Maxim Power Corp. Announces 2012 Second Quarter Financial and Operating Results
10 Agosto 2012 - 12:19AM
Marketwired Canada
Maxim Power Corp. ("MAXIM" or the "Corporation") (TSX:MXG) announced today the
release of financial and operating results for its second quarter ended June 30,
2012. The unaudited financial statements, accompanying notes and Management
Discussion and Analysis will be available on SEDAR and on MAXIM's website on
August 10, 2012. All figures reported herein are Canadian dollars unless
otherwise stated.
FINANCIAL HIGHLIGHTS
Three Months Ended Six Months Ended
June 30, June 30,
($ in thousands except per share
amounts) 2012 2011 2012 2011
Net revenue (1) $ 17,961 $ 17,884 $ 63,834 $ 72,881
Adjusted EBITDA (1) (1,313) (1,987) 8,647 13,833
Adjusted net income (loss) (1) (3,658) (3,990) 181 569
Net loss (8,991) (5,475) (6,090) (916)
Per share - basic and diluted $ (0.17) $ (0.10) $ (0.11) $ (0.02)
Funds from operations (1) (1,212) (2,124) 8,966 13,695
Per share - basic and diluted $ (0.02) $ (0.04) $ 0.17 $ 0.25
Electricity Deliveries (MWh) 153,372 180,535 480,015 572,540
Net Generation Capacity (MW) (2) 788 815 788 815
Average Alberta Power Prices ($
per MWh) $ 40.03 $ 51.90 $ 50.07 $ 66.88
Average Milner Realized
Electricity Price ($ per MWh) $ 66.60 $ 53.70 $ 60.37 $ 64.78
(1) Select financial information was derived from the unaudited condensed
consolidated interim financial statements and is prepared in accordance with
Part 1 of the Canadian Institute of Chartered Accountants Handbook ("GAAP"),
except net revenue, adjusted EBITDA, adjusted net income (loss) 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, adjusted net income is used
to compare MAXIM's results among reporting periods without consideration of
unrealized gains and losses and to evaluate MAXIM's performance 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, adjusted net income 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, adjusted net income (loss) and funds from
operations increased in the second quarter of 2012 when compared to the second
quarter of 2011. The increase in these financial measures is primarily due to
higher generation and pricing at MAXIM's Pittsfield facility in the Northeast
US. Adjusted EBITDA and funds from operations have also increased due to fuel
cost savings at the Milner facility in Alberta. These increases have been
partially offset by lower Alberta power prices and a longer turnaround at Milner
in 2012.
Net loss in the second quarter of 2012 was favorably affected by the
aforementioned factors, offset by an unrealized loss on a derivative coal
contract.
On a year to date basis, net revenue, adjusted EBITDA, adjusted net income
(loss), net loss, and funds from operations have decreased from the prior year.
The decrease in these financial measures is primarily due to a decline in
Alberta power prices which impacted Milner results as well as lower generation
in the Northeast US. Net loss further decreased because of the previously
mentioned unrealized loss on a derivative coal contract, which was partially
offset by a gain from the sale of the APP facility.
GROWTH INITIATIVES AND NOTABLE EVENTS
Deerland Peaking Station ("D1")
MAXIM is actively pursuing commercial arrangements that will allow for the
construction of the 190 MW D1 Station 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. D1 is the only permitted peaking
development project in the province of Alberta as at the date of this press
release. This project is attractive due to an anticipated 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.
During the second quarter of 2012, MAXIM entered into an agreement to secure
firm natural gas transportation services for D1.
Summit Coal Limited Partnership ("SUMMIT") Mine 14 Project
MAXIM is advancing the development of Mine 14, located north of Grande Cache,
Alberta, to realize value through the potential sale of coal to metallurgical
coal markets and potentially to augment coal supply to Milner. During the second
quarter of 2012, SUMMIT acquired three additional coal leases, two of which are
adjacent to its existing Mine 14 lease. The new leases comprise 1,328 hectares,
which increases SUMMIT's lease holdings by 25% to 6,669 hectares. SUMMIT is
currently carrying out an exploration program to identify additional Resources
and Reserves on both its existing and recently acquired leases.
