Kenon Holdings Reports Second Quarter 2015 Results

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-- Update on assets in advanced stages of construction:
- CDA
As of June 30, 2015, CDA has received proceeds of $547 million from the $591 million available debt facilities for this project.
As of June 30, 2015, CDA has invested an aggregate $787 million in the project and has completed 79% of the project, with 87% of the dam construction and 100% of the tunnel drilling completed.
CDA is expected to commence commercial operation by the middle of 2016 and has an estimated construction cost of $954 million.
- Samay I
As of June 30, 2015, Samay I has received $252 million in proceeds from the $311 million financing facility obtained for this project.
As of June 30, 2015, Samay I has invested an aggregate $268 million in the project and has completed 76% of the project.
Samay I is expected to commenced commercial operation by the middle of 2016 and has an estimated construction cost of $380 million.
- Kanan
As of June 30, 2015, Kanan has invested an aggregate $61 million in the project (including $40 million of intercompany expenses relating to Puerto Quetzal's and CEPP's sale of the barges to Kanan) and has completed 76% of the project.
Kanan is expected to commence commercial operation by the end of 2015 and has an estimated construction cost of $73 million (including $40 million of intercompany expenses relating to Puerto Quetzal's and CEPP's sale of the barges to Kanan). -- On August 10, 2015, IC Power acquired Advanced Integrated Energy ("AIE"), which holds a conditional license for the construction of a 120 MW cogeneration natural gas power plant and will seek regulatory approval for licenses in respect of an additional 25 MW in Israel, for NIS 60 million (approximately $16 million). The project is in the advanced development stage and construction is expected to commence in early 2016. Based upon its initial assessment, IC Power expects that the total cost of completing the AIE plant (including the consideration for the acquisition of AIE and the construction cost of the power station) will be approximately $200 million. The AIE plant is expected to commence commercial operations in the second half of 2018. -- Project pipeline: IC Power is currently assessing various projects in Israel and various Latin American countries, such as Chile, Colombia, Guatemala, Mexico, Peru, Panama, the Dominican Republic, and Nicaragua. These potential projects range in size from small-scale power facilities (e.g., less than 40 MW) to large-scale power facilities (e.g., approximately 550 MW) and utilize different fuels and technologies, including natural gas, hydroelectric, wind, and stranded gas. IC Power is also considering acquiring companies and assets in power generation and related businesses (e.g., transmission and distribution companies or assets). There is no guarantee that IC Power will proceed with any of the above-mentioned projects.
Decisions by the PUAE (Israel's Power Regulator)
In August 2015, Israel's Public Utilities Authority (the PUAE) published a decision that independent power producers ("IPPs") in Israel would be obligated to pay system management service charges, retroactively from June 1, 2013. According to the PUAE decision, the amount of system management service charges that would be payable by OPC from the effective date to June 2015 is approximately NIS 152 million (approximately $40 million), not including interest rate and linkage costs. IC Power is considering the implications of this decision and may contest it. This decision has resulted in a revision in certain provisions that had been taken by OPC, and has resulted in adjustments to IC Power's income statement. Specifically, IC Power's cost of sales were adjusted downwards by $46 million and $6 million in the year ended December 31, 2014 and the three months ended March 31, 2015, respectively, resulting in a corresponding upward adjustment in IC Power's Adjusted EBITDA in those periods; there was no adjustment to Kenon's financials during those periods, but Kenon recognized a $52 million gain ($31 million for Kenon's shareholders after tax effect) in the three months ended June 30, 2015 in connection with its revision of this provision in its financial statements for the three months ended June 30, 2015. For more information, see Appendix B.
In August 2015, the PUAE also published a notice for a hearing regarding tariff updates effective from September 9, 2015. Such tariffs reflect a decline in the generation component tariff from NIS 300.9 per MWh and NIS 301.5 per MWh to a single tariff of NIS 260.2 per MWh. OPC uses privately negotiated rates to sell electricity to customers under its PPAs, but such rates are expressed as a discount to the generation component included within the PUAE rate, so a decline in PUAE rates will result in a corresponding decline in OPC's rates and, accordingly, its revenues. OPC's main cost of sales is gas, and prices for the gas it consumes under its supply agreement with the Tamar Group are indexed in part to the PUAE generation component tariff and NIS/USD exchange rate. However, the supply agreement also contains a floor price and, as a result of previous declines in the PUAE generation component tariff, OPC will soon begin to pay the floor price, so the decline in the tariff will result in a greater decline in OPC's margins.
Qoros
Car Sales
In the three months ended June 30, 2015, Qoros sold approximately 3,256 vehicles as compared to 2,488 vehicles sold in the three months ended March 31, 2015 and 1,671 vehicles in the three months ended June 30, 2014, representing an increase of 31% and 95%, respectively.
In the six months ended June 30, 2015, Qoros sold 5,744 vehicles as compared to 2,561 vehicles sold in the six months ended June 30, 2014.
In July 2015, Qoros sold 1,230 cars.
Dealerships
As of June 30, 2015, there were 81 Qoros dealerships (70 of which were operational), 12 additional dealerships under construction, and twenty three signed Memorandums of Understanding with respect to the development of 23 additional dealerships.
Qoros Brand Day
On August 19, 2015 Qoros held a Qoros Brand Day in its Changshu plant with approximately 120 media personnel, 100 car owners and Key Opinion Leaders, and 33 dealers in attendance. The Qoros Brand Day event served as the kick-off for a series of Qoros marketing campaigns focusing on its brand positioning and product line updates.
Qoros also launched the new 2016 model year versions of the Qoros 3 Sedan, the Qoros 3 Hatch and the Qoros 3 City SUV. Two additional trims are also being offered for each of the Qoros 3 Sudan and the Qoros 3 Hatch, which has extended Qoros' pricing range to the RMB100,000 entry price.
Awards
In April 2015, the Qoros 3 Sedan was awarded a 5 plus star safety rating in the China - New Car Assessment Program (C-NCAP)'s 2015 crash test, and received the highest score ever in its 9-year history.
In July 2015, Qoros received a Connected Service Award at the 2015 China Auto Customer Care Award in recognition of the QorosQloud. Qoros was the only Chinese brand among the eight brands which received a 2015 China Auto Customer Care Award in July.
Shareholder Investments in Qoros and Guarantees of Qoros Bank Debt
In Q2 2015, Kenon and Chery each provided a RMB400 million ($64 million) shareholder loan to Qoros.
Also in Q2 2015, Kenon provided a back-to-back guarantee to Chery for RMB175 million ($28 million), plus up to RMB30 million of related fees, in connection with Qoros' drawdown of RMB350m ($56 million) under a long-term loan, which drawdown is guaranteed by Chery.
Voluntarily Recall of Certain Vehicle Models
In July 2015, Qoros voluntarily recalled 6,736 vehicles as a result of information derived from frontal impact crash tests of new Qoros models under development, which suggested that certain Qoros vehicles already in production and in the market may have had safety belt pre-tensioner system crimping assembly process issues. Regarding customer safety as an absolute priority, Qoros decided to recall all vehicles within the scope of impact and to replace the front safety belt pre-tensioner free of charge, to eliminate any risk. As of the date of this release, Qoros has not received any field incidences or customer complaints related to this defect across any of its vehicles in the market.
