Maxim Power Corp. Announces 2013 Financial and Operating Results
CALGARY, ALBERTA--(Marketwired - Mar 18, 2014) - Maxim Power
Corp. (TSX:MXG) ("MAXIM" or the "Corporation") announced today the
release of its financial and operating results for the fourth
quarter and year ended December 31, 2013. The audited financial
statements, accompanying notes and Management Discussion and
Analysis will be available on SEDAR and on MAXIM's website on March
18, 2014. All figures reported herein are Canadian dollars unless
otherwise stated.
FINANCIAL HIGHLIGHTS
|
Three Months Ended December 31, |
Twelve Months Ended December 31, |
($ in thousands except per share amounts and as
noted) |
2013 |
2012 |
2013 |
2012 |
Net revenue (1) |
36,807 |
51,155 |
173,740 |
156,609 |
Adjusted EBITDA (1) |
(3,633) |
9,642 |
39,599 |
34,901 |
Adjusted net income (loss) (1) |
(9,812) |
566 |
10,583 |
10,513 |
|
Per share - basic and diluted |
$
(0.18) |
$
0.01 |
$
0.20 |
$
0.19 |
Net income (loss) attributable to shareholders |
(9,082) |
1,372 |
9,590 |
3,625 |
|
Per share - basic and diluted |
$
(0.17) |
$
0.03 |
$
0.18 |
$
0.07 |
Funds from operating activities before changes in
working capital ("FFO") (2) |
(3,867) |
8,304 |
37,266 |
33,970 |
|
Per share - basic and diluted |
$
(0.07) |
$
0.15 |
$
0.69 |
$
0.63 |
Electricity Deliveries (MWh) |
257,025 |
321,530 |
1,091,053 |
1,156,522 |
Average Power Prices: |
|
|
|
|
Alberta Pool ($ per MWh) |
$
48.60 |
$
78.70 |
$
80.19 |
$
64.31 |
Milner Realized ($ per MWh) |
$
50.30 |
$
98.21 |
$
106.92 |
$
90.78 |
Northeast U.S. Realized (US$ per MWh) |
$
150.62 |
$
162.72 |
$
136.30 |
$
91.76 |
|
|
|
|
|
(1) Select financial information was derived from the
audited consolidated financial statements and is prepared in
accordance with IFRS, except net revenue, adjusted EBITDA, and
adjusted net income. 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. Net revenue, adjusted EBITDA, and adjusted net
income do not have any standardized meaning prescribed by IFRS and
may not be comparable to similar measures presented by other
companies. |
(2) Funds from operating activities before changes in
working capital ("FFO") is an Additional GAAP measure provided to
assist management and investors in determining the Corporation's
cash flows generated by operations before the cash impact of
working capital fluctuations. |
(3) Generation capacity is manufacturer's nameplate
capacity net of minority ownership interests of third parties. |
OPERATING RESULTS
During the fourth quarter of 2013, net revenue decreased
primarily due to a decline in the Alberta pool price, which led to
a corresponding decline in generation at Milner. Adjusted EBITDA
and FFO decreased by a similar amount as fuel savings from lower
generation were offset by higher operating costs, primarily due to
costs related to an inquiry by the Federal Energy Regulatory
Commission, as well as losses on MAXIM's financial power swaps. Net
income (loss) attributable to shareholders and adjusted net income
(loss) decreased to a lesser extent as a result of tax recoveries
on lower taxable income.
On a year-to-date basis, net revenue improved in 2013 when
compared to 2012. The increase in this financial measure is
primarily due to higher electricity prices in Alberta and the
Northeast U.S. in the first three quarters of the year.
On a year-to-date basis, adjusted EBITDA, FFO, adjusted net
income and net income attributable to shareholders all improved in
2013 when compared to 2012. The increase in these financial
measures is primarily due to the same factors impacting net revenue
and gains on MAXIM's financial power swaps, partially offset by
higher operating costs. Net income attributable to shareholders
further increased primarily due to recognizing a smaller unrealized
loss on the derivative coal contract in 2013 as opposed to
2012.
STRATEGIC REVIEW
During the fourth quarter of 2012, MAXIM appointed financial
advisors to review the Corporation's investments in the United
States and France in order to identify options to maximize
shareholder value. Several offers were received for both of these
investments that were not compelling. MAXIM will continue to
operate these businesses as usual, work to bring the previously
reported FERC Inquiry in the United States to resolution, and
investigate further sales opportunities as they arise.
GROWTH INITIATIVES
Summit Coal Limited Partnership ("SUMMIT")
SUMMIT is MAXIM's development initiative located north of Grande
Cache, Alberta that owns metallurgical coal leases for Mine 14
("M14") and Mