Abengoa Reports Nine-Month Loss as Auditor Highlights Concerns

Updated on
  • Abengoa says main reason for loss is Abengoa Yield charge
  • Deloitte says `significant doubts' could arise over its future

Abengoa SA, the Spanish renewable-energy company that’s lost almost half its value this year, reported a nine-month loss and pledged to sell assets to raise funds as its auditor highlighted risks to its future.

The Seville, Spain-based company’s B shares fell as much as 8.2 percent after the firm swung to a 193.9 million-euro ($208 million) loss from a profit a year earlier. Deloitte, the auditor, said Abengoa’s losses, slumping shares and difficulty accessing financing could generate “significant doubts” over its ability to keep operating.

Concern over the company’s accounting methods and ability to produce enough cash to meet its obligations have roiled the stock. Problems mounted in July when the company cut its guidance for free cash flow, leading Chairman Felipe Benjumea, who led the firm for 25 years, to step down. On Nov. 8, Abengoa said a unit of the Gestamp group would invest 350 million euros in the firm as part of a 650 million-euro fund-raising effort.

"We have announced a number of strategic actions that are already in place in order to restore confidence and reinforce cash flow generation and liquidity," Chief Executive Officer Santiago Seage said on a conference call Friday. "We remain confident that with this action plan announced to the market we will be able to restore confidence among investors.”

Further Sales

Deloitte said Abengoa’s administrators expect that the measures should keep the company viable. The share sales and the planned investment by Gestamp’s Gonvarri unit, which will make it the largest shareholder, are expected this year, Seage said.

The nine-month loss resulted from a 198 million-euro charge to mark to market the company’s stake in Abengoa Yield, which owns renewable energy and power assets in the Americas and Europe.

Net revenue fell to 4.87 billion euros from 5.07 billion euros as cash and equivalents slumped to 1.22 billion euros from 2.97 billion euros a year ago, Abengoa said in a regulatory filing Friday. The company also said it may sell all or part of its stake in Abengoa Yield and listed assets from Brazil to Mexico, Chile and Ghana.

The B shares were down 4.4 percent at 93.7 cents by 4:10 p.m. in Madrid, bringing the decline over the past 12 months to 59 percent.

Abengoa’s 500 million euros of bonds due in March 2018 were indicated at 85.6 cents at 1:53 p.m. in London, up from an intraday low of 83.6 cents. The notes were quoted at 88.7 cents at market close on Thursday, according to data compiled by Bloomberg.

— With assistance by Luca Casiraghi

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE