Alterra Power Announces Results for the Quarter Ended June 30, 2013
(under IFRS and all amounts in US dollars unless otherwise stated)
VANCOUVER, Aug. 12, 2013 /CNW/ - Alterra Power Corp. (TSX: AXY) is pleased to
report its financial and operating results for the three and six months ended
June 30, 2013. For further information on these results please see Alterra's
Condensed Consolidated Interim Financial Statements and Management's
Discussion and Analysis.
Alterra consolidates 100% of the HS Orka and Soda Lake operations and accounts
for its interests in the Toba Montrose and Dokie 1 facilities as equity
investments. Alterra's results are sometimes disclosed as Alterra's "net
interest", which means the results that Alterra would have reported if each of
HS Orka (66.6%), Toba Montrose (40%), Dokie 1 (51%) and Soda Lake (100%) had
been reported in accordance with Alterra's actual share of ownership.
Management believes that net interest reporting provides the clearest view of
the Company's performance.
Highlights for the current quarter and subsequent period include:
-- Increased revenue and EBITDA (net interest): Revenue (including
business interruption proceeds) was $22.1 million and EBITDA
was $10.8 million in the quarter, up 5% and 12% respectively
from the comparative quarter, primarily due to increased
earnings at HS Orka and Dokie 1.
-- Reliable power generation: Alterra's net interest on power
generated during the quarter was 315,456 MWh of clean power
during the quarter, achieving 92% of its budgeted generation
despite the Montrose hydro facility being offline the entire
quarter for repairs. Generation would have been 103% of budget
had the Montrose plant not been offline. Total generation from
plants operated by Alterra was 544,620 MWh.
-- Mid-year distributions from projects: Mid-year dividends were
declared at both Toba Montrose and Dokie 1 totalling $4.4
million in the quarter, with Alterra's share being $2.0
million. Blue Lagoon also declared a dividend during the
quarter with HS Orka's share being $1.8 million.
-- Reduction in overheads: General and administrative expenses
declined by 32% against the comparative quarter primarily due
to lower recurring corporate overhead costs and fluctuations in
the pension liability.
-- Montrose rockslide repair update: Repair work has progressed
and return to service is now expected in the second half of
2013. Property and business insurance proceeds have
substantially funded the repairs.
-- Completion of South America partnership: Alterra finalized its
partnership with Energy Development Corporation ("EDC") to
further geothermal projects in Chile and Peru, as EDC completed
its due diligence, and completed definitive documentation.
-- Jimmie Creek project development: Subsequent to the quarter
ended June 30, 2013 a Limited Notice to Proceed was signed with
SNC Lavalin on the Upper Toba Valley (Jimmie Creek) Hydro
project in British Columbia.
-- New development opportunities: Alterra continues to pursue new
project options and subsequent to the quarter has entered into
an exclusivity agreement for a wind project in the United
John Carson, Alterra's CEO, said, "We're pleased to report solid progress on
the Montrose repair, accompanied by another quarter of strong asset
performance and reductions in administrative costs. I'm confident we are
well-positioned for new opportunities as well as meeting the current
challenges before us in the remainder of 2013 and into 2014."
The following table shows key financial information extracted from the
(expressed in thousands of US dollars, except for generation)
Dokie Soda Exploration
HS Orka Montrose 1 Lake and Head Interest
(66.6%) (40%) (51%) (100%) Office Total Results
(MWh) 202,604 63,975 32,885 15,992 - 315,456 320,202
Revenue $ 9,373 $ 6,233 $ 3,535 $ 1,022 $ - $ 20,163 $ 15,096
Proceeds - 1,936 - - - 1,936 -
(Loss) 1,688 4,117 1,321 (539) - 6,587 1,996
EBITDA ((a)) 3,341 7,059 2,018 59 (1,712) 10,765 12,440
Dokie Soda Net
HS Orka Montrose 1 Lake and Head Interest Consolidated
(66.6%) (40%) (51%) (100%) Office Total Results
(MWh) 191,180 85,271 33,854 15,502 - 325,807 302,559
Revenue $ 8,837 $ 8,222 $ 3,110 $ 974 $ - $ 21,143 $ 14,242
(Loss) 2,491 5,679 561 (614) - 8,117 3,127
EBITDA ((a)) 3,617 6,947 1,356 80 (2,463) 9,537 11,350
Note (a) - Here and elsewhere, EBITDA is defined by Alterra as earnings before
interest, taxes, foreign exchange, depreciation and amortization, as well as
before deductions for change in fair value of bonds payable and derivatives,
foreign exchange gain (loss), write off of development costs and other income
(expense) except business interruption proceeds, amortization of below market
contracts, and value assigned to options granted less share of income (loss)
of equity accounted investees plus the Company's interest in EBITDA of its
equity accounted investees. Alterra discloses EBITDA as it is a measure used
by analysts and by management to evaluate Alterra's performance. As EBITDA is
a non-IFRS measure, it may not be comparable to EBITDA calculated by others.
