NTR project delays lead to posting of €210m loss
NTR’S DECISION to hold off on two large solar energy projects in the US contributed to a write-down that led to the utility posting a €210 million loss in its last financial year, according to its chief executive.
The energy company reported recently that it lost €210.6 million in the 12 months to March 31st, its financial year, compared with a €22 million deficit in 2009.
The main contributor to the losses was a €147.9 million write-down in the value of a number of the utility’s assets, including its Greenstar waste management operation, and its solar power development business, whose value it cut by €96 million.
NTR plans to build two solar energy plants in Imperial Valley and the Mojave Desert in California that will have the capacity to generate up to 1,300 megawatts, three times that of an average-sized gas-fired power station.
But the projects would require an investment of €2 billion and the company decided to hold off until economic conditions and capital markets’ appetites for such investments improved.
Management explained to shareholders at the company’s annual general meeting (agm) in Dublin yesterday that its assets were valued according to their potential to generate revenues.
As construction of the solar energy plants has been held up, this has hit its value.
Chief executive Jim Barry said that the company believed it had to reflect the impact on the value of the assets in its accounts.
NTR is largely focused on waste management through Greenstar and various US-based energy businesses, including Stirling Energy Systems and Tessera – which are solar power developers – biofuel producer Green Plains and Wind Capital Group.
Missouri-based Wind Capital recently spent $340 million developing a wind farm that is now up and running. Mr Barry said that it was providing power to about 50,000 homes.
NTR is a public limited company, but its shares are not listed and are traded on the grey market.
Mr Barry said that the group was looking at a “liquidity event” over the next few years, which could involve a total or partial flotation, although he said no decision had been made yet.
The Roche family and the Philip Lynch-led investment vehicle, One51, which is focused mainly on energy and utilities, hold about 70 per cent of the shares.
Its price has fallen by just under 50 per cent to €1 from €1.95 over the last three months. Mr Barry said yesterday that part of the reason for this was a lack of liquidity, which means that just a small number of its shares are traded, with the result that dealings have an exaggerated impact on the price.
A full or partial flotation would be likely to boost liquidity and bring in more shareholders.