China Vehicle Market Conditions
The overall passenger vehicle market in China continued to grow in the first half of 2015 with a 7% YoY growth rate and 8.97 million units sold during this period. The first quarter of 2015 experienced an 11% YoY growth rate, and the second quarter of 2015 experienced a 3% YoY growth rate. This growth was unevenly distributed by segment; sales in the C Sedan and Hatch segments decreased by 10% and 34% YoY, respectively, while sales in the SUV segment increased by 43% YoY. Some auto manufacturers are offering significant price reductions, discounts, and/or rebates, to stimulate purchases of their vehicles. In addition, as sales are generally lower during the summer, Qoros expects such price reductions to continue, and potentially escalate, during the third quarter of 2015.
Additionally, the Shanghai Composite Index has declined by more than 30% percent since mid-June and this decline in China's stock market could further impact negatively consumption rates and the purchase of costly items, such as vehicles, throughout China. In light of current financial market and economic conditions in China, which could affect vehicle sales industry-wide in China, Qoros may find it challenging to so increase sales, and may even experience a decline in sales.
Qoros is evaluating appropriate measures to address the above market conditions. Qoros is also seeking to optimize its cost structure, and may undertake cost-cutting measures, including workforce optimizations, the downsizing of various departments and other measures to align its operations with its business plan.
Investors' Conference Call
Kenon's management will host a conference call for investors and analysts on September 8, 2015. To participate, please call one of the following teleconferencing numbers:
US: 1-888-407-2553 Israel: 03- 918-0644 International: 972-3-918-0644
The call will commence at 9:00am Eastern Time, 6:00am Pacific Time, 2:00pm UK Time, 4:00pm Israel Time and 9:00pm Singapore Time.
About Kenon
Kenon is a holding company that operates dynamic, primarily growth-oriented businesses. The companies it owns, in whole or in part, are at various stages of development, ranging from established, cash-generating businesses to early stage development companies. Kenon's businesses consist of: -- IC Power (100% interest) - a leading owner, developer and operator of power generation facilities in the Latin American, Caribbean and Israeli power generation markets; -- Qoros (50% interest) - a China-based automotive company; -- ZIM Integrated Shipping Services, Ltd. (32% interest) - an international shipping company; and -- Primus Green Energy, Inc. (91% interest) - an early stage developer of alternative fuel technology.
Kenon's primary focus is to grow and develop its primary businesses, IC Power and Qoros. Following the growth and development of its primary businesses, Kenon intends to provide its shareholders with direct access to these businesses, when we believe it is in the best interests of its shareholders for it to do so based on factors specific to each business, market conditions and other relevant information. Kenon intends to support the development of its non-primary businesses, and to act to realize their value for its shareholders by distributing its interests in its non-primary businesses to its shareholders or selling its interests in its non-primary businesses, rationally and expeditiously. For further information on Kenon's businesses and strategy, see Kenon's publicly available filings, which can be found on the SEC's website at www.sec.gov. Please also see http://www.kenon-holdings.com for additional information.
Caution Concerning Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about tariffs published by the PUAE and the expected impact on OPC, the impact of recent PUAE draft and financial decisions on IC Power's operations and financial results, the expected cost and expected timing of completion of IC Power's construction projects and the expected timing of completion of AIE, which IC Power recently acquired, IC Power's project pipeline, statements about China's vehicle market and other non-historical matters, including statements about IC Power's and Qoros' expected operating results and trends. These statements are based on Kenon's management's current expectations or beliefs, and are subject to uncertainty and changes in circumstances. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond Kenon's control, which could cause the actual results to differ materially from those indicated in such forward-looking statements. Such risks include risks relating to a failure by IC Power to complete the construction of its various power plants under construction on a timely basis, within expected budget or at all, develop or acquire any of the assets within its project pipeline, and other risks and factors, including those risks set forth under the heading "Risk Factors" in Kenon's Annual Report on Form 20-F filed with the SEC, and other filings. Except as required by law, Kenon undertakes no obligation to update these forward-looking statements, whether as a result of new information, future events, or otherwise.
Contact Info Kenon Holdings Ltd. Barak Cohen External Investor Relations VP Business Development and IR Ehud Helft / Kenny Green [email protected] GK Investor Relations Tel: +65 6351 1780 [email protected] Tel: +1 646 201 9246
[1] IC Power's net income attributable to Kenon for the six months and three months ended June 30, 2015, as reported by Kenon, was $60 million and $48 million, respectively; the amounts differ from amounts reported by IC Power as a result of the revision of certain provisions at IC Power, which were adjusted in IC Power's Q1 and 2014 financial statements, but were not adjusted until Q2 2015 for Kenon. For further information, see "Business Developments - Decisions by the PUAE (Israel's Power Regulator). Kenon Holdings Ltd Unaudited condensed consolidated statements of financial position June 30 December 31 2015 2014 ---- ---- $ Thousands Current assets Cash and cash equivalents 460,469 610,056 Short-term investments and deposits 209,089 226,830 Trade receivables, net 173,809 181,358 Other current assets 91,335 59,064 Income tax receivable 4,422 3,418 Inventories 56,784 55,335 Assets held for distribution 45,595 - --- Total current assets 1,041,503 1,136,061 Non-current assets Investments in associated companies 474,077 435,783 Deposits, loans and other receivables, including financial instruments 98,349 74,658 Deferred taxes, net 38,679 42,609 Property, plant and equipment, net 2,830,272 2,502,787 Intangible assets 148,702 144,671 Total non- current assets 3,590,079 3,200,508 Total assets 4,631,582 4,336,569 Kenon Holdings Ltd Unaudited condensed consolidated statements of financial position, continued June 30 December 31 2015 2014 ---- ---- $ Thousands Current liabilities Loans and debentures 158,025 161,486 Trade payables 148,021 144,488 Other payables, including derivative 106,824 114,165 Provisions 38,432 69,882 Income tax payable 4,535 6,766 Total current liabilities 455,837 496,787 Non-current liabilities Loans 1,802,345 1,528,930 Debentures 679,805 686,942 Derivative instruments 18,738 21,045 Deferred taxes, net 148,732 130,983 Employee benefits 6,254 6,219 Other non- current liabilities 9,966 10,072 Total non- current liabilities 2,665,840 2,384,191 Total liabilities 3,121,677 2,880,978 Equity Share capital 1,281,272 - Parent company investment - 1,240,727 Translation reserve (1,489) 28,440 Capital reserve 10,003 (25,274) Retained Earnings 7,499 - --- Equity attributable to owners of the Company 1,297,285 1,243,893 Non- controlling interests 212,620 211,698 Total equity 1,509,905 1,455,591 Total liabilities and equity 4,631,582 4,336,569
