☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Singapore
|
4911
|
Not Applicable
|
(State or other jurisdiction of
incorporation or organization)
|
(Primary Standard Industrial
Classification Code Number)
|
(I.R.S. Employer
Identification No.) |
1 Temasek Avenue #36-01
Millenia Tower Singapore 039192 +65 6351 1780 |
||
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Ordinary Shares, no par value
|
The New York Stock Exchange
|
Large accelerated filer
☒
|
Accelerated filer
☐
|
Non-accelerated filer
☐
|
Emerging growth company
☐
|
U.S. GAAP
☐
|
International Financial Reporting Standards as issued by the International Accounting Standards Board
☒
|
Other
☐
|
9
|
||
9
|
||
A.
|
Directors and Senior Management
|
9
|
B.
|
Advisers
|
9
|
C.
|
Auditors
|
9
|
9
|
||
9
|
||
A.
|
Selected Financial Data
|
9
|
B.
|
Capitalization and Indebtedness
|
15
|
C.
|
Reasons for the Offer and Use of Proceeds
|
15
|
D.
|
Risk Factors
|
15
|
49
|
||
A.
|
History and Development of the Company
|
49
|
B.
|
Business Overview
|
50
|
C.
|
Organizational Structure
|
88
|
D.
|
Property, Plants and Equipment
|
88
|
88
|
||
88
|
||
A.
|
Operating Results
|
95
|
B.
|
Liquidity and Capital Resources
|
105
|
C.
|
Research and Development, Patents and Licenses, Etc.
|
114
|
D.
|
Trend Information
|
114
|
E.
|
Off-Balance Sheet Arrangements
|
115
|
F.
|
Tabular Disclosure of Contractual Obligations
|
115
|
G.
|
Safe Harbor
|
115
|
116
|
||
A.
|
Directors and Senior Management
|
116
|
B.
|
Compensation
|
118
|
C.
|
Board Practices
|
118
|
D.
|
Employees
|
120
|
E.
|
Share Ownership
|
121
|
121
|
||
A.
|
Major Shareholders
|
121
|
B.
|
Related Party Transactions
|
122
|
C.
|
Interests of Experts and Counsel
|
123
|
123
|
||
A.
|
Consolidated Statements and Other Financial Information
|
123
|
B.
|
Significant Changes
|
123
|
123
|
||
A.
|
Offer and Listing Details.
|
123
|
B.
|
Plan of Distribution
|
123
|
C.
|
Markets
|
123
|
D.
|
Selling Shareholders
|
123
|
E.
|
Dilution.
|
123
|
F.
|
Expenses of the Issue
|
123
|
123
|
||
A.
|
Share Capital
|
123
|
B.
|
Constitution
|
124
|
C.
|
Material Contracts
|
135
|
D.
|
Exchange Controls
|
135
|
E.
|
Taxation
|
135
|
F.
|
Dividends and Paying Agents
|
139
|
G.
|
Statement by Experts
|
139
|
H.
|
Documents on Display
|
139
|
I.
|
Subsidiary Information
|
140
|
140
|
140
|
||
A.
|
Debt Securities
|
140
|
B.
|
Warrants and Rights
|
140
|
C.
|
Other Securities
|
140
|
D.
|
American Depositary Shares
|
140
|
141
|
||
141
|
||
141
|
||
141
|
||
141
|
||
141
|
||
142
|
||
142
|
||
142
|
||
142
|
||
142
|
142
|
||
142
|
||
143
|
||
143
|
||
143
|
||
143
|
· |
I.C. Power Asia Development Ltd. (“ICP”), formerly I.C. Power Ltd., an Israeli company, in which Kenon has a direct 100% interest;
|
· |
IC Power Ltd. (“IC Power”), formerly IC Power Pte. Ltd, a Singaporean company, in which Kenon has a direct 100% interest;
|
· |
IC Power Distribution Holdings Pte. Ltd. (“ICPDH”), a Singaporean corporation in which Kenon has an indirect 100% interest;
|
· |
“Inkia” means Inkia Energy Limited, a Bermudian corporation and a wholly-owned subsidiary of Kenon, which is in the process of being liquidated. In December 2017, Inkia sold the Inkia Business (as defined below);
|
· |
OPC Energy Ltd. (“OPC”), an owner, developer and operator of power generation facilities in the Israeli power market, in which Kenon has a 76% interest;
|
· |
Qoros Automotive Co., Ltd. (“Qoros”), a Chinese automotive company based in China, in which Kenon, through its 100%-owned subsidiary Quantum (as defined below), has a 24% interest. In January 2019, Kenon announced it had entered into an agreement to sell half of its remaining interest in Qoros (i.e. 12%) to the Majority Shareholder in Qoros (as defined below). The sale is subject to obtaining relevant third-party consents and other closing conditions, including approvals by relevant government authorities;
|
· |
ZIM Integrated Shipping Services, Ltd. (“ZIM”), an Israeli global container shipping company, in which Kenon has a 32% interest; and
|
· |
Primus Green Energy, Inc. (“Primus”), a New Jersey corporation which is a developer of an alternative fuel technology, in which Kenon, through IC Green (as defined below), has a 91% interest.
|
· |
“Ansonia” means Ansonia Holdings Singapore B.V., a company organized under the laws of Singapore, which owns approximately 58% of the outstanding shares of Kenon;
|
· |
“CDA” means Cerro del Águila S.A., a Peruvian corporation;
|
· |
“DEOCSA” means Distribuidora de Electricidad de Occidente, S.A., a Guatemalan corporation, which was owned by Inkia prior to the sale of the Inkia Business in December 2017;
|
· |
“DEORSA” means Distribuidora de Electricidad de Oriente, S.A., a Guatemalan corporation, which was owned by Inkia prior to the sale of the Inkia Business in December 2017;
|
· |
“Hadera Paper” means Hadera Paper Ltd., an Israeli corporation, which is owned by OPC;
|
· |
“HelioFocus” means HelioFocus Ltd., an Israeli corporation, in which Kenon, through IC Green, held a 70% interest, and which was liquidated on July 6, 2017;
|
· |
“IC” means Israel Corporation Ltd., an Israeli corporation traded on the Tel Aviv Stock Exchange, or the “TASE,” and Kenon’s former parent company;
|
· |
“IC Green” means IC Green Energy Ltd., an Israeli corporation and a wholly-owned subsidiary of Kenon, which holds Kenon’s equity interests in Primus and previously held Kenon’s equity interest in HelioFocus;
|
· |
“IEC” means Israel Electric Corporation, a government-owned entity, which generates and supplies the majority of electricity in Israel, transmits and distributes all of the electricity in Israel, acts as the system operator of Israel’s electricity system, determines the dispatch order of generation units, grants interconnection surveys, and sets spot prices, among other roles;
|
· |
“Inkia Business” means Inkia’s Latin American and Caribbean power generation and distribution businesses, which were sold in December 2017;
|
· |
“Kallpa” means Kallpa Generación SA, a company within the Inkia Business. In August 2017, Kallpa merged with CDA, with the surviving entity renamed Kallpa Generación SA. Kallpa was owned by Inkia until December 2017;
|
· |
“Majority Shareholder in Qoros” means the China-based investor related to the Baoneng group that acquired 51% of Qoros from Kenon and Chery Automobile Co. Ltd., or Chery, in 2018. In January 2019, Kenon announced it had entered into an agreement to sell half of its remaining interest in Qoros (i.e. 12%) to the Majority Shareholder in Qoros. Following completion of the sale, this investor will hold 63% of Qoros;
|
· |
“OPC-Rotem” means O.P.C. Rotem Ltd., an Israeli corporation, in which OPC has an 80% interest;
|
· |
“OPC-Hadera” is the trade name of Advanced Integrated Energy Ltd., an Israeli corporation, in which OPC has a 100% interest;
|
· |
“OPC Solar” means OPC Solar Limited Partnership, a limited partnership engaged in the initiation of solar projects;
|
· |
“our businesses” shall refer to each of our subsidiaries and associated companies, collectively, as the context may require;
|
· |
“Petrotec” means Petrotec AG, a German company, which IC Green sold in December 2014;
|
· |
“Quantum” means Quantum (2007) LLC, a Delaware limited liability company, is a wholly-owned subsidiary of Kenon and which is the direct owner of our interest in Qoros;
|
· |
“Samay I” means Samay I S.A., a Peruvian corporation;
|
· |
“spin-off” shall refer to (i) IC’s January 7, 2015 contribution to Kenon of its interests in each of IC Power, Qoros, ZIM, Tower, Primus, HelioFocus and the Renewable Energy Group, as well as other intermediate holding companies related to these entities, and (ii) IC’s January 9, 2015 distribution of Kenon’s issued and outstanding ordinary shares, via a dividend-in-kind, to IC’s shareholders;
|
· |
“Tower” means Tower Semiconductor Ltd., an Israeli specialty foundry semiconductor manufacturer, listed on the NASDAQ stock exchange, or “NASDAQ,” and the TASE, in which Kenon used to hold an interest; and
|
· |
“Tzomet” means Tzomet Energy Ltd., an Israeli corporation in which OPC has a 95% interest. In January 2019, OPC entered into an agreement to acquire the remaining 5% interest in Tzomet from minority shareholders.
|
· |
“Availability factor” refers to the number of hours that a generation facility is available to produce electricity divided by the total number of hours in a year.
|
· |
“COD” means the commercial operation date of a development project;
|
· |
“distribution” refers to the transfer of electricity from the transmission lines at grid supply points and its delivery to consumers at lower voltages through a distribution system;
|
· |
“Hadera Energy Center” means Hadera Paper’s existing gas consuming facilities;
|
· |
“EPC” means engineering, procurement and construction;
|
· |
“firm capacity” means the amount of energy available for production that, pursuant to applicable regulations, must be guaranteed to be available at a given time for injection to a certain power grid;
|
· |
“Greenfield” means a project constructed on unused land with no need to demolish or remodel existing structures;
|
· |
“GWh” means gigawatt hours (one GWh is equal to 1,000 MWh);
|
· |
“OPC’s capacity” or “OPC’s installed capacity” means, with respect to each asset, 100% of the capacity of such asset, regardless of OPC’s ownership interest in the entity that owns such asset;
|
· |
“installed capacity” means the intended full-load sustained output of energy that a generation unit is designed to produce (also referred to as name-plate capacity);
|
· |
“IPP” means independent power producer, excluding co-generators and generators for self-consumption;
|
· |
“kWh” means kilowatts per hour;
|
· |
“MW” means megawatts (one MW is equal to 1,000 kilowatts or kW);
|
· |
“MWh” means megawatt per hour;
|
· |
“OEM” means original equipment manufacturer;
|
· |
“PPA” means power purchase agreement; and
|
· |
“transmission” refers to the bulk transfer of electricity from generating facilities to the distribution system at load center station in which the electricity is stabilized by means of the transmission grid.
|
· |
our goals and strategies;
|
· |
our capital commitments and/or intentions with respect to each of our businesses;
|
· |
our capital allocation principles, as set forth in “
Item 4.B Business Overview”
;
|
· |
the funding requirements, strategies, and business plans of our businesses;
|
· |
the potential listing, offering, distribution or monetization of our businesses;
|
· |
expected trends in the industries and markets in which each of our businesses operate;
|
· |
our expected tax status and treatment;
|
· |
statements relating to litigation and/or regulatory proceedings, including expected settlement amounts;
|
· |
statements relating to the sale of the Inkia Business including the pledge of OPC’s shares, the deferred payment agreement and Kenon’s guarantee and risks related thereto, and statements with respect to claims relating to the Inkia Business sale retained by Kenon;
|
· |
the expected effect of new accounting standards on Kenon;
|
· |
with respect to OPC
:
|
· |
the expected cost and timing of commencement and completion of development and construction projects, as well as the anticipated installed capacities and expected performance (e.g. efficiency) of such projects, including:
|
· |
the Tzomet project, including the license and approvals for the development of the project, financing and the expected payment of the remaining consideration, and
|
· |
the OPC-Hadera project, including the expected financing, total cost of construction, expected capacity, COD date, expected level of energy utilization, efficiency, and energy source of the OPC-Hadera power plant;
|
· |
the OPC restructuring, including statements with respect to Kenon’s expectation in relation to future tax liability;
|
· |
expected macroeconomic trends in Israel, including the expected growth in energy demand;
|
· |
potential expansions (including new projects or existing projects);
|
· |
its gas supply agreements;
|
· |
its strategy;
|
· |
expected trends in energy consumption;
|
· |
regulatory trends;
|
· |
its anticipated capital expenditures, and the expected sources of funding for capital expenditures;
|
· |
projections and expected trends in the electricity market in Israel; and
|
· |
the price and volume of gas available to OPC and other IPPs in Israel;
|
· |
with respect to Qoros
:
|
· |
Qoros’ expectation to renew or refinance its working capital facilities to support its continued operations and development;
|
· |
statements with respect to trends in the Chinese passenger vehicle market, particularly within the C-segment, C-segment SUV and New Energy Vehicle, or NEV, markets;
|
· |
Qoros’ expectation of pricing trends in the Chinese passenger vehicle market;
|
· |
Qoros’ liquidity position;
|
· |
Qoros’ dealer network;
|
· |
environmental regulations and the expected effect of such regulations on Qoros’ business;
|
· |
Qoros’ ability to increase its production capacity;
|
· |
the investment by the Majority Shareholder in Qoros into Qoros, including the various elements of the investment and expected timing thereof, including, the commitment by the investor or an affiliate to introduce vehicle purchase orders to Qoros, the requirement that Chery make payments to Kenon in connection with guarantee releases, the put option and investor’s right to make further investments under the investment agreement, and the Majority Shareholder in Qoros’ commitment to assume its proportionate share of Kenon and Chery’s guarantee and pledge obligations;
|
· |
the agreement to sell half of Kenon's remaining interest in Qoros; and
|
· |
Qoros’ expectation of the development of the NEV market in China, including expected trends regarding government subsidies for the purchase of NEVs and the growth of NEV infrastructure;
|
· |
with respect to ZIM
:
|
· |
the assumptions used in Kenon’s and ZIM’s impairment analysis with respect to Kenon’s investment in ZIM, and ZIM’s assets, respectively, including with respect to expected fuel price, freight rates, demand trends;
|
· |
ZIM’s strategy with respect to its debt obligations;
|
· |
ZIM’s expectation of modifications with respect to its and other shipping companies’ operating fleet and lines, including the utilization of larger vessels within certain trade zones and modifications made in light of environmental regulations;
|
· |
ZIM’s compliance with International Maritime Organization, or IMO, regulations expected to come into effect in 2020 and other regulations, including the expected effects of such regulations;
|
· |
statements regarding the 2M alliance and expected benefits of the alliance; and
|
· |
trends related to the global container shipping industry, including with respect to fluctuations in container supply, industry consolidation, demand, bunker prices and charter/freights rates; and
|
· |
with respect to Primus, its
:
|
· |
strategy;
|
· |
plans to seek equity partners for projects;
|
· |
potential customers;
|
· |
potential project pipeline, including in relation to the non-binding term sheets it has executed; and
|
· |
potential sources of revenue.
|
Year Ended December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
1
|
2015
1
|
2014
1
|
||||||||||||||||
(in millions of USD, except share data)
|
||||||||||||||||||||
Statements of Profit and Loss Data
2
|
||||||||||||||||||||
Revenue
|
$
|
364
|
$
|
366
|
$
|
324
|
$
|
326
|
$
|
413
|
||||||||||
Cost of sales and services (excluding depreciation)
|
(259
|
)
|
(267
|
)
|
(251
|
)
|
(245
|
)
|
(297
|
)
|
||||||||||
Depreciation |
(30
|
)
|
(31
|
)
|
(27
|
)
|
(25
|
)
|
(24
|
)
|
||||||||||
Gross profit
|
$
|
75
|
$
|
68
|
$
|
46
|
$
|
56
|
$
|
92
|
||||||||||
Selling, general and administrative expenses
|
(34
|
)
|
(56
|
)
|
(47
|
)
|
(50
|
)
|
(86
|
)
|
||||||||||
Gain from distribution of dividend in kind
|
—
|
—
|
—
|
210
|
—
|
|||||||||||||||
Gain from disposal of investees
|
—
|
—
|
—
|
—
|
157
|
|||||||||||||||
Impairment of assets and investments
|
—
|
29
|
(72
|
)
|
(7
|
)
|
(48
|
)
|
||||||||||||
Dilution gains from reduction in equity interest held in associates
|
—
|
—
|
—
|
33
|
—
|
|||||||||||||||
Other expenses
|
(1
|
)
|
—
|
—
|
(1
|
)
|
(6
|
)
|
||||||||||||
Other income
|
2
|
1
|
1
|
4
|
(55
|
)
|
||||||||||||||
Financing expenses
|
(30
|
)
|
(70
|
)
|
(47
|
)
|
(36
|
)
|
(49
|
)
|
||||||||||
Financing income |
28
|
3
|
7
|
11
|
14
|
|||||||||||||||
Financing expenses, net
|
$
|
(2
|
)
|
$
|
(67
|
)
|
$
|
(40
|
)
|
$
|
(25
|
)
|
$
|
(35
|
)
|
|||||
Gain on third party investment in Qoros
|
504
|
—
|
—
|
—
|
—
|
|||||||||||||||
Fair value loss on option
|
(40
|
)
|
—
|
—
|
—
|
—
|
||||||||||||||
Write back / (provision) of financial guarantee
|
63
|
—
|
(130
|
)
|
—
|
—
|
||||||||||||||
Share in losses of associated companies, net of tax 3 |
(105
|
)
|
(111
|
)
|
(186
|
)
|
(187
|
)
|
(185
|
)
|
||||||||||
Profit / (loss) from continuing operations before income taxes
|
$
|
462
|
$
|
(136
|
)
|
$
|
(428
|
)
|
$
|
33
|
$
|
(166
|
)
|
|||||||
Income taxes |
(11
|
)
|
(73
|
)
|
(2
|
)
|
(9
|
)
|
(68
|
)
|
||||||||||
Profit / (loss) for the year from continuing operations
|
$
|
451
|
$
|
(209
|
)
|
$
|
(430
|
)
|
$
|
24
|
$
|
(234
|
)
|
|||||||
(Loss) / profit and gain from sale of discontinued operations (after taxes) 4 |
(6
|
)
|
478
|
36
|
72
|
711
|
||||||||||||||
Profit / (loss) for the year
|
$
|
445
|
$
|
269
|
$
|
(394
|
)
|
$
|
96
|
$
|
477
|
|||||||||
Attributable to:
|
||||||||||||||||||||
Kenon’s shareholders
|
434
|
237
|
(412
|
)
|
73
|
459
|
||||||||||||||
Non-controlling interests
|
11
|
32
|
18
|
23
|
18
|
|||||||||||||||
Basic/diluted profit/(loss) per share attributable to Kenon’s shareholders (in Dollars):
|
||||||||||||||||||||
Basic/diluted profit/(loss) per share
|
8.07
|
4.40
|
(7.67
|
)
|
1.36
|
8.58
|
||||||||||||||
Basic/diluted profit/(loss) per share from continuing operations
|
8.17
|
(4.00
|
)
|
(8.08
|
)
|
0.24
|
(4.44
|
)
|
||||||||||||
Basic/diluted (loss)/profit per share from discontinued operations
|
(0.10
|
)
|
8.40
|
0.41
|
1.12
|
13.02
|
||||||||||||||
Statements of Financial Position Data
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
131
|
$
|
1,417
|
$
|
327
|
$
|
384
|
$
|
610
|
||||||||||
Short-term investments and deposits
|
50
|
7
|
90
|
309
|
227
|
|||||||||||||||
Trade receivables
|
36
|
44
|
284
|
123
|
181
|
|||||||||||||||
Other current assets, including derivatives
|
41
|
36
|
50
|
45
|
59
|
|||||||||||||||
Income tax receivable
|
—
|
—
|
11
|
4
|
3
|
|||||||||||||||
Inventories
|
—
|
—
|
92
|
51
|
56
|
|||||||||||||||
Assets held for sale |
70
|
—
|
—
|
—
|
—
|
|||||||||||||||
Total current assets |
328
|
1,504
|
854
|
916
|
1,136
|
|||||||||||||||
Total non-current assets 5 |
1,127
|
1,022
|
4,284
|
3,567
|
3,184
|
|||||||||||||||
Total assets |
$
|
1,455
|
$
|
2,526
|
$
|
5,138
|
$
|
4,483
|
$
|
4,320
|
||||||||||
Total current liabilities |
90
|
806
|
1,045
|
653
|
497
|
|||||||||||||||
Total non-current liabilities |
$
|
649
|
$
|
669
|
$
|
3,199
|
$
|
2,566
|
$
|
2,385
|
||||||||||
Equity attributable to the owners of the Company |
649
|
983
|
681
|
1,061
|
1,230
|
|||||||||||||||
Share capital |
$
|
602
|
$
|
1,267
|
$
|
1,267
|
$
|
1,267
|
$
|
—
|
||||||||||
Total equity |
$
|
716
|
$
|
1,051
|
$
|
894
|
$
|
1,264
|
$
|
1,438
|
||||||||||
Total liabilities and equity |
$
|
1,455
|
$
|
2,526
|
$
|
5,138
|
$
|
4,483
|
$
|
4,320
|
||||||||||
Basic/Diluted weighted average common shares outstanding used in calculating profit/(loss) per share (thousands)
|
53,826
|
53,761
|
53,720
|
53,649
|
53,383
|
6
|
||||||||||||||
Statements of Cash Flow Data
|
||||||||||||||||||||
Net cash provided by operating activities
|
$
|
52
|
$
|
392
|
$
|
162
|
$
|
290
|
$
|
410
|
||||||||||
Net cash (used in) / provided by investing activities
|
(113
|
)
|
585
|
(400
|
)
|
(737
|
)
|
(883
|
)
|
|||||||||||
Net cash (used in) / provided by financing activities
|
(1,218
|
)
|
97
|
175
|
233
|
430
|
||||||||||||||
(Decrease) / increase in cash and cash equivalents
|
(1,279
|
)
|
1,074
|
(63
|
)
|
(214
|
)
|
(43
|
)
|
(1) |
Results during these periods have been reclassified to reflect the Inkia Business as discontinued operations. For further information, see Note 27 to our financial statements included in this annual report.
|
(2) |
Consists of the consolidated results of OPC and Primus and, from June 30, 2014 until its liquidation in July 2016, the consolidated results of HelioFocus.
|
(3) |
Includes Kenon’s share in ZIM’s loss for the six months ended December 31, 2014 and the years ended December 31, 2015, 2016, 2017 and 2018. As from July 1, 2014, Kenon accounted for ZIM’s results of operations pursuant to the equity method of accounting.
|
(4) |
Consists of (i) ZIM’s results of operations for the six months ended June 30, 2014, (ii) Petrotec’s results of operations for 2014 and (iii) the results of operations of the Inkia Business for 2014 through 2017.
|
(5) |
Includes Kenon’s associated companies: (i) Qoros, (ii) Tower (until June 30, 2015), (iii) ZIM (from July 1, 2014); and (iv) HelioFocus (prior to June 30, 2014).
|
(6) |
Based on 53,383,015 shares which were issued as of January 7, 2015, the date of our spin-off from IC.
|
|
Year Ended December 31, 2018
|
|||||||||||||||||||
|
OPC
|
Quantum
1
|
Other
2
|
Adjustments
3
|
Consolidated Results
|
|||||||||||||||
|
(in millions of USD, unless otherwise indicated)
|
|||||||||||||||||||
Sales
|
$
|
363
|
$
|
—
|
$
|
1
|
$
|
—
|
$
|
364
|
||||||||||
Depreciation and amortization
|
(30
|
)
|
—
|
—
|
—
|
(30
|
)
|
|||||||||||||
Financing income
|
2
|
10
|
48
|
(32
|
)
|
28
|
||||||||||||||
Financing expenses
|
(27
|
)
|
(2
|
)
|
(33
|
)
|
32
|
(30
|
)
|
|||||||||||
Gain on third party investment in Qoros
|
—
|
504
|
—
|
—
|
504
|
|||||||||||||||
Fair value loss on option
|
—
|
(40
|
)
|
—
|
—
|
(40
|
)
|
|||||||||||||
Write back of financial guarantee
|
—
|
63
|
—
|
—
|
63
|
|||||||||||||||
Share in losses of associatedcompanies
|
—
|
(78
|
)
|
(27
|
)
|
—
|
(105
|
)
|
||||||||||||
Profit / (Loss) before taxes
|
$
|
36
|
$
|
457
|
$
|
(31
|
)
|
$
|
—
|
$
|
462
|
|||||||||
Income taxes
|
(10
|
)
|
—
|
(1
|
)
|
—
|
(11
|
)
|
||||||||||||
Profit / (Loss) from continuing operations
|
$
|
26
|
$
|
457
|
$
|
(32
|
)
|
$
|
—
|
$
|
451
|
|||||||||
|
||||||||||||||||||||
Segment assets
4
|
$
|
893
|
$
|
92
|
$
|
2395
|
$
|
—
|
$
|
1,224
|
||||||||||
Investments in associated companies
|
—
|
139
|
92
|
—
|
231
|
|||||||||||||||
Segment liabilities
|
700
|
—
|
396
|
—
|
739
|
|||||||||||||||
Capital expenditure
7
|
100
|
—
|
—
|
—
|
100
|
(1) |
Subsidiary of Kenon that owns Kenon’s equity holding in Qoros.
|
(2) |
Includes the results of Primus, the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
|
(3) |
“Adjustments” includes inter segment financing income and expense.
|
(4) |
Includes investments in associates.
|
(5) |
Includes Kenon’s, IC Green’s and IC Power holding company assets.
|
(6) |
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
|
(7) |
Includes the additions of Property, Plant and Equipment, or PP&E, and intangibles based on an accrual basis.
|
|
Year Ended December 31, 2017
1
|
|||||||||||||||||||
|
OPC
|
Quantum
2
|
Other
3
|
Adjustments
4
|
Consolidated Results
|
|||||||||||||||
|
(in millions of USD, unless otherwise indicated)
|
|||||||||||||||||||
Sales
|
$
|
365
|
$
|
—
|
$
|
1
|
$
|
—
|
$
|
366
|
||||||||||
Depreciation and amortization
|
(30
|
)
|
—
|
(1
|
)
|
—
|
(31
|
)
|
||||||||||||
Impairment of assets and investments
|
—
|
—
|
29
|
—
|
29
|
|||||||||||||||
Financing income
|
1
|
—
|
13
|
(11
|
)
|
3
|
||||||||||||||
Financing expenses
|
(34
|
)
|
(6
|
)
|
(41
|
)
|
11
|
(70
|
)
|
|||||||||||
Share in (losses) income of associated companies
|
—
|
(121
|
)
|
10
|
—
|
(111
|
)
|
|||||||||||||
Profit / (Loss) before taxes
|
$
|
23
|
$
|
(127
|
)
|
$
|
(32
|
)
|
$
|
—
|
$
|
(136
|
)
|
|||||||
Income taxes
|
(9
|
)
|
—
|
(64
|
)
|
—
|
(73
|
)
|
||||||||||||
Profit / (Loss) from continuing operations
|
$
|
14
|
$
|
(127
|
)
|
$
|
(96
|
)
|
$
|
—
|
$
|
(209
|
)
|
|||||||
|
||||||||||||||||||||
Segment assets
5
|
$
|
940
|
$
|
16
|
$
|
1,448
|
6
|
$
|
—
|
$
|
2,404
|
|||||||||
Investments in associated companies
|
—
|
2
|
120
|
—
|
122
|
|||||||||||||||
Segment liabilities
|
743
|
75
|
657
|
7 |
—
|
1,475
|
||||||||||||||
Capital expenditure
8
|
109
|
—
|
121
|
—
|
230
|
(1) |
Results for this period reflect the results of the Inkia Business as discontinued operations. For further information, see Note 27 to our financial statements included in this annual report.
|
(2) |
Subsidiary of Kenon that owns Kenon’s equity holding in Qoros.
|
(3) |
Includes the results of Primus and HelioFocus (which was liquidated in July 2017); the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
|
(4) |
“Adjustments” includes inter-segment financing income and expenses.
|
(5) |
Excludes investments in associates.
|
(6) |
Includes Kenon’s, IC Green’s and IC Power holding company assets.
|
(7) |
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
|
(8) |
Includes the additions of PP&E, and intangibles based on an accrual basis.
|
|
Year Ended December 31, 2016
1
|
|||||||||||||||||||
|
OPC
|
Quantum
2
|
Other
3
|
Adjustments
4
|
Consolidated Results
|
|||||||||||||||
|
(in millions of USD, unless otherwise indicated)
|
|||||||||||||||||||
Sales
|
$
|
324
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
324
|
||||||||||
Depreciation and amortization
|
(27
|
)
|
—
|
—
|
—
|
(27
|
)
|
|||||||||||||
Impairment of assets and investments
|
—
|
—
|
(72
|
)
|
—
|
(72
|
)
|
|||||||||||||
Financing income
|
3
|
—
|
16
|
(12
|
)
|
7
|
||||||||||||||
Financing expenses
|
(23
|
)
|
—
|
(36
|
)
|
12
|
(47
|
)
|
||||||||||||
Share in losses of associated companies
|
—
|
(143
|
)
|
(43
|
)
|
—
|
(186
|
)
|
||||||||||||
Provision of financial guarantee
|
—
|
—
|
(130
|
)
|
—
|
(130
|
)
|
|||||||||||||
Profit/(Loss) before taxes
|
$
|
20
|
$
|
(143
|
)
|
$
|
(305
|
)
|
$
|
—
|
$
|
(428
|
)
|
|||||||
Income taxes
|
—
|
—
|
(2
|
)
|
—
|
(2
|
)
|
|||||||||||||
Profit/(Loss) from continuing
operations
|
$
|
20
|
$
|
(143
|
)
|
$
|
(307
|
)
|
$
|
—
|
$
|
(430
|
)
|
|||||||
|
||||||||||||||||||||
Segment assets
5
|
$
|
668
|
$
|
2
|
$
|
4,260
|
$
|
—
|
$
|
4,930
|
||||||||||
Investments in associated companies
|
—
|
118
|
90
|
—
|
208
|
|||||||||||||||
Segment liabilities
|
534
|
—
|
3,710
|
7 |
—
|
4,244
|
||||||||||||||
Capital expenditure
8
|
73
|
—
|
245
|
—
|
318
|
(1) |
Results for this period have been reclassified to reflect the results of the Inkia Business as discontinued operations. For further information, see Note 27 to our financial statements included in this annual report.
|
(2) |
Subsidiary of Kenon that owns Kenon’s equity holding in Qoros.
|
(3) |
Includes the results of Primus and HelioFocus (which was liquidated in July 2017); the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
|
(4) |
“Adjustments” includes inter-segment financing income and expenses.
|
(5) |
Excludes investments in associates.
|
(6) |
Includes Kenon’s, IC Green’s and IC Power holding company assets.
|
(7) |
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
|
(8) |
Includes the additions of PP&E and intangibles based on an accrual basis.
|
2018
|
2017
|
2016
|
||||||||||
($ millions, except as otherwise indicated)
|
||||||||||||
Net income for the period
|
26
|
14
|
20
|
|||||||||
EBITDA
1
|
91
|
86
|
67
|
|||||||||
Net Debt
2
|
401
|
395
|
371
|
|||||||||
Net energy generated (GWh)
|
3,383
|
3,655
|
3,510
|
|||||||||
Energy sales (GWh)
|
3,965
|
3,988
|
3,996
|
(1) |
OPC defines “EBITDA” for each period as net income for the period before depreciation and amortization, financing expenses, net and income tax expense.
