Exhibit 99.2
Financial Information for the Year Ended December 31, 2020 of Kenon and OPC and
Reconciliation of Certain non-IFRS Financial Information
Table of Contents
Summary Kenon consolidated financial information
Kenon Holdings Ltd. and subsidiaries
Consolidated Statements of Financial Position as at December 31, 2020 and 2019
Consolidated Statements of Financial Position as at December 31, 2020 and 2019
As at December 31 | ||||||||
2020 | 2019 | |||||||
$ millions | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 286 | 147 | ||||||
Short-term deposits and restricted cash | 564 | 33 | ||||||
Trade receivables | 48 | 39 | ||||||
Other current assets | 22 | 40 | ||||||
Asset held for sale | - | 70 | ||||||
Total current assets | 920 | 329 | ||||||
Non-current assets | ||||||||
Investments in associated companies | 297 | 120 | ||||||
Long-term investment | 235 | - | ||||||
Long-term deposits and restricted cash | 72 | 77 | ||||||
Long-term prepaid expenses | 45 | 30 | ||||||
Long-term derivative instruments | - | 2 | ||||||
Other non-current assets | - | 58 | ||||||
Deferred payment receivable | - | 204 | ||||||
Deferred taxes, net | 7 | 2 | ||||||
Property, plant and equipment, net | 819 | 668 | ||||||
Intangible assets, net | 1 | 1 | ||||||
Right-of-use assets, net | 86 | 17 | ||||||
Total non-current assets | 1,562 | 1,179 | ||||||
Total assets | 2,482 | 1,508 | ||||||
Current liabilities | ||||||||
Current maturities of loans from banks and others | 47 | 46 | ||||||
Trade and other payables | 128 | 52 | ||||||
Short-term derivative instruments | 39 | 6 | ||||||
Current maturities of lease liabilities | 14 | 1 | ||||||
Total current liabilities | 228 | 105 | ||||||
Non-current liabilities | ||||||||
Long-term loans from banks and others | 576 | 504 | ||||||
Debentures | 296 | 73 | ||||||
Deferred taxes, net | 94 | 79 | ||||||
Non-current tax liabilities | - | 29 | ||||||
Other non-current liabilities | 1 | 1 | ||||||
Long-term derivative instruments | 7 | - | ||||||
Long-term lease liabilities | 4 | 5 | ||||||
Total non-current liabilities | 978 | 691 | ||||||
Total liabilities | 1,206 | 796 | ||||||
Equity | ||||||||
Share capital | 602 | 602 | ||||||
Translation reserve | 16 | 18 | ||||||
Capital reserve | (11 | ) | 14 | |||||
Accumulated profit/(loss) | 460 | (11 | ) | |||||
Equity attributable to owners of the Company | 1,067 | 623 | ||||||
Non-controlling interests | 209 | 89 | ||||||
Total equity | 1,276 | 712 | ||||||
Total liabilities and equity | 2,482 | 1,508 |
2
Kenon Holdings Ltd. and subsidiaries
Consolidated Statements of Profit & Loss for the years ended December 31, 2020 and 2019
Consolidated Statements of Profit & Loss for the years ended December 31, 2020 and 2019
For the year ended December 31, | ||||||||
2020 | 2019 | |||||||
$ millions | ||||||||
Revenue | 386 | 373 | ||||||
Cost of sales and services (excluding depreciation and amortization) | (282 | ) | (256 | ) | ||||
Depreciation and amortization | (33 | ) | (31 | ) | ||||
Gross profit | 71 | 86 | ||||||
Selling, general and administrative expenses | (50 | ) | (36 | ) | ||||
Write back of impairment of investment | 44 | - | ||||||
Other income | 2 | 6 | ||||||
Operating profit | 67 | 56 | ||||||
