Kenon Holdings Reports Q1 2024 Results and Additional Updates
Q1 and Recent Highlights
Kenon
- Kenon has obtained a favorable decision in our litigation proceedings against
Shenzhen Baoneng Investment Group Co., Ltd. in theSupreme People's Court ofChina in relation to its claim for breach of guarantee. - Kenon and its wholly-owned subsidiary
IC Power Ltd. obtained a favorable decision in its arbitration proceedings against theRepublic of Peru with respect to pre- and post-award interest on the award, further to the tribunal's prior award in favor of Kenon. - In
April 2024 , Kenon distributed a cash dividend of approximately$200 million ($3.80 per share).
OPC
- In
April 2024 , CPV Renewable Power (in which OPC has an indirect 70% interest), which operates, constructs and develops renewable energy projects in theU.S. , entered into a non-binding term sheet with a North American infrastructure private equity fund regarding a potential investment of$300 million . - Financial results:
- OPC's net profit in Q1 2024 was
$4 million , as compared to$22 million in Q1 2023. OPC's Q1 2024 net profit included share in profit of CPV of$20 million as compared to$24 million in Q1 2023. - OPC's Adjusted EBITDA[1] (including proportionate share in EBITDA of associated companies) in Q1 2024 was
$95 million , as compared to$75 million in Q1 2023.
ZIM
- ZIM announced a cash dividend, to be paid on
June 11, 2024 , of$0.23 per share, or approximately$28 million in aggregate, of which Kenon's share would be approximately$5 million net of tax. - Financial results:
- ZIM reported a net profit in Q1 2024 of
$92 million , as compared to net loss$58 million in Q1 2023. - ZIM reported Adjusted EBITDA1 in Q1 2024 of
$427 million , as compared to$373 million in Q1 2023.
Discussion of Results for the Three Months ended
Kenon's consolidated results of operations from its operating companies essentially comprise the consolidated results of OPC Energy Ltd ("OPC"). Our share of the results of ZIM Integrated Shipping Services Ltd. ("ZIM") are reflected under results from associated companies.
See Exhibit 99.2 of Kenon's Form 6-K dated
OPC
The following discussion of OPC's results of operations is derived from OPC's consolidated financial statements, translated into US dollars.
Summary Financial Information of OPC |
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For the three months ended
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2024 |
2023 |
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$ millions |
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Revenue |
174 |
147 |
Cost of sales (excluding depreciation and amortization) |
(117) |
(103) |
Finance expenses, net |
(17) |
(5) |
Share in profit of associated companies, net |
20 |
24 |
Profit for the period |
4 |
22 |
Attributable to: |
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|
Equity holders of OPC |
5 |
18 |
Non-controlling interest |
(1) |
4 |
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Adjusted EBITDA[2] |
95 |
75 |
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|
For details of OPC's results by segment, please refer to Appendix A. |
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Revenue |
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For the three months ended |
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2024 |
2023 |
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$ millions |
|
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|
|
|
145 |
131 |
|
29 |
16 |
Total |
174 |
147 |
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OPC's revenue increased by
OPC's revenue from the sale of electricity to private customers is derived from electricity sold at the generation component tariffs, as published by the
Set forth below is a discussion of significant changes in revenue between Q1 2024 and Q1 2023.
-
Revenue from sale of energy to the System Operator and to other suppliers – Such revenues increased by
$9 million in Q1 2024 as compared to Q1 2023. Excluding the impact of translating OPC's revenue from NIS to USD, such revenues increased by$9 million primarily due to the consolidation of results of the Tzomet Power Plant which commenced operations in Q2 2023 and the Gat Power Plant which was consolidated starting in Q2 2023; -
Revenue from capacity payments – Such revenues increased by
$11 million in Q1 2024 as compared to Q1 2023, primarily as a result of the commencement of commercial operations of the Tzomet Power Plant from Q2 2023; -
Revenue from private customers in respect of infrastructure services – Such revenues decreased by
$5 million in Q1 2024 as compared to Q1 2023. Excluding the impact of translating OPC's revenue from NIS to USD, such revenues decreased by$4 million primarily due to a decrease in the infrastructure tariff of$2 million and a decrease of customer consumption of$4 million , offset by an increase of$2 million due to the consolidation of results of the Gat Power Plant which was consolidated starting in Q2 2023; and -
Revenue from sale of renewable energy in
U.S. – Such revenues increased by$9 million primarily due to the consolidation of results of Mountain Wind and Maple Hill projects starting in Q2 2023 and Q4 2023, respectively.
