-Revenue of $84.7 million, up 10.5% at constant exchange rates and
down 2.9% at current exchange rates -EBITDA of $29.5 million, up
2.0% at constant exchange rates and down 11.5% at current exchange
rates -Net profit up 26% to $13.9 million -EPS up 26% to $0.45
LONDON, Nov. 10 /PRNewswire-FirstCall/ -- Cascal N.V. (NYSE:HOO)
(the "Company"), a leading provider of water and wastewater
services in seven countries, today announced unaudited financial
results for the six months and the second quarter ended September
30, 2009. Cascal N.V. results are presented in U.S. dollars.
Year-to-date Fiscal 2010 Results Revenue for the six months ended
September 30, 2009 increased by $8.0 million or 10.5% at constant
exchange rates, compared to the same period last year. This
increase was the result of approximately $5.9 million contributed
by the acquisitions completed last year, with the remaining $2.6
million achieved by the Company's historical portfolio (through a
combination of rate increases, additional customers and higher
volumes), offset by $0.5 million reduction in Panama due to prior
period revenue recognition. At current exchange rates, the $8.0
million increase was offset by a $10.6 million translation effect
into USD, including $8.7 million due to USD-GBP movements. --
Revenue in Chile increased by $3.9 million or 93% at constant
exchange rates, compared to the same period last year. Servicomunal
and Servilampa, which were acquired on June 27, 2008, contributed
$2.9 million of the overall increase, and $0.7 million was
contributed by the Company's operations in Northern Chile as a
result of volume and rate increases. The remainder of the increase
originates from the Company's operations in Santiago. -- Revenue in
China increased by $3.4 million or 39% at constant exchange rates,
compared to the same period last year. This increase was mainly due
to the $3.0 million contribution made by Yancheng joint venture and
Zhumadian subsidiary, which were acquired on April 29, 2008 and
July 23, 2008, respectively. The remainder of the increase came
from a combination of rate and volume increases in the Company's
pre-existing operations in China. -- Revenue in South Africa
increased by $0.7 million or 6.0% at constant exchange rates,
compared to the same period last year, mainly as a result of a 10%
rate increase implemented by the Nelspruit business and a 9%
increase implemented by Siza Water, both with effect from July
2009. These increases were partially offset by lower sundry revenue
for additional services in our Nelspruit subsidiary. -- Revenue in
Panama decreased by $0.5 million or 8.9%, compared to the same
period last year, due to $0.5 million additional revenue recognized
in the six months ended September 30, 2008 which related to a prior
period following the late approval by our client of a rate
increase. For the six months ended September 30, 2009, EBITDA
increased by $0.6 million or 2.0% at constant exchange rates,
compared to the same period last year. The acquisitions completed
last year contributed $2.0 million of additional EBITDA and a
reduction in corporate overhead contributed a further $0.3 million.
Excluding acquisitions and corporate overhead, EBITDA changes from
pre-existing operations were Chile (+$0.6 million), The Philippines
(+$0.2 million), China (-$0.1 million), Indonesia (-$0.3 million),
South Africa (-$0.3 million), Panama (-$0.4 million) and the U.K.
(-$1.4 million). The $1.4 million decline in the U.K. is due to a
-2.4% real rate adjustment in the regulated business and some
margin contraction in the unregulated business, together with
one-off costs associated with the current five yearly rate review
process ($0.2 million) and pension costs ($0.3 million). The $0.4
million reduction in Panama is in fact a $0.1 million increase
offset by the impact of the prior period revenue recognition
described above. Similarly, the reduction in South Africa is due to
a $0.3 million bad debt recovery included in the six months ended
September 30, 2008 in connection with the buy back of the previous
10% minority shareholding in our Nelspruit subsidiary. Excluding
one-off items, EBITDA increased by $1.9 million or 6.6% at constant
exchange rates. Please read "Use of Non-GAAP Financial Measures"
for a description of EBITDA. Overall, net financial income and
expense decreased by $2.0 million for the six months ended
September 30, 2009, essentially as a result of the reduction of our
Artesian loan balance driven by negative indexation of the retail
price index in the United Kingdom. For the six months ended
September 30, 2009, net profit was $13.9 million, or $0.45 per
share, compared to net profit of $11.0 million, or $0.36 per share
for the same period last year. The effective tax rate incurred was
23.2% compared to 41.4% in the same period last year. A change in
U.K. tax law which means that dividends remitted from foreign
operations are no longer subject to tax has resulted in deferred
tax provisions being reversed in relation to our company in Panama.
