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Press release from PR Newswire

/C O R R E C T I O N -- Alterra Power Corp./

Monday, November 14, 2011

/C O R R E C T I O N -- Alterra Power Corp./20:38 EST Monday, November 14, 2011 In TO#882 transmitted today at 19:01e torday, an error occured in the select operating and financial results table. In the numbers of the "Total" column, a entry was omitted and the numbers below appeared a row above their intended placement. Corrected copy follow: Alterra Power Announces Results for First Quarter Ended September 30, 2011 (under IFRS and all amounts in US dollars unless otherwise stated) TSX : AXY VANCOUVER, Nov. 14, 2011 /PRNewswire/ - Alterra Power Corp. (TSX: AXY) (the "Company" or "Alterra") today provided an update on its operations and reported its financial and operating results for the first quarter ended September 30, 2011. For further information on the first quarter results, please see the Company's Unaudited Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis. In Alterra's current financials, the results of HS Orka are 100% consolidated, and Toba Montrose and Dokie Wind are accounted for as equity investments. In certain statements in this news release, the Company's results are characterized as Alterra's "net interest", which means the effective portion of results that Alterra would have reported if each of HS Orka (75%), Toba Montrose (40%), Dokie Wind (51%) and Soda Lake (100%) had been reported in accordance with the actual share owned by Alterra. Highlights for the quarter include: Production from the six operating power plants totaled 802,650 megawatt hours ("MWh"), or 105% of forecast; Alterra's net interest in generation totalled 441,409 MWh. Revenue for the quarter was $17.0 million.  Alterra's net interest in revenue for the quarter was $36.1 million. The Company's net interest in EBITDA for the quarter was $20.5 million. John Carson was appointed as Alterra's Chief Executive Officer. Ross Beaty will continue as Executive Chairman. The Toba Montrose firm energy allotment was increased by 10% and an additional 2.4% in annual revenue is expected as a result. An operating permit was granted for the planned 80 megawatt ("MW") expansions at the Reykjanes geothermal power plant in Iceland. Alterra signed an Impact Benefit Agreement with the Homalco First Nation to advance the Bute Inlet hydroelectric project, which lies within their traditional territories. Six new geothermal exploration concessions were awarded in British Columbia, Canada and Peru. Alterra adopted International Financial Reporting Standards ("IFRS"), transitioning from Canadian GAAP as of July 1, 2011 and reporting this first quarter and comparative quarters under IFRS. Alterra has also changed its fiscal year end to December 31. John Carson, Alterra's Chief Executive Officer, commented, "I am very pleased with the outstanding performance of our operating assets this quarter. Our team is now focused on new growth projects. We're optimizing the Upper Toba Valley construction design, installing new meteorological towers at the Dokie 2 site, and refreshing our Reykjanes capital and financing plans so that all three of those assets will be ready or near ready for construction by late 2012." Financial Results The Company began reporting under IFRS beginning with this first quarter ended September 30, 2011. Comparative numbers at July 1, 2010, September 30, 2010 and June 30, 2011 have been restated to reflect the change in accounting standards. Material changes under IFRS include the accounting for the Company's interest in Toba Montrose and Dokie general partnerships, which are now equity accounted, but which previously under Canadian GAAP had been proportionately consolidated. The Company has also changed its fiscal year end from June 30 to December 31.  As a result, the Company will have a short fiscal year from July 1, 2011 to December 31, 2011, and its next full fiscal year will then commence on January 1, 2012. The quarter ended September 30, 2011 is the first quarter where the financial results include a full quarter from all of Alterra's operating assets. The results are therefore not comparable with prior periods. The previous year's comparative quarter only includes the consolidated results of HS Orka since August 17, 2010, the date the Company acquired control, and does not include the results of the acquisition of Plutonic Power Corp as of May 13, 2011. The following table shows the Company's net interest in select operating and financial results. (expressed in thousands of US dollars, except for production and per share amounts)                                                                                 Exploration                         Toba     Dokie     Soda     and head                   HS Orka     Montrose     Wind     Lake     office     Total           Production (MWh) 217,721     162,460     46,813     14,415     -     441,409           Total Revenue 11,850     17,339     5,681     1,209     -     36,079           Gross Profit 3,369     14,075     2,399     364     -     20,207           EBITDA (a) 4,943     15,031     3,047     378     (2,943)     20,456           Total Assets                               906,642           Total Liabilities                               594,648           Cash and Cash Equivalents                               40,472           Working Capital                                25,007 (a) EBITDA is defined by the Company 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. The