Business Irish

Wednesday 13 December 2017

Losses widened to €25m ahead of Gaelectric sale

Gaelectric chief executive Barry Gavin
Gaelectric chief executive Barry Gavin
John Mulligan

John Mulligan

Losses at Irish energy firm Gaelectric increased to €24.8m in the 12 months to March last year, as its finance and administration expenses soared, newly-filed accounts for the business show.

The results do not reflect the sale in December of €350m worth of its windfarms to China General Nuclear Power Company (CGNP).

Total revenue, at €31.5m, was more than twice the €12.7m generated in the 2015 financial year.

Almost all its revenue, €31.2m, was derived from the sale of electricity.

In the previous financial year, it received €9.9m in revenue from the sale of power.

CGNP bought 14 operational and in-development windfarms from Gaelectric, which were believed to have an equity value of €350m.

The assets sold by Gaelectric included 10 operating wind farms with total output of 184MW.

It also included a further four wind farms generating a total of 46MW that will be operational by mid-2017.

Seven of the wind farms are located in the North and a futher seven in the Republic of Ireland.

Gaelectric, whose ceo is Barry Gavin, will continue to manage the wind farms on behalf of the new owner, and provide power take-off services to the group.

The latest set of accounts for Gaelectric show that it posted a €1.6m operating loss in the last financial year - much less than the €6.9m loss it made the year before that.

That was even allowing for a sharp increase in administrative expenses in the period, which climbed to €29.6m from €18m.

But its finance costs jumped to €11m in the last financial year, from just under €3.4m in the previous period.

The latest accounts for the business show that Gaelectric's net debt soared to €317.2m at the end of last March from €172m a year earlier.

During the last financial year, Gaelectric paid a total cash consideration of €43.8m to purchase three wind farm projects.

They were the Ballywater wind farm in Co Wexford; another scheme in Co Roscommon; and a third in Co Kerry - the 46MW operational Clogboola wind farm.

Although the cash consideration paid by Gaelectric for the three windfarms was almost €44m, the actual acquisition price of the three projects was much higher.

The Co Kerry wind farm was bought for about €70m, according to law firm McCann Fitzgerald, which advised Gaelectric on the transaction.

Gaelectric is also developing a so-called CAES storage project in Larne.

It involves the creation of two vast storage caverns more than 1.4km beneath the Antrim coast in order to generate up to 330MW of power.

Irish Independent

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