Financing expenses | (51 | ) | (30 | ) | ||||
Financing income | 14 | 18 | ||||||
Financing expenses, net | (37 | ) | (12 | ) | ||||
Net gains/(losses) related to Qoros | 310 | (8 | ) | |||||
Share in profit/(losses) of associated companies, net of tax | 161 | (41 | ) | |||||
Profit/(loss) before income taxes | 501 | (5 | ) | |||||
Income taxes | (5 | ) | (17 | ) | ||||
Profit/(loss) for the year from continuing operations | 496 | (22 | ) | |||||
Gain/(loss) for the year from discontinued operations | ||||||||
-Recovery of retained claims, net | 8 | 25 | ||||||
-Other | - | (1 | ) | |||||
8 | 24 | |||||||
Profit for the year | 504 | 2 | ||||||
Attributable to: | ||||||||
Kenon’s shareholders | 507 | (14 | ) | |||||
Non-controlling interests | (3 | ) | 16 | |||||
Profit for the year | 504 | 2 | ||||||
Basic/diluted profit/(loss) per share attributable to Kenon’s shareholders (in dollars): | ||||||||
Basic/diluted profit/(loss) per share | 9.41 | (0.25 | ) | |||||
Basic/diluted profit/(loss) per share from continuing operations | 9.25 | (0.71 | ) | |||||
Basic/diluted profit per share from discontinued operations | 0.16 | 0.46 |
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Kenon Holdings Ltd. and subsidiaries
Consolidated Statements of Cash Flows
For the years ended December 31, 2020 and 2019
Consolidated Statements of Cash Flows
For the years ended December 31, 2020 and 2019
For the year ended December 31 | ||||||||
2020 | 2019 | |||||||
$ millions | ||||||||
Cash flows from operating activities | ||||||||
Profit for the year | 504 | 2 | ||||||
Adjustments: | ||||||||
Depreciation and amortization | 34 | 32 | ||||||
Write back of impairment of investment | (44 | ) | - | |||||
Financing expenses, net | 37 | 12 | ||||||
Share in (profit)/losses of associated companies, net | (161 | ) | 41 | |||||
(Gains)/losses on disposal of property, plant and equipment, net | (1 | ) | - | |||||
Net (gains)/losses related to changes of interest in Qoros | (310 | ) | 8 | |||||
Recovery of retained claims | (10 | ) | (30 | ) | ||||
Share-based payments | 1 | 2 | ||||||
Income taxes | 7 | 22 | ||||||
57 | 89 | |||||||
Change in trade and other receivables | (10 | ) | 4 | |||||
Change in trade and other payables | 45 | (5 | ) | |||||
Cash generated from operating activities | 92 | 88 | ||||||
Income taxes paid, net | - | (2 | ) | |||||
Net cash provided by operating activities | 92 | 86 |
4
Kenon Holdings Ltd. and subsidiaries
Consolidated Statement of Cash Flows, continued
For the years ended December 31, 2020 and 2019
Consolidated Statement of Cash Flows, continued
For the years ended December 31, 2020 and 2019
For the year ended December 31 | ||||||||
2020 | 2019 | |||||||
$ millions | ||||||||
Cash flows from investing activities | ||||||||
Short-term deposits and restricted cash, net | (503 | ) | 20 | |||||
Investment in long-term deposits, net | 8 | (25 | ) | |||||
Sale of subsidiary, net of cash disposed off | - | 1 | ||||||
Income tax paid | (32 | ) | (6 | ) | ||||
Acquisition of property, plant and equipment | (74 | ) | (34 | ) | ||||
Payment of long-term deposits | - | (3 | ) | |||||
Interest received | 1 | 2 | ||||||
Deferred consideration in respect of acquisition of subsidiary | (14 | ) | - | |||||