Company discloses EBITDA as it is a measure used by analysts and by management to evaluate the Company's 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 the Company's performance. Revenue for the quarter was $17.0 million, while Alterra's net interest in revenue was $36.1 million. Production costs for the quarter were $12.2 million, while Alterra's net interest in production costs was $15.9 million. General and administrative expenses for the quarter were $4.2 million, including full consolidation of HS Orka's general and administrative expenses. The Company has realized most of its $2.2 million in annual cost savings from the Magma-Plutonic merger. Equity income during the quarter was $12.8 million, and includes the Company's interests in Toba Montrose and Dokie, which were formerly consolidated according to Alterra's proportionate share of interest. Equity income in the comparative quarter last year was $8.4 million, and only included the Company's interest in HS Orka. Net other gains or losses for the quarter were a net loss of $26.1 million, primarily due to a number of significant non-cash items more fully described in our financial statements, including a $25.4 million loss related solely to a change in the marked-to-market value of HS Orka's aluminum-linked power purchase agreements due to a downward move in the future price of aluminum during the period. The aluminum spot price declined in the quarter from $2,503 to $2,207 per tonne. 36% of HS Orka's power sales are currently indexed to the future price of aluminum, as compared to 46% at the end of the previous period. For the quarter ended September 30, 2011, the Company recorded a net loss of $11.4 million ($0.02 per common share), compared to a net income of $6.0 million ($0.02 per common share) in the same quarter last year. Alterra's net interest in EBITDA for the quarter totaled $20.5 million and included: i.     Toba Montrose - $15.0 million, included in equity income. ii.     Dokie Wind Farm - $3.0 million, included in equity income. iii.     HS Orka operations - $4.9 million. iv.     Soda Lake - $0.4 million. At September 30, 2011, the Company had cash and cash equivalents of $24.7 million (June 30, 2011: $68.3 million), primarily reflecting repayment of the C$18.0 million credit facility and the settlement of other current liabilities. The Company's net interest in cash and cash equivalents at September 30, 2011 was $40.5 million. The Company ended the quarter with consolidated working capital of $3.9 million compared to $39.5 million at June 30, 2011.  Our net interest in working capital at September 30, 2011 was $25.0 million. Iceland Operations (75% Interest) Both the Reykjanes and Svartsengi geothermal power plants produced as expected in the quarter. The 100 MW Reykjanes plant generated 170,431 MWh of electricity, which was 101% of budget, and the 75 MW Svartsengi plant generated 119,864 MWh of electricity, which was 105% of budget, and continued to supply 150 MW of thermal energy for district heating. An arbitration hearing was held in May to determine the validity of a purchase price agreement ("PPA") entered into in 2007. A result is now expected by the end of 2011. Toba Montrose Operations (40% Interest) The 89 MW Montrose Creek and the 146 MW East Toba River run of river hydro plants generated 406,149 MWh of electricity for the quarter, which was 104% of budget. Alterra's operating subsidiary for Toba Montrose exercised a right to increase by 10% the allotment of delivered energy priced as firm, the highest price bracket. Alterra expects this will result in an additional 2.4% in annual revenue. Subsequent to the quarter, Toba Montrose achieved final completion, and Alterra's operating subsidiary and the lead contractor, Peter Kiewit Infrastructure Co. ("Kiewit") have reached agreement on outstanding commercial issues from the construction of the $498 million project. Under the agreement, an inspection of the penstock coatings will take place at both the East Toba and Montrose Creek facilities. The inspection of the penstocks, and any resulting repairs, will require curtailment of both facilities for approximately 40 days during November and December, when water flows and project revenues are seasonally low. The repairs were planned and budgeted for 2011 and no liquidated damages are expected for lost generation to BC Hydro, the power purchaser. Mr. Bruce Ripley, Alterra's Chief Operating Officer, said, "I am very pleased we have reached final completion of this large and complex project and have amicably settled all outstanding construction issues with Kiewit. Construction of the $498 million project spanned 48 months and involved more than 600 personnel, working in remote and very challenging terrain in the mountains of British Columbia. I commend all of our people, all of our contractors led by Kiewit, and all of our First Nations partners for successful completion of the project. Both the East Toba and the Montrose Creek plants are operating well, and we expect them to produce clean energy for British Columbia and good returns to Alterra shareholders for many decades to come." Dokie Operations (51% Interest) The 48 turbine 144 MW Dokie wind farm generated 91,791 MWh of electricity for the quarter, or 128% of budget. The operating subsidiary for the wind farm also successfully reached agreement with its lenders for term conversion of its loans, which converts the construction loan to an operating loan with the final maturity of its borrowings to 2030. Soda Lake Operations (100% Interest) The 16 MW capacity Soda Lake geothermal plant generated a net 14,415 MWh of electricity for the quarter, which is 87% of forecast, with the shortfall due primarily to decreased plant efficiency as a result of September weather that was hotter than expected. Additional improvements should increase capacity by up to 2 MW. A grant application is being submitted for reimbursement of 10% , or approximately $2 million, of eligible project costs. Two deep slim holes were recently completed and are now heating up for temperature surveys later this year. Expansion and Development Projects Alterra plans to expand the Reykjanes plant's capacity to 180 MW in two phases of 50 MW and 30 MW and thereby increase annual average generation by nearly 700 GWh, pending new PPAs with one or more power purchasers and obtaining project financing. During the quarter, Alterra received the operating permit required for the drilling of additional wells and other work necessary for the 50 MW expansion. The 30 MW expansion will not require any additional drilling as the utilized resource will be low pressure steam generated from current operations. In 2010, a 40 year power purchase agreement was signed with BC Hydro for the Upper Toba Valley Project that would expand Alterra's operations in the Toba Valley with two more run of river hydro plants, with combined capacity of 124 MW and estimated annual average generation of 316,000 MWh. The Company and its partner are updating a feasibility study for the project. Alterra holds a 51% interest in a potential expansion of the Dokie operations with a projected addition to capacity of approximately 156 MW.  The project has received a BC Provincial Environmental Assessment Certificate. Data collection for a resource assessment is scheduled to be completed mid-year 2012. Alterra holds an option to purchase for C$6 million 10% of a 50 MW portfolio of five photovoltaic solar facilities to be built in Ontario ("ABW Solar") by First Solar, Inc. If the option is exercised, Alterra will serve as the managing partner. First Solar, Inc. is expected to begin construction of ABW Solar within the next six months and completion is targeted for mid-2012. Exploration Projects New geothermal concessions were acquired in the Upper Lillooet region of southwestern British Columbia, and in southern Peru adjacent to and near Alterra's existing concessions. Certain less-promising concessions in Nevada were relinquished, and other concessions were sold. At the advanced-stage Mariposa project in Chile, further drilling is planned to complement the three existing slim hole wells and a partner is being considered to assist in the funding of this future work. In Nevada, exploratory drilling programs are planned or underway at the Soda Lake and McCoy geothermal fields. In Iceland, hole RN-30 was finished and testing and analysis commenced to assess its use in the proposed Reykjanes expansion. The Company holds an early stage run of river hydro power project in Bute Inlet of British Columbia with an estimated potential annual generation of 2.9 million MWh. In July 2011, the Company signed an Impact Benefit Agreement to advance this project, which lies primarily within the traditional territories of the Homalco First Nation. Outlook Ross Beaty, Alterra's Chairman, said, "Alterra's clean power production and cash generation grew strongly during the quarter due to the excellent performance of all six of our operating power plants. We are now a large, stable, long-term clean energy producer. I look forward to building on this solid base as we advance our great pipeline of in-house growth assets in 2012." Alterra Power will host a conference call to discuss financial and operating results on Tuesday, November 15, 2011 at 11:30 am ET (8:30 am PT).  North American participants dial 1-888-231-8191 and International participants dial 1-647-427-7450, the conference ID is 2533 7803. The call will also be broadcast live on the Internet at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3732960 . The call will be available for replay for one week after the call by dialing 1-416-849-0833 and entering replay pin number 2533 7803. Cautionary Note regarding Forward-Looking Statements and Information Certain statements included in this news release may contain information that is forward-looking within the meaning of certain securities laws, including information and statements regarding prospective results of operations, financial position, cash flows or growth potential.  These statements are based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions based on historical trends, current conditions and expected future developments. Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve 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 statements. Material risk factors include those set out in the management's discussion and analysis section of Alterra's most recent annual report and quarterly report, and in Alterra's Annual Information Form. Given these risks, undue reliance should not be placed on these forward-looking statements, which apply only as of their dates. Other than as specifically required by law, Alterra undertakes no obligation to update any forward-looking statements or information to reflect new information, subsequent or otherwise.             SOURCE Alterra Power Corp.For further information: <p> Anders Kruus, Vice President, Corporate Relations<br/> Alterra Power Corp.<br/> Phone: 604.678.6743<br/> Email: <a href="mailto:info@alterrapower.ca">info@alterrapower.ca</a> </p>