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. 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. EBITDA presents limitations that impair its use as a measure of OPC’s profitability since it does not take into consideration certain costs and expenses that result from its business that could have a significant effect on OPC’s net income, such as finance expenses, taxes and depreciation. |
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in millions of USD)
|
||||||||||||
Net income for the period
|
$
|
26
|
$
|
14
|
$
|
20
|
||||||
Depreciation and amortization
|
30
|
30
|
27
|
|||||||||
Finance expenses, net
|
25
|
33
|
20
|
|||||||||
Income tax expense
|
10
|
9
|
—
|
|||||||||
EBITDA
|
$
|
91
|
$
|
86
|
$
|
67
|
(2) |
Net debt is calculated as total debt, minus cash (which includes short term deposits and restricted cash and long-term deposits and restricted cash). Net debt is not a measure recognized under IFRS. The tables below sets forth a reconciliation of OPC’s total debt to net debt.
|
Year Ended December 31, 2018
|
||||||||||||||||
OPC-Rotem
|
OPC-Hadera
|
Energy & Others
|
Total OPC
|
|||||||||||||
(in millions of USD)
|
||||||||||||||||
Total debt
(i)
|
336
|
172
|
79
|
587
|
||||||||||||
Cash
(ii)
|
72
|
14
|
100
|
186
|
||||||||||||
Net Debt
|
$
|
264
|
$
|
158
|
$
|
(21
|
)
|
$
|
401
|
(i) |
Total debt comprises loans from banks and third parties and debentures, and includes long term and short term debt.
|
(ii) |
Includes short-term deposits and restricted cash of $50 million; and includes long-term deposits and restricted cash of $48 million including $22 million in cash that was deposited into an escrow account in connection with the Tamar gas dispute. For further information, see “
Item 4.B Business Overview—Our Businesses—OPC—Legal Proceedings.
”
|
Year Ended December 31, 2017
|
||||||||||||||||
OPC-Rotem
|
OPC-Hadera
|
Energy & Others
|
Total OPC
|
|||||||||||||
(in millions of USD)
|
||||||||||||||||
Total debt
(i)
|
383
|
144
|
91
|
618
|
||||||||||||
Cash
(ii)
|
86
|
31
|
106
|
223
|
||||||||||||
Net Debt
|
$
|
297
|
$
|
113
|
$
|
(15
|
)
|
$
|
395
|
(i) |
Total debt comprises loans from banks and third parties and debentures, and includes long term and short term debt.
|
(ii) |
Includes short-term deposits and restricted cash of $0 million; and includes long-term deposits and restricted cash of $76 million including $22 million in cash that was deposited into an escrow account in connection with the Tamar gas dispute. For further information, see “Item 4.B Business Overview—Our Businesses—OPC—Legal Proceedings.”
|
Year Ended December 31, 2016
|
||||||||||||||||
OPC-Rotem
|
OPC-Hadera
|
Energy & Others
|
Total OPC
|
|||||||||||||
(in millions of USD)
|
||||||||||||||||
Total debt
(i)
|
365
|
—
|
52
|
417
|
||||||||||||
Cash
(ii)
|
22
|
1
|
23
|
46
|
||||||||||||
Net Debt
|
$
|
343
|
$
|
(1
|
)
|
$
|
29
|
$
|
371
|
(i) |
Total debt comprises loans from banks and third parties and debentures, and includes long term and short term debt.
|
(ii) |
Includes short-term deposits and restricted cash of $4 million and long-term deposits and restricted cash of $19 million.
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
($ millions, except as otherwise indicated)
|
||||||||||||
Sales
|
363
|
365
|
324
|
|||||||||
Cost of Sales
|
(258
|
)
|
(266
|
)
|
(251
|
)
|
||||||
Operating income
|
75
|
69
|
46
|
|||||||||
Operating margins
|
21
|
%
|
19
|
%
|
14
|
%
|
||||||
Financing expenses, net
|
25
|
33
|
20
|
|||||||||
Net income for the period
|
26
|
14
|
20
|
|||||||||
Net Energy sales (GWh)
|
3,965
|
3,988
|
3,996
|
· |
leverage ratio;
|
· |
minimum equity;
|
· |
debt service coverage ratio;
|
· |
limits on the incurrence of liens or the pledging of certain assets;
|
· |
limits on the incurrence of subsidiary debt;
|
· |
limits on the ability to enter into transactions with affiliates, including us;
|
· |
minimum liquidity and fixed charge cover ratios;
|
· |
limits on the ability to pay dividends to shareholders, including us;
|
· |
limits on our ability to sell assets; and
|
· |
other non-financial covenants and limitations and various reporting obligations.
|
· |
Transaction Risk
—exists where sales or purchases are denominated in overseas currencies and the exchange rate changes after our entry into a purchase or sale commitment but
prior to
the completion of the underlying transaction itself;
|
· |
Translation Risk
—exists where the currency in which the results of a business are reported differs from the underlying currency in which the business’ operations are transacted;
|
· |
Economic Risk
—exists where the manufacturing cost base of a business is denominated in a currency different from the currency of the market into which the business’ products are sold; and
|
· |
Reinvestment Risk
—exists where our ability to reinvest earnings from operations in one country to fund the capital needs of operations in other countries becomes limited.
|
· |
If our businesses are unable to manage their interest rate risks effectively, our cash flows and operating results may suffer.
|
· |
heightened economic volatility;
|
· |
difficulty in enforcing agreements, collecting receivables and protecting assets;
|
· |
the possibility of encountering unfavorable circumstances from host country laws or regulations;
|
· |
fluctuations in revenues, operating margins and/or other financial measures due to currency exchange rate fluctuations and restrictions on currency and earnings repatriation;
|
· |
unfavorable changes in regulated electricity tariffs;
|
· |
trade protection measures, import or export restrictions, licensing requirements and local fire and security codes and standards;
|
· |
increased costs and risks of developing, staffing and simultaneously managing a number of operations across a number of countries as a result of language and cultural differences;
|
· |
issues related to occupational safety, work hazard, and adherence to local labor laws and regulations;
|
· |
adverse tax developments;
|
· |
changes in the general political, social and/or economic conditions in the countries where we operate; and
|
· |
the presence of corruption in certain countries.
|
· |
Minimum liquidity, loan life coverage ratios and debt service coverage ratios covenants; and
|
· |
Other non-financial covenants and limitations such as restrictions on dividend distributions, repayments of shareholder loans, asset sales, pledges investments and incurrence of debt, as well as reporting obligations.
|
· |
risks associated with the construction contractor,
|
· |
supply of key equipment,
|
· |
performance of works at the required specifications and within the required time,
|
· |
receipt of services required from the IEC to establish the station and connect it to the grid (which may be affected by sanctions and IEC strikes),
|
· |
impact on PPAs of any delays in completing new projects;
|
· |
applicable regulation, and
|
· |
obtaining the required approvals and permits for the development and operation of the station, including obtaining permits required in connection with the environment, including emission permits, and compliance with their terms.
|
· |
the continued development of the Qoros brand;
|
· |
successful development and launch of new vehicle models;
|
· |
expansion and enhanced sales performance of its dealer network;
|
· |
build-up of its aftersales and services infrastructure;
|
· |
managing its procurement, manufacturing and supply processes;
|
· |
the volume of vehicles acquired by a new customer introduced by the Majority Shareholder in Qoros;
|
· |
establishing effective, and continuing to improve, customer service processes; and
|
· |
securing additional financing to support its operating and capital expenses and further its growth and development.
|
· |
Risks relating to the evolution of its vehicle models and brand and the achievement of broad customer acceptance
– as Qoros’ brand and business are relatively new Qoros has not achieved significant sales levels and its future business and profitability depend, in large part, on Qoros’ ability to sell vehicle models to its targeted customers in its targeted price range;
|
· |
Risks relating to Qoros’ dependence upon a network of independent dealers to sell its automobiles
– Qoros’ success is dependent, in large part, upon a network of dealers, whose salespersons Qoros does not directly employ and therefore cannot control, and as a result Qoros’ dealer network may not achieve the required standards of quality of service producers within Qoros’ expected timeframe, if at all. Qoros’ development of its dealer network will likely be affected by conditions in the Chinese passenger vehicle market and the Chinese economy (which may impact Qoros, as a relatively new company, more than other established companies), the financial resources available to existing and potential dealers, the decisions dealers make as a result of the current and future sales prospects of Qoros’ vehicle models, and the availability and cost of the capital necessary to acquire and hold inventories of Qoros’ vehicles for resale. Qoros may have difficulty in expanding its dealer network if existing dealers are not performing well in terms of sales, and if Qoros is unable to expand its dealer network, this could make it difficult for Qoros to significantly increase sales levels;
|
· |
Risks relating to the competitive industry in which Qoros operates
– Qoros competes in the highly competitive Chinese passenger vehicle market with established automobile manufacturers that may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, pricing sale and support of their products, which could impair Qoros’ ability to operate within this market or adversely impact Qoros’ sales volumes or margins. Furthermore, additional competitors, both international and domestic, may seek to enter the Chinese market. Increased competition may reduce Qoros' margins and may also make it difficult for Qoros to increase sales.
|
· |
Risks relating to recent trends in the Chinese
market
. The growth rate in the Chinese vehicle market declined in recent years and sales declined in China in 2018, after many years of growth. This trend has resulted in increased competition in China’s automotive market through price reductions, which has resulted in reduced margins.
|
· |
Credit risk.
Qoros has accounts receivable for sales of cars on a wholesale basis of RMB1,521 million (approximately US$221 million) as of December 31, 2018 and, accordingly, is subject to credit risk.
|
· |
Minimum liquidity, fixed charge coverage ratio and total leverage covenants; and
|
· |
Other non-financial covenants and limitations such as restrictions on dividend distributions, asset sales, investments and incurrence of debt, as well as reporting obligations.
|
· |
global and regional economic and geopolitical trends, including armed conflicts, terrorist activities, embargoes and strikes;
|
· |
the supply of and demand for commodities and industrial products globally and in certain key markets, such as China;
|
· |
developments in international trade, including the imposition of tariffs, the modification of trade agreements between states and other trade protectionism (mainly in the U.S. - China trades);
|
· |
the relocation of manufacturing capabilities to importers’ nearby locations/inland locations;
|
· |
currency exchange rates;
|
· |
prices of energy resources;
|
· |
environmental and other regulatory developments;
|
· |
changes in seaborne and other transportation patterns;
|
· |
changes in the shipping industry, including mergers and acquisitions, bankruptcies, restructurings and alliances;
|
· |
changes in the infrastructure and capabilities of ports and terminals;
|
· |
weather conditions; and
|
· |
development of digital platforms to manage operations and customer relations, including billing and services.
|
· |
retain and recruit key personnel;
|
· |
adequately protect its intellectual property;
|
· |
secure necessary capital;
|
· |
successfully negotiate with government agencies, vendors, customers, feedstock suppliers or other third parties;
|
· |
successfully manage its existing, or enter into new, strategic relationships and partnerships;
|
· |
commence projects on the current, or any revised, schedule in compliance with the budget;
|
· |
effectively manage rapid growth in personnel or operations; and
|
· |
develop technology, products or processes that complement existing business strategies or address changing market conditions.
|
· |
a 76% interest in
OPC
,
an owner, developer and operator of power generation facilities in the Israeli power market;
|
· |
a 24% interest in
Qoros
, a China-based automotive company (Kenon has agreed to sell half of its interest to the Majority Shareholder in Qoros, subject to closing conditions; upon completion of this sale, Kenon will hold a 12% interest in Qoros);
|
· |
a 32% interest in
ZIM
, a large provider of global container shipping services; and
|
· |
a 91% interest in
Primus
, an innovative developer and owner of a proprietary natural gas-to-liquids technology process.
|
· |
OPC
:
|
· |
In 2017, we completed an IPO and listing of our OPC business in Israel, resulting in net proceeds to OPC of approximately $100 million and Kenon retaining a 76% stake.
|
· |
Qoros
:
|
· |
In 2018 we entered into agreements to facilitate a new investment in Qoros, whereby the Majority Shareholder in Qoros acquired a 51% stake in Qoros, with Kenon and Chery retaining a 24% and 25% stake in Qoros, respectively. The agreement also provided Kenon a put option to sell some or all of its remaining interest in Qoros to the Majority Shareholder in Qoros for consideration of up to RMB3.12 billion (approximately $454 million) (subject to adjustments). The investment resulted in significant equity investment in Qoros and required the Majority Shareholder in Qoros to assume its pro rata share of guarantee and pledge obligations in respect of Qoros bank debt. This investment ultimately led to net cash proceeds to Kenon's subsidiary Quantum of RMB1.2 billion (approximately $175 million).
|
· |
In January 2019, we entered into an agreement to sell half of our remaining interest in Qoros (i.e. 12%) to the Majority Shareholder in Qoros for a purchase price of RMB1,560 million (approximately US$227 million), which is based on the same post-investment valuation as
the initial
investment by the Majority Shareholder in Qoros. The sale is subject to obtaining relevant third-party consents and other closing conditions, including approvals by relevant government authorities. Following completion of the sale, Kenon will hold a 12% interest in Qoros, the Majority Shareholder in Qoros will hold 63% and Chery will own 25%. The Majority Shareholder in Qoros will be required to assume its pro rata share of guarantees and equity pledges of Kenon and Chery based on its equity ownership in Qoros (including this change in its ownership).
|
· |
IC Power
: At the end of 2017, we sold IC Power’s power distribution and generation businesses in Latin America and the Caribbean for consideration of $1,322 million (including final closing adjustments), of which $175 million was deferred. The proceeds were used to repay debt and pay taxes and other expenses, and to fund a distribution to Kenon shareholders of $665 million.
|
· |
Distributions to Shareholders:
Kenon distributed a total of $765 million to shareholders via a return of capital and a dividend in 2018 which Kenon was able to do as a result of the transactions described above.
|
· |
ZIM
, a large provider of global container shipping services, which, as of December 31, 2018 operated 73 (owned and chartered) vessels with a total container capacity of 348,053 TEUs, and in which we have a 32% equity interest; and
|
· |
Primus
, an innovative developer and owner of a proprietary natural gas-to-liquid technology process, in which we have a 91% equity interest.
|
· |
OPC-Rotem
, in which OPC has an 80% equity interest, operates a conventional combined cycle power plant in Mishor Rotem, Israel, with an installed capacity of 466 MW (based on OPC-Rotem’s generation license). The power plant utilizes natural gas, with diesel oil and crude oil as backups.
|
· |
OPC-Hadera
, a wholly-owned subsidiary of OPC, operates steam boilers and turbines with an installed capacity of up to 18 MW in Hadera. In June 2016, OPC-Hadera commenced construction of the OPC-Hadera plant, a cogeneration power station in Israel, which is expected to have a capacity of up to 148 MW, and is expected to reach its COD by the third quarter of 2019. OPC expects that the total cost of completing the OPC-Hadera plant (including the consideration for the original acquisition of OPC-Hadera) will be approximately NIS 1 billion (approximately $267 million). As of December 31, 2018, OPC-Hadera had substantially completed construction of the power plant’s generation units; however, construction still requires the completion of additional tests and further preliminary requirements to reach commercial operation. As of December 31, 2018, OPC-Hadera had invested approximately NIS 822 million (approximately $219 million) in the project.
|
· |
Tzomet
, in which OPC has a 95% equity interest, is developing a natural gas-fired open-cycle power station in Israel with capacity of approximately 396 MW. In January 2019, OPC entered into an agreement for the acquisition of the remaining 5% of the shares of Tzomet. A conditional license for the construction of the Tzomet plant remains subject to conditions. In addition, the Tzomet project is subject to a positive interconnection survey and to financial closing. In September 2018, Tzomet entered into an EPC contract in an amount equivalent to approximately $300 million with PW for the design, engineering, procurement and construction of the Tzomet power plant. The aggregate consideration is payable based on the achievement of milestones. For more information, see “
Item 4.B Business Overview—OPC—OPC’s Description of Operations—Tzomet.
”
|
Country
|
Entity
|
Ownership Percentage (Rounded)
|
Fuel
|
Installed Capacity
(MW)
|
Type of
Asset |
|||||||
Israel
|
OPC-Rotem
|
80
|
%
|
Natural Gas and Diesel
|
466
|
Greenfield
|
||||||
Israel
|
OPC-Hadera
|
100
|
%
|
Natural Gas and Diesel
|
18
|
Acquired
|
||||||
Total Operating Capacity |
484
|
|
December 31, 2017
|
December 31, 2016
|
|||||||||||||||
Installed Capacity (MW)
|
% of Total Installed Capacity in the Market
|
Installed Capacity (MW)
|
% of Total Installed Capacity in the Market
|
|||||||||||||
IEC
|
13,355
|
76
|
%
|
13,617
|
77
|
%
|
||||||||||
Private electricity producers (including renewable energy)
|
4,254
|
24
|
%
|
4,012
|
23
|
%
|
||||||||||
Private electricity producers (without renewable energy)
|
3,217
|
18
|
%
|
3,077
|
17
|
%
|
||||||||||
Renewable energy (private electricity producers)
|
1,037
|
6
|
%
|
935
|
6
|
%
|
||||||||||
Total in the market
|
17,609
|
100
|
%
|
17,629
|
100
|
%
|
Energy generated (thousands of MWh)
|
% of total generated in the market
|
Energy generated (thousands of MWh)
|
% of total generated in the market
|
|||||||||||||
IEC
|
48,833
|
72
|
%
|
48,722
|
72
|
%
|
||||||||||
Private electricity producers (including renewable energy)
|
19,338
|
28
|
%
|
18,554
|
28
|
%
|
||||||||||
Private electricity producers (without renewable energy)
|
17,748
|
26
|
%
|
17,015
|
26
|
%
|
||||||||||
Renewable energy (private electricity producers)
|
1,590
|
2
|
%
|
1,539
|
2
|
%
|
||||||||||
Total in the market
|
68,171
|
100
|
%
|
67,276
|
100
|
%
|
(1) |
Based on the Report on the Condition of the Electricity Market for 2017 and the database for the annual update to the electrical tariff for 2019, as published by the EA.
|
Component
|
Megawatt
|
Installed capacity (without renewable energy) as at December 31, 2017
|
16,525
|
Disposal of power plants of IEC up to 2030, whether by virtue of a Government decision or due to the age of the plants (Orot Rabin units 1–4 (1,440 MW), Reading (428 MW), Eshkol (912 MW), Ramat Hovav (335 MW) and additional units (621 MW)
|
3,736
|
Additional capacity through facilities under construction and quotas published by the EA
|
2,838
|
Expected installed capacity in 2030 without additional quotas
|
15,527
|
Forecasted peak demand in 2030 plus required reserve of 3,700 MW
|
23,400
|
Contribution of renewable energy and integration of accumulation in the renewable energy facilities for savings on the conventional capacity required
|
1,200
|
Additional installed capacity required (not including renewable energy)
|
6,573
|
Additional installed capacity required (including renewable energy)
|
7,500
|
Hours per Consumption Block
1
|
||||||||||||
Winter
|
Transition
|
Summer
|
||||||||||
(Hours)
|
||||||||||||
Peak
|
420
|
1,932
|
308
|
|||||||||
Shoulder
|
204
|
936
|
308
|
|||||||||
Off-Peak
|
1,536
|
2,244
|
872
|
(1) |
The hours per consumption block may vary due to changes in the dates of weekdays, weekends and public holidays.
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
($ millions)
|
||||||||||||
Sales
|
363
|
365
|
324
|
|||||||||
Cost of Sales
|
258
|
266
|
251
|
|||||||||
Net Income
|
26
|
14
|
20
|
|||||||||
EBITDA
1
|
91
|
86
|
67
|
|||||||||
Outstanding Debt
2
|
587
|
618
|
417
|
|||||||||
Net Debt
3
|
401
|
395
|
371
|
(1) |
“EBITDA” is a non-IFRS measure. For a reconciliation of OPC’s net income (loss) to its EBITDA, see footnote 1 to the first table in “
Item 3.A Selected Financial Data—Selected Reportable Segment Data—OPC
” setting forth the selected financial data for the year ended December 31, 2018.
|
(2) |
Includes short-term and long-term debt and excludes loans and notes owed to a parent company.
|
(3) |
“Net debt” is a non-IFRS measure. For a reconciliation of total debt to net debt for OPC and its businesses as of December 31, 2018 see footnote 2 to the first table in “
Item 3.A Selected Financial Data—OPC
” setting forth the selected financial data for the year ended December 31, 2018.
|
Entity
|
Installed
Capacity (MW) 1 |
Net
energy generated (GWh) |
Availability
factor (%) |
|||||||||
OPC-Rotem
|
466
|
3,299
|
87
|
%
|
||||||||
OPC-Hadera
|
18
|
84
|
94
|
%
|
||||||||
OPC Total
|
484
|
3,383
|
Entity
|
Installed
Capacity (MW) 1 |
Net
energy generated (GWh) |
Availability
factor (%) |
|||||||||
OPC-Rotem
|
466
|
3,576
|
94
|
%
|
||||||||
OPC-Hadera
|
18
|
79
|
89
|
%
|
||||||||
OPC Total
|
484
|
3,655
|
Entity
|
Installed
Capacity (MW) 1 |
Net
energy generated (GWh) |
Availability
factor (%) |
|||||||||
OPC-Rotem
|
466
|
3,422
|
91
|
%
|
||||||||
OPC-Hadera
|
18
|
88
|
95
|
%
|
||||||||
OPC Total
|
484
|
3,510
|
Name
|
Power Station Technology
|
Approximate Capacity (MW)
|
Commercial Operating Date
|
Dorad
|
Conventional
|
860
|
May 2014
|
Mashav
|
Conventional
|
120
|
April 2014
|
Dalia – Unit 1
1
|
Conventional
|
450
|
July 2015
|
Dalia – Unit 2
1
|
Conventional
|
450
|
September 2015
|
Ashdod Energy
2
|
Cogeneration
|
60
|
October 2015
|
Ramat Negev Energy
2
|
Cogeneration
|
120
|
January 2016
|
Sugat
2
|
Cogeneration
|
70
|
Under construction
|
Alon Tabor
2
|
Cogeneration
|
70
|
Under construction
|
Ramat Gabriel
2
|
Cogeneration
|
70
|
Under construction
|
Paz Ashdod
2
|
Cogeneration
|
100
|
July 2013
|
Delek Sorek
2
|
Conventional
|
140
|
August 2017
|
Dead Sea Works (DSW)
2
|
Cogeneration
|
230
|
Under construction
|
IPM Beer Tuvia
2
|
Conventional
|
450
|
Under construction
|
OPD Delek Ashkelon
2
|
Cogeneration
|
87
|
February 2019
|
(1) |
To OPC’s knowledge, part of Dalia’s total installed output (Unit 1 and Unit 2) is allocated to the IEC, and part of it is allocated to private customers.
|
(2) |
To OPC’s knowledge, part of the capacity generated by these entities is designated to a yard consumer or to independent consumption.
|
2017
|
2018
|
|
Summer (2 months)
|
70
|
67
|
Winter (3 months)
|
99
|
98
|
Transitional Seasons (7 months)
|
181
|
182
|
Total for the year
|
350
|
347
|
Company/Plant
|
Location
|
Installed Capacity
|
Fuel Type
|
||||
(MW)
|
|||||||
Operating Companies
|
|||||||
OPC-Rotem
|
Mishor Rotem, Israel
|
466
|
Natural gas and diesel (combined cycle)
|
||||
OPC-Hadera
1
|
Hadera, Israel
|
18
|
2
|
Natural gas and diesel
|
(1) |
OPC-Hadera also holds a conditional license for the construction of a cogeneration power station in Israel, based upon a plant with up to 148 MW of capacity. Construction commenced in June 2016 and, following delays in the plant’s construction and operation, COD is currently expected in the third quarter of 2019.
|
(2) |
OPC-Hadera’s generation license refers to an installed capacity of 25 MW, representing an 18 MW and 7 MW unit. The 7 MW steam turbine reflected in OPC-Hadera’s license is not active, and therefore OPC-Hadera’s installed capacity is only 18 MW.
|
As of December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Number of employees by category of activity:
|
||||||||||||
Plant operation and maintenance
|
55
|
51
|
51
|
|||||||||
Corporate management, finance, commercial and other
|
37
|
37
|
28
|
|||||||||
OPC Total
|
92
|
88
|
79
|
· |
An entity may not acquire more than two of the sites sold in the tender process;
|
· |
An entity that holds the right to an electricity generation plant with more than 30MW in capacity using conventional or cogeneration technology, may not acquire more than one of the sites sold in the tender process;
|
· |
An entity may not hold more than 20% of the total planned installed capacity on the date of sale of all the sites being sold; and
|
· |
An entity holding a right to a fuel venture may not acquire any of the sites being sold.
|
· |
Conventional technology
– electricity generation using fossil fuel (natural gas or diesel oil). Exercise of the quota of IPPs using this technology amounts to approximately 2,540 MW out of a total quota of 3,470 MW assigned to generation using this technology.
|
· |
Cogeneration technology
–electricity generation using facilities that simultaneously generate both electrical energy and useful thermal energy (steam) from a single source of energy. Exercise of the quota of generators using this technology amounts to approximately 998 MW out of a total quota of 1,000 MW assigned under the current regulation. Licenses issued beyond that shall be subject to different regulation.
|
· |
Renewable energy
– generation of electric power the source of energy of which includes, inter alia, sun, wind, water or waste. The installed capacity of renewable energy generation facilities amounts to approximately 1,916 MW as well as another 105 MW in various stages of construction, constituting 2,021 MW out of a quota of 3,746 MW assigned to generation using renewable energy.
|
· |
Pumped storage energy
– generation of electricity using an electrical pump connected to the power grid in order to pump water from a lower water reservoir to an upper water reservoir, while taking advantage of the height differences between them in order to power an electric turbine. The installed capacity of production facilities using this technology amounts to 644 MW out of a total quota of 800 MW assigned to generation.
|
1. |
Capacity and Energy to IEC
: according to the IEC PPA, OPC-Rotem is obligated to allocate its full capacity to IEC. In return, IEC shall pay OPC-Rotem a monthly payment for each available MW, net, that was available to IEC.
In addition, when IEC requests to dispatch OPC-Rotem, the IEC shall pay a variable payment based on the cost of fuel and the efficiency of the station. This payment will cover the variable cost deriving from the operation of the OPC-Rotem Power station and the generation of electricity. |
2. |
Sale of energy to end users
: OPC-Rotem is allowed to inform IEC, subject to the provision of advanced notice, that it is releasing itself in whole or in part from the allocation of capacity to IEC, and extract (in whole or in part) the capacity allocated to IEC, in order to sell electricity to private customers pursuant to the Electricity Sector Law. OPC-Rotem may, subject to 12-months’ advanced notice, re-include the excluded capacity (in whole or in part) as capacity sold to IEC.
|
1. |
At peak and shoulder times, one of the following shall apply:
|
2. |
At low demand times, IPPs with units with an installed capacity of up to 175 MW, may sell electrical energy produced by it with a capacity of up to 35 MW, calculated annually or up to 20% of the produced power, inasmuch as the installed output of the unit is higher than 175 MW, all calculated on an annual basis.
|
· |
Qoros 3 Sedan
–launched in 2013;
|
· |
Qoros 3 Hatch –
launched in 2014;
|
· |
Qoros 3 City SUV –
launched in 2014;
|
· |
Qoros 5 SUV –
launched in 2016; and
|
· |
Qoros 3GT –
launched in 2016.
|
• |
Qoros’ dealerships included 160 points of sales, 29 additional points of sales under construction and Memorandums of Understanding;
|
• |
Qoros had 96 full-service dealerships, providing Qoros’ customers with authorized salesmen, showrooms, and services and parts, under one roof; the remaining portion of Qoros’ dealership network comprises only showrooms; and
|
• |
Qoros operated 2 self-owned dealerships.
|
• |
During the three-year period beginning from the closing of the investment, Kenon has the right to cause the Majority Shareholder in Qoros to purchase up to 50% of its remaining equity interest in Qoros for up to RMB1.56 billion, subject to adjustments for inflation; and
|
• |
From the third anniversary of the closing until April 2023, Kenon has the right to cause the Majority Shareholder in Qoros to purchase up to all of its remaining equity interests in Qoros for up to a total of RMB3.12 billion (for Kenon’s full 24% interest in Qoros), subject to adjustment for inflation. Another company within the Baoneng group effectively guarantees this put option by also serving as a grantor of the option. The put option requires six months’ notice for exercise.
|
Business Unit
|
Description of Business Unit
|
2018
TEU Transported (%) |
2017
TEU Transported (%) |
2016
TEU Transported (%) |
||||
Pacific
|
The Pacific BU consists of the Trans-Pacific trade zone, which covers trade between Asia (mainly China) and the east coast and west coast of the U.S., Canada, Central America and the Caribbean
|
38.3
|
34.2
|
33.6
|
||||
Cross Suez
|
The Cross Suez BU consists of the Asia-Europe trade zone, which covers trade between Asia and Europe through the Suez Canal, primarily through the Asia-Black Sea/Mediterranean Sea sub-trade zone
|
14.7
|
15.9
|
16.5
|
||||
Intra-Asia
|
The Intra-Asia BU consists primarily of the Intra-Asia trade zone, which covers trade within regional ports in Asia, as well as trade between Asia and Africa
|
21.4
|
21.1
|
20.3
|
||||
Atlantic
|
The Atlantic BU consists of the Trans-Atlantic trade zone, which covers the trade between the Mediterranean to U.S. east and west coasts and the Caribbean, as well as Intra trades which include the East Mediterranean, West Mediterranean and North Europe and the Mediterranean to West Africa trade
|
18.5
|
21.3
|
21.4
|
||||
Latin America
|
The Latin America BU consists of the Intra-America trade zone, which covers trade within regional ports in the Americas as well as trade between South American east coast and Asia and the Mediterranean to South America east coast via the Atlantic Ocean
|
7.
