Alterra Power Announces Results for the Quarter Ended September 30, 2015

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Nov 10, 2015, 10:08 ET

(under IFRS and all amounts in US dollars unless otherwise stated)

VANCOUVER, Nov. 10, 2015 /PRNewswire/ - Alterra Power Corp. (TSX: AXY) ("Alterra" or the "Company") is pleased to report its financial and operating results for the three and nine months ended September 30, 2015. For further information on these results please see Alterra's Unaudited Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis.

For the quarter ended September 30, 2015, Alterra consolidated 100% of the results of operations at HS Orka, while Alterra's interests in the Toba Montrose run of river hydro facility and the Dokie 1 wind facility were 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 operating results that Alterra would have reported if each of HS Orka (66.6%), Toba Montrose (40%), and Dokie 1 (25.5%) had been reported in accordance with Alterra's actual share of ownership at September 30, 2015 and for the three months then ended. While management monitors the consolidated results closely, it believes that net interest reporting provides the clearest view of Alterra's performance.

Highlights for the quarter and subsequent period include:

Fleet Generation: The Company achieved fleet-wide generation of 97% in the current quarter (net interest), and 101% for the year to date, led by the Toba Montrose project which has generated a record 111% for the year to date. Excluding Soda Lake, Alterra's fleet generation is 1.5% ahead of last year's record pace.
Construction projects on schedule and on budget:
- Shannon: All road construction, turbine foundations and collector lines have now been completed for the 204 MW wind farm. All 119 turbines have been delivered to site and most of those have been fully erected. Commissioning is underway to allow connection to the grid, and the project is now delivering limited test power. The Company expects commercial operations to commence in December 2015.
- Jimmie Creek: Intake and tailrace construction is nearly complete, penstock installation is 95% complete, and the rubber dam has been fully commissioned for the 62 MW hydro project. Removal of the lower diversion is complete, and the facility is expected to commence generation in the summer of 2016.
Distributions received: The Company received distributions during the period from Toba Montrose (C$7.2 million), Dokie 1 (C$0.9 million) and HS Orka ($1.6 million).
Currency fluctuations drive lower quarterly EBITDA and revenue: Consolidated EBITDA decreased by 17% to $17.0 million and net interest EBITDA decreased by 17% to $14.8 million, primarily due to the Canadian dollar weakening 19% versus the comparative quarter. Consolidated revenue decreased by 25% to $12.2 million and net interest revenue decreased by 22% to $22.3 million primarily due to currency fluctuations, lower aluminum prices and reduced quarterly generation (3.8% lower, excluding Soda Lake).
Acquisition of new hydroelectric projects: On October 20, 2015, the Company announced an agreement to acquire the water rights for four hydro development projects (the South Toba projects: Chusan, Powell, Eldred North and Eldred South) which are all located near the Toba Montrose and Jimmie Creek projects.
New power purchase agreement: Subsequent to the quarter, the Company's Iceland subsidiary HS Orka announced the signing of a power purchase agreement with Thorsil ehf., which is planning to construct and operate a silicon metal plant in Helguvík, Iceland to supply up to 32 MW of the plant's power needs. The delivery of power under the contract is subject to several conditions on behalf of both parties.

Financial Results

The following table shows Alterra's net interest in selected operating and financial results for the quarter, in addition to key financial information extracted from the consolidated results.


For the three months ended September 30, 2015 ^(a)	HS Orka (66.6%)	Toba Montrose (40%)	Dokie 1 (25.5%)	Development and Head Office	Net Interest Total	Consolidated Results
Generation (MWh)	191,992	149,927	19,981	—	361,900	288,275
Total revenue	8,147	12,422	1,696	—	22,265	12,232
Gross profit	1,911	10,098	854	—	12,863	2,870
EBITDA ^(b)	4,531	10,617	1,193	(1,579)	14,762	17,035


For the three months ended September 30, 2014 ^(a)	HS Orka (66.6%)	Toba Montrose (40%)	Dokie 1 (25.5%)	Soda Lake ^(c)(100%)	Development and Head Office	Net Interest Total	Consolidated Results
Generation (MWh)	200,223	161,337	14,802	13,916	—	390,278	314,551
Total revenue	10,198	15,895	1,477	896	—	28,466	16,209
Gross profit (loss)	2,357	13,185	441	(433)	—	15,550	3,105
EBITDA ^(b)	5,186	13,709	837	(344)	(1,555)	17,833	20,433

(a)	All tabular amounts in the table above are expressed in thousands of US dollars with the exception of generation.
(b)	Here and elsewhere, Adjusted EBITDA ("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 goodwill, 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 condensed consolidated interim financial statements refer to the Company's Management's Discussion and Analysis for the three and nine months ended September 30, 2015.
(c)	The facility was sold on January 30, 2015.

Consolidated Quarterly Results

Revenue was $12.2 million for the quarter ended September 30, 2015, down 25% from the comparative quarter primarily due to foreign exchange, the loss of revenue resulting from the sale of Soda Lake on January 30, 2015 ($0.9 million impact quarter on quarter), decreased generation at the Reykjanes plant and lower aluminum prices.

The Company recorded net income of $2.3 million in the current quarter, compared to net income of $2.4 million in the comparative quarter. The decrease resulted primarily from changes in non-cash items such as the fair value of derivatives and foreign exchange fluctuations.

Consolidated cash and cash equivalents at September 30, 2015 was $14.5 million of which $11.9 million is held in the Company's Icelandic subsidiary ($63.2 million and $25.1 million respectively at December 31, 2014).

Net Interest Results

Alterra's net interest in revenue decreased by $6.2 million to $22.3 million due to currency impacts, the sale of Soda Lake, and decreased quarterly generation at the Toba Montrose and Reykjanes plants, which also drove a 17% decrease in EBITDA to $14.8 million.

The net interest cash position at September 30, 2015 was $12.4 million.

Operating Results

For the quarter ended September 30, 2015, the Company achieved fleet-wide generation of 97% of budget (net interest), and 101% for the year to date, led by the Toba Montrose project which has generated a record 111% for the year to date.


	Q3 2015 Generation (MWh)
			Net Interest
Facility	Budget ^(a)	Actual	Budget ^(a)	Actual	% of Budget
Reykjanes	188,221	168,651	125,355	112,322	90	%
Svartsengi	116,280	119,624	77,442	79,670	103	%
Toba Montrose	380,493	374,818	152,197	149,927	99	%
Dokie 1	71,909	78,358	18,337	19,981	109	%
TOTAL	756,903	741,451	373,331	361,900	97	%

(a)	Includes planned maintenance outages.

Outlook

"We're excited to be in the home stretch of construction for the Shannon and Jimmie Creek hydro projects, with both projects poised to be delivered on-time and on-budget," said John Carson, Alterra's CEO, "separately, our teams are working toward our next growth phase, with new project development and acquisition efforts across all clean power technologies."

Alterra Power will host a conference call to discuss financial and operating results on Wednesday, November 11, 2015 at 11:30 am ET (8:30 am PT).

North American participants dial 1-888-390-0546 and International participants dial 1-416-764-8688; the conference ID is 92327308

The call will also be broadcast live on the Internet at

http://event.on24.com/r.htm?e=1082992&s=1&k=0F5751AB7E6BB349CF52F0E221F0A2E9

The call will be available for replay for one week after the call by dialing 1-416-764-8677 and entering replay PIN 327308#

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.