kenon's $200 million credit facility from Israel Corporation Ltd. were $110 million. Kenon expects that a substantial portion of its remaining liquidity will be used to support the development of Qoros and its commitments with respect to Qoros, as discussed below.

As announced in November 2015, Kenon has agreed to provide a shareholder loan to Qoros of RMB 275 million ($43 million) and to provide guarantees of certain of Qoros' bank debt. Kenon intends to fund such loans to Qoros through cash on hand and drawdowns under its credit facility with Israel Corporation Ltd.

Set forth below is an overview of all of the guarantees provided by Kenon in respect of Qoros' debt to date, including the guarantee announced in November 2015:

Date Granted

Qoros Credit Facility

Kenon Guarantee Amount

Spin-Off /
November 2015

RMB3 billion credit facility

RMB750 million ($117 million)1

May 2015

RMB700 million EXIM Bank loan facility

RMB175 million ($27 million), plus interest and fees of up to RMB30 million ($5 million)2

November 2015

RMB175 million ($27 million), plus interest and fees of up to RMB30 million ($5 million)2

Total 


RMB 1,160 million ($181 million)

 

1.

In the event that Chery's liability under its guarantee exceeds RMB1.5 billion ($234 million), Kenon has committed to negotiate with Chery in good faith to find a solution so that Kenon's and Chery's liabilities for the indebtedness of Qoros under this credit facility are equal in proportion.



2.

In the event that Chery is obligated under its guarantee of the EXIM Bank loan facility to make payments that exceed Kenon's obligations under the guarantee, Kenon and Chery have agreed to discuss the matter and to try to find an acceptable solution, but without any obligation on Kenon to be liable for more than the amounts set forth in the table above.

IC Power

As of September 30, 2015, IC Power had cash, cash equivalents and short term deposits, including restricted cash, of $610 million, interest bearing financial liabilities of $2,444 million, and net interest bearing financial liabilities (a non-IFRS financial measure, which is defined as interest bearing financial liabilities minus cash and short-term deposits and restricted cash) of $1,834 million.

Qoros

As of September 30, 2015, Qoros had cash and cash equivalents and pledged deposits of RMB364 million ($57 million), total loans and borrowings (excluding shareholder loans) of RMB5.6 billion ($875 million), and net loans and borrowings (excluding shareholder loans) (a non-IFRS financial measure, which is defined as total loans and borrowings (excluding shareholder loans) minus cash and cash equivalents and pledged deposits) of RMB5.2 billion ($813 million).

As of September 30, 2015, Qoros had current liabilities (excluding shareholder loans) of RMB4.3 billion ($672 million), including trade payables of RMB2.7 billion ($422 million), and current assets of RMB1.7 billion ($266 million), including cash and cash equivalents of RMB230 million ($36 million). Qoros has short-term and working capital credit facilities, but amounts available under such facilities are limited.  Qoros actively manages its trade payables, accrued expenses and other operating expenses in connection with the management of its liquidity requirements and available resources.

Qoros commenced commercial operations at the end of 2013. In the year ended December 31, 2014 and the nine months ended September 30, 2015, Qoros incurred a net loss of RMB2.2 billion ($344 million) and RMB1.4 billion ($219 million), respectively. Qoros is continuing to experience losses and negative operating cash flow and expects that this will continue until it achieves significantly higher levels of sales. 

In November 2015, Kenon agreed to make an additional shareholder loan of RMB275 million ($43 million) to Qoros (Chery agreed to make a loan in equal amount) and to guarantee up to RMB175 million ($27 million), plus interest and fees, in respect of drawings under a Qoros loan facility, with Chery having equal guarantee obligations with respect to such facility. These guarantees are intended to support drawings of up to RMB350 million ($55 million) under Qoros' bank loan facility; such drawings are needed by Qoros to support its immediate liquidity needs, including to meet its trade payable obligations.

Qoros' operating expenses, debt service requirements, capital expenditures and other liquidity requirements are significant. Until Qoros experiences a significant increase in sales, it will continue to require significant additional external financing in the near future to meet these expenses and requirements, and there is no assurance that Qoros will experience an increase in sales in the near-term, if at all.  Furthermore, Qoros is exploring potential financing from external sources, but there is no assurance of any such financing, and any such financing may dilute Kenon's interest in Qoros.

To the extent that Qoros is unable to obtain such external financing, Qoros may be unable to meet its operating expenses, debt service requirements and other liquidity requirements and therefore may be unable to continue its business operations. As a result, Kenon may not recoup its investment in Qoros and may be required to make payments under its guarantees of Qoros' debt.

Business Developments

IC Power

Assets Under Construction and Potential Projects

  • Set forth below is an update on assets in advanced stages of construction:

CDA

    • As of September 30, 2015, CDA has invested an aggregate $802 million in the project and has completed 85% of the project, with 96% of the dam construction and 100% of the tunnel drilling completed.
    • CDA is expected to commence commercial operation by the middle of 2016 and has an estimated construction cost of $954 million. The CDA plant has three turbines, which each have a separate commercial operation date, with the first commercial operation date expected to be in early 2016.
    • As of September 30, 2015, CDA has received proceeds of $547 million from the $591 million available debt facilities for this project.

Samay I

    • As of September 30, 2015, Samay I has invested an aggregate $305 million in the project and has completed 91% of the project.
    • Samay I is expected to commence commercial operation by the middle of 2016 and has an estimated construction cost of $380 million
    • As of September 30, 2015, Samay I has received $252 million in proceeds from the $311 million financing facility for this project.

Kanan

    • As of September 30, 2015, Kanan has invested an aggregate $72 million in the project out of an estimated construction cost of $78 million (including $40 million of intercompany expenses relating to Puerto Quetzal's and CEPP's sale of the barges to Kanan) and has completed 85% of the project. Kanan is expected to commence commercial operation by the end of 2015.
  • AIE: On August 10, 2015, IC Power acquired AIE from Hadera Paper Ltd. for NIS 60 million (approximately $16 million); AIE currently operates an 18 MW steam turbine. AIE also holds conditional licenses for the construction of a 120 MW cogeneration natural gas power plant. The project is in the advanced development stage and construction is expected to commence in early 2016. IC Power expects that the total cost of completing the AIE plant (including the consideration for the acquisition of AIE and the construction cost of the power station) will be approximately $250 million, based upon a plant with 135 MW of capacity. The AIE plant is expected to commence commercial operations in the second half of 2018.
  • Project pipeline:  IC Power is currently assessing various projects in Israel and various Latin American countries, such as Chile, Colombia, Guatemala, Mexico, Peru, Panama, the Dominican Republic, and Nicaragua. These potential projects range in size from small-scale power facilities (e.g., less than 40 MW) to large-scale power facilities (e.g., approximately 550 MW) and utilize different fuels and technologies, including natural gas, hydroelectric, wind, and stranded gas. IC Power is also considering acquiring companies and assets in power generation and related businesses (e.g., transmission and distribution companies or assets). There is no guarantee that IC Power will complete any of the above-mentioned projects.

Regulatory Developments

Decisions by Israel's Power Regulator (the PUAE)

In August 2015, the PUAE published a decision that independent power producers ("IPPs") in Israel would be obligated to pay system management service charges, retroactively from June 1, 2013. According to the PUAE decision, as amended in September 2015, the amount of system management service charges that would be payable by OPC from the effective date of June 1, 2013 to June 2015 is approximately NIS 159 million (approximately $41 million), not including interest rate and linkage costs. The amount deemed payable by OPC is based upon the "average rate" of the system management service charges. However, as the rate of the new system management service charges, like other rates of the PUAE, varies by season (e.g., summer and winter) and by demand period (peak, shoulder and off-peak), the PUAE's final calculation of the amount payable by OPC will be based upon the applicable "time of use" rates. IC Power is considering the implications of this decision and may contest it.

In September, 2015, the PUAE  confirmed a reduction in the PUAE generation component tariff by approximately 12% (as initially announced in August 2015), following a reduction of approximately 10% in the tariff in January 2015. 