Kenon Holdings Ltd Unaudited condensed consolidated statements of profit or loss For the Six Months ended For the Three Months ended June 30 June 30 June 30 June 30 2015 2014 * 2015 2014 ---- ---- ---- $ Thousands $ Thousands Revenue 655,247 661,343 333,089 336,518 Cost of sales and services (excluding depreciation) (412,251) (468,277) (181,887) (244,714) Depreciation (54,121) (48,178) (28,506) (25,268) Gross profit 188,875 144,888 122,696 66,536 Other income 6,540 6,518 6,016 4,142 Gain from bargain purchase - 47,767 - 24,116 Dilution gains from reductions in equity interest held in associates 32,829 6,591 404 4,314 Selling, general and administrative expenses (47,487) (51,370) (21,379) (31,476) Other expenses (1,948) (959) (1,475) (840) ---- ---- Operating profit from continuing operations 178,809 153,435 106,262 66,792 Financing expenses (61,326) (46,757) (35,612) (24,871) Financing income 13,283 1,652 5,077 1,232 Financing expenses, net (48,043) (45,105) (30,535) (23,639) Share in net losses of associated companies, net of tax (63,378) (52,002) (29,677) (39,064) Profit from continuing operations before income taxes 67,388 56,328 46,050 4,089 Tax expenses (33,360) (34,748) (22,055) (17,779) Profit/(loss) for the period from continuing operations 34,028 21,580 23,995 (13,690) Loss for the period from discontinued operations - (130,069) - (70,204) --- --- Profit/(loss) for the period 34,028 (108,489) 23,995 (83,894) Attributable to: Kenon's shareholders 17,218 (123,635) 12,698 (90,145) Non-controlling interests 16,810 15,146 11,297 6,251 Profit/(loss) for the period 34,028 (108,489) 23,995 (83,894) Basic/Diluted profit (loss) per share attributable to Kenon's shareholders (in dollars): Basic/Diluted profit (loss) per share 0.33 (2.32) 0.24 (1.69) Basic/Diluted profit (loss) per share from continuing operations 0.33 (0.18) 0.24 (0.34) Basic/Diluted loss per share from discontinued operations - (2.50) - (1.35)
* Reflects adjustments in the consolidated statement of income and cash flows for the six months ended June 30, 2014 as a result of the completion of the fair value measurement related to the acquisitions by IC Power's subsidiary Inkia Energy Limited of AIE Nicaragua Holdings, Surpetroil S.A.S. and AEI Jamaica Holdings, which occurred on March 12, 2104, March 28, 2014 and May 30, 2014, respectively. Kenon Holdings Ltd Unaudited condensed consolidated statements of cash flows For the Six Months ended For the Three Months ended June 30, 2015 June 30, 2014 * June 30, 2015 June 30, 2014 * $ Thousands Cash flows from operating activities Profit/(loss) for the period 34,028 (108,489) 23,995 (83,894) Adjustments: - - Depreciation and amortization 58,537 128,748 29,327 67,220 Gain on bargain purchase - (47,767) - (24,116) Financing expenses, net 48,043 152,320 30,535 84,070 Share in losses of associated companies, net of tax 63,378 46,737 29,677 36,140 Gain from changes in interest held in associates (32,829) (2,277) (404) - Other capital loss/(gains), net 3,471 (8,889) 3,327 (8,099) Share-based payments (1,336) 2,964 (683) 2,812 Taxes on income 33,360 44,483 22,055 21,347 206,652 207,830 137,829 95,480 Change in inventories (1,449) (8,772) 2,670 703 Change in trade and other receivables (9,811) (32,538) 8,841 6,952 Change in trade and other payables (29,966) 54,879 (16,165) 11,560 Change in provisions and employee benefits (36,331) 25,324 (47,754) 14,337 129,095 246,723 85,421 129,032 Income taxes paid, net (19,983) (43,764) (10,660) (23,023) Dividends received from investments in associates 4,487 14,973 3,850 13,765 Net cash provided by operating activities 113,599 217,932 78,611 119,774 Kenon Holdings Ltd Unaudited condensed consolidated statements of cash flows, continued For the Six Months ended For the Three Months ended June 30, 2015 June 30, 2014 * June 30, 2015 June 30, 2014 * $ Thousands Cash flows from investing activities Proceeds from sale of property, plant and equipment 221 17,298 193 4,720 Deposits and loans, net 23,641 (94,098) (7,940) (39,420) Business combinations less cash acquired - (32,086) - (2,920) Investment in associated company (129,234) (122,226) (64,874) (81,438) Acquisition of property, plant and equipment** (357,912) (180,804) (229,465) (100,521) Acquisition of intangible assets (7,287) (6,251) (5,740) (2,321) Interest received 3,425 2,223 2,115 1,099 Payment of consideration retained (2,800) - (2,800) - Payments for derivative investments used for hedging, net - 876 - 1,001 Settlement of derivatives - (945) - (733) --- ---- Net cash used in investing activities (469,946) (416,013) (308,511) (220,533) Cash flows from financing activities Dividend paid to non- controlling interests (4,254) (9,208 ) (2,510) (5,600) Proceeds from issuance of shares to holders of non- controlling interests in subsidiaries 5,310 17,248 5,310 8,032 Receipt of long-term loans and issuance of debentures 296,890 367,234 251,890 121,997 Repayment of long- term loans and debentures (51,511) (121,727) (25,369) (39,624) Purchase of non- controlling interest (20,000) - - - Short-term credit from banks and others, net (5,631) 45,430 (4,177) 16,328 Contribution from parent company 34,271 122,651 - 76,172 Payments to parent company - (300,047) - (300,047) Interest paid (47,974) (121,771) (28,237) (64,615) Net cash provided by/ (used in) financing activities 207,101 (190) 196,907 (187,357) Decrease in cash and cash equivalents (149,246) (198,271) (32,993) (288,116) Cash and cash equivalents at beginning of the period 610,056 670,910 - 159 Effect of exchange rate fluctuations on balances of cash and cash equivalents (341) 40 6,655 2,157 Cash and cash equivalents at end of the period 460,469 472,679 (26,338) (285,800) Significant non-cash investing transactions: Acquisition of fixed assets under lease contract - (107,688) - (107,688) Purchase of fixed assets on credit and others (4,899) (762) 3,629 7,252
Significant non-cash investing and financing activity during the period ended June 30, 2015 relating to transfer of certain business interests to Kenon Holdings Ltd from Israel Corporation Ltd and the issuance of common stock and reclassification of parent company investment in connection with the spin-off.
* Reflects adjustments in the consolidated statement of income and cash flows for the six months ended June 30, 2014 as a result of the completion of the fair value measurement related to the acquisitions by IC Power's subsidiary Inkia Energy Limited of AIE Nicaragua Holdings, Surpetroil S.A.S. and AEI Jamaica Holdings, which occurred on March 12, 2104, March 28, 2014 and May 30, 2014, respectively.
** Mainly assets acquired by I.C. Power for the construction of projects in Cerro del Aguila and Samay facilities during the period ended June 30, 2015.
