EX-99.2 3 exhibit_99-2.htm EXHIBIT 99.2
Exhibit 99.2
 
Financial Information for the Year Ended December 31, 2018 of Kenon and OPC and
 
Reconciliation of Certain non-IFRS Financial Information

Table of Contents






Appendix A

Summary Kenon consolidated financial information
 
Kenon Holdings Ltd and subsidiaries
 Consolidated Statements of Financial Position as at December 31, 2018 and 2017
 
   
As at December 31
  
   
2018
    
2017
  
   
$ millions
  
Current assets
            
Cash and cash equivalents
    
131
      
1,417
  
Short-term investments and deposits
    
50
      
7
  
Trade receivables, net
    
36
      
44
  
Other current assets, including derivatives
    
41
      
36
  
Assets held for sale
    
70
      
-
  
Total current assets
    
328
      
1,504
  
Non-current assets
                
Investments in associated companies
    
161
      
122
  
Deposits, loans and other receivables, including derivative instruments
    
140
      
107
  
Deferred payment receivable
    
189
      
175
  
Deferred taxes, net
    
1
      
-
  
Property, plant and equipment, net
    
635
      
616
  
Intangible assets, net
    
1
      
2
  
Total non-current assets
    
1,127
      
1,022
  
Total assets
    
1,455
      
2,526
  
Current liabilities
                
Loans and debentures
    
23
      
448
  
Trade payables
    
48
      
59
  
Other payables, including derivative instruments
    
12
      
83
  
Provisions
    
-
      
44
  
Income tax payable
    
7
      
172
  
Total current liabilities
    
90
      
806
  
Non-current liabilities
                
Loans, excluding current portion
    
488
      
504
  
Debentures, excluding current portion
    
75
      
85
  
Deferred taxes, net
    
59
      
53
  
Income tax payable
    
27
      
27
  
Total non-current liabilities
    
649
      
669
  
Total liabilities
    
739
      
1,475
  
Equity
                
Share capital
    
602
      
1,267
  
Shareholder transaction reserve
    
-
      
4
  
Translation reserve
    
1
      
(2
)
Capital reserve
    
17
      
19
  
Accumulated profit/(loss)
    
29
      
(305
)
Equity attributable to owners of the Company
    
649
      
983
  
Non-controlling interests
    
67
      
68
  
Total equity
    
716
      
1,051
  
Total liabilities and equity
    
1,455
      
2,526
  

 
2
Kenon Holdings Ltd and subsidiaries
 Consolidated Statements of Profit & Loss for the years ended December 31, 2018 and 2017
 
   
For the year ended December 31,
  
   
2018
    
2017
  
   
$ millions
  
Revenue
    
364
      
366
  
Cost of sales and services (excluding depreciation)
    
(259
)
    
(267
)
Depreciation
    
(30
)
    
(31
)
Gross profit
    
75
      
68
  
Selling, general and administrative expenses
    
(34
)
    
(56
)
Impairment of assets and investments
    
-
      
29
  
Other expenses
    
(1
)
    
-
  
Other income
    
2
      
1
  
Financing expenses
    
(30
)
    
(70
)
Financing income
    
28
      
3
  
Financing expenses, net
    
(2
)
    
(67
)
Gain on third party investment in Qoros
    
504
      
-
  
Fair value loss on option
    
(40
)
    
-
  
Write back of financial guarantee
    
63
      
-
  
Share in losses of associated companies, net of tax
    
(105
)
    
(111
)
Profit/(loss) before income taxes
    
462
      
(136
)
Income taxes
    
(11
)
    
(73
)
Profit/(loss) for the year from continuing operations
    
451
      
(209
)
(Loss)/profit for the year from discontinued operations
    
(6
)
    
478
  
Profit for the year
    
445
      
269
  
Attributable to:
                
Kenon's shareholders
    
434
      
237
  
Non-controlling interests
    
11
      
32
  
Profit for the year
    
445
      
269
  
Basic/diluted profit/(loss) per share attributable to Kenon's shareholders (in dollars):
                
Basic/diluted profit/(loss) per share
    
8.07
      
4.40
  
Basic/diluted profit/(loss) per share from continuing operations
    
8.17
      
(4.00
)
Basic/diluted (loss)/profit per share from discontinued operations
    
(0.10
)
    
8.40
  
 

3
 
Kenon Holdings Ltd and subsidiaries
Consolidated Statements of Cash Flows
 For the years ended December 31, 2018 and 2017
 
