Maxim Power Corp. ("MAXIM" or the "Corporation") (TSX:MXG)
announced today the release of financial and operating results for
its first quarter ended March 31, 2012. The unaudited financial
statements, accompanying notes and Management Discussion and
Analysis will be available on SEDAR and on MAXIM's website on May
9, 2012. All figures reported herein are Canadian dollars unless
otherwise stated.
FINANCIAL HIGHLIGHTS
Three Months Ended
March 31
($ in thousands except per share amounts) 2012 2011
Net revenue (1) $ 45,873 $ 54,997
Adjusted EBITDA (1) 9,960 15,820
Net income 2,901 4,559
Per share - basic and diluted $ 0.05 $ 0.08
Funds from operations (1) 10,178 14,312
Per share - basic and diluted $ 0.19 $ 0.26
Electricity Deliveries (MWh) 326,644 392,005
Net Generation Capacity (MW) (2) 788 809
Average Alberta Power Prices ($ per MWh) $ 60.12 $ 82.04
Average Milner Realized Electricity Price ($ per MWh) $ 57.44 $ 70.43
(1) Select financial information was derived from the audited
consolidated financial statements and is prepared in accordance
with Part 1 of the Canadian Institute of Chartered Accountants
Handbook ("GAAP"), except net revenue, adjusted EBITDA and funds
from operations ("FFO"). Net revenue is provided to highlight
revenue net of any gains or losses realized on commodity swaps.
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 income and expenses and FFO is provided to assist
management and investors in determining the Corporation's cash
flows generated by operations before the cash impact of working
capital fluctuations. Net revenue, adjusted EBITDA and FFO do not
have any standardized meaning prescribed by GAAP and may not be
comparable to similar measures presented by other companies.
(2) Generation capacity is manufacturer's nameplate capacity net
of minority ownership interests of third parties.
OPERATING RESULTS
Net revenue, adjusted EBITDA, net income and funds from
operation declined in the first quarter of 2012 when compared to
the first quarter of 2011. The decrease in these financial measures
is primarily due to a decline in Alberta power prices which
impacted Milner results.
Net income included the gain from the sale of the APP facility
and an unrealized loss on a derivative coal contract, the net of
which resulted in a lower decrease than other financial measures
noted above.
GROWTH INITIATIVES AND NOTABLE EVENTS
Alberta Utilities Commission ("AUC") Line Loss Factor
Decision
In April 2012, the AUC upheld the complaint made by MAXIM that
the ISO Line Loss Rules contravened the Transmission Regulation for
the periods from 2006 to 2008. The AUC made further findings that
the present rule, which has been in place since 2009 does not
succeed under the new standard of review. The AUC is seeking
submissions from all of the parties on how best to proceed. The
Corporation anticipates that these proceedings will have a positive
impact on MAXIM by establishing compensation.
Deerland Peaking Station ("D1")
MAXIM is actively pursuing commercial arrangements that will
allow for the construction of the 190 MW Deerland peaking station
("D1") to commence in late 2012. MAXIM received regulatory
approvals in 2008 to construct and operate D1. The D1 site is
located near Bruderheim in Alberta's industrial heartland, and it
is in close proximity to the entry point of the proposed Gateway
pipeline and adjacent to the existing Deerland high voltage
substation. This area is expected to experience significant growth
in electrical demand. Deerland is the only permitted peaking
facility in the province of Alberta as at the date of this press
release. This project is highly attractive due to a contraction of
reliable base load supply in the Alberta power market. As such,
MAXIM expects peaking requirements across Alberta to continue to
grow to meet increasing demand and to provide firm backup for
additional intermittent wind resources.
Summit Coal Limited Partnership ("SUMMIT") Mine 14 Project
MAXIM is advancing the development of Mine 14 to realize value
through the potential sale of coal to metallurgical coal markets
and potentially to augment coal supply to Milner. Mine 14, which is
located north of Grande Cache, Alberta, is estimated to contain
18.7 million tonnes of coal reserves.
