Cascal N.V. Announces Fiscal 2009 Year End Results

- Revenue from continuing operations of $163.4 million, up 4% at current exchange rates and up 19% at constant exchange rates

- EBITDA from continuing operations of $59.1 million, down 4% at current exchange rates and up 10% at constant exchange rates

- Net Profit from continuing operations up 81% to $17.9 million

- EPS from continuing operations up 40% to $0.59

LONDON, June 23 /PRNewswire-FirstCall/ -- Cascal N.V. (NYSE: HOO) (the "Company"), a leading provider of water and wastewater services in seven countries, today announced unaudited financial results for the fiscal year ended March 31, 2009 and the fourth quarter ended March 31, 2009. Cascal N.V. results are presented in U.S. dollars.

Results for Fiscal Year Ended March 31, 2009

Revenue from continuing operations for the year ended March 31, 2009 increased by $25.8 million or 19% at constant exchange rates, compared to the same period last year. The $25.8 million increase was the result of a $13.2 million contribution by the historical portfolio (through a combination of rate increases, additional customers and volumes) and a $12.6 million contribution by the new acquisitions. At current exchange rates, the $25.8 million increase was offset by a $20.5 million translation effect into USD, including $15.0 million due to USD-GBP movements.

• Revenue in China almost doubled at constant exchange rates, increasing by $10.1 million or 93%, compared to the same period last year. The increase was mainly due to the acquisition of the Yancheng joint venture on April 29, 2008 and the Zhumadian subsidiary on July 23, 2008. These acquisitions account for $9.5 million of the increase with the remainder coming from a combination of rate and volume increases in the Company's pre-existing operations in China.

• Revenue in Chile increased by $4.5 million or 66% at constant exchange rates, compared to the same period last year, of which $2.6 million related to the contribution of Servicomunal and Servilampa acquired on June 27, 2008 and $1.9 million originated from the Company's pre-existing operations and was the result of rate increases and higher volumes sold. For fiscal 2009, the contribution from Servicomunal and Servilampa represents only six months of operations since our Chilean results are consolidated with a three month lag due to having non-coterminous year ends.

• Revenue in the UK increased by $3.8 million or 4.8% at constant exchange rates, compared to the same period last year. The increase was primarily due to the effect of a scheduled rate increase of 3.68%, together with a $2.7 million increase from the non-regulated business.

• Revenue in Indonesia increased by $2.8 million or 28% at constant exchange rates, compared to the same period last year. This increase was primarily due to a 20% rate increase implemented in December 2007, together with higher demand for water caused by continued population growth.

• Revenue in South Africa increased by $2.5 million or 14% at constant exchange rates, compared to the same period last year. This increase was primarily due to a 10.0% rate increase implemented by the Nelspruit subsidiary and increases of 6% and 9% for water and sewerage rates respectively implemented by Siza Water, all with effect from July 2008, along with continued growth in the number of connections offset in part by a decrease in consumption observed toward the end of calendar 2008.

• Revenue in Panama increased by $1.9 million or 22%, compared to the same period last year, due to $0.5 million additional revenue recognized following the approval of a rate increase applied for in May 2007, along with the impact of a further $1.4 million from rate increases taking effect from April 1, 2008 and September 1, 2008.

For the year ended March 31, 2009, EBITDA from continuing operations increased by $5.3 million or 10% at constant exchange rates, compared to the same period last year. Of the $5.3 million increase, approximately $4.1 million was contributed by new projects and $2.4 million came from organic growth of the historical portfolio, offset by $1.2 million additional corporate overhead. The EBITDA increase was essentially contributed by the Company's operations in China (+$3.8 million), Indonesia (+$1.8 million), Chile (+1.7 million), South Africa (+$1.2 million) and Panama (+$0.9 million), offset by a reduction in the U.K. (-$2.8 million) due notably to higher electricity prices. The increased corporate overhead was mainly the result of the higher compliance costs of a public company (including tax and legal advisors, insurance and the board of independent directors). On a current exchange rates basis, the $5.3 million increase was offset by an $8.1 million translation effect into USD, including $7.4 million due USD-GBP movements. Please read "Use of Non-GAAP Financial Measures" for a description of EBITDA.

