-Revenue of $84.7 million, up 10.5% at constant exchange rates and down 2.9% at current exchange rates -EBITDA of $29.5 million, up 2.0% at constant exchange rates and down 11.5% at current exchange rates -Net profit up 26% to $13.9 million -EPS up 26% to $0.45 LONDON, Nov. 10 /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 six months and the second quarter ended September 30, 2009. Cascal N.V. results are presented in U.S. dollars. Year-to-date Fiscal 2010 Results Revenue for the six months ended September 30, 2009 increased by $8.0 million or 10.5% at constant exchange rates, compared to the same period last year. This increase was the result of approximately $5.9 million contributed by the acquisitions completed last year, with the remaining $2.6 million achieved by the Company's historical portfolio (through a combination of rate increases, additional customers and higher volumes), offset by $0.5 million reduction in Panama due to prior period revenue recognition. At current exchange rates, the $8.0 million increase was offset by a $10.6 million translation effect into USD, including $8.7 million due to USD-GBP movements. -- Revenue in Chile increased by $3.9 million or 93% at constant exchange rates, compared to the same period last year. Servicomunal and Servilampa, which were acquired on June 27, 2008, contributed $2.9 million of the overall increase, and $0.7 million was contributed by the Company's operations in Northern Chile as a result of volume and rate increases. The remainder of the increase originates from the Company's operations in Santiago. -- Revenue in China increased by $3.4 million or 39% at constant exchange rates, compared to the same period last year. This increase was mainly due to the $3.0 million contribution made by Yancheng joint venture and Zhumadian subsidiary, which were acquired on April 29, 2008 and July 23, 2008, respectively. The remainder of the increase came from a combination of rate and volume increases in the Company's pre-existing operations in China. -- Revenue in South Africa increased by $0.7 million or 6.0% at constant exchange rates, compared to the same period last year, mainly as a result of a 10% rate increase implemented by the Nelspruit business and a 9% increase implemented by Siza Water, both with effect from July 2009. These increases were partially offset by lower sundry revenue for additional services in our Nelspruit subsidiary. -- Revenue in Panama decreased by $0.5 million or 8.9%, compared to the same period last year, due to $0.5 million additional revenue recognized in the six months ended September 30, 2008 which related to a prior period following the late approval by our client of a rate increase. For the six months ended September 30, 2009, EBITDA increased by $0.6 million or 2.0% at constant exchange rates, compared to the same period last year. The acquisitions completed last year contributed $2.0 million of additional EBITDA and a reduction in corporate overhead contributed a further $0.3 million. Excluding acquisitions and corporate overhead, EBITDA changes from pre-existing operations were Chile (+$0.6 million), The Philippines (+$0.2 million), China (-$0.1 million), Indonesia (-$0.3 million), South Africa (-$0.3 million), Panama (-$0.4 million) and the U.K. (-$1.4 million). The $1.4 million decline in the U.K. is due to a -2.4% real rate adjustment in the regulated business and some margin contraction in the unregulated business, together with one-off costs associated with the current five yearly rate review process ($0.2 million) and pension costs ($0.3 million). The $0.4 million reduction in Panama is in fact a $0.1 million increase offset by the impact of the prior period revenue recognition described above. Similarly, the reduction in South Africa is due to a $0.3 million bad debt recovery included in the six months ended September 30, 2008 in connection with the buy back of the previous 10% minority shareholding in our Nelspruit subsidiary. Excluding one-off items, EBITDA increased by $1.9 million or 6.6% at constant exchange rates. Please read "Use of Non-GAAP Financial Measures" for a description of EBITDA. Overall, net financial income and expense decreased by $2.0 million for the six months ended September 30, 2009, essentially as a result of the reduction of our Artesian loan balance driven by negative indexation of the