Long-term advance deposits and prepaid expenses | (58 | ) | - | |||||
Payment of transactions in derivatives, net | (4 | ) | (1 | ) | ||||
Proceeds from sale of interest in Qoros | 220 | - | ||||||
Proceeds from deferred payment | 218 | - | ||||||
Receipt from recovery of financial guarantee | 6 | 11 | ||||||
Recovery of retained claims | 10 | 30 | ||||||
Net cash used in investing activities | (222 | ) | (5 | ) | ||||
Cash flows from financing activities | ||||||||
Dividends paid to holders of non-controlling interests | (12 | ) | (33 | ) | ||||
Dividends paid | (120 | ) | (65 | ) | ||||
Costs paid in advance in respect of taking out of loans | (9 | ) | (2 | ) | ||||
Payment of early redemption commission with respect to the debentures (Series A) | (11 | ) | - | |||||
Proceeds from issuance of share capital by a subsidiary to non-controlling interests | 217 | 76 | ||||||
Proceeds from long-term loans | 73 | - | ||||||
Proceeds from issuance of debentures, less issuance expenses | 281 | - | ||||||
Repayment of long-term loans and debentures, derivative financial instruments and lease liabilities | (130 | ) | (28 | ) | ||||
Acquisition of non-controlling interests | (8 | ) | (1 | ) | ||||
Interest paid | (25 | ) | (21 | ) | ||||
Net cash provided by/(used in) financing activities | 256 | (74 | ) | |||||
Increase in cash and cash equivalents | 126 | 7 | ||||||
Cash and cash equivalents at beginning of the year | 147 | 131 | ||||||
Effect of exchange rate fluctuations on balances of cash and cash equivalents | 13 | 9 | ||||||
Cash and cash equivalents at end of the year | 286 | 147 |
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Information regarding reportable segments
Information regarding activities of the reportable segments are set forth in the following table.
OPC | Quantum1 | ZIM | Other | Total | ||||||||||||||||
$ millions | ||||||||||||||||||||
2020 | ||||||||||||||||||||
Revenue | 386 | - | - | - | 386 | |||||||||||||||
Adjusted EBITDA2 | 75 | - | - | (18 | ) | 57 | ||||||||||||||
Depreciation and amortization | (34 | ) | - | - | - | (34 | ) | |||||||||||||
Financing income | - | - | - | 14 | 14 | |||||||||||||||
Financing expenses | (50 | ) | - | - | (1 | ) | (51 | ) | ||||||||||||
Other items: | ||||||||||||||||||||
Net gains related to Qoros | - | 310 | - | - | 310 | |||||||||||||||
Share in (losses)/profit of associated companies | - | (6 | ) | 167 | - | 161 | ||||||||||||||
Write back of impairment of investment | - | - | 44 | - | 44 | |||||||||||||||
(Loss)/profit before taxes | (9 | ) | 304 | 211 | (5 | ) | 501 | |||||||||||||
Income Taxes | (4 | ) | - | - | (1 | ) | (5 | ) | ||||||||||||
(Loss)/profit from continuing operations | (13 | ) | 304 | 211 | (6 | ) | 496 | |||||||||||||
Segment assets | 1,724 | 235 | - | 226 | 2,185 | |||||||||||||||
Investments in associated companies | - | - | 297 | - | 297 | |||||||||||||||
2,482 | ||||||||||||||||||||
Segment liabilities | 1,200 | - | - | 6 | 1,206 |
1 Quantum (2007) LLC, which is wholly-owned by Kenon, owns our 12% interest in Qoros Automotive Ltd.
2 Adjusted EBITDA is defined as EBITDA adjusted for net gains related to Qoros, share in (losses)/profit of associated companies and write back of impairment of investment.
