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ContourGlobal PLC on Friday said it delivered a record financial performance in 2021 and said the current energy market volatility has potential upside for the company, not just risk.
The London-based power generation company has assets spanning Europe, North and South America, the Caribbean and Africa.
It reported pretax profit of $142.9 million in 2021, nearly double the previous year's figure of $72.3 million.
Revenue totalled $2.15 billion, up 53% from $1.41 billion in 2020. Of this, thermal energy revenue grew 77% year-on-year to $1.71 billion while renewable energy declined 0.8% to $443.7 million against the previous year.
ContourGlobal said the revenue increase was mainly driven by its Western Generation acquisition completed in February, higher CO2 pass through revenue from its Maritsa thermal power plant in Bulgaria and higher pricing at its Arrubal power plant in Spain.
The company said it does not own or operate any power plants in Russia, Belarus or Ukraine but noted that supply chain exposures resulting from associated sanctions and trade disruption were primarily centred on Maritsa.
Speaking to Alliance News, Chief Executive Joseph Brandt said the situation unfolding in Ukraine will likely ‘create more opportunity than risk’ for ContourGlobal, saying that the company had been ‘resilient’ thus far in the face of ‘extraordinary volatility’ in the European power markets.
Brandt explained that as ContourGlobal doesn't concentrate on just one part of the world, its diversification means it can embrace the energy ‘transition period’ he felt was currently underway, particularly in Europe.
In January, ContourGlobal sold its hydro-electric generation business in Brazil to Patria Investments for R$1.73 billion, about $313 million. When originally announced, the company said it had not decided whether to return the cash to shareholders or reinvest it once the deal closed.
Brandt told Alliance News on Friday that the proceeds likely will be invested into business growth, noting a ‘number of activities which will require funding’ in 2022.
This, the chief executive continued, included an active programme in Austria seeking to upgrade plant technology, opportunities in the Italian solar market, and the support of recent acquisitions in the Caribbean and US.
The company declared a fourth quarter dividend of 4.465 cents per share, reflecting a 10% year-on-year growth.
Chief Financial Officer Stefan Schellinger said ContourGlobal has no plan to accelerate that 10% pace of annual dividend growth, saying its current policy is ‘sustainable’ and provides the company with the correct balance in regards to payouts and funds available for business investment.
ContourGlobal said it has started the financial year positively and is currently trading ahead of expectations.
Schellinger said it was too early to provide a profit forecast for the year but said the company would provide guidance when possible.
In the company's results statement, Chair Craig Huff expressed his frustration with the company's share price and said the company was ‘actively trying to close the gap’ between its price and ‘intrinsic value’.
CEO Brandt agreed, lamenting that ContourGlobal is a ‘great company and a lousy stock’, saying it is ‘deeply frustrating’ the company is trading below its IPO price of 250 pence.
ContourGlobal's initial public offering on the London Main Market was back in November 2017.
Shares in ContourGlobal were up 0.6% at 191.60p on Friday morning in London. The stock is down 6.1% over the past year.
Despite this, Brandt expressed his belief in the future growth and value realization of the business.
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