retail price index in the United Kingdom. For the six months ended September 30, 2009, net profit was $13.9 million, or $0.45 per share, compared to net profit of $11.0 million, or $0.36 per share for the same period last year. The effective tax rate incurred was 23.2% compared to 41.4% in the same period last year. A change in U.K. tax law which means that dividends remitted from foreign operations are no longer subject to tax has resulted in deferred tax provisions being reversed in relation to our company in Panama. This reversal has resulted in a credit of $1.4m during the six months ended September 30, 2009 and is expected to contribute a total credit of $4.0 million for the full year to March 2010. In addition, in the six months ended September 30, 2008 we incurred a charge of $1.5 million relating to a change in the system of tax allowances for industrial buildings in the United Kingdom. In addition to these two one-off items, the underlying tax rate has continued to decline following the implementation of a more tax efficient holding company structure in February 2009. Commenting on the Company's results, Stephane Richer, Cascal Chief Executive Officer, stated, "Consistent with every quarter since our IPO in early 2008, Cascal has again delivered revenue growth at constant exchange rates. Our EBITDA margin close to 35% has remained strong and resilient in a tough operating environment and confirms our business model based upon targeted acquisitions together with organic growth of our international portfolio. Our cash flows have been solid with $29.2 million generated from operating activities and $25.0 million invested in capital expenditure net of proceeds from disposals (including $7.7 million relating to a one-time investment in our Zhumadian subsidiary). I am also especially pleased that our financial performance has not been at the expense of the quality of the services that we provide with our U.K. company, Bournemouth and West Hampshire Water, recently announced as the number one ranked water company for overall performance by the U.K. regulator." As of September 30, 2009, the consolidated balance sheet shows cash and cash equivalents of $38.1 million, an improvement of $3.5 million during the six months ended September 30, 2009. Results for Second Quarter Ended September 30, 2009 Revenue for the three months ended September 30, 2009 increased by $3.3 million or 8.2% at constant exchange rates, compared to the same period last year. The $3.3 million increase was the result of $2.2 million contributed by the acquisitions completed last year, with the remaining $1.1 million achieved by the Company's historical portfolio. At current exchange rates, the $3.3 million increase was offset by a $3.8 million translation effect into USD, including $3.3 million due to USD-GBP movements. For the three months ended September 30, 2009, EBITDA increased by $0.3 million or 2% at constant exchange rates, compared to the same period last year. The EBITDA increase was essentially contributed by the Company's operations in Chile (+$0.7 million), China (+$0.2 million), Panama (+$0.2 million) and The Philippines (+$0.1 million) offset by reductions in the UK (-$1.1 million), South Africa. (-$0.4 million) and Indonesia (-$0.1 million). Additionally corporate overhead reduced by $0.7 million which was mainly the result of decreased costs of Sarbanes-Oxley compliance and a reduction in legal and other professional fees. Overall, net financial income and expense increased by $0.8 million for the quarter ended September 30, 2009. A reduction in interest expense of $3.0 million due to the reduction of our Artesian loan balance driven by negative indexation of the retail price index in the United Kingdom was offset by a reduction in exchange rate results of $3.0 million. The remaining movement is largely due to the recognition in the six months to September 30, 2008 of $0.6 million accrued interest income due under the terms of a loan advanced to the former minority shareholder in our Nelspruit subsidiary. For the quarter ended September 30, 2009, net profit was $7.4 million, or $0.24 per share, compared to net profit of $5.5 million, or $0.18 per share for the same period last year. Guidance for Fiscal Year ending March 31, 2010 With regard to the guidance for the year 2009/10 issued last June, the Company now expects