1
|
7.5
|
8.2
|
||||
Total
|
100.0
|
100.0
|
100.0
|
Container Vessels
|
||||||||||||||||
Number
|
Capacity
(TEU) |
Other Vessels
|
Total
|
|||||||||||||
Vessels owned by ZIM
|
3
|
15,031
|
3
|
|||||||||||||
Vessels chartered from parties related to ZIM
|
||||||||||||||||
Periods up to 1 year (from December 31, 2018)
|
2
|
10,024
|
1
|
1
|
3
|
|||||||||||
Periods between 1 to 5 years (from December 31, 2018)
|
2
|
8,442
|
—
|
2
|
||||||||||||
Periods over 5 years (from December 31, 2018)
|
—
|
—
|
—
|
—
|
||||||||||||
Vessels chartered from third parties
2
|
||||||||||||||||
Periods up to 1 year (from December 31, 2018)
|
46
|
202,950
|
1
|
47
|
||||||||||||
Periods between 1 to 5 years (from December 31, 2018)
|
8
|
44,995
|
—
|
8
|
||||||||||||
Periods over 5 years (from December 31, 2018)
|
10
|
66,611
|
10
|
|||||||||||||
Total
|
71
|
348,053
|
2
|
1
|
73
|
(1) |
Vehicle transport vessels.
|
(2) |
Includes 5 vessels accounted under financial leases and 4 vessels accounted under sale and leaseback refinancing agreements (engaged in 2018).
|
· |
60 vessels were chartered under a “time charter,” which consists of chartering the vessel capacity for a given period of time against a daily charter fee, with the crewing and technical operation of the vessel handled by its owner, including 5 vessels chartered under a time charter from parties related to ZIM;
|
· |
1 vessel was chartered under a “bareboat charter,” which consists of the chartering of a vessel for a given period of time against a charter fee, with the operation of the vessel handled by the charterer; and
|
· |
9 vessels were chartered under financial lease agreements and sale and leaseback refinancing agreements.
|
· |
ZIM must be, at all times, a company incorporated and registered in Israel, whose headquarters and registered main office are domiciled in Israel;
|
· |
at least a majority of the members of ZIM’s board of directors, including the Chairman of the board, as well as the Chief Executive Officer or the person serving as its Chief Business Officer, whatever his/her title may be, must be Israeli citizens;
|
· |
any transfer of vessels shall be invalid vis-à-vis ZIM, its shareholders and any third party if, as a result thereof, the minimum fleet target mandated by the State of Israel will not be maintained and the holder of the Special State Share has not given prior written consent thereto;
|
· |
any holding and/or transfer of shares and/or allocation that confers possession of shares in ZIM at 35% or more of its issued share capital, or that vests the holder thereof with control over ZIM, including as a result of a voting agreement, shall be invalid vis-à-vis ZIM, its shareholders and any third party, if the holder of the Special State Share has not given prior written consent thereto; and
|
· |
any transfer of shares granting the owner a holding exceeding 24% but not exceeding 35%, shall require prior notice to the State of Israel, including full information regarding the transferor and the transferee, the percentage of the shares held by the transferee after the transaction will be completed, and the relevant information about the transaction, including voting agreements and agreements for the appointment of directors (if applicable). In any case, if the State of Israel determines that a transfer of such shares shall constitute potential harm to the State of Israel’s security, or any of its vital interests, or that it has not received the relevant information in order to make a decision, the State of Israel shall be entitled to notify the parties within 30 days that it opposes the transaction, and will be obligated to justify its opposition. In such a situation, the requestor of the transaction shall be entitled to transfer this matter to the competent court, which shall hear and rule on the subject in question.
|
· |
Gasoline Production.
Primus intends to provide its STG+ process to convert natural gas into RBOB gasoline as blend-stock at industrial and chemical plant locations that have spare syngas capacity and in emerging international markets where low value natural gas can be converted to high value (usually imported) gasoline.
|
· |
Gas Flaring Solutions.
Primus offers gas flaring solutions to convert natural gas that would otherwise be flared into gasoline or crude oil diluent. Primus intends to deploy its STG+ technology for operators seeking to remain in compliance with strict anti-flaring regulations and monetize natural gas that would otherwise be flared.
|
· |
Methanol Production.
Primus intends to own, operate and develop, or license the technology for the operation and development of, methanol production plants to service local users of methanol who are located far from larger-scale methanol plants.
|
· |
prior to their expiration in July 2019 (or December 2020 in the case of representations relating to environmental matters), a breach of any of the sellers’ representations and warranties (other than fundamental representations) up to a maximum amount of $176.55 million;
|
· |
prior to their expiration upon the expiration of the statute of limitations applicable to breach of contract claims in New York, a breach of any of the sellers’ covenants or agreements set forth in the share purchase agreement;
|
· |
prior to their expiration thirty days after the expiration of the applicable statute of limitations, certain tax liabilities for pre-closing periods and certain transfer taxes, breach of certain tax representations and the incurrence of certain capital gain taxes by the transferred companies in connection with the transaction; and
|
· |
without limitation with respect to time, a breach of any of the sellers’ fundamental representations (including representations relating to due authorization, ownership title, and capitalization).
|
· |
IC Power’s three-year pledge of OPC shares representing 25% of OPC shares as of December 31, 2017;
|
· |
to the extent any indemnification obligations remain outstanding after the exercise of the above-described pledge (or payments of amounts equal to the value of the pledge), a deferral of $175 million of the purchase price in the form of a four-year $175 million Deferred Payment Agreement, accruing interest at a rate of 8% per annum payable-in-kind accruing from the closing date, which the buyer may use to set-off any such indemnification obligations owed to it (see “
—Nautilus Energy TopCo LLC Deferred Payment Agreement
”); and
|
· |
to the extent any obligations remain outstanding after seeking recourse against of the Deferred Payment Agreement, a three-year corporate guarantee from Kenon.
|
· |
Kenon can withdraw dividends paid into that account as follows (i) in the first 365 days from November 24, 2017, if the 30-trading day volume weighted average price, or VWAP prior to drawing such dividends exceeds NIS14.45 Kenon can draw an amount up to 50% of cumulative net income of OPC from January 1, 2017 (such amount is referred to as the “dividend cap”), (ii) during the following 365-day period, if the 30-trading day VWAP prior to drawing such dividends exceeds NIS14.82, Kenon can draw an amount up to the dividend cap and (iii) during the following 365-day period, if the 30-trading day VWAP prior to drawing such dividends exceeds NIS15.17, Kenon can draw an amount up to the dividend cap; and
|
· |
in addition, on one occasion over the life of the pledge Kenon can draw from the pledged account its pro rata share of OPC dividends up to $25 million paid in respect of all of the pledged shares (by way of example
if the company makes a distribution of US$50 million following the original effective date of the pledge agreement, Kenon is entitled to draw from the pledged account $6.25 million). OPC has not paid a dividend since the date the pledge was executed, and therefore Kenon has not made such draw.
|
(1) |
In January 2019, Kenon announced it had entered into an agreement to sell half of its remaining interest in Qoros (i.e. 12%) to the Majority Shareholder in Qoros. The sale is subject to obtaining customary relevant third-party consents and other closing conditions, including approvals by relevant government authorities. Following completion of the sale, Kenon will hold a 12% interest in Qoros.
|
Ownership Percentage
|
Method of Accounting
|
Treatment in Consolidated
Financial Statements |
|||||
OPC
|
76
|
%
|
Consolidated
|
Consolidated
|
|||
Qoros
|
24
|
%
1
|
Equity
|
Share in losses of associated companies, net of tax
|
|||
ZIM
|
32
|
%
|
Equity
|
Share in losses of associated companies, net of tax
|
|||
Other
|
|||||||
Primus
|
91
|
%
|
Consolidated
|
Consolidated
|
(1) |
In January 2018, our ownership in Qoros was reduced from 50% to 24% in connection with the investment in Qoros by the Majority Shareholder in Qoros. In January 2019, Kenon announced it had entered into an agreement to sell half of its remaining interest in Qoros (i.e. 12%) to the Majority Shareholder in Qoros. The sale is subject to obtaining customary relevant third-party consents and other closing conditions, including approvals by relevant government authorities. Following completion of the sale, Kenon will hold a 12% interest in Qoros.
|
|
Year Ended December 31, 2018
|
|||||||||||||||||||
|
OPC
|
Quantum
1
|
Other
2
|
Adjustments
3
|
Consolidated Results
|
|||||||||||||||
|
(in millions of USD, unless otherwise indicated)
|
|||||||||||||||||||
Sales
|
$
|
363
|
$
|
—
|
$
|
1
|
$
|
—
|
$
|
364
|
||||||||||
Depreciation and amortization
|
(30
|
)
|
—
|
—
|
—
|
(30
|
)
|
|||||||||||||
Financing income
|
2
|
10
|
48
|
(32
|
)
|
28
|
||||||||||||||
Financing expenses
|
(27
|
)
|
(2
|
)
|
(33
|
)
|
32
|
(30
|
)
|
|||||||||||
Gain on third party investment in Qoros
|
—
|
504
|
—
|
—
|
504
|
|||||||||||||||
Fair value loss on option
|
—
|
(40
|
)
|
—
|
—
|
(40
|
)
|
|||||||||||||
Write back of financial guarantee
|
—
|
63
|
—
|
—
|
63
|
|||||||||||||||
Share in losses of associated companies
|
—
|
(78
|
)
|
(27
|
)
|
—
|
(105
|
)
|
||||||||||||
Profit / (Loss) before taxes
|
$
|
36
|
$
|
457
|
$
|
(31
|
)
|
$
|
—
|
$
|
462
|
|||||||||
Income taxes
|
(10
|
)
|
—
|
(1
|
)
|
—
|
(11
|
)
|
||||||||||||
Profit / (Loss) from continuing operations
|
$
|
26
|
$
|
457
|
$
|
(32
|
)
|
$
|
—
|
$
|
451
|
|||||||||
|
||||||||||||||||||||
Segment assets
4
|
$
|
893
|
$
|
92
|
$
|
239
|
5
|
$
|
—
|
$
|
1,224
|
|||||||||
Investments in associated companies
|
—
|
139
|
92
|
—
|
231
|
|||||||||||||||
Segment liabilities
|
700
|
—
|
39
|
6
|
—
|
739
|
||||||||||||||
Capital expenditure
7
|
100
|
—
|
—
|
—
|
100
|
(1) |
Subsidiary of Kenon that owns Kenon’s equity holding in Qoros.
|
(2) |
Includes the results of Primus, the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
|
(3) |
“Adjustments” includes inter segment financing income and expense.
|
(4) |
Includes investments in associates.
|
(5) |
Includes Kenon’s, IC Green’s and IC Power holding company assets.
|
(6) |
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
|
(7) |
Includes the additions of Property, Plant and Equipment, or PP&E, and intangibles based on an accrual basis.
|
|
Year Ended December 31, 2017
1
|
|||||||||||||||||||
|
OPC
|
Quantum
2
|
Other
3
|
Adjustments
4
|
Consolidated Results
|
|||||||||||||||
|
(in millions of USD, unless otherwise indicated)
|
|||||||||||||||||||
Sales
|
$
|
365
|
$
|
—
|
$
|
1
|
$
|
—
|
$
|
366
|
||||||||||
Depreciation and amortization
|
(30
|
)
|
—
|
(1
|
)
|
—
|
(31
|
)
|
||||||||||||
Impairment of assets and investments
|
—
|
—
|
29
|
—
|
29
|
|||||||||||||||
Financing income
|
1
|
—
|
13
|
(11
|
)
|
3
|
||||||||||||||
Financing expenses
|
(34
|
)
|
(6
|
)
|
(41
|
)
|
11
|
(70
|
)
|
|||||||||||
Share in (losses) income of associated companies
|
—
|
(121
|
)
|
10
|
—
|
(111
|
)
|
|||||||||||||
Profit / (Loss) before taxes
|
$
|
23
|
$
|
(127
|
)
|
$
|
(32
|
)
|
$
|
—
|
$
|
(136
|
)
|
|||||||
Income taxes
|
(9
|
)
|
—
|
(64
|
)
|
—
|
(73
|
)
|
||||||||||||
Profit / (Loss) from continuing operations
|
$
|
14
|
$
|
(127
|
)
|
$
|
(96
|
)
|
$
|
—
|
$
|
(209
|
)
|
|||||||
|
||||||||||||||||||||
Segment assets
5
|
$
|
940
|
$
|
16
|
$
|
1,448
|
6
|
$
|
—
|
$
|
2,404
|
|||||||||
Investments in associated companies
|
—
|
2
|
120
|
—
|
122
|
|||||||||||||||
Segment liabilities
|
743
|
75
|
657
|
7 |
—
|
1,475
|
||||||||||||||
Capital expenditure
8
|
109
|
—
|
121
|
—
|
230
|
(1) |
Results for this period reflect the results of the Inkia Business as discontinued operations. For further information, see Note 27 to our financial statements included in this annual report.
|
(2) |
Subsidiary of Kenon that owns Kenon’s equity holding in Qoros.
|
(3) |
Includes the results of Primus and HelioFocus (which was liquidated in July 2017); the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
|
(4) |
“Adjustments” includes inter-segment financing income and expenses.
|
(5) |
Excludes investments in associates.
|
(6) |
Includes Kenon’s, IC Green’s and IC Power holding company assets.
|
(7) |
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
|
(8) |
Includes the additions of PP&E, and intangibles based on an accrual basis.
|
Year Ended December 31, 2016
1
|
||||||||||||||||||||
OPC
|
Quantum
2
|
Other
3
|
Adjustments
4
|
Consolidated Results
|
||||||||||||||||
(
in millions of USD, unless otherwise indicated
)
|
||||||||||||||||||||
Sales
|
$
|
324
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
324
|
||||||||||
Depreciation and amortization
|
(27
|
)
|
—
|
—
|
—
|
(27
|
)
|
|||||||||||||
Impairment of assets and investments
|
—
|
—
|
72
|
—
|
(72
|
)
|
||||||||||||||
Financing income
|
3
|
—
|
16
|
(12
|
)
|
7
|
||||||||||||||
Financing expenses
|
(23
|
)
|
—
|
(36
|
)
|
12
|
(47
|
)
|
||||||||||||
Share in losses of associated companies
|
—
|
(143
|
)
|
(43
|
)
|
—
|
(186
|
)
|
||||||||||||
Provision of financial guarantee
|
—
|
—
|
(130
|
)
|
—
|
(130
|
)
|
|||||||||||||
Profit/(Loss) before taxes
|
$
|
20
|
$
|
(143
|
)
|
$
|
(305
|
)
|
$
|
—
|
$
|
(428
|
)
|
|||||||
Income taxes
|
—
|
—
|
(2
|
)
|
—
|
(2
|
)
|
|||||||||||||
Profit/(Loss) from continuing operations
|
$
|
20
|
$
|
(143
|
)
|
$
|
(307
|
)
|
$
|
—
|
$
|
(430
|
)
|
|||||||
Segment assets
5
|
$
|
668
|
$
|
2
|
$
|
4,260
|
6
|
$
|
—
|
$
|
4,930
|
|||||||||
Investments in associated companies
|
—
|
118
|
90
|
—
|
208
|
|||||||||||||||
Segment liabilities
|
534
|
—
|
3,710
|
7
|
—
|
4,244
|
||||||||||||||
Capital expenditure
8
|
73
|
—
|
245
|
—
|
318
|
(1) |
Results during this period have been reclassified to reflect the results of the Inkia Business as discontinued operations. For further information, see Note 27 to our financial statements included in this annual report.
|
(2) |
Subsidiary of Kenon that owns Kenon’s equity holding in Qoros.
|
(3) |
Includes the results of Primus and HelioFocus (which was liquidated in July 2017); the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
|
(4) |
“Adjustments” includes inter-segment financing income and expenses.
|
(5) |
Excludes investments in associates.
|
(6) |
Includes Kenon’s, IC Green’s and IC Power holding company assets.
|
(7) |
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
|
(8) |
Includes the additions of PP&E and intangibles based on an accrual basis.
|
Year Ended December 31, 2018
|
||||||||||||||||
Qoros
|
ZIM
|
Other
|
Total
|
|||||||||||||
(
in millions of USD
)
|
||||||||||||||||
Loss (100% of results)
|
$
|
(330
|
)
|
$
|
(126
|
)
|
$
|
—
|
$
|
(456
|
)
|
|||||
Share of loss from Associates
|
(78
|
)
|
(27
|
)
|
—
|
(105
|
)
|
|||||||||
Book Value
|
139
|
92
|
—
|
231
|
Year Ended December 31, 2017
|
||||||||||||||||
Qoros
|
ZIM
|
Other
|
Total
|
|||||||||||||
(
in millions of USD
)
|
||||||||||||||||
(Loss) income (100% of results)
|
$
|
(242
|
)
|
$
|
6
|
$
|
—
|
$
|
(236
|
)
|
||||||
Share of (Loss) income from Associates
|
(121
|
)
|
10
|
—
|
(111
|
)
|
||||||||||
Book Value
|
2
|
120
|
—
|
122
|
Year Ended December 31, 2016
|
||||||||||||||||
Qoros
|
ZIM
|
Other
|
Total
|
|||||||||||||
(
in millions of USD
)
|
||||||||||||||||
Loss (100% of results)
|
$
|
(285
|
)
|
$
|
(168
|
)
|
$
|
—
|
$
|
(453
|
)
|
|||||
Share of Loss from Associates
|
(143
|
)
|
(43
|
)
|
—
|
(186
|
)
|
|||||||||
Book Value
|
118
|
82
|
8
|
208
|
· |
recoverable amount of non-financial assets and Cash Generating Units;
|
· |
fair value of derivative financial instruments (including Qoros put option);
|
· |
business combinations; and
|
· |
contingent liabilities.
|
|
Year Ended December 31, 2018
|
|||||||||||||||||||
|
OPC
|
Quantum
1
|
Other
2
|
Adjustments
3
|
Consolidated Results
|
|||||||||||||||
|
(in millions of USD, unless otherwise indicated)
|
|||||||||||||||||||
Sales
|
$
|
363
|
$
|
—
|
$
|
1
|
$
|
—
|
$
|
364
|
||||||||||
Depreciation and amortization
|
(30
|
)
|
—
|
—
|
—
|
(30
|
)
|
|||||||||||||
Financing income
|
2
|
10
|
48
|
(32
|
)
|
28
|
||||||||||||||
Financing expenses
|
(27
|
)
|
(2
|
)
|
(33
|
)
|
32
|
(30
|
)
|
|||||||||||
Gain on third party investment in Qoros
|
—
|
504
|
—
|
—
|
504
|
|||||||||||||||
Fair value loss on option
|
—
|
(40
|
)
|
—
|
—
|
(40
|
)
|
|||||||||||||
Write back of financial guarantee
|
—
|
63
|
—
|
—
|
63
|
|||||||||||||||
Share in losses of associated companies
|
—
|
(78
|
)
|
(27
|
)
|
—
|
(105
|
)
|
||||||||||||
Profit / (Loss) before taxes
|
$
|
36
|
$
|
457
|
$
|
(31
|
)
|
$
|
—
|
$
|
462
|
|||||||||
Income taxes
|
(10
|
)
|
—
|
(1
|
)
|
—
|
(11
|
)
|
||||||||||||
Profit / (Loss) from continuing operations
|
$
|
26
|
$
|
457
|
$
|
(32
|
)
|
$
|
—
|
$
|
451
|
|||||||||
|
||||||||||||||||||||
Segment assets
4
|
$
|
893
|
$
|
92
|
$
|
239
|
5
|
$
|
—
|
$
|
1,224
|
|||||||||
Investments in associated companies
|
—
|
139
|
92
|
—
|
231
|
|||||||||||||||
Segment liabilities
|
700
|
—
|
39
|
6
|
—
|
739
|
||||||||||||||
Capital expenditure
7
|
100
|
—
|
—
|
—
|
100
|
(1) |
Due to maintenance work, OPC-Rotem was not operational for two months in Q4 2018.
|
(2) |
Subsidiary of Kenon that owns Kenon’s equity holding in Qoros.
|
(3) |
Includes the results of Primus, the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
|
(4) |
“Adjustments” includes inter segment financing income and expense.
|
(5) |
Includes investments in associates.
|
(6) |
Includes Kenon’s, IC Green’s and IC Power holding company assets.
|
(7) |
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
|
(8) |
Includes the additions of Property, Plant and Equipment, or PP&E, and intangibles based on an accrual basis.
|
|
Year Ended December 31, 2017
1
|
|||||||||||||||||||
|
OPC
|
Quantum
2
|
Other
3
|
Adjustments
4
|
Consolidated Results
|
|||||||||||||||
|
(in millions of USD, unless otherwise indicated)
|
|||||||||||||||||||
Sales
|
$
|
365
|
$
|
—
|
$
|
1
|
$
|
—
|
$
|
366
|
||||||||||
Depreciation and amortization
|
(30
|
)
|
—
|
(1
|
)
|
—
|
(31
|
)
|
||||||||||||
Impairment of assets and investments
|
—
|
—
|
29
|
—
|
29
|
|||||||||||||||
Financing income
|
1
|
—
|
13
|
(11
|
)
|
3
|
||||||||||||||
Financing expenses
|
(34
|
)
|
(6
|
)
|
(41
|
)
|
11
|
(70
|
)
|
|||||||||||
Share in (losses) income of associated companies
|
—
|
(121
|
)
|
10
|
—
|
(111
|
)
|
|||||||||||||
Profit / (Loss) before taxes
|
$
|
23
|
$
|
(127
|
)
|
$
|
(32
|
)
|
$
|
—
|
$
|
(136
|
)
|
|||||||
Income taxes
|
(9
|
)
|
—
|
(64
|
)
|
—
|
(73
|
)
|
||||||||||||
Profit / (Loss) from continuing operations
|
$
|
14
|
$
|
(127
|
)
|
$
|
(96
|
)
|
$
|
—
|
$
|
(209
|
)
|
|||||||
|
||||||||||||||||||||
Segment assets
5
|
$
|
940
|
$
|
16
|
$
|
1,448
|
6
|
$
|
—
|
$
|
2,404
|
|||||||||
Investments in associated companies
|
—
|
2
|
120
|
—
|
122
|
|||||||||||||||
Segment liabilities
|
743
|
75
|
657
|
7 |
—
|
1,475
|
||||||||||||||
Capital expenditure
8
|
109
|
—
|
121
|
—
|
230
|
(1) |
In December 2017, Inkia completed the sale of the Inkia Business. Results for this period reflect the results of the Inkia Business as discontinued operations. For further information, see Note 27 to our financial statements included in this annual report.
|
(2) |
Subsidiary of Kenon that owns Kenon’s equity holding in Qoros.
|
(3) |
Includes the results of Primus and HelioFocus (which was liquidated in July 2017); the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
|
(4) |
“Adjustments” includes inter-segment financing income and expenses.
|
(5) |
Excludes investments in associates.
|
(6) |
Includes Kenon’s, IC Green’s and IC Power holding company assets.
|
(7) |
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
|
(8) |
Includes the additions of PP&E, and intangibles based on an accrual basis.
|
Year Ended December 31,
2018 |
Year Ended December 31,
2017 |
|||||||||||||||
ZIM
|
Qoros
1
|
ZIM
|
Qoros
2
|
|||||||||||||
(in millions of USD)
|
||||||||||||||||
Revenues
|
$
|
3,248
|
$
|
812
|
$
|
2,978
|
$
|
280
|
||||||||
(Loss)/Income
|
(126
|
)
|
(330
|
)
|
6
|
(242
|
)
|
|||||||||
Other comprehensive loss
|
(6
|
)
|
-
|
(4
|
)
|
—
|
||||||||||
Total comprehensive (loss)/income
|
$
|
(132
|
)
|
$
|
(330
|
)
|
$
|
2
|
$
|
(242
|
)
|
|||||
Share of Kenon in total comprehensive (loss)/income
|
$
|
(40
|
)
|
$
|
(78
|
)
|
$
|
2
|
$
|
(121
|
)
|
|||||
Adjustments
|
13
|
-
|
8
|
—
|
||||||||||||
Share of Kenon in total comprehensive (loss)/(loss) presented in the books
|
$
|
(27
|
)
|
$
|
(78
|
)
|
$
|
10
|
$
|
(121
|
)
|
|||||
Total assets
|
$
|
1,826
|
$
|
1,914
|
$
|
1,802
|
$
|
1,495
|
||||||||
Total liabilities
|
2,050
|
1,475
|
1,896
|
1,674
|
||||||||||||
Book value of investment
|
92
|
139
|
120
|
2
|
(1) |
We owned 50% of Qoros until January 2018, when our equity interest in Qoros was reduced to 24% in connection with the initial investment by the Majority Shareholder in Qoros. In January 2019, we announced our entry into an agreement to sell half of our remaining interest in Qoros (i.e. 12%) to the Majority Shareholder in Qoros. The sale is subject to obtaining customary relevant third-party consents and other closing conditions, including approvals by relevant government authorities. Following completion of the sale, we will hold a 12% interest in Qoros.
|
(2) |
We owned 50% of Qoros throughout 2017.
|
For the year ended December 31,
|
||||||||
2018
|
2017
|
|||||||
$ millions
|
||||||||
Revenue from energy generated by OPC and sold to private customers
|
225
|
233
|
||||||
Revenue from energy purchased by OPC and sold to private customers
|
39
|
20
|
||||||
Revenue from private customers in respect of infrastructures services
|
79
|
94
|
||||||
Revenue from energy sold to the System Administrator
|
4
|
3
|
||||||
Revenue from sale of steam
|
16
|
15
|
||||||
Total
|
363
|
365
|
· |
Revenue from energy generated by OPC and sold to private customers –
decreased by $8 million in 2018, as compared to 2017, primarily as a result of (i) an $18 million decrease in revenues due to the lower availability of the OPC-Rotem power plant and (ii) $5 million one-off revenues in 2017, partially offset by a $12 million increase in revenues due to the higher generation component in 2018, as compared to 2017.
|
· |
Revenue from energy purchased by OPC and sold to private customers
– increased by $19 million in 2018, as compared to 2017, primarily as a result of increased energy purchased and sold by OPC in 2018 as compared to 2017, resulting from the lower availability of the OPC-Rotem power plant due to the maintenance at OPC-Rotem in 2018.
|
· |
Revenue from private customers in respect of infrastructures services
– decreased by $
15
million in 2018, as compared to 2017, primarily as a result of
(i) an $11 million decrease in the infrastructure tariffs in 2018, and (ii) a $2 million decrease due to past reconciliation of OPC’s customers in 2017
.
|
· |
Revenue from energy sold to the System Administrator
– increased by $1 million in 2018, as compared to 2017, primarily as a result of higher sales volume to the System Administrator.
|
· |
Revenue from sale of steam
– increased by $1 million in 2018, as compared to 2017, primarily as of a result of higher steam consumption by customers.
|
For the year ended December 31,
|
||||||||
2018
|
2017
|
|||||||
$ millions
|
||||||||
Natural gas and diesel oil consumption
|
118
|
130
|
||||||
Payment to IEC for infrastructure services and purchase of electricity
|
118
|
114
|
||||||
Natural gas transmission
|
7
|
7
|
||||||
Operating expenses
|
15
|
15
|
||||||
Total
|
258
|
266
|
· |
Natural gas and diesel oil consumption –
decreased by $12 million in 2018, as compared to 2017, primarily due to (i) a $6 million decrease as a result of scheduled maintenance at OPC-Rotem in 2018, (ii) a $3 million decrease as diesel oil consumption in 2017 was high due to a disruption in gas supply from the Tamar reservoir, and (iii) a $2 million reimbursement from IEC for diesel oil cost in prior years.
|
· |
Payment to IEC for infrastructures services and purchase of electricity –
increased by $4 million in 2018, as compared to 2017, primarily as a result of an approximately $17 million increase due to lower generation of the OPC-Rotem power plant, partially offset by (i) a $9 million decrease due to lower infrastructure service tariffs in 2018 and (ii) a $2 million decrease due to past reconciliation with OPC’s customers in 2017.