This reversal has resulted in a credit of $1.4m during the six
months ended September 30, 2009 and is expected to contribute a
total credit of $4.0 million for the full year to March 2010. In
addition, in the six months ended September 30, 2008 we incurred a
charge of $1.5 million relating to a change in the system of tax
allowances for industrial buildings in the United Kingdom. In
addition to these two one-off items, the underlying tax rate has
continued to decline following the implementation of a more tax
efficient holding company structure in February 2009. Commenting on
the Company's results, Stephane Richer, Cascal Chief Executive
Officer, stated, "Consistent with every quarter since our IPO in
early 2008, Cascal has again delivered revenue growth at constant
exchange rates. Our EBITDA margin close to 35% has remained strong
and resilient in a tough operating environment and confirms our
business model based upon targeted acquisitions together with
organic growth of our international portfolio. Our cash flows have
been solid with $29.2 million generated from operating activities
and $25.0 million invested in capital expenditure net of proceeds
from disposals (including $7.7 million relating to a one-time
investment in our Zhumadian subsidiary). I am also especially
pleased that our financial performance has not been at the expense
of the quality of the services that we provide with our U.K.
company, Bournemouth and West Hampshire Water, recently announced
as the number one ranked water company for overall performance by
the U.K. regulator." As of September 30, 2009, the consolidated
balance sheet shows cash and cash equivalents of $38.1 million, an
improvement of $3.5 million during the six months ended September
30, 2009. Results for Second Quarter Ended September 30, 2009
Revenue for the three months ended September 30, 2009 increased by
$3.3 million or 8.2% at constant exchange rates, compared to the
same period last year. The $3.3 million increase was the result of
$2.2 million contributed by the acquisitions completed last year,
with the remaining $1.1 million achieved by the Company's
historical portfolio. At current exchange rates, the $3.3 million
increase was offset by a $3.8 million translation effect into USD,
including $3.3 million due to USD-GBP movements. For the three
months ended September 30, 2009, EBITDA increased by $0.3 million
or 2% at constant exchange rates, compared to the same period last
year. The EBITDA increase was essentially contributed by the
Company's operations in Chile (+$0.7 million), China (+$0.2
million), Panama (+$0.2 million) and The Philippines (+$0.1
million) offset by reductions in the UK (-$1.1 million), South
Africa. (-$0.4 million) and Indonesia (-$0.1 million). Additionally
corporate overhead reduced by $0.7 million which was mainly the
result of decreased costs of Sarbanes-Oxley compliance and a
reduction in legal and other professional fees. Overall, net
financial income and expense increased by $0.8 million for the
quarter ended September 30, 2009. A reduction in interest expense
of $3.0 million due to the reduction of our Artesian loan balance
driven by negative indexation of the retail price index in the
United Kingdom was offset by a reduction in exchange rate results
of $3.0 million. The remaining movement is largely due to the
recognition in the six months to September 30, 2008 of $0.6 million
accrued interest income due under the terms of a loan advanced to
the former minority shareholder in our Nelspruit subsidiary. For
the quarter ended September 30, 2009, net profit was $7.4 million,
or $0.24 per share, compared to net profit of $5.5 million, or
$0.18 per share for the same period last year. Guidance for Fiscal
Year ending March 31, 2010 With regard to the guidance for the year
2009/10 issued last June, the Company now expects higher EPS of
approximately $0.70, primarily due to the much improved effective
tax rate, with revenue and EBITDA expected marginally below the
initial guidance levels of $174 million and $63 million
respectively. Recent Business Highlights -- In September, the
Company named Mark Thurston, age 45, as its new Chief Financial
Officer. Most recently, Thurston served as UK Finance Director for
Colt Telecommunications, a $2 billion revenue B2B alternative
network provider of voice and data services. Prior to that, he
served as Deputy Finance Director for Xansa PLC, an information
technology outsourcing and business process management company. --
Dividend of $0.09 per share was paid on September 30, 2009. -- In
October, Cascal announced that its United Kingdom subsidiary,
Bournemouth and West Hampshire Water (BWHW), has been ranked number
one out of all UK water companies in "Overall Performance" in the
UK regulator's annual Service and Delivery Assessment Report. -- In
October, the last of four promissory notes from the Government of
Belize which formed deferred consideration following the sale of
the Company's 83% interest in Belize Water Services Limited to the
Government of Belize was paid. Each $2.5 million promissory note
was paid on time and in full. Conference Call The Company will host
a conference call at 9 a.m. Eastern Time / 2 p.m. GMT on November
11, 2009. On the call, Stephane Richer, CEO of Cascal, and Mark
Thurston, CFO, will discuss the Company's results, and review
operational highlights and other business developments. The Company
invites you to participate on the call at the following telephone
numbers: (877) 375-4189 (local), (404) 665-9923 (international),
(0800) 032-3836 (UK Freephone). The access code for all callers is
38595702. The call will also be available via webcast at
http://www.cascal.co.uk/. Please allow extra time prior to the call
to visit the site and to download any necessary software to listen
to the Internet broadcast. An online archive of the webcast will be
available on the Company's website for 30 days following the call.
