We'll go like the wind: B&BW

The Age
Friday 8/9/2006 Page: 4

WIND farm operator Babcock & Brown Wind Partners (BBW) has increased its distribution guidance for this year and says the market for wind energy remains robust.

BBW, floated by investment bank Babcock & Brown last October, reported a net loss of $16.24 million for 2005-06.

But BBW chief executive Peter O'connell said the renewable energy investor had begun the new financial year in a strong position. "The 2007 financial year will be a year in which security holders will benefit from BBW's acquisition program and diversification strategy," Mr O'connell said.

"The directors have upgraded the distribution guidance for fiscal year 2007 from 11.2 per stapled security to 12.5¢ per stapled security."

He said the company wanted at least 3.5 per cent compound annual growth in distributions in the medium term.

Revenue for the financial year was $73 million, while earnings before interest, tax, depreciation and amortisation reached $51.8 million. Both were below BBW's forecast by $4 million and $5.7 million respectively, due to one-off items including delays in the acquisition of three wind farms in Spain.

BBW has increased its portfolio from four wind farms at the time of its initial public offering to 19, spreading across Australia, Europe and the US. Together they produce about 1360 gigawatt hours a year.

Mr O'Connell said the investment rationale for wind energy continued to improve as world demand for electricity increased, concerns about global warming deepened, and the source of clean energy became more costcompetitive against fossil fuels.

"We enter a market with a more mature and diverse portfolio, and with a balance sheet which is undergeared, and we face a market here wind energy drives remain robust," he said. In Australia, Mr O'connell said wind development would be limited unless it received more government support.

BBW declared a final distribution of 5.1 per stapled security, bringing the total distribution for the year to 1O.2¢. Its stapled securities closed up 7¢, or 5 per cent, to $1.46.