Segment Information I.C. Qoros** Other Adjustments Total Power* $ Thousands For the six months ended June 30, 2015: Sales to external customers 649,907 - 225 - 650,132 Intersegment sales 5,115 - - - 5,115 655,022 - 225 - 655,247 Elimination of intersegment sales (5,115) - - 5,115 - Total sales 649,907 - 225 5,115 655,247 === === EBITDA 221,511 - 15,835 - 237,346 --- --- Depreciation and amortization 58,318 - 219 - 58,537 Financing income (4,315 ) - (8,968) - (13,283) Financing expenses 57,254 - 4,072 - 61,326 Other items: Share in (income)/losses of associated companies (116) 73,864 (10,370) - 63,378 ---- --- 111,141 73,864 (15,047) - 169,958 --- Profit/(loss) before taxes 110,370 (73,864 ) 30,882 - 67,388 Taxes on income 33,360 - - - 33,360 --- --- --- Profit/(loss) for the period from continuing operations 77,010 (73,864 ) 30,882 - 34,028 ===
* The total assets and liabilities of I.C. Power are $4,049,894 thousand and $2,999,249 thousand at June 30, 2015, respectively.
** Associated company I.C. Qoros** Other Adjustment Total Restatements*** Total Power* $ Thousands For the six months ended June 30, 2014: Sales to external customers 654,776 - - - 654,776 - 654,776 Intersegment sales 6,567 - - - 6,567 - 6,567 --- --- --- --- 661,343 - - - 661,343 - 661,343 Elimination of intersegment sales (6,567) - - 6,567 - - - --- --- --- --- --- Total sales 654,776 - - 6,567 661,343 - 661,343 === === === EBITDA 170,972 - (14,224) - 156,748 (86) 156,662 --- --- --- Depreciation and amortization 49,782 - 566 - 50,348 646 50,994 Financing income (1,719 ) - (9,623) 9,690 (1,652) - (1,652) Financing expenses 54,417 - 800 (9,690) 45,527 1,230 46,757 Other items: Share in (income)/losses of associated companies (13,051) 68,413 (3,360) - 52,002 - 52,002 Gain on bargain purchase (38,818) - - - (38,818) (8,949) (47,767) --- --- --- 50,611 68,413 (11,617) - 107,407 (7,073) 100,334 --- Profit/(loss) before taxes 120,361 (68,413) (2,607) - 49,341 6,987 56,328 Taxes on income 34,878 - (130) - 34,748 - 34,748 --- ---- --- --- Profit/(loss) for the period from continuing operations 85,483 (68,413) (2,477) - 14,593 6,987 21,580 === Loss for the period from discontinued operations - - (130,069) - (130,069) - (130,069) === === === ===
* The total assets and liabilities of I.C. Power are $3,504,322 thousand and $2,637,894 thousand at June 30, 2014, respectively.
** Associated company
*** Reflects adjustments in the consolidated statement of income and cash flows for the six months ended June 30, 2014 as a result of the completion of the fair value measurement related to the acquisitions by IC Power's subsidiary Inkia Energy Limited of AIE Nicaragua Holdings, Surpetroil S.A.S. and AEI Jamaica Holdings, which occurred on March 12, 2104, March 28, 2014 and May 30, 2014, respectively. I.C. Qoros** Other Adjustments Total Power $ Thousands For the three months ended June 30, 2015: Sales to external customers 330,835 - - - 330,835 Intersegment sales 2,254 - - - 2,254 333,089 - - - 333,089 Elimination of intersegment sales (2,254) - - 2,254 - Total sales 330,835 - - 2,254 333,089 === === EBITDA 142,007 - (6,418) - 135,589 --- --- Depreciation and amortization 29,239 - 88 - 29,327 Financing income (2,755 ) - (869) (1,453) (5,077) Financing expenses 34,159 - - 1,453 35,612 Other items: Share in (income)/losses of associated companies (124) 38,104 (8,303) - 29,677 ---- --- 60,519 38,104 (9,084) - 89,539 --- Profit/(loss) before taxes 81,488 (38,104 ) 2,666 - 46,050 Taxes on income 22,055 - - - 22,055 --- --- --- Profit/(loss) for the period from continuing operations 59,433 (38,104 ) 2,666 - 23,995 ===
** Associated company
I.C. Qoros** Other Adjustments Total Power $ Thousands For the three months ended June 30, 2014: Sales to external customers 333,450 - - - 333,450 Intersegment sales 3,068 - - - 3,068 336,518 - - - 336,518 Elimination of intersegment sales (3,068) - - 3,068 - Total sales 333,450 - - 3,068 336,518 EBITDA 76,796 - (7,070) - 69,726 --- --- Depreciation and amortization 27,518 - (468) - 27,050 Financing income (724 ) - (6,115) 5,607 (1,232) Financing expenses 30,478 - - (5,607) 24,871 Other items: Share in (income)/losses of associated companies (3,689) 39,060 3,693 - 39,064 Gain on bargain purchase (24,116) - - (24,116) --- --- 29,467 39,060 (2,890) - 65,637 --- Profit/(loss) before taxes 47,329 (39,060) (4,180) - 4,089 Taxes on income 17,889 - (110) - 17,779 --- ---- --- Profit/(loss) for the period from continuing operations 29,440 (39,060) (4,070) - (13,690) === Loss for the period from discontinued operations - - (70,204) - (70,204) === === ===
** Associated company
Information Regarding Associated Companies A. Carrying amounts of investments in associated companies As at As at June 30, 2015 December 31, 2014 ---- (In USD Thousands) ZIM 202,822 191,069 Tower - 14,061 Qoros 262,339 221,038 Others 8,916 9,615 474,077 435,783 B. Equity in the net earnings (losses) of associate companies For the six months ended For the three months ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 (In USD Thousands) ZIM 11,432 - 6,465 - Tower (798) 4,788 2,102 (3,230) Qoros (73,864) (68,413) (38,403) (39,060) Others (148) 11,623 159 3,226 ---- --- (63,378) (52,002) (29,677) (39,064) Appendix A Contribution of Principal Operations to Profit (attributable to Kenon's shareholders) Six Months Ended June 30, Three Months Ended June 30, 2015 2014 2015 2014 ---- ---- ---- ---- (in millions of USD) Profit /(loss) attributable to Kenon's shareholders 17 (124) 13 (90) Contributions to Kenon's income (loss) for the period IC Power 60 79 48 26 Qoros (74) (68) (38) (39) Tower (1) 5 2 (3) ZIM 11 (131) 6 (69) Other 21 (9) (5) (5)
Appendix B IC Power's Consolidated Statement of Income (Unaudited) For the six month period For the three month period ended June 30 ended June 30 2015 *2014 2015 *2014 (in millions of USD) Continuing Operations Sales 655 661 333 336 Cost of sales (excluding depreciation and amortization) (458) (468) (234) (244) Depreciation and amortization (54) (48) (28) (26) --- --- --- --- Gross profit 143 145 71 66 General, selling and administrative expenses (31) (30) (15) (20) Gain on bargain purchase - 48 - 24 Measurement to fair value of pre-existing share - 3 - 3 Other income, net 5 2 5 - --- --- --- --- Operating income 117 168 61 73 Financing expenses, net 53 67 32 45 Share in income of companies, net of tax - 2 - 1 Income before taxes from continuing operations 64 103 29 29 Taxes on income (21) (31) (8) (14) --- --- --- --- Net income from continuing operations 43 72 21 15 Discontinued operations Net income from discontinued operations, net of tax - 7 - 1 Net income for the period 43 79 21 16 === === === === Attributable to: Equity holders of the company 33 66 17 11 Non-controlling interest 10 13 4 5 Net income for the period 43 79 21 16 === === === ===
*Reflects adjustments in the consolidated statement of income and cash flows for the six months ended June 30, 2014 as a result of the completion of the fair value measurement related to the acquisitions by IC Power's subsidiary Inkia Energy Limited of AIE Nicaragua Holdings, Surpetroil S.A.S. and AEI Jamaica Holdings, which occurred on March 12, 2104, March 28, 2014 and May 30, 2014, respectively. Summary Data from IC Power's Consolidated Statement of Cash Flows (Unaudited) Six Months Ended Three Months June 30, Ended June 30, 2015 2014 2015 2014 ---- ---- ---- ---- (in millions of USD) Cash flows provided by operating activities 131 177 86 87 Cash flows used in investing activities (341) (267) (244) (124) Cash flows provided by (used in) financing activities 63 (90) 132 (242) --- --- --- ---- Increase (decrease) in cash and cash equivalents (147) (180) (26) (279) ==== ==== === ==== Cash and cash equivalents at end of the period 436 339 436 339 Investments in property, plant and equipment (333) (178) (205) (108) Total depreciation and amortization 58 51 29 28
Summary Data from IC Power's Consolidated Statement of Financial Position (Unaudited) As at June 30, 2015 June 30, 2014 December 31, 2014 (in millions of USD) Total financial liabilities(1) 2,514 2,035 2,348 Total monetary assets(2) 621 406 791 Total equity attributable to the owners 852 685 815 Total assets 4,063 3,531 3,858