In addition, as EBITDA is not a substitute for net earnings, readers should
consider net earnings in evaluating Alterra's performance. For a
reconciliation of consolidated EBITDA to Alterra's consolidated financial
statements refer to the Company's Management's Discussion and Analysis for the
three and six months ended June 30, 2013.
Revenue was up 6% for the quarter ended June 30, 2013 from the comparative
quarter ($15.1 million compared to $14.2 million) due to increased generation
at HS Orka. Gross profit fell by 36% as a result of increased maintenance
spend on two producing wells at HS Orka.
Alterra recorded a net loss of $2.3 million for the current quarter compared
to a net loss of $9.7 million for the comparative quarter, an improvement of
$7.4 million. Non-cash items contributing to this result include:
-- A positive change in the fair value of bonds and derivatives of
$5.4 million, related primarily to fluctuation in forecasted
-- A negative movement of $4.2 million related to foreign exchange
($2.4 million loss in the quarter versus a $1.8 million gain in
the comparative quarter.)
Alterra had consolidated cash and cash equivalents of $43.5 million at the end
of the period, up from $39.2 million at December 31, 2012, with the increase
primarily related to draws on the Company's revolving line of credit.
Net Interest Results
Alterra's net interest in generation, revenue and EBITDA increased quarter on
quarter (including proforma results from Montrose Creek) due to new sales
contracts at HS Orka and the timing of wind generation at Dokie 1 as the
pricing of the power purchase agreement fluctuates month over month.
Iceland Operations (66.6% Interest)
The 100 MW Reykjanes plant generated 120,729 MWh of electricity (96% of
budget), and the 72 MW Svartsengi plant generated 81,875 MWh of electricity
(112% of budget), and continued to supply thermal energy for district heating.
The work-over of an existing well was completed at HS Orka's Reykjanes
facility during the second quarter and initial indications are positive with
respect to increased capacity.
Toba Montrose Operations (40% Interest)
The 146 MW East Toba River facility generated 63,975 MWh of electricity, or
110% of forecasted generation. Although the Montrose facility was offline for
repairs, the measured water flow for purposes of business interruption
insurance payments (attributed generation) is also 110% of budget.
On December 13, 2012 a naturally occurring rockslide damaged a 300 meter
section of the five kilometer penstock (which supplies water from the intake
to the power generating plant) at the Montrose facility. The penstock repairs
at the Montrose hydro facility continued in Q2 2013 with excavation for the
replacement of the 300 meter penstock segment and delivery of the replacement
penstock to the site. Installation of the replacement penstock commenced in
July 2013 and the Montrose hydro facility is expected to be back in service in
the second half of 2013. Property and business interruption proceeds were
received by the insurer during the quarter.
Dokie 1 Operations (51% Interest)
The 144 MW Dokie 1 wind farm generated 32,885 MWh of electricity for the
quarter, or 95% of budget. Revenue for the current quarter increased over
the comparative quarter due to the timing of wind generation as pricing
fluctuates month to month in the power purchase agreement
Soda Lake Operations (100% Interest)
The 15 MW Soda Lake geothermal plant generated 15,992 MWh of electricity for
the current quarter, or 96% of budget.
Expansion and Development Projects
Alterra has agreed to purchase for approximately $7.2 million a 10% of
interest in a 50 MW solar generation project built in Ontario by First Solar,
Inc., ABW Solar. Alterra will serve as the managing partner for ABW Solar.
In April 2013 the project entered commercial operations and Alterra together
with our partner General Electric Energy Financial Services and First Solar
Inc. are currently in late-stage negotiations with lenders for the required
debt financing and expect the project to close in the third quarter of 2013.
