French Wind Farm Firm Theolia Blown Off Course
FRANCE: November 18, 2008
PARIS - French alternative energy firm Theolia announced a strategy turnaround on Monday as it scales down its ambitions and reduces costs to focus on cash generation amid the financial crisis.
The firm, which on Friday reported flat nine-month sales of 85.1 million euros (US$107.6 million) versus 83.48 million a year ago, said it was selling German wind farms for 81 million euros to Meinl International Power Ltd of Austria.
In September the group had said it would hold its German wind farms as part of a build-and-hold strategy.
But the financial crisis, which made access to financing for new power projects more difficult, prompted a strategy review and a management overhaul.
Eric Peugeot, a scion of the carmaking family, was appointed nonexecutive chairman and Marc van 't Noordende interim chief executive until April after executive chairman Jean-Marie Santander resigned in late September.
A strategy review has already led to some decisions. The company will focus on wind energy and has accelerated the divestment of its nonwind assets.
Further focus will be realised by narrowing its geographic activity base, the company said, and the planned listing of Theolia Emerging Markets as a separate entity has been canceled.
The firm said that given ongoing restructuring and the potential large impact of one-offs, the company was not in a position to confirm its earlier 2008 EBITDA target.
In September, it cut its EBITDA target to at least 20 million euros from 55-65 million euros.
The company also said earlier stated 2009-2011 MegaWatt targets cannot be maintained in the current financial environment.
"In recognition of the current challenging financial environment, Theolia will align future growth with its financial capacity," it said.
In order to increase internal cash generation to finance growth, Theolia has resumed efforts to sell wind farms in Germany, and is evaluating the sale of wind farms in other countries as well.
Management intends to finalise the strategy review later this year and said it will make a statement in January.
The company said it is cutting its headquarters staff by half, which will save about 4 million euros.
Free cash flow at end 2008 is now seen at 10 to 40 million euros, compared to a total cash position of 326 million on Dec. 31 last year that melted to 95 million by Oct. 31.
Theolia added it had very limited turbine procurement commitments for 2009.
Theolia has lost 75 percent of its share value this year to 202.1 million euros. General Electric Co has a stake of 16.72 percent, according to Reuters data, Fc Holding GmbH 13.9 percent and bank Societe Generale 5.46 percent.
Theolia made a net loss of 48.8 million euros in 2007 and had a core operating profit EBITDA of 26.9 million euros.
(Reporting by Marcel Michelson; Editing by Brian Moss)
REUTERS NEWS SERVICE
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