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OPC | Quantum | ZIM | Other | Total | ||||||||||||||||
$ millions | ||||||||||||||||||||
2019 | ||||||||||||||||||||
Revenue | 373 | - | - | - | 373 | |||||||||||||||
Adjusted EBITDA1 | 105 | - | - | (18 | ) | 87 | ||||||||||||||
Depreciation and amortization | (31 | ) | - | - | - | (31 | ) | |||||||||||||
Financing income | 2 | - | - | 16 | 18 | |||||||||||||||
Financing expenses | (28 | ) | - | - | (2 | ) | (30 | ) | ||||||||||||
Other items: | ||||||||||||||||||||
Net losses related to Qoros | - | (8 | ) | - | - | (8 | ) | |||||||||||||
Share in losses of associated companies | - | (37 | ) | (4 | ) | - | (41 | ) | ||||||||||||
Profit /(loss) before taxes | 48 | (45 | ) | (4 | ) | (4 | ) | (5 | ) | |||||||||||
Income Taxes | (14 | ) | - | - | (3 | ) | (17 | ) | ||||||||||||
Profit/(loss) from continuing operations | 34 | (45 | ) | (4 | ) | (7 | ) | (22 | ) | |||||||||||
Segment assets | 1,000 | 72 | - | 246 | 1,318 | |||||||||||||||
Investments in associated companies | - | 106 | 84 | - | 190 | |||||||||||||||
1,508 | ||||||||||||||||||||
Segment liabilities | 762 | - | - | 34 | 796 |
1 Adjusted EBITDA is defined as EBITDA adjusted for net losses related to Qoros and share of losses of associated companies.
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Information regarding associated companies
Asset held for sale | Carrying amounts of investment in associated companies | Equity in the net earnings / (losses) of associated companies | ||||||||||||||||||
as at | as at | for the year ended | ||||||||||||||||||
December 31, 2019 | December 31, 2020 | December 31, 2019 | December 30, 2020 | December 31, 2019 | ||||||||||||||||
$ millions | $ millions | $ millions | ||||||||||||||||||
ZIM | - | 297 | 84 | 167 | (4 | ) | ||||||||||||||
Qoros* | 70 | - | 36 | (6 | ) | (37 | ) | |||||||||||||
70 | 297 | 120 | 161 | (41 | ) |
*Qoros was accounted for as an associated company until April 2020, when we reduced our interest in Qoros from 24% to 12%
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Summary of OPC consolidated financial information
OPC’s Consolidated Statement of Profit & Loss
For the year ended December 31, | ||||||||
2020 | 2019 | |||||||
$ millions | $ millions | |||||||
Revenue | 386 | 373 | ||||||
Cost of sales (excluding depreciation and amortization) | (282 | ) | (256 | ) | ||||
Depreciation and amortization | (33 | ) | (31 | ) | ||||
Gross profit | 71 | 86 | ||||||
Selling, general and administrative expenses | (30 | ) | (18 | ) | ||||
Other income | - | 6 | ||||||
Operating profit | 41 | 74 | ||||||
Financing expenses | (50 | ) | (28 | ) | ||||
Financing income | - | 2 | ||||||
Financing expenses, net | (50 | ) | (26 | ) | ||||
(Loss)/profit before income taxes | (9 | ) | 48 | |||||
Income taxes | (4 | ) | (14 | ) | ||||
Net (loss)/profit for the period | (13 | ) | 34 | |||||
Attributable to: | ||||||||
Equity holders of the company | (17 | ) | 25 | |||||
Non-controlling interest | 4 | 9 | ||||||
Net (loss)/profit for the period | (13 | ) | 34 |
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Summary Data from OPC’s Consolidated Statement of Cash Flows
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
$ millions | ||||||||
Cash flows provided by operating activities | 105 | 109 | ||||||
Cash flows used in investing activities | (644 | ) | (41 | ) | ||||
Cash flows provided by/(used in) financing activities | 478 | (54 | ) | |||||
(Decrease)/increase in cash and cash equivalents | (61 | ) | 14 | |||||
Cash and cash equivalents at end of the period | 62 | 111 |
Summary Data from OPC’s Consolidated Statement of Financial Position
As at | ||||||||
December 31, 2020 | December 31, 2019 | |||||||
$ millions | ||||||||
Total financial liabilities1 | 921 | 622 | ||||||
Total monetary assets2 | 608 | 152 | ||||||
Total equity attributable to the owners | 520 | 228 | ||||||
Total assets | 1,734 | 1,011 |
1. | Including loans from banks and others and debentures |
2. | Including cash and cash equivalents, short-term deposits and debt service reserves (out of restricted cash) |
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Definition of OPC’s EBITDA and non-IFRS reconciliation
This press release, including the financial tables, presents OPC’s EBITDA, which is a non-IFRS financial measure.