The PUAE power generation component tariff forms the basis for OPC's prices under its PPAs.  In addition, the price at which OPC purchases its natural gas is predominantly indexed (in excess of 70%) to changes in the PUAE's generation component tariff. As a result, changes in this tariff have a related effect on OPC's revenues, as well as its cost of sales and margins. However, the natural gas price formula in OPC's gas supply agreement is subject to a floor. As a result of previous declines in the PUAE generation component tariff, OPC began to pay the ultimate floor price as of November 2015. Therefore, any further declines in the PUAE generation component tariff will lead to a greater decline in OPC's margins.

Trend Information

Fluctuations in Oil Prices and Currency Exchange Rates

Many of IC Power's PPAs contain an adjustment mechanism such that prices under IC Power's PPAs are adjusted to reflect (among other things) changes in the price of oil or the underlying fuel, the relevant producer price index ("PPI") or changes in the local currency to U.S. Dollar exchange rate. In addition, for most of IC Power's gas and other fuel supply agreements, the price IC Power pays is subject to adjustment based on changes in oil prices, the price of the underlying fuel, and currency exchange rates.

These adjustments under IC Power's PPAs and supply agreements are made on a periodic basis and may also be subject to minimum deviation thresholds. Accordingly, although changes in oil, or other fuel, prices, inflation rates and foreign exchange rates can affect IC Power's revenues, there is generally not a corresponding effect on IC Power's margins.  However, these adjustments do not fully hedge IC Power's margins against changes in fuel prices and such other factors. In addition, IC Power remains subject to variations in oil, or other fuel, prices, inflation and currency exchange rates in the short- to medium-term until such adjustments are made and to the extent of variations below the threshold. Further, IC Power makes sales in the spot market and is therefore subject to spot market prices, and is also subject to changes in market rates (which are influenced by fuel prices and inflation and exchange rates) when it renews its PPAs. Therefore, a significant change in fuel costs, the PPI or currency exchange rates (even where fuel costs and sales prices under PPAs are fully indexed). IC Power expects that current trends in oil and other fuel prices and exchange rates will negatively affect its revenues and margins in the short- to medium-term.

Peru Power Market

As a result of the completion of various plants under construction in Peru, IC Power expects the generation capacity in Peru to increase at a faster rate than the demand for such electricity, resulting in an oversupply of capacity and a downward pressure on energy and capacity prices. Although a significant majority of IC Power's Peruvian energy and capacity is sold pursuant to PPAs, IC Power also sells energy and capacity on the spot market in Peru and is therefore exposed to any declines in spot market rates. IC Power also expects to enter into, and renegotiate, PPAs during this expected period of oversupply and downward pressure on energy prices, which may negatively impact the long-term rates IC Power is able to negotiate with its customers and its revenues, margins or results of operations.

Qoros

Car Sales

In the three months ended September 30, 2015, Qoros sold approximately 3,667 vehicles, as compared to approximately 3,256 vehicles sold in the three months ended June 30, 2015 and approximately 1,849 vehicles in the three months ended September 30, 2014, representing an increase of 13% and 98%, respectively.

In the nine months ended September 30, 2015, Qoros sold approximately 9,411 vehicles, as compared to approximately 4,410 vehicles sold in the nine months ended September 30, 2014, representing an increase of 113%.

In October 2015, Qoros sold approximately 1,403 vehicles.

SUV and New Models Launch

In November 2015, Qoros debuted the Qoros 5 SUV at the Guangzhou Auto Show in China. The Qoros 5 SUV is expected to commence commercial sales in early 2016 at a price range of RMB150,000 to RMB220,000. Qoros also launched the new 2016 model year versions of the Qoros 3 City SUV. The SUV segment is becoming increasingly popular in the Chinese automotive market. In the third quarter of 2015 and October 2015, within the C-segment, sales in the SUV segment increased by 35% and 53%, respectively.

Qoros also launched the new 2016 model year versions of the Qoros 3 Sedan, the Qoros 3 Hatch. Two additional trims are also being offered for each of the Qoros 3 Sedan and the Qoros 3 Hatch, which has extended Qoros' pricing range to the RMB100,000 entry price.

Dealerships

As of September 30, 2015, there were 73 operational Qoros dealerships, 12 dealerships under construction, and Memorandums of Understanding signed with respect to the development of 20 additional dealerships.  

Qoros Marketing Activities

On August 19, 2015, Qoros held a Qoros Brand Day in its Changshu plant with approximately 120 media personnel and 100 car owners and Key Opinion Leaders. The Qoros Brand Day event served as the kick-off for a series of Qoros marketing campaigns focusing on its brand positioning and product line updates.

Awards

Qoros continued to achieve industry recognition in the second half of 2015. In July 2015, Qoros received a Connected Service Award at the 2015 China Auto Customer Care Award in recognition of the QorosQloud. Qoros was the only Chinese brand among the eight brands that received a 2015 China Auto Customer Care Award in July.

In August 2015, Qoros received a Compact SUV Award (primarily based upon consumer votes and expert review) at the 5th China Car Public Praise by Huaxi Metropolis Daily at the Chengdu Auto Show.

In September 2015, Qoros received a Chinese Crossover Award by Tencent Car for the Qoros 3 City SUV.

In October 2015, Qoros received a Road Pioneer Award and a China Auto Safety Award from the CATRAC and Global NCAP.

In November 2015, Qoros received "Model of the Year" and "Beauty of the Year" awards by Automotive Observer for the performance in manufacturing quality, safety features, and appearance design of the Qoros 3 Sedan  at the 10th 2015 Chinese Car Annual Election ceremony at the Guangzhou International Automobile Show.

Guarantees and Other Commitments to Qoros

As Qoros' liquidity requirements are significant, until Qoros experiences a significant increase in sales, Qoros will continue to require significant additional external financing in the near future to meet its liquidity requirements. In November 2015, Chery provided a RMB200 million ($31 million) shareholder loan to Qoros and Kenon restored a RMB750 million ($117 million) back-to-back guarantee to Chery in respect of Qoros' RMB3 billion ($469 million) credit facility. Chery's RMB200 million ($31 million) shareholder loan to Qoros and Kenon's restoration of its RMB750 million ($117 million) back-to-back guarantee satisfied Chery's and Kenon's obligations under their equality agreement.

Additionally, in November 2015, Kenon and Chery each agreed to provide a RMB275 million ($43 million) shareholder loan to Qoros. Kenon also agreed to provide a back-to-back guarantee to Chery for RMB175 million ($28 million), plus up to RMB 30 million ($5 million) of related fees, so as to have equal guarantee obligations with Chery in respect of Qoros' RMB700 million ($109 million) loan facility. The additional guarantee which Kenon has provided is intended to support Qoros' drawing of the remaining RMB350 million ($55 million) under the facility.

Voluntary Recall of Certain Vehicle Models

As announced in July 2015, Qoros voluntarily recalled 6,736 vehicles in connection with  information discovered during testing done on frontal impact crashes of new Qoros models under development. As of the date of this report, Qoros has completed the repairs of 62% of the outstanding recalls. Qoros' completion schedule is in line with regulatory guidelines, which require Qoros to complete 90% of the outstanding recalls within a twelve-month period. As of the date of this release, Qoros has not received any field incidences or customer complaints related to this defect across any of its vehicles in the market.

China Vehicle Market Conditions

Cumulative passenger vehicle wholesales in the first three quarters of 2015 totaled 13 million units, representing an increase of 5%, with most of the sales increase taking place in the first quarter. The first and second quarters of 2015 experienced an 11% and 3% growth rate, respectively. After a slowdown in the second quarter, the overall passenger vehicle market in China remained flat in the third quarter of 2015, with 4.1 million units sold during this period, representing a 1% increase.

In September 2015 and October 2015, wholesale sales reached 1.6 million and 1.8 million units, respectively, representing a 7% and 14% increase compared to the same periods in 2014, respectively. These increases are attributable to increased incentives offered by dealers and OEMs and a newly initiated tax policy, as discussed below. Qoros believes these price reductions will continue, and potentially increase, during the fourth quarter of 2015, as OEMs work to reach annual targets in the last three months of the year (which tends to be the peak car sales season in China). Additionally, the SUV segment is becoming increasingly popular as compared to other segments. In the third quarter of 2015, within the C-segment, sales in the SUV segment increased by 35%, while sales in the Sedan and Hatch segments declined by 11% and 29%, respectively. In October 2015, within the C segment, sales in the SUV segment increased by 53%, while sales in the Sedan segment increased by 8% and sales in the hatchback segment decreased by 10%, as compared to October 2014.