higher EPS of approximately $0.70, primarily due to the much improved effective tax rate, with revenue and EBITDA expected marginally below the initial guidance levels of $174 million and $63 million respectively. Recent Business Highlights -- In September, the Company named Mark Thurston, age 45, as its new Chief Financial Officer. Most recently, Thurston served as UK Finance Director for Colt Telecommunications, a $2 billion revenue B2B alternative network provider of voice and data services. Prior to that, he served as Deputy Finance Director for Xansa PLC, an information technology outsourcing and business process management company. -- Dividend of $0.09 per share was paid on September 30, 2009. -- In October, Cascal announced that its United Kingdom subsidiary, Bournemouth and West Hampshire Water (BWHW), has been ranked number one out of all UK water companies in "Overall Performance" in the UK regulator's annual Service and Delivery Assessment Report. -- In October, the last of four promissory notes from the Government of Belize which formed deferred consideration following the sale of the Company's 83% interest in Belize Water Services Limited to the Government of Belize was paid. Each $2.5 million promissory note was paid on time and in full. Conference Call The Company will host a conference call at 9 a.m. Eastern Time / 2 p.m. GMT on November 11, 2009. On the call, Stephane Richer, CEO of Cascal, and Mark Thurston, 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), (404) 665-9923 (international), (0800) 032-3836 (UK Freephone). The access code for all callers is 38595702. The call will also be available via webcast at http://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 November 11, 2009 at 9.45 a.m., ET/2.45 p.m. BST through November 11, 2009 at 4.59 a.m. BST. To access the replay, please call (800) 642-1687 (local) or +1(706) 645-9291 (international) and enter the following code: 38595702. About Cascal N.V. Cascal provides water and wastewater services to its customers in seven countries: the United Kingdom, South Africa, Indonesia, China, Chile, Panama and The Philippines. Cascal's customers are predominantly homes and businesses representing a total population of approximately 4.5 million. Forward-looking statements This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future of our operations in Panama. 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, 2009, filed with the SEC on July 1, 2009. 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 / Tables follow Consolidated Statements of Income Six months ended September 30, 2009 Amounts, except shares and per share amounts, expressed Continuing Discontinued in thousands of operations operations Total USD Unaudited Unaudited Unaudited --------------- ---------- ---------- ---------- Revenue 84,717 - 84,717 Operating Expenses Raw and auxiliary materials and other external costs 22,095 - 22,095 Staff costs 18,773 - 18,773 Depreciation and amortization of intangible and tangible fixed assets and negative goodwill 12,191 - 12,191 Profit on disposal of intangible and tangible fixed assets (1,275) - (1,275) Other operating charges 14,333 - 14,333 ------ -- ------ 66,117 - 66,117 ------ -- ------ Operating Profit 18,600 - 18,600 ------ -- ------ Gain on disposal / termination of subsidiary - 248 248 Net Financial Income and Expense Exchange rate results 719 - 719 Interest income 433 - 433 Interest expense (1,327) - (1,327) ------ -- ------ (175) - (175) ---- -- ---- Profit before Taxation 18,425 248 18,673 Taxation (4,270) (69) (4,339) ------ --- ------ Profit after Taxation 14,155 179 14,334 Minority Interest (450) - (450) ---- -- ---- Net Profit 13,705 179 13,884 ------ --- ------ Earnings per share - Basic and Diluted 0.44 0.01 0.45 Weighted average number of shares - Basic and Diluted 30,566,091 30,566,091 30,566,091 ---------------- ---------- ---------- ---------- Six months ended September 30, 2008 Amounts, except shares and per share amounts, expressed Continuing Discontinued in thousands of operations operations Total USD Unaudited Unaudited Unaudited --------------- ---------- ---------- ---------- Revenue 87,256 - 87,256 Operating Expenses Raw and auxiliary materials and other external costs 20,531 - 20,531 Staff costs 18,401 - 18,401 Depreciation and amortization of intangible and tangible fixed assets and negative goodwill 