Commenting on the Company's results, Stephane Richer, Cascal Chief Executive Officer, stated, "I am very pleased with the progress that our group has made during fiscal 2009, our first full year operating as a publicly traded company. During the year, we have worked diligently to deliver on our stated acquisition and operational goals despite the challenges of the global recessionary environment. Our acquisitions have significantly contributed to our results, as we continue to provide much needed high-quality water and wastewater services to a growing population."

Overall, net financial income and expense improved by $16.1 million for the year ended March 31, 2009, compared to the same period last year. This result was comprised of a $12.4 million favorable movement in exchange rate results, combined with a $3.7 million decrease in net interest expense.

Richer concluded, "As we look towards fiscal 2010, we remain focused on executing our stated business plan of making selective acquisitions, and working to integrate the acquisitions that we have already made. While the global economy continues to flounder, we are beginning to see signs of life, and we are confident that the economy will right itself in due course. Until such time, we plan to continue to meet the demand for private sector expertise and capital to meet higher water quality, environmental standards, and to ensure that our value proposition is communicated to the investment community."

The effective tax rate for fiscal 2009 was 43.1%, compared to 43.7% in fiscal 2008. The U.K. project company's effective tax rate was 59.2% for fiscal year 2009 compared to 20.3% in the prior period. This increase was due essentially to a change in tax allowances for industrial buildings which has generated a one-time deferred tax charge of $4.2 million in the year ended March 31, 2009. During the prior period, the statement of income received a benefit of $2.2 million due to the change to the standard rate of UK income tax from 30% to 28%. Following the reorganization announced on February 26, 2009 the effective tax rate is expected to trend towards the 30% level in future periods.

For the year ended March 31, 2009, net profit was $17.8 million, or $0.58 per share, compared to net profit of $11.6 million, or $0.49 per share for the same period last year. Net profit from continuing operations was $17.9 million, or $0.59 per share, compared to $9.9 million, or $0.42 per share, for the same period last year.

As of March 31, 2009, the consolidated balance sheet shows cash and cash equivalents of $34.7 million. The consolidated balance sheet at March 31, 2009 shows an amount of $60 million, drawn under the company's revolving credit facility, as a short-term loan within current liabilities. This is because the facility comes to maturity on March 31, 2010. (See - Recent Business Highlights and Updates).

Results for the Three Months Ended March 31, 2009

For the three months ended March 31, 2009, revenue from continuing operations increased by $7.3 million or 24% at constant exchange rates, compared to the same period last year. The revenue increase was primarily contributed by the Company's operations in China (+$3.7 million), Chile (+$2.3 million), Indonesia (+$0.8 million) and Panama (+$0.4 million). At current exchange rates, the $7.3 million increase was offset by a $9.6 million translation effect into USD, including $7.0 million due to USD-GBP movements.

For the three months ended March 31, 2009, EBITDA from continuing operations increased by $2.8 million or 27% at constant exchange rates, compared to the same period last year. The EBITDA increase was essentially contributed by the Company's operations in China (+$1.4 million), Chile (+$1.1 million), Panama (+$0.5 million), Indonesia (+$0.4 million) and also reduced overheads (+$0.7 million), partially offset by a reduction in the U.K. (-$1.4 million) due notably to higher electricity prices. On a current exchange rates basis, the $2.8 million increase was offset by a $3.7 million translation effect into USD, including $3.4 million due USD-GBP movements. Please read "Use of Non-GAAP Financial Measures" for a description of EBITDA.

Guidance for Fiscal Year ending March 31, 2010

For the fiscal year ending March 31, 2010, the Company expects revenue of approximately $174 million, EBITDA of approximately $63 million and EPS of approximately $0.59. This guidance is substantially based on the continuing solid growth of the existing portfolio (approximately + 15% at constant exchange rates) and assumes a reduced impact of exchange rates movements. In particular, the average USD-GBP exchange rate was 1.69 actual for fiscal 2009 compared to 1.50 assumed in this guidance for fiscal 2010.