Furthermore, in the third quarter of 2015, China's central government initiated a tax policy to incentivize domestic vehicle sales by reducing invoice prices by approximately 4.25%. From October 1, 2015 to December 31, 2016, passenger vehicles with engines that are 1.6L or smaller, which includes all Qoros vehicles, will be eligible for this tax cut; unlike many of its SUV competitors, the Qoros 3 City SUV and the Qoros 5 SUV (which is expected to commence commercial sales in early 2016) will be eligible for this tax cut.

The current financial market and economic conditions in China may have an impact on Qoros' business and operating results. Qoros is continuing to evaluate appropriate measures to address the above market conditions. Qoros is also seeking to optimize its cost structure, and may undertake cost-cutting measures.

Investors' Conference Call

Kenon's management will host a conference call for investors and analysts on December 1, 2015. To participate, please call one of the following teleconferencing numbers:

US:  1-888-668-9141
UK:  0-800-917-5108
Israel:  03- 918-0609 
International: 972-3-918-0609

The call will commence at 9:00am Eastern Time, 6:00am Pacific Time, 2:00pm UK Time, 4:00pm Israel Time and 10:00pm Singapore Time.

About Kenon 

Kenon is a holding company that operates dynamic, primarily growth-oriented businesses. The companies it owns, in whole or in part, are at various stages of development, ranging from established, cash-generating businesses to early stage development companies. Kenon's businesses consist of:

  • IC Power (100% interest) – a leading owner, developer and operator of power generation facilities in the Latin American, Caribbean and Israeli power generation markets;
  • Qoros (50% interest) – a China-based automotive company;
  • ZIM (32% interest) – an international shipping company; and
  • Primus Green Energy, Inc. (91% interest) – an early stage developer of alternative fuel technology.

Kenon's primary focus is to grow and develop its primary businesses, IC Power and Qoros. Following the growth and development of its primary businesses, Kenon intends to provide its shareholders with direct access to these businesses, when we believe it is in the best interests of its shareholders for it to do so based on factors specific to each business, market conditions and other relevant information. Kenon intends to support the development of its non-primary businesses, and to act to realize their value for its shareholders by distributing its interests in its non-primary businesses to its shareholders or selling its interests in its non-primary businesses, rationally and expeditiously. For further information on Kenon's businesses and strategy, see Kenon's publicly available filings, which can be found on the SEC's website at www.sec.gov. Please also see http://www.kenon-holdings.com for additional information.

Caution Concerning Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to,(i) with respect to IC Power, statements about tariffs and charges published by the PUAE and the expected impact on OPC, the impact of recent PUAE decisions on IC Power's operations and financial results, the expected cost and expected timing of completion of IC Power's construction projects, including CDA, Samay, Kanan and AIE,  IC Power's project pipeline, statements relating to material trends in the power generation market, including statements about trends affecting IC Power, including the Peruvian power generation market and statements about the effects of fluctuations in oil and other fuel prices and currency exchange rates on IC Power's results of operations, (ii) with respect to ZIM, statements about expected trends in the container shipping industry, and (iii) with respect to Qoros, statements about Qoros' liquidity requirements and sources of funding, statements about its plans to seek external financing, statements about Kenon and Chery's obligations and commitments with respect to one another as it relates to Qoros, statements about trends in China's vehicle market, and other non-historical matters. These statements are based on Kenon's management's current expectations or beliefs, and are subject to uncertainty and changes in circumstances. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond Kenon's control, which could cause the actual results to differ materially from those indicated in such forward-looking statements. Such risks include (i) with respect to IC Power, risks relating to IC Power's failure to complete the construction of its various power plants under construction on a timely basis, within expected budget or at all, develop or acquire any of the assets within its project pipeline, future developments in the power generation markets in which IC Power operates, (ii) with respect to ZIM, developments in the container shipping industry and freight rates, and (iii) with respect to Qoros, China's financial market and economic conditions and Qoros' ability to secure the funding it requires to meet its expenses and liquidity requirements, whether or not it is able to obtain external financing, and other risks and factors, including those risks set forth under the heading "Risk Factors" in Kenon's Annual Report on Form 20-F filed with the SEC, and other filings. Except as required by law, Kenon undertakes no obligation to update these forward-looking statements, whether as a result of new information, future events, or otherwise.

 


Contact Info


Kenon Holdings Ltd.


Barak Cohen

VP Business Development and IR

barakc@kenon-holdings.com

Tel: +65 6351 1780;


Karen Koh

Director, Investor Relations and BD

karenk@kenon-holdings.com

Tel: +65 6351 1794




Zongda Huang

Associate Director, Business Development & IR

huangz@kenon-holdings.com

Tel: +65 6351 1780






External Investor Relations

Ehud Helft / Kenny Green

GK Investor Relations

kenon@gkir.com

Tel: +1 646 201 9246



 

 


Kenon Holdings Ltd

Unaudited condensed consolidated statements of financial position



September 30
2015

December 31
2014


$ Thousands

Current assets



Cash and cash equivalents

485,785

610,056

Short-term investments and deposits

160,765

226,830

Trade receivables, net

129,847

181,358

Other current assets

48,759

59,064

Income tax receivable

3,757

3,418

Inventories

55,158

55,335




Total current assets

884,071

1,136,061




Non-current assets



Investments in associated companies

436,268

435,783

Deposits, loans and other receivables, including financial instruments

95,309

74,658

Deferred taxes, net

25,020

42,609

Property, plant and equipment, net

2,878,437

2,502,787

Intangible assets

150,182

144,671




Total non-current assets

3,585,216

3,200,508




Total assets

4,469,287

4,336,569




 

 

Kenon Holdings Ltd

Unaudited condensed consolidated statements of financial position, continued




September 30
2015

December 31
2014





$ Thousands

Current liabilities




Loans and debentures


146,251

161,486

Trade payables


152,670

144,488

Other payables, including derivative


119,699

114,165

Provisions


38,745

69,882

Income tax payable


3,924

6,766





Total current liabilities


461,289

496,787





Non-current liabilities




Loans


1,750,330

1,528,930

Debentures


676,057

686,942

Derivative instruments


46,590

21,045

Deferred taxes, net


127,494

130,983

Employee benefits


6,250

6,219

Other non-current liabilities


12,294

10,072





Total non-current liabilities


2,619,015

2,384,191





Total liabilities


3,080,304

2,880,978





Equity




Share capital


1,267,211

Parent company investment


1,240,727

Translation reserve


(10,934)

28,440

Capital reserve


(4,723)

(25,274)

Retained earnings


(69,461)





Equity attributable to owners of the Company


1,182,093

1,243,893

Non-controlling interests


206,890

211,698





Total equity


1,388,983

1,455,591





Total liabilities and equity


4,469,287

4,336,569





 

 

Kenon Holdings Ltd
Unaudited condensed consolidated statements of profit or loss 




For the Nine Months ended


For the Three Months ended


September 30
2015    


September 30
2014   


September 30
2015    


September 30
2014    


$ Thousands


$ Thousands

Revenue

991,656


1,033,785


336,409


372,442

Cost of sales and services (excluding depreciation)

(654,195)


(732,366)


(241,944)


(264,089)

Depreciation

(82,012)


(73,924)


(27,891)


(25,746)









Gross profit

255,449


227,495


66,574


82,607

Other income

6,557


178,166


17


171,648

Gain from distribution of dividend in kind

209,710



209,710


Gain from bargain purchase


68,210



20,443

Dilution gains from reductions in equity interest held in associates

32,829


14,842



8,251

Selling, general and administrative expenses

(72,883)


(83,399)


(25,396)


(32,029)

Other expenses

(2,214)


(36,140)


(266)


(35,181)









Operating profit from continuing operations

429,448


369,174


250,639


215,739









Financing expenses

(92,955)


(85,534)


(39,658)


(38,777)

Financing income

7,731


6,097


2,477


4,445









Financing expenses, net

(85,224)


(79,437)


(37,181)


(34,332)









