CHAIRMAN’S STATEMENT
The year ended 31 March 2009 was one of ongoing transition and development for NTR plc. The Group continued to pursue our objective of becoming “A Leading International Developer and Operator in Renewable Energy and Sustainable Waste Management”.
In the face of increasingly difficult and uncertain global financial and market conditions, the Group achieved several significant milestones throughout the year, and as we stand today, we are well positioned to capitalise on the structural growth opportunities presented by the emerging global clean energy industries.
Many of the key development milestones achieved by the Group during the year will have already been reported to you but it is worth reprising them here:
| • | In April 2008, the Group invested US$100 million for a controlling interest in Stirling Energy Systems (“SES”). SES, headquartered in Phoenix Arizona, is a manufacturer of Concentrating Solar Power (“CSP”) electricity generating equipment, and through its sister company, Tessera Solar, is a developer of utility scale solar powered generating projects, in the USA and internationally. In addition to our initial investment, the Group has an option to invest a further US$55 million in SES and Tessera Solar in September 2009. |
| • | Since making our investment last year, our solar portfolio has been focused on the commercialisation of its CSP technology, the “SunCatcher”, and the expansion of its project development pipeline. I am pleased to report that this division has achieved all of the objectives which we set for the business at the time of making our decision to invest. |
| • | Also in April 2008, the Group invested US$150 million for a controlling interest in Wind Capital Group (“WCG”). WCG, headquartered in St Louis, Missouri, is a leading Wind Energy developer in the US Midwest. The business has a proven track record in wind energy development and a near term (3 years) development pipeline of 800 MW in Missouri and adjacent states. WCG recently announced its first wind project since NTR plc’s investment, a 150 MW project at Lost Creek in North Western Missouri, which is expected to commence construction in the third quarter of 2009. |
| • | In October 2008, the Group completed the merger of its US Ethanol business, VBV, with Green Plains Renewable Energy, Inc. (NASDAQ: GPRE). Following the merger, NTR plc holds a 45% interest in GPRE, which is a NASDAQ listed ethanol producer. Based in Omaha, Nebraska, GPRE recently completed the acquisition of two further production plants, to bring its total production capacity to 480 million gallons per annum, making it the fourth largest ethanol producer in the US. |
| • | In April 2008, the Group completed the merger of our internet services business, Irish Broadband, with Imagine Communications Group. This merger marked the Group’s exit from the telecommunications market and we now hold a 19.1% interest in the enlarged Imagine Communications Group. |
| • | The Group completed the return of €258 million of capital to shareholders by way of a share redemption. |
In parallel with these developments, the Group continued the development of our Greenstar recycling led waste management businesses, through organic growth, ongoing integration of past acquisitions and selective additional “bolt-on” acquisitions. The Greenstar Group has added 1.56m tonnes of production capacity to its portfolio, including the commissioning of two of the largest recycling processing facilities of their type, one in the UK and the other in Texas.
The result of all of these activities was to consolidate the position of the Group (following the sale of the West-Link toll facility to the Irish State, and the sale of Airtricity) as a leading International Developer and Operator in Renewable Energy and Sustainable Waste Management. Our business portfolio, covering renewable energy (solar, wind and ethanol) and recycling (Greenstar), represents a unique platform from which to exploit the growth potential in the global renewable energy and sustainable waste management sectors.
Further details on the activities and progress of each of our individual business units are set out in the “Business Review” section, which starts on page 17.
Financial Results
Group revenue for the year ended 31 March 2009 was €485.5 million, compared
to €421.4 million for the prior year.
Group operating loss for the year was €76.4 million, compared to a profit
of €462.8 million for the prior year (including exceptional profit of €420.4
million). Net financing income was €23.1 million compared to an income of
€0.3 million in the prior year, resulting in a loss before tax for the year
of €53.4 million compared to a profit before tax of €463.1 million in the
prior year (including exceptional profit of €420.4 million). The exceptional
profit in 2008 resulted from the sale of the
West-Link toll concession.
After a tax credit of €7.7 million and minority interests of €23.3 million, losses attributable to equity holders in NTR plc were €22.4 million compared to a profit of €830.8 million for the prior year (including exceptional profits and profits from discontinued operations).
The results characterise the shift in the Group’s portfolio balance from one with a significant trading/operating emphasis to one heavily weighted towards early stage development and pre-revenue businesses.
Liquidity
Following the completion of the share redemption in the first half of
the year, the Group had net cash at 30 September 2008 of €84.9 million,
comprising cash resources of €285.9 million held at Group and net borrowings
of €201.0 million. All borrowings were held in subsidiary companies.
At 31 March 2009, the Group had net cash of €101.4 million, comprising cash resources held at Group of €171.6 million and net borrowings of €70.2 million. All borrowings were held in subsidiary companies.
In addition, the Group had within Financial Assets €63.3 million held in escrow following the completion of the sale of Airtricity. Of these escrow amounts, €32.1 million was released from escrow on 19 June 2009 and the balance is due to be released in early 2010.
Notwithstanding the strength of the Group’s balance sheet, the scale of the opportunity available to our businesses will mean that those businesses will require access to new sources of third party equity capital in order to ensure that they meet their full potential.
Dividend
An interim dividend of 2.28 cent per ordinary share was paid on 30 January
2009.The Directors are recommending a final dividend of 4.94 cent per
ordinary share. This final dividend, if approved by shareholders at the
Annual General Meeting on 10 September, will be paid on 15 September
2009.
The total dividend in respect of the year ended 31 March 2009 will therefore amount to 7.22 cent per ordinary share, an increase of 25% on the total dividend per share paid in respect of the year ended 31 March 2008, and is consistent with the indication given to shareholders at the time of the Share Redemption in 2008.
Conclusion
Over the past two years, the Group has undergone a period of enormous
transformation and is now clearly recognised as a leader in the North
American, and increasingly, the international renewable energy industry.
Such recognition is not easily achieved and it is a tribute to the leadership teams in the Group that we have built such a strong reputation so quickly.
The Board extends its deep appreciation to all members of these teams and indeed to all Group staff.
Our combination of strategic insight, business leadership and proven execution capability means that, despite current economic uncertainty, we can look forward with confidence to further progress in the development of our businesses in the coming years.
Tom Roche
Chairman
16 July 2009