Recent Business Highlights and Updates

• The Company has agreed the terms for the renewal of its corporate revolving loan and guarantee facilities with current lender, HSBC, for a period of two years ending June 30, 2011. The facilities are to be renewed under substantially the same terms and conditions with the exception of higher interest rate margin in line with current market trends. Execution of the facility documentation is expected in the next few days.

• The Company has recently been granted several rate increases: 5% for Servicomunal (Chile) and 10% for Servilampa (Chile) with effect from June 2009; 11% for Silulumanzi (South Africa) and 9% for Siza Water (South Africa) with effect from July 2009.

• In April 2009, the Company signed a contract amendment with Xstrata (Chile) whereby during the year 2009 the maximum water supply available under the contract has been increased by close to 30%.

• Since January 2009, the Company has been receiving monthly payments in full from the Instituto de Acueductos y Alcantarillados Nacionales ("IDAAN"), Panama's water authority. Prior to January, IDAAN had only been paying invoices on the basis of the base rate, excluding invoices associated with the agreed upon rate indexation.

Conference Call

The Company will host a conference call at 9 a.m. Eastern Time / 2 p.m. GMT on June 24, 2009. On the call, Stephane Richer, CEO of Cascal, and Steve Hollinshead, CFO, will discuss the Company's results, and review operational highlights and other business developments. The Company invites you to participate on the call at the following telephone numbers: (877) 375-4189 (local), +1 (404) 665-9923 (international), (0800) 032-3836 (UK Freephone). The access code for all callers is 16012411. The call will also be available via webcast at www.cascal.co.uk. Please allow extra time prior to the call to visit the site and to download any necessary software to listen to the Internet broadcast. An online archive of the webcast will be available on the Company's website for 30 days following the call. A replay of the call will be available from June 24, 2009 at 9:45 a.m., ET, through July 24, 2009 at 11:59 p.m., ET. To access the replay, please call (800) 642-1687 (local) or (706) 645-9291 (international) and enter the following code: 16012411.

About Cascal N.V.

Cascal provides water and wastewater services to its customers in seven countries: the United Kingdom, China, South Africa, Chile, Indonesia, Panama and The Philippines. Cascal's customers are predominantly homes and businesses representing a total population of approximately 4.3 million.

Forward-looking statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. There are important factors, many of which are outside of our control, that could cause actual results to differ materially from those expressed or implied by such forward- looking statements including: general economic business conditions, unfavorable weather conditions, housing and population growth trends, changes in energy prices and taxes, fluctuations with currency exchange rates, changes in regulations or regulatory treatment, changes in environmental compliance and water quality requirements, availability and the cost of capital, the success of growth initiatives, acquisitions and our ability to successfully integrate acquired companies and other factors discussed in our filings with the Securities and Exchange Commission, including under Risk Factors in our Form 20-F for the fiscal year ended March 31, 2008, filed with the SEC on June 25, 2008. We do not undertake and have no obligation to publicly update or revise any forward-looking statement.

Use of Non-GAAP Financial Measures

In evaluating its business, the Company uses EBITDA as a supplemental measure of its operating performance. The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. The term EBITDA is not defined under generally accepted accounting principles, or GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with GAAP. EBITDA has limitations as an analytical tool, and when assessing the Company's operating performance, investors should not consider EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with GAAP.

