Alterra Power Announces Results for the Year Ended December 31, 2015


(under IFRS and all amounts in US dollars unless otherwise stated)

VANCOUVER, March 15, 2016 /CNW/ - Alterra Power Corp. (TSX: AXY) ("Alterra" or the "Company") is pleased to report its financial and operating results for the year ended December 31, 2015. For further information on these results please see Alterra's Consolidated Financial Statements and Management's Discussion and Analysis.

At December 31, 2015, Alterra consolidated 100% of the results of operations from its Icelandic subsidiary HS Orka, while Alterra's interests in the Toba Montrose, Dokie 1 and Shannon renewable power projects were accounted for as equity investments. In certain statements in this news release, Alterra's results are disclosed as Alterra's "net interest", by which the Company means the effective portion of operating results that the Company would have reported if each of HS Orka (66.6%), Toba Montrose (40%), Dokie 1 (25.5%), Shannon (50% sponsor equity interest) and Soda Lake (100% until Soda Lake was sold on January 30, 2015) had been reported in accordance with Alterra's actual share of ownership at December 31, 2015 and for the year then ended. Management believes that net interest reporting provides the clearest view of Alterra's performance.

Highlights for the year include and subsequent period include:

  • On-target production: The Company achieved 99.6% of its budgeted generation for the year.
  • Record generation at BC assets; earn-out payment: Both Toba Montrose and Dokie 1 achieved record generation in 2015, breaking previous records from 2014 and 2011 respectively. On December 26, Dokie 1 achieved a performance hurdle entitling the Company to a C$0.8 million earn-out payment, which was received in February 2016.
  • Commercial operations achieved at Shannon:
    • Financial closing: On June 30, the Company closed a $287.0 million construction loan which was supported by a $218.8 million tax equity investment commitment. On the same day, the Company entered into a partnership agreement resulting in each party owning 50% of the project.
    • Commercial operations: On December 10, construction of the 204 MW wind farm was completed and Shannon commenced commercial operations. All 119 turbines were successfully placed in service and the construction was completed on time and on budget.
    • Tax equity funding: On December 14, the tax equity investment was fully funded, with proceeds used to retire the construction loan facility in full and the sponsors commenced a partnership with the tax equity investors.
    • Initial return of capital: On December 29, Alterra received a $3.5 million return of capital representing unused construction contingency funds.
  • Jimmie Creek construction continues: Construction for the 62 MW hydro project continued and is on time and on budget. Progress during the year included completion of the switchyard, penstock, intake and tie-in to the transmission line as well as commissioning of the intake. At the powerhouse, all of the electrical and mechanical equipment has been delivered to the site and the installation of the generators has commenced. The facility is expected to commence generation in the summer of 2016.
  • Acquisition of South Toba hydroelectric projects: In October the Company agreed to acquire the water rights for four hydro development projects (the South Toba projects: Chusan, Powell, Eldred North and Eldred South) which are all located near the Toba Montrose and Jimmie Creek projects and are situated along the Toba Montrose transmission line.
  • First Nation agreement signed for Tahumming hydro project: The Company signed an agreement with the Klahoose First Nation to jointly develop the 15 MW Tahumming hydro project in British Columbia, near the Toba Montrose and Jimmie Creek projects.
  • Completed step-up acquisition of Icelandic hydro projects: In October 2015 HS Orka increased its ownership interest to 52.5% in the 55 MW Hvalá and 10 MW Skúfnavatnavirkjun hydro projects through a step-up acquisition of subsidiary Vesturverk ehf.
  • USA wind projects: The Company executed land leases for two wind projects with a generation capacity of up to 350 MW.
  • Mariposa drilling project in Chile postponed: In October 2015, Energy Development Corporation, our majority partner on the project, elected to postpone the previously scheduled 2015 drilling program in response to lower commodity prices which have negatively impacted the near-term project economics.
  • Distributions received: The Company received distributions during the year from equity investments of $8.8 million and another C$5.1 million subsequent to year end. The Company also received a $1.6 million distribution from HS Orka (which was a flow through of the 2014 distribution from the Blue Lagoon asset).
  • Currency fluctuations resulted in lower annual Adjusted EBITDA and revenue: Consolidated and net interest Adjusted EBITDA each decreased by 10% to $46.4 million and $37.0 million, respectively, and consolidated and net interest revenue each decreased by 18% to $57.8 million and 16% to $71.6 million, respectively. The decline in annual Adjusted EBITDA and revenue was primarily due to currency fluctuations with the Canadian dollar weakening 19% from the prior year, in addition to the sale of the Soda Lake facility in January 2015.
  • New power purchase agreement: HS Orka signed a power purchase agreement with Thorsil ehf., which is planning to construct and operate a silicon metal plant in Helguvík, Iceland to supply up to 32 MW of the plant's power needs. The delivery of power under the contract is subject to several conditions on behalf of both parties.

