ContourGlobal raises dividend after beating expectations
Power Generation Company ContourGlobal Raises Dividend After Beating Expectations on Tremendous Growth in Thermal Arm Earnings
- ContourGlobal revealed that its revenue increased by more than half to $652.2 million
- Adjusted underlying earnings increased $28 million to $208.3 million in the first quarter
- Most of the profit growth came from the company’s thermal division
ContourGlobal has announced a dividend increase after reporting better-than-expected performance for the first quarter of the year.
Shareholders in the power generation business will receive the equivalent of $32.2 million between them through a dividend payment of 4.92 cents per share, an increase of 10 percent over the same period last year, within of four weeks.
Company CEO Joseph Brandt said this reward was supported by high operating cash flows and adjusted underlying earnings that increased by $28 million to $208.3 million in the first three months of 2022.
Gas boost: ContourGlobal revealed that its revenue increased by more than half to $652.2 million on the back of its thermal arm that produces just over 4,700 gigawatt-hours of power
Most of the growth in earnings came from the company’s thermal division, with its acquisitions of gas-fired plants from US-based Western Energy Group and Mexican chemical manufacturer Alpek, each generating an increase of $11 million.
Another $8 million boost came from its Austrian wind turbine division, although it lost the same amount of money due to unfavorable currency exchange.
The sizeable expansion in underlying earnings helped total funds from operations grow 9 percent to $112 million despite lower interest earnings and a $20 million cost of higher distributions to minority investors.
It also achieved higher revenue from its operations even though the amount of time during the first quarter that its renewable and thermal fleets produced electricity decreased.
This was due to power outages at its hydroelectric complex in Armenia and its natural gas plants in Trinidad and Tobago and Arrubal, Spain, neither of which the company said had “significant financial impacts.”
ContourGlobal revealed that its revenue more than halved to $652.2 million thanks to its thermal arm that produces just over 4,700 gigawatt-hours of power, a 40 percent increase from last year.
The FTSE 250 company’s results come amid rising energy costs around the world and calls among activists and opposition politicians in the UK for an extraordinary tax on oil giants’ profits. and gas like BP and Shell.
Much of the increase in gas prices is due to the global economic recovery from the Covid-19 pandemic and weak supply in Europe, following a cold European winter in 2020/21, and a summer of low winds that led to less renewable electricity being generated.
However, it has also been exacerbated by strong demand from Asia, and Russia’s recent large-scale invasion of the Ukraine, while prices in Britain have been further affected by a fire that broke out at an electricity interconnection in Kent.
Nonetheless, the London-listed company has a positive financial outlook, thanks to a “highly resilient business model with stable and predictable cash flows,” it said.
‘The current financial year has started on a positive note and overall trading across the Group is above the Board’s expectations and continues to underpin the Board’s confidence in continued shareholder dividend growth.
Amid a broader rally in London markets, GlobalContour shares rose 0.2 percent to £1.90 on Friday morning.