    Investor Contacts:
    KCSA Strategic Communications
    Jeffrey Goldberger / Yemi Rose
    +1 212.896.1249 / +1 212.896.1233
    jgoldberger@kcsa.com / yrose@kcsa.com

Tables follow

                           Consolidated Statements of Income

    Amounts, except shares and
    per share amounts, expressed
    in thousands of USD

                 Year ended March 31, 2009    Year ended March 31, 2008
              Continuing  Discontinued
                 opera-     opera-            Continuing  Discontinued
                 tions      tions    Total       opera-      opera-
               Unaudited  Unaudited  Unaudited   tions       tions     Total

    Revenue     163,396          -    163,396    157,777      2,865    160,642
    Operating
     Expenses
    Raw and
     auxiliary
     materials and
     other
     external
     costs       42,041          -     42,041     34,499        689     35,188
    Staff costs  33,735          -     33,735     33,675        673     34,348
    Depreciation
     and
     amortization
     of
     intangible
     and tangible
     fixed assets
     and negative
     goodwill    22,968          -     22,968     22,740         46     22,786
    Profit on
     disposal of
     intangible
     and tangible
     fixed assets  (688)         -       (688)      (749)          -     (749)
    Other
     operating
     charges     28,563          -     28,563     27,060      1,000     28,060
    Incremental
     offering-
     related
     costs            -          -          -        767          -        767
                126,619          -    126,619    117,992      2,408    120,400
    Operating
     Profit      36,777          -     36,777     39,785        457     40,242
    (Loss)/Gain
     on disposal
     of subsidiary    -        (68)       (68)         -      1,691      1,691
    Net Financial
     Income and
     Expense
    Exchange rate
     results      9,975          -      9,975     (2,267)      (114)   (2,381)
    Interest
     income       2,740         11      2,751      2,839         96      2,935
    Interest
     expense    (16,319)         -    (16,319)   (20,165)       (73)  (20,238)
                 (3,604)        11     (3,593)   (19,593)       (91)  (19,684)
    Profit before
     Taxation    33,173        (57)    33,116     20,192      2,057     22,249
    Taxation    (14,232)       (31)   (14,263)    (9,359)      (357)   (9,716)
    Profit after
     taxation    18,941        (88)    18,853     10,833      1,700     12,533
    Minority
     Interest    (1,012)         -     (1,012)      (945)         -      (945)
    Net Profit   17,929        (88)    17,841      9,888      1,700     11,588
    Earnings
     per share -
     Basic and
     Diluted       0.59      (0.01)      0.58       0.42       0.07       0.49
    Weighted
     average
     number of
     shares -
     Basic and
     Diluted 30,566,007 30,566,007 30,566,007 23,329,982 23,329,982 23,329,982



                             Consolidated Statements of Income

    Amounts, except shares and
    per share amounts, expressed
    in thousands of USD

                       Three months ended         Three months ended
                         March 31, 2009             March 31, 2008
              Continuing  Discontinued        Continuing  Discontinued
                 opera-     opera-              opera-      opera-
                 tions      tions     Total     tions       tions      Total
               Unaudited  Unaudited  Unaudited  Unaudited  Unaudited Unaudited

    Revenue      37,766          -     37,766     39,797        697     40,494
    Operating
     Expenses
    Raw and
     auxiliary
     materials
     and other
     external
     costs       11,110          -     11,110      9,292        156      9,448
    Staff costs   6,523          -      6,523      8,174         61      8,235
    Depreciation
     and
     amortization
     of
     intangible
     and tangible
     fixed assets
     and negative
     goodwill     5,036          -      5,036      5,712          7      5,719
    Loss/(Profit)
     on disposal
     of intangible
     and tangible
     fixed
     assets         247          -        247       (675)         -      (675)
    Other
     operating
     charges      6,769          3      6,772      7,417        181      7,598
    Incremental
     offering-
     related
     costs            -          -          -        692          -        692
                 29,685          3     29,688     30,612        405     31,017
    Operating
     Profit       8,081         (3)     8,078      9,185        292      9,477
    (Loss)/Gain
     on disposal
     of
     subsidiary       -       (271)      (271)         -        396        396
    Net Financial
     Income and
     Expense
     Exchange rate
     results        (46)         -        (46)      (356)      (101)     (457)
    Interest
     income         284          3        287      1,482         22      1,504
    Interest
     expense     (4,085)         1     (4,084)    (4,804)       (49)   (4,853)
                 (3,847)         4     (3,843)    (3,678)      (128)   (3,806)
    Profit
     before
     Taxation     4,234       (270)     3,964      5,507        560      6,067
    Taxation     (2,969)        38     (2,931)    (2,919)      (276)   (3,195)
    Profit
     after
     taxation     1,265       (232)     1,033      2,588        284      2,872
    Minority
     Interest      (225)         -       (225)      (264)         -      (264)
    Net Profit    1,040       (232)       808      2,324        284      2,608
    Earnings
     per share -
     Basic and
     Diluted       0.03      (0.01)      0.02       0.08       0.01       0.09
    Weighted
     average
     number of
     shares -
     Basic
     and
     Diluted 30,566,007 30,566,007 30,566,007 27,854,156 27,854,156 27,854,156



