Alterra Power Announces Results for the Quarter Ended March 31, 2012
VANCOUVER, May 14, 2012
(under IFRS and all amounts in US dollars unless otherwise stated)
VANCOUVER, May 14, 2012 /PRNewswire/ - Alterra Power Corp. (TSX: AXY) ("the
Company") today provided an update on its operations and reported its
financial and operating results for the quarter ended March 31, 2012
("the current quarter"). For further information on these results
please see the Company's Unaudited Condensed Consolidated Interim
Financial Statements ("consolidated results") and Management's
Discussion and Analysis.
Alterra continues to consolidate 100% of the HS Orka and Soda Lake
operations, while Alterra's interests in the Toba Montrose run-of-river
hydro facility ("Toba Montrose") and the Dokie wind facility ("Dokie
1") are accounted for as equity investments. In certain statements in
this news release, the Company'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 (66.6%), Toba Montrose
(40%), Dokie 1 (51%) and Soda Lake (100%) had been reported in
accordance with the Company's actual share ownership at March 31, 2012.
Highlights for the current quarter include:
Power production from Alterra's six power plants was 99% of budgeted
forecast (446,845 MWh). Alterra's net interest in generation totalled
Alterra's net interest in revenue and EBITDA was $18.2 million and $5.2
Altera's net interest in cash and cash equivalents increased from $20.7
to $50.9 million.
HS Orka received $37.5 million from the issuance of shares to Alterra's
partner in HS Orka, a group of Icelandic pension funds ("Jarðvarmi").
Jarðvarmi exercised an option in February 2012 to purchase the
additional shares at a 15.6% premium to the original purchase price on
a per share basis. Jarðvarmi previously held a 25% interest in HS Orka
and now holds 33.4%.
The US Treasury Department awarded a grant of $2.1 million to the
Company's Soda Lake operations under the American Recovery and
The Montrose Creek and East Toba River run-of-river hydro plants were
offline for planned maintenance and warranty work during the current
quarter, which was purposefully scheduled during this period when water
flows and project revenues are seasonally very low. Both facilities are
now fully operational and operated at 132% of the revised budget for
the partial month of April.
The firm energy allotment under Dokie 1's Power Purchase Agreement
("PPA") was increased by 10% and as a result annual revenue at Dokie 1
is expected to increase by 1.2%.
Dokie 1 achieved Final Completion, formally marking the conclusion of
First Solar, Inc. received all of its Renewable Energy Approvals permits
and is expected to begin construction of the ABW solar farm in May
2012. Completion is expected by the end of 2012.
John Carson, Alterra's CEO, said, "I'm proud that we hit our operational
targets again this period, in spite of taking our hydro assets offline
for the entire quarter as planned. Meanwhile, the work to advance our
immediate growth projects continues in full swing with the Upper Toba,
Dokie 2 and Reykjanes expansions. Hitting all of our resource and
economic goals for these projects will almost double our operating cash
flow, building further value for our shareholders."
The comparative period of the three months ended March 31, 2011 ("the
comparative quarter") are not fully comparable to the current quarter
since it does not include results for Toba Montrose and Dokie 1.
The following table shows the Company's net interest in selected
operating and financial results for the current quarter, in addition to
key financial information extracted from the consolidated results.
(expressed in thousands of US dollars, except for production)
HS Orka* (75% - 66.6%)
Toba Montrose (40%)
Dokie Wind (51%)
Soda Lake (100%)
Exploration and Head Office
Net Interest Total
Cash and Cash Equivalents
EBITDA is defined by the Company 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. The Company discloses
EBITDA as it is a measure used by analysts and by management to
evaluate the Company'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 the Company's performance.
2 months of results at 75% and 1 month at 66.6%
Consolidated revenue for the current quarter was $16.4 million compared
to $18.9 million in the comparative quarter, due to lower revenue from
our Icelandic operations as a result of lower aluminum prices, which
declined 13.9% versus the comparative quarter. Alterra's net interest
in revenue was $18.2 million. This included Dokie 1 revenue which was
higher than budgeted due to strong winds, and lower than forecasted
revenue at Toba Montrose since the facilities were offline for planned
maintenance and warranty work.
Consolidated gross profit was $4.7 million for the current quarter,
compared to $5.5 million for the comparative quarter, a decrease of
$0.8 million. This was primarily due to lower revenues and was
partially offset by a lower cost of production in Iceland.
Alterra's net interest in EBITDA for the current quarter totaled $5.2
million, reflecting among other things the strong generation
performance of its operating assets (99% of budget), offset by the Toba
Montrose Facility being offline as planned during the entire current
The Company recorded a net loss of $10.4 million for the current quarter
compared to net income of $11.9 million for the comparative quarter, a
decrease of $22.3 million which is attributable in large part to a
number of non-cash items. The significant factors contributing to and
offsetting this decrease include:
A non-cash change in the fair value of bonds and derivatives of $20.7
million related primarily to changes in the future price of aluminum.