OPC defines EBITDA as for each period as net profit 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 profit or loss, cash flow from operations or other measures of operating performance 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. There are limitations that impair the use of EBITDA as a measure of OPC’s profitability since it does not take into consideration certain costs and expenses that result from OPC’s business that could have a significant effect on net profit, such as financial expenses, taxes, and depreciation and amortization.
OPC believes that the disclosure of EBITDA provides transparent and useful information to investors and financial analysts in their review of the company’s, or its subsidiaries’ operating performance and in the comparison of such operating performance to the operating performance of other companies in the same industry or in other industries that have different capital structures, debt levels and/or income tax rates.
Set forth below is a reconciliation of OPC’s net profit to EBITDA for the periods presented. Other companies may calculate EBITDA differently, and therefore this presentation of EBITDA may not be comparable to other similarly titled measures used by other companies.
Year Ended December 31, 2020 | ||||
$ millions | ||||
Total | ||||
Net loss for the period | (13 | ) | ||
Depreciation and amortization | 34 | |||
Financing expenses, net | 50 | |||
Income tax expense | 4 | |||
EBITDA | 75 |
Year Ended December 31, 2019 | ||||
$ millions | ||||
Total | ||||
Net profit for the period | 34 | |||
Depreciation and amortization | 31 | |||
Financing expenses, net | 26 | |||
Income tax expense | 14 | |||
EBITDA | 105 |
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Summary Financial Information of OPC’s Subsidiaries
The tables below set forth debt, cash and cash equivalents, and debt service reserves for OPC’s subsidiaries as at December 31, 2020 and 2019 (in $ millions):
As at December 31, 2020 | OPC Energy | OPC-Rotem | OPC-Hadera | Other | Total | |||||||||||||||
Debt (including accrued interest) | 305 | 341 | 217 | 58 | 921 | |||||||||||||||
Cash and cash equivalents and short-term deposits | 511 | 38 | 1 | 12 | 562 | |||||||||||||||
Debt service reserves (out of restricted cash)1 | 8 | 24 | 14 | - | 46 |
As at December 31, 2019 | OPC Energy | OPC-Rotem | OPC-Hadera | Other | Total | |||||||||||||||
Debt (including accrued interest) | 82 | 346 | 194 | - | 622 | |||||||||||||||
Cash and cash equivalents and short-term deposits | 74 | 33 | 3 | 1 | 111 | |||||||||||||||
Debt service reserves (out of restricted cash)1 | 19 | 40 | - | - | 59 |
1 Including reserves used for guarantees of debt.
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Summary Operational Information of OPC
The tables below set forth details of sales, generation and purchases of electricity by OPC and availability and net generation of OPC split by the OPC-Rotem plant and the Hadera energy center (kWh in millions):
For the year ended December 31, | ||||||||
2020 | 2019 | |||||||
Sales to private customers | 4,191 | 3,928 | ||||||
Sales to the system administrator | 153 | 102 | ||||||
Total sales | 4,344 | 4,030 |
For the year ended December 31, | ||||||||
2020 | 2019 | |||||||
Net generation of electricity | 3,925 | 3,811 | ||||||
Purchase of electricity from the system administrator | 419 | 219 | ||||||
Total volume of electricity generated and purchases from the system administrator | 4,344 | 4,030 |
For the year ended December 31, | ||||||||
2020 | 2019 | |||||||
Net generation of electricity and purchases during dispatch reduction – OPC Rotem | 3,494 | 3,727 | ||||||
Net generation – OPC Hadera (energy center) | 431 | 84 | ||||||
Total volume of electricity generated and purchases from the system administrator | 3,925 | 3,811 |
For the year ended December 31, | ||||||||
2020 | 2019 | |||||||
In thousands of tonnes | ||||||||
Steam Generation | 720 | 745 |
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