Alterra is currently finalizing plant design for the Jimmie Creek project and
in July 2013 signed a limited notice to proceed with SNC Lavalin who will
provide further pre-construction services. Alterra also renegotiated certain
terms of the Power Purchase Agreement with BC Hydro, and expects to execute an
amendment to the agreement in the third quarter of 2013. The revised
agreement will cover the Jimmie Creek project only, at a nameplate capacity of
62 MW with projected annual firm energy of 114 GWh with a May 1, 2016
completion date. Alterrawill examine the possibility of constructing the
Upper Toba project at a later date under a future call for power.
Preparations continue for the two expansions at the Reykjanes plant that would
increase capacity to 180 MW and annual average generation by approximately
700,000 MWh. The key matters remaining prior to construction are concluding a
power purchase agreement, obtaining project financing and confirmation of
resource. Alterra has commenced a reinjection program at the Reykjanes field,
and will refine the timeline for the Reykjanes expansion pending results from
Alterra holds a 51% interest in a planned expansion of the Dokie 1 wind farm
("Dokie 2") with projected additions to capacity of up to 156 MW. During the
quarter Alterra continued to collect data, conduct engineering work and
perform other studies to complete the assessment of the project.
In July 2013 Alterra completed an agreement with EDC for the further
development of the Mariposa project in Chile and the Crucero, Loriscota, and
Tutupaca Norte concessions in Peru (Peruvian assets) on a joint basis.
Under the terms of the joint venture agreement EDC will be entitled to earn a
70% interest by funding $58.3 million in project expenditures at Mariposa and
$8.0 million on the Peruvian concessions. Subsequent project equity
contributions and all economic sharing would be on a pro rata basis between
the partners. On completion of the transaction control over the Mariposa
project and the Peruvian assets were transferred to EDC, and in subsequent
periods the projects will be recorded as equity investments by Alterra.
Alterra continues to advance other early stage geothermal projects in Italy
and Peru, including exploration field work, data assessment and continued
community consultations. Alterra also continues to advance its British
Columbia hydro projects in 2013 through collection of hydrology data for the
Bute Inlet project and other early stage run of river and pumped storage hydro
projects. In Iceland, Alterra began an environmental assessment on the
Bulandsvirkjun hydroelectric project.
Alterra entered into a solar partnership with Greenbriar Capital Corp.
("Greenbriar"), AG Solar One in Puerto Rico. Subsequent to the quarter,
Alterra and Greenbriar Capital Corp. mutually agreed to end efforts to
finalize next-stage partnership arrangements. Alterra will have no ownership
stake in the development project going forward, and all amounts contributed to
the partnership by Alterra will be returned.
|Alterra Power will host a conference call to discuss financial and operating results on Tuesday, August 13, 2013 at
11:30 am ET (8:30 am PT). |
|North American participants dial 1-888-390-0605 and International participants dial 1-416-764-8609, the conference ID
is 51380004. The call |
|will also be broadcast live on the Internet at
|The call will be available for replay for one week after the call by dialing 1-416-764-8677 and entering replay PIN
Cautionary Note regarding Forward-Looking Statements and Information
Certain statements included in this news release may contain information that
is forward-looking within the meaning of certain securities laws, including
information and statements regarding prospective results of operations,
financial position, cash flows or growth potential. These statements are based
on factors or assumptions that were applied in drawing a conclusion or making
a forecast or projection, including assumptions based on historical trends,
current conditions and expected future developments. Since forward-looking
statements relate to future events and conditions, by their very nature they
require making assumptions and involve inherent risks and uncertainties.
Alterra cautions that although it is believed that the assumptions are
reasonable in the circumstances, these risks and uncertainties give rise to
the possibility that actual results may differ materially from the
expectations set out in the forward-looking statements. Material risk factors
include those set out in the management's discussion and analysis section of
Alterra's most recent annual report and quarterly report, and in Alterra's
Annual Information Form. Given these risks, undue reliance should not be
placed on these forward-looking statements, which apply only as of their
dates. Other than as specifically required by law, Alterra undertakes no
obligation to update any forward-looking statements or information to reflect
new information, subsequent or otherwise.
SOURCE Alterra Power Corp.
Peter Lekich, Corporate Communications Alterra Power Corp. Phone: 604.235.6719
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-0- Aug/13/2013 05:01 GMT
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