                                 Revenue by segment

    Amounts expressed in
     thousands of USD
                             Three months Three months
                                 ended       ended    Year ended   Year ended
                                March 31,  March 31,   March 31,    March 31,
                                  2009        2008        2009         2008

    United Kingdom              $16,727     $23,704      $83,643      $94,791
    South Africa                  4,378       5,485       20,340       21,673
    Indonesia                     3,071       2,889       12,999       11,356
    China                         6,061       2,313       20,929       10,023
    Chile                         4,102       2,301       11,343        7,593
    Panama                        2,555       2,183       10,691        8,780
    The Philippines                 740         756        2,881        2,861
    Holding companies               132         166          570          700
    Total continuing operations $37,766     $39,797     $163,396     $157,777
    Discontinued operations
     - Mexico                         -         697            -        2,865
    Total                       $37,766     $40,494     $163,396     $160,642



    Revenue
    Dutch GAAP
                                                                    Percentage
                                                  Year ended  Change  change
                               Year      Year      March 31,  2008-    2008-
                               ended     ended     2008 at   2009 at  2009 at
                              March 31, March 31,  constant  constant constant
    (Dollars in                2009 as   2008 as   exchange  exchange exchange
     thousands)               reported  reported     rates     rates    rates

    United Kingdom            $83,643    $94,791    $79,807    $3,836    4.8%
    South Africa               20,340     21,673     17,835     2,505   14.0
    Indonesia                  12,999     11,356     10,151     2,848   28.1
    China                      20,929     10,023     10,852    10,077   92.9
    Chile                      11,343      7,593      6,849     4,494   65.6
    Panama                     10,691      8,780      8,780     1,911   21.8
    The Philippines             2,881      2,861      2,742       139    5.1
    Holding companies             570        700        575        (5)  (0.8)
    Total continuing
     operations              $163,396   $157,777   $137,591   $25,805   18.8%
    Discontinued operations
     - Mexico                       -      2,865      2,578    (2,578)   n/a
    Exchange rate effect                             20,473
    Total after exchange
     rate effect             $163,396   $160,642   $160,642



    Revenue
    Dutch GAAP
                                                   Three
                                                   Months           Percentage
                               Three     Three      ended    Change   change
                               Months    Months    March 31,  2008-    2008-
                               ended     ended     2008 at   2009 at  2009 at
                              March 31, March 31,  constant  constant constant
    (Dollars in                2009 as   2008 as   exchange  exchange exchange
     thousands)               reported  reported     rates     rates    rates

    United Kingdom            $16,727    $23,704    $16,684       $43    0.3%
    South Africa                4,378      5,485      4,301       $77    1.8
    Indonesia                   3,071      2,889      2,264      $807   35.6
    China                       6,061      2,313      2,407    $3,654  151.8
    Chile                       4,102      2,301      1,820    $2,282  125.4
    Panama                      2,555      2,183      2,183      $372   17.0
    The Philippines               740        756        652       $88   13.5
    Holding companies             132        166        110       $22    0.2
    Total continuing
     operations               $37,766    $39,797    $30,421    $7,345   24.1%
    Discontinued operations
     - Mexico                       -        697        492      (492)   n/a
    Exchange rate effect                              9,581
    Total after exchange
     rate effect              $37,766    $40,494    $40,734