1. Not including trade payables, other payables and credit balances and financial instruments.
2. Not including trade receivables, other receivables and debit balances and financial instruments.
Decisions by the PUAE (Israel's Power Regulator)
In August 2015, Israel's Public Utilities Authority (the PUAE) published a decision that independent power producers (IPPs) in Israel would be obligated to pay system management service charges, retroactively from June 1, 2013. According to the PUAE decision, the amount of system management service charges that would be payable by OPC from the effective date to June 2015 is approximately NIS 152 million (approximately $40 million), not including interest rate and linkage costs. IC Power is considering the implications of this decision and may contest it.
IC Power's financial statements as of December 31, 2014 and March 31, 2015 initially authorized for issuance included provisions by OPC for system management service charges and diesel surcharges in the aggregate amount of $70 million as of December 31, 2014 and $79 million as of March 31, 2015. In IC Power's opinion, due to the PUAE decision, it is more likely than not that OPC will not be charged more than the amount that was indicated in the PUAE decision. Therefore, OPC revised the provisions, such that the revised balance of the provision as of December 31, 2014 and March 31, 2015 was $27 million and $31 million, respectively. Because IC Power reapproved its financial statements in connection with its filing of a registration statement with the SEC, this revision resulted in adjustments to IC Power's income statement (a $46 million and $6 million downward adjustment in cost of sales, and all line items below cost of sales in 2014 and Q1 2015, respectively, which resulted in a corresponding upward adjustment in IC Power's Adjusted EBITDA during those periods) and in its statement of financial position as of the end of 2014 and Q1 2015; for 2014, the provisions were taken over the full year, but the adjustment was only made in Q4 2014.
In accordance with IFRS, Kenon revised its provisions as of June 30, 2015, such that the revised balance of the provision as of such date in Kenon's financial statements was $38 million, resulting in a gain of $52 million in Q2 2015 ($31 million to Kenon's shareholders after tax effect). Kenon was not required to revise its financial statements as of December 31, 2014 or March 31, 2015, as Kenon's financial statements for these periods were already approved at the time of the PUAE's August 2015 decision. Accordingly, income statement figures in IC Power's financials for 2014 and Q1 and Q2 2015 differ from those attributable to IC Power in Kenon's financials for those periods.
Appendix C
IC Power's Non-IFRS Financial Measures
This press release, including the financial tables, presents Adjusted EBITDA, net debt and net financial liabilities, which are financial metrics considered to be "non-IFRS financial measures." Non-IFRS financial measures should be evaluated in conjunction with, and are not a substitute for, IFRS financial measures. The tables also present the IFRS financial measures, which are most comparable to the non-IFRS financial measures as well as reconciliation between the non-IFRS financial measures and the most comparable IFRS financial measures. The non-IFRS financial information presented herein should not be considered in isolation from or as a substitute for operating income, net income or per share data prepared in accordance with IFRS.
IC Power defines "Adjusted EBITDA" as for each period for each entity as net income, excluding net income from discontinued operations, net of tax (excluding dividends received from discontinued operations), before depreciation and amortization, finance expenses, net, income tax expense and asset write-off, and excluding share in income from associates, and negative goodwill. Adjusted EBITDA is not recognized under IFRS or any other generally accepted accounting principles as measures of financial performance and should not be considered as a substitute for net income or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. Adjusted 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. Adjusted EBITDA presents limitations that impair its use as a measure of our profitability since it does not take into consideration certain costs and expenses that result from our business that could have a significant effect on our net income, such as financial expenses, taxes, depreciation, capital expenses and other related charges.
Set forth below is a reconciliation of IC Power's net income to Adjusted EBITDA for the periods presented. Other companies may calculate Adjusted EBITDA differently, and therefore this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.
Six Months Ended June 30, Three Months Year Ended December 31, Ended June 30, 2015 2014 2015 2014 2014 ---- ---- ---- ---- ---- (in USD million) 43 79 21 16 268 Net income for the period Depreciation and amortization(1) 58 51 29 28 108 Financing expenses, net 53 67 32 45 119 Income tax expense 21 31 8 14 51 Asset write-off - - - - 35 Share in income of associated companies - (2) - (1) (2) Recognized negative goodwill - (51) 2 - (27) 2 (71)(2) Net income from discontinued operations, net of tax, excluding dividends received from discontinued operations(3) - (7) - (1) (113) --- --- --- --- ---- Adjusted EBITDA 175 168 90 74 395 === === === === ===
1. Includes depreciation and amortization expenses from cost of sales and general, selling and administrative expenses.
2. Includes $68 million of income recognized from recognition of negative goodwill and $3 million of income recognized from the measurement of fair value.
3. Excludes $15 million received from Edegel post-equity method accounting, which is reflected as "other income" in IC Power's discontinued operations for that period.
