GGU Energy and Water Utilities Investment Overview
GGU - a privately-owned natural monopoly
GGU is the only profitable water-utilities player in Georgia with plenty of efficiency rooms
GGU is the largest privately owned water utility company in
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2 core activities:
1.
1.
Georgia
Water supply and sanitation (including wastewater collection and
processing) - Provides water to 1.4m people (1/3 of Georgia)
2016A: 522M m3
Generation of electric power - Owns 3 HPPs and has 1 HPP under
management with total installed capacity of 149.3MW. Generated
power is primarily used by GGU's water business. The excess
amount of generated power is sold to the third party clients every year
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Revenue of GEL 127.2m in 2016, +7.6% y-o-y
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EBITDA of GEL 68.5m in 2016, +11.0% y-o-y
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Company has strong execution track record & financial
strength
Management team with extensive experience in utility business
“BB-” rating affirmed by Fitch Ratings to major subsidiary of GGU -
Georgian Water and Power in 2016 (currently Georgia's sovereign rating is
"BB-" and the country ceiling is BB by Fitch)
First bond placement by utility company in Georgia (GEL 8.6m) through
Georgian Water and Power in 2015
GGU issued GEL 30m 5-year local currency bond- the largest amount ever
issued in local currency by a non-financial institution in Georgia
GGU attracted long-term IFI financing of EUR 81.5m in 2017 from FMO,
DEG and EIB. For EIB this was first loan provided directly to a private
corporate entity in Georgia
EBITDA (in GEL m) & EBITDA margin (in %)
GEL millions
CAGR'14-18
+10.5%
100
55.1%
56%
53.8%
53.7%
EBITDA growth drivers:
54%
75
52.2%
52%
50
50%
82.3
75.3
68.5
48%
61.7
25
55.3
Cost saving from reduction in technical
water losses
Subsequent savings from freed-up
46%
energy
45.2%
0
44%
2014
2,015
2016
2017F
2018F
GGU
October 2017
page 9View entire presentation