|
Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
(in millions of USD)
|
||||||||
Sales
|
$
|
3,248
|
$
|
2,978
|
||||
Cost of sales
|
3,100
|
2,697
|
||||||
Gross profit
|
148
|
281
|
||||||
Operating (loss)/profit
|
(29
|
)*
|
135
|
|||||
(Loss)/profit before taxes on income
|
(106
|
)
|
25
|
|||||
Taxes on income
|
(14
|
)
|
(14
|
)
|
||||
(Loss)/profit after taxes on income
|
(120
|
)
|
11
|
|||||
(Loss)/profit for the period
|
$
|
(120
|
)
|
$
|
11
|
|
Year Ended December 31, 2017
1
|
|||||||||||||||||||
|
OPC
|
Quantum
2
|
Other
3
|
Adjustments
4
|
Consolidated Results
|
|||||||||||||||
|
(in millions of USD, unless otherwise indicated)
|
|||||||||||||||||||
Sales
|
$
|
365
|
$
|
—
|
$
|
1
|
$
|
—
|
$
|
366
|
||||||||||
Depreciation and amortization
|
(30
|
)
|
—
|
(1
|
)
|
—
|
(31
|
)
|
||||||||||||
Impairment of assets and investments
|
—
|
—
|
29
|
—
|
29
|
|||||||||||||||
Financing income
|
1
|
—
|
13
|
(11
|
)
|
3
|
||||||||||||||
Financing expenses
|
(34
|
)
|
(6
|
)
|
(41
|
)
|
11
|
(70
|
)
|
|||||||||||
Share in (losses) income of associated companies
|
—
|
(121
|
)
|
10
|
—
|
(111
|
)
|
|||||||||||||
Profit / (Loss) before taxes
|
$
|
23
|
$
|
(127
|
)
|
$
|
(32
|
)
|
$
|
—
|
$
|
(136
|
)
|
|||||||
Income taxes
|
(9
|
)
|
—
|
(64
|
)
|
—
|
(73
|
)
|
||||||||||||
Profit / (Loss) from continuing operations
|
$
|
14
|
$
|
(127
|
)
|
$
|
(96
|
)
|
$
|
—
|
$
|
(209
|
)
|
|||||||
|
||||||||||||||||||||
Segment assets
5
|
$
|
940
|
$
|
16
|
$
|
1,448
|
6
|
$
|
—
|
$
|
2,404
|
|||||||||
Investments in associated companies
|
—
|
2
|
120
|
—
|
122
|
|||||||||||||||
Segment liabilities
|
743
|
75
|
657
|
7 |
—
|
1,475
|
||||||||||||||
Capital expenditure
8
|
109
|
—
|
121
|
—
|
230
|
(1) |
In December 2017, Inkia completed the sale of the Inkia Business. Results for this period reflect the results of the Inkia Business as discontinued operations. For further information, see Note 27 to our financial statements included in this annual report.
|
(2) |
Subsidiary of Kenon that owns Kenon’s equity holding in Qoros.
|
(3) |
Includes the results of Primus and HelioFocus (which was liquidated in July 2017); the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
|
(4) |
“Adjustments” includes inter-segment financing income and expenses.
|
(5) |
Excludes investments in associates.
|
(6) |
Includes Kenon’s, IC Green’s and IC Power holding company assets.
|
(7) |
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
|
(8) |
Includes the additions of PP&E, and intangibles based on an accrual basis.
|
Year Ended December 31, 2016
1
|
||||||||||||||||||||
OPC
|
Quantum
2
|
Other
3
|
Adjustments
4
|
Consolidated Results
|
||||||||||||||||
(
in millions of USD, unless otherwise indicated
)
|
||||||||||||||||||||
Sales
|
$
|
324
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
324
|
||||||||||
Depreciation and amortization
|
(27
|
)
|
—
|
—
|
—
|
(27
|
)
|
|||||||||||||
Impairment of assets and investments
|
—
|
—
|
72
|
—
|
(72
|
)
|
||||||||||||||
Financing income
|
3
|
—
|
16
|
(12
|
)
|
7
|
||||||||||||||
Financing expenses
|
(23
|
)
|
—
|
(36
|
)
|
12
|
(47
|
)
|
||||||||||||
Share in losses of associated companies
|
—
|
(143
|
)
|
(43
|
)
|
—
|
(186
|
)
|
||||||||||||
Provision of financial guarantee
|
—
|
—
|
(130
|
)
|
—
|
(130
|
)
|
|||||||||||||
Profit/(Loss) before taxes
|
$
|
20
|
$
|
(143
|
)
|
$
|
(305
|
)
|
$
|
—
|
$
|
(428
|
)
|
|||||||
Income taxes
|
—
|
—
|
(2
|
)
|
—
|
(2
|
)
|
|||||||||||||
Profit/(Loss) from continuing operations
|
$
|
20
|
$
|
(143
|
)
|
$
|
(307
|
)
|
$
|
—
|
$
|
(430
|
)
|
|||||||
Segment assets
5
|
$
|
668
|
$
|
2
|
$
|
4,260
|
6
|
$
|
—
|
$
|
4,930
|
|||||||||
Investments in associated companies
|
—
|
118
|
90
|
—
|
208
|
|||||||||||||||
Segment liabilities
|
534
|
—
|
3,710
|
7
|
—
|
4,244
|
||||||||||||||
Capital expenditure
8
|
73
|
—
|
245
|
—
|
318
|
(1) |
Results during this period have been reclassified to reflect the results of the Inkia Business as discontinued operations. For further information, see Note 27 to our financial statements included in this annual report.
|
(2) |
Subsidiary of Kenon that owns Kenon’s equity holding in Qoros.
|
(3) |
Includes the results of Primus and HelioFocus (which was liquidated in July 2017); the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses.
|
(4) |
“Adjustments” includes inter-segment financing income and expenses.
|
(5) |
Excludes investments in associates.
|
(6) |
Includes Kenon’s, IC Green’s and IC Power holding company assets.
|
(7) |
Includes Kenon’s, IC Green’s and IC Power holding company liabilities.
|
(8) |
Includes the additions of PP&E and intangibles based on an accrual basis.
|
Year Ended December 31,
2017 |
Year Ended December 31,
2016 |
|||||||||||||||
ZIM
|
Qoros
|
ZIM
|
Qoros
|
|||||||||||||
(in millions of USD)
|
||||||||||||||||
Revenues
|
$
|
2,978
|
$
|
280
|
$
|
2,539
|
$
|
377
|
||||||||
Income/(Loss)
|
6
|
(242
|
)
|
(168
|
)
|
(285
|
)
|
|||||||||
Other comprehensive loss
|
(4
|
)
|
—
|
(13
|
)
|
—
|
||||||||||
Total comprehensive income/(loss)
|
$
|
2
|
$
|
(242
|
)
|
$
|
(181
|
)
|
$
|
(285
|
)
|
|||||
Share of Kenon in total comprehensive income/(loss)
|
$
|
2
|
$
|
(121
|
)
|
$
|
(57
|
)
|
$
|
(143
|
)
|
|||||
Adjustments
|
8
|
—
|
9
|
—
|
||||||||||||
Share of Kenon in total comprehensive income/(loss) presented in the books
|
$
|
10
|
$
|
(121
|
)
|
$
|
(48
|
)
|
$
|
(143
|
)
|
|||||
Total assets
|
$
|
1,802
|
$
|
1,495
|
$
|
1,704
|
$
|
1,534
|
||||||||
Total liabilities
|
1,896
|
1,674
|
1,804
|
1,469
|
||||||||||||
Book value of investment
|
120
|
2
|
82
|
118
|
Year Ended December 31,
|
||||||||
2017
|
2016
|
|||||||
(in millions of USD)
|
||||||||
Sales
|
$
|
2,978
|
$
|
2,539
|
||||
Cost of sales
|
2,697
|
2,480
|
||||||
Gross profit
|
281
|
59
|
||||||
Operating profit (loss)
|
135
|
(52
|
)
|
|||||
Profit (loss) before taxes on income
|
25
|
(145
|
)
|
|||||
Taxes on income
|
(14
|
)
|
(19
|
)
|
||||
Profit (loss) after taxes on income
|
11
|
(164
|
)
|
|||||
Profit (loss) for the period
|
$
|
11
|
$
|
(164
|
)
|
Year Ended December 31,
|
||||||||
2018
|
2017
1
|
|||||||
(in millions of USD)
|
||||||||
Continuing operations
|
||||||||
Net cash flows provided by operating activities
|
||||||||
OPC
|
86
|
114
|
||||||
Adjustments and Other
|
(34
|
)
|
(42
|
)
|
||||
Total
|
52
|
72
|
||||||
Net cash flows provided by / (used in) investing activities
|
42
|
(232
|
)
|
|||||
Net cash flows (used in) / provided by financing activities
|
(1,217
|
)
|
200
|
|||||
Net change in cash from continuing operations
|
(1,123
|
)
|
40
|
|||||
Net change in cash from discontinued operations
|
(155
|
)
|
1,033
|
|||||
Cash—opening balance
|
1,417
|
327
|
||||||
Effect of exchange rate fluctuations on balances of cash and cash equivalents
|
(8
|
)
|
17
|
|||||
Cash—closing balance
|
$
|
131
|
$
|
1,417
|
Year Ended December 31,
|
||||||||
2017
1
|
2016
2
|
|||||||
(in millions of USD)
|
||||||||
Continuing operations
|
||||||||
Net cash flows used in operating activities
|
||||||||
OPC
|
114
|
25
|
||||||
Adjustments and Other
|
(42
|
)
|
(39
|
)
|
||||
Total
|
72
|
(14
|
)
|
|||||
Net cash flows used in investing activities
|
(232
|
)
|
(99
|
)
|
||||
Net cash flows provided by financing activities
|
200
|
149
|
||||||
Net change in cash from continuing operations
|
40
|
36
|
||||||
Net change in cash from discontinued operations
|
1,033
|
(99
|
)
|
|||||
Cash—opening balance
|
327
|
384
|
||||||
Effect of exchange rate fluctuations on balances of cash and cash equivalents
|
17
|
6
|
||||||
Cash—closing balance
|
$
|
1,417
|
$
|
327
|
(1) |
Results reflect the results of the Inkia Business as discontinued operations. For further information, see Note 27 to our financial statements included in this annual report.
|
(2) |
Results during this period have been reclassified to reflect the results of the Inkia Business as discontinued operations. For further information, see Note 27 to our financial statements included in this annual report.
|
Outstanding
Principal Amount as
of December 31, 2018
|
Interest Rate
|
Final Maturity
|
Amortization Schedule
|
||||
($ millions)
|
|||||||
OPC-Rotem:
|
|||||||
Financing agreement
1
|
336
|
4.9%-5.4%, CPI linked
|
June 2031
|
Quarterly principal payments to maturity
|
|||
OPC-Hadera:
|
|||||||
Financing agreement
2
|
172
|
3.4%-3.9%, CPI linked (2/3 of the loan) 4.8%-5.4% (1/3 of the loan)
|
18 years from commercial operations date of Hadera power plant
|
Quarterly principal payments to maturity, commenting 6 months following commercial operations of Hadera power plant
|
|||
OPC:
|
|||||||
Bonds
3
|
79
|
4.45% (commencing from the date of registration for trading on the stock exchange)
|
December 2030
|
Semi-annual principal payments to maturity
|
|||
Total
|
587
|
(1) |
Represents NIS 1,259 million converted into U.S. Dollars at the exchange rate for NIS into U.S. Dollars of NIS 3.748 to $1.00. All debt has been issued in Israeli currency (NIS) linked to CPI.
|
(2) |
Represents NIS 644 million converted into U.S. Dollars at the exchange rate for NIS into U.S. Dollars of NIS 3.748 to $1.00. All debt has been issued in Israeli currency (NIS), of which 2/3 is linked to CPI and 1/3 is not linked to CPI.
|
(3) |
Represents NIS 294 million converted into U.S. Dollars at the exchange rate for NIS into U.S. Dollars of NIS 3.748 to $1.00. All debt has been issued in Israeli currency (NIS) and is not linked to CPI.
|
· |
minimum liquidity, loan life coverage ratios and debt service coverage ratios covenants; and
|
· |
other non-financial covenants and limitations such as restrictions on asset sales, pledges investments and incurrence of debt, as well as reporting obligations
|
· |
minimum liquidity, loan life coverage ratios and debt service coverage ratios covenants; and
|
· |
other non-financial covenants and limitations such as restrictions on dividend distributions, repayments of shareholder loans, asset sales, pledges investments and incurrence of debt, as well as reporting obligations.
|
Payments Due by Period
1
|
||||||||||||||||||||
Total
|
Less than One Year
|
One to Three Years
|
Three to Five Years
|
More than Five Years
|
||||||||||||||||
($ millions)
|
||||||||||||||||||||
OPC’s consolidated contractual obligations
|
||||||||||||||||||||
Trade Payables
|
$
|
47
|
$
|
47
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
Other payables
|
3
|
3
|
—
|
—
|
—
|
|||||||||||||||
Bonds
|
104
|
7
|
12
|
31
|
54
|
|||||||||||||||
Loans
|
697
|
39
|
56
|
166
|
436
|
|||||||||||||||
Total contractual obligations and commitments
|
$
|
851
|
96
|
68
|
197
|
490
|
(1) |
Excludes Kenon’s back-to-back guarantees to Chery as well as obligations under agreement with capital provider relating to Peru BIT claim and guarantee of indemnity obligations under the sale agreement for the Inkia Business. For further information on other commitments, see Note 19 to our financial statements included in this annual report.
|
Name
|
Age
|
Function
|
Original
Appointment Date |
Current
Term Begins |
Current Term Expires
|
|||||
Antoine Bonnier
|
36
|
Board Member
|
2016
|
2018
|
2019
|
|||||
Laurence N. Charney
|
72
|
Chairman of the Audit Committee, Compensation Committee Member, Board Member
|
2016
|
2018
|
2019
|
|||||
Barak Cohen
|
37
|
Board Member
|
2018
|
2018
|
2019
|
|||||
Cyril Pierre-Jean Ducau
|
40
|
Chairman of the Board, Nominating and Corporate Governance Committee Chairman
|
2014
|
2018
|
2019
|
|||||
N. Scott Fine
|
62
|
Audit Committee Member, Compensation Committee Chairman, Board Member
|
2014
|
2018
|
2019
|
|||||
Bill Foo
|
61
|
Board Member, Nominating and Corporate Governance Committee Member
|
2017
|
2018
|
2019
|
|||||
Aviad Kaufman
|
48
|
Compensation Committee Member, Board Member, Nominating and Corporate Governance Committee Member
|
2014
|
2018
|
2019
|
|||||
Arunava Sen
|
58
|
Board Member, Audit Committee Member
|
2017
|
2018
|
2019
|
Name
|
Age
|
Position
|
||
Robert L. Rosen
|
46
|
Chief Executive Officer
|
||
Mark Hasson
|
43
|
Chief Financial Officer
|
· |
the quality and integrity of our financial statements and internal controls;
|
· |
the compensation, qualifications, evaluation and independence of, and making a recommendation to our board for recommendation to the annual general meeting for appointment of, our independent registered public accounting firm;
|
· |
the performance of our internal audit function;
|
· |
our compliance with legal and regulatory requirements; and
|
· |
review of related party transactions.
|
· |
reviewing and determining the compensation package for our Chief Executive Officer and other senior executives;
|
· |
reviewing and making recommendations to our board with respect to the compensation of our non-employee directors;
|
· |
reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other senior executives, including evaluating their performance in light of such goals and objectives; and
|
· |
reviewing periodically and approving and administering stock options plans, long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans for all employees, including reviewing and approving the granting of options and other incentive awards.
|
Company
|
2018
|
2017
|
2016
|
|||||||||
OPC
|
92
|
88
|
79
|
|||||||||
Primus
|
13
|
14
|
31
|
|||||||||
Kenon
|
7
|
6
|
5
|
|||||||||
Total
|
112
|
108
|
115
|
Beneficial Owner (Name/Address)
|
Ordinary Shares
Owned |
Percentage of Ordinary Shares
|
||||||
Ansonia Holdings Singapore B.V.
1
|
31,156,869
|
58.0
|
%
|
|||||
Clal Insurance Enterprises Holdings Ltd.
2
|
3,860,158
|
7.2
|
%
|
|||||
Menora Mivtachim Holdings Ltd.
3
|
3,120,626
|
5.8
|
%
|
|||||
Laurence N. Charney
4
|
32,482
|
*
|
5
|
|||||
N. Scott Fine
4
|
27,265
|
*
|
5
|
|||||
Bill Foo
4
|
3,085
|
*
|
5
|
|||||
Arunava Sen
4
|
3,085
|
*
|
5
|
|||||
Directors and Executive Officers
6
|
–
|
*
|
5
|
(1) |
Based solely on the Schedule 13-D/A (Amendment No. 4) filed by Ansonia Holdings Singapore B.V. with the SEC on January 25, 2017. A discretionary trust, in which Mr. Idan Ofer is the prime beneficiary, indirectly holds 100% of Ansonia Holdings Singapore B.V.
|
(2) |
Based solely upon the Schedule 13-G/A (Amendment No. 1) filed by Clal Insurance Enterprises Holdings Ltd. with the SEC on February 14, 2019. According to the Schedule 13-G/A, of the 3,860,158 ordinary shares reported on the Schedule 13-G/A, (i) 3,488,155 ordinary shares are held for members of the public through, among others, provident funds and/or pension funds and/or insurance policies, which are managed by subsidiaries of Clal Insurance Enterprises Holdings Ltd., which subsidiaries operate under independent management and make independent voting and investment decisions; and (ii) 372,003 ordinary shares are beneficially held for Clal Insurance Enterprises Holdings Ltd.’s own account.
|
(3) |
Based solely upon the Schedule 13-G/A (Amendment No. 1) filed by Menora Mivtachim Holdings Ltd. with the SEC on February 11, 2019. According to the Schedule 13-G/A (i) the ordinary shares reported are beneficially owned by
Menora Mivtachim Holdings Ltd. and by entities that are its direct or indirect, wholly-owned or majority-owned, subsidiaries; and (ii) the economic interest or beneficial ownership in a portion of the ordinary shares reported (including the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities) is held for the benefit of insurance policy holders or the members of provident funds or pension funds, as the case may be.
According to the Schedule 13-G/A, of the 3,120,626 ordinary shares reported, (i) 2,542,995 ordinary shares are held by Menora Mivtachim Pensions and Gemel Ltd; (ii) 527,124 ordinary shares are held by Menora Mivtachim Insurance Ltd.; and (iii) 50,507 ordinary shares are held by Menora Mivtachim
Vehistadrut Hamehandesim Nihul Kupot Gemel Ltd.
|
(4) |
Based solely on Exhibit 99.3 to the Form 6-K furnished by Kenon with the SEC on May 16, 2018.
|
(5) |
Owns less than 1% of Kenon’s ordinary shares.
|
(6) |
Excludes shares held by Laurence N. Charney, N. Scott Fine, Bill Foo and Arunava Sen.
|
· |
the conclusion of the next annual general meeting;
|
· |
the expiration of the period within which the next annual general meeting is required by law to be held (i.e., within six months after our financial year end, being December 31); or
|
· |
the subsequent revocation or modification of approval by our shareholders acting at a duly convened general meeting.
|
· |
upon any resolution concerning the winding-up of our company; and
|
· |
upon any resolution which varies the rights attached to such preference shares.
|
· |
all the directors have made a solvency statement in relation to such redemption; and
|
· |
we have lodged a copy of the statement with the Singapore Registrar of Companies.
|
· |
14 days’ written notice to be given by Kenon of a general meeting to pass an ordinary resolution; and
|
· |
21 days’ written notice to be given by Kenon of a general meeting to pass a special resolution,
|
· |
a company and its related companies, the associated companies of any of the company and its related companies, companies whose associated companies include any of these companies and any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the foregoing for the purchase of voting rights;
|
· |
a company and its directors (including their close relatives, related trusts and companies controlled by any of the directors, their close relatives and related trusts);
|
· |
a company and its pension funds and employee share schemes;
|
· |
a person and any investment company, unit trust or other fund whose investment such person manages on a discretionary basis but only in respect of the investment account which such person manages;
|
· |
a financial or other professional adviser, including a stockbroker, and its clients in respect of shares held by the adviser and persons controlling, controlled by or under the same control as the adviser and all the funds managed by the adviser on a discretionary basis, where the shareholdings of the adviser and any of those funds in the client total 10% or more of the client’s equity share capital;
|
· |
directors of a company (including their close relatives, related trusts and companies controlled by any of such directors, their close relatives and related trusts) which is subject to an offer or where the directors have reason to believe a bona fide offer for the company may be imminent;
|
· |
partners; and
|
· |
an individual and such person’s close relatives, related trusts, any person who is accustomed to act in accordance with such person’s instructions and companies controlled by the individual, such person’s close relatives, related trusts or any person who is accustomed to act in accordance with such person’s instructions and any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the foregoing for the purchase of voting rights.
|
Delaware
|
Singapore—Kenon Holdings Ltd.
|
|
Board of Directors
|
||
A typical certificate of incorporation and bylaws would provide that the number of directors on the board of directors will be fixed from time to time by a vote of the majority of the authorized directors. Under Delaware law, a board of directors can be divided into classes and cumulative voting in the election of directors is only permitted if expressly authorized in a corporation’s certificate of incorporation.
|
The constitution of companies will typically state the minimum and maximum number of directors as well as provide that the number of directors may be increased or reduced by shareholders via ordinary resolution passed at a general meeting, provided that the number of directors following such increase or reduction is within the maximum and minimum number of directors provided in the constitution and the Singapore Companies Act, respectively. Our constitution provides that, unless otherwise determined by a general meeting, the minimum number of directors is five and the maximum number is 12.
|
Filling Vacancies on the Board of Directors
|
||
A typical certificate of incorporation and bylaws provide that, subject to the rights of the holders of any preferred stock, any vacancy, whether arising through death, resignation, retirement, disqualification, removal, an increase in the number of directors or any other reason, may be filled by a majority vote of the remaining directors, even if such directors remaining in office constitute less than a quorum, or by the sole remaining director. Any newly elected director usually holds office for the remainder of the full term expiring at the annual meeting of stockholders at which the term of the class of directors to which the newly elected director has been elected expires.
|
The constitution of a Singapore company typically provides that the directors have the power to appoint any person to be a director, either to fill a vacancy or as an addition to the existing directors, but so that the total number of directors will not at any time exceed the maximum number fixed in the constitution. Any newly elected director shall hold office until the next following annual general meeting, where such director will then be eligible for re-election. Our constitution provides that the shareholders may by ordinary resolution, or the directors may, appoint any person to be a director as an additional director or to fill a vacancy provided that any person so appointed by the directors will only hold office until the next annual general meeting, and will then be eligible for re-election.
|
|
Amendment of Governing Documents
|
||
Under the Delaware General Corporation Law, amendments to a corporation’s certificate of incorporation require the approval of stockholders holding a majority of the outstanding shares entitled to vote on the amendment. If a class vote on the amendment is required by the Delaware General Corporation Law, a majority of the outstanding stock of the class is required, unless a greater proportion is specified in the certificate of incorporation or by other provisions of the Delaware General Corporation Law. Under the Delaware General Corporation Law, the board of directors may amend bylaws if so authorized in the charter. The stockholders of a Delaware corporation also have the power to amend bylaws.
|
Our constitution may be altered by special resolution (i.e., a resolution passed by at least a three-fourths majority of the shares entitled to vote, present in person or by proxy at a meeting for which not less than 21 days written notice is given). The board of directors has no right to amend the constitution.
|
|
Meetings of Shareholders
|
||
Annual and Special Meetings
Typical bylaws provide that annual meetings of stockholders are to be held on a date and at a time fixed by the board of directors. Under the Delaware General Corporation Law, a special meeting of stockholders may be called by the board of directors or by any other person authorized to do so in the certificate of incorporation or the bylaws.
Quorum Requirements
Under the Delaware General Corporation Law, a corporation’s certificate of incorporation or bylaws can specify the number of shares which constitute the quorum required to conduct business at a meeting, provided that in no event shall a quorum consist of less than one-third of the shares entitled to vote at a meeting.
|
Annual General Meetings
All companies are required to hold an annual general meeting once every calendar year. The first annual general meeting was required to be held within 18 months of Kenon’s incorporation and subsequently, annual general meetings must be held within six months after Kenon’s financial year end.
Extraordinary General Meetings
Any general meeting other than the annual general meeting is called an “extraordinary general meeting.” Two or more members (shareholders) holding not less than 10% of the total number of issued shares (excluding treasury shares) may call an extraordinary general meeting. In addition, the constitution usually also provides that general meetings may be convened in accordance with the Singapore Companies Act by the directors.
Notwithstanding anything in the constitution, the directors are required to convene a general meeting if required to do so by requisition (i.e., written notice to directors requiring that a meeting be called) by shareholder(s) holding not less than 10% of the total number of paid-up shares of Kenon carrying voting rights.
Our constitution provides that the directors may, whenever they think fit, convene an extraordinary general meeting.
Quorum Requirements
Our constitution provides that shareholders entitled to vote holding 33 and 1/3 percent of our issued and paid-up shares, present in person or by proxy at a meeting, shall be a quorum. In the event a quorum is not present, the meeting may be adjourned for one week.
|
Indemnification of Officers, Directors and Employers
|
||
Under the Delaware General Corporation Law, subject to specified limitations in the case of derivative suits brought by a corporation’s stockholders in its name, a corporation may indemnify any person who is made a party to any third-party action, suit or proceeding on account of being a director, officer, employee or agent of the corporation (or was serving at the request of the corporation in such capacity for another corporation, partnership, joint venture, trust or other enterprise) against expenses, including attorney’s fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit or proceeding through, among other things, a majority vote of a quorum consisting of directors who were not parties to the suit or proceeding, if the person:
•
acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation or, in some circumstances, at least not opposed to its best interests; and
•
in a criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Delaware corporate law permits indemnification by a corporation under similar circumstances for expenses (including attorneys’ fees) actually and reasonably incurred by such persons in connection with the defense or settlement of a derivative action or suit, except that no indemnification may be made in respect of any claim, issue or matter as to which the person is adjudged to be liable to the corporation unless the Delaware Court of Chancery or the court in which the action or suit was brought determines upon application that the person is fairly and reasonably entitled to indemnity for the expenses which the court deems to be proper.
To the extent a director, officer, employee or agent is successful in the defense of such an action, suit or proceeding, the corporation is required by Delaware corporate law to indemnify such person for expenses (including attorneys' fees) actually and reasonably incurred thereby. Expenses (including attorneys’ fees) incurred by such persons in defending any action, suit or proceeding may be paid in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of that person to repay the amount if it is ultimately determined that that person is not entitled to be so indemnified.
|
The Singapore Companies Act specifically provides that Kenon is allowed to:
•
purchase and maintain for any officer insurance against any liability attaching to such officer in respect of any negligence, default, breach of duty or breach of trust in relation to Kenon;
•
indemnify such officer against liability incurred by a director to a person other than Kenon except when the indemnity is against (i) any liability of the director to pay a fine in criminal proceedings or a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising); or (ii) any liability incurred by the officer (1) in defending criminal proceedings in which he is convicted, (2) in defending civil proceedings brought by Kenon or a related company of Kenon in which judgment is given against him or (3) in connection with an application for relief under specified sections of the Singapore Companies Act in which the court refuses to grant him relief.
•
indemnify any auditor against any liability incurred or to be incurred by such auditor in defending any proceedings (whether civil or criminal) in which judgment is given in such auditor’s favor or in which such auditor is acquitted; or
•
indemnify any auditor against any liability incurred by such auditor in connection with any application under specified sections of the Singapore Companies Act in which relief is granted to such auditor by a court.
In cases where, inter alia, an officer is sued by Kenon the Singapore Companies Act gives the court the power to relieve directors either wholly or partially from the consequences of their negligence, default, breach of duty or breach of trust. However, Singapore case law has indicated that such relief will not be granted to a director who has benefited as a result of his or her breach of trust. In order for relief to be obtained, it must be shown that (i) the director acted reasonably; (ii) the director acted honestly; and (iii) it is fair, having regard to all the circumstances of the case including those connected with such director’s appointment, to excuse the director.
Our constitution currently provides that, subject to the provisions of the Singapore Companies Act and every other act for the time being in force concerning companies and affecting Kenon, every director, auditor, secretary or other officer of Kenon and its subsidiaries and affiliates shall be entitled to be indemnified by Kenon against all liabilities incurred by him in the execution and discharge of his duties and where he serves at the request of Kenon as a director, officer, employee or agent of any subsidiary or affiliate of Kenon or in relation thereto, including any liability incurred by him in defending any proceedings, whether civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of Kenon, and in which judgment is given in his favor (or the proceedings otherwise disposed of without any finding or admission of any material breach of duty on his part) or in which he is acquitted, or in connection with an application under statute in respect of such act or omission in which relief is granted to him by the court.
|
Shareholder Suits
|
||
Under the Delaware General Corporation Law, a stockholder may bring a derivative action on behalf of the corporation to enforce the rights of the corporation. An individual also may commence a class action suit on behalf of himself or herself and other similarly situated stockholders where the requirements for maintaining a class action under the Delaware General Corporation Law have been met. A person may institute and maintain such a suit only if such person was a stockholder at the time of the transaction which is the subject of the suit or his or her shares thereafter devolved upon him or her by operation of law. Additionally, under Delaware case law, the plaintiff generally must be a stockholder not only at the time of the transaction which is the subject of the suit, but also through the duration of the derivative suit. Delaware Law also requires that the derivative plaintiff make a demand on the directors of the corporation to assert the corporate claim before the suit may be prosecuted by the derivative plaintiff, unless such demand would be futile.
|
Derivative actions
The Singapore Companies Act has a provision which provides a mechanism enabling shareholders to apply to the court for leave to bring a derivative action on behalf of Kenon.
Applications are generally made by shareholders of Kenon or individual directors, but courts are given the discretion to allow such persons as they deem proper to apply (e.g., beneficial owner of shares).
It should be noted that this provision of the Singapore Companies Act is primarily used by minority shareholders to bring an action in the name and on behalf of Kenon or intervene in an action to which Kenon is a party for the purpose of prosecuting, defending or discontinuing the action on behalf of Kenon.
|
|
Class actions
The concept of class action suits, which allows individual shareholders to bring an action seeking to represent the class or classes of shareholders, generally does not exist in Singapore. However, it is possible as a matter of procedure for a number of shareholders to lead an action and establish liability on behalf of themselves and other shareholders who join in or who are made parties to the action.