An equity loss of $5.4 million, primarily due to a $7.4 million equity
loss from Toba Montrose because the facility was offline for warranty
and maintenance work.
A non-cash foreign exchange loss of $2.1 million.
A non-cash income tax recovery of $6.2 million.
At March 31, 2012, the Company had consolidated cash and cash
equivalents of $52.6 million (December 31, 2011: $22.2 million), versus
net interest of $50.9 million. The Company ended the quarter with
consolidated working capital of $39.3 million (net interest $35.2
million), compared to $4.6 million at December 31, 2011. The increase
in both cash and working capital was primarily due to the investment in
HS Orka by Jarðvarmi and the receipt of the US government grant by Soda
Iceland Operations (66.6% Interest at March 31, 2012)
The 100 MW Reykjanes plant generated 206,535 MWh of electricity, 99% of
budget, and the 72 MW Svartsengi plant generated 115,863 MWh of
electricity, 114% of budget, and continued to supply thermal energy for
The newly invested funds from Jarðvarmi are currently being held at HS
Orka in preparation for the Reykjanes expansion project.
Toba Montrose Operations (40% Interest)
The 146 MW East Toba River and 89 MW Montrose Creek run-of-river hydro
plants were offline for planned maintenance and warranty work during
the current quarter. The penstock coatings at both the East Toba and
Montrose Creek facilities were inspected and repaired under warranty by
the contractor, requiring curtailment of both facilities from November
2011 to March 2012, a time when water flows and project revenues are
seasonally very low. Both facilities are now fully operational and
generated 21,875 MWh during the partial month of April (132% of plan
for the period).
Dokie Operations (51% Interest)
The 48 turbine 144 MW Dokie wind farm generated 101,086 MWh of
electricity for the period, or 111% of budget. The operating subsidiary
for the wind farm, Dokie General Partnership, also reached agreement
with the project lenders for term conversion of its loans, with final
maturity in 2030 and the first possibility for a partnership dividend
in June 2012.
The Dokie General Partnership exercised a one-time right in its PPA to
increase its firm energy allotment by 10%, commencing in May 2012. This
is expected to result in an average 1.2% increase to annual net
Soda Lake Operations (100% Interest)
The 15 MW Soda Lake geothermal plant generated a net 18,668 MWh of
electricity for the period, or 92% of budget. Soda Lake also received a
grant of $2.1 million from the US Department of the Treasury under
Section 1603 of the American Recovery and Reinvestment Act of 2009.
Expansion and Development Projects
Preparations continue for the expansion of the Reykjanes plant's
capacity to 180 MW and thereby increase annual average generation by
nearly 700,000 MWh, subject to satisfactory resolution of all PPA
issues and obtaining project financing. Permitting is now in place for
all construction-related activities.
The Company is currently in final negotiations on a partnership
agreement for the Upper Toba Valley run-of-river hydro project. The
Company is finalizing plant design and planning to commence
construction by the end of 2012. The proposed facility would share much
of the infrastructure already in place for Toba Montrose, and is
currently configured for 124 MW of capacity and producing annual
generation of 345,000 MWh. The project already has a 40 year PPA with
BC Hydro. In April 2012, an interconnection agreement was signed for
joint use of the transmission line with the Toba Montrose facility.
Alterra holds a 51% interest in a planned expansion of the Dokie Wind
Farm with a projected addition to capacity of 156 MW and annual
production of 357,000 MWh. The project has already received a BC
Provincial Environmental Assessment Certificate. Data collection for a
resource assessment of the project remains on schedule to be completed
by mid-2012 and Alterra is planning to commence construction in early
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 to be built in Ontario ("ABW Solar") by
First Solar, Inc. Alterra will serve as the managing partner for the
project. All of the Renewable Energy Approvals for the project have
been received and construction is expected to begin in May 2012, with
completion of construction expected by the end of 2012.
Alterra continues to advance its geothermal exploration projects in
Chile, Peru and Italy, and is in active discussions with prospective
industry partners at each project to fund the next phase of exploration
and development costs.
The Company also continues to advance its early stage run-of-river hydro
projects in British Columbia, including the Bute Inlet project which
has an estimated potential annual generation of 2.9 million MWh.
Ross Beaty, Alterra's Chairman, said, "The highlight of the quarter was
the purchase for $38 million of new shares in HS Orka by our Icelandic
pension fund partners. This will finance our geothermal expansion plans
there and free up Alterra's funds for our hydro and wind power
expansions in British Columbia. I look forward to all three projects
being construction-ready by the end of 2012 while we continue to drive
excellent operating results at our six existing clean power plants.
Alterra Power will host a conference call to discuss financial and
operating results on Tuesday, May 15, 2012 at 11:30 am ET (8:30 am PT).
North American participants dial 1-888-231-8191 and International
participants dial 1-647-427-7450, the conference ID is 7657 9008. The
call will also be broadcast live on the Internet at http://www.newswire.ca/en/webcast/detail/962625/1032397. The call will be available for replay for one week after the call by
dialing 1-416-849-0833 and entering replay pin number 7657 9008.
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.