Wednesday, July 1, 2009

comite de credit..

the things i wrote this morning....I'm so efficient... Will reward myself by going to the Ocean Aquarium at lunchtime :3


Regulatory Risk
Electricity and water tariffs set by the
Government.
By maintaining tariff at a constant level, the Government was
able to mitigate the effects of inflation on Dubai’s economy.
The tariff
adjustment set by the Government (March 2008) caused a significant increase in
the revenues from the sale of electricity.
DEWA is the sole supplier
of electricity and water to Dubai, therefore critical to the Government for the
development of Dubai.

Commodity Risk
DEWA is dependent on DUSUP
for its entire supply of natural gas and there can be no assurance that there
will be enough natural gas available to meet DEWA’s requirements.
Supplies
of natural gas in Dubai are arranged entirely by the Government through DUSUP,
which is mandated to seek to obtain sufficient gas supplies to meet all of
DEWA’s requirements.
DUSUP can tap various sources in order to meet all of
DEWA’s natural gas requirements (25-year agreement with
Dolphin)


Capacity Constraints
Any significant
misjudgment as to future demand could result in a shortfall of capacity or large
amounts of excess capacity and wasted expenditures. Operations may be
subject to delays or an inability to operate at the necessary levels.

DEWA intends to spent up to USD19 billion over the next 5 years to
meet the growing requirement for an aggressive expansion plan.
DEWA is able
to make sophisticated forecasts of peak demand, to predict the demand for
electricity at any given time and ensure an adequate
supply.


Operational/ Financial Risks

DEWA
may not be able to adequately fund its capital expenditures, since it may
require substantial amount of capital and future leverage may affect its ability
to raise additional capital.

Debt free company til 2005, has a long
strong operating history.
Borrowing by DEWA/guarantee requires the consent of
the Government
The balance sheet of DEWA has strengthened in 2008 by the
capitalization of land on its books, which was valued at over USD 5
billion.
It is diversifying it sources of funding (to not put pressure
on any single market for financing. DEWA is tapping the capital markets,
international & local bank markets and ECA markets to meet its growing
funding requirements.


Environmental
risk
-pollution, contamination, leakage may be subject to penalties as a
result of any violation of environmental regulations

Environmental
audit of DEWA’ operations conducted regularly and report submitted to Dubai
Municipality.

Til now (2009) DEWA has not been in breach of any
environmental regulation sand has implemented internet regulations that are more
strict than those required by law and awarded ISO 140000 certification

Country risk
-significant involvement through direct ownership
and regulation, may be subject to political and economic conditions (economic
and political developments affecting the Emirate and the UAE)

Dubai
has a strong and diversified economy, important commercial centre in the Middle
East
Government as invested heavily in Dubai’s infrastructure(one of its
cornerstones is the constant and reliable supply of electricity and water to
individuals, businesses, hotels or industrial zone.
Dubai’ population,
economy and infrastructure are growing, demand for water & electricity
expected to increase.




Financial
Analysis

Equity increased substantially, total assets doubled in
2008. Land was capitalized on the balance sheet of the company in the form of
Government equity.

Revenues increased from 2007 to 2008 by 51%, due
to the introduction of the new billing system applied by DEWA and validated by
the Dubai Government on water& electricity sector.

Cost
of Sale decreased from 2007, where DEWA suffered from higher fuel and gas
prices.

EBITDA in 2008 is positive (Euro 939M), compared to a
negative one in 2007 (Euro-79M) due to high turnover level(sales) and better
management and decrease of the Costs of Sales.

Services &
Personnel expenses increased again in 2008, primarily related to increasing
maintenance activities in the transmission and distribution networks reflecting
DEWA’s expanding business.
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