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GAIA INFRASTRUCTURE CAPITAL LIMITED - Asset diversification, trading statement and change of measurement criteria for trading statement purposes

Release Date: 26/10/2018 16:38
Code(s): GAI     PDF:  
 
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Asset diversification, trading statement and change of measurement criteria for trading statement purposes

Gaia Infrastructure Capital Limited
(Incorporated in the Republic of South Africa)
(Registration number 2015/115237/06)
ISIN: ZAE000210555
JSE code: GAI
(“GAIA” or “the Company”)

ASSET DIVERSIFICATION, TRADING STATEMENT AND CHANGE OF
MEASUREMENT CRITERIA FOR TRADING STATEMENT PURPOSES

ASSET DIVERSIFICATION

Shareholders are referred to the announcements released on the Stock Exchange News Service on 12
July 2016, 19 September 2016 and 18 October 2016, regarding the Company’s acquisition of a 25.2%
effective see-through economic interest in Dorper Wind Farm (RF) Proprietary Limited (“Dorper
Investment”) from TriAlpha Specialised Investment Trust III (“TriAlpha”) and certain of its
subsidiary companies. As part of the Dorper Investment, GAIA was granted an option, on conversion
of its convertible loan, to acquire indirect interests in three renewable energy projects in which
TriAlpha held minority interests, namely Jasper, Lesedi and Letsatsi solar PV farms (“Solar Energy
Assets”). In order to diversify its investment portfolio and to reduce its exposure to the Dorper
Investment, the Company has exercised the option in accordance with the terms of the Dorper
Investment approved by shareholders at the general meeting of the Company held on 18 October
2016 (“Transaction”). GAIA’s resultant effective interest in the Solar Energy Assets, following
implementation of the Transaction, will be 4.5% in Jasper, 5.6% in Lesedi and 5.6% in Letsatsi.

The Transaction is in line with GAIA’s Investment Policy, as available on the Company’s website at
http://gaia-ic.com/index.php/2015-11-09-11-08-18/investment-policy, including the criteria to invest
in:
     - operational infrastructure assets;
     - investments with a target return on at least CPI plus 6%;
     - investments with visible environmental, social and governance policy appreciation; and
     - investments with low risk and attractive long-term, inflation-linked and predictable cash
       generation profiles.

Post implementation of the Transaction, GAIA will have five investments under management, being
exposure to Dorper Wind Farm, Lesedi, Letsatsi and Jasper Solar PV Farms and Noblesfontein Wind
Farm. The Transaction is expected to be effective on or about 31 October 2018.

About the Solar Energy Assets
The Solar Energy Assets are operational, round 1 Renewable Energy Independent Power Producer
Procurement Programme (REIPPPP) solar PV plants. Jasper is a 75MW plant located in Kimberly
in the Northern Cape Province, Lesedi is a 75MW solar PV plant located 150Km west of Kimberley
in the Northern Cape Province, and Letsatsi is a 75MW solar PV plant located 50Km north-west of
Bloemfontein in the Free State Province


TRADING STATEMENT

In terms of the Listings Requirements of the JSE Limited, a listed company is required to publish a
trading statement as soon as it is satisfied that a reasonable degree of certainty exists that the financial
results for the period to be reported on next will vary by 20% or more from those of the previous
comparable period.

Due to changes in the timing of dividends and other revenues from current assets under management,
GAIA’s revenue is expected to be reduced in the first 6 months of its financial year, but to increase
in the second half of the financial year. The Company is in a sound financial position and is expected
to maintain its dividend payment to its shareholders for the interim reporting period.

GAIA’s shareholders are therefore hereby advised that the Company and its directors have reasonable
certainty that:

    -   as at 31 August 2018, the tangible net asset value (“TNAV”) per share of the Company is
        expected to be between R10.10 and R10.20, representing a decrease of between 1.37% and
        0.39% compared to the TNAV per share of R10.24 reported for the year ended 31 August
        2017. The expected reduction in the TNAV over the reporting year is as a result of the final
        dividend payment that was made in the first 6 months of the current financial year, as GAIA
        declared a final dividend to shareholders of 42 cents per share as at 28 February 2018; and

    -   earnings and headline earnings per share for the interim period ended 31 August 2018 are
        expected to be between 6 and 7.5 cents per share being a decrease of between 75.9% and
        69.8%, compared to earnings and headline earnings per share of 24.84 cents per share reported
        for the interim period ended 31 August 2017. The decrease in earnings is primarily as a result
        of the restructuring of its asset portfolio, as explained above, coupled with an increase in
        operating costs as GAIA has increased its internal capacity in anticipation of increased assets
        under management.

The estimate financial information on which this trading statement is based has not been reviewed
and reported on by GAIA’s external auditors. The interim financial results for the period ended 31
August 2018 are expected to be published on SENS on or about 6 November 2018.

CHANGE OF MEASUREMENT CRITERIA FOR TRADING STATEMENT PURPOSES

As an investment holding company, the assessment of net asset value is a more appropriate
measurement of financial performance for GAIA, in comparison to headline earnings per share and
earnings per share. In accordance with paragraph 3.4(b)(v) of the Listings Requirements of the JSE
Limited, shareholders are advised that the board of directors of the Company has resolved to adopt
NAV per share for trading statement purposes for the forthcoming year ending 28 February 2019 and
going forward. The Company undertakes to confirm this measurement criterion annually in the annual
financial statements.

Johannesburg
26 October 2018

 
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)




 

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