Abengoa returned to positive operating profit (EBITDA) in the first half of 2017 after completing its financial restructuring in March and restarting business operations, the company said September 29.
EBITDA measured 16 million euros ($18.9 million) and would have been 117 million euros if adjusted for one-off costs. Profitability rose on the back of reduced overheads and operating profit continued to be impacted by asset impairments, the company said.
Abengoa filed for Chapter 11 and 15 bankruptcy protection in 2016 and sold off certain assets to reduce its debt pile. In September 2016, the company signed a restructuring agreement with financial creditors and investors.
The Abengoa group reduced its financial debt from 12.7 billion euros at the end of 2016, to 5.6 billion euros at the end of June 2017, it said.
Abengoa’s key short-term objectives include the sale of its 41% stake in Atlantic Yield and the completion and sale of its A3T cogeneration plant in Mexico. These assets will be sold to pay off 1.1 billion euros of new liquidity provided to Abengoa by creditors. Further debt reductions are due from 2022 onwards “with low financial cost,” the company said.
New contracts worth 761 million euros
Despite limited financial resources, Abengoa was awarded 761 million euros of new contracts in the first half of the year, raising the engineering and construction (E&C) backlog to 1.9 billion euros.
New projects awarded in 2017 include a 275,000 m3/day desalination plant in Morocco and a 250,000 m3/day desalination plant in Saudi Arabia, a contract to build 140 km high-voltage transmission line and two substations in Chile, and a contract for a high voltage transformer station in Argentina.
Abengoa’s E&C business has identified a pipeline of 37 billion euros of projects, of which 47% are in power generation, 24% in water supply, 24% in transmission and 5% in services.
Some 45% of these potential projects are in South America while 21% are located in the Middle East and 15% in Africa. The majority of new projects would be through EPC contracts and Abengoa plans to increase the weighting of smaller projects in its portfolio.
South Africa progress
In August, Abengoa achieved the “practical completion” of its Xina Solar One CSP plant in Northern Cape, South Africa.
The 100 MW Xina Solar One plant uses parabolic trough technology and hosts 5.5 hours of storage capacity. The plant will feed power into the adjacent Paulputs substation via a short 3 km transmission line. The facility is situated just south of Abengoa’s operational 100 MW Kaxu Solar One plant, which provides 2.5 hours of storage capacity.
The “practical completion” of Xina Solar One project certifies the plant can be handed over to the consortium of project owners, which includes Abengoa, Industrial Development Corporation (IDC), the Public Investment Corporation (PIC) and the Xina Community Trust.
Xina Solar One will provide power to Eskom under a 20-year power purchase agreement (PPA).
The project was allocated in Round 3 of South Africa’s Renewable Energy Independent Power Producers Procurement Program (REIPPPP).
REIPPPP Round 3 allocated CSP projects