Share in net losses of associated companies, net of tax

(97,533)


(119,141)


(34,155)


(67,139)









Profit from continuing operations before income taxes

246,691


170,596


179,303


114,268

Tax expenses

(43,101)


(90,698)


(9,741)


(55,950)









Profit for the period from continuing operations

203,590


79,898


169,562


58,318

Profit for the period from discontinued operations


478,410



608,479









Profit for the period

203,590


558,308


169,562


666,797









Attributable to:








Kenon's shareholders

182,165


537,273


164,947


660,908

Non-controlling interests

21,425


21,035


4,615


5,889









Profit for the period

203,590


558,308


169,562


666,797

























Basic/Diluted profit per share attributable to Kenon's shareholders (in dollars):








Basic/Diluted profit per share

3.44


10.06


3.07


12.38

Basic/Diluted profit per share from continuing operations

3.44


1.16


3.07


0.98

Basic/Diluted profit per share from discontinued operations


8.90



11.40

 

 


Kenon Holdings Ltd

Unaudited condensed consolidated statements of cash flows



For the Nine Months ended


September 30, 2015

September 30, 2014


$ Thousands

Cash flows from operating activities



Profit for the period

203,590

558,308

Adjustments:



Depreciation and amortization

88,801

158,453

Gain on bargain purchase

(68,210)

Financing expenses, net

85,224

180,918

Share in losses of associated companies, net of tax

97,533

113,691

Gain from changes in interest held in associates

(32,829)

-

Gain from distribution of dividend in kind

(209,710)

-

Other capital loss/(gains), net

2,340

(744,200)

Share-based payments

76

3,329

Taxes on income

43,101

100,240





278,126

302,529

Change in inventories

178

8,900

Change in trade and other receivables

31,691

(13,588)

Change in trade and other payables

(11,936)

24,831

Change in provisions and employee benefits

(34,468)

41,885





263,591

364,557

Income taxes paid

(27,809)

(53,274)

Dividend received from investments in associates

4,487

30,641




Net cash provided by operating activities

240,269

341,924




 

 

Kenon Holdings Ltd

Unaudited condensed consolidated statements of cash flows, continued 



For the Nine Months ended


September 30, 2015

September 30, 2014


$ Thousands

Cash flows from investing activities



Proceeds from sale of property, plant and equipment

376

17,349

Deposits and loans, net

58,953

(210,895)

Business combinations less cash acquired

(9,441)

(61,272)

Investment in associated company

(129,240)

(322,226)

Proceeds from sale of associated company, net

249,013

Sale of securities held for trade and available for sale, net

6,694

Acquisition of property, plant and equipment*

(418,403)

(299,474)

Acquisition of intangible assets

(12,546)

(10,271)

Interest received

7,114

3,246

Payment of consideration retained

(2,800)

Payments for derivative investments used for hedging, net

(212)

Settlement of derivatives

2,395




Net cash used in investing activities

(499,293)

(632,347)




Cash flows from financing activities



Dividend paid to non-controlling interests

(7,923)

(13,264)

Proceeds from issuance of shares to holders of non-controlling interests in subsidiaries

5,310

18,863

Receipt of long-term loans and issuance of debentures

297,169

368,552

Repayment of long-term loans and debentures

(85,304)

(152,192)

Purchase of non-controlling interest

(20,000)

Payment of consent fee

(400)

(1,012)

Short-term credit from banks and others, net

(12,210)

(79,420)

Contribution from parent company

34,271

342,890

Payments to parent company

(300,047)

Proceeds from transactions in derivatives for hedging, net

209

Interest paid

(66,660)

(141,557)




Net cash provided by financing activities

144,253

43,022




Decrease in cash and cash equivalents

(114,771)

(247,401)

Cash and cash equivalents at beginning of the period

610,056

670,910

Effect of exchange rate fluctuations on balances of cash and cash equivalents

(9,500)

(11,746)




Cash and cash equivalents at end of the period

485,785

411,763




Significant non-cash investing transactions:



Acquisition of fixed assets under lease contract

(107,688)

Purchase of fixed assets on credit and others

(29,855 )

(5,336 )

 

Significant non-cash investing and financing activity during the period ended September 30, 2015 relating to transfer of certain business interests to Kenon Holdings Ltd. from Israel Corporation Ltd and the issuance of common stock and reclassification of parent company investment in connection with the spin-off.

* Mainly assets acquired by I.C. Power for the construction of projects in Cerro del Aguila and Samay facilities during the period ended September 30, 2015.

 

Segment Information



I.C.
Power*

Qoros**

Other

Adjustments

Total


$ Thousands

For the nine months ended September 30, 2015:






Sales to external customers

986,316

225

986,541

Intersegment sales

5,115

5,115








991,431

225

991,656

Elimination of intersegment sales

(5,115)

5,115







Total sales

986,316

225

5,115

991,656













EBITDA

299,990

8,549

308,539







Depreciation and amortization

88,296

505

88,801

Financing income

(6,787)

(944)

(7,731)

Financing expenses

85,609

7,346

92,955

Other items:






Gain from distribution of dividend in kind

(209,710)

(209,710)

Share in (income)/losses of associated companies

(229)

113,671

(15,909)

97,533








166,889

113,671

(218,712)

61,848







Profit/(loss) before taxes

133,101

(113,671)

227,261

246,691

Taxes on income

43,090

11

43,101







Profit/(loss) for the period from continuing operations

90,011

(113,671)

227,250

203,590







* The total assets and liabilities of I.C. Power are $3,986,904 thousands and $2,954,948 thousands at September 30, 2015, respectively.

**  Associated company.

 


I.C.
Power*

Qoros**

Other

Adjustments

Total


$ Thousands

For the nine months ended September 30, 2014:






Sales to external customers

1,022,877

1,022,877

Intersegment sales

10,908

10,908








1,033,785

1,033,785

Elimination of intersegment sales

(10,908)

10,908







Total sales

1,022,877

10,908

1,033,785













EBITDA

397,420

(18,343)

379,077







Depreciation and amortization

77,898

215

78,113

Financing income

(6,246)

(6,379)

6,528

(6,097)

Financing expenses

89,734

2,328

(6,528)

85,534

Other items:






Share in (income)/losses of associated companies

(13,451)

116,281

16,311

119,141

Gain on bargain purchase

(68,210)

(68,210)








79,725

116,281

12,475

208,481







Profit/(loss) before taxes

317,695

(116,281)

(30,818)

170,596

Taxes on income

90,698

90,698







Profit/(loss) for the period from continuing operations

226,997

(116,281)

(30,818)

79,898







Loss for the period from discontinued operations

478,410

478,410







* The total assets and liabilities of I.C. Power are $4,009,703 thousands and $2,975,747 thousands at September 30, 2014, respectively.

** Associated company.



I.C.
Power

Qoros**

Other

Adjustments

Total


$ Thousands

For the three months ended September 30, 2015:






Total sales

336,409

336,409













EBITDA

78,479

(7,286)

71,193







Depreciation and amortization

29,978

286

30,264

Financing income

(2,472)

(5)

(2,477)

Financing expenses

28,355

11,303

39,658

Other items:






Gain from distribution of dividend in kind

(209,710)

(209,710)

Share in (income)/losses of associated companies

(113)

39,807

(5,539)

34,155








55,748

39,807

(203,665)

(108,110)







Profit/(loss) before taxes

22,731

(39,807)

196,379

179,303

Taxes on income

9,730

11

9,741







Profit/(loss) for the period from continuing operations

13,001

(39,807)

196,368

169,562







** Associated company






 








I.C.
Power

Qoros**

Other

Adjustments

Total


$ Thousands

For the three months ended September 30, 2014:






Sales to external customers

368,101

368,101

Intersegment sales

4,341

4,341








372,442

372,442

Elimination of intersegment sales

(4,341)

4,341







Total sales

368,101

4,341

372,442













EBITDA

226,534

(4,119)

222,415







Depreciation and amortization

27,470

(351)

27,119

Financing income

(4,527)

82

(4,445)

Financing expenses

34,087

4,772

(82)

38,777

Other items:






Share in (income)/losses of associated companies

(400)

47,868

19,671

67,139

Gain on bargain purchase

(20,443)

