Energy firm expects recovery

Irish energy company Mainstream Renewable Power is expecting a strong turnaround in this year’s performance, having posted a €46.6m loss in 2014.

The firm incurred the multi-million euro loss on the back of losses totalling €53.9m the previous year.

Last year’s results include €9.3m of costs arising from its exit of under-performing activities and asset impairments.

The company’s chairman said in his statement attached to the annual accounts that it intended to move away from offshore activities which will free up capital for other opportunities.

“Following changes in government policies internationally and the reduction in attractive opportunities, [we plan] moving away from offshore development through a planned and structured exit,” said Mainstream Renewable Power chairman Roy Gardner.

Significant financing costs also contributed heavily to the company’s losses last year, coming in at €28.2m for the full-year.

Interest payments alone cost the company €26.1m compared to €12.1m in 2013.

The loss was incurred despite revenues increasing from €37.2m to €88.4m.

Some €81.7m was taken in from the sale of assets while the sale of power from its operational windfarms came in at €1.8m.

Services provided to joint ventures delivered further revenue of €2.9m. The increase in revenue was mirrored by a sharp rise in its cost of sales, however, which rose from €28.7m to €78.7m.

The company, headed up by Airtricity founder Eddie O’Connor, expects the benefits of actions, including cost-cutting exercises and refocusing regional markets to bear fruit in the next full set of accounts, however.

The company’s cost base was reduced “to reflect the changes in strategy and exiting under-performing activities” which saw its workforce fall from 180 at the beginning of 2014 to 134.

The full-year savings arising from the job cuts are expected to amount to €3.5m, while a further €10m is expected from savings on its financing costs. The group restructured its debt and reduced its corporate borrowings from €118.6m to €60.7m.

The directors did not recommend the payment of a dividend for the year.

The Irish firm last week announced that it had begun construction on two South African windfarms with an investment of more than €450m. The firm also indicated earlier this year its intention to raise €75m in equity by selling a 20% stake in the business.


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