   
For the year ended December 31
  
   
2018
    
2017
  
   
$ millions
  
Cash flows from operating activities
            
Profit for the year
    
445
      
269
  
Adjustments:
                
Depreciation and amortization
    
30
      
178
  
Impairment/(write back) of assets and investments
    
5
      
(8
)
Financing expenses, net
    
2
      
276
  
Share in losses of associated companies, net
    
105
      
111
  
Capital gains, net
    
-
      
(26
)
Net change in fair value of derivative financial instruments
    
1
      
-
  
(Write back)/provision for financial guarantee
    
(63
)
    
-
  
Bad debt expense
    
-
      
7
  
Gain on third party investment in Qoros
    
(504
)
    
-
  
Fair value loss on option
    
40
      
-
  
Write down of other payables
    
1
      
-
  
Share-based payments
    
2
      
1
  
Income taxes
    
16
      
278
  
     
80
      
1,086
  
Change in inventories
    
-
      
1
  
Change in trade and other receivables
    
9
      
(63
)
Change in trade and other payables
    
(35
)
    
(568
)
Change in provisions and employee benefits
    
-
      
2
  
Cash generated from operating activities
    
54
      
458
  
Income taxes paid, net
    
(2
)
    
(66
)
Net cash provided by operating activities
    
52
      
392
  

4
Kenon Holdings Ltd and subsidiaries
Consolidated Statement of Cash Flows, continued
 For the years ended December 31, 2018 and 2017
 
   
For the year ended December 31
  
   
2018
    
2017
  
   
$ millions
  
Cash flows from investing activities
            
Proceeds from sale of property, plant and equipment and intangible assets
    
-
      
5
  
Short-term deposits and loans, net
    
(29
)
    
(5
)
Investment in long-term deposits, net
    
(14
)
    
-
  
Cash paid for asset acquisition, less cash acquired
    
(2
)
    
-
  
Sale of subsidiaries – Latin America and Caribbean businesses, net of cash disposed off
    
-
      
793
  
Income tax paid
    
(170
)
    
-
  
Investment in associates
    
(90
)
    
-
  
Acquisition of property, plant and equipment
    
(69
)
    
(228
)
Acquisition of intangible assets
    
-
      
(10
)
Proceeds from realization of long-term deposits
    
18
      
5
  
Interest received
    
13
      
7
  
Proceeds from dilution of third party investment in Qoros
    
260
      
-
  
Receipt/(payment) to release financial guarantee
    
18
      
(72
)
Payment of transaction cost for sale of subsidiaries
    
(48
)
    
-
  
Energuate purchase adjustment
    
-
      
10
  
Insurance claim received
    
-
      
80
  
Net cash (used in)/provided by investing activities
    
(113
)
    
585
  
                 
Cash flows from financing activities
                
Dividend paid to non-controlling interests
    
(8
)
    
(29
)
Dividends paid
    
(100
)
    
-
  
Capital distribution
    
(665
)
    
-
  
Proceeds from issuance of shares to holders of non-controlling interests in subsidiaries
    
-
      
100
  
Payment of issuance expenses related to long term debt
    
-
      
(35
)
Payment of consent fee
    
-
      
(5
)
Receipt of long-term loans and issuance of debentures
    
34
      
1,939
  
Repayment of long-term loans and debentures
    
(376
)
    
(1,506
)
Short-term credit from banks and others, net
    
(77
)
    
(126
)
Payment of swap unwinding and early repayment fee
    
-
      
(47
)
Purchase of non-controlling interest
    
-
      
(14
)
Interest paid
    
(25
)
    
(180
)
Net cash (used in)/provided by financing activities
    
(1,217
)
    
97
  
                 
Decrease in cash and cash equivalents
    
(1,278
)
    
1,074
  
Cash and cash equivalents at beginning of the year
    
1,417
      
327
  
Effect of exchange rate fluctuations on balances of cash and cash equivalents
    
(8
)
    
16
  
Cash and cash equivalents at end of the year
    
131
      
1,417
  

5
Information regarding reportable segments
 
Information regarding activities of the reportable segments are set forth in the following table.
 