A replay of the call will be available from November 11, 2009 at
9.45 a.m., ET/2.45 p.m. BST through November 11, 2009 at 4.59 a.m.
BST. To access the replay, please call (800) 642-1687 (local) or
+1(706) 645-9291 (international) and enter the following code:
38595702. About Cascal N.V. Cascal provides water and wastewater
services to its customers in seven countries: the United Kingdom,
South Africa, Indonesia, China, Chile, Panama and The Philippines.
Cascal's customers are predominantly homes and businesses
representing a total population of approximately 4.5 million.
Forward-looking statements This release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including statements relating to the future of
our operations in Panama. Such forward-looking statements are not
guarantees of future performance. There are important factors, many
of which are outside of our control, that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements including: general economic
business conditions, unfavorable weather conditions, housing and
population growth trends, changes in energy prices and taxes,
fluctuations with currency exchange rates, changes in regulations
or regulatory treatment, changes in environmental compliance and
water quality requirements, availability and the cost of capital,
the success of growth initiatives, acquisitions and our ability to
successfully integrate acquired companies and other factors
discussed in our filings with the Securities and Exchange
Commission, including under Risk Factors in our Form 20-F for the
fiscal year ended March 31, 2009, filed with the SEC on July 1,
2009. We do not undertake and have no obligation to publicly update
or revise any forward-looking statement. Use of Non-GAAP Financial
Measures In evaluating its business, the Company uses EBITDA as a
supplemental measure of its operating performance. The Company
defines EBITDA as earnings before interest, taxes, depreciation and
amortization. The term EBITDA is not defined under generally
accepted accounting principles, or GAAP, and is not a measure of
operating income, operating performance or liquidity presented in
accordance with GAAP. EBITDA has limitations as an analytical tool,
and when assessing the Company's operating performance, investors
should not consider EBITDA in isolation, or as a substitute for net
income (loss) or other consolidated income statement data prepared
in accordance with GAAP. Investor Contacts: KCSA Strategic
Communications Jeffrey Goldberger / Yemi Rose +1 212.896.1249 / +1
212.896.1233 / Tables follow Consolidated Statements of Income Six
months ended September 30, 2009 Amounts, except shares and per
share amounts, expressed Continuing Discontinued in thousands of
operations operations Total USD Unaudited Unaudited Unaudited
--------------- ---------- ---------- ---------- Revenue 84,717 -
84,717 Operating Expenses Raw and auxiliary materials and other
external costs 22,095 - 22,095 Staff costs 18,773 - 18,773
Depreciation and amortization of intangible and tangible fixed
assets and negative goodwill 12,191 - 12,191 Profit on disposal of
intangible and tangible fixed assets (1,275) - (1,275) Other
operating charges 14,333 - 14,333 ------ -- ------ 66,117 - 66,117
------ -- ------ Operating Profit 18,600 - 18,600 ------ -- ------
Gain on disposal / termination of subsidiary - 248 248 Net
Financial Income and Expense Exchange rate results 719 - 719
Interest income 433 - 433 Interest expense (1,327) - (1,327) ------
-- ------ (175) - (175) ---- -- ---- Profit before Taxation 18,425
248 18,673 Taxation (4,270) (69) (4,339) ------ --- ------ Profit
after Taxation 14,155 179 14,334 Minority Interest (450) - (450)
---- -- ---- Net Profit 13,705 179 13,884 ------ --- ------
Earnings per share - Basic and Diluted 0.44 0.01 0.45 Weighted
average number of shares - Basic and Diluted 30,566,091 30,566,091
30,566,091 ---------------- ---------- ---------- ---------- Six
months ended September 30, 2008 Amounts, except shares and per
share amounts, expressed Continuing Discontinued in thousands of
operations operations Total USD Unaudited Unaudited Unaudited
--------------- ---------- ---------- ---------- Revenue 87,256 -
