Please note that Alterra is now an affiliate of Innergex Renewable Energy Inc. For more information, please visit


Alterra Power Announces HS Orka's Release of Mid Year Financial Results


VANCOUVER, Aug. 26, 2011 /CNW/ - Alterra Power Corp. (TSX: AXY) announces that Icelandic geothermal company HS Orka hf ("HS Orka"), held 75% by Alterra, today released its audited financial and operating results for the six month period ended June 30, 2011.

HS Orka prepares its financial statements in accordance with International Financial Reporting Standards and the statements are reported in Icelandic krona ("ISK"). These results can be accessed at

Highlights comparing the six month period ended June 30, 2011 to the six month period ended June 30, 2010 (based on amounts converted into US$ at an average rate of US$0.00782 per ISK for the six month period ended June 30, 2010 and at an average of US$0.00868 per ISK for the six month period ended June 30, 2011):

  • Revenue increased by 19.1% from $27.7 million to $33.0 million due to an increase in retail sales, higher aluminum prices, an improved currency conversion rate and a 1.7% increase in electricity production. Approximately 46% of the HS Orka's power sales agreements are indexed to the price of aluminum.

  • Gross profit increased by 28.0% from $9.3 million to $11.9 million due to the increase in revenue, offset by an increase in the pension, salary and depreciation expenses in 2011 and by the higher currency conversion rate.

  • EBITDA increased by 12.9% from $11.6 million to $13.1 million, including $1.9 million in one-time arbitration costs and pension plan expenses. EDITDA for the 12 month period ended June 30, 2011 was $24.1 million.

  • During the quarter ended June 30, 2011, HS Orka invested $4.9 million to drill exploratory well RN-30 at Reykjanes. Results are expected later this year. RN-30 is part of the planned expansion of the Reykjanes plant capacity from 100 MW to 180 MW in two phases pending permitting and new power purchase agreements with one or more power purchasers.  As at June 30, 2011, HS Orka had invested approximately $46.5 million for this expansion.

  • HS Orka generated a net income increase of $25.2 million, moving from a net loss of $18.7 million to a net income of $6.5 million. The increase in net income was due to the increase in EBITDA and recognition of a non-cash gain in fair value of embedded derivatives in sales contracts in 2011 compared to a loss in 2010, partially offset by non-cash currency losses and higher non-cash income tax expense in 2011.

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

HS Orka Financial Results

(expressed in millions of US dollars and under IFRS - unaudited)

For the six months ended
June 30, 2011

For the six months ended
June 30, 2010
Total revenue $ 33.0   $ 27.7
Cost of energy production   (21.1)     (18.5)
Gross Profit   11.9     9.3
Other operating expenses   (3.1)     (1.8)
Operating income (loss)   8.8     7.4
Other income (expenses)   (1.4)     (28.5)
Equity income   0.6     (1.3)
Income tax   (1.5)     3.7
Income (loss) for the period   6.5     (18.7)
EBITDA (1)   13.1     11.6
As at June 30, 2011 / 2010:          
Total assets   377.0     314.7
Total liabilities   218.9     206.2
Cash and cash equivalents   16.3     7.7
Working capital (2)   17.9     20.4

HS Orka Financial Results to be included in Alterra's Consolidated Financial Statements

On August 17, 2010, Alterra increased its shareholding of HS Orka to 84.21% and began consolidating HS Orka results in full. Prior to August 17, 2010 Alterra equity accounted for its interest in HS Orka.  On September 3, 2010, the Company increased its shareholding of HS Orka to 98.53% and on June 1, 2011, the Company reduced its shareholding of HS Orka to 75%.

As a result, Alterra will include equity income from HS Orka from July 1, 2010 to August 16, 2010 and commence consolidating HS Orka's results from August 17, 2010. Alterra expects to include the following amounts in its consolidated financial statements for the year ended June 30, 2011 including fair value adjustments applied on acquisition:

(expressed in millions of US dollars and reconciled to Canadian GAAP - unaudited)

For the six months
ended June 30, 2011
Total revenue   $ 33.9
Cost of energy production     (22.3)
Gross Profit     11.6
Other operating expenses     (2.5)
Operating income     9.1
Other income (expenses)     (1.3)
Equity income     0.4
Income tax expense     (1.6)
Income for the period     6.6
EBITDA (1)     12.9
As at June 30, 2011:      
Total assets     512.3
Total liabilities     254.8
Cash and cash equivalents     16.3
Working capital (2)     13.6

1 EBITDA is defined by the Company as earnings before interest and other financing costs, taxes, depreciation and amortization, as well as before deductions for non-cash charges related to employee compensation, equity earnings/losses, loss on re-measurement of equity interest, changes to the balance sheet carrying value of long-term debt. 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.

Current assets - current liabilities (net of current portion of long term debt)

About HS Orka

HS Orka is the largest privately owned energy company in Iceland, producing 9% of the country's power needs and 10% of the country's heating needs. Installed geothermal power capacity is 175 MW from the Svartsengi and Reykjanes power plants. In addition, HS Orka generates 150 MW of thermal energy for district heating. Expansions are planned that could increase HS Orka's geothermal power production to 405 MW by 2016.

About Alterra Power Corp.

Alterra Power Corp is a leading global renewable energy company, formed in 2011 through the merger of Magma Energy Corp and Plutonic Power Corp.  We operate six power plants totaling 571 MW of capacity, including the HS Orka geothermal plants, a geothermal plant in Nevada, British Columbia's largest run of river hydro facilities and the province's largest wind farm. Our 315 MW share of production generates 1,575 GWh of clean power annually. We have an extensive portfolio of exploration and development projects, a skilled international team of explorers, builders and operators and the financial capacity to support our aggressive growth plans.

Cautionary Note regarding Forward-Looking Statements and Information

This news release contains certain "forward-looking information" within the meaning of Canadian securities laws, which may include, but is not limited to, statements with respect to future events or future performance, the fulfillment of all conditions precedent to the obligation of the parties under the agreements, required consents and third party approvals. This news release also contains statements with respect to our plans to expand our operations, management's expectations regarding our growth, business prospects and opportunities and energy generation capacities. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. 

Notice on third party links

You are now leaving Alterra Power Corp.’s website. The views, opinions and information presented are solely of the author and not representative of those of Alterra Power Corp., its directors, officers or employees.

Alterra Power Corp. disclaims responsibility in respect of any third party web sites and any views, information or opinions contained therein.