The current Technical Report for Mine 14, issued on May 3, 2012 pursuant to
National Instrument 43-101, does not include additional coal that may be
identified through the 2012 exploration program. This report identifies Measured
and Indicated Resources of 119.3 million tonnes and Inferred Resources of 154.0
million tonnes. Proven and Probable Reserves, which are included in the Resource
estimate, are 18.7 million tonnes. Refer to the May 2012 Technical Report on
SEDAR (www.sedar.com), which was prepared by Golder Associates. MAXIM
anticipates that it will provide an updated Technical Report during the fourth
quarter of 2012 to incorporate the findings of its 2012 exploration program.
SUMMIT has achieved certain key milestones essential to commencing commercial
operations of Mine 14. In 2011, the ERCB granted 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 the second half of 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 the second half of 2012.
OUTLOOK
2012 Guidance
MAXIM's results are significantly impacted by Alberta spot power prices. In
preparing its guidance, management uses Alberta forward electricity prices as a
proxy for Alberta spot electricity prices. The market for forward contracts is
relatively illiquid and forward prices may not be a good predictor of settled
prices as they may not factor in events such as unplanned outages that can cause
a significant increase in settled power prices. Notwithstanding, MAXIM prepares
its guidance using forward electricity price from independent sources.
Guidance is as follows:
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(in thousands of Canadian dollars, except as otherwise For the year ending
noted) December 31, 2012
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Adjusted EBITDA 34,300
Funds from operations 34,900
Funds from operations per share - basic and diluted ($
per share) 0.65
Adjusted net income 11,600
Adjusted net income per share - basic and diluted ($
per share) 0.21
Net income 6,100
Net income per share- basic and diluted ($ per share) 0.11
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The forecast 2012 results are based upon the following assumptions:
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(in thousands of Canadian dollars, except as otherwise For the year ending
noted) December 31, 2012
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Electricity deliveries (MWh):
HR Milner 722,227
Other facilities 532,942
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Total electricity deliveries 1,255,169
Net generation capacity at year end (MW) 796
Capital expenditures (excluding acquisitions):
France repowering and peaking facilities 9,300
Development projects 12,500
Other assets 3,400
HR Milner 1,600
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Total capital expenditures 26,800
Average Alberta spot electricity price ($/MWh) 64.80
Average annual foreign exchange rates:
C$/USD 1.00
C$/Euro 1.27
Weighted average shares outstanding - basic (000's) 54,084
Weighted average shares outstanding - diluted (000's) 54,086
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In addition to the above assumptions, the 2012 forecast assumes all sales of
Milner output at Alberta spot market prices. The 2012 average Alberta power
price forecast of $64.80 per MWh is based upon settled prices to the date of
this MD&A and NGX forward prices for the remaining balance of the period. The
impact of a $5/MWh increase/(decrease) in the NGX price for the remaining
balance of the period would result in a corresponding $900 thousand
increase/(decrease) in adjusted EBITDA and FFO and a $700 thousand
increase/(decrease) in adjusted net income and net income. Forecast results
include the assumption that MAXIM will continue its development initiatives
related to Deerland, Mine 14 and other capital projects.
CONFERENCE CALL FOR SECOND QUARTER 2012 RESULTS
MAXIM will host a conference call for analysts and investors on Tuesday August
14, 2012 at 11:00 am MDT. 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 (866) 226-1798 or (416) 340-2218 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 August 14, 2012 to
August 21, 2012. To access the replay, dial (800) 408-3053 or (905) 694-9451
followed by the passcode 4502310. In addition, the webcast will be available
commencing August 14, 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, the 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.
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