   
OPC
    
Quantum (Qoros)
    
Other
    
Adjustments
    
Total
  
   
$ millions
  
2018
                              
Total sales
    
363
      
-
      
1
      
-
      
364
  
                                         
Adjusted EBITDA
    
91
      
-
      
(19
)
    
-
      
72
  
Depreciation and amortization
    
(30
)
    
-
      
(1
)
    
-
      
(31
)
Financing income
    
2
      
10
      
48
      
(32
)
    
28
  
Financing expenses
    
(27
)
    
(2
)
    
(33
)
    
32
      
(30
)
Other items:
                                        
Gain on third party investment in Qoros
    
-
      
504
      
-
      
-
      
504
  
Fair value loss on derivative asset
    
-
      
(40
)
    
-
      
-
      
(40
)
Share in losses of associated companies
    
-
      
(78
)
    
(27
)
    
-
      
(105
)
Write back of financial guarantee
    
-
      
63
      
-
      
-
      
63
  
Profit / (Loss) before taxes
    
36
      
457
      
(31
)
    
-
      
462
  
Income Taxes
    
(10
)
    
-
      
(1
)
    
-
      
(11
)
Profit / (Loss) from continuing operations
    
26
      
457
      
(32
)
    
-
      
451
  
                                         
Segment assets
    
893
      
92
      
239
      
-
      
1,224
  
Investments in associated companies
            
139
      
92
      
-
      
231
  
                                     
1,455
  
Segment liabilities
    
700
      
-
      
39
      
-
      
739
  
Capital expenditure
    
100
      
-
      
-
      
-
      
100
  
 
6
   
OPC
    
Quantum (Qoros)
    
Other
    
Adjustments
    
Total
  
   
$ millions
  
2017
                              
Total sales
    
365
      
-
      
1
      
-
      
366
  
Depreciation and amortization
    
(30
)
    
-
      
(1
)
    
-
      
(31
)
Impairment of assets and investments
    
-
      
-
      
29
      
-
      
29
  
Financing income
    
1
      
-
      
13
      
(11
)
    
3
  
Financing expenses
    
(34
)
    
(6
)
    
(41
)
    
11
      
(70
)
Share in (losses) income of associated companies
    
-
      
(121
)
    
10
      
-
      
(111
)
Profit / (Loss) before taxes
    
23
      
(127
)
    
(32
)
    
-
      
(136
)
Income taxes
    
(9
)
    
-
      
(64
)
    
-
      
(73
)
Profit / (Loss) from continuing operations
    
14
      
(127
)
    
(96
)
    
-
      
(209
)
                                         
Segment assets
    
940
      
16
      
1,448
      
-
      
2,404
  
Investments in associated companies
    
-
      
2
      
120
      
-
      
122
  
                                     
2,526
  
Segment liabilities
    
743
      
75
      
657
      
-
      
1,475
  
Capital expenditure
    
109
      
-
      
121
      
-
      
230
  

Information regarding associated companies
 
 
  
Carrying amounts of investment in
associated companies
    
Equity in the net (losses) /
earnings of associated companies
  
 
  
as at
    
for the year ended
  
 
  
December 31
    
December 31
    
December 31
    
December 31
  
 
  
2018
    
2017
    
2018
    
2017
  
 
  
$ millions
    
$ millions
  
ZIM
    
92
      
120
      
(27
)
    
10
  
Qoros
    
139
      
2
      
(78
)
    
(121
)
 
    
231
      
122
      
(105
)
    
(111
)
 
 
 
7
 
Appendix B
 
Summary OPC consolidated financial information
 
OPC’s Consolidated Statement of Income
 
 
  
For the year ended December 31,
  
 
  
2018
    
2017
  
 
  
US$ million
    
US$ million
  
Continuing Operations
            
Sales
    
363
      
365
  
Cost of sales (excluding depreciation and amortization)
    
(258
)
    
(266
)
Depreciation and amortization
    
(30
)
    
(30
)
Gross profit
    
75
      
69
  
General, selling and administrative expenses
    
(14
)
    
(13
)
Operating income
    
61
      
56
  
Financing expenses
    
(27
)
    
(34
)
Financing income
    
2
      
1
  
Financing expenses, net
    
(25
)
    
(33
)
Income before taxes
    
36
      
23
  
Taxes on income
    
(10
)
    
(9
)
Net income for the period
    
26
      
14
  
                 
Attributable to:
                
Equity holders of the company
    
20
      
9
  
Non-controlling interest
    
6
      
5
  
Net profit for the period
    
26
      
14
  
 
8
Summary Data from OPC’s Consolidated Statement of Cash Flows
 
 
  
Year ended December 31,
  
 
  
2018
    
2017*
  
 
  
(in millions of USD)
  
Cash flows provided by operating activities
    
86
      
114
  
Cash flows used in investing activities
    
(102
)
    
(158
)
Cash flows (used in) provided by financing activities
    
(34
)
    
163
  
(Decrease) increase in cash and cash equivalents
    
(50
)
    
