Alterra Power Announces HS Orka's 2015 Annual Financial Results

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Alterra Power Announces HS Orka's 2015 Annual Financial Results

PR Newswire

VANCOUVER, Feb. 22, 2016 /PRNewswire/ - Alterra Power Corp. (TSX: AXY) ("Alterra") announces that its 66.6% owned Icelandic subsidiary, HS Orka hf, today released audited financial and operating results for the twelve-month period ended December 31, 2015. HS Orka's financial statements are prepared in accordance with International Financial Reporting Standards (as adopted by the European Union), are reported in Icelandic Krona (ISK), and can be found at

Highlights for the year ended December 31, 2015 include (all amounts in US$):

  • HS Orka generated $21.0 million of EBITDA and $15.0 million of gross profit in 2015 (2014: 23.5 million and 15.9 million, respectively); the decrease in EBITDA and gross profit is entirely due to fluctuations in foreign exchange, in ISK EBITDA and gross profit increased 1% and 7% respectively against the prior year. Both revenue and operating cost decreased by $5.5 million year on year, due to the transfer of certain employees directly to former affiliate HS Veitur. Previously, the employees costs and revenues related to activities performed for HS Veitur were recharged and recorded in income. Excluding the impact of the transfer, revenue increased year on year largely due to increased retail sales (up 13% from prior year).
  • Net loss of $1.9 million was recorded in 2015 versus a net income of $6.3 million in 2014. In addition to the operating results described above, this decrease was primarily due to a year on year change in the fair value of the embedded derivative in power purchase agreements (linked to the aluminum price) which resulted in a non-cash loss of $24.7 million (2014: non-cash loss of $16.9 million).
  • HS Orka's share of income from associates increased by 78% to $8.9 million (2014: $5.0 million) primarily due to results from the company's ownership stake in the Blue Lagoon ehf. tourist resort, which continues to outperform expectations due to increased visitor attendance. Income from Blue Lagoon also increased due to a one-time gain of $2.0 million as a result of a share issuance by Blue Lagoon ehf. in the second quarter of 2015.
  • HS Orka received a dividend of $2.7 million in the year from Blue Lagoon (2014: $2.8 million) and consistent with previous years HS Orka plans to pass this dividend to its shareholders in 2016 (2015 HS Orka cash dividend paid to shareholders of $2.4 million, with Alterra's share being $1.6 million).
  • HS Orka continues to use cash from operating activities to pay down loans and borrowings, with repayments of $17.5 million in 2015 (2014: $19.1 million) and a loan balance outstanding at year-end of $76.5 million. Loan repayments are set to decline substantially from 2017 onwards.

Summary financial information with respect to the operations of HS Orka is as follows:

HS Orka Financial Results Summary
(expressed in millions of US dollars)

For the twelve months ended

For the twelve months ended

December 31, 2015

December 31, 2014

at an average rate of 132 ISK per USD

at an average rate of 117 ISK per USD

Total revenue





Cost of energy production



Gross profit



Other operating expenses



Operating income



Other income (expenses)



Equity income



Income tax (expense) recovery



Income (loss) for the year






As at December 31, 2015

As at December 31, 2014

at a rate of 130 ISK per USD

at a rate of 128 ISK per USD

Total assets





Total liabilities



Cash and cash equivalents(2)



 Working capital



1 EBITDA is defined by HS Orka and Alterra 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. HS Orka and Alterra disclose EBITDA as it is a measure used by analysts and by management to evaluate company 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 HS Orka's performance.

2   Includes $10.2 million of restricted cash

Alterra will include the results of HS Orka together with all applicable fair value adjustments applied as a result of its acquisition of control of HS Orka in August 2010, in its consolidated results to be released on March 15, 2016.

About HS Orka

HS Orka is the largest privately owned energy company in Iceland, producing 7% of the country's power needs and approximately 11% of the country's heating needs. Installed geothermal power capacity is 174 MW from the Svartsengi and Reykjanes power plants. In addition, HS Orka generates 190 MW of thermal energy for district heating. HS Orka also owns a 30% interest in Blue Lagoon, ehf., a tourist resort that adjoins our Svartsengi power plant in Iceland.

About Alterra Power Corp.

Alterra Power Corp. is a leading global renewable energy company, operating six power plants totaling 757 MW of generation capacity including the Shannon wind project, British Columbia's largest run-of-river hydro facility and largest wind farm, and two geothermal facilities in Iceland. Alterra owns a 349 MW share of this capacity, generating over 1,600 GWh of clean power annually.

Alterra is also constructing the 62 MW Jimmie Creek run-of-river hydroelectric project in British Columbia, which is expected to be in operation by Q3 2016 (51% owned by Alterra). Upon completion of Jimmie Creek, Alterra will operate seven power plants totaling 819 MW of capacity and will own a 381 MW share of this capacity, generating over 1,700 GWh of clean power annually. Alterra has an extensive portfolio of exploration and development projects and a skilled international team of developers, builders and operators to support its growth plans.

The company trades on the Toronto Stock Exchange under the symbol AXY and OTC in the United States as MGMXF.

Cautionary Note regarding Forward-Looking Statements and Information

Certain statements and information included in this news release are "forward-looking information" within the meaning of Canadian securities laws that involve risks and uncertainties. Forward-looking information relates to future events or future performance and reflects management's expectations and beliefs regarding future events as of the date hereof. Examples of forward-looking information in this news release include the date the Jimmie Creek project will achieve commercial operations. Forward-looking information is based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection. Since forward-looking information relates to future events and conditions, by its very nature it requires making assumptions and involves 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 information. Material risk factors and assumptions include those set out in the management's discussion and analysis section of Alterra's most recent annual and quarterly reports and in Alterra's Annual Information Form for the year ended December 31, 2014. Although Alterra has attempted to identify important factors that could cause actual actions, events or results to differ materially from forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate and undue reliance should not be placed on forward-looking information. Except as required by law, Alterra undertakes no obligation to update any forward-looking information to reflect new information, subsequent or otherwise.

SOURCE Alterra Power Corp.

Copyright CNW Group 2016

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