CALGARY, Alberta, March 15, 2022 (GLOBE NEWSWIRE) -- Maxim Power Corp. ("MAXIM" or the "Corporation") (TSX: MXG) announced today the release of financial and operating results for the fourth quarter ended December 31, 2021. The audited consolidated financial statements, accompanying notes and Management’s Discussion and Analysis (“MD&A”) will be available on SEDAR and on MAXIM's website on March 15, 2022. All figures reported herein are Canadian dollars unless otherwise stated.
FINANCIAL HIGHLIGHTS
| | Three Months Ended
December 31, | Twelve Months Ended
December 31, |
| ($ in thousands except per share amounts) | 2021 | 2020 | 2021 | 2020 |
| Revenue | 37,418 | 17,282 | 156,014 | 46,726 |
| Net income | 4,402 | 8,923 | 78,509 | 9,260 |
| Earnings per share – basic | 0.09 | 0.18 | 1.57 | 0.19 |
| Earnings per share – diluted | 0.08 | 0.18 | 1.28 | 0.18 |
| Adjusted EBITDA (1) | 16,915 | 3,998 | 68,418 | 10,302 |
| Total generation – (MWh) (2) | 317,813 | 338,201 | 1,449,915 | 837,760 |
| Total fuel consumption – (GJ) (2) | 3,366,505 | 3,713,241 | 15,491,739 | 9,840,790 |
| Average Alberta market power price ($ per MWh) | 107.31 | 46.13 | 101.93 | 46.72 |
| Average realized power price ($ per MWh) (2) | 117.74 | 51.10 | 107.60 | 55.77 |
| Total net debt (1) | 37,242 | 59,800 | 37,242 | 59,800 |
| Total assets | 312,437 | 239,310 | 312,437 | 239,310 |
| (1) | Select financial information was derived from the consolidated financial statements and is prepared in accordance with GAAP, except adjusted Earnings before Interest, Income Taxes, Depreciation and Amortization (“Adjusted EBITDA”). Adjusted EBITDA is provided to assist management and investors in determining the Corporation's approximate operating cash flows before interest, income taxes, and depreciation and amortization and certain other non-recurring income and expenses. Total net debt was derived from the consolidated financial statements to include: loans and borrowings (including the convertible loan facility), current liabilities, other long-term liability, less total current assets. |
| (2) | Total generation, fuel consumption and average realized power prices for 2021 relate to Milner 2 (“M2”) and 2020 relate to both M2 and HR Milner (“Milner”) |
OPERATING RESULTS
During the fourth quarter and twelve months of 2021, revenues increased to $37 million and $156 million, as compared to $17 million and $47 million, respectively, in the same periods in 2020. The increase is the direct result of the operations of M2, which was commissioned in the second quarter of 2020. Realized power prices in the fourth quarter and twelve months of 2021 were $117.74 per MWh and $107.60 per MWh, respectively, as compared to $51.10 per MWh and $55.77 per MWh, respectively, in the same periods in 2020.
During the fourth quarter and twelve months of 2021, Adjusted EBITDA increased to $17 million and $68 million, respectively, as compared to $4 million and $10 million, respectively, in the same periods in 2020. As expected, the capacity and high reliability of M2 increased revenues and reduced operations and maintenance costs on a per MWh basis. Additionally, the Government of Alberta Technology Innovation and Emissions Reduction program benefits accrue to earnings through reduced carbon tax associated with M2. These favourable variances were partially offset by higher fuel costs due to higher generation volumes, higher per unit natural gas costs and net realized losses on commodity swaps in 2021 as compared to the same periods in 2020.
Net income increased in 2021 to $79 million from $9 million in the same period in 2020, primarily due to the same factors impacting Adjusted EBITDA and the receipt of second and third Line Loss Proceeding payments. These favourable variances were partially offset by the recognition of a deferred tax expense, depreciation of M2 and impairment of the Deerland project.
M2 CCGT PROJECT UPDATE
During the fourth quarter of 2021, MAXIM continued progress on the engineering and construction of the Combined Cycle Gas Turbine (“CCGT”) expansion of M2 and is pleased to report that the project remains on schedule to commission in December 2022. Recent milestones include over 90,000 construction hours expended and the completion of major foundations for the Heat Recovery Steam Generator (“HRSG”) and associated balance of plant. Additional milestones during the fourth quarter of 2021 included the erection of the HRSG heat transfer surfaces and HRSG casings. The estimated project cost is currently $136.0 million. As at December 31, 2021, MAXIM has incurred $76.5 million of capital investment in relation to the CCGT expansion of M2 and has funded this spending with existing cash on hand and cash flow from operating activities.
At this time, MAXIM forecasts it has sufficient liquidity to complete the CCGT expansion of M2 and will fund the project using cash on hand, cash flow from operating revenues and available funds through the existing senior and subordinated credit facilities, as required.
Upon completion, the CCGT expansion of M2 will capture waste heat that would otherwise exhaust into the atmosphere and turn it into useful low carbon electricity for the Alberta power grid. The CCGT expansion of M2 will reduce the intensity of carbon emissions by more than 60% compared to the legacy coal-fired Milner facility.
NORMAL COURSE ISSUER BID
On August 20, 2021, MAXIM announced that it has received approval from the Toronto Stock Exchange to proceed with a normal course issuer bid ("NCIB") for 2021/2022. Under this NCIB, the Corporation may purchase for cancellation up to 2,400,000 common shares of the Corporation. As of the date of this press release, the Corporation has repurchased and cancelled 121,955 common shares under the 2021/2022 program.
About MAXIM
Based in Calgary, Alberta, MAXIM is one of Canada’s largest truly independent power producers. MAXIM is now focused entirely on power projects in Alberta. Its core asset – the 204 MW H.R. Milner Plant, M2, in Grande Cache, AB – is a state-of-the-art natural gas-fired power plant that commissioned in Q2, 2020. MAXIM is currently increasing the capacity of M2 to approximately 300 MW and concurrently will realize an improvement in the efficiency of the plant by investing in heat recovery combined cycle technology. In addition, MAXIM continues to explore additional development options in Alberta including its currently permitted gas-fired generation projects and the permitting of its wind power generation project. MAXIM trades on the TSX under the symbol “MXG”. For more information about MAXIM, visit our website at www.maximpowercorp.com. For further information please contact:
Bob Emmott, President and COO, (403) 263-3021
Kyle Mitton, CFO and Vice President, Corporate Development, (403) 263-3021