Use of Non-GAAP Financial Measures - EBITDA

EBITDA from continuing operations represents net profit from continuing operations before interest expense/(income) and exchange rate results, taxation, depreciation and amortization of intangible and tangible fixed assets and negative goodwill, loss/(profit) on disposal of intangible and tangible fixed assets and minority interest. EBITDA is a non-GAAP measure and does not represent and should not be considered as an alternative to net profit or cash flow as determined under generally accepted accounting principles. We believe EBITDA facilitates operating performance comparisons from period to period. We believe EBITDA may facilitate company to company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting net interest expense), taxation and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance, and other non-recurring one-time items. We further believe that EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an EBITDA measure when reporting their results.

EBITDA has limitations as an analytical tool, and you should not consider it either in isolation or as a substitute for analyzing our results as reported under Dutch GAAP. Some of these limitations are:

• EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
• EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
• EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
• EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;
• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements of those replacements; and
• other companies in our industry may calculate EBITDA differently, limiting its usefulness as a comparative measure.

Because of these limitations, EBITDA from continuing operations should not be considered as the primary measure of our operating performance or as a measure of discretionary cash available to us to invest in the growth of our business. The following is a reconciliation of net profit from continuing operations, the most directly comparable Dutch GAAP performance measure, to EBITDA from continuing operations.

    (Dollars in thousands)                  Year ended           Year ended
                                          March 31, 2009       March 31, 2008
    Net profit from continuing
     operations                              $17,929                $9,888
    Add:
    Interest expense and
     exchange rate results                     3,604                19,593
    Taxation                                  14,232                 9,359
    Depreciation and amortization
     of intangible and tangible
     fixed assets and negative goodwill       22,968                22,740
    Profit on disposal of intangible
     and tangible fixed assets                  (688)                 (749)
    Minority interest
                                               1,012                   945
    EBITDA from continuing operations        $59,057               $61,776
    Revenue from continuing operations       163,396               157,777
    EBITDA as a percentage of revenue
     from continuing operations                 36.1%                 39.2%



    (Dollars in thousands)            Three months ended  Three months ended
                                         March 31, 2009      March 31, 2008
    Net profit from continuing
     operations                               $1,040                $2,324
    Add:
    Interest expense and exchange
     rate results                              3,847                 3,678
    Taxation                                   2,969                 2,919
    Depreciation and amortization of
     intangible and tangible fixed
     assets and negative goodwill              5,036                 5,712
    Loss/(profit) on disposal of
     intangible and tangible fixed assets        247                  (675)
    Minority interest
                                                 225                   264
    EBITDA from continuing operations        $13,364               $14,222
    Revenue from continuing operations        37,766                39,797
    EBITDA as a percentage of revenue
     from continuing operations                 35.4%                 35.7%



                                      Cascal
                           Consolidated Balance Sheets 

                                                   March 31,     March 31,
                                                     2009          2008
    Amounts expressed in thousands of USD         Unaudited
    Assets
    Fixed Assets
    Intangible fixed assets                         42,860        18,424
    Tangible fixed assets                          397,593       366,357
    Financial fixed assets                          19,298        26,685
                                                   459,751       411,466
    Current Assets
    Stocks and work in progress                      5,901         2,083
    Debtors                                         51,350        54,474
    Cash at bank and in hand                        34,678        54,380
                                                    91,929       110,937
    Total Assets                                   551,680       522,403
    Shareholders' Equity & Liabilities
    Shareholders' equity                           118,214       136,726
    Minority shareholders' interest                 35,080        16,101
    Group Equity                                   153,294       152,827
    Negative goodwill                                1,210         1,232
    Provisions & deferred revenue                  112,036       126,341
    Long term liabilities                          161,812       190,190
    Current liabilities                            123,328        51,813
    Total Liabilities                              398,386       369,576
    Total Shareholders' Equity and Liabilities     551,680       522,403

SOURCE Cascal N.V.