87,256 Operating Expenses Raw and auxiliary materials and other
external costs 20,531 - 20,531 Staff costs 18,401 - 18,401
Depreciation and amortization of intangible and tangible fixed
assets and negative goodwill 12,366 - 12,366 Profit on disposal of
intangible and tangible fixed assets (804) - (804) Other operating
charges 14,955 - 14,955 ------ -- ------ 65,449 - 65,449 ------ --
------ Operating Profit 21,807 - 21,807 ------ -- ------ Gain on
disposal / termination of subsidiary - 251 251 Net Financial Income
and Expense Exchange rate results 3,262 - 3,262 Interest income
2,096 8 2,104 Interest expense (7,543) (1) (7,544) ------ -- ------
(2,185) 7 (2,178) ------ - ------ Profit before Taxation 19,622 258
19,880 Taxation (8,162) (69) (8,231) ------ --- ------ Profit after
Taxation 11,460 189 11,649 Minority Interest (608) - (608) ---- --
---- Net Profit 10,852 189 11,041 ------ --- ------ Earnings per
share - Basic and Diluted 0.35 0.01 0.36 Weighted average number of
shares - Basic and Diluted 30,566,007 30,566,007 30,566,007
---------------- ---------- ---------- ---------- Consolidated
Statements of Income Three months ended September 30, 2009 Amounts,
except shares and per share amounts, expressed Continuing
Discontinued in thousands of operations operations Total USD
Unaudited Unaudited Unaudited --------------- ---------- ----------
---------- Revenue 43,822 - 43,822 Operating Expenses Raw and
auxiliary materials and other external costs 11,598 - 11,598 Staff
costs 10,087 - 10,087 Depreciation and amortization of intangible
and tangible fixed assets and negative goodwill 6,248 - 6,248
Profit on disposal of intangible and tangible fixed assets (40) -
(40) Other operating charges 6,960 - 6,960 ----- -- ----- 34,853 -
34,853 ------ -- ------ Operating Profit 8,969 - 8,969 ----- --
----- Gain on disposal of subsidiary - 248 248 Net Financial Income
and Expense Exchange rate results 467 - 467 Interest income 211 -
211 Interest expense (895) - (895) ---- -- ---- (217) - (217) ----
-- ---- Profit before Taxation 8,752 248 9,000 Taxation (1,259)
(69) (1,328) ------ --- ------ Profit after Taxation 7,493 179
7,672 Minority Interest (284) - (284) ---- -- ---- Net Profit 7,209
179 7,388 ----- --- ----- Earnings per share - Basic and Diluted
0.23 0.01 0.24 Weighted average number of shares - Basic and
Diluted 30,566,174 30,566,174 30,566,174 ----------------
---------- ---------- ---------- Three months ended September 30,
2008 Amounts, except shares and per share amounts, expressed
Continuing Discontinued in thousands of operations operations Total
USD Unaudited Unaudited Unaudited --------------- ----------
---------- ---------- Revenue 44,294 - 44,294 Operating Expenses
Raw and auxiliary materials and other external costs 10,498 -
10,498 Staff costs 9,531 - 9,531 Depreciation and amortization of
intangible and tangible fixed assets and negative goodwill 6,441 -
6,441 Profit on disposal of intangible and tangible fixed assets
(4) - (4) Other operating charges 7,669 - 7,669 ----- -- -----
34,135 - 34,135 ------ -- ------ Operating Profit 10,159 - 10,159
------ -- ------ Gain on disposal of subsidiary - 248 248 Net
Financial Income and Expense Exchange rate results 3,443 - 3,443
Interest income 1,554 - 1,554 Interest expense (4,410) - (4,410)
------ -- ------ 587 - 587 --- -- --- Profit before Taxation 10,746
248 10,994 Taxation (5,067) (69) (5,136) ------ --- ------ Profit
after Taxation 5,679 179 5,858 Minority Interest (310) - (310) ----
-- ---- Net Profit 5,369 179 5,548 ----- --- ----- Earnings per
share - Basic and Diluted 0.17 0.01 0.18 Weighted average number of
shares - Basic and Diluted 30,566,007 30,566,007 30,566,007
---------------- ---------- ---------- ---------- Revenue by
segment Three Three Six Six months months months months ended ended
ended ended September September September September Amounts
expressed 30, 30, 30, 30, in thousands of 2009 2008 2009 2008 USD
Unaudited Unaudited Unaudited Unaudited ----------------- ---------
--------- --------- --------- United Kingdom $20,432 $23,694
$39,302 $47,898 South Africa 6,392 6,271 11,749 11,648 Indonesia
3,551 3,639 6,646 7,050 China 6,247 5,245 12,137 8,670 Chile 3,790