On May 3, 2012, MAXIM issued an updated Technical Report for
Mine 14 pursuant to National Instrument 43-101. Measured and
Indicated Resources are 119.3 million tonnes and Inferred Resources
are 154.0 million tonnes. Proven and Probable Reserves, which are
included in the Resource estimate, are 18.7 million tonnes,
representing an increase of 40%. As a result, the estimated mine
life of Mine 14 increases from 10 years to 14.4 years based on the
currently planned mining program. Refer to the May 2012 Technical
Report on SEDAR (www.sedar.com), which was prepared by Golder
Associates.
In 2011, the ERCB granted Milner Power Inc. the license to
commence underground mining of the Mine 14 coal reserve. SUMMIT has
firm terminal capacity and terminal processing services to enable
the majority of Mine 14's proposed coal production to access the
valuable seaborne coking coal market commencing January 1, 2015.
SUMMIT has also secured firm 2013 delivery dates for critical
mining equipment, including continuous miners and shuttle cars.
Milner Expansion ("M2")
On August 10, 2011, MAXIM received approval from the Alberta
Utilities Commission for its new 500 MW M2 project. MAXIM is
planning to construct and operate this new 500 MW generating
station on the site of and adjacent to the existing 150 MW Milner
generating station. The M2 design incorporates emission control
equipment capable of achieving 60 to 80 percent reductions in
sulphur dioxide, nitrogen oxides and mercury compared to the
conventional coal fired power plants still operating in Alberta.
The highly efficient M2 design will also reduce carbon dioxide
emissions by 20% compared to these existing plants. Advancing the
project is subject to pending Government of Canada regulations,
which are expected in 2012.
Buffalo Atlee ("B1")
MAXIM acquired the Buffalo Atlee Power Project ("B1"), situated
near Brooks, Alberta, through an amalgamation with EarthFirst
Canada Inc. This project has the potential for development of over
200 MW of wind generation capacity. Wind data has been collected on
the site for approximately four years and supports project
development based on higher power prices than those realized during
recent months. MAXIM holds an exploratory Crown land permit with a
term of five years, expiring on January 1, 2016. The addition of
wind generation to MAXIM's existing portfolio of assets will
diversify MAXIM's generation fuel types and provide the potential
to offset the impact of proposed carbon legislation. MAXIM plans to
advance the development of this project once greater clarity on
carbon policy is available in 2012.
CONFERENCE CALL FOR FIRST QUARTER 2012 RESULTS
MAXIM will host a conference call for analysts and investors on
Thursday May 10, 2012 at 11:00 am MT. The call will be hosted by
John Bobenic, MAXIM's President and Chief Executive Officer, and by
Mike Mayder, Vice President, Finance and Chief Financial Officer.
To participate in this conference call, please dial (877) 440-9795
or (416) 340-8530 in the Toronto area. It is recommended that
participants call at least ten minutes prior to start time.
A recording of the conference call will be available from May
10, 2012 to May 17, 2012. To access the replay, dial (800) 408-3053
or (905) 694-9451 followed by the passcode. In addition, the
webcast will be available commencing May 11, 2012 in the Investor
Relations section of MAXIM's website at www.maximpowercorp.com.
About MAXIM
Based in Calgary, Alberta, MAXIM is an independent power
producer, which acquires or develops, owns and operates innovative
and environmentally responsible power and power related projects.
MAXIM currently owns and operates 40 power plants in western
Canada, United States and France, having 788 MW of electric and 111
MW of thermal net generating capacity. MAXIM trades on the TSX
under the symbol "MXG". For more information about MAXIM, visit our
website at www.maximpowercorp.com.
Statements in this release which describe MAXIM's intentions,
expectations or predictions, or which relate to matters that are
not historical facts are forward-looking statements. These
forward-looking statements involve known and unknown risks and
uncertainties which may cause the actual results, performances or
achievements of MAXIM to be materially different from any future
results, performances or achievements expressed in or implied by
such forward-looking statements. MAXIM may update or revise any
forward-looking statements, whether as a result of new information,
future events or changing market and business conditions and will
update such forward-looking statements as required pursuant to
applicable securities laws.
Contacts: Maxim Power Corp. John R. Bobenic President and CEO
(403) 750-9300 Maxim Power Corp. Michael R. Mayder Vice President,
Finance and CFO (403) 750-9311
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