These shareholders are commonly known as “lead plaintiffs.” Further, there are circumstances under the provisions of certain Singapore statutes where shareholders may file and prove their claims for compensation in the event that Kenon has been convicted of a criminal offense or has a court order for the payment of a civil penalty made against it.
Additionally, for as long as Kenon is listed in the U.S. or in Israel, Kenon has undertaken not to claim that it is not subject to any derivative/class action that may be filed against it in the U.S. or Israel, as applicable, solely on the basis that it is a Singapore company.
|
Transactions with Officers and Directors
|
||
Under the Delaware General Corporation Law, some contracts or transactions in which one or more of a corporation’s directors has an interest are not void or voidable because of such interest provided that some conditions, such as obtaining the required approval and fulfilling the requirements of good faith and full disclosure, are met. Under the Delaware General Corporation Law, either (a) the stockholders or the board of directors must approve in good faith any such contract or transaction after full disclosure of the material facts or (b) the contract or transaction must have been “fair” as to the corporation at the time it was approved. If board approval is sought, the contract or transaction must be approved in good faith by a majority of disinterested directors after full disclosure of material facts, even though less than a majority of a quorum.
|
Under the Singapore Companies Act, the chief executive officer and directors are not prohibited from dealing with Kenon, but where they have an interest in a transaction with Kenon, that interest must be disclosed to the board of directors. In particular, the chief executive officer and every director who is in any way, whether directly or indirectly, interested in a transaction or proposed transaction with Kenon must, as soon as practicable after the relevant facts have come to such officer or director’s knowledge, declare the nature of such officer or director’s interest at a board of directors’ meeting or send a written notice to Kenon containing details on the nature, character and extent of his interest in the transaction or proposed transaction with Kenon.
In addition, a director or chief executive officer who holds any office or possesses any property which, directly or indirectly, duties or interests might be created in conflict with such officer’s duties or interests as director or chief executive officer, is required to declare the fact and the nature, character and extent of the conflict at a meeting of directors or send a written notice to Kenon containing details on the nature, character and extent of the conflict.
The Singapore Companies Act extends the scope of this statutory duty of a director or chief executive officer to disclose any interests by pronouncing that an interest of a member of the director’s or, as the case may be, the chief executive officer’s family (including spouse, son, adopted son, step-son, daughter, adopted daughter and step-daughter) will be treated as an interest of the director.
|
|
There is however no requirement for disclosure where the interest of the director or chief executive officer (as the case may be) consists only of being a member or creditor of a corporation which is interested in the proposed transaction with Kenon if the interest may properly be regarded as immaterial. Where the proposed transaction relates to any loan to Kenon, no disclosure need be made where the director or chief executive officer has only guaranteed or joined in guaranteeing the repayment of such loan, unless the constitution provides otherwise.
Further, where the proposed transaction is to be made with or for the benefit of a related corporation (i.e. the holding company, subsidiary or subsidiary of a common holding company) no disclosure need be made of the fact that the director or chief executive officer is also a director or chief executive officer of that corporation, unless the constitution provides otherwise.
Subject to specified exceptions, including a loan to a director for expenditure in defending criminal or civil proceedings, etc. or in connection with an investigation, or an action proposed to be taken by a regulatory authority in connection with any alleged negligence, default, breach of duty or breach of trust by him in relation to Kenon, the Singapore Companies Act prohibits Kenon from: (i) making a loan or quasi-loan to its directors or to directors of a related corporation (each, a “relevant director”); (ii) giving a guarantee or security in connection with a loan or quasi-loan made to a relevant director by any other person; (iii) entering into a credit transaction as creditor for the benefit of a relevant director; (iv) giving a guarantee or security in connection with such credit transaction entered into by any person for the benefit of a relevant director; (v) taking part in an arrangement where another person enters into any of the transactions in (i) to (iv) above or (vi) below and such person obtains a benefit from Kenon or a related corporation; or (vi) arranging for the assignment to Kenon or assumption by Kenon of any rights, obligations or liabilities under a transaction in (i) to (v) above. Kenon is also prohibited from entering into the transactions in (i) to (vi) above with or for the benefit of a relevant director’s spouse or children (whether adopted or naturally or step-children).
|
Dissenters’ Rights
|
||
Under the Delaware General Corporation Law, a stockholder of a corporation participating in some types of major corporate transactions may, under varying circumstances, be entitled to appraisal rights pursuant to which the stockholder may receive cash in the amount of the fair market value of his or her shares in lieu of the consideration he or she would otherwise receive in the transaction.
|
There are no equivalent provisions under the Singapore Companies Act.
|
|
Cumulative Voting
|
||
Under the Delaware General Corporation Law, a corporation may adopt in its bylaws that its directors shall be elected by cumulative voting. When directors are elected by cumulative voting, a stockholder has the number of votes equal to the number of shares held by such stockholder times the number of directors nominated for election. The stockholder may cast all of such votes for one director or among the directors in any proportion.
|
There is no equivalent provision under the Singapore Companies Act in respect of companies incorporated in Singapore.
|
Anti-Takeover Measures
|
||
Under the Delaware General Corporation Law, the certificate of incorporation of a corporation may give the board the right to issue new classes of preferred stock with voting, conversion, dividend distribution, and other rights to be determined by the board at the time of issuance, which could prevent a takeover attempt and thereby preclude shareholders from realizing a potential premium over the market value of their shares
In addition, Delaware law does not prohibit a corporation from adopting a stockholder rights plan, or “poison pill,” which could prevent a takeover attempt and also preclude shareholders from realizing a potential premium over the market value of their shares.
|
The constitution of a Singapore company typically provides that the company may allot and issue new shares of a different class with preferential, deferred, qualified or other special rights as its board of directors may determine with the prior approval of the company’s shareholders in a general meeting. Our constitution provides that our shareholders may grant to our board the general authority to issue such preference shares until the next general meeting. For further information, see “
Item 3D. Risk Factors—Risks Relating to Our Ordinary Shares—Our directors have general authority to allot and issue new shares on terms and conditions and with any preferences, rights or restrictions as may be determined by our board of directors in its sole discretion, which may dilute our existing shareholders. We may also issue securities that have rights and privileges that are more favorable than the rights and privileges accorded to our existing shareholders” and “Item 10.B Constitution—Preference Shares.
”
Singapore law does not generally prohibit a corporation from adopting “poison pill” arrangements which could prevent a takeover attempt and also preclude shareholders from realizing a potential premium over the market value of their shares.
However, under the Singapore Code on Take-overs and Mergers, if, in the course of an offer, or even before the date of the offer announcement, the board of the offeree company has reason to believe that a bona fide offer is imminent, the board must not, except pursuant to a contract entered into earlier, take any action, without the approval of shareholders at a general meeting, on the affairs of the offeree company that could effectively result in any bona fide offer being frustrated or the shareholders being denied an opportunity to decide on its merits.
For further information on the Singapore Code on Take-overs and Mergers, see “
—Takeovers
.”
|
· |
persons that are not U.S. Holders;
|
· |
persons that are subject to alternative minimum taxes;
|
· |
insurance companies;
|
· |
tax-exempt entities;
|
· |
financial institutions;
|
· |
broker-dealers;
|
· |
persons that hold our ordinary shares through partnerships (or other entities classified as partnerships for U.S. federal income tax purposes);
|
· |
pass-through entities;
|
· |
persons that actually or constructively own 10% or more of the total combined voting power of all classes of our voting stock or 10% or more of the total value of shares of all classes of our stock;
|
· |
traders in securities that elect to apply a mark-to-market method of accounting, holders that hold our ordinary shares as part of a “hedge,” “straddle,” “conversion,” or other risk reduction transaction for U.S. federal income tax purposes; and
|
· |
individuals who receive our ordinary shares upon the exercise of compensatory options or otherwise as compensation.
|
· |
an individual who is a citizen or resident of the United States;
|
· |
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States, any state thereof or the District of Columbia;
|
· |
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
|
· |
a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
|
· |
currency risk, as a result of changes in the rates of exchange of various foreign currencies (in particular, the Euro and the New Israeli Shekel) in relation to the U.S. Dollar, our functional currency and the currency against which we measure our exposure;
|
· |
index risk, as a result of changes in the Consumer Price Index;
|
· |
interest rate risk, as a result of changes in the market interest rates affecting certain of our businesses’ issuance of debt and related financial instruments; and
|
· |
price risk, as a result of changes in market prices, such as the price of certain commodities (e.g., natural gas and heavy fuel oil).
|
Year ended
December 31, |
||||||||
2018
|
2017
|
|||||||
(in thousands of USD)
|
||||||||
Audit Fees
1
|
$
|
2,948
|
$
|
5,170
|
||||
Audit-Related Fees
|
1
|
2
|
||||||
Tax Fees
2
|
729
|
974
|
||||||
All Other Fees
|
472
|
—
|
||||||
Total
|
$
|
4,150
|
$
|
6,146
|
(1) |
Includes fees billed or accrued for professional services rendered by the principal accountant, and member firms in their respective network, for the audit of our annual financial statements, and those of our consolidated subsidiaries, as well as additional services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements, except for those not required by statute or regulation.
|
(2) |
Tax fees consist of fees for professional services rendered during the fiscal year by the principal accountant mainly for tax compliance and assistance with tax audits and appeals.
|
Exhibit Number
|
|
Description of Document
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
1. |
Portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Exchange Act. Omitted information has been filed separately with the SEC.
|
2. |
Portions of this exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
|
Page
|
F-1 – F-6
|
|
F-7 – F-8
|
|
F-9
|
|
F-10
|
|
F-11 – F-13
|
|
F-14 – F-15
|
|
F-16 – F-92
|
KPMG LLP
16 Raffles Quay #22-00
Hong Leong Building
Singapore 048581
|
Telephone
+65 6213 3388
Fax
+65 6225 0984
Internet
www.kpmg.com.sg
|
KPMG LLP
16 Raffles Quay #22-00
Hong Leong Building
Singapore 048581
|
Telephone
+65 6213 3388
Fax
+65 6225 0984
Internet
www.kpmg.com.sg
|
|
Deloitte, Inc.
|
Contadores Públicos Autorizados
RUC 16292-152-155203 D.V. 65 Torre Banco Panamá, piso 12 Avenida Boulevard y la Rotonda
Costa del Este, Panamá
Apartado 0816-01558 Panamá, Rep. de Panamá |
|
Teléfono: (507) 303-4100
Fax: (507) 269-2386 infopanama@deloitte.com www.deloitte.com/pa |
Deloitte LATCO
|
|
Firma miembro de
|
|
Deloitte Touche Tohmatsu Limited
|
As at December 31,
|
||||||||||||
2018
|
2017
|
|||||||||||
Note
|
$ Thousands
|
|||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
5
|
131,123
|
1,417,388
|
|||||||||
Short-term investments and deposits
|
6
|
49,938
|
7,144
|
|||||||||
Trade receivables
|
7
|
35,548
|
44,137
|
|||||||||
Other current assets, including derivative instruments
|
8
|
41,514
|
35,752
|
|||||||||
Income tax receivable
|
-
|
220
|
||||||||||
Assets held for sale
|
9.F
|
|
69,592
|
-
|
||||||||
Total current assets
|
327,715
|
1,504,641
|
||||||||||
Non-current assets
|
||||||||||||
Investments in associated companies
|
9
|
161,188
|
121,694
|
|||||||||
Deposits, loans and other receivables, including derivative instruments
|
11
|
140,023
|
106,717
|
|||||||||
Deferred payment receivable
|
12
|
189,166
|
175,000
|
|||||||||
Deferred taxes, net
|
25
|
632
|
-
|
|||||||||
Property, plant and equipment, net
|
13
|
635,088
|
616,164
|
|||||||||
Intangible assets, net
|
14
|
1,306
|
1,641
|
|||||||||
Total non-current assets
|
1,127,403
|
1,021,216
|
||||||||||
Total assets
|
1,455,118
|
2,525,857
|
As at December 31,
|
||||||||||||
2018
|
2017
|
|||||||||||
Note
|
$ Thousands
|
|||||||||||
Current liabilities
|
||||||||||||
Loans and debentures
|
15
|
23,235
|
447,956
|
|||||||||
Trade payables
|
16
|
47,672
|
58,895
|
|||||||||
Other payables, including derivative instruments
|
17
|
12,072
|
82,522
|
|||||||||
Provisions
|
18
|
-
|
44,342
|
|||||||||
Income tax payable
|
6,939
|
172,607
|
||||||||||
Total current liabilities
|
89,918
|
806,322
|
||||||||||
Non-current liabilities
|
||||||||||||
Loans, excluding current portion
|
15
|
487,759
|
503,785
|
|||||||||
Debentures, excluding current portion
|
15
|
75,476
|
84,758
|
|||||||||
Deferred taxes, net
|
25
|
59,067
|
52,753
|
|||||||||
Income tax payable
|
26,811
|
26,811
|
||||||||||
Other non-current liabilities
|
17
|
369
|
81
|
|||||||||
Total non-current liabilities
|
649,482
|
668,188
|
||||||||||
Total liabilities
|
739,400
|
1,474,510
|
||||||||||
Equity
|
20
|
|||||||||||
Share capital
|
602,450
|
1,267,210
|
||||||||||
Shareholder transaction reserve
|
-
|
3,540
|
||||||||||
Translation reserve
|
802
|
(1,592
|
)
|
|||||||||
Capital reserve
|
16,854
|
19,297
|
||||||||||
Accumulated profit/(loss)
|
28,917
|
(305,337
|
)
|
|||||||||
Equity attributable to owners of the Company
|
649,023
|
983,118
|
||||||||||
Non-controlling interests
|
66,695
|
68,229
|
||||||||||
Total equity
|
715,718
|
1,051,347
|
||||||||||
Total liabilities and equity
|
1,455,118
|
2,525,857
|
|
|
|
|
|
Cyril Pierre-Jean Ducau
Chairman of Board of Directors
|
|
Robert L. Rosen
CEO
|
|
Mark Hasson
CFO
|
For the year ended December 31,
|
||||||||||||||||
2018
|
2017
|
2016
|
||||||||||||||
Note
|
$ thousands
|
|||||||||||||||
Continuing Operations
|
||||||||||||||||
Revenue
|
22.A
|
|
364,012
|
365,704
|
324,253
|
|||||||||||
Cost of sales and services (excluding depreciation)
|
22.B
|
|
(259,515
|
)
|
(267,136
|
)
|
(251,666
|
)
|
||||||||
Depreciation
|
(29,809
|
)
|
(30,102
|
)
|
(26,697
|
)
|
||||||||||
Gross profit
|
74,688
|
68,466
|
45,890
|
|||||||||||||
Selling, general and administrative expenses
|
23
|
(34,031
|
)
|
(56,292
|
)
|
(47,095
|
)
|
|||||||||
Write back/(impairment) of assets and investments
|
9.C.a
|
-
|
28,758
|
(72,263
|
)
|
|||||||||||
Other expenses
|
(613
|
)
|
(51
|
)
|
(229
|
)
|
||||||||||
Other income
|
2,147
|
1,410
|
2,757
|
|||||||||||||
Financing expenses
|
24
|
(30,382
|
)
|
(70,166
|
)
|
(47,276
|
)
|
|||||||||
Financing income
|
24
|
28,592
|
2,904
|
7,724
|
||||||||||||
Financing expenses, net
|
(1,790
|
)
|
(67,262
|
)
|
(39,552
|
)
|
||||||||||
Gain on third party investment in Qoros
|
9.C.b.2
|
504,049
|
-
|
-
|
||||||||||||
Fair value loss on option
|
9.C.b.2
|
(39,788
|
)
|
-
|
-
|
|||||||||||
Write back/(provision) of financial guarantee
|
9.C.b.6.g
|
62,563
|
-
|
(130,193
|
)
|
|||||||||||
Share in losses of associated companies, net of tax
|
9.A.2
|
(105,257
|
)
|
(110,665
|
)
|
(186,215
|
)
|
|||||||||
Profit/(loss) before income taxes
|
461,968
|
(135,636
|
)
|
(426,900
|
)
|
|||||||||||
Income taxes
|
25
|
(11,499
|
)
|
(72,809
|
)
|
(2,252
|
)
|
|||||||||
Profit/(loss) for the year from continuing operations
|
450,469
|
(208,445
|
)
|
(429,152
|
)
|
|||||||||||
(Loss)/profit for the year from discontinued operations
|
1.B, 27
|
(5,631
|
)
|
476,565
|
35,150
|
|||||||||||
Profit/(loss) for the year
|
444,838
|
268,120
|
(394,002
|
)
|
||||||||||||
Attributable to:
|
||||||||||||||||
Kenon’s shareholders
|
434,213
|
236,590
|
(411,937
|
)
|
||||||||||||
Non-controlling interests
|
10,625
|
31,530
|
17,935
|
|||||||||||||
Profit/(loss) for the year
|
444,838
|
268,120
|
(394,002
|
)
|
||||||||||||
Basic/diluted profit/(loss) per share attributable to Kenon’s shareholders (in dollars):
|
26
|
|||||||||||||||
Basic/diluted profit/(loss) per share
|
8.07
|
4.40
|
(7.67
|
)
|
||||||||||||
Basic/diluted profit/(loss) per share from continuing operations
|
8.17
|
(4.00
|
)
|
(8.08
|
)
|
|||||||||||
Basic/diluted (loss)/profit per share from discontinued operations
|
(0.10
|
)
|
8.40
|
0.41
|
For the year ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ thousands
|
||||||||||||
Profit/(loss) for the year
|
444,838
|
268,120
|
(394,002
|
)
|
||||||||
Items that are or will be subsequently reclassified to profit or loss
|
||||||||||||
Foreign currency translation differences in respect of foreign operations
|
8,672
|
29,320
|
157
|
|||||||||
Foreign currency translation and capital reserves differences reclassified to profit or loss due to third party investment in Qoros
|
(15,073
|
)
|
-
|
-
|
||||||||
Group’s share in other comprehensive loss of associated companies
|
(177
|
)
|
(1,239
|
)
|
(3,968
|
)
|
||||||
Change in fair value of derivatives used to hedge cash flows
|
491
|
19,489
|
14,397
|
|||||||||
Income taxes in respect of components other comprehensive loss
|
(104
|
)
|
(6,142
|
)
|
(1,507
|
)
|
||||||
Total other comprehensive (loss)/income for the year
|
(6,191
|
)
|
41,428
|
9,079
|
||||||||
Total comprehensive income/(loss) for the year
|
438,647
|
309,548
|
(384,923
|
)
|
||||||||
Attributable to:
|
||||||||||||
Kenon’s shareholders
|
432,576
|
270,175
|
(407,749
|
)
|
||||||||
Non-controlling interests
|
6,071
|
39,373
|
22,826
|
|||||||||
Total comprehensive income/(loss) for the year
|
438,647
|
309,548
|
(384,923
|
)
|
Non-
|
||||||||||||||||||||||||||||||||||||
controlling
|
||||||||||||||||||||||||||||||||||||
Attributable to the owners of the Company
|
interests
|
Total
|
||||||||||||||||||||||||||||||||||
Shareholder
|
||||||||||||||||||||||||||||||||||||
Share
|
transaction
|
Translation
|
Capital
|
Accumulated
|
||||||||||||||||||||||||||||||||
Capital
|
reserve
|
reserve
|
reserve
|
profit/(loss)
|
Total
|
|||||||||||||||||||||||||||||||
Note
|
$ Thousands
|
|||||||||||||||||||||||||||||||||||
Balance at January 1, 2018
|
1,267,210
|
3,540
|
(1,592
|
)
|
19,297
|
(305,337
|
)
|
983,118
|
68,229
|
1,051,347
|
||||||||||||||||||||||||||
Share based payments
|
-
|
-
|
-
|
1,411
|
-
|
1,411
|
403
|
1,814
|
||||||||||||||||||||||||||||
Capital distribution
|
20.A
|
|
(664,760
|
)
|
-
|
-
|
-
|
-
|
(664,760
|
)
|
-
|
(664,760
|
)
|
|||||||||||||||||||||||
Dividend to holders of non-controlling interests in subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
(8,219
|
)
|
(8,219
|
)
|
||||||||||||||||||||||||||
Dividends paid
|
20.D
|
|
-
|
-
|
-
|
-
|
(100,118
|
)
|
(100,118
|
)
|
-
|
(100,118
|
)
|
|||||||||||||||||||||||
Transactions with controlling shareholder
|
-
|
(3,540
|
)
|
-
|
-
|
-
|
(3,540
|
)
|
-
|
(3,540
|
)
|
|||||||||||||||||||||||||
Acquisition of shares of subsidiary from holders of rights not conferring control
|
-
|
-
|
-
|
-
|
336
|
336
|
4
|
340
|
||||||||||||||||||||||||||||
Capital reserve in respect of transactions with holders of non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
207
|
207
|
||||||||||||||||||||||||||||
Total comprehensive income for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||
Net profit for the year
|
-
|
-
|
-
|
-
|
434,213
|
434,213
|
10,625
|
444,838
|
||||||||||||||||||||||||||||
Other comprehensive income/(loss) for the year, net of tax
|
-
|
-
|
2,394
|
(3,854
|
)
|
(177
|
)
|
(1,637
|
)
|
(4,554
|
)
|
(6,191
|
)
|
|||||||||||||||||||||||
Balance at December 31, 2018
|
602,450
|
-
|
802
|
16,854
|
28,917
|
649,023
|
66,695
|
715,718
|
Non-
|
||||||||||||||||||||||||||||||||||||
controlling
|
||||||||||||||||||||||||||||||||||||
Attributable to the owners of the Company
|
interests
|
Total
|
||||||||||||||||||||||||||||||||||
Shareholder
|
||||||||||||||||||||||||||||||||||||
Share
|
transaction
|
Translation
|
Capital
|
Accumulated
|
||||||||||||||||||||||||||||||||
Capital
|
reserve
|
reserve
|
reserve
|
profit/(loss)
|
Total
|
|||||||||||||||||||||||||||||||
Note
|
$ Thousands
|
|||||||||||||||||||||||||||||||||||
Balance at January 1, 2017
|
1,267,450
|
26,559
|
(21,745
|
)
|
11,575
|
(602,598
|
)
|
681,241
|
212,963
|
894,204
|
||||||||||||||||||||||||||
Share based payments
|
(240
|
)
|
-
|
-
|
748
|
-
|
508
|
449
|
957
|
|||||||||||||||||||||||||||
Dividend to holders of non-controlling interests in subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
(33,848
|
)
|
(33,848
|
)
|
||||||||||||||||||||||||||
Capital reduction to non-controlling interests in subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
(13,805
|
)
|
(13,805
|
)
|
||||||||||||||||||||||||||
Sale of Colombian assets
|
-
|
-
|
-
|
-
|
-
|
-
|
(8,890
|
)
|
(8,890
|
)
|
||||||||||||||||||||||||||
Non-controlling interests in respect of business combination
|
-
|
-
|
-
|
-
|
-
|
-
|
(50
|
)
|
(50
|
)
|
||||||||||||||||||||||||||
Sale of subsidiaries - Latin America and Caribbean businesses
|
-
|
-
|
(5,650
|
)
|
2,045
|
-
|
(3,605
|
)
|
(170,513
|
)
|
(174,118
|
)
|
||||||||||||||||||||||||
Dilution of investment in subsidiary
|
21
|
-
|
-
|
299
|
(4,691
|
)
|
62,210
|
57,818
|
42,550
|
100,368
|
||||||||||||||||||||||||||
Fair value of shareholder loan
|
-
|
(23,019
|
)
|
-
|
-
|
-
|
(23,019
|
)
|
-
|
(23,019
|
)
|
|||||||||||||||||||||||||
Total comprehensive income for the year
|
||||||||||||||||||||||||||||||||||||
Net profit for the year
|
-
|
-
|
-
|
-
|
236,590
|
236,590
|
31,530
|
268,120
|
||||||||||||||||||||||||||||
Other comprehensive income/(loss) for the year, net of tax
|
-
|
-
|
25,504
|
9,620
|
(1,539
|
)
|
33,585
|
7,843
|
41,428
|
|||||||||||||||||||||||||||
Balance at December 31, 2017
|
1,267,210
|
3,540
|
(1,592
|
)
|
19,297
|
(305,337
|
)
|
983,118
|
68,229
|
1,051,347
|
Non-
|
||||||||||||||||||||||||||||||||||||
controlling
|
||||||||||||||||||||||||||||||||||||
Attributable to the owners of the Company
|
interests
|
Total
|
||||||||||||||||||||||||||||||||||
Shareholder
|
||||||||||||||||||||||||||||||||||||
Share
|
transaction
|
Translation
|
Capital
|
Accumulated
|
||||||||||||||||||||||||||||||||
Capital
|
reserve
|
reserve
|
reserve
|
profit/(loss)
|
Total
|
|||||||||||||||||||||||||||||||
|
Note
|
$ Thousands
|
||||||||||||||||||||||||||||||||||
Balance at January 1, 2016
|
1,267,210
|
-
|
(16,916
|
)
|
2,212
|
(191,292
|
)
|
1,061,214
|
202,341
|
1,263,555
|
||||||||||||||||||||||||||
Share based payments
|
240
|
-
|
-
|
307
|
-
|
547
|
285
|
832
|
||||||||||||||||||||||||||||
Dividend to holders of non-controlling interests in a subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
(35,255
|
)
|
(35,255
|
)
|
||||||||||||||||||||||||||
Acquisition of non- controlling interest in subsidiary
|
-
|
-
|
-
|
-
|
670
|
670
|
20,325
|
20,995
|
||||||||||||||||||||||||||||
Contribution from non-controlling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
2,441
|
2,441
|
||||||||||||||||||||||||||||
Transactions with controlling shareholder
|
9.C.b.6
|
-
|
3,540
|
-
|
-
|
-
|
3,540
|
-
|
3,540
|
|||||||||||||||||||||||||||
Gain in fair value of shareholder loan
|
9.C.b.5
|
-
|
23,019
|
-
|
-
|
-
|
23,019
|
-
|
23,019
|
|||||||||||||||||||||||||||
Total comprehensive income for the year
|
||||||||||||||||||||||||||||||||||||
Net (loss)/profit for the year
|
-
|
-
|
-
|
-
|
(411,937
|
)
|
(411,937
|
)
|
17,935
|
(394,002
|
)
|
|||||||||||||||||||||||||
Other comprehensive (loss)/income for the year, net of tax
|
-
|
-
|
(4,829
|
)
|
9,056
|
(39
|
)
|
4,188
|
4,891
|
9,079
|
||||||||||||||||||||||||||
Balance at December 31, 2016
|
1,267,450
|
26,559
|
(21,745
|
)
|
11,575
|
(602,598
|
)
|
681,241
|
212,963
|
894,204
|
For the year ended December 31
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
Cash flows from operating activities
|
||||||||||||
Profit/(loss) for the year
|
444,838
|
268,120
|
(394,002
|
)
|
||||||||
Adjustments:
|
||||||||||||
Depreciation and amortization
|
30,416
|
178,461
|
172,381
|
|||||||||
Impairment/(write back) of assets and investments
|
4,812
|
(8,314
|
)
|
72,263
|
||||||||
Financing expenses, net
|
1,790
|
275,799
|
171,118
|
|||||||||
Share in losses of associated companies, net
|
105,257
|
109,980
|
185,592
|
|||||||||
Capital (gains)/losses, net *
|
—
|
(25,529
|
)
|
2,534
|
||||||||
Loss on disposal of property, plant and equipment, net
|
206
|
—
|
—
|
|||||||||
Net change in fair value of derivative financial instruments
|
1,002
|
—
|
—
|
|||||||||
(Write back)/provision of financial guarantee
|
(62,563
|
)
|
—
|
130,193
|
||||||||
Bad debt expense
|
—
|
7,866
|
4,896
|
|||||||||
Gain on third party investment in Qoros
|
(504,049
|
)
|
—
|
—
|
||||||||
Fair value loss on
option
|
39,788
|
—
|
—
|
|||||||||
Write
down
of other payables
|
489
|
—
|
—
|
|||||||||
Share-based payments
|
1,814
|
957
|
832
|
|||||||||
Income taxes
|
16,244
|
278,447
|
59,334
|
|||||||||
80,044
|
1,085,787
|
405,141
|
||||||||||
Change in inventories
|
—
|
1,291
|
(40,076
|
)
|
||||||||
Change in trade and other receivables
|
9,192
|
(62,436
|
)
|
(68,634
|
)
|
|||||||
Change in trade and other payables
|
(
35,311
|
)
|
(568,364
|
)
|
22,835
|
|||||||
Change in provisions and employee benefits
|
—
|
2,021
|
(41,243
|
)
|
||||||||
Cash generated from operating activities
|
53,925
|
458,299
|
278,023
|
|||||||||
Income taxes paid, net
|
(1,546
|
)
|
(66,830
|
)
|
(116,429
|
)
|
||||||
Dividends received from investments in associates
|
—
|
382
|
743
|
|||||||||
Net cash provided by operating activities
|
52,379
|
391,851
|
162,337
|
For the year ended December 31,
|
||||||||||||||||
2018
|
2017
|
2016
|
||||||||||||||
Note
|
$ Thousands
|
|||||||||||||||
Cash flows from investing activities
|
||||||||||||||||
Proceeds from sale of property, plant and equipment and intangible assets
|
66
|
4,727
|
426
|
|||||||||||||
Short-term deposits and loans, net
|
(28,511
|
)
|
(4,876
|
)
|
222,451
|
|||||||||||
Investment in long-term deposits, net
|
(13,560
|
)
|
—
|
—
|
||||||||||||
Cash paid for businesses purchased, less cash acquired
|
—
|
—
|
(206,059
|
)
|
||||||||||||
Cash paid for asset acquisition, less cash acquired
|
(2,344
|
)
|
—
|
—
|
||||||||||||
Sale of subsidiaries - Latin America and Caribbean businesses, net of cash disposed off
|
27
|
—
|
792,585
|
—
|
||||||||||||
Income tax paid
|
(169,845
|
)
|
—
|
—
|
||||||||||||
Sale of Colombian assets, net of cash disposed off
|
—
|
600
|
—
|
|||||||||||||
Investment in associates
|
(90,154
|
)
|
—
|
(111,153
|
)
|
|||||||||||
Sale of securities held for trade and available for sale, net
|
—
|
—
|
17,334
|
|||||||||||||
Acquisition of property, plant and equipment
|
(69,314
|
)
|
(227,601
|
)
|
(280,955
|
)
|
||||||||||
Acquisition of intangible assets
|
(132
|
)
|
(10,412
|
)
|
(9,598
|
)
|
||||||||||
Proceeds from realization of long-term deposits
|
18,476
|
4,655
|
—
|
|||||||||||||
Interest received
|
12,578
|
6,825
|
6,143
|
|||||||||||||
Proceeds from transactions in derivatives, net
|
31
|
|||||||||||||||
Proceeds from dilution of third party investment in Qoros
|
259,749
|
|||||||||||||||
Payment of consideration retained
|
—
|
—
|
(2,204
|
)
|
||||||||||||
Receipt/(payment) to release financial guarantee
|
18,336
|
(72,278
|
)
|
(36,023
|
)
|
|||||||||||
Payment of transaction cost for sale of subsidiaries
|
(48,759
|
)
|
—
|
—
|
||||||||||||
Energuate purchase adjustment
|
—
|
10,272
|
—
|
|||||||||||||
Insurance claim received
|
—
|
80,000
|
—
|
|||||||||||||
Net cash (used in)/provided by investing activities
|
(113,383
|
)
|
584,497
|
(399,638
|
)
|
|||||||||||
Cash flows from financing activities
|
||||||||||||||||
Dividend paid to non-controlling interests
|
(8,219
|
)
|
(29,443
|
)
|
(32,694
|
)
|
||||||||||
Dividends paid
|
(100,084
|
)
|
—
|
—
|
||||||||||||
Capital distribution
|
(664,700
|
)
|
—
|
—
|
||||||||||||
Proceeds from issuance of shares to holders of non-controlling interests in subsidiaries
|
—
|
100,478
|
9,468
|
|||||||||||||
Payment of issuance expenses related to long term debt
|
—
|
(34,391
|
)
|
—
|
||||||||||||
Payment of consent fee
|
—
|
(4,547
|
)
|
—
|
||||||||||||
Receipt of long-term loans and issuance of debentures
|
33,762
|
1,938,877
|
799,481
|
|||||||||||||
Repayment of long-term loans and debentures
|
(376,412
|
)
|
(1,506,553
|
)
|
(444,976
|
)
|
||||||||||
Short-term credit from banks and others, net
|
(77,073
|
)
|
(126,287
|
)
|
(5,477
|
)
|
||||||||||
Payment of swap unwinding and early repayment fee
|
—
|
(46,966
|
)
|
—
|
||||||||||||
Purchase of non-controlling interest
|
—
|
(13,805
|
)
|
—
|
||||||||||||
Interest paid
|
(24,875
|
)
|
(180,242
|
)
|
(151,241
|
)
|
||||||||||
Net cash (used in)/provided by financing activities
|
(1,217,601
|
)
|
97,121
|
174,561
|
||||||||||||
(Decrease)/increase in cash and cash equivalents
|
(1,278,605
|
)
|
1,073,469
|
(62,740
|
)
|
|||||||||||
Cash and cash equivalents at beginning of the year
|
1,417,388
|
326,635
|
383,953
|
|||||||||||||
Effect of exchange rate fluctuations on balances of cash and cash equivalents
|
(7,660
|
)
|
17,284
|
5,422
|
||||||||||||
Cash and cash equivalents at end of the year
|
131,123
|
1,417,388
|
326,635
|
A. |
The Reporting Entity
|
B. |
Sale of power business
|
C. |
Definitions
|
A. |
Declaration of compliance with International Financial Reporting Standards (IFRS)
|
B. |
Functional and presentation currency
|
C. |
Basis of measurement
|
• |
Deferred tax assets and liabilities
|
• |
Provisions
|
• |
Assets and liabilities in respect of employee benefits
|
• |
Investments in associates
|
• |
Qoros put option
|
D. |
Use of estimates and judgment
|
1. |
Recoverable amount of non-financial assets and Cash Generating Units
|
2. |
Fair value of derivative financial instruments (including Qoros put option)
|
3. |
Business Combinations
|
4. |
Contingent Liabilities
|
A. |
First-time application of new accounting standards, amendments and interpretations
|
(1) |
IFRS 9 (2014), Financial Instruments
|
a)
|
Non-derivative financial assets and financial liabilities - recognition and de-recognition
|
b)
|
Non-derivative financial assets – measurement
|
c) |
Non-derivative financial liabilities - Measurement
|
d) |
Derivative financial instruments and hedge accounting
|
e) |
Cash flow hedges
|
f) |
Financial guarantees
|
a) |
Classification and measurement of financial assets and financial liabilities
|
-
|
The objective of the entity's business model is to hold the financial asset to collect the contractual cash flows; and
|
-
|
The contractual terms of the financial asset create entitlement on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
|
b) |
Financial assets at fair value through profit or loss
|
c) |
Impairment
|
-
|
It is not probable that the borrower will fully meet its payment obligations to the Company, and the Company has no right to perform actions such as the realization of collaterals (if any); or
|
-
|
The
contractual payments in respect of the financial asset are more than 90 days in arrears.