(20,443)








36,187

47,868

24,092

108,147







Profit/(loss) before taxes

190,347

(47,868)

(28,211)

114,268

Taxes on income

55,820

130

55,950







Profit/(loss) for the period from continuing operations

134,527

(47,868)

(28,341)

58,318







Profit for the period from discontinued operations

608,479

608,479







** Associated company

 

Information Regarding Associated Companies

A.  Carrying amounts of investments in associated companies


As at

September 30, 2015

As at

December 31, 2014


$ Thousands

ZIM

207,582

191,069

Tower

14,061

Qoros

219,733

221,038

Others

8,953

9,615


436,268

435,783

 

B.  Equity in the net earnings (losses) of associate companies



For the nine months ended


For the three months ended


September 30, 2015

September 30, 2014


September 30, 2015

September 30, 2014


$ Thousands

ZIM

16,906

(14,008)


5,474

(14,008)

Tower

(798)

(658)


(5,446)

Qoros

(113,671)

(116,281)


(39,807)

(47,868)

Others

30

11,806


178

183


(97,533)

(119,141)


(34,155)

(67,139)

 

Appendix A

Contribution of Principal Operations to Profit (attributable to Kenon's shareholders)


Nine Months Ended 
September 30,

Three Months 
Ended September 30,


2015

2014

2015

2014


(in millions of USD)

Profit attributable to Kenon's shareholders

182

537

165

660

Contributions to Kenon's income (loss) for the period

IC Power

68*

205**

8

125**

Qoros

(114)

(116)

(40)

(48)

ZIM

17

(145)

6

(14)

Tower

-

(1)

1

(4)

Gain from ZIM's deconsolidation and change to associated company

-

609

-

609

Gain from distribution of dividend-in-kind as per market value of Tower

210

-

210

-

Other

1

(15)

(20)

(8)

*   Includes $4 million capital gain from the sale of Edegel.

** Includes $110 million capital gain from the sale of Edegel.


 

Appendix B

IC Power's Consolidated Statement of Income (Unaudited)


For the nine months

For the three months


ended

ended


September 30, 2015 

September 30,  2014 

September 30,    2015 

September 30,  2014 


US$ million 

US$ million 

US$ million 

US$ million 

Continuing Operations





Sales

991

1,034

336

373

Cost of sales (excluding depreciation and amortization)

(700)

(731)

(242)

(263)

Depreciation and amortization

(82)

(75)

(28)

(27)

Gross profit

209

228

66

83

General, selling and administrative expenses

(49 )

(49)

(18)

(19)

Asset write-off

(35)

(35)

Gain on bargain purchase

68

20

Measurement to fair value of pre-existing share

3

Other expenses

(1)

(1)

Other income

3

3

1

Operating income

162

217

49

49

Financing expenses

86

87

29

31

Finance expenses on IC capital notes settlement

13

Financing income

(7)

(5 )

(3)

(3)

Financing expenses, net

79

95

26

28

Share in income of companies, net of tax

2

Income before taxes from continuing operations

83

124

23

21

Taxes on income

(31)

(38)

(10)

(7)

Net income from continuing operations

52

86

13

14

Discontinued operations





Net income from discontinued operations, net of tax

4

128

121

Net income for the period

56

214

13

135

Attributable to:





Equity holders of the company

41

195

8

129

Non-controlling interest

15

19

5

6

Net income for the period

56

214

13

135

 

Summary Data from IC Power's Consolidated Statement of Cash Flows (Unaudited)


Nine months ended

Three months ended


September 30,

September 30,


2015

2014

2015

2014


(in millions of USD)

(in millions of USD)

Cash flows provided by operating activities

264

320

133

143

Cash flows used in investing activities

(377)

(176)

(36)

91

Cash flows provided by (used in) financing activities

-

(264)

(63)

(175)

Increase (decrease) in cash and cash equivalents

(113)

(120)

34

59

Cash and cash equivalents at end of the period

461

386

461

386

Investments in property, plant and equipment

(431)

(287)

(98)

(110)

Total depreciation and amortization

88

80

30

29

 

Summary Data from IC Power's Consolidated Statement of Financial Position (Unaudited)


As at


September 30, 2015

September 30,  2014


(in millions of USD)

Total financial liabilities1

2,444

2,019

Total monetary assets2

610

574

Total equity attributable to the owners

838

784

Total assets

4,000

3,559

1. Including loans from banks and others and debentures

2. Including cash and cash equivalents, short-term deposits and restricted cash.

 

Appendix C

IC Power's Non-IFRS Financial Measures

This press release, including the financial tables, presents Adjusted EBITDA, net debt and net financial liabilities, which are financial metrics considered to be "non-IFRS financial measures." Non-IFRS financial measures should be evaluated in conjunction with, and are not a substitute for, IFRS financial measures. The non-IFRS financial information presented herein should not be considered in isolation from or as a substitute for operating income, net income or per share data prepared in accordance with IFRS.

IC Power defines "Adjusted EBITDA" as for each period for each entity as net income, excluding net income from discontinued operations, net of tax (excluding dividends received from discontinued operations), before depreciation and amortization, financing expenses, net, income tax expense and asset write-off, and excluding share in income from associated companies, and negative goodwill. Adjusted EBITDA is not recognized under IFRS or any other generally accepted accounting principles as measures of financial performance and should not be considered as a substitute for net income or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. Adjusted EBITDA is not intended to represent funds available for dividends or other discretionary uses because those funds may be required for debt service, capital expenditures, working capital and other commitments and contingencies. Adjusted EBITDA presents limitations that impair its use as a measure of our profitability since it does not take into consideration certain costs and expenses that result from our business that could have a significant effect on our net income, such as financial expenses, taxes, depreciation, capital expenses and other related charges.

Set forth below is a reconciliation of IC Power's net income to Adjusted EBITDA for the periods presented. Other companies may calculate Adjusted EBITDA differently, and therefore this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.


Nine Months Ended September 30,

Three Months Ended September 30,


2015

2014

2015

2014



(in USD millions)


Net income for the period

56

214

13

135

Depreciation and amortization1

88

80

30

29

Financing expenses, net

79

95

26

28

Income tax expense

31

38

10

7

Asset write-off

-

35

-

35

Share in income of associated companies

-

(2)

-

-

Recognized negative goodwill

-

(71)2

-

(20)

Net income from discontinued operations, net of tax, excluding dividends received from discontinued operations3

-

 

(113)

-

 

(106)

Adjusted EBITDA

254

276

79

108

1.  Includes depreciation and amortization expenses from cost of sales and general, selling and administrative expenses.

2.  Includes $68 million of income recognized from recognition of negative goodwill and $3 million of income recognized from the measurement of fair value.

3.  Excludes $4 million and $15 million received from Edegel post-equity method accounting, which is reflected as "other income" in IC Power's discontinued operations for the nine months ended September 30, 2015 and 2014, respectively.


Appendix D

The following table sets forth summary operational information regarding each of IC Power's operating companies as of September 30, 2015 by segment.








Segment

Country

Entity

Ownership
Percentage
(Rounded)

Fuel

Installed
Capacity
(MW)
1

Type of Asset

Peru

Peru

Kallpa

75 %

Natural Gas

1,063

Greenfield2








Israel

Israel

OPC

80 %

Natural Gas and Diesel

440

Greenfield


Israel

AIE

100 %

Natural Gas

18

Acquired








Central

America

Nicaragua

Corinto

65 %

HFO

71

Acquired

Nicaragua

Tipitapa Power

65 %

HFO

51

Acquired

Nicaragua

Amayo I

61 %

Wind

40

Acquired

Nicaragua

Amayo II

61 %

Wind

23

Acquired

Guatemala

Puerto Quetzal

100 %

HFO

179

Acquired

El Salvador

Nejapa

100 %

HFO

140

Original Inkia Asset








Other

Bolivia

COBEE

100 %

Hydroelectric, Natural Gas

228

Original Inkia Asset

Chile

Central Cardones

87 %

Diesel

153

Acquired

Chile

Colmito

100 %

Natural Gas and Diesel

58

Acquired

Dominican Republic

CEPP

97 %

HFO

67

Original Inkia Asset

Jamaica

JPPC

100 %

HFO

60

Original Inkia Asset

Colombia

Surpetroil

60 %

Natural Gas

15

Acquired

Panama

Pedregal3

           21 %4

HFO

54

Original Inkia Asset


Total Operating Capacity


2,660









1.  Reflects 100% of the capacity of each of IC Power's assets, regardless of its ownership interest in the entity that owns each such asset.

