Delays and low winds blamed

As it warned in August, Babcock and Brown Wind Partners (BBWP) fell short of its targeted results for fiscal year 2005-06 to the end of June, returning a loss of $16.2 million compared with a $2.67 million profit the previous year. The global wind fund manager had expected a 2005-06 profit of $13.5 million. Revenue at $73 million fell short of the $77 million projected and earnings before tax and financials of $51.8 million missed the $57.1 million target.

Even so, BBWP remains positive and its shareholders apparently still enamoured by the company's aggressive acquisition strategy, which has seen its portfolio increase from four operational wind farms when it listed in October 2005 to interests which total 468 MW in 19 operational wind farms as of July.

Delays in the acquisition of the Olivio wind farms in Spain and the construction of the Niederrhien wind farm in Germany, combined with low wind conditions in May and June across its European portfolio and at Lake Bonney 1 in Australia were to blame for the deficit, says BBWP. Together the problems, labelled as non-recurring items, cut $18 million from expected revenue, with low winds accounting for $8.7 million of that.

The shortfall was offset by $14 million in unexpected income from operations, namely pre-commissioning revenues from the Alinta wind farm in Australia, higher wind power purchase prices in Spain, the contribution from the 27 MW Eifel wind farm in Germany, and $5.3 million paid to it by turbine manufacturer Vestas to compensate the company for loss of revenue caused by commissioning issues at Alinta.

BBWP says it is starting the 2007 financial year in a strong position, with a portfolio comprising an interest in or agreement to buy 23 wind farms, spread across Europe, the US, and Australia, totalling 1150 MW. "The 2007 financial year will be a year in which security holders will benefit from BBWP's acquisition program and diversification strategy," vows the company's Peter O'Connell.

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