|
(2) |
IFRS 15, Revenue from Contracts with Customers
|
(3) |
IFRIC 22, Foreign Currency Transactions and Advance Consideration
|
B. |
Basis for consolidation/ combination
|
(1) |
Business combinations
|
(2) |
Subsidiaries
|
(3) |
Non-Controlling Interest (“NCI”)
|
(4 ) |
Investments in equity-accounted investees
|
(5) |
Loss of significant influence
|
(6) |
Change in interest held in equity accounted investees while retaining significant influence
|
(7) |
Intra-group Transactions
|
(8) |
Reorganizations under Common Control Transactions
|
C. |
Foreign currency
|
(1) |
Foreign currency transactions
|
(2) |
Foreign operations
|
D. |
Cash and Cash Equivalents
|
E. |
Property, plant and equipment, net
|
(1) |
Recognition and measurement
|
•
|
The cost of materials and direct labor;
|
•
|
Any other costs directly attributable to bringing the assets to a working condition for their intended use;
|
•
|
When the Group has an obligation to remove the assets or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on which they are located; and
|
•
|
Capitalized borrowing costs.
|
(2) |
Subsequent Cost
|
(3) |
Depreciation
|
Years
|
|||
Land, roads and buildings
|
30
|
||
Installations, machinery and equipment
|
5 – 25
|
||
Dams
|
18 – 80
|
||
Office furniture, motor vehicles and other equipment
|
3 – 16
|
||
Computer
|
3
|
||
Leasehold improvements (*)
|
3 – 30
|
F. |
Intangible assets, net
|
(1) |
Recognition and measurement
|
Goodwill
|
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment; and any impairment loss is allocated to the carrying amount of the equity investee as a whole.
|
Software
|
Software acquired by the Group and have a finite useful life are measured at cost less accumulated amortization and any accumulated impairment losses.
|
Concessions
|
Intangible assets granted by the Energy and Mining Ministry of Guatemala to DEORSA and DEOCSA to operate power distribution business in defined geographic areas, and acquired as part of business combination. The Group measures Concessions at cost less accumulated amortization and any accumulated impairment losses.
|
Customer relationships
|
Intangible assets acquired as part of a business combination and are recognized separately from goodwill if the assets are separable or arise from contractual or other legal rights and their fair value can be measured reliably. Customer relationships are measured at cost less accumulated amortization and any accumulated impairment losses.
|
Other intangible assets
|
Other intangible assets, including licenses, patents and trademarks, which are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.
|
(2) |
Amortization
|
· | Concessions | 33 years* |
· | Customer relationships | 1-12 years |
· | Software | 3-10 years |
· | Others | 5-27 years |
G. |
Subsequent expenditure
|
H. |
Service Concession arrangements
|
I. |
Leases
|
(1) |
Leased assets
|
(2) |
Lease payments
|
J. |
Inventories
|
K. |
Borrowing costs
|
L. |
Impairment of non-financial assets
|
M. |
Employee benefits
|
(1) |
Short-term employee benefits
|
(2) |
Bonus plans transactions
|
(3) |
Termination Benefits
|
(4) |
Defined Benefit Plans
|
(5) |
Share-based compensation plans
|
N. |
Provisions
|
O. |
Revenue recognition
|
(A) |
The parties to the contract have approved the contract (in writing, orally or according to other customary business practices) and they are committed to satisfying their obligations thereunder;
|
(B) |
The Group is able to identify the rights of each party in relation to the goods or services that are to be transferred;
|
(C) |
The Group is able to identify the payment terms for the goods or services that are to be transferred;
|
(D) |
The contract has commercial substance (i.e., the entity’s risk, timing and amount of future cash flows are expected to change as a result of the contract); and
|
(E) |
It is probable that the consideration to which the Group is entitled to in exchange for the goods or services transferred to the customer will be collected.
|
(A) |
Negotiations were held on the contracts as one package with a single commercial purpose;
|
(B) |
The amount of the consideration in one contract depends on the price or performance of a different contract; or
|
(C) |
The goods or services promised in the contracts (or certain goods or services promised in each one of the contracts) constitute a single performance obligation.
|
(A) |
Goods or services (or a bundle of goods or services) that are distinct; or
|
(B) |
A series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer.
|
P. |
Government grants
|
Q. |
Deposits received from consumers
|
R. |
Energy purchase
|
S. |
Financing income and expenses
|
· |
Interest income;
|
· |
Interest expense;
|
· |
The net gain or loss on the disposal of held-for-sale financial assets;
|
· |
The net gain or loss on financial assets at fair value through profit or loss;
|
· |
The foreign currency gain or loss on financial assets and financial liabilities;
|
· |
The fair value loss on contingent consideration classified as financial liability;
|
· |
Impairment losses recognized on financial assets (other than trade receivables);
|
· |
The net gain or loss on hedging instruments that are recognized in profit or loss; and
|
· |
The reclassification of net gains previously recognized in OCI.
|
T. |
Income taxes
|
• |
Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;
|
• |
Temporary differences related to investments in subsidiaries and associates where the Group is able to control the timing of the reversal of the temporary differences and it is not probable that they will reverse it in the foreseeable future; and
|
• |
Taxable temporary differences arising on the initial recognition of goodwill.
|
U. |
Earnings per share
|
V. |
Share capital – ordinary shares
|
W. |
Discontinued operations
|
· |
Is part of a single coordinated plan to dispose of a separate major line of business or geographic area of operations; or
|
X. |
Operating segment and geographic information
|
Y. |
Transactions with controlling shareholders
|
Z. |
New standards and interpretations not yet adopted
|
1) |
International Financial Reporting Standard IFRS 16 “
Leases
”
– The standard replaces IAS 17 – Leases and its related interpretations. The standard's instructions annul the existing requirement from lessees to classify leases as operating or finance leases. Instead of this, for lessees, the new standard presents a unified model for the accounting treatment of all leases according to which the lessee has to recognize an asset and liability in respect of the lease in its financial statements. Similarly, the standard determines new and expanded disclosure requirements from those required at present. The standard includes a number of alternatives for the implementation of transitional provisions, so that companies can choose one of the following alternatives at the implementation date: full retrospective implementation or implementation from the effective date while adjusting the balance of retained earnings at that date. The Group examined the expected effects of the implementation of the Standard, and the Standard is not expected to have a material impact on the financial statements.
|
2) |
International Accounting Standard IAS 28 “
Investments in Associates and Joint Ventures”
– The amendment clarifies that:
|
- |
a venture capital organisation, or other qualifying entity, may elect to measure its investments in an associate or joint venture at fair value through profit or loss on an investment-by-investment basis.
|
- |
a non-investment entity investor may elect to retain the fair value accounting applied by an investment entity associate or investment entity joint venture to its subsidiaries. This election can be made separately for each investment entity associate or joint venture.
|
A. |
Business Combinations
|
· |
Fixed assets were valued considering the market value provided by an appraiser;
|
· |
Intangibles consider the valuation of Concessions;
|
· |
Deferred taxes were valued based on the temporary differences between the accounting and tax basis of the business combination;
|
· |
Non-controlling interests were measured as a proportional basis of the net assets identified on the acquisition date
|
· |
Intangibles consider the valuation of its Power Purchase Agreements (PPAs); and,
|
· |
Contingent liabilities were determined over the average probability established by third party legal processes.
|
B. |
Cash Generating Unit for impairment testing
|
C. |
Derivatives and Qoros put option
|
D. |
Non-derivative financial liabilities
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Cash in banks
|
72,074
|
1,313,710
|
||||||
Time deposits
|
59,049
|
103,678
|
||||||
131,123
|
1,417,388
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Restricted cash and short-term deposits (1)
|
49,881
|
7,085
|
||||||
Others
|
57
|
59
|
||||||
49,938
|
7,144
|
(1) |
Balance as at December 31, 2018 includes approximately $22 million held in escrow in relation to the Tamar dispute (Refer to Note 19.A.a).
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Trade receivables
|
35,548
|
44,137
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Advances to suppliers
|
827
|
673
|
||||||
Prepaid expenses
|
1,740
|
1,818
|
||||||
Qoros put option (1)
|
24,435
|
-
|
||||||
Derivative instruments
|
726
|
1,471
|
||||||
Government agencies
|
5,362
|
7,408
|
||||||
Contingent consideration (2)
|
4,500
|
18,004
|
||||||
Other receivables
|
3,924
|
6,378
|
||||||
41,514
|
35,752
|
(1) |
Refer to Note 9.C.b.2.
|
(2) |
This represents contingent consideration receivable from ISQ as a part of the transaction described in Note 27.
|
A. |
Condensed information regarding significant associated companies
|
1. |
Condensed financial information with respect to the statement of financial position
|
ZIM
|
Qoros*
|
|||||||||||||||
As at December 31,
|
||||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Principal place of business
|
International
|
China
|
||||||||||||||
Proportion of ownership interest
|
32%
|
|
32%
|
|
24%
|
|
50%
|
|
||||||||
Current assets
|
746,636
|
579,595
|
724,697
|
235,237
|
||||||||||||
Non-current assets
|
1,079,501
|
1,222,743
|
1,188,996
|
1,259,762
|
||||||||||||
Current liabilities
|
(932,969
|
)
|
(686,693
|
)
|
(939,950
|
)
|
(804,062
|
)
|
||||||||
Non-current liabilities
|
(1,117,180
|
)
|
(1,209,137
|
)
|
(534,720
|
)
|
(870,192
|
)
|
||||||||
Non-controlling interests
|
(6,282
|
)
|
(6,509
|
)
|
-
|
-
|
||||||||||
Total net (liabilities)/assets attributable to the Group
|
(230,294
|
)
|
(100,001
|
)
|
439,023
|
(179,255
|
)
|
|||||||||
Share of Group in net (liabilities)/assets
|
(73,694
|
)
|
(32,000
|
)
|
105,366
|
(89,627
|
)
|
|||||||||
Adjustments:
|
||||||||||||||||
Write back of assets and investments
|
-
|
28,758
|
-
|
-
|
||||||||||||
Currency translation
|
-
|
-
|
33,818
|
-
|
||||||||||||
Excess cost
|
165,290
|
123,242
|
-
|
-
|
||||||||||||
Loans
|
-
|
-
|
-
|
61,645
|
||||||||||||
Financial guarantee
|
-
|
-
|
-
|
29,676
|
||||||||||||
Book value of investment
|
91,596
|
120,000
|
139,184
|
1,694
|
||||||||||||
Assets held for sale
|
-
|
-
|
69,592
|
-
|
||||||||||||
Investment in associated companies
|
91,596
|
120,000
|
69,592
|
1,694
|
* |
Qoros is an associated company (See Note 9.C.b). The current assets include cash and cash equivalent of $149 million (2017: $12 million). The current and non-current liabilities excluding trade and other payables and provisions amount to $766 million (2017: $1 billion).
|
2. |
Condensed financial information with respect to results of operations
|
ZIM
|
Qoros*
|
|||||||||||||||||||||||
For the year ended December 31,
|
||||||||||||||||||||||||
2018
|
2017
|
2016
|
2018
|
2017
|
2016
|
|||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||
Revenue
|
3,247,864
|
2,978,291
|
2,539,296
|
811,997
|
280,079
|
377,456
|
||||||||||||||||||
(Loss) / income **
|
(125,653
|
)
|
6,235
|
(168,290
|
)
|
(330,023
|
)
|
(242,395
|
)
|
(285,069
|
)
|
|||||||||||||
Other comprehensive (loss) / income **
|
(6,057
|
)
|
(3,871
|
)
|
(12,351
|
)
|
(23
|
)
|
31
|
7
|
||||||||||||||
Total comprehensive (loss) / income
|
(131,710
|
)
|
2,364
|
(180,641
|
)
|
(330,046
|
)
|
(242,364
|
)
|
(285,062
|
)
|
|||||||||||||
Kenon’s share of comprehensive
|
||||||||||||||||||||||||
(loss) / income
|
(42,147
|
)
|
756
|
(57,805
|
)
|
(79,211
|
)
|
(121,182
|
)
|
(142,531
|
)
|
|||||||||||||
Adjustments
|
13,290
|
8,538
|
9,856
|
873
|
(16
|
)
|
(3
|
)
|
||||||||||||||||
Kenon’s share of comprehensive
|
||||||||||||||||||||||||
(loss) / income presented in the books
|
(28,857
|
)
|
9,294
|
(47,949
|
)
|
(78,338
|
)
|
(121,198
|
)
|
(142,534
|
)
|
* |
The depreciation and amortization, interest income, interest expense and income tax expenses recorded by Qoros during 2018 were $129 million, $5 million, $42 million and $142 thousand (2017: $102 million, $2 million, $50 million and $14 thousand; 2016: $119 million, $2 million, $63 million and $37 thousand) respectively.
|
** |
Excludes portion attributable to non-controlling interest.
|
B. |
Associated companies that are individually immaterial
|
Associated Companies
|
||||||||||||
As at December 31,
|
||||||||||||
2018 | 2017 | 2016 | ||||||||||
$ Thousands
|
||||||||||||
Book value of investments as at December 31
|
-
|
-
|
8,897
|
C. |
Additional information
|
a. |
ZIM
|
1. |
The container shipping industry is dynamic and volatile and has been marked in recent years by instability, which is characterized by a large supply-demand gap and an increase in vessel capacity. In addition, the container shipping market has experienced significant consodoliation as carriers look for operational savings that will improve efficiency and margins. This situation combined with the increase in tariffs and trade tensions between the U.S. and China and other countries have impacted the global trade environment. Bunker prices have increased substantially since reaching historical low levels in January 2016 (excluding a decrease which began in November 2018), while freight rates have decreased since the end of 2017. By the end of 2018, freight rates started to recover in most trades, while bunker prices continued to increase.
|
1) |
Deferral of payments in a total amount of $116 million (the “Deferred Amounts”), during a period of up to 12 months starting on September 30, 2016, each creditor with relation to its specific contracts. The repayment of the Deferred Amounts will begin as from January 1, 2018 on a straight line basis and will end on December 31, 2020 (the “Repayment Period”). In case any respective agreement expires before the end of the Repayment Period, the unpaid balance of Deferred Amounts will be paid in full upon expiration.
|
2)
|
The Deferred Amounts bear interest, at an annual rate of Libor + 2.8% paid quarterly in cash.
|
3)
|
ZIM granted security related to its rights and interests deriving from certain of its receivables, for securing the repayment of the Deferred Amounts (using a similar receivable-backed facility as described in No). The balance of the secured Deferred Amounts as of December 31, 2018 amounted to $58 million.
|
4) |
In case of excess cash, as defined in the rescheduling agreements, a mechanism of mandatory prepayments of the abovementioned rescheduled amounts and their related accrued interest, will apply.
|
(a) |
ZIM obtained amendments to its financial covenants in 2018. Below are the current financial covenants of ZIM:
|
1)
|
Fixed Charge Cover ratio – During the period starting on (and including) September 30, 2018 and through (and including) December 31, 2019, all prior Fixed Charge Cover ratio requirements are waived. In the following periods, the required ratio will be 0.90:1 and will remain at that level thereafter.
|
2) |
Total Leverage ratio - During the period starting on (and including) September 30, 2018 and through (and including) December 31, 2019, all prior Total Leverage ratio requirements are waived. In the following periods, the required ratio will be 9.00:1 and will remain at that level thereafter.
|
3) |
Minimum Liquidity - This covenant was amended as from March 31, 2016 to include all cash and cash equivalents available to ZIM without any restrictions. In addition, during 2016 and through (and including) September 30, 2016 ZIM was required to stand a minimum liquidity of $150 million. Starting December 31, 2016 the minimum Liquidity required is reinstated at $125 million.
|
2. |
Further to the recent trends in the shipping industry, ZIM tested its assets for impairment based on IAS 36, where ZIM operates an integrated liner network, as one cash-generating unit (“CGU”). ZIM estimated its recoverable amount on the basis of fair value less costs to sell, using the discounted cash flow (“DCF”) method, measured at Level 3 fair value measurement under IFRS 13. The impairment test resulted with a recoverable amount exceeding the carrying amount of the CGU with a range between $418 million and $543 million, and therefore no impairment was recognized. Although ZIM believes the assumptions used for impairment are reasonable and acceptable, no assurance can be made against the level of bunker prices and freight rates sustainability.
|
1. |
During 2016, ZIM sold a portion of its holdings in an associated company and ceased to have significant influence over such investee. ZIM recognized a disposal gain in an amount of $16 million, Kenon's share of the disposal gain is $5 million and is recognized in share of net income and losses from associated companies.
|
2. |
During 2017 and 2018, ZIM did not sell any of its holdings.
|
b. |
Qoros Automotive Co. Ltd. (“Qoros”)
|
1. |
As at December 31, 2018, the Group holds a 24% equity interest in Qoros through a wholly-owned and controlled company, Quantum (2007) LLC (“Quantum”),. Chery Automobiles Limited (“Chery”), a Chinese automobile manufacturer, holds a 25% equity interest and, following the transaction detailed below, the remaining 51% interest is held by an entity related to the Baoneng Group (“New Qoros Investor” or “New Strategic Partner”).
|
2. |
Qoros introduced a New Strategic Partner
|
3. |
As at December 31, 2018, Kenon’s investment in Qoros amounts to $139.2 million (2017: $1.7 million).
|
4. |
Qoros incurred a net loss of RMB2.2 billion (approximately $332 million) in 2018 and had net current liabilities of approximately RMB 1.5 billion (approximately $215 million) for the year ended December 31, 2018, (RMB 1.4 billion (approximately $211 million) and RMB 3.7 billion (approximately $555 million) as of December 31, 2017 and RMB 1.9 billion (approximately $284 million) and RMB 3.57 billion (approximately $515 million) as of December 31, 2016 respectively).
|
5. |
Ansonia Loans
|
a. |
Overview
|
6. |
Financial Guarantees Provision and Releases
|
a. |
In July 2012, Chery provided a guarantee to the banks, in the amount of RMB1.5 billion ($242 million), in relation to an agreement with the banks to provide Qoros a loan, in the amount of RMB3 billion ($482 million). In November 2015, Kenon provided back-to-back guarantees to Chery of RMB750 million (approximately $115 million) in respect of this loan thereby committing to pay half of every amount Chery may be required to pay with respect to the guarantee. As a result, if Qoros is unable to comply with the terms of certain of its debt agreements, Kenon may be required to make payments under its guarantees to Chery. The fair value of the guarantee has been recorded in the financial statements.
|
b. |
On May 12, 2015, Qoros signed a Consortium Loan Agreement with the Export-Import Bank of China, and China Construction Bank Co., LTD, Suzhou Branch, concerning the Project of Research and Development of Hybrid Model (“Loan Agreement”), for an amount of RMB700 million ($108 million) or in USD not exceeding the equivalent to RMB480 million ($78 million) (the “Facility”).
|
c. |
On June 15, 2015, this Facility was guaranteed by Chery and pledged with Qoros’ 90 vehicle patents with an appraisal value of minimum RMB3.1 billion ($500 million). The Loan Agreement’s term of 102 months bears a 5-years interest rate quoted by the People’s Bank of China in RMB at LIBOR+10%, or in USD at LIBOR+3.50% per annum.
|
d. |
On July 31, 2014, in order to secure additional funding for Qoros of approximately RMB 1.2 billion ($200 million as of August 7, 2014) IC pledged a portion of its shares (including dividends derived therefrom) in Qoros, in proportion to its share in Qoros’s capital, in favor of the Chinese bank providing Qoros with such financing. Simultaneously, the subsidiary of Chery that holds Chery’s rights in Qoros also pledged a proportionate part of its rights in Qoros. Such financing agreement includes, inter alia, liabilities, provisions regarding covenants, events of immediate payment and/or early payment for violations and/or events specified in the agreement. The lien agreement includes, inter alia, provisions concerning the ratio of securities and the pledging of further securities in certain circumstances, including pledges of up to all of Quantum’s shares in Qoros (or cash), provisions regarding events that would entitle the Chinese Bank to exercise the lien, certain representations and covenants, and provisions regarding the registration and approval of the lien.
|
e. |
On June 30, 2016, Kenon increased its previously recognized provision of $30 million to $160 million in respect to Kenon’s “back-to-back” guarantee obligations to Chery (RMB1,100 million), in respect of guarantees that Chery has given for Qoros’ bank debt and has pledged a portion of its interests in Qoros to secure Qoros’ bank debt. In addition to the current liquidity needs of Qoros, its financial position and Kenon’s strategic intent, the provision was made due to uncertainty in the Chinese automobile market. As a result, Kenon recognized a $130 million charge to expense for such financial guarantees in its consolidated statement of profit or loss in 2016.
|
f. |
On December 25, 2016. Kenon has agreed to provide a RMB250 million (approximately $36 million) shareholder loan to Qoros, and in relation to this loan, the maximum amount of Kenon’s back-to-back guarantee obligations to Chery was reduced by RMB250 million. As part of the loan to Qoros, Kenon’s back-to-back guarantee obligations to Chery with respect to Chery’s guarantee of Qoros’ RMB3 billion loan facility with the Export-Import Bank of China (“EXIM Bank”) were reduced by one third, and the maximum amount of Kenon’s obligations under this back-to-back guarantee (subject to certain obligations to negotiate fees and interest) were reduced from RMB750 million to RMB500 million (approximately $72 million). In addition, Ansonia committed to fund RMB25 million (approximately $4 million) of Kenon’s remaining back-to-back guarantee obligations to Chery in certain circumstances (“Ansonia Commitment”).
|
g. |
On March 10, 2017, Kenon announced that it had agreed to fund up to RMB777 million (approximately $114 million) to Qoros in relation to the full release of its remaining RMB825 million (approximately $125 million) back-to-back guarantee obligations to Chery in two tranches, which releases Kenon from commitments to pay any related interest and fees to Chery under the guarantees.
|
Date
|
Description
|
Amount (US$ million)
|
||||
June 2016
|
Provision in respect of Kenon’s “back-to-back” guarantee obligations to Chery (See Note 9.C.b.6.e)
|
160
|
||||
December 2016
|
Shareholder loan to Qoros (See Note 9.C.b.6.f)
|
(36
|
)
|
|||
March 2017
|
Transfer of First Tranche Loans (See Note 9.C.b.6.f)
|
(64
|
)
|
|||
April 2017
|
Transfer of Second Tranche Loans (See Note 9.C.b.6.g)
|
(16
|
)
|
|||
January 2018
|
Release of remaining financial guarantees (See Note 9.C.b.6.g)
|
(44
|
)
|
|||
December 2018
|
Year end balance
|
-
|
7. |
Business Plans
|
D. |
Details regarding dividends received from associated companies
|
For the Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
From associated companies
|
-
|
382
|
743
|
E. |
Restrictions
|
F. |
Assets held for sale
|
A. |
Investments
|
1. |
O.P.C. Energy Ltd.