2.  Kallpa's plants were developed as greenfield projects in four different stages between 2005 and 2012, resulting in 870 MW of installed capacity. In addition, Kallpa acquired Las Flores' power plant in 2014, adding 193 MW to Kallpa's capacity.

3.  Although Pedregal is located in Central America, it is a minority investment. Therefore, from an income statement perspective, it is not part of the Central America segment and Pedregal is only reflected in IC Power's share in income of associated companies.

4.  Although IC Power has a non-controlling interest in Pedregal, it is party to a management services agreement, which designates it as the administrator responsible for the day-to-day management of Pedregal.

 

Appendix E

Summary Financial Information of IC Power's Subsidiaries and Associated Company

(Unaudited)








Nine Months Ended September 30, 2015

 

Entity

Ownership
Interest (%)

Revenues

Cost of Sales

Adjusted
EBITDA1

Outstanding
Debt2

Net debt3

(in millions of USD, unless otherwise stated)

Peru segment







Kallpa

75

339

210

117

419

393

Assets in advance stages of construction







CDA

75

-

-

-

535

481

Samay I

75

-

-

-

246

225

Israel segment







OPC

80

243

177

63

402

179

AIE

100

3

3

-

-

-

Central America segment







ICPNH4

61-65

86

56

27

101

83

Puerto Quetzal5

100

91

82

8

19

10

Nejapa6

100

79

68

9

-

(28)

Cenergica

100

11

8

3

-

(3)

Assets in advance stages of construction







Kanan

100

-

-

-

-

-

Other segment







COBEE

100

30

13

14

72

52

Central Cardones

87

11

2

8

44

43

Colmito

100

25

21

2

17

15

CEPP

97

31

25

5

25

(5)

JPPC7

100

35

32

3

6

-

Surpetroil8

60

6

3

1

2

2

Inkia & Other9

100

1

-

(3)

447

305

IC Power & Other10

100

-

-

(3)

109

82

Total

-

991

700

254

2,444

1,834

Pedregal

21

33

27

4

12

4

Total (Associated company)

-

33

27

4

12

4

 

1. "Adjusted EBITDA" for each entity is defined as net income (loss), excluding net income from discontinued operations, net of tax (excluding dividends received from discontinued operations), before depreciation and amortization, finance expenses, net, income tax expense (benefit) and asset write-off, and excluding share in income from associates, measurement to fair value of our existing share, and negative goodwill.

Adjusted EBITDA is not recognized under IFRS or any other generally accepted accounting principles as a measure of financial performance and should not be considered as a substitute for net income or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. Adjusted EBITDA is not intended to represent funds available for dividends or other discretionary uses because those funds may be required for debt service, capital expenditures, working capital and other commitments and contingencies. Adjusted EBITDA presents limitations that impair its use as a measure of profitability since it does not take into consideration certain costs and expenses that result from each business that could have a significant effect on its net income, such as financial expenses, taxes, depreciation, capital expenses and other related charges.

The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA for IC Power's subsidiaries and associated company for the nine months ended September 30, 2015:

 


Kallpa

CDA

Samay I

OPC

AIE

ICPNH

Puerto
Quetzal


(in millions of USD)

Income (loss) for the year

37

(2)

(2)

18

-

10

1

Depreciation and amortization

38

-

-

18

-

9

3

Finance expenses, net

26

2

2

20

-

7

2

Income tax expense (benefit)

16

-

-

7

-

1

2

Adjusted EBITDA

117

-

-

63

-

27

8










 


Nejapa

Cenergica

COBEE

Central
Cardones

Colmito


(in millions of USD)

Income (loss) for the year

4

2

6

2

-

Depreciation and amortization

3

-

3

3

1

Finance expenses, net

-

-

4

2

1

Income tax expense (benefit)

2

1

1

1

-

Adjusted EBITDA

9

3

14

8

2

 


CEPP

JPPC

Surpetroil

Inkia & Other

IC Power & Others

Total

Pedregal


(in millions of USD)


Income (loss) for the year

3

(1)

(2)

(15)

(5)

56

1

Depreciation and amortization

2

3

2

3

-

88

3

Finance expenses, net

(1)

1

1

12

-

79

-

Income tax expense

1

-

-

(3)

2

31

-

Adjusted EBITDA

5

3

1

(3)

(3)

254

4

 

2. Includes short-term and long-term debt.

3. Net debt is defined as total debt attributable to each of our subsidiaries, minus the cash and short term deposits and restricted cash of such companies. Net debt is not a measure of liabilities in accordance with IFRS. The tables below set forth a reconciliation of net debt to total debt for IC Power's subsidiaries.

 


Kallpa

CDA

Samay I

OPC

AIE

ICPNH

Puerto Quetzal

Nejapa

Cenergica

Kanan

(in millions of USD)

Total debt

419

535

246

402

-

101

19

-

-

-

Cash

26

54

21

223

-

18

9

28

3

-

Net Debt

393

481

225

179

-

83

10

(28)

(3)

-

 


COBEE

Central Cardones

Colmito

CEPP

JPPC

Surpetroil

Inkia & Other

ICP & Others

Total

Pedregal





Total debt

72

44

17

25

6

2

447

109

2,444

12

Cash

20

1

2

30

6

-

142

27

610

8

Net Debt

52

43

15

(5)

-

2

305

82

1,834

4

 

4.  Through ICPNH, IC Power indirectly holds 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.

5.  Figures include Puerto Quetzal and Poliwatt Limited (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Puerto Quetzal).

6.  Figures include amounts related to Nejapa's branch and main office.

7.  Figures include JPPC and Private Power Operator Ltd. (an IC Power subsidiary that employs JPPC's employees and performs administrative-related functions).

8.  Figures include Surpetroil and Surenergy S.A.S ESP (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Surpetroil).

9.  Outstanding debt includes Inkia for $447 million.

10.  Includes $12 million of outstanding IC Power debt and $97 million of ICPI debt.


 








Nine Months Ended September 30, 2014

 

Entity

Ownership Interest (%)

Revenues

Cost of Sales

Adjusted EBITDA1

Outstanding Debt2

Net debt3

(in millions of USD, unless otherwise stated)

Peru segment







Kallpa

75

330

206

114

468

431

Assets in advance stages of construction







CDA

75

-

-

-

231

219

Samay I

75

-

-

-

-

(12)

Israel segment







OPC

80

319

222

90

446

277

Central America segment







ICPNH4

61-65

93

74

18

107

88

Puerto Quetzal5

100

4

4

(1)

40

27

Nejapa6

71

106

94

9

-

(16)

Cenergica

100

16

13

3

-

(2)

Assets in advance stages of construction







Kanan

100

-

-

-

-

-

Other segment







COBEE

100

30

13

13

61

46

Central Cardones

87

8

2

5

48

47

Colmito

100

32

30

2

20

17

CEPP

97

62

46

14

41

35

JPPC7

100

27

24

3

9

5

Surpetroil8

60

6

3

2

4

3

Inkia & Other9

100

1

-

7

447

211

IC Power & Other10

100

-

-

(3)

97

69

Total

-

1,034

731

276

2,019

1,445

Pedregal

21

65

49

15

16

5

Total (Associated company)11

-

65

49

15

16

5

 

1.  The following table sets forth a reconciliation of net income to Adjusted EBITDA for our subsidiaries and associated company for the nine months ended September 30, 2014:


Kallpa

CDA

OPC

ICPNH

Puerto
Quetzal


(in millions of USD)

Income (loss) for the year

37

(1)

34

5

(1)

Depreciation and amortization

34

-

20

7

-

Finance expenses, net

25

1

24

5

-

Income tax expense (benefit)

18

-

12

1

-

Adjusted EBITDA

114

-

90

18

(1)

 


Nejapa

Cenergica

COBEE

Central
Cardones

Colmito


(in millions of USD)