2,111 8,092 4,707 Panama 2,480 2,551 5,065 5,562 The Philippines
755 709 1,468 1,470 Holding Companies 175 74 258 251 Total $43,822
$44,294 $84,717 $87,256 ----- ------- ------- ------- -------
Revenue ------- Dutch GAAP Six Six Six months Percentage months
months ended Change change ended ended September 30, 2008- 2008-
September September 2008 at 2009 at 2009 at (Dollars 30, 2009 30,
2008 constant constant constant in thousands) as as exchange
exchange exchange -------------- reported reported rates rates
rates United Kingdom $39,302 $47,898 $39,173 $129 0.3% South Africa
11,749 11,648 11,080 669 6.0% Indonesia 6,646 7,050 6,300 346 5.5%
China 12,137 8,670 8,757 3,380 38.6% Chile 8,092 4,707 4,194 3,898
92.9% Panama 5,065 5,562 5,562 (497) (8.9)% The Philippines 1,468
1,470 1,353 115 8.5% Holding companies 258 251 253 5 2.0% --- ---
--- - --- Total operations $84,717 $87,256 $76,672 $8,045 10.5%
------- ------- ------- ------ ---- Exchange rate effect 10,584
------ Total after exchange rate effect $84,717 $87,256 $87,256
-------------- ------- ------- ------- Revenue ------- Dutch GAAP
Three Three Three months Percentage months months ended Change
change ended ended September 30, 2008- 2008- September September
2008 at 2009 at 2009 at (Dollars 30, 2009 30, 2008 constant
constant constant in thousands) as as exchange exchange exchange
-------------- reported reported rates rates rates United Kingdom
$20,432 $23,694 $20,410 $22 0.1% South Africa 6,392 6,271 6,119 273
4.5% Indonesia 3,551 3,639 3,342 209 6.3% China 6,247 5,245 5,275
972 18.4% Chile 3,790 2,111 2,001 1,789 89.4% Panama 2,480 2,551
2,551 (71) (2.8)% The Philippines 755 709 669 86 12.9% Holding
companies 175 74 118 57 50.4% --- -- --- -- ---- Total operations
$43,822 $44,294 $40,485 $3,337 8.2% ------- ------- ------- ------
--- Exchange rate effect 3,809 ----- Total after exchange rate
effect $43,822 $44,294 $44,294 ------------ ------- ------- -------
Use of Non-GAAP Financial Measures - EBITDA EBITDA represents net
profit before interest expense/(income) and exchange rate results,
taxation, depreciation and amortization of intangible and tangible
fixed assets and negative goodwill, loss/(profit) on disposal of
intangible and tangible fixed assets and minority interest. EBITDA
is a non-GAAP measure and does not represent and should not be
considered as an alternative to net profit or cash flow as
determined under generally accepted accounting principles. We
believe EBITDA facilitates operating performance comparisons from
period to period. We believe EBITDA may facilitate company to
company operating performance comparisons by backing out potential
differences caused by variations in capital structures (affecting
net interest expense), taxation and the age and book depreciation
of facilities and equipment (affecting relative depreciation
expense), which may vary for different companies for reasons
unrelated to operating performance, and other non-recurring
one-time items. We further believe that EBITDA is frequently used
by securities analysts, investors and other interested parties in
their evaluation of companies, many of which present an EBITDA
measure when reporting their results. EBITDA has limitations as an
analytical tool, and you should not consider it either in isolation
or as a substitute for analyzing our results as reported under
Dutch GAAP. Some of these limitations are: -- EBITDA does not
reflect historical cash expenditures or future requirements for
capital expenditures or contractual commitments; -- EBITDA does not
reflect changes in, or cash requirements for, our working capital
needs; -- EBITDA does not reflect our interest expense, or the cash
requirements necessary to service interest or principal payments on
our debt; -- EBITDA does not reflect our tax expense or the cash
requirements to pay our taxes; -- although depreciation and
amortization are non-cash charges, the assets being depreciated and
amortized will often have to be replaced in the future, and EBITDA
does not reflect any cash requirements of those replacements; and
-- other companies in our industry may calculate EBITDA
differently, limiting its usefulness as a comparative measure.