(formerly part of the I.C. Power Ltd group)
|
a. |
Acquisition of Tzomet Energy Ltd. (“Tzomet”)
|
2. |
I.C. Green Energy Ltd (I.C. Green)
|
a. |
As of December 31, 2018, I.C. Green held 90.85% of the shares of Primus Green Energy Inc. (“PGE”). In 2017 I.C. Green granted PGE additional $7.4 million as convertible bridge financing agreement. All of the convertible loans including interest have been consolidated to a convertible bridge financing agreement in the amount of $35 million with interest of 7% annually. During 2018, I.C. Green granted PGE additional $7 million with interest of 2% annually.
|
B. |
The following table summarizes the information relating to each of the Group’s subsidiaries in 2018, 2017 and 2016 that has material NCI:
|
As at and for the year ended December 31,
|
||||||||||||||||||||||||
2018
|
2017
|
2016*
|
||||||||||||||||||||||
OPC Energy Ltd.
|
OPC Energy Ltd.
|
Samay I.S.A
|
Nicaragua Energy Holding
|
Kallpa Generacion S.A.
|
Cerro del Aguila S.A.
|
|||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||
NCI percentage **
|
32.23
|
%
|
34.82
|
%
|
25.10
|
%
|
35.42
|
%
|
25.10
|
%
|
25.10
|
%
|
||||||||||||
Current assets
|
184,211
|
204,461
|
75,485
|
41,630
|
108,246
|
53,843
|
||||||||||||||||||
Non-current assets
|
720,469
|
736,123
|
380,947
|
144,313
|
611,928
|
949,440
|
||||||||||||||||||
Current liabilities
|
(77,792
|
)
|
(99,441
|
)
|
(73,846
|
)
|
(26,053
|
)
|
(55,323
|
)
|
(85,935
|
)
|
||||||||||||
Non-current liabilities
|
(624,570
|
)
|
(667,996
|
)
|
(311,030
|
)
|
(100,834
|
)
|
(511,277
|
)
|
(618,219
|
)
|
||||||||||||
Net assets
|
202,318
|
173,147
|
71,556
|
59,056
|
153,574
|
299,129
|
||||||||||||||||||
Carrying amount of NCI
|
65,215
|
60,290
|
17,961
|
20,918
|
38,547
|
75,081
|
||||||||||||||||||
Revenues
|
363,262
|
365,395
|
40,000
|
90,017
|
438,475
|
49,646
|
||||||||||||||||||
Profit
|
26,266
|
15,934
|
548
|
7,511
|
35,820
|
9
|
||||||||||||||||||
Other comprehensive (loss)/income
|
(14,280
|
)
|
8,514
|
4,825
|
—
|
—
|
10,449
|
|||||||||||||||||
Profit attributable to NCI
|
11,396
|
8,323
|
138
|
2,660
|
8,991
|
2
|
||||||||||||||||||
OCI attributable to NCI
|
(4,554
|
)
|
3,686
|
1,211
|
—
|
—
|
2,623
|
|||||||||||||||||
Cash flows from operating activities
|
85,581
|
110,290
|
(1,276
|
)
|
17,737
|
114,838
|
25,629
|
|||||||||||||||||
Cash flows from investing activities
|
(102,080
|
)
|
(154,194
|
)
|
(60,468
|
)
|
(931
|
)
|
(16,082
|
)
|
(69,372
|
)
|
||||||||||||
Cash flows from financing activities excluding dividends paid to non-controlling interests
|
(34,474
|
)
|
165,107
|
—
|
(4,004
|
)
|
(16,943
|
)
|
—
|
|||||||||||||||
Dividends paid to non-controlling interests
|
—
|
(4,159
|
)
|
47,088
|
(26,440
|
)
|
(88,911
|
)
|
62,823
|
|||||||||||||||
Effect of changes in the exchange rate on cash and cash equivalents
|
(7,570
|
)
|
7,126
|
373
|
(348
|
)
|
198
|
369
|
||||||||||||||||
Net (decrease)/increase in cash and cash equivalents
|
(58,543
|
)
|
124,170
|
(14,283
|
)
|
(13,986
|
)
|
(6,900
|
)
|
19,449
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Deposits in banks and others – restricted cash
|
48,640
|
54,300
|
||||||
Long-term trade receivable
|
1,067
|
-
|
||||||
Qoros put option (1)
|
65,668
|
-
|
||||||
Deferred expenses, net (2)
|
18,786
|
21,412
|
||||||
Contract asset
|
3,720
|
747
|
||||||
Other receivables (3)
|
2,142
|
30,258
|
||||||
140,023
|
106,717
|
(1) |
Refer to Note 9.C.b.2.
|
(2) |
Mainly relates to deferred expenses, net from OPC.
|
(3) |
Mainly from discontinued operations.
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Deferred payment receivable
|
189,166
|
175,000
|
A. |
Composition
|
As at December 31, 2018
|
||||||||||||||||||||
Balance at beginning of year
|
Additions
|
Disposals
|
Differences in translation reserves
|
Balance at end of year
|
||||||||||||||||
$ Thousands
|
||||||||||||||||||||
Cost
|
||||||||||||||||||||
Land, roads, buildings and leasehold improvements
|
42,789
|
4,188
|
(188
|
)
|
(3,266
|
)
|
43,523
|
|||||||||||||
Installations, machinery and equipment
|
499,431
|
22,388
|
(17,990
|
)
|
(36,942
|
)
|
466,887
|
|||||||||||||
Office furniture, equipment and motor vehicles
|
5,568
|
9,294
|
(2,242
|
)
|
1,548
|
14,168
|
||||||||||||||
547,788
|
35,870
|
(20,420
|
)
|
(38,660
|
)
|
524,578
|
||||||||||||||
Plants under construction
|
164,619
|
59,531
|
-
|
(17,002
|
)
|
207,148
|
||||||||||||||
Spare parts for installations
|
13,390
|
5,007
|
(829
|
)
|
(1,171
|
)
|
16,397
|
|||||||||||||
725,797
|
100,408
|
(21,249
|
)
|
(56,833
|
)
|
748,123
|
||||||||||||||
Accumulated depreciation
|
||||||||||||||||||||
Land, roads, buildings and leasehold improvements
|
7,293
|
1,671
|
(188
|
)
|
(514
|
)
|
8,262
|
|||||||||||||
Installations, machinery and equipment
|
100,833
|
27,800
|
(17,970
|
)
|
(7,483
|
)
|
103,180
|
|||||||||||||
Office furniture, equipment and motor vehicles
|
1,507
|
562
|
(348
|
)
|
(128
|
)
|
1,593
|
|||||||||||||
109,633
|
30,033
|
(18,506
|
)
|
(8,125
|
)
|
113,035
|
||||||||||||||
Balance as at December 31, 2018
|
616,164
|
70,
375
|
(2,743
|
)
|
(48,708
|
)
|
635,088
|
As at December 31, 2017
|
||||||||||||||||||||||||
Balance at beginning of year
|
Additions
|
Disposals
|
Differences in translation reserves
|
Sale of subsidiaries*
|
Balance at end of year
|
|||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||
Cost
|
||||||||||||||||||||||||
Land, roads, buildings and leasehold improvements
|
1,041,723
|
4,139
|
(1,615
|
)
|
4,167
|
(1,005,625
|
)
|
42,789
|
||||||||||||||||
Installations, machinery and equipment
|
2,445,579
|
68,410
|
(70,142
|
)
|
49,825
|
(1,994,241
|
)
|
499,431
|
||||||||||||||||
Dams
|
164,469
|
105
|
(5
|
)
|
-
|
(164,569
|
)
|
-
|
||||||||||||||||
Office furniture, equipment and motor vehicles
|
455,352
|
43,744
|
(4,954
|
)
|
11,589
|
(500,163
|
)
|
5,568
|
||||||||||||||||
4,107,123
|
116,398
|
(76,716
|
)
|
65,581
|
(3,664,598
|
)
|
547,788
|
|||||||||||||||||
Plants under construction
|
131,178
|
109,709
|
(15
|
)
|
9,356
|
(85,609
|
)
|
164,619
|
||||||||||||||||
Spare parts for installations
|
68,854
|
4,364
|
(186
|
)
|
1,487
|
(61,129
|
)
|
13,390
|
||||||||||||||||
4,307,155
|
230,471
|
(76,917
|
)
|
76,424
|
(3,811,336
|
)
|
725,797
|
|||||||||||||||||
Accumulated depreciation
|
||||||||||||||||||||||||
Land, roads, buildings and leasehold improvements
|
83,737
|
20,523
|
(807
|
)
|
530
|
(96,690
|
)
|
7,293
|
||||||||||||||||
Installations, machinery and equipment
|
637,794
|
112,416
|
(13,466
|
)
|
8,547
|
(644,458
|
)
|
100,833
|
||||||||||||||||
Dams
|
48,385
|
8,097
|
(250
|
)
|
-
|
(56,232
|
)
|
-
|
||||||||||||||||
Office furniture, equipment and motor vehicles
|
39,939
|
23,824
|
(1,307
|
)
|
484
|
(61,433
|
)
|
1,507
|
||||||||||||||||
809,855
|
164,860
|
(15,830
|
)
|
9,561
|
(858,813
|
)
|
109,633
|
|||||||||||||||||
Balance as at December 31, 2017
|
3,497,300
|
65,611
|
(61,087
|
)
|
66,863
|
(2,952,523
|
)
|
616,164
|
* |
This amount includes impairment as a result of the sale of Colombian assets. The Group recorded the impairment in cost of sales of $10 million
|
B. |
Net carrying values
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Land, roads, buildings and leasehold improvements
|
35,261
|
35,496
|
||||||
Installations, machinery and equipment
|
363,707
|
398,598
|
||||||
Office furniture, equipment and motor vehicles
|
12,575
|
4,061
|
||||||
Plants under construction
|
207,148
|
164,619
|
||||||
Spare parts for installations
|
16,397
|
13,390
|
||||||
635,088
|
616,164
|
C. |
When there is any indication of impairment, the Group’s entities perform impairment tests for their long-lived assets using fair values less cost to sell based on independent appraisals or value in use estimations, with assumptions based on past experience and current sector forecasts, described below:
|
· |
Discount rate is a post-tax measure based on the characteristics of each CGU.
|
· |
Cash flow projections include specific estimates for around five years and a terminal growth rate thereafter. The terminal growth rate is determined based on management’s estimate of long-term inflation.
|
· |
Existing power purchase agreements (PPAs) signed and existing number of customers.
|
· |
The production mix of each country was determined using specifically-developed internal forecast models that consider factors such as prices and availability of commodities, forecast demand of electricity, planned construction or the commissioning of new capacity in the country’s various technologies.
|
· |
The distribution business profits were determined using specifically-developed internal forecast models that consider factors such as forecasted demand, fuel prices, energy purchases, collection rates, percentage of losses, quality service improvement, among others.
|
· |
Fuel prices have been calculated based on existing supply contracts and on estimated future prices including a price differential adjustment specific to every product according to local characteristics.
|
· |
Assumptions for energy sale and purchase prices and output of generation facilities are made based on complex specifically-developed internal forecast models for each country.
|
· |
Demand – Demand forecast has taken into consideration the most probably economic performance as well as growth forecasts of different sources.
|
· |
Technical performance – The forecast takes into consideration that the power plants have an appropriate preventive maintenance that permits their proper functioning and the distribution businesss has the required capital expenditure to expand and perform properly in order to reach the targeted quality levels.
|
D. |
The amount of borrowing costs capitalized in 2018 was $8 million ($3 million in 2017).
|
E. |
Fixed assets purchased on credit in 2018, 2017 and 2016 were $23 million, $5 million and $25 million respectively.
|
F. |
The composition of depreciation expenses from continuing operations is as follows
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Depreciation charged to cost of sales
|
29,809
|
30,102
|
||||||
Depreciation charged to general, selling and administrative expenses
|
224
|
597
|
||||||
Depreciation charged to results
|
30,
033
|
30,699
|
||||||
Amortization of intangibles charged to general, selling and administrative expenses
|
383
|
95
|
||||||
Depreciation and amortization from continuing operations
|
30,416
|
30,794
|
A. |
Composition:
|
Goodwill
|
Software
|
Others
|
Total
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Cost
|
||||||||||||||||
Balance as at January 1, 2018
|
21,914
|
1,153
|
509
|
23,576
|
||||||||||||
Acquisitions – self development
|
—
|
162
|
—
|
162
|
||||||||||||
Translation differences
|
(34
|
)
|
(67
|
)
|
(55
|
)
|
(156
|
)
|
||||||||
Balance as at December 31, 2018
|
21,880
|
1,248
|
454
|
23,582
|
||||||||||||
Amortization and impairment
|
||||||||||||||||
Balance as at January 1, 2018
|
21,455
|
445
|
35
|
21,935
|
||||||||||||
Amortization for the year
|
94
|
107
|
182
|
383
|
||||||||||||
Translation differences
|
(4
|
)
|
(28
|
)
|
(10
|
)
|
(42
|
)
|
||||||||
Balance as at December 31, 2018
|
21,545
|
524
|
207
|
22,276
|
||||||||||||
Carrying value
|
||||||||||||||||
As at January 1, 2018
|
459
|
708
|
474
|
1,641
|
||||||||||||
As at December 31, 2018
|
335
|
724
|
247
|
1,306
|
Goodwill
|
Concessions licenses
|
Customer relationships
|
Software
|
Others
|
Total
|
|||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||
Cost
|
||||||||||||||||||||||||
Balance as at January 1, 2017
|
117,550
|
189,351
|
41,074
|
1,771
|
83,897
|
433,643
|
||||||||||||||||||
Acquisitions as part of business combinations
|
296
|
-
|
-
|
195
|
-
|
491
|
||||||||||||||||||
Acquisitions – self development
|
-
|
-
|
-
|
179
|
10,280
|
10,459
|
||||||||||||||||||
Disposals
|
-
|
-
|
-
|
-
|
(82
|
)
|
(82
|
)
|
||||||||||||||||
Sale of subsidiaries
|
(97,167
|
)
|
(189,351
|
)
|
(41,074
|
)
|
(1,066
|
)
|
(93,842
|
)
|
(422,500
|
)
|
||||||||||||
Translation differences
|
1,235
|
-
|
-
|
74
|
256
|
1,565
|
||||||||||||||||||
Balance as at December 31, 2017
|
21,914
|
-
|
-
|
1,153
|
509
|
23,576
|
||||||||||||||||||
Amortization and impairment
|
||||||||||||||||||||||||
Balance as at January 1, 2017
|
21,455
|
5,434
|
20,942
|
1,015
|
8,019
|
56,865
|
||||||||||||||||||
Amortization for the year
|
-
|
5,759
|
3,970
|
209
|
2,984
|
12,922
|
||||||||||||||||||
Disposals
|
-
|
-
|
-
|
25
|
-
|
25
|
||||||||||||||||||
Sale of subsidiaries*
|
-
|
(11,193
|
)
|
(24,912
|
)
|
(804
|
)
|
(11,021
|
)
|
(47,930
|
)
|
|||||||||||||
Translation differences
|
-
|
-
|
-
|
-
|
53
|
53
|
||||||||||||||||||
Balance as at December 31, 2017
|
21,455
|
-
|
-
|
445
|
35
|
21,935
|
||||||||||||||||||
Carrying value
|
||||||||||||||||||||||||
As at January 1, 2017
|
96,095
|
183,917
|
20,132
|
756
|
75,878
|
376,778
|
||||||||||||||||||
As at December 31, 2017
|
459
|
-
|
-
|
708
|
474
|
1,641
|
* |
This amount includes impairment as a result of the sale of Colombian assets. The Group recorded the impairment in cost of sales of $10 million ($3 million in Others and $7 million in Goodwill).
|
B. |
The total carrying amounts of intangible assets with a finite useful life and with an indefinite useful life or not yet available for use
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Intangible assets with a finite useful life
|
971
|
1,182
|
||||||
Intangible assets with an indefinite useful life or not yet available for use
|
335
|
459
|
||||||
1,306
|
1,641
|
C. |
Examination of impairment of cash generating units containing goodwill
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
OPC Rotem (former AIE)
|
425
|
459
|
||||||
425
|
459
|
As at December 31
|
||||||||
2018
|
2017
|
|||||||
$ thousands
|
||||||||
Current liabilities
|
||||||||
Short-term loans from banks, financial institutions and others (1)
|
-
|
317,684
|
||||||
-
|
317,684
|
|||||||
Current maturities of long-term liabilities:
|
||||||||
Loans from banks, financial institutions and others
|
20,302
|
123,908
|
||||||
Non-convertible debentures
|
2,933
|
6,364
|
||||||
23,235
|
130,272
|
|||||||
Total current liabilities
|
23,235
|
447,956
|
||||||
Non-current liabilities
|
||||||||
Loans from banks and financial institutions
|
487,759
|
503,785
|
||||||
Non-convertible debentures
|
75,476
|
84,758
|
||||||
Total non-current liabilities
|
563,235
|
588,543
|
||||||
Total liabilities
|
586,470
|
1,036,499
|
(1) |
Balances as at December 31, 2017 mainly relate to loans from related parties (see Note 29.D).
|
A. |
Classification based on currencies and interest rates
|
Weighted-average interest rate December 31
|
As at December 31,
|
|||||||||||
2018
|
2018
|
2017
|
||||||||||
%
|
$ Thousands
|
|||||||||||
Non-current liabilities (including current maturities)
|
||||||||||||
Debentures
|
||||||||||||
In shekels
|
4.45
|
%
|
78,409
|
91,122
|
||||||||
78,409
|
91,122
|
|||||||||||
Loans from financial institutions (including financing lease)
|
||||||||||||
In dollars
|
-
|
-
|
99,964
|
|||||||||
In shekels
|
4.72
|
%
|
508,061
|
527,729
|
||||||||
508,061
|
627,693
|
|||||||||||
586,470
|
718,815
|
B. |
O
verseas Investments Peru —
On May 9, 2016, Overseas Investments Peru S.A., a 100% whole-owned subsidiary of ICP, signed a $100 million Credit Facility with Credit Suisse AG. The proceeds from this facility were fully drawn on August 31, 2016. This facility had an original maturity on November 9, 2017 bears an interest rate of 90-day Libor plus 5.00% (from the funding date to the 6-month anniversary of the funding date); 90-day Libor plus 5.75% (from one day after the 6-month anniversary to the 12-month anniversary of the funding date); and 90-day Libor plus 6.50% thereafter. On September 8, 2017, Overseas Investment Peru signed an amendment changing the final maturity date to May 9, 2019. As of December 31, 2017, the outstanding principal amount under this facility was $ 100 million. ($99.9 million, net of transaction costs) ($97 million, net of transaction costs as of December 31, 2016).
|
C. |
OPC Rotem
- In January 2011, OPC entered into a financing agreement with a consortium of lenders led by Bank Leumi L’Israel Ltd (“Bank Leumi”) (shareholder of Kenon - 14% shareholding) for the financing of its power plant project. The financing consortium includes Bank Leumi and institutional entities from the following groups: Clal Insurance Company Ltd.; Amitim Senior Pension Funds; Phoenix Insurance Company Ltd.; and Harel Insurance Company Ltd (“OPC’s lenders”). As part of the financing agreement, the lenders committed to provide OPC a long-term credit facility (including a facility for variances in the construction costs), a working capital facility, and a facility for financing the debt service, in the overall amount of approximately NIS 1,800 million (approximately $480 million). The loans are CPI linked and are repaid on a quarterly basis beginning in the fourth quarter of 2013 until 2031. As part of the financing agreement, OPC had certain restrictions to make distributions of dividends and repayments of shareholders’ loans, only after the third year after the completion of OPC’s power plant. On October 13, 2015, OPC and the senior lenders amended the Facility Agreement to remove this restriction.
|
D. |
OPC Hadera -
In July 2016, Hadera entered into a financing agreement for the senior debt (hereinafter – “the Hadera Financing Agreement”) with Israel Discount Bank Ltd. (hereinafter – “Bank Discount”) and Harel Insurance Company Ltd. (hereinafter – “Harel”) to finance the construction of the Hadera Power Plant, whereby the lenders undertook to provide Hadera credit frameworks, mostly linked to the CPI, in the amount of NIS 1,006 million in several facilities (some of which are alternates): (1) a long‑term credit facility (including a framework for changes in construction and related costs); (2) a working capital facility; (3) a debt service reserves account and a VAT facility; (4) a guarantees facility; and (5) a hedge facility. In December 2017, Bank Discount assigned to Clal Pension and Provident Ltd. and Atudot Pension Fund for Salaried Employees and Self-Employed Persons Ltd. 43.35% of its share in the long‑term credit facility (including the facility for changes in construction and related costs). In March 2017, the Electricity Authority confirmed that Hadera had complied with a milestone for a financial closing, as stipulated in the conditional license for construction of the power station.
|
E. |
In May, 2017, OPC issued debentures (Series A) to classified investors under a private placement, which were listed for trade on the Institutional Continuous Trading Platform. The debentures, with a par value of NIS 320 million (approximately $85 million), bear annual interest at the rate of 4.95% and are repayable, principal and interest, every six months, commencing on June 30, 2018 (on June 30 and December 30 of every calendar year) through December 30, 2030. Under the terms, the interest on the debentures will be reduced by 0.5% in the event of their listing for trade on the main list of the TASE. The debentures have received a rating of A3 from Midroog and A- from S&P Global Ratings Maalot Ltd. (hereinafter -– “Maalot”).
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Current
|
||||||||
Trade Payables
|
25,082
|
36,994
|
||||||
Accrued expenses and other payables
|
22,590
|
21,901
|
||||||
47,672
|
58,895
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Current liabilities:
|
||||||||
Financial derivatives not used for hedging
|
-
|
73
|
||||||
Financial derivatives used for hedging
|
-
|
439
|
||||||
The State of Israel and government agencies
|
244
|
1,208
|
||||||
Employees and payroll-related agencies
|
40
|
179
|
||||||
Accrued expenses
|
7,505
|
14,915
|
||||||
Interest payable
|
277
|
21
|
||||||
Transaction costs on sale of subsidiaries
|
-
|
59,000
|
||||||
Others
|
4,006
|
6,687
|
||||||
12,072
|
82,522
|
|||||||
Non-current liabilities:
|
||||||||
Others
|
369
|
81
|
||||||
369
|
81
|
Financial Guarantee*
|
Total
|
Financial Guarantee*
|
Others
|
Total
|
||||||||||||||||
2018
|
2017
|
|||||||||||||||||||
$ thousands
|
$ thousands
|
|||||||||||||||||||
Balance at January, 1
|
44,342
|
44,342
|
118,763
|
768
|
119,531
|
|||||||||||||||
Provision released
|
(44,342
|
)
|
(44,342
|
)
|
(74,421
|
)
|
(768
|
)
|
(75,189
|
)
|
||||||||||
Balance at December, 31
|
-
|
-
|
44,342
|
-
|
44,342
|
A. |
Claims
|
a. |
OPC Rotem – Tamar
|
b. |
ORL Claim
|
B. |
Commitments
|
a. |
OPC Rotem
|
b. |
OPC Hadera
|
- |
Short Term PSPA - Pursuant this agreement, OPC Hadera will supply steam and electricity until COD of the power plant, which shall be done through the existing energy center.
|
- |
Long Term PSPA – Pursuant this agreement, OPC Hadera will supply steam and electricity during the period commencing upon COD of the power plant and for a period of 18 years thereafter. Subsequent to the date of the report, in January 2019, an amendment was signed to this agreement providing that the period will be 25 years from the COD of the power plant.
|
c. |
OPC Energy Ltd.
|
d. |
Tzomet Energy Ltd.
|
e. |
OPC Rotem and OPC Hadera
|
f. |
Inkia Energy Limited
|
A. |
Share Capital
|
Company
No. of shares
|
||||||||
2018
|
2017
|
|||||||
Authorised and in issue at January, 1
|
53,808
|
53,720
|
||||||
Issued for share plan
|
19
|
88
|
||||||
Authorised and in issue at December. 31
|
53,827
|
53,808
|
B. |
Translation reserve
|
C. |
Capital reserves
|
D. |
Dividend
|
E. |
Kenon's share plan
|
A. |
Revenue
|
For the Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
Revenue from sale of electricity
|
347,167
|
349,957
|
309,249
|
|||||||||
Revenue from sale of steam
|
16,095
|
15,438
|
14,939
|
|||||||||
Others
|
750
|
309
|
65
|
|||||||||
364,012
|
365,704
|
324,253
|
B. |
Cost of Sales and Services
|
For the Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
Fuels
|
118,698
|
129,788
|
125,528
|
|||||||||
Electricty and infrastructure services
|
125,623
|
122,340
|
112,038
|
|||||||||
Salaries and related expenses
|
6,097
|
5,822
|
5,305
|
|||||||||
Generation and operating expenses and outsourcing
|
6,509
|
6,432
|
6,119
|
|||||||||
Third party services
|
1,548
|
1,734
|
1,764
|
|||||||||
Other
|
1,040
|
1,020
|
912
|
|||||||||
259,515
|
267,136
|
251,666
|
For the year ended December 31, 2017
|
As previously stated
|
Effect of restatements
|
Restated
|
|||||||||
$ Thousands
|
||||||||||||
Fuels
|
-
|
129,788
|
129,788
|
|||||||||
Fuel, gas and lubricants
|
137,832
|
(137,832
|
)
|
-
|
||||||||
Electricity and infrastructure services
|
-
|
122,340
|
122,340
|
|||||||||
Capacity and energy purchases and transmission costs
|
50,973
|
(50,973
|
)
|
-
|
||||||||
Regulatory expenses
|
62,908
|
(62,908
|
)
|
-
|
||||||||
Salaries and related expenses
|
6,269
|
(447
|
)
|
5,822
|
||||||||
Generation and operating expenses and outsourcing
|
-
|
6,432
|
6,432
|
|||||||||
Third party services
|
2,670
|
(936
|
)
|
1,734
|
||||||||
Other
|
6,484
|
(5,464
|
)
|
1,020
|
||||||||
267,136
|
-
|
267,136
|
For the year ended December 31, 2016
|
As previously stated
|
Effect of restatements
|
Restated
|
|||||||||
$ Thousands
|
||||||||||||
Fuels
|
-
|
125,528
|
125,528
|
|||||||||
Fuel, gas and lubricants
|
133,012
|
(133,012
|
)
|
-
|
||||||||
Electricty and infrastructure services
|
-
|
112,038
|
112,038
|
|||||||||
Capacity and energy purchases and transmission costs
|
57,310
|
(57,310
|
)
|
-
|
||||||||
Regulatory expenses
|
48,509
|
(48,509
|
)
|
-
|
||||||||
Salaries and related expenses
|
5,942
|
(637
|
)
|
5,305
|
||||||||
Generation and operating expenses and outsourcing
|
-
|
6,119
|
6,119
|
|||||||||
Third party services
|
2,890
|
(1,126
|
)
|
1,764
|
||||||||
Other
|
4,003
|
(3,091
|
)
|
912
|
||||||||
251,666
|
-
|
251,666
|
For the Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
Payroll and related expenses
|
11,399
|
21,380
|
14,830
|
|||||||||
Depreciation and amortization
|
607
|
692
|
641
|
|||||||||
Professional fees
|
12,115
|
20,334
|
23,863
|
|||||||||
Other expenses
|
9,910
|
13,886
|
7,761
|
|||||||||
34,031
|
56,292
|
47,095
|
For the Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
Interest income from bank deposits
|
4,360
|
640
|
2,269
|
|||||||||
Interest income from deferred payment
|
14,166
|
-
|
-
|
|||||||||
Interest income from associated company
|
8,494
|
|||||||||||
Net change from change in exchange rates
|
1,129
|
2,259
|
5,448
|
|||||||||
Net change in fair value of derivative financial instruments
|
-
|
-
|
6
|
|||||||||
Other income
|
443
|
5
|
1
|
|||||||||
Financing income
|
28,592
|
2,904
|
7,724
|
|||||||||
Interest expenses to banks and others
|
(30,382
|
)
|
(59,514
|
)
|
(45,317
|
)
|
||||||
Net change in fair value of derivative financial instruments
|
-
|
(1,168
|
)
|
-
|
||||||||
Other expenses
|
-
|
(9,484
|
)
|
(1,959
|
)
|
|||||||
Financing expenses
|
(30,382
|
)
|
(70,166
|
)
|
(47,276
|
)
|
||||||
Net financing expenses recognized in the statement of profit and loss
|
(1,790
|
)
|
(67,262
|
)
|
(39,552
|
)
|
A. |
Components of the Income Taxes
|
For the Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
Current taxes on income
|
||||||||||||
In respect of current year*
|
1,878
|
64,291
|
1,687
|
|||||||||
In respect of prior years
|
(48
|
)
|
44
|
92
|
||||||||
Deferred tax income
|
||||||||||||
Creation and reversal of temporary differences
|
9,669
|
8,474
|
473
|
|||||||||
Total taxes on income
|
11,499
|
72,809
|
2,252
|
* |
Current taxes on income in 2017 include $61 million taxes payable in connection with a restructuring to simplify the holding structure of some of the companies remaining in the Kenon group subsequent to the Inkia transaction. As a result of this restructuring (which was substantially completed in January 2018), Kenon holds its interest in OPC directly.
