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Abengoa releases H1 2016 financial results, reports EBITDA of -€51m

Struggling Spanish ethanol producer Abengoa has published the financial results for the first six months of 2016, recording revenues of €1.215 billion and EBITDA of -€51 million.

The company is in the course of obtaining the necessary accessions to the Restructuring Agreement of its financial debt, which was reached with a group of financial creditors and investors.

Obtaining the necessary percentage of accessions from the creditors as required by law will provide Abengoa with the financial resources needed to restart its ordinary business activities and operate in a competitive and sustainable manner, the company says.

In the industrial production activity, which includes Abengoa’s bioenergy and biofuel business, revenues reached €532 million and EBITDA amounted to €7 million, compared to €972 million and €16 million in H1 2015, respectively.

The decrease is mainly due to the continued effects of business slowdown and in some cases plant stoppages in the US and Europe.

The impact has been partially offset by the positive impact in EBITDA in the volume of ethanol and sugar sold in Brazil derived from higher raw material stocks from the previous harvest and the early beginning of the current harvest, as well higher prices in both products when compared to 2015 prices around the same time.

Revenues in the engineering and construction activity reached €611 million and EBITDA amounted to negative €103 million, and in the concession-type infrastructure activity Abengoa reported revenues of €73 million and EBITDA of €46 million.

Losses in biofuels

The net result represents a loss of €3.689 billion to the company, mostly due to the negative impact from the impairment of certain assets, the ongoing insolvency proceedings in the US, Brazil and Europe, and the general decrease in activity.

The main negative impacts, amounting to €3.253 billion, correspond to the registration of impairments in assets and affiliates for a total of €3.079 billion.

This is mostly due to the accounting losses for the lower valuation of certain bioenergy assets in the US and Europe and certain transmission lines in Brazil.

In bioenergy, the impairment totals €1.256 billion due to the lower value of the first and second generation ethanol plants, which are currently under various Chapter 11 insolvency proceedings in the US and similar liquidation procedures in Europe for the plant in Rotterdam

The viability plan used as a base for Abengoa’s Restructuring Agreement will entail the execution of certain measures such as the abandonment of activities and the liquidation or sale of assets that could trigger further losses.

In accordance with the relevant accounting principles, the impact of these additional losses will be recorded in the second half of the year together with the positive impact derived from the debt write-offs and capital increases.

The Restructuring Agreement is expected to compensate completely all accumulated losses and restore the equity balance by 31 December.





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