119
  
Cash and cash equivalents at end of the period
    
88
      
147
  
Total depreciation and amortization
    
30
      
30
  
 
*Reclassified
 
Summary Data from OPC’s Consolidated Statement of Financial Position
 
 
  
As at
  
 
  
December 31, 2018
    
December 31, 2017
  
 
  
(in millions of USD)
  
Total financial liabilities1
    
586
      
618
  
Total monetary assets2
    
138
      
147
  
Total equity attributable to the owners
    
181
      
173
  
Total assets
    
905
      
941
  
1.
Including loans from banks and others and debentures
2.
Including cash and cash equivalents, short-term deposits and restricted cash.
 
9
Appendix C
 
Definition of OPC’s Adjusted EBITDA and non-IFRS reconciliation
 
This press release, including the financial tables, presents EBITDA, which is considered to be a non-IFRS financial measure.
 
OPC defines EBITDA as for each period as net profit before depreciation and amortization, financing expenses, net, and income tax expense. EBITDA is not recognized under IFRS or any other generally accepted accounting principles as a measure of financial performance and should not be considered as a substitute for net profit or loss, cash flow from operations or other measures of operating performance determined in accordance with IFRS. EBITDA is not intended to represent funds available for dividends or other discretionary uses because those funds may be required for debt service, capital expenditures, working capital and other commitments and contingencies. There are limitations that impair the use of EBITDA as a measure of OPC's profitability since it does not take into consideration certain costs and expenses that result from OPC's business that could have a significant effect on net profit, such as financial expenses, taxes, depreciation, capital expenses and other related items.
 
OPC believes that the disclosure of EBITDA provides transparent and useful information to investors and financial analysts in their review of the company’s, or its subsidiaries’ operating performance and in the comparison of such operating performance to the operating performance of other companies in the same industry or in other industries that have different capital structures, debt levels and/or income tax rates.
 
Set forth below is a reconciliation of OPC’s net profit to EBITDA for the periods presented. Other companies may calculate EBITDA differently, and therefore this presentation of EBITDA may not be comparable to other similarly titled measures used by other companies.


   
Year Ended December 31, 2018
  
   
(in USD millions)
  
   
Total
  
 
Net profit for the period
    
26
  
Depreciation and amortization
    
30
  
Financing expenses, net
    
25
  
Income tax expense
    
10
  
Adjusted EBITDA
    
91
  
 
   
Year Ended December 31, 2017
  
   
(in USD millions)
  
   
Total
  
 
Net income for the period
    
14
  
Depreciation and amortization
    
30
  
Financing expenses, net
    
33
  
Income tax expense
    
9
  
Adjusted EBITDA
    
86
  
 
10
 
Appendix D
 
Summary Financial Information of OPC’s Subsidiaries
 
The tables below set forth debt, cash and cash equivalents, deposits and restricted cash for OPC’s subsidiaries as of December 31, 2018 (in USD millions):
 
 
  
OPC-Rotem
    
OPC-Hadera
    
Tzomet
    
Total
  
 
                        
Debt (excluding accrued interest)
    
336
      
172
      
79
      
587
  
Cash and cash equivalents and short term deposits
    
26
      
12
      
77
      
115
  
Restricted cash (including debt service reserves) 
    
46
      
2
      
24
      
72
  
Debt service reserves
    
24
      
-
      
13
      
37
  


11
Appendix E
 
Summary Operational Information of OPC
 
The tables below set forth details of sales, generation and purchases of electricity by OPC and availability and net generation of OPC split by the OPC-Rotem plant and the Hadera energy center (kWh in millions):

 
  
For the year ended
December 31,
  
 
  
2018
    
2017
  
Sales to private customers
    
3,489
      
3,888
  
Sales to the system administrator
    
116
      
100
  
Total sales
    
3,965
      
3,988
  

   
For the year ended
December 31,
  
 
  
2018
    
2017
  
Net generation of electricity
    
3,383
      
3,655
  
Purchase of electricity from the system administrator
    
582
      
333
  
Total volume of electricity generated and purchases from the system administrator
    
3,965
      
3,988
  
 
 
  
For the year ended December 31,
  
 
  
2018
    
2017
  
 
  
Availability
(%)
    
Net generation
(kWh in millions)
    
Availability
(%)
    
Net generation
(kWh in millions)
  
OPC- Rotem
    
87
%
    
3,299
      
94
%
    
3,576
  
OPC- Hadera
    
94
%
    
84
      
89
%
    
79
  
 
12



fddf