Kenon does not expect any further tax liability in relation to any future sales of its interest in OPC.
|
B. |
Reconciliation between the theoretical tax expense (benefit) on the pre-tax income (loss) and the actual income tax expenses
|
For the Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
Profit/(loss) from continuing operations before income taxes
|
461,968
|
(135,636
|
)
|
(426,900
|
)
|
|||||||
Statutory tax rate
|
17.00
|
%
|
17.00
|
%
|
17.00
|
%
|
||||||
Tax computed at the statutory tax rate
|
78,
535
|
(23,058
|
)
|
(72,573
|
)
|
|||||||
Increase (decrease) in tax in respect of:
|
||||||||||||
Elimination of tax calculated in respect of the Group’s share in losses of associated companies
|
18,215
|
20,924
|
31,651
|
|||||||||
Income subject to tax at a different tax rate
|
2,632
|
63,446
|
(2,548
|
)
|
||||||||
Non-deductible expenses
|
6,
752
|
12,850
|
41,960
|
|||||||||
Exempt income
|
(97,664
|
)
|
(7,006
|
)
|
-
|
|||||||
Taxes in respect of prior years
|
(48
|
)
|
44
|
92
|
||||||||
Changes in temporary differences in respect of which deferred taxes are not recognized
|
(4
|
)
|
4,285
|
1,419
|
||||||||
Tax losses and other tax benefits for the period regarding which deferred taxes were not recorded
|
2,883
|
350
|
2,449
|
|||||||||
Differences between the measurement base of income reported for tax purposes and the income reported in the financial statements
|
-
|
13
|
-
|
|||||||||
Other differences
|
198
|
961
|
(198
|
)
|
||||||||
Taxes on income included in the statement of profit and loss
|
11,499
|
72,809
|
2,252
|
C. |
Deferred tax assets and liabilities
|
1. |
Deferred tax assets and liabilities recognized
|
Property plant and equipment
|
Employee benefits
|
Carryforward of losses and deductions for tax purposes
|
Other*
|
Total
|
||||||||||||||||
$ thousands
|
||||||||||||||||||||
Balance of deferred tax asset (liability) as at January 1, 2017
|
(207,493
|
)
|
1,711
|
84,735
|
(79,203
|
)
|
(200,250
|
)
|
||||||||||||
Changes recorded on the statement of profit and loss
|
(13,940
|
)
|
(1,097
|
)
|
(13,919
|
)
|
15,845
|
(13,111
|
)
|
|||||||||||
Changes recorded to equity reserve
|
-
|
882
|
-
|
(7,024
|
)
|
(6,142
|
)
|
|||||||||||||
Translation differences
|
(10,046
|
)
|
24
|
4,397
|
1,253
|
(4,372
|
)
|
|||||||||||||
Impact of change in tax rate
|
575
|
-
|
-
|
-
|
575
|
|||||||||||||||
Sale of subsidiaries
|
140,736
|
(1,520
|
)
|
(39,764
|
)
|
71,095
|
170,547
|
|||||||||||||
Balance of deferred tax asset (liability) as at December 31, 2017
|
(90,168
|
)
|
-
|
35,449
|
1,966
|
(52,753
|
)
|
|||||||||||||
Changes recorded on the statement of profit and loss
|
4,532
|
68
|
(14,695
|
)
|
134
|
(9,961
|
)
|
|||||||||||||
Changes recorded to equity reserve
|
-
|
-
|
-
|
(104
|
)
|
(104
|
)
|
|||||||||||||
Translation differences
|
6,344
|
(2
|
)
|
(1,972
|
)
|
13
|
4,383
|
|||||||||||||
Balance of deferred tax asset (liability) as at December 31, 2018
|
(79,292
|
)
|
66
|
18,782
|
2,009
|
(58,435
|
)
|
* |
This amount includes deferred tax arising from derivative instruments, intangibles, undistributed profits, non-monetary items and trade receivables distribution.
|
2. |
The deferred taxes are presented in the statements of financial position as follows:
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
As part of non-current assets
|
632
|
-
|
||||||
As part of non-current liabilities
|
(59,067
|
)
|
(52,753
|
)
|
||||
(58,435
|
)
|
(52,753
|
)
|
1. |
The highest corporate tax rate (headline tax rate) of the foreign jurisdiction from which the income is received is at least 15% at the time the foreign income is received in Singapore;
|
2. |
The foreign income had been subjected to tax in the foreign jurisdiction from which they were received (known as the "subject to tax" condition). The rate at which the foreign income was taxed can be different from the headline tax rate; and
|
3. |
The Tax Comptroller is satisfied that the tax exemption would be beneficial to the person resident in Singapore.
|
A. |
Income/(Loss) allocated to the holders of the ordinary shareholders
|
For the year ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
Income/(loss) for the year attributable to Kenon’s shareholders
|
434,213
|
236,590
|
(411,937
|
)
|
||||||||
(Loss)/income for the year from discontinued operations (after tax)
|
(5,631
|
)
|
476,565
|
35,150
|
||||||||
Less: NCI
|
-
|
(24,928
|
)
|
(13,250
|
)
|
|||||||
(Loss)/income for the year from discontinued operations (after tax) attributable to Kenon’s shareholders
|
(5,631
|
)
|
451,637
|
21,900
|
||||||||
Income/(loss) for the year from continuing operations attributable to Kenon’s shareholders
|
439,844
|
(215,047
|
)
|
(433,837
|
)
|
B. |
Number of ordinary shares
|
For the year ended December 31
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Thousands
|
||||||||||||
Weighted Average number of shares used in calculation of basic/diluted earnings per share
|
53,826
|
53,761
|
53,720
|
(a) |
I.C. Power (Latin America businesses)
|
Year ended
December 31, 2018
|
Year ended
December 31, 2017
|
Year ended
December 31, 2016
|
||||||||||
$ thousands
|
||||||||||||
Revenue
|
-
|
1,777,232
|
1,517,391
|
|||||||||
Cost of sales and services (excluding depreciation and amortization)
|
-
|
(1,235,214
|
)
|
(1,076,563
|
)
|
|||||||
Depreciation and amortization
|
-
|
(135,733
|
)
|
(132,998
|
)
|
|||||||
Gross profit
|
-
|
406,285
|
307,830
|
|||||||||
Income before taxes on income
|
1,178
|
152,280
|
92,233
|
|||||||||
Taxes on income (1)
|
(3,944
|
)
|
(73,141
|
)
|
(57,083
|
)
|
||||||
(Loss)/income after taxes on income
|
(2,766
|
)
|
79,139
|
35,150
|
||||||||
(Loss)/gain on sale of discontinued operations (2)
|
(2,065
|
)
|
529,923
|
-
|
||||||||
Tax on loss on sale of discontinued operations
|
(800
|
)
|
(132,497
|
)
|
-
|
|||||||
(Loss)/income from discontinued operations
|
(5,631
|
)
|
476,565
|
35,150
|
||||||||
Net cash flows provided by operating activities
|
-
|
319,637
|
176,515
|
|||||||||
Net cash flows (used in)/provided by investing activities
|
(155,361
|
)
|
816,544
|
(300,833
|
)
|
|||||||
Net cash flows (used in)/provided by financing activities
|
-
|
(103,524
|
)
|
25,308
|
||||||||
Cash and cash equivalents (used in)/provided by discontinued operations
|
(155,361
|
)
|
1,032,657
|
(99,010
|
)
|
|||||||
Income tax payable
|
4,744
|
|||||||||||
Net liabilities
|
4,744
|
A. |
General
|
1. |
OPC –
OPC Energy Ltd operates in the Israeli electricity generation sector, including the initiation, development, construction and operation of power plants and the sale and supply of electricity.
|
2. |
Quantum –
Quantum (2007) LLC is a wholly owned subsidiary of Kenon and holds Kenon’s share in Qoros. Qoros is a China-based automotive company that is jointly-owned with Baoneng Group and a subsidiary of Wuhu.
|
B. |
Information regarding reportable segments
|
OPC
|
Quantum
|
Other
|
Adjustments
|
Total
|
||||||||||||||||
$ thousands
|
||||||||||||||||||||
2018
|
||||||||||||||||||||
Total sales
|
363,262
|
-
|
750
|
-
|
364,012
|
|||||||||||||||
Income/(loss) before taxes
|
36,499
|
456,854
|
(31,385
|
)
|
461,968
|
|||||||||||||||
Income Taxes
|
(10,233
|
)
|
-
|
(1,266
|
)
|
-
|
(11,499
|
)
|
||||||||||||
Income/(loss) from continuing operations
|
26,266
|
456,854
|
(32,651
|
)
|
-
|
450,469
|
||||||||||||||
Depreciation and amortization
|
29,809
|
-
|
607
|
30,416
|
||||||||||||||||
Financing income
|
(2,031
|
)
|
(10,371
|
)
|
(48,430
|
)
|
32,240
|
(28,592
|
)
|
|||||||||||
Financing expenses
|
27,219
|
2,003
|
33,400
|
(32,240
|
)
|
30,382
|
||||||||||||||
Other items:
|
||||||||||||||||||||
Write back of financial guarantee
|
-
|
(62,563
|
)
|
-
|
-
|
(62,563
|
)
|
|||||||||||||
Gain on third party investment in Qoros
|
-
|
(504,049
|
)
|
-
|
-
|
(504,049
|
)
|
|||||||||||||
Fair value loss on option
|
-
|
39,788
|
-
|
-
|
39,788
|
|||||||||||||||
Share in losses of associated companies
|
-
|
78,338
|
26,919
|
-
|
105,257
|
|||||||||||||||
54,997
|
(456,854
|
)
|
12,496
|
-
|
(389,361
|
)
|
||||||||||||||
Adjusted EBITDA
|
91,496
|
-
|
(18,889
|
)
|
-
|
72,607
|
||||||||||||||
Segment assets
|
893,162
|
91,626
|
239,550
|
-
|
1,224,338
|
|||||||||||||||
Investments in associated companies
|
-
|
139,184
|
91,596
|
-
|
230,780
|
|||||||||||||||
1,455,118
|
||||||||||||||||||||
Segment liabilities
|
700,452
|
-
|
38,948
|
-
|
739,400
|
|||||||||||||||
Capital expenditure
|
100,389
|
-
|
19
|
-
|
100,408
|
OPC
|
Quantum
|
Other
|
Adjustments
|
Total
|
||||||||||||||||
$ thousands
|
||||||||||||||||||||
2017
|
||||||||||||||||||||
Total sales
|
365,395
|
-
|
309
|
-
|
365,704
|
|||||||||||||||
Income/(loss) before taxes
|
22,708
|
(127,526
|
)
|
(30,818
|
)
|
-
|
(135,636
|
)
|
||||||||||||
Income Taxes
|
(8,945
|
)
|
-
|
(63,864
|
)
|
-
|
(72,809
|
)
|
||||||||||||
Income/(loss) from continuing operations
|
13,763
|
(127,526
|
)
|
(94,682
|
)
|
-
|
(208,445
|
)
|
||||||||||||
Depreciation and amortization
|
30,102
|
-
|
692
|
-
|
30,794
|
|||||||||||||||
Financing income
|
(1,088
|
)
|
-
|
(13,230
|
)
|
11,414
|
(2,904
|
)
|
||||||||||||
Financing expenses
|
33,753
|
6,328
|
41,499
|
(11,414
|
)
|
70,166
|
||||||||||||||
Other items:
|
||||||||||||||||||||
Share in losses/(income) of associated companies
|
-
|
121,198
|
(10,533
|
)
|
-
|
110,665
|
||||||||||||||
Write back of impairment of investments
|
-
|
-
|
(28,758
|
)
|
-
|
(28,758
|
)
|
|||||||||||||
62,767
|
127,526
|
(10,330
|
)
|
-
|
179,963
|
|||||||||||||||
Adjusted EBITDA
|
85,475
|
-
|
(41,148
|
)
|
-
|
44,327
|
||||||||||||||
Segment assets
|
939,809
|
15,654
|
1,448,700
|
-
|
2,404,163
|
|||||||||||||||
Investments in associated companies
|
-
|
1,694
|
120,000
|
-
|
121,694
|
|||||||||||||||
2,525,857
|
||||||||||||||||||||
Segment liabilities
|
742,692
|
75,081
|
656,737
|
-
|
1,474,510
|
|||||||||||||||
Capital expenditure
|
109,226
|
-
|
121,245
|
-
|
230,471
|
OPC
|
Quantum
|
Other
|
Adjustments
|
Total
|
||||||||||||||||
$ thousands
|
||||||||||||||||||||
2016
|
||||||||||||||||||||
Total sales
|
324,188
|
-
|
65
|
-
|
324,253
|
|||||||||||||||
Income/(loss) before taxes
|
20,450
|
(142,534
|
)
|
(304,816
|
)
|
-
|
(426,900
|
)
|
||||||||||||
Income Taxes
|
(67
|
)
|
-
|
(2,185
|
)
|
-
|
(2,252
|
)
|
||||||||||||
Income/(loss) from continuing operations
|
20,383
|
(142,534
|
)
|
(307,001
|
)
|
-
|
(429,152
|
)
|
||||||||||||
Depreciation and amortization
|
26,697
|
-
|
589
|
-
|
27,286
|
|||||||||||||||
Financing income
|
(2,988
|
)
|
-
|
(17,081
|
)
|
12,345
|
(7,724
|
)
|
||||||||||||
Financing expenses
|
22,838
|
-
|
36,783
|
(12,345
|
)
|
47,276
|
||||||||||||||
Other items:
|
||||||||||||||||||||
Share in losses/(income) of associated companies
|
-
|
142,534
|
43,681
|
-
|
186,215
|
|||||||||||||||
Provision of financial guarantee
|
-
|
-
|
130,193
|
-
|
130,193
|
|||||||||||||||
Impairment of investments
|
-
|
-
|
72,263
|
-
|
72,263
|
|||||||||||||||
46,547
|
142,534
|
266,428
|
-
|
455,509
|
||||||||||||||||
Adjusted EBITDA
|
66,997
|
-
|
(38,388
|
)
|
-
|
28,609
|
||||||||||||||
Segment assets
|
667,631
|
2,016
|
4,261,929
|
-
|
4,931,576
|
|||||||||||||||
Investments in associated companies
|
-
|
117,593
|
90,640
|
-
|
208,233
|
|||||||||||||||
5,139,809
|
||||||||||||||||||||
Segment liabilities
|
533,684
|
-
|
3,709,905
|
-
|
4,243,589
|
|||||||||||||||
Capital expenditure
|
72,540
|
-
|
245,313
|
-
|
317,853
|
C. |
Customer and Geographic Information
|
|
2018
|
2017
|
2016
|
|||||||||||||||||||||
Customer
|
Total revenues
|
Percentage of revenues of the Group
|
Total revenues
|
Percentage of revenues of the Group
|
Total revenues
|
Percentage of revenues of the Group
|
||||||||||||||||||
|
||||||||||||||||||||||||
Customer 1
|
74,019
|
20.33
|
%
|
75,757
|
20.72
|
%
|
59,886
|
18.47
|
%
|
|||||||||||||||
Customer 2
|
61,482
|
16.89
|
%
|
50,461
|
13.80
|
%
|
32,449
|
10.01
|
%
|
|||||||||||||||
Customer 3
|
54,639
|
15.01
|
%
|
53,617
|
14.66
|
%
|
39,359
|
12.14
|
%
|
|||||||||||||||
Customer 4
|
42,487
|
11.67
|
%
|
*
|
*
|
*
|
*
|
|||||||||||||||||
Customer 5
|
39,276
|
10.79
|
%
|
38,223
|
10.45
|
%
|
36,394
|
11.22
|
%
|
For the year ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
Israel
|
363,262
|
365,395
|
324,188
|
|||||||||
Others
|
750
|
309
|
65
|
|||||||||
Total revenues
|
364,012
|
365,704
|
324,253
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Israel
|
636,256
|
617,358
|
||||||
Others
|
138
|
447
|
||||||
Total non-current assets
|
636,394
|
617,805
|
A. |
Identity of related parties:
|
B. |
Transactions with directors and officers (Kenon's directors and officers):
|
B. Key management personnel compensation
|
||||||||
For the year ended December 31,
|
||||||||
2018
|
2017
|
|||||||
$ thousands
|
||||||||
Short-term benefits
|
2,475
|
5,632
|
||||||
Share-based payments
|
732
|
508
|
||||||
3,207
|
6,140
|
C. |
Transactions with related parties (excluding associates):
|
For the year ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ thousands
|
||||||||||||
Sales of electricity
|
80,269
|
102,443
|
148,119
|
|||||||||
Administrative expenses
|
393
|
331
|
614
|
|||||||||
Sales of gas
|
6,868
|
31,296
|
29,873
|
|||||||||
Financing expenses, net
|
(2,091
|
)
|
18,444
|
14,475
|
||||||||
Repayment of loan to Ansonia
|
(77,085
|
)
|
-
|
-
|
||||||||
Repayment of loan to IC
|
(239,971
|
)
|
-
|
-
|
D. |
Transactions with associates:
|
For the year ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
$ Thousands
|
||||||||||||
Finance income, net
|
8,494
|
-
|
-
|
|||||||||
Other income, net
|
140
|
198
|
178
|
As at December 31,
|
As at December 31,
|
|||||||||||||||||||
2018
|
2017
|
|||||||||||||||||||
Other related parties *
|
Total
|
Ansonia
|
Other related parties *
|
Total
|
||||||||||||||||
$ Thousands
|
$ Thousands | |||||||||||||||||||
Trade receivables
|
7,041
|
7,041
|
—
|
12,778
|
12,778
|
|||||||||||||||
Loans and Other Liabilities
|
||||||||||||||||||||
In US dollar or linked thereto
|
(1,481
|
)
|
(1,481
|
)
|
75,081
|
242,598
|
317,679
|
|||||||||||||
Weighted-average interest rates (%)
|
0.00
|
%
|
0.00
|
%
|
6.00
|
%
|
7.69
|
%
|
7.29
|
%
|
||||||||||
Repayment years
|
||||||||||||||||||||
Current maturities
|
1,170
|
75,081
|
242,598
|
|||||||||||||||||
Second year
|
-
|
—
|
—
|
|||||||||||||||||
Third year
|
-
|
—
|
—
|
|||||||||||||||||
Fourth year
|
-
|
—
|
—
|
|||||||||||||||||
Fifth year
|
311
|
—
|
—
|
|||||||||||||||||
Sixth year and thereafter
|
-
|
—
|
—
|
|||||||||||||||||
1,481
|
—
|
242,598
|
* |
IC, Israel Chemicals Ltd (“ICL”), Oil Refineries Ltd (“ORL”).
|
E. |
Regarding the convertible loan from Ansonia to Quantum, see Note 9.C.b.6.
|
F. |
Gas Sale Agreement with ORL, see Note 19.B.(a).
|
A. |
General
|
B. |
Credit risk
Counterparty credit risk is the risk that the financial benefits of contracts with a specific counterparty will be lost if a counterparty defaults on their obligations under the contract. This includes any cash amounts owed to the Group by those counterparties, less any amounts owed to the counterparty by the Group where a legal right of set-offs exists and also includes the fair values of contracts with individual counterparties which are included in the financial statements. The maximum exposure to credit risk at each reporting date is the carrying value of each class of financial assets mentioned in this note.
|
(1) |
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Carrying amount
|
||||||||
Cash and cash equivalents
|
131,123
|
1,417,388
|
||||||
Short-term investments and deposits
|
49,938
|
7,144
|
||||||
Trade receivables, net
|
35,548
|
44,137
|
||||||
Other current assets
|
33,210
|
35,752
|
||||||
Deposits and other long-term receivables including derivative instruments
|
305,616
|
259,555
|
||||||
555,435
|
1,763,976
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
||||||||
Israel
|
35,291
|
44,058
|
||||||
Other regions
|
257
|
79
|
||||||
35,548
|
44,137
|
(2) |
Aging of debts and impairment losses
|
As at December 31
|
||||||||
2018
|
2017
|
|||||||
$ Thousands
|
$ Thousands
|
|||||||
Not past due
|
35,438
|
50
|
||||||
Past due up to 3 months
|
87
|
40,879
|
||||||
Past due 3 – 6 months
|
—
|
3,208
|
||||||
Past due more than one year
|
23
|
—
|
||||||
35,548
|
44,137
|
C. |
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and adverse credit and market conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages its liquidity risk by means of holding cash balances, short-term deposits, other liquid financial assets and credit lines.
Set forth below are the anticipated repayment dates of the financial liabilities, including an estimate of the interest payments. This disclosure does not include amounts regarding which there are offset agreements:
|
As at December 31, 2018
|
||||||||||||||||||||||||
Book value
|
Projected cash flows
|
Up to 1 year
|
1-2 years
|
2-5 years
|
More than 5 years
|
|||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||
Non-derivative financial liabilities
|
||||||||||||||||||||||||
Trade payables
|
47,672
|
47,672
|
47,672
|
-
|
-
|
-
|
||||||||||||||||||
Other payables
|
5,885
|
5,885
|
5,885
|
-
|
-
|
-
|
||||||||||||||||||
Non-convertible debentures *
|
78,409
|
103,561
|
6,555
|
11,596
|
30,910
|
54,500
|
||||||||||||||||||
Loans from banks and others *
|
538,209
|
699,563
|
41,646
|
56,446
|
165,829
|
435,642
|
||||||||||||||||||
670,175
|
856,681
|
101,758
|
68,042
|
196,739
|
490,142
|
* |
Includes current portion of long-term liabilities.
|
As at December 31, 2017
|
||||||||||||||||||||||||
Book value
|
Projected cash flows
|
Up to 1 year
|
1-2 years
|
2-5 years
|
More than 5 years
|
|||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||
Non-derivative financial liabilities
|
||||||||||||||||||||||||
Loans from banks and others *
|
317,684
|
317,786
|
317,786
|
-
|
-
|
-
|
||||||||||||||||||
Trade payables
|
58,895
|
58,895
|
58,895
|
-
|
-
|
-
|
||||||||||||||||||
Other payables
|
77,869
|
77,964
|
77,964
|
-
|
-
|
-
|
||||||||||||||||||
Non-convertible debentures **
|
91,122
|
125,089
|
13,153
|
7,086
|
34,033
|
70,817
|
||||||||||||||||||
Loans from banks and others **
|
627,150
|
846,652
|
157,805
|
50,768
|
173,222
|
464,857
|
||||||||||||||||||
Financial guarantee ***
|
44,342
|
44,342
|
44,342
|
-
|
-
|
-
|
||||||||||||||||||
Financial liabilities – hedging instruments
|
||||||||||||||||||||||||
Forward exchange rate contracts
|
439
|
439
|
439
|
-
|
-
|
-
|
||||||||||||||||||
Financial liabilities not for hedging
|
||||||||||||||||||||||||
Derivatives on exchange rates
|
73
|
73
|
73
|
-
|
-
|
-
|
||||||||||||||||||
1,217,574
|
1,471,240
|
670,457
|
57,854
|
207,255
|
535,674
|
** |
Includes current portion of long-term liabilities and long-term liabilities which were classified to short-term.
|
*** |
Financial Guarantees contractual period in Qoros is dependent on Qoros’s timeliness to meet the obligation of current loans payable.
|
D. |
Market risks
Market risk is the risk that changes in market prices, such as foreign exchange rates, the CPI, interest rates and prices of capital products and instruments will affect the fair value of the future cash flows of a financial instrument.
The Group buys and sells derivatives in the ordinary course of business, and also incurs financial liabilities, in order to manage market risks. All such transactions are carried out within the guidelines set by the Boards of Directors of the companies. For the most part, the Group companies enter into hedging transactions for purposes of avoiding economic exposures that arise from their operating activities. Most of the transactions entered into do not meet the conditions for recognition as an accounting hedge and, therefore, differences in their fair values are recorded on the statement of profit and loss.
(1)
CPI and foreign currency risk
Currency risk
The Group’s functional currency is the U.S. dollar. The exposures of the Group companies are measured with reference to the changes in the exchange rate of the dollar vis-à-vis the other currencies in which it transacts business.
The Group is exposed to currency risk on sales, purchases, assets and liabilities that are denominated in a currency other than the respective functional currencies of the Group entities. The primary exposure is to the Shekel (NIS).
The Group uses options and forward exchange contracts on exchange rates for purposes of hedging short-term currency risks, usually up to one year, in order to reduce the risk with respect to the final cash flows in dollars deriving from the existing assets and liabilities and sales and purchases of goods and services within the framework of firm or anticipated commitments, including in relation to future operating expenses.
The Group is exposed to currency risk in relation to loans it has taken out and debentures it has issued in currencies other than the dollar. The principal amounts of these bank loans and debentures have been hedged by swap transactions the repayment date of which corresponds with the payment date of the loans and debentures.
|
(a) |
Exposure to CPI and foreign currency risks
The Group’s exposure to CPI and foreign currency risk, based on nominal amounts, is as follows:
|
As at December 31, 2018
|
||||||||||||
Foreign currency
|
||||||||||||
Shekel
|
||||||||||||
Unlinked
|
CPI linked
|
Other
|
||||||||||
Non-derivative instruments
|
||||||||||||
Cash and cash equivalents
|
86,896
|
—
|
2,778
|
|||||||||
Short-term investments, deposits and loans
|
27,638
|
—
|
55
|
|||||||||
Trade receivables
|
35,291
|
—
|
44
|
|||||||||
Other receivables
|
286
|
—
|
26
|
|||||||||
Long-term deposits and loans
|
48,490
|
—
|
—
|
|||||||||
Total financial assets
|
198,601
|
—
|
2,903
|
|||||||||
Trade payables
|
23,774
|
—
|
9,968
|
|||||||||
Other payables
|
2,215
|
—
|
811
|
|||||||||
Loans from banks and others and debentures
|
163,162
|
450,571
|
—
|
|||||||||
Total financial liabilities
|
189,151
|
450,571
|
10,779
|
|||||||||
Total non-derivative financial instruments, net
|
||||||||||||
Derivative instruments
|
—
|
—
|
90,184
|
|||||||||
Net exposure
|
—
|
—
|
90,184
|
As at December 31, 2017
|
||||||||||||
Foreign currency
|
||||||||||||
Shekel
|
||||||||||||
Unlinked
|
CPI linked
|
Other
|
||||||||||
Non-derivative instruments
|
||||||||||||
Cash and cash equivalents
|
158,679
|
—
|
18,593
|
|||||||||
Short-term investments, deposits and loans
|
60,855
|
—
|
—
|
|||||||||
Trade receivables
|
42,004
|
—
|
—
|
|||||||||
Other receivables
|
2,686
|
—
|
3,603
|
|||||||||
Long-term deposits and loans
|
25,600
|
—
|
—
|
|||||||||
Total financial assets
|
289,824
|
—
|
22,196
|
|||||||||
Loans from banks and others
|
—
|
—
|
30,308
|
|||||||||
Trade payables
|
31,286
|
—
|
86
|
|||||||||
Other payables
|
3,178
|
—
|
1,316
|
|||||||||
Long-term loans from banks and others and debentures
|
109,629
|
478,891
|
—
|
|||||||||
Total financial liabilities
|
144,093
|
478,891
|
31,710
|
|||||||||
Total non-derivative financial instruments, net
|
145,731
|
478,891
|
(9,514
|
)
|
||||||||
Derivative instruments
|
—
|
—
|
(439
|
)
|
||||||||
Net exposure
|
145,731
|
478,891
|
(9,953
|
)
|
(b)
|
Sensitivity analysis
A strengthening of the dollar exchange rate by 5%–10% against the following currencies and change of the CPI in rate of 5%–10% would have increased (decreased) the net income or net loss and the equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2015.
|
As at December 31, 2018
|
||||||||||||||||
10% increase
|
5% increase
|
5% decrease
|
10% decrease
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Non-derivative instruments
|
||||||||||||||||
Shekel/dollar
|
(35,582
|
)
|
(18,658
|
)
|
18,658
|
35,582
|
||||||||||
CPI
|
(25,875
|
)
|
(12,937
|
)
|
10,222
|
10,600
|
||||||||||
As at December 31, 2017
|
||||||||||||||||
10% increase
|
5% increase
|
5% decrease
|
10% decrease
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Non-derivative instruments
|
||||||||||||||||
Shekel/dollar
|
13,248
|
6,940
|
(6,940
|
)
|
(13,248
|
)
|
||||||||||
CPI
|
(43,536
|
)
|
(22,804
|
)
|
22,804
|
43,536
|
(2) |
Interest rate risk
The Group is exposed to changes in the interest rates with respect to loans bearing interest at variable rates, as well as in relation to swap transactions of liabilities in foreign currency for dollar liabilities bearing a variable interest rate.
The Group has not set a policy limiting the exposure and it hedges this exposure based on forecasts of future interest rates.
The Group enters into transactions mainly to reduce the exposure to cash flow risk in respect of interest rates. The transactions include interest rate swaps and “collars”. In addition, options are acquired and written for hedging the interest rate at different rates.
Type of interest
Set forth below is detail of the type of interest borne by the Group’s interest-bearing financial instruments:
|
As at December 31,
|
||||||||
2018
|
2017
|
|||||||
Carrying amount
|
||||||||
$ Thousands
|
||||||||
Fixed rate instruments
|
||||||||
Financial assets
|
55,027
|
1,438,243
|
||||||
Financial liabilities
|
(586,334
|
)
|
-
|
|||||
(531,307
|
)
|
1,438,243
|
||||||
Variable rate instruments
|
||||||||
Financial assets
|
102,392
|
-
|
||||||
Financial liabilities
|
-
|
(239,876
|
)
|
|||||
102,392
|
(239,876
|
)
|
E. |
Fair value
|
(1) |
Fair value compared with carrying value
|
(2) |
Hierarchy of fair value
|
As at
|
As at
|
|||||||
December 31, 2018
|
December 31, 2017
|
|||||||
Level 3
|
Level 2
|
|||||||
$ Thousands
|
$ Thousands
|
|||||||
Assets
|
||||||||
Qoros put option
|
90,103
|
-
|
||||||
Derivatives not used for accounting hedge
|
-
|
1,471
|
||||||
90,103
|
1,471
|
|||||||
Liabilities
|
||||||||
Derivatives used for accounting hedge
|
-
|
439
|
||||||
Derivatives not used for accounting hedge
|
-
|
73
|
||||||
-
|
512
|
(3) |
Data and measurement of the fair value of financial instruments at Level 2
|
· |
The underlying asset value
is Qoros’ equity value as of the valuation date.
|
· |
The exercise price of the option
is the price that must be paid for the stock on the date the put option is exercised, and is defined by the terms of the award.
|
· |
The expected exercise date
is the period between the grant date and the expiration date.
|
· |
The Risk-free interest rate
was based on yields on traded China government bonds, with time to maturity equals to the put option contractual period.
|
· |
Expected volatility
was based on the historical weekly volatility of comparable companies for a period of 4.3 years (remaining contractual term of the put option, as of the valuation date).
|
· |
Expected dividend yield
is 0% as no dividend distribution is expected in the foreseeable future.
|
Type
|
Valuation technique
|
Significant unobservable data
|
Inter-relationship between significant unobservable inputs and fair value measurement
|
Interest rate Swaps
|
The Group applies standard valuation techniques such as:
discounted cash flows
for fixed and variables coupons (estimated with forward curves) using as discounted rates the
projected LIBOR zero coupon curve
. The observable inputs are obtained through market information suppliers.
|
Not applicable
|
Not applicable
|
Put Options
|
The Group applies standard valuation techniques such as: Binomial model using risk free rates from market information suppliers.
|
The group researched on data from comparable companies on inputs such as expected volatility and credit risk.
|
The estimated fair value would increase(decrease) if:
-
the volatility is higher (lower)
-
the credit risk is lower (higher)
|
Foreign Exchange Forwards
|
The Group applies standard valuation techniques which include market observable parameters such as the implicit exchange rate calculated with forward points. These variables are obtained through market information suppliers.
|
Not applicable
|
Not applicable
|
Credit from banks, others and debentures
|
Discounted cash flows with market interest rate
|
Not applicable
|
Not applicable
|
Marketable Securities held for trade
|
DLOM valuation method
|
Not applicable
|
Not applicable
|
1. |
Qoros
|
A. |
On January 8, 2019, Kenon announced that it had entered into an agreement to sell half of its remaining interest in Qoros (i.e. 12%) to the New Qoros Investor in Qoros for a purchase price of RMB1,560 million (approximately $227 million), which is based on the same post-investment valuation as the initial investment by the New Qoros Investor in Qoros. The sale is subject to obtaining customary relevant third-party consents and other closing conditions, including approvals by relevant government authorities. Following completion of the sale, Kenon will hold a 12% interest in Qoros, the New Qoros Investor in Qoros will hold 63% and Chery will own 25%.
|
2. |
OPC
|
A.
|
Market Concentration Committee – Regulatory Outline Plan
|
B.
|
Dividend
|
|
Kenon Holdings Ltd.
By:
/s/ Robert L. Rosen
Name: Robert L. Rosen Title: Chief Executive Officer |
Exhibit Number
|
|
Description of Document
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
1. |
Portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Exchange Act. Omitted information has been filed separately with the SEC.
|
2. |
Portions of this exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed.
|