12,366 - 12,366 Profit on disposal of intangible and tangible fixed assets (804) - (804) Other operating charges 14,955 - 14,955 ------ -- ------ 65,449 - 65,449 ------ -- ------ Operating Profit 21,807 - 21,807 ------ -- ------ Gain on disposal / termination of subsidiary - 251 251 Net Financial Income and Expense Exchange rate results 3,262 - 3,262 Interest income 2,096 8 2,104 Interest expense (7,543) (1) (7,544) ------ -- ------ (2,185) 7 (2,178) ------ - ------ Profit before Taxation 19,622 258 19,880 Taxation (8,162) (69) (8,231) ------ --- ------ Profit after Taxation 11,460 189 11,649 Minority Interest (608) - (608) ---- -- ---- Net Profit 10,852 189 11,041 ------ --- ------ Earnings per share - Basic and Diluted 0.35 0.01 0.36 Weighted average number of shares - Basic and Diluted 30,566,007 30,566,007 30,566,007 ---------------- ---------- ---------- ---------- Consolidated Statements of Income Three months ended September 30, 2009 Amounts, except shares and per share amounts, expressed Continuing Discontinued in thousands of operations operations Total USD Unaudited Unaudited Unaudited --------------- ---------- ---------- ---------- Revenue 43,822 - 43,822 Operating Expenses Raw and auxiliary materials and other external costs 11,598 - 11,598 Staff costs 10,087 - 10,087 Depreciation and amortization of intangible and tangible fixed assets and negative goodwill 6,248 - 6,248 Profit on disposal of intangible and tangible fixed assets (40) - (40) Other operating charges 6,960 - 6,960 ----- -- ----- 34,853 - 34,853 ------ -- ------ Operating Profit 8,969 - 8,969 ----- -- ----- Gain on disposal of subsidiary - 248 248 Net Financial Income and Expense Exchange rate results 467 - 467 Interest income 211 - 211 Interest expense (895) - (895) ---- -- ---- (217) - (217) ---- -- ---- Profit before Taxation 8,752 248 9,000 Taxation (1,259) (69) (1,328) ------ --- ------ Profit after Taxation 7,493 179 7,672 Minority Interest (284) - (284) ---- -- ---- Net Profit 7,209 179 7,388 ----- --- ----- Earnings per share - Basic and Diluted 0.23 0.01 0.24 Weighted average number of shares - Basic and Diluted 30,566,174 30,566,174 30,566,174 ---------------- ---------- ---------- ---------- Three months ended September 30, 2008 Amounts, except shares and per share amounts, expressed Continuing Discontinued in thousands of operations operations Total USD Unaudited Unaudited Unaudited --------------- ---------- ---------- ---------- Revenue 44,294 - 44,294 Operating Expenses Raw and auxiliary materials and other external costs 10,498 - 10,498 Staff costs 9,531 - 9,531 Depreciation and amortization of intangible and tangible fixed assets and negative goodwill 6,441 - 6,441 Profit on disposal of intangible and tangible fixed assets (4) - (4) Other operating charges 7,669 - 7,669 ----- -- ----- 34,135 - 34,135 ------ -- ------ Operating Profit 10,159 - 10,159 ------ -- ------ Gain on disposal of subsidiary - 248 248 Net Financial Income and Expense Exchange rate results 3,443 - 3,443 Interest income 1,554 - 1,554 Interest expense (4,410) - (4,410) ------ -- ------ 587 - 587 --- -- --- Profit before Taxation 10,746 248 10,994 Taxation (5,067) (69) (5,136) ------ --- ------ Profit after Taxation 5,679 179 5,858 Minority Interest (310) - (310) ---- -- ---- Net Profit 5,369 179 5,548 ----- --- ----- Earnings per share - Basic and Diluted 0.17 0.01 0.18 Weighted average number of shares - Basic and Diluted 30,566,007 30,566,007 30,566,007 ---------------- ---------- ---------- ---------- Revenue by segment Three Three Six Six months months months months ended ended ended ended September September September September Amounts expressed 30, 30, 30, 30, in thousands of 2009 2008 2009 2008 USD Unaudited Unaudited Unaudited Unaudited ----------------- --------- --------- --------- --------- United Kingdom $20,432 $23,694 $39,302 $47,898 South Africa 6,392 6,271 11,749 11,648 Indonesia 3,551 3,639 6,646 7,050 China 6,247 5,245 12,137 8,670 Chile 3,790 2,111 8,092 4,707 Panama 2,480 2,551 5,065 5,562 The Philippines 755 709 1,468 1,470 Holding Companies 175 74 258 251 Total $43,822 $44,294 $84,717 $87,256 ----- ------- ------- ------- ------- Revenue ------- Dutch GAAP Six Six Six months Percentage months months ended Change change ended ended September 30, 2008- 2008- September September 2008 at 2009 at 2009 at (Dollars 30, 2009 30, 