Alterra Power announces HS Orka's 2011 Annual Financial Results
VANCOUVER, Feb. 14, 2012 /PRNewswire/ - Alterra Power Corp. (TSX: AXY) announces that its 75% owned Icelandic subsidiary, HS Orka hf, today released audited financial results and operating results for the twelve month period ended December 31, 2011. HS Orka's financial statements are prepared according to IFRS and reported in Icelandic kronur (ISK), and can be found at http://www.hsorka.is.
Highlights of the year ended December 31, 2011 include:
- Revenue increased by 11.7% to $64.0 million (2010: $57.3 million). Revenue growth came primarily from an average 5.2% strengthening of the ISK against the US Dollar, and from aluminum prices that were on average 9.9% higher than in 2010. In 2011 approximately 44% of HS Orka's revenue was indexed to the price of aluminum (2010: 48%); this is expected to drop to approximately 36% in 2012 as the result of the expiry in October 2011 of one of the related sales contracts.
- Gross profit increased by 12.2% to $21.1 million (2010: $18.8 million), primarily as a result of revenue growth which was partially offset by higher maintenance and salary costs and increased depreciation charges.
- Electricity production from the Reykjanes and Svartsengi geothermal power plants decreased by 5.2% to 1,258,697 MWh (2010:1,327,372 MWh), due primarily to a planned six-week maintenance shutdown on the Reykjanes Unit 1 turbine.
- EBITDA in 2011 decreased marginally by 2.1% to $23.1 million (2010: $23.6 million), primarily attributable to $3.0 million of non-recurring expenses related to the Nordural contract arbitration.
- A net loss of $8.1 million was recorded in 2011 as compared to a net income of $7.1 million in 2010. This reduction was primarily due to foreign exchange rate fluctuations that adjusted the book value of loans and derivatives, which resulted in a $10.9 million gain in 2010 versus a $6.9 million loss in 2011.
- Subsequent to year end, HS Orka successfully amended its loan agreement with one lender and was in compliance with all loan agreements as of December 31, 2011.
HS Orka Financial Results
(expressed in millions of US dollars)
| For the twelve months ended | For the twelve months ended | |
| December 31, 2011 | December 31, 2010 | |
| at an average rate of 116 ISK per USD | at an average rate of 122 ISK per USD | |
| Total revenue | 64.0 | 57.3 |
| Cost of energy production | (42.9) | (38.5) |
| Gross profit | 21.1 | 18.8 |
| Other operating expenses | (6.5) | (3.3) |
| Operating income | 14.6 | 15.5 |
| Other income (expenses) | (24.3) | (5.6) |
| Equity loss | (0.3) | (1.5) |
| Income tax | 1.9 | (1.3) |
| Income (loss) for the year | (8.1) | 7.1 |
| EBITDA (1) | 23.1 | 23.6 |
| As at December 31, 2011 | As at December 31, 2010 | |
| at a rate of 122 ISK per USD | at a rate of 115 ISK per USD | |
| Total assets | 326.3 | 362.0 |
| Total liabilities | 192.2 | 211.3 |
| Cash and cash equivalents | 10.7 | 9.1 |
| Working capital (2) | 11.8 | 21.8 |
HS Orka Financial Results to be included in Alterra's Consolidated Financial Statements
(expressed in millions of US dollars - unaudited)
As Alterra changed its year end in 2011 from June 30 to December 31, Alterra expects to include the following amounts in its consolidated financial statements for the six month period ended December 31, 2011, including fair value adjustments applied on its acquisition of HS Orka in August 2010:
| For the six months ended | |
| December 31, 2011 | |
| at an average rate of 117 ISK per USD | |
| Total revenue | 32.4 |
| Cost of energy production | (23.0) |
| Gross profit | 9.4 |
| Other operating expenses | (3.4) |
| Operating income | 6.0 |
| Other income (expenses) | (23.1) |
| Equity loss | (0.9) |
| Income tax | 3.6 |
| Loss for the year | (14.4) |
| EBITDA (1) | 12.3 |
| As at December 31, 2011 | |
| at a rate of 122 ISK per USD | |
| Total assets | 461.0 |
| Total liabilities | 236.3 |
| Cash and cash equivalents | 10.7 |
| Working capital (2) | 7.9 |
1 The Company's 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-GAAP 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 Current assets less current liabilities (net of current portion of long-term debt)
About HS Orka
HS Orka is the largest privately owned energy company in Iceland, producing 9% of the country's power needs and 10% of the country's heating needs. Installed geothermal power capacity is 175 MW from the Svartsengi and Reykjanes power plants. In addition, HS Orka generates 150 MW of thermal energy for district heating. Expansions are planned that could increase HS Orka's geothermal power production capacity to 405 MW by 2016.
About Alterra Power Corp.
Alterra Power Corp. is a leading global renewable energy company. We operate six power plants totaling 570 MW of capacity, including two geothermal facilities in Iceland, a geothermal plant in Nevada, British Columbia's largest run of river hydro facilities and the province's largest wind farm. Our 315 MW share of production capacity generates over 1,500 GWh of clean power annually. We have an extensive portfolio of exploration and development projects, a skilled international team of explorers, builders and operators as well as the strong financial capacity to support our aggressive growth plans.
Cautionary Note regarding Forward-Looking Statements and Information
This news release contains certain "forward-looking information" within the meaning of Canadian securities laws, which may include, but is not limited to, statements with respect to future events or future performance, the fulfillment of all conditions precedent to the obligation of the parties under the agreements, required consents and third party approvals. This news release also contains statements with respect to our plans to expand our operations, management's expectations regarding our growth, business prospects and opportunities and energy generation capacities. Such forward-looking information reflects management's current beliefs and is based on information currently available to management.
SOURCE Alterra Power Corp.
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