Income (loss) for the year

4

2

6

(1)

-

Depreciation and amortization

4

-

3

3

1

Finance expenses, net

-

-

3

1

1

Income tax expense (benefit)

1

1

1

2

-

Adjusted EBITDA

9

3

13

5

2

 


CEPP

JPPC

Surpetroil

Inkia & Other

IC Power & Others

Total

Pedregal




(in millions of USD)

Income (loss) for the year

7

1

-

140

(19)

214

8

Depreciation and amortization

2

1

1

4

-

80

3

Finance expenses, net

1

1

1

20

12

95

1

Income tax expense

4

-

-

(6)

4

38

3

Share in income of associated companies

-

-

-

(2)

-

(2)

-

Recognized negative goodwill

-

-

-

(68)

-

(68)

-

Asset write-off

-

-

-

35

-

35

-

Measurement to fair value of pre-existing share

 

-

 

-

 

-

 

(3)

 

-

 

(3)

 

-

Net income from discontinued operations, net of tax, excluding dividends received from discontinued operations

 

 

-

 

 

-

 

 

-

 

 

(113)

 

 

-

 

 

(113)

 

 

-

Adjusted EBITDA

14

3

2

7

(3)

276

15










 

2.  Includes short-term and long-term debt.

3.  Net debt is defined as total debt attributable to each of our subsidiaries, minus the cash and short term deposits and restricted cash of such companies. Net debt is not a measure of liabilities in accordance with IFRS. The tables below set forth a reconciliation of net debt to total debt for IC Power's subsidiaries.

 


Kallpa

CDA

Samay I

OPC

ICPNH

Puerto
Quetzal

Nejapa

Cenergica

(in millions of USD)

Total debt

468

231

-

446

107

40

-

-

Cash

37

12

12

169

19

13

16

2

Net Debt

431

219

(12)

277

88

27

(16)

(2)

 


COBEE

Central Cardones

Colmito

CEPP

JPPC

Surpetroil

Inkia
& Other

IC Power
& Others

Total

Pedregal


(in millions of USD)


Total debt

61

48

20

41

9

4

447

97

2,019

16

Cash

15

1

3

6

4

1

236

28

574

11

Net Debt

46

47

17

35

5

3

211

69

1,445

5

 

4.  Through ICPNH, IC Power indirectly holds 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.

5.  Figures include Puerto Quetzal and Poliwatt Limited (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Puerto Quetzal).

6.  Figures include amounts related to Nejapa's branch and main office.

7.  Figures include JPPC and Private Power Operator Ltd. (an IC Power subsidiary that employs JPPC's employees and performs administrative-related functions).

8.  Figures include Surpetroil and Surenergy S.A.S ESP (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Surpetroil).

9.  Outstanding debt includes Inkia for $447 million.

10. Includes $97 million of outstanding ICPI debt.

11.   Excludes IC Power's interest in Edegel, which IC Power sold in September 2014.


Three Months Ended September 30, 2015

Entity

Ownership
Interest
(%)

Revenues

Cost of
Sales

Adjusted
EBITDA1


(in millions of USD, unless otherwise stated)

Peru segment






Kallpa

75

114

71

39


Assets in advance stages of construction






CDA

75

-

-

-


Samay I

75

-

-

-


Israel segment






OPC

80

86

65

20


AIE

100

3

3

-


Central America segment






ICPNH2

61-65

29

19

9


Puerto Quetzal3

100

31

28

3


Nejapa4

100

26

22

3


Cenergica

100

6

5

2


Assets in advance stages of construction






Kanan

100

-

-

-


Other segment






COBEE

100

8

5

3


Central Cardones

87

3

-

2


Colmito

100

5

4

-


CEPP

97

11

8

2


JPPC5

100

11

11

1


Surpetroil6

60

2

1

-


Inkia & Other

100

1

-

(3)


IC Power & Other

100

-

-

(2)


Total

-

336

242

79


Pedregal

21

10

8

2


Total (Associated company)

-

10

8

2


 

1.  The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA for IC Power's subsidiaries for the three months ended September 30, 2015:

 


Kallpa

CDA

Samay I

OPC

AIE

ICPNH

Puerto
Quetzal



(in millions of USD)

Income (loss) for the year

13

(1)

(1)

5

-

2

-

Depreciation and amortization

13

-

-

6

-

4

1

Finance expenses, net

8

1

1

7

-

3

1

Income tax expense (benefit)

5

-

-

2

-

-

1

Adjusted EBITDA

39

-

-

20

-

9

3










 


Nejapa

Cenergica

COBEE

Central
Cardones

Colmito


(in millions of USD)

Income (loss) for the year

2

1

1

-

(1)

Depreciation and amortization

-

-

1

1

1

Finance expenses, net

-

-

1

1

-

Income tax expense (benefit)

1

1

-

-

-

Adjusted EBITDA

3

2

3

2

-

 


CEPP

JPPC

Surpetroil

Inkia & Other

IC Power & Others

Total

Pedregal


(in millions of USD)


Income (loss) for the year

1

(1)

(1)

(4)

(3)

13

1

Depreciation and amortization

1

1

1

-

-

30

1

Finance expenses, net

-

1

-

2

-

26

-

Income tax expense

-

-

-

(1)

1

10

-

Adjusted EBITDA

2

1

-

(3)

(2)

79

2

 

2.  Through ICPNH, IC Power indirectly holds 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.

3.  Figures include Puerto Quetzal and Poliwatt Limited (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Puerto Quetzal).

4.  Figures include amounts related to Nejapa's branch and main office.

5.   Figures include JPPC and Private Power Operator Ltd. (an IC Power subsidiary that employs JPPC's employees and performs administrative-related functions).

6.   Figures include Surpetroil and Surenergy S.A.S ESP (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Surpetroil).

 

Three Months Ended September 30, 2014

Entity

Ownership
Interest
(%)

Revenues

Cost of
Sales

Adjusted
EBITDA1


(in millions of USD, unless otherwise stated)


Peru segment






Kallpa

75

105

61

39


Assets in advance stages of construction






CDA

75

-

-

-


Samay I

75

-

-

-


Israel segment






OPC

80

117

81

34


Central America segment






ICPNH2

61-65

40

35

5


Puerto Quetzal3

100

4

4

(1)


Nejapa4

100

37

32

3


Cenergica

100

2

1

1


Assets in advance stages of construction






Kanan

100

-

-

-


Other segment






COBEE

100

9

4

4


Central Cardones

87

3

1

2


Colmito

100

9

8

-


CEPP

97

22

16

6


JPPC5

100

20

18

3


Surpetroil6

60

4

2

1


Inkia & Other

100

1

-

14


IC Power & Other

100

-

-

(3)


Total

-

373

263

108


Pedregal

21

20

16

4


Total (Associated company)7

-

20

16

4


1.   The following table sets forth a reconciliation of net income to Adjusted EBITDA for our subsidiaries for the three months ended September 30, 2014:


Kallpa

CDA

OPC

ICPNH

Puerto
Quetzal


(in millions of USD)

Income (loss) for the year

12

-

13

(1)

(1)

Depreciation and amortization

12

-

7

4

-

Finance expenses, net

9

-

9

2

-

Income tax expense (benefit)

6

-

5

-

-

Adjusted EBITDA

39

-

34

5

(1)

 


Nejapa

Cenergica

COBEE

Central
Cardones

Colmito


(in millions of USD)

Income (loss) for the year

2

1

2

(1)

-

Depreciation and amortization

1

-

1

1

-

Finance expenses, net

-

-

1

-

-

Income tax expense (benefit)

-

-

-

2

-

Adjusted EBITDA

3

1

4

2

-

 


CEPP

JPPC

Surpetroil

Inkia & Other

IC Power & Others

Total

Pedregal




(in millions of USD)

Income (loss) for the year

2

1

-

104

1

135

1

Depreciation and amortization

1

1

1

-

-

29

1

Finance expenses, net

1

1

1

7

(3)

28

1

Income tax expense

2

-

(1)

(6)

(1)

7

1

Share in income of associated companies

-

-

-

-

-

-

-

Recognized negative goodwill

-

-

-

(20)

-

(20)

-

Asset write-off

-

-

-

35

-

35

-

Measurement to fair value of pre-existing share

-

-

-

-

-

-

-

Net income from discontinued operations, net of tax, excluding dividends received from discontinued operations

-

-

-

(106)

-

(106)

-

Adjusted EBITDA

6

3

1

14

(3)

108

4










 

2.   Through ICPNH, IC Power indirectly holds 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.

3.  Figures include Puerto Quetzal and Poliwatt Limited (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Puerto Quetzal).

