Infinis Energy announces landfill gas financial results, exports

By Katie Fletcher | February 25, 2015

Infinis Energy plc generates renewable power in the United Kingdom, operating a portfolio of landfill gas, onshore wind and hydro power plants. The company recently published its quarter three trading statement for the period Oct. 1, 2014 to Feb. 16, 2015. Infinis’ landfill gas (LFG) subsidiary, Infinis plc or the issuer, also released third quarter and full-year financial results in February, reporting LFG has continued to deliver strong output across the portfolio and reliability levels have been good.

Infinis plc financial results include total revenue for nine months ended Dec. 31 of £129.9 million ($201.38 million) up from £125.7 million in the same period during the prior year. Quarter three resulted in underlying revenue up 5.1 percent to £45.7 million and reported revenue up 0.7 percent to £43.8 million. Its earnings before interest, taxation, depreciation and amortization (EBITDA) is £73.2 million for the nine months ended Dec. 31 compared to £72.6 million in 2013. Underlying EBITDA for the most recent quarter was up 4 percent to £25.9 million, and reported EBITDA down 2.4 percent to £24.3 million.

The company’s LFG segment operates 121 landfill sites with a total installed capacity of 319 MW. Infinis is the largest generator of LFG-to-electricity in the U.K. with 40 percent of the market share.

Infinis exported 1,391 gigawatt hours (GWh) in the nine months ended Dec. 31, a 1.6 percent decline in exported power compared to 1,413 GWh for the same period in 2013 in its LFG segment. For the third quarter output was 467 GWh, slightly lower than 473 GWh for the same quarter in 2013.

Also announced in the company’s quarter three trading statement was that its LFG business has continued to make good progress on normalized funds from operations (NFFO) to renewables obligation (RO) conversions. The proportion of electricity exported under the RO regime for the nine months in 2014 was 89 percent compared to 76 percent for the comparative period in 2013. The proportion of sales under RO contracts increased from 78 percent in the quarter ended Dec. 31, 2013 to 92 percent in the same quarter in 2014. The total average selling price (ASP) was £90.24 per MWh for the nine-month 2014 period, an increase of £4.32 per MWh in the prior year.

The company continually looks to lock power prices through forward contracts in the LFG business. Infinis shared expected power output and ASP from the company’s contracted position for the second half of the financial year ending March 31, 2015 and for summer and winter 2015, which correspond to the financial year ending March 31, 2016. NFFO sales at a fixed price have an expected output of 7 percent for winter 2014 and summer 2015, dropping to 6 percent for winter 2015. The ASP for NFFO sales stays consistent around £43 per MWh. RO sales for only power at a contracted fixed price have an 88 percent expected output for winter 2014, then dropping to 74 percent and 70 percent in summer 2015 and winter 2015, respectively. The ASP for RO sales at a contracted fixed price stays fairly consistent over the periods ranging from £48.23 at the lowest in summer 2015 to £52.18 at the highest in winter 2015.

At the end of 2014, the company’s total business cash and cash equivalents stood at £65.5 million and net debt was £554.3 million, as indicated in the quarter three trading statement.

Beyond the recent reports, Infinis has signed a landmark deal to supply 113,800 MWh per year of renewable power from its portfolio of landfill gas sites to approximately 1,700 Lloyds Banking Group branches for the next 10 years.

“Corporations are becoming increasingly sophisticated in their understanding of the energy market and how they can interact with it,” said Eric Machiels, chief executive of Infinis Energy in a statement. “There is tremendous scope to expand and deepen the use of this particular power purchase agreement model, which provides Infinis with guaranteed and stable revenues despite the volatile power markets. This is an excellent example of our strategy to seek secure, long-term supply agreements with our partners.”