Financial Results

The following table shows Alterra's net interest in select operating and financial results for the year, in addition to key financial information extracted from the consolidated results.

For the year ended
December 31, 2015 (a)

HS Orka



Dokie 1





and Head



Generation (MWh)








Total revenue








Gross profit








Adjusted EBITDA (b)









For the year ended
December 31, 2014 (a)

HS Orka


Toba Montrose


Dokie 1


Soda Lake



and Head







Generation (MWh)







Total revenue







Gross profit







Adjusted EBITDA (b)









Here and elsewhere, all tabular amounts (except generation) are expressed in thousands of US dollars.


Here and elsewhere, adjusted EBITDA ("Adjusted EBITDA") is defined by the Company as earnings before interest, taxes, foreign exchange, depreciation and amortization, as well as before adjustments for changes in the fair value of holding company bonds (Sweden) and derivatives, write-offs of development costs, other income (expense) except business interruption insurance proceeds, amortization of below market contracts, value assigned to options granted, share of results of equity investments, the Company's proportionate interest in Adjusted EBITDA of its equity investments and non-recurring items (insurance deductibles, litigation and arbitration costs).   Adjusted EBITDA has been calculated on a consistent basis with the prior year.  The Company discloses Adjusted EBITDA as it is a measure used by analysts and by management to evaluate the Company's performance.  As Adjusted EBITDA is a non-IFRS measure, it may not be comparable to Adjusted EBITDA calculated by others.  In addition, Adjusted EBITDA is not a substitute for net earnings.  Readers should consider net earnings in evaluating the Company's performance. For a reconciliation of consolidated Adjusted EBITDA  to Alterra's consolidated financial statements refer to the Company's Management's Discussion and Analysis for the year ended December 31, 2015 available on SEDAR at


The facility was sold on January 30, 2015.


Here and elsewhere, the 50% net interest in Shannon reflects the Company's 50% share in sponsor equity. Under the partnership agreement between the sponsors and the tax equity investors, 99% of taxable earnings and tax credits will be allocated from the project to the tax equity investors, as well as a minority allocation of cash that will vary under certain conditions, until the tax equity investors achieve an agreed yield, which is expected to occur within ten years of the commercial operations date.

Consolidated Results

Revenue was $57.8 million for the year ended December 31, 2015, down 18% from the comparative year primarily due to fluctuations in foreign exchange and the sale of the Soda Lake facility in January 2015.

The Company recorded a net loss of $17.3 million, an improvement from the comparative year ($34.8 million loss), resulting primarily from changes in non-cash items such as the fair value of derivatives and foreign exchange fluctuations.

Consolidated cash and cash equivalents at December 31, 2015 was $10.3 million of which $6.4 million is held in the Company's Icelandic subsidiary ($63.2 million and $25.1 million respectively at December 31, 2014). The decline in cash was primarily due to funding the Company's equity contribution into Shannon plus HS Orka's capital expenditures and loan repayments.

The Company's consolidated working capital deficit at December 31, 2015 was $123.3 million compared to a positive working capital of $46.2 million at December 31, 2014.  The decrease was primarily due to the holding company bonds (Sweden) being reclassified as short-term (the bonds mature in July and December 2016 and are non-recourse to the Company) and spend associated with the construction of Shannon. Excluding HS Orka and the holding company bonds (Sweden), which the Company is in the process of refinancing, the Company has positive working capital of $2.2 million.

Net Interest Results

Alterra's net interest revenue decreased by $13.6 million to $71.6 million primarily due to currency impacts and the sale of Soda Lake. These factors also resulted in a 10% decrease in Adjusted EBITDA to $37.0 million. Measured in originating currencies, revenue and Adjusted EBITDA increased at HS Orka, Toba Montrose and Dokie 1 due to higher generation at Toba Montrose and Dokie 1 and increased retail sales at HS Orka.

The net interest cash position at December 31, 2015 was $20.9 million.

Operating Results

For the year ended December 31, 2015, the Company achieved 99.6% of its budgeted generation for the year, led by Toba Montrose and Dokie 1 which both achieved record generation in 2015.

2015 Generation (MWh)


Net Interest


Budget (a)


Budget (a)


% of Budget













Soda Lake (b)






Toba Montrose






Dokie 1


















(a) Includes planned maintenance outages.

(b) The facility was sold on January 30, 2015.


