GOGC posted FY15 financial results. Revenue increased 7.7% y/y to US$ 218.2mn, thanks to the addition of electricity sales from the Gardabani power plant. Driven by the cost of gas, operating expenses increased 16.4% y/y to US$ 176.7mn, causing a 14.2% y/y drop in FY15 adjusted EBITDA to US$ 53.3mn. Net income decreased 66.4% y/y to US$ 16.0mn, mainly due to the FX loss caused by GEL depreciation. FY15 net debt-to-adjusted EBITDA came in at 2.6x, below the Eurobond covenant of 3.5x.
FY15 revenue increased 7.7% y/y to US$ 218.2mn thanks to the newly added electricity sales (US$ 21.5mn) from the Gardabani power plant. Sale of gas, the key source of revenue, was flat in FY15 at US$ 154.0mn, while gas pipeline rental revenue increased 5.4% y/y to US$ 30.3mn. Crude oil sales was down 66.0% y/y to US$ 4.5mn.
FY15 operating expenses climbed 16.4% y/y to US$ 176.7mn on the back of a 16.9% y/y rise in the cost of gas, the largest expense item with an 84.0% share.
FY15 adjusted EBITDA was at US$ 53.3mn – a decrease of 14.2% y/y. Adjusted EBITDA margin came in at 24.4% in FY15, compared to 30.7% in FY14. EBIT shrank to US$ 42.5mn, down 18.4% y/y. FY15 net income settled on US$ 16.0mn, dropping 66.4% y/y as a result of a significant FX loss, stemming from the weakening of GEL against US$ in FY15. However, the FX loss is an unrealized charge and not a cause for concern. Net profit margin was at 7.3% in FY15, compared to 23.4% in the previous year.
Net debt-to-adjusted EBITDA deteriorated to 2.6x, largely due to the decrease in adjusted EBITDA. Net debt also declined, as a decrease in the cash balance was more than compensated by a US$ 30.0mn credit line, opened in late 2015, which per the Eurobond prospectus, is added to cash and cash equivalents when calculating the net debt-to-adjusted EBITDA ratio.