Appendix D Summary Financial Information of IC Power's Subsidiaries and Associated Company (Unaudited) Six Months Ended June 30, 2015 Entity Ownership Revenues Cost of Adjusted EBITDA(1) Outstanding Net debt(3) Interest Sales debt(2) (%) --- --- (in millions of USD, unless otherwise stated) Operating Companies Peru segment Kallpa 75 225 139 78 438 409 Assets in advance stages of construction CdA 75 - - - 546 453 Samay I 75 - - - 244 221 Israel segment OPC 80 157 112 43 422 210 Central America segment ICPNH4 61-65 57 37 18 104 88 Puerto Quetzal5 100 60 54 5 22 16 Nejapa6 100 53 46 6 - (27) Cenergica 100 5 3 1 - (1) Assets in advance stages of construction Kanan 100 - - - - (4) Other segment COBEE 100 22 8 11 79 54 Central Cardones 87 8 2 6 47 43 Colmito 100 20 17 2 18 16 CEPP 97 20 17 3 25 24 JPPC7 100 24 21 2 7 3 Surpetroil8 60 4 2 1 3 2 Inkia & Other9 100 - - - 448 302 IC Power & Other10 100 - - (1) 111 84 --- --- --- --- --- --- Total 655 458 175 2,514 1,893 Pedregal 21 23 19 2 13 6 Total (Associated company) - 23 19 2 13 6 --- --- --- --- --- ---
1. "Adjusted EBITDA" for each entity is defined as net income, excluding net income from discontinued operations, net of tax (excluding dividends received from discontinued operations), before depreciation and amortization, finance expenses, net, income tax expense (benefit) and asset write-off, and excluding share in income from associates, measurement to fair value of our-existing share, and negative goodwill.
Adjusted EBITDA is not recognized under IFRS or any other generally accepted accounting principles as measures of financial performance and should not be considered as substitutes for net income or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. Adjusted 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. Adjusted EBITDA presents limitations that impair its use as a measure of profitability since it does not take into consideration certain costs and expenses that result from each business that could have a significant effect on its net income, such as financial expenses, taxes, depreciation, capital expenses and other related charges.
The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA for IC Power's subsidiaries for the six months ended June 30, 2015:
Kallpa CDA Samay I OPC ICPNH Puerto Quetzal --- --- (in millions of USD) Income (loss) for the year 24 (1) (1) 13 8 1 Depreciation and amortization 25 - - 12 5 2 Finance expenses, net 18 1 1 13 4 1 Income tax expense (benefit) 11 - - 5 1 1 Adjusted EBITDA 78 - - 43 18 5
Nejapa Cenérgica Central Colmito Cardones COBEE (in millions of USD) Income (loss) for the year 2 1 5 2 1 Depreciation and amortization 3 - 2 2 - Finance expenses, net - - 3 1 1 Income tax expense (benefit) 1 - 1 1 - Adjusted EBITDA 6 1 11 6 2
CEPP JPPC Surpetroil Inkia & IC Power & Total Other Others Pedregal (in millions of USD) Income (loss) for the year 2 - (1) (11) (2) 43 - Depreciation and amortization 1 2 1 3 - 58 2 Finance expenses, net (1) - 1 10 - 53 - Income tax expense 1 - - (2) 1 21 - Adjusted EBITDA 3 2 1 - (1) 175 2
2. Includes short-term and long-term debt.
3. Net debt is defined as total debt attributable to each of our subsidiaries, minus the cash and short term deposits and restricted cash of such companies. Net debt is not a measure of liabilities in accordance with IFRS. The tables below set forth a reconciliation of net debt to total debt for IC Power's subsidiaries. Kallpa CDA Samay I OPC ICPNH Puerto Quetzal Nejapa Cenérgica Kanan --- --- (in millions of USD) Total debt 438 546 244 422 104 22 - - - Cash 29 93 23 212 16 6 27 1 4 Net Debt 409 453 221 210 88 16 (27) (1) (4)
Central Cardones Colmito CEPP JPPC Surpetroil Inkia & ICP & Others Other COBEE Total Pedregal Total debt 79 47 18 25 7 3 448 111 2,514 13 Cash 25 4 2 1 4 1 146 27 621 7 Net Debt 54 43 16 24 3 2 302 84 1,893 6
4. Through ICPNH, IC Power indirectly holds 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.
5. Figures include Puerto Quetzal and Poliwatt Limited (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Puerto Quetzal).
6. Figures include amounts related to Nejapa's branch and main office.
7. Figures include JPPC and Private Power Operator Ltd. (an IC Power subsidiary that employs JPPC's employees and performs administrative-related functions).
8. Figures include Surpetroil and Surenergy S.A.S ESP (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Surpetroil).
9. Outstanding debt includes Inkia for $448 million.
10. Includes $12 million of outstanding IC Power debt and $99 million of ICPI debt. Six Months Ended June 30, 2014 Entity Ownership Revenues Cost of Adjusted EBITDA(1) Outstanding Net debt(3) Interest Sales debt(2) (%) --- --- (in millions of USD, unless otherwise stated) Operating Companies Peru segment Kallpa 75 225 145 75 482 452 Assets in advance stages of construction CdA 75 - - - 224 135 Samay I 75 - - - - (22) Israel segment OPC 80 202 141 56 481 340 Central America segment ICPNH4 61-65 53 39 13 110 94 Nejapa5 71 69 62 6 4 (9) Cenergica 100 14 12 2 1 - Assets in advance stages of construction Kanan 100 - - - - - Other segment COBEE 100 21 9 9 66 48 Central Cardones 87 5 1 3 50 47 Colmito 100 23 22 2 22 19 CEPP 97 40 30 8 32 29 JPPC6 100 7 6 - 9 7 Surpetroil7 60 2 1 1 5 5 Inkia & Other8 100 - - (7) 447 410 IC Power & Other9 100 - - - 102 74 --- --- --- --- --- --- Total - 661 468 168 2,035 1,629 Pedregal 21 45 33 11 16 1 Total (Associated company)10 - 45 33 11 16 1 === === === === === ---
1. "Adjusted EBITDA" for each entity is defined as net income, excluding net income from discontinued operations, net of tax (excluding dividends received from discontinued operations), before depreciation and amortization, finance expenses, net, income tax expense (benefit) and asset write-off, and excluding share in income from associates, measurement to fair value of our-existing share, and negative goodwill.
Adjusted EBITDA is not recognized under IFRS or any other generally accepted accounting principles as measures of financial performance and should not be considered as substitutes for net income or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. Adjusted 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. Adjusted EBITDA presents limitations that impair its use as a measure of profitability since it does not take into consideration certain costs and expenses that result from each business that could have a significant effect on its net income, such as financial expenses, taxes, depreciation, capital expenses and other related charges.
The following table sets forth a reconciliation of net income to Adjusted EBITDA for our subsidiaries for the six months ended June 30, 2014:
Kallpa CDA OPC ICPNH --- --- (in millions of USD) Income (loss) for the year 25 (1) 21 6 Depreciation and amortization 22 - 13 3 Finance expenses, net 16 1 15 3 Income tax expense (benefit) 12 - 7 1 Adjusted EBITDA 75 - 56 13
Nejapa Cenérgica Central Cardones Colmito COBEE (in millions of USD) Income (loss) for the year 2 1 4 - - Depreciation and amortization 3 - 2 2 1 Finance expenses, net - - 2 1 1 Income tax expense (benefit) 1 1 1 - - Adjusted EBITDA 6 2 9 3 2
CEPP Surpetroil Inkia & IC Power & Total Other Others Pedregal (in millions of USD) Income (loss) for the year 5 - 36 (20) 79 9 Depreciation and amortization 1 - 4 - 51 4 Finance expenses, net - - 13 15 67 1 Income tax expense 2 1 - 5 31 3 Share in income of associated companies - - (2) - (2) - Recognized negative goodwill - - (51) - (51) - Net income from discontinued operations, net of tax, excluding dividends received from discontinued operations - - - (7) - (7) Adjusted EBITDA 8 1 (7) - 168 17
2. Includes short-term and long-term debt.
3. Net debt is defined as total debt attributable to each of our subsidiaries, minus the cash and short term deposits and restricted cash of such companies. Net debt is not a measure of liabilities in accordance with IFRS. The tables below set forth a reconciliation of net debt to total debt for IC Power's subsidiaries. Cenérgica Kallpa CDA Samay I OPC ICPNH Puerto Quetzal Nejapa --- --- (in millions of USD) Total debt 482 224 - 481 110 - 4 1 Cash 30 89 22 141 16 - 13 1 Net Debt 452 135 (22) 340 94 - (9) - Total COBEE Central Cardones Colmito CEPP JPPC Surpetroil Inkia & IC Power Pedregal Other & Others (in millions of USD) Total debt 66 50 22 32 9 5 447 102 2,035 16 Cash 18 3 3 3 2 - 37 28 406 15 Net Debt 48 47 19 29 7 5 410 74 1,629 1
4. Through ICPNH, IC Power indirectly holds 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.
5. Figures include amounts related to Nejapa's branch and main office.
6. Figures include JPPC and Private Power Operator Ltd. (an IC Power subsidiary that employs JPPC's employees and performs administrative-related functions).
7. Figures include Surpetroil and Surenergy S.A.S ESP (an IC Power subsidiary that performs administrative functions and maintains certain licenses on behalf of Surpetroil).
8. Outstanding debt includes Inkia for $447 million.
9. Includes $102 million of outstanding ICPI debt.
10. Excludes IC Power's interest in Edegel, which IC Power sold in September 2014.
Year Ended December 31, 2014 Entity Ownership Revenues Cost of Adjusted EBITDA(1) Outstanding Net debt(2) Interest Sales debt (%) --- --- (in millions of USD, unless otherwise stated) Operating Companies Peru segment Kallpa 75 437 270 154 453 428 Assets in advance stages of construction CdA 75 - - - 444 338 Samay I 75 - - - 145 11 Israel segment OPC(3) 80 413 252 153 419 231 Central America segment ICPNH4 61-65 125 98 22 108 92 Puerto Quetzal5 100 33 29 3 32 14 Nejapa6 71 132 119 11 - (23) Cenergica 100 18 14 4 - (4) Assets in advance stages of construction Kanan 100 - - - - (4) Other segment COBEE 100 41 18 19 85 43 Central Cardones 87 11 2 7 48 44 Colmito 100 38 36 2 20 19 CEPP 97 73 56 16 30 22 JPPC7 100 41 39 1 8 4 Surpetroil8 60 9 3 5 3 2 Inkia & Other 100 1 - 1 4479 262 IC Power & Other10 100 - - (3) 10611 78 --- --- --- --- --- Total - 1,372 936 395 2,348 1,557 Pedregal 21 80 62 17 15 3 Total (Associated Company) 12 - 80 62 17 15 3
1. "Adjusted EBITDA" for each entity is defined as net income, excluding net income from discontinued operations, net of tax (excluding dividends received from discontinued operations), before depreciation and amortization, finance expenses, net, income tax expense (benefit) and asset write-off, and excluding share in income from associates, measurement to fair value of our existing share, and negative goodwill.
Adjusted 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 income or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. Adjusted 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. Adjusted EBITDA presents limitations that impair its use as a measure of profitability since it does not take into consideration certain costs and expenses that result from each business that could have a significant effect on its net income, such as financing expenses, taxes, depreciation, capital expenses and other related charges.
The following tables set forth a reconciliation of net income from continuing operations to Adjusted EBITDA for our subsidiaries for the year ended December 31, 2014:
Kallpa CDA Samay I OPC ICPNH Puerto Quetzal --- --- (in millions of USD) Net income(i) 50 7(ii) - 71 6 (1) Depreciation and amortization 46 - - 25 8 1 Finance expenses, net 35 - - 31 7 1 Income tax expense (benefit) 23 (7) - 26 1 2 Adjusted EBITDA 154 0 - 153 22 3

(i) Reflects net income after elimination and consolidation of adjustments.
(ii) Non-operating income relating to swaps.
Nejapa Cenérgica Central Colmito Cardones COBEE (in millions of USD) Net income(i) 4 2 9 (1) - Depreciation and amortization 5 1 4 4 1 Finance expenses, net - - 4 2 1 Income tax expense (benefit) 2 1 2 2 - Adjusted EBITDA 11 4 19 7 2

(i) Reflects net income after elimination and consolidation of adjustments.
CEPP JPPC Surpetroil Inkia & IC Power & Total Other Others Pedregal (in millions of USD) Net income(i) 9 (2) 2 131 (19) 268 7 Net income from discontinued operations, net of tax, excluding dividends received from discontinued operations(ii) - - - (131) - (113) - Depreciation and amortization 3 3 1 6 - 108 2 Finance expenses, net 1 1 1 23 12 119 - Income tax expense 3 (1) 1 (8) 4 51 2 Asset write-off - - - 35 - 35 - Share in income from associates - - - (2) - (2) - Measurement to fair value of pre-existing share - - - (3) - (3) - Negative Goodwill - - - (68) - (68) - Adjusted EBITDA 16 1 5 1 (3) 395 11

(i) Reflects net income after elimination and consolidation of adjustments.
(ii) Excludes $15 million received from Edegel post-equity method accounting, which is reflected as "other income" in our discontinued operations for the period.
2. Net debt is defined as total debt attributable to each of our subsidiaries, minus the cash and short term deposits and restricted cash of such companies. Net debt is not a measure of liabilities in accordance with IFRS. The tables below set forth a reconciliation of net debt to total debt for our subsidiaries. Kallpa CDA Samay I OPC ICPNH Puerto Quetzal Nejapa Cenérgica Kanan --- --- (in millions of USD) Total debt 453 444 145 419 108 32 - - - Cash 25 106 134 188 16 18 23 4 4 Net Debt 428 338 11 231 92 14 (23) (4) (4)
Central Cardones Colmito CEPP JPPC Surpetroil Inkia & ICP & Others Total Pedregal Other COBEE (in millions of USD) Total debt 85 48 20 30 8 3 447 106 2,348 15 Cash 42 4 1 8 4 1 185 28 791 2 Net Debt 43 44 19 22 4 2 262 78 1,557 3
3. Reflects tariffs in 2014, which are higher than the applicable tariffs in 2015.
4. Reflects 100% of ICPNH's financial results from the date of consolidation (March 2014). Through ICPNH, we indirectly hold 65% interests in Corinto and Tipitapa Power and 61% interests in Amayo I and Amayo II.
5. Reflects 100% of Puerto Quetzal's financial results from the date of consolidation (September 2014). Figures include Puerto Quetzal and Poliwatt Limited (one of our subsidiaries that performs administrative functions and maintains certain licenses on behalf of Puerto Quetzal).
6. In January 2015, we acquired Crystal Power's 29% stake in Nejapa in connection with the settlement of our shareholder dispute with Crystal Power. Figures include amounts related to Nejapa's branch and main office.
7. Reflects 100% of JPPC's financial results from the date of consolidation (May 2014). Reflects 16% of JPPC's financial results prior to May 2014. Figures include JPPC and Private Power Operator Ltd (one of our subsidiaries that employs JPPC's employees and performs administrative-related functions).
8. Reflects 100% of Surpetroil's financial results from the date of consolidation (March 2014). Figures include Surpetroil and Surenergy S.A.S ESP (one of our subsidiaries that performs administrative functions and maintains certain licenses on behalf of Surpetroil).
9. Reflects Inkia's outstanding debt.
10. Includes the results of Acter Holdings, which primarily consists of our proportionate share of Generandes' results of operations, which are reflected in our income statement as discontinued operations.
11. Includes $12 million of outstanding ICP debt and $93 million of ICPI debt.
12. Excludes IC Power's interest in Edegel, which IC Power sold in September 2014. Appendix E IC Power's Segment Information (Unaudited) Central All other Peru Israel America Segments Adjustments Total ---- (in millions of USD) For the six months ended June 30, 2015 Continuing Operations Sales 225 157 175 98 - 655 Cost of Sales (139) (112) (140) (67) - (458) Depreciation and amortization (25) (12) (10) (12) 5 (54) --- --- --- --- --- --- Gross profit 61 33 25 19 5 143 General, selling and administrative expenses (8) (3) (6) (14) - (31) Other income, net - 1 - 4 - 5 Operating income 53 31 19 9 5 117 Financing expenses, net (20) (13) (5) (15) - (53) Share in losses (income) of associated companies - - - - - - Income before taxes from continuing operations 33 18 14 (6) 5 64 Taxes on income (11) (5) (3) (1) (1) (21) Net income from continuing operations 22 13 11 (7) 4 43 === === === === === === Central All other Peru Israel America Segments Adjustments Total ---- (in millions of USD) For the six months ended June 30, 2014 Continuing Operations Sales 225 202 136 98 - 661 Cost of Sales (145) (141) (113) (69) - (468) Depreciation and amortization (21) (13) (8) (11) 5 (48) --- --- --- --- --- --- Gross profit 59 48 15 18 5 145 General, selling and administrative expenses (9) (4) (3) (14) - (30) Gain on bargain purchase - - - 48 - 48 Measurement to fair value of pre-existing share - - - 3 - 3 Other income, net 3 - - (1) - 2 Operating income 53 44 12 54 5 168 Financing expenses, net (17) (15) (3) (32) - (67) Share in losses (income) of associated companies - - - 2 - 2 Income before taxes from continuing operations 36 29 9 24 5 103 Taxes on income (12) (8) (2) (8) (1) (31) Net income from continuing operations 24 21 7 16 4 72 === === === === === === Central All other Peru Israel America Segments Adjustments Total ---- 2014 (in millions of USD) Continuing Operations Sales 437 413 308 214 - 1,372 Cost of Sales (270) (252) (260) (154) - (936) Depreciation and amortization (45) (25) (18) (22) 9 (101) --- --- --- --- --- ---- Gross profit 122 136 30 38 9 335 General, selling and administrative expenses (17) (8) (9) (34) - (68) Asset write-off - - - (35) - (35) Gain on bargain purchase - - - 68 - 68 Measurement to fair value of pre-existing share - - - 3 - 3 Other income, net 3 (1) - 3 - 5 Operating income 108 127 21 43 9 308 Financing expenses, net (34) (30) (8) (46) (1) (119) Share in losses (income) of associated companies - - - 2 - 2 Income before taxes from continuing operations 74 97 13 (1) 8 191 Taxes on income (17) (26) (4) (3) (1) (51) Net income from continuing operations 57 71 9 (4) 7 140 === === === === === === Appendix F Qoros' Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited) For the six months ended For the Three Months ended 30 June 30 June 30 June 30 June 2015 2014 2015 2014 ---- ---- ---- ---- (In thousands of RMB) Revenue 661,188 334,504 367,695 209,230 Cost of sales (685,630) (300,331) (366,315) (186,774) Gross (loss)/profit (24,442) 34,173 1,380 22,456 Other income 8,858 29,843 3,327 26,989 Research and development expenses (150,651) (162,385) (71,689) (118,774) Selling and distribution expenses (249,950) (383,500) (149,767) (208,539) Administrative expenses (285,557) (286,042) (147,281) (167,690) Other expenses (41,250) (22,412) (19,480) (12,498) Results from operating activities (742,992) (790,323) (383,510) (458,056) Finance income 7,287 12,504 2,849 6,705 Finance costs (182 541) (66,778) (95,478) (35,373) Net finance cost (175,254) (54,274) (92,629) (28,668) Share of loss of equity- accounted investee, net of nil tax (59) - (46) - Loss before income tax (918,305) (844,597) (476,185) (486,724) Income tax expenses (276) (150) (128) (99) ---- ---- ---- --- Loss for the period (918,581) (844,747) (476,313) (486,823) Qoros' Condensed Consolidated Statement of Financial Position (Unaudited) 30 June 31 December 2014 2015 ---- (In thousands of RMB) Assets Property, plant and equipment 4,109,121 4,039,948 Intangible assets 4,809,070 4,638,364 Prepayments for purchase of equipment 98,044 117,922 Lease prepayments 205,922 208,128 Trade and other receivables 92,540 96,533 Equity- accounted investees 1,797 2,025 Non-current assets 9,316,494 9,102,920 Inventories 248,269 197,522 Available-for- sale financial assets 175,000 - Trade and other receivables 891,769 729,906 Prepayments 58,360 154,655 Pledged deposits 234,751 290,840 Cash and cash equivalents 565,302 752,088 Current assets 2,173,451 2,125,011 Total assets 11,489,945 11 ,227,931 Qoros' Condensed Consolidated Statement of Financial Position (Continued) (Unaudited) 30 June 31 December 2015 2014 ---- ---- (In thousands of RMB) Equity Paid-in capital 6,531,840 6,531,840 Reserves (205) (26) Accumulated losses (6,579,122) (5,660,541) Total equity (47,487) 871,273 Liabilities Loans and borrowings 4,759,114 3,928,224 Finance lease liabilities - 479 Deferred income 174,689 179,982 Provision 19,591 12,971 Non-current liabilities 4,953,394 4,121,656 Loans and borrowings 3,982,299 3,374,660 Trade and other payables 2,575,382 2,833,459 Finance lease liabilities 1,261 1,541 Deferred income 25,096 25,342 Current liabilities 6,584,038 6,235,002 Total liabilities 11,537,432 10,356,658 Total equity and liabilities 11,489 945 11,227,931