For the 2016 and 2017, management expects the Company to achieve (net interest):



Generation (GWh)



Total revenue



Adjusted EBITDA



Outlook notes:

  1. Estimated generation for hydro and wind projects is based on resource assessments of average annual generation at each project, adjusted for planned maintenance outages, assuming Jimmie Creek commences commercial operations in the summer of 2016. Forecast generation for geothermal facilities is based on historical generation, assuming the recently drilled new wells at Svartsengi are placed in service and reinjection at Reykjanes is successful, in each case, on schedule.
  2. Revenue and Adjusted EBITDA projections are based on internal budgets and models for revenue and cost for all operating projects (Jimmie Creek commencing summer 2016) and modest escalation of other expense and revenue streams. Shannon estimated revenue reflects the majority of power sales occurring under the long-term power hedge (commencing June 1, 2016) and a minority amount sold at estimated merchant spot prices. HS Orka revenue estimates reflect forecasted aluminum prices for a portion of revenue (25.9% in 2015). Anticipated head office cost and development spend has been included in Adjusted EBITDA and reflects budgeted spend for the year.
  3. Generation, revenue and Adjusted EBITDA for HS Orka are forecast to be lower in 2016 than 2017, as the anticipated positive impact from the reinjection program at Reykjanes is not expected to be substantially realized until 2017.  Until full realization of the reinjection program has occurred, additional power purchases will be necessary in order to meet demand.  Such purchases, while still profitable, achieve a lower gross margin than if such sales resulted from power generated by our power plants.
  4. The 2017 outlook for revenue and Adjusted EBITDA (other than for HS Orka, discussed above) reflects modest inflation and a full year of the Shannon hedge and Jimmie Creek operations.
  5. Revenue and Adjusted EBITDA projections have been converted from their functional currency to USD at a rate of C$1.34, ISK129 and Euro1.97 for both 2016 and 2017.

"We were pleased to mark an important milestone this year through our success in placing Shannon into full operations" said John Carson, Alterra's CEO. "2016 will see us continue that growth in both Canada and the USA, as we construct Jimmie Creek and develop new projects that we expect to be realized over the next few years."

Alterra Power will host a conference call to discuss financial and operating results on Wednesday, March 16, 2016 at 11:30 am ET (8:30 am PT).

North American participants dial 1-888-390-0605 and International participants dial 1-416-764-8609; the conference ID is 85456007

The call will also be broadcast live on the Internet at

The call will be available for replay for one week after the call by dialing 1-416-764-8677 and entering replay PIN 456007

Cautionary Note Regarding Forward-Looking Statements and Information

Certain of the statements and information included in this news release constitute forward-looking statements and information within the meaning of applicable securities laws. All statements, other than statements of historical fact, are forward-looking statements or information. This information may involve known and unknown risks, assumptions and uncertainties, and other factors which may cause the Company's actual results, performance or achievements to be materially different from the future results, performance or achievements implied by such statements or information. Specifically, forward-looking statements within this news release relate to, among other things: successful development and construction of our pre-operational projects and properties, prospective generation, results of operations, and financial position, and the information found under the heading "Outlook".

These statements and information reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. These assumptions include, among others, the expected power generation from our operations, the success and timely completion of planned development, expansion and construction programs, and modeling and budgeting based on historical trends, current conditions and expected future developments. Forward-looking statements and information also involve known and unknown risks that may cause actual results to differ materially from those expressed by such statements or information, and the Company has made assumptions and estimates based on or related to many of these factors. These risks include volatility of renewable energy resources, inherent risks in operating and constructing power plants and development programs related to the same, contractual risks related to credit facilities, partnership and power purchase agreements, prospective power, currency and commodity price fluctuations, health, safety, social and environmental risks and risks related to reliance on third parties.  Additional risks, assumptions and influential factors are set out in the Company's management discussion analysis and Alterra's most recent annual information form, copies of which are available on SEDAR at

Although the Company has attempted to identify important factors that could cause actual results to differ materially, given the inherent uncertainties in such forward-looking statements and information, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Investors are cautioned against undue reliance on any such forward-looking statements or information, 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.

Cautionary Note Regarding Forward-Looking Financial Information
The information provided in the "Outlook" section of this news release constitutes forward-looking financial information within the meaning of applicable securities laws. Management has provided this information as of the date of this news release in order to assist readers to better understand the expected results and impact of the Company's operating and construction projects expected to be commissioned in the near term. Readers are cautioned that this information may not be appropriate for any other purpose, including investment purposes, and consequently, should not place undue reliance on this information. Forward-looking financial information also constitutes forward-looking statements within the context of applicable securities laws and as such, is subject to the same risks, uncertainties and assumptions as are set out above.

SOURCE Alterra Power Corp.

Peter Lekich, Corporate Communications, Alterra Power Corp., Phone: 604.235.6719, Email: