Alterra Power Announces Audited Results for the Year Ended December 31, 2012
(under IFRS and all amounts in US dollars unless otherwise stated)
TSX : AXY
VANCOUVER, March 27, 2013 /PRNewswire/ – Alterra Power Corp. (TSX: AXY)
(“Alterra”) today is pleased to provide an update on its operations and
to report its financial and operating results for the year ended
December 31, 2012. For further information on these results please see
Alterra’s Consolidated Financial Statements (“consolidated results”)
and Management’s Discussion and Analysis.
Alterra consolidates 100% of the results of operations at HS Orka and
Soda Lake, while Alterra’s interests in the Toba Montrose run of river
hydro facility and the Dokie 1 wind facility are accounted for as
equity investments. In certain statements in this news release,
Alterra’s results are disclosed as Alterra’s “net interest”, which
means the effective portion of results that Alterra would have reported
if each of HS Orka (75% for 2 months of the year and 66.6% for the
remaining 10 months), Toba Montrose (40%), Dokie 1 (51%) and Soda Lake
(100%) had been reported in accordance with Alterra’s actual share of
ownership at December 31, 2012 and for the twelve months then ended.
Management believes that net interest reporting provides the clearest
view of Alterra’s performance.
Highlights for the year include:
-- Alterra's net interest in revenue for the year was $87.2 million and net interest in EBITDA was $37.0 million. -- Our gross earnings remained steady at 24% of revenues for the year, marginally down from 25% in the previous six-month reporting period. -- Power production from Alterra's six power plants of 2,250,804 MWh was at 98% of budgeted generation (94% of long-term forecast annual generation, which does not take into account planned outages), with consistently strong performances at the Svartsengi and Reykjanes geothermal plants offset by lower than forecast production from the Soda Lake geothermal plant, Toba Montrose and Dokie 1 wind farm. Alterra's net interest in generation totaled 1,316,004 MWh. -- HS Orka received cash of ISK 4.7 billion ($37.5 million) from the issuance of shares to Alterra's partner in HS Orka, a group of Icelandic pension funds ("JarÃ°varmi"). JarÃ°varmi now holds a 33.4% interest in HS Orka, with Alterra holding 66.6%. -- During the year C$11.0 million in dividends were declared by the Toba Montrose and the Dokie 1 facilities, of which Alterra received C$4.8 million. -- Alterra continued to advance the Upper Toba Hydro project (consisting of the Upper Toba and Jimmie Creek projects), through continued assessment of project economics and performance of drilling and seismic testing on both the Upper Toba and the Jimmie Creek projects. Following the results of this work Alterra plans to advance only the 62 MW Jimmie Creek project in order to optimize project economics. Construction of Jimmie Creek is planned to commence in the summer of 2013. Further analysis will be performed on the Upper Toba project during 2013. -- Alterra entered into an agreement with Energy Development Corporation ("EDC"), a Philippines-based global leader in the geothermal power industry, which may be advanced into partnerships for the development of the Mariposa geothermal project in Chile and five geothermal concessions in Peru. The terms allow EDC to earn 70% interests in the partnerships in return for funding the next $58.3 million of expenditures at Mariposa and the next $8.0 million in Peru. Alterra expects final arrangements to be completed within the first half of 2013.
-- Effective April 1, 2013, Paul Rapp has been appointed Vice President, Wind and Geothermal Power and Murray Kroeker has been promoted to the position of Vice President, Solar Power and Engineering. Together with Jay Sutton, Vice President, Hydro Power, Mr. Rapp and Mr. Kroeker will assume overall responsibility for Alterra's existing operations and development projects, replacing Bruce Ripley, Chief Operating Officer, who has resigned and will be taking a leadership position with Discover Energy, effective April 1. -- A major rockslide occurred at Toba Montrose in December 2012 affecting the Montrose penstock. Repairs are expected to be completed by the summer of 2013. Repairs and business interruption costs are fully insured (subject to policy deductibles).
John Carson, Alterra’s CEO, said, “I’m pleased to report another solid
year of operational performance, demonstrating again the quality of our
assets and our team. We have recently reduced our overhead costs and
development expenses to improve our net cash flow from operations,
which will enable us to focus our capital only on the most attractive
opportunities. We are well equipped to advance our growth projects in
2013. I’d also like to thank Bruce Ripley for his many contributions as
Alterra’s COO, and on behalf of the Company we wish him the best
success at his new position.”
The following table shows Alterra’s net interest in selected operating
and financial results for the year, in addition to key financial
information extracted from the consolidated results.
(expressed in thousands of US dollars, except for production)
HS Toba Exploration Orka* Montrose Soda and Head Net (75% - (40%) Dokie 1 Lake Office Interest Consolidated 66.6%) (51%) (100%) Total Results Production 835,352 264,564 64,421 - (MWh) 151,667 1,316,004 1,292,008 Total $ $ $ $ $ Revenue 38,560 27,238 17,034 4,406 - $ 87,238 $ 61,112 Gross 11,904 15,248 (2,982) - Profit 6,480 30,650 14,524 EBITDA (a), (b) 16,440 20,463 10,550 (614) (9,884) 36,955 44,692 Long Term 93,406 185,894 - 129,194 Debt 90,297 498,791 269,443 Cash 2,458 11,830 - 218 Interest Paid 6,219 20,725 3,908 Total Assets 712,530 Total Liabilities 348,483 Cash and Cash Equivalents 39,211 Working Capital 29,300
(a)EBITDA is defined by Alterra as earnings before interest, taxes, foreign exchange, depreciation and amortization, as well as before deductions for other gains and losses, 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. (b) For a reconciliation of consolidated EBITDA to Alterra's consolidated financial statements refer to the Company's Management's Discussion and Analysis for the year ended December 31, 2012. * 2 months of results at 75% and 10 months at 66.6%
Due to a change in year-end, the timing of the acquisitions of Toba
Montrose and Dokie 1 and the change of ownership of HS Orka, the
following proforma results represent what Alterra’s net interest in the
operating facilities would have been had Alterra reported the results
representing Alterra’s ownership percentage in effect as at December
31, 2012 of HS Orka (66.6%), TMGP (40%), DGP (51%), and Soda Lake
facility (100%) for the twelve months ended December 31, 2012 and 2011.
Pro Forma Information
For the 12 months ended HS Orka Toba Montrose Dokie 1 Soda Lake December 31, 2012 (66.6%) (40%)(a) (51%)(a) (100%)(a) Total Production (MWh) 817,459 264,564 151,667 64,421 1,298,111 Revenue $ 38,367 $ 27,238 $ 17,034 $ 4,406 87,045 EBITDA (b, c) 15,214 20,463 10,550 (614) 45,613 For the 12 months ended HS Orka Toba Montrose Dokie 1 Soda Lake December 31, 2011 (66.6%) (40%) (51%) (100%) Total Production (MWh) 838,292 254,095 167,557 71,970 1,331,914 Revenue $ 44,516 $ 25,830 $ 16,650 $ 5,163 92,159 EBITDA (b, c) 15,369 19,011 10,748 949 46,077
(a) - Actual results for the year ended December 31, 2012 (b) - EBITDA is a non-GAAP measure as defined above. (c) - This financial information has been prepared from the financial results of each operating facility. This information has not been audited or reviewed by Alterra's auditors and is purely provided for additional comparative information only.
Generation remained consistent in 2011 and 2012, with only a marginal
decrease of 2% on a pro forma basis in 2012 primarily related to the
expiration of a 35 MW contract in October 2011 at HS Orka, lower than
expected winds at Dokie as well as planned maintenance activities and
delays in bringing a well back online at the Soda Lake facility. This
was offset in part by an increase in generation at the Toba Montrose
facility due to a 4% increase in water flow in 2012.
Revenue from both the Toba Montrose and Dokie 1 wind facility was higher
than 2011 on a pro forma basis in 2012 due to an uplift in the firm
energy price for both facilities in 2012, off-set by reduced revenue
related to the contract expiry mentioned above coupled with a weakening
of the Icelandic krona against the US dollar, resulting in a net 5%
decrease in revenue (on a net interest consolidated basis).
Year on year EBITDA was essentially unchanged from 2011.
Iceland Operations (66.6% Interest)
The 100 MW Reykjanes plant generated 760,770 MWh of electricity (95% of
forecast), and the 72 MW Svartsengi plant generated 466,817 MWh of
electricity (101% of forecast), and continued to supply thermal energy
for district heating. A drilling program for two new production wells
and one work over well at the Reykjanes reservoir commenced in late
2012. The new capacity expected to result from the drilling will be
used for the planned 80 MW expansion and as reserve capacity for the
existing 100 MW plant.
Toba Montrose Operations (40% Interest)
The 146 MW East Toba River and 89 MW Montrose Creek run of river hydro
plants generated 661,409 MWh of electricity, or 91% of forecast. The
shortfall was due to low flows during the first quarter of 2012.
Generation was up 4% at Toba Montrose in 2012 due to increased water
flow, and in July the facility achieved a new daily production record
of 5,504 MWh. The Toba Montrose General Partnership declared equity
distributions of C7.0 million to its partners, Fiera Axium
Infrastructure and Alterra (Alterra received 40% or C$2.8 million).
On December 12, 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.
Replacement pipe for the damaged section has been ordered, and
preparations for the repair are nearing completion. Alterra expects the
facility to return to full operations in the summer of 2013. The
repairs are to be carried out during the first half of 2013 when water
flows and power generation are lower. The project’s insurers have
confirmed that the incident is covered by property and business
interruption insurance, and total insurance deductibles related to the
rockslide are expected to be less than $1.0 million for the Toba
Montrose project (of which the Company’s interest is 40%).
Dokie 1 Operations (51% Interest)
The 144 MW Dokie 1 wind farm generated 297,387 MWh of electricity for
the year, or 90% of forecast. The shortfall was primarily due to lower
than expected winds in the fourth quarter of 2012. During the year,
Dokie 1 declared equity distributions to the partners of $4.0 million
(of which Alterra received $2.0 million) and completed funding of a
C$8.9 million required loan reserve.
Soda Lake Operations (100% Interest)
The 15 MW Soda Lake geothermal plant generated 64,421 MWh of electricity
for 2012. In March 2012, the US Department of the Treasury awarded and
paid a grant of $2.1 million to Soda Lake under the American Recovery
and Reinvestment Act of 2009.
Expansion and Development Projects
Alterra has agreed to purchase for approximately $6.0 million, subject
to a number of closing conditions, 10% of a 50 MW portfolio of five
photovoltaic solar facilities being built in Ontario (“ABW Solar”) by
First Solar, Inc. Alterra will serve as the managing partner for ABW
Solar. Construction has begun on the project and completion of two
facilities occurred at the end of 2012. The remaining three facilities
are expected to be completed in the first half of 2013. Long term
project financing arrangements are expected to be completed in the
first half of 2013.
During 2012, Alterra continued to advance the Upper Toba project
entering into an interconnection agreement with BC Hydro and Power
Authority to allow the project to interconnect to the Saltery Bay
substation; signing a Resource Development Agreement with the Klahoose
First Nation, the final First Nation impacted by the project; and
entering into a development phase agreement with a contractor to
perform project optimization and design work for the project. Alterra
is currently finalizing plant design for the Jimmie Creek run of river
hydro project (the first half of the Upper Toba project) and plans to
commence construction in 2013. The project has a 40 year PPA in place
with BC Hydro.
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 the ongoing PPA discussions and obtaining
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 year Alterra continued to advance the resource assessment
and planning for the project.
Other Development Projects
Alterra signed an agreement with EDC that outlines the terms of
partnerships for the development of the Mariposa geothermal project in
Chile and further exploration at five of Alterra’s geothermal
concessions in Peru. If EDC advances into a formal arrangement then
they will be entitled to earn 70% interests in the partnerships by
funding the next $58.3 million in project expenditures at Mariposa and
the next $8.0 million in project expenditures on the Peruvian
concessions. Alterra expects any final arrangements to be completed in
the first half of 2013.
Alterra continued to advance other early stage geothermal projects in
Italy, British Columbia and Peru, including exploration field work,
data assessment and continued community consultations.
Alterra also continued to advance its Bute Inlet run of river hydro
project in 2012, including signing a Resource Development Agreements
with the Sliammon First Nation. Alterra continues to collect hydrology
data for the Bute Inlet project and other early stage run of river and
pumped storage hydro projects in British Columbia, and began an
environmental assessment on a hydroelectric project in Iceland.
Ross Beaty, Alterra’s Chairman, said, “Alterra’s operating assets
performed well in 2012 and I look forward to another year in 2013, with
new growth from project development at Jimmie Creek, Iceland and
Alterra Power will host a conference call to discuss financial and operating results on: Thursday, March 28, 2013 at 11:30 am ET (8:30 am PT). North American participants dial 1-888-390-0546 and International participants dial 1-647-764-8688, the conference ID is 74385375. The call will also be broadcast live on the Internet at http://www.newswire.ca/en/webcast/detail/1127041/1229311. The call will be available for replay until April 11th by dialing 1-416-764-8677 and entering replay PIN number 385375.
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.