Alterra Power MGMXD

2015 results

[materialsgirl]

Many great things happening but once again as always profitability is awful with a 10% drop as compared to last year.  One of the staple excuses (currency fluctuations) is drawn from the excuse bag.  Here are headline comments;

Highlights for the year include and subsequent period include:

• On-target production: The Company achieved 99.6% of its budgeted generation for the year.
• Record generation at BC assets; earn-out payment: Both Toba Montrose and Dokie 1 achieved record generation in 2015, breaking previous records from 2014 and 2011 respectively. On December 26, Dokie 1 achieved a performance hurdle entitling the Company to a C$0.8 million earn-out payment, which was received in February 2016.
• Commercial operations achieved at Shannon:
  • Financial closing: On June 30, the Company closed a $287.0 million construction loan which was supported by a $218.8 million tax equity investment commitment. On the same day, the Company entered into a partnership agreement resulting in each party owning 50% of the project.
  • Commercial operations: On December 10, construction of the 204 MW wind farm was completed and Shannon commenced commercial operations. All 119 turbines were successfully placed in service and the construction was completed on time and on budget.
  • Tax equity funding: On December 14, the tax equity investment was fully funded, with proceeds used to retire the construction loan facility in full and the sponsors commenced a partnership with the tax equity investors.
  • Initial return of capital: On December 29, Alterra received a $3.5 million return of capital representing unused construction contingency funds.
• Jimmie Creek construction continues: Construction for the 62 MW hydro project continued and is on time and on budget. Progress during the year included completion of the switchyard, penstock, intake and tie-in to the transmission line as well as commissioning of the intake. At the powerhouse, all of the electrical and mechanical equipment has been delivered to the site and the installation of the generators has commenced. The facility is expected to commence generation in the summer of 2016.
• Acquisition of South Toba hydroelectric projects: In October the Company agreed 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 and are situated along the Toba Montrose transmission line.
• First Nation agreement signed for Tahumming hydro project: The Company signed an agreement with the Klahoose First Nation to jointly develop the 15 MW Tahumming hydro project in British Columbia, near the Toba Montrose and Jimmie Creek projects.
• Completed step-up acquisition of Icelandic hydro projects: In October 2015 HS Orka increased its ownership interest to 52.5% in the 55 MW Hval and 10 MW Skfnavatnavirkjun hydro projects through a step-up acquisition of subsidiary Vesturverk ehf.
• USA wind projects: The Company executed land leases for two wind projects with a generation capacity of up to 350 MW.
• Mariposa drilling project in Chile postponed: In October 2015, Energy Development Corporation, our majority partner on the project, elected to postpone the previously scheduled 2015 drilling program in response to lower commodity prices which have negatively impacted the near-term project economics.
• Distributions received: The Company received distributions during the year from equity investments of $8.8 million and another C$5.1 million subsequent to year end. The Company also received a $1.6 million distribution from HS Orka (which was a flow through of the 2014 distribution from the Blue Lagoon asset).
• Currency fluctuations resulted in lower annual Adjusted EBITDA and revenue: Consolidated and net interest Adjusted EBITDA each decreased by 10% to $46.4 million and $37.0 million, respectively, and consolidated and net interest revenue each decreased by 18% to $57.8 million and 16% to $71.6 million, respectively. The decline in annual Adjusted EBITDA and revenue was primarily due to currency fluctuations with the Canadian dollar weakening 19% from the prior year, in addition to the sale of the Soda Lake facility in January 2015.
• New power purchase agreement: HS Orka signed a power purchase agreement with Thorsil ehf., which is planning to construct and operate a silicon metal plant in Helguvk, 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.