Because of these limitations, EBITDA should not be considered as
the primary measure of our operating performance or as a measure of
discretionary cash available to us to invest in the growth of our
business. The following is a reconciliation of net profit, the most
directly comparable Dutch GAAP performance measure, to EBITDA. Six
months ended Six months ended (Dollars in thousands) September 30,
2009 September 30, 2008 --------------------- ---------------------
--------------------- Net profit $13,884 $11,041 Add: Interest
(income)/expense and exchange rate results 175 2,178 Gain on
disposal/termination of subsidiary (248) (251) Taxation 4,339 8,231
Depreciation and amortization of intangible and tangible fixed
assets and negative goodwill 12,191 12,366 (Profit)/loss on
disposal of intangible and tangible fixed assets (1,275) (804)
Minority interest 450 608 --- --- EBITDA $29,516 $33,369 -------
------- Revenue $84,717 $87,256 ------- ------- EBITDA as a
percentage of revenue 34.8% 38.2% ---- ---- Three months ended
Three months ended (Dollars in thousands) September 30, 2009
September 30, 2008 --------------------- ---------------------
--------------------- Net profit $7,388 $5,548 Add: Interest
(income)/expense and exchange rate results 217 (587) Gain on
disposal of subsidiary (248) (248) Taxation 1,328 5,136
Depreciation and amortization of intangible and tangible fixed
assets and negative goodwill 6,248 6,441 Profit on disposal of
intangible and tangible fixed assets (40) (4) Minority interest 284
310 --- --- EBITDA $15,177 $16,596 ------- ------- Revenue $43,822
$44,294 ------- ------- EBITDA as a percentage of revenue 34.6%
37.5% ---- ---- Consolidated Balance Sheets September 30, March 31,
Amounts expressed in 2009 2009 thousands of USD Unaudited
-------------------- --------- ---- Assets Fixed Assets Intangible
fixed assets 43,027 42,860 Tangible fixed assets 443,338 397,593
Financial fixed assets 22,812 19,298 ------ ------ 509,177 459,751
------- ------- Current Assets Stocks 2,396 2,174 Work in progress
4,087 3,727 Debtors 62,686 51,350 Cash at bank and in hand 38,131
34,678 ------ ------ 107,300 91,929 ------- ------ Total Assets
616,477 551,680 ------- ------- Shareholders' Equity &
Liabilities Shareholders' equity 137,838 118,214 Minority
shareholders' interest 34,995 35,080 ------ ------ Group Equity
172,833 153,294 ------- ------- Negative goodwill 1,182 1,210
Provisions 66,279 60,328 Deferred revenue 61,472 51,708 Long term
liabilities 235,051 161,812 Current liabilities 79,660 123,328
------ ------- Total Liabilities 443,644 398,386 ------- -------
Total Shareholders' Equity and Liabilities 616,477 551,680
DATASOURCE: Cascal N.V. CONTACT: Jeffrey Goldberger,
+1-212-896-1249, , or Yemi Rose, +1-212-896-1233, , both of KCSA
Strategic Communications Web Site: http://www.cascal.co.uk/
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