2008 constant constant constant in thousands) as as exchange exchange exchange -------------- reported reported rates rates rates United Kingdom $39,302 $47,898 $39,173 $129 0.3% South Africa 11,749 11,648 11,080 669 6.0% Indonesia 6,646 7,050 6,300 346 5.5% China 12,137 8,670 8,757 3,380 38.6% Chile 8,092 4,707 4,194 3,898 92.9% Panama 5,065 5,562 5,562 (497) (8.9)% The Philippines 1,468 1,470 1,353 115 8.5% Holding companies 258 251 253 5 2.0% --- --- --- - --- Total operations $84,717 $87,256 $76,672 $8,045 10.5% ------- ------- ------- ------ ---- Exchange rate effect 10,584 ------ Total after exchange rate effect $84,717 $87,256 $87,256 -------------- ------- ------- ------- Revenue ------- Dutch GAAP Three Three Three months Percentage months months ended Change change ended ended September 30, 2008- 2008- September September 2008 at 2009 at 2009 at (Dollars 30, 2009 30, 2008 constant constant constant in thousands) as as exchange exchange exchange -------------- reported reported rates rates rates United Kingdom $20,432 $23,694 $20,410 $22 0.1% South Africa 6,392 6,271 6,119 273 4.5% Indonesia 3,551 3,639 3,342 209 6.3% China 6,247 5,245 5,275 972 18.4% Chile 3,790 2,111 2,001 1,789 89.4% Panama 2,480 2,551 2,551 (71) (2.8)% The Philippines 755 709 669 86 12.9% Holding companies 175 74 118 57 50.4% --- -- --- -- ---- Total operations $43,822 $44,294 $40,485 $3,337 8.2% ------- ------- ------- ------ --- Exchange rate effect 3,809 ----- Total after exchange rate effect $43,822 $44,294 $44,294 ------------ ------- ------- ------- Use of Non-GAAP Financial Measures - EBITDA EBITDA represents net profit 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 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, the most directly comparable Dutch GAAP performance measure, to EBITDA. Six months ended Six months ended (Dollars in thousands) September 30, 2009 September 30, 2008 --------------------- --------------------- --------------------- Net profit $13,884 $11,041 Add: Interest (income)/expense and exchange rate results 175 2,178 Gain on disposal/termination of subsidiary (248) (251) Taxation 4,339 8,231 Depreciation and amortization of intangible and tangible fixed assets and negative goodwill 12,191 12,366 (Profit)/loss on disposal of intangible and tangible fixed assets (1,275) (804) Minority interest 450 608 --- --- EBITDA $29,516 $33,369 ------- ------- Revenue $84,717 $87,256 ------- ------- EBITDA as a percentage of revenue 34.8% 38.2% ---- ---- Three months ended Three months ended (Dollars in thousands) September 30, 2009 September 30, 2008 --------------------- --------------------- --------------------- Net profit $7,388 $5,548 Add: Interest (income)/expense and exchange rate results 217 (587) Gain on disposal of subsidiary (248) (248) Taxation 1,328 5,136 Depreciation and amortization of intangible and tangible fixed assets and negative goodwill 6,248 6,441 Profit on disposal of intangible and tangible fixed assets (40) (4) Minority interest 284 310 --- --- EBITDA $15,177 $16,596 ------- ------- Revenue $43,822 $44,294 ------- ------- EBITDA as a percentage of revenue 34.6% 37.5% ---- ---- Consolidated Balance Sheets September 30, March 31, Amounts expressed in 2009 2009 thousands of USD Unaudited -------------------- --------- ---- Assets Fixed Assets Intangible fixed assets 43,027 42,860 Tangible fixed assets 443,338 397,593 Financial fixed assets 22,812 19,298 ------ ------ 509,177 459,751 ------- ------- Current Assets Stocks 2,396 2,174 Work in progress 4,087 3,727 Debtors 62,686 51,350 Cash at bank and in hand 38,131 34,678 ------ ------ 107,300 91,929 ------- ------ Total Assets 616,477 551,680 ------- ------- Shareholders' Equity & Liabilities Shareholders' equity 137,838 118,214 Minority shareholders' interest 34,995 35,080 ------ ------ Group Equity 172,833 153,294 ------- ------- Negative goodwill 1,182 1,210 Provisions 66,279 60,328 Deferred revenue 61,472 51,708 Long term liabilities 235,051 161,812 Current liabilities 79,660 123,328 ------ ------- Total Liabilities 443,644 398,386 ------- ------- Total Shareholders' Equity and Liabilities 616,477 551,680 DATASOURCE: Cascal N.V. CONTACT: Jeffrey Goldberger, +1-212-896-1249, , or Yemi Rose, +1-212-896-1233, , both of KCSA Strategic Communications Web Site: http://www.cascal.co.uk/

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