Cost of Sales (Excluding Depreciation and Amortization) |
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For the three months ended |
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2024 |
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2023 |
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$ millions |
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101 |
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94 |
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16 |
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9 |
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Total |
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117 |
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103 |
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OPC's cost of sales (excluding depreciation and amortization) increased by
-
Natural gas and diesel oil consumption in
Israel – Increased by$4 million in Q1 2024 as compared to Q1 2023. Excluding the impact of translating OPC's cost of sales (excluding depreciation and amortization) from NIS to USD, such costs increased by$6 million primarily due to an increase of$12 million from the consolidation of results of the Gat Power Plant beginning in Q2 2023, offset by a decrease of$7 million as a result of decrease in the quantity of gas consumed in Q1 2024 as compared to Q1 2023 and a decrease of$5 million as a result of the commencement of delivery of gas from Energean from Q2 2023; -
Expenses for infrastructure services in
Israel – Increased by$4 million in Q1 2024 as compared to Q1 2023. Excluding the impact of translating OPC's cost of sales (excluding depreciation and amortization) from NIS to USD, such costs increased by$4 million primarily due to an increase of$10 million as a result of maintenance work carried out at Rotem Power Plant during Q1 2024, offset by a decrease of$7 million as a result of decrease in the quantity of gas consumed in Q1 2024 as compared to Q1 2023; and -
Other operating expenses in
Israel – Increased by$4 million in Q1 2024 as compared to Q1 2023. Excluding the impact of translating OPC's cost of sales (excluding depreciation and amortization) from NIS to USD, such costs increased by$4 million primarily due to the consolidation of results of the Tzomet Power Plant which commenced operations in Q2 2023 and the Gat Power Plant which was consolidated starting in Q2 2023.
Finance Expenses, net
Finance expenses, net increased by
Share of Profit of Associated Companies, net
OPC's share of profit of associated companies, net decreased by
For further details of the results of associated companies of CPV, refer to OPC's immediate report published on the Tel Aviv Stock Exchange ("TASE") on
Liquidity and Capital Resources
As of
As of
Business and Other Developments
In
ZIM
Announcement of Q1 2024 Dividend and 2024 Guidance
On
Discussion of ZIM's Results for Q1 2024
ZIM carried approximately 846 thousand TEUs in Q1 2024, representing a 10% increase as compared to Q1 2023, in which ZIM carried approximately 769 thousand TEUs. The average freight rate in Q1 2024 was
ZIM's revenues increased by approximately 14% in Q1 2024 to approximately
ZIM's net profit in Q1 2024 was
Additional Kenon Updates
Kenon's (stand-alone) Liquidity and Capital Resources
As of
Bilateral Investment Treaty Claims Relating to
On
As described in more detail in the Form 20-F,
Kenon is taking steps to enforce the Award.
Pursuant to the
Qoros update
Kenon holds a 12% equity interest in
As previously disclosed in the Form 20-F, an entity related to
Kenon has previously obtained a court order freezing certain assets of
The ruling in favor of Kenon described above is separate from the arbitration proceedings which have been previously disclosed and pursuant to which in
Any value that could be realized in respect of these proceedings is subject to significant risks and uncertainties, including risks relating to enforcement and collection in respect of these proceedings and other risks and uncertainties.
About Kenon
Kenon has interests in the following businesses:
- OPC (55% interest) – a leading owner, operator and developer of power generation facilities in the Israeli and
U.S. power markets; and - ZIM (21% interest) – an international shipping company.
For further information on Kenon's businesses and strategy, see Kenon's publicly available filings, which can be found on the
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 statements relating to (i) OPC, including OPC's business developments including the non-binding term sheet which CPV Renewable entered into with a North American infrastructure private equity fund regarding a potential investment of
Contact Info
Chief Financial Officer
deepaj@kenon-holdings.com
Tel: +65 9669 4761
[1] Adjusted EBITDA is a non-IFRS measure. See Exhibit 99.2 of Kenon's Form 6-K dated
[2] Non-IFRS measure. See Appendix C for a definition of OPC's EBITDA and Adjusted EBITDA and a reconciliation of these measures to profit for the period.
[3] For the comparison excluding the impact of translation from NIS to USD, results for both Q1 2024 and Q1 2023 were converted using an average exchange rate of
[4] Adjusted EBITDA is a non-IFRS measure. See Exhibit 99.2 of Kenon's Form 6-K dated
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