4. Figures include amounts related to Nejapa's branch and main office.

5. Figures include JPPC and Private Power Operator Ltd. (an IC Power subsidiary that employs JPPC's employees and performs administrative-related functions).

6. Figures include Surpetroil and Surenergy S.A.S ESP (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Surpetroil).

7.  Excludes IC Power's interest in Edegel, which IC Power sold in September 2014.

 


Appendix F

IC Power's Segment Information (Unaudited)




Central

All other




Peru

Israel

America

Segments

Adjustments

Total


(in millions of USD)

For the nine months ended September 30, 2015







Continuing Operations







Sales

339

246

267

139

-

991

Cost of Sales

(210)

(180)

(214)

(96)

-

(700)

Depreciation and amortization

(37)

(18)

(16)

(18)

7

(82)

Gross profit

92

48

37

25

7

209








General, selling and administrative expenses

(13)

(4)

(9)

(23)

-

(49)

Other income,  net

-

1

1

-

-

2








Operating income

79

45

29

2

7

162








Financing expenses,  net

(30)

(20)

(8)

(21)

-

(79)








Income before taxes from continuing operations

49

25

21

(19)

7

83








Taxes on income

(16)

(7)

(5)

(2)

(1)

(31)








Net income from continuing operations

33

18

16

(21)

6

52

 

 




Central

All other




Peru

Israel

America

Segments

Adjustments

Total


(in millions of USD)

For the nine months ended September 30, 2014







Continuing Operations







Sales

330

319

219

166

-

1,034

Cost of Sales

(206)

(222)

(185)

(118)

-

(731)

Depreciation and amortization

(33)

(20)

(12)

(17)

7

(75)

Gross profit

91

77

22

31

7

228








General, selling and administrative expenses

(13)

(6)

(6)

(24)

-

(49)

Gain on bargain purchase

-

-

-

68

-

68

Asset write-off

-

-

-

(35)

-

(35)

Measurement to fair value of pre-existing share

-

-

-

3

-

3

Other income,  net

5

-

1

(4)

-

2








Operating income

83

71

17

39

7

217








Financing expenses,  net

(27)

(25)

(5)

(38)

-

(95)

Share in losses (income) of associated companies

-

-

-

2

-

2








Income before taxes from continuing operations

56

46

12

3

7

124








Taxes on income

(18)

(12)

(3)

(4)

(1)

(38)








Net income from continuing operations

38

34

9

(1)

6

86

 

 




Central

All other




Peru

Israel

America

Segments

Adjustments

Total


(in millions of USD)

For the three months ended September 30, 2015







Continuing Operations







Sales

114

89

92

41

336

Cost of Sales

(71)

(68)

(74)

(29)

(242)

Depreciation and amortization

(12)

(6)

(5)

(7)

2

(28)

Gross profit

31

15

13

5

2

66








General, selling and administrative expenses

(5)

(1)

(3)

(9)

(18)

Other income, net

1

1

Operating income

27

14

10

(4)

2

49








Financing expenses,  net

(10)

(7)

(3)

(6)

(26)








Income before taxes from continuing operations

17

6

8

(10)

2

23








Taxes on income

(6)

(2)

(2)

(10)








Net income from continuing operations

11

5

6

(11)

2

13

 

 




Central

All other




Peru

Israel

America

Segments

Adjustments

Total


(in millions of USD)

For the three months ended September 30, 2014







Continuing Operations







Sales

105

117

83

68

373

Cost of Sales

(61)

(81)

(72)

(49)

(263)

Depreciation and amortization

(12)

(6)

(5)

(6)

2

(27)

Gross profit

32

30

6

13

2

83








General, selling and administrative expenses

(4)

(3)

(2)

(10)

(19)

Asset write-off

(35)

(35)

Gain on bargain purchase

20

20

Other income (loss),  net

2

(2)








Operating income

30

27

4

(14)

2

49








Financing expenses,  net

(10)

(9)

(2)

(7)

(28)

Share in losses (income) of associated companies








Income before taxes from continuing operations

20

18

2

(21)

2

21








Taxes on income

(6)

(5)

(1)

5

(7)








Net income from continuing operations

14

13

1

(16)

2

14

 


Appendix G

Qoros' Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited)







In thousands of RMB

For the nine months ended

For the three months ended 


30 September

2015

30 September

2014

30 September

2015

30 September

2014






Revenue

1,054,419

570,479

393,231

235,975

Cost of sales

(1,130,491)

(615,300)

(444,861)

(314,969)

Gross profit

(76,072)

(44,821)

(51,630)

(78,994)

 

Other income

33,682

34,364

24,824

4,521

Research and development
expenses

(201,438)

(170,086)

(50,787)

(7,701)

Selling and distribution
expenses

(358,319)

(650,543)

(108,369)

(267,043)

Administrative expenses

(410,485)

(443,589)

(160,183)

(157,547)

Other expenses

(60,668)

(39,086)

(19,418)

(16,674)

Results from operating
activities

(1,073,300)

(1,313,761)

(365,563)

(523,438)






Finance income

9,980

16,221

2,693

3,717

Finance costs

(321,517)

(137,055)

(138,976)

(70,277)

Net finance cost

(311,537)

(120,834)

(136,283)

(66,560)

Share of gain of equity-accounted investee, net of nil tax

165

-

224

-






Loss before income tax

(1,384,672)

(1,434,595)

(501,622)

(589,998)






Income tax expenses

(435)

(303)

(159)

(153)

Loss for the period

(1,385,107)

(1,434,898)

(501,781)

(590,151)






Other comprehensive income





Items that are or may be reclassified subsequently to profit or loss:

Foreign operations – foreign currency translation

differences, net of nil tax

(96)

(66)

83

(78)

Other comprehensive income for the period, net of nil tax

(96)

(66)

83

(78)






Total comprehensive income for the period

(1,385,203)

(1,434,964)

(501,698)

(590,229)

 

Qoros' Condensed Consolidated Statement of Financial Position (Unaudited)





In thousands of RMB

At 30 September 2015

At 31 December 2014




Assets



Property, plant and equipment

4,191,030

4,039,948

Intangible assets

4,807,864

4,638,364

Prepayments for purchase of equipment

71,290

117,922

Lease prepayments

204,819

208,128

Trade and other receivables

92,363

96,533

Equity-accounted investees

2,105

2,025

Non-current assets

9,369,471

9,102,920

Inventories

370,518

197,522

Trade and other receivables

888,840

729,906

Prepayments

77,841

154,655

Pledged deposits

133,945

290,840

Cash and cash equivalents

230,141

752,088


Current assets

1,701,285

2,125,011




Total assets

11,070,756

11,227,931

 

Qoros' Condensed Consolidated Statement of Financial Position (Continued) (Unaudited)




In thousands of RMB

At 30 September 2015

At 31 December 2014




Equity



Paid-in capital

6,531,840

6,531,840

Reserves

(121)

(26)

Accumulated losses

(7,045,649)

(5,660,541)

Total equity

(513,930)

871,273

Liabilities



Loans and borrowings

4,309,718

3,928,224

Finance lease liabilities

-

479

Deferred income

172,042

179,982

Provision

29,416

12,971

Non-current liabilities

4,511,176

4,121,656

Loans and borrowings

4,309,970

3,374,660

Trade and other payables

2,737,695

2,833,459

Finance lease liabilities

873

1,541

Deferred income

24,972

25,342

Current liabilities

7,073,510

6,235,002




Total liabilities

11,584,686

10,356,658




Total equity and liabilities

11,070,756

11,227,931

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/kenon-holdings-reports-third-quarter-2015-results-and-additional-updates-300185956.html

SOURCE Kenon Holdings Ltd.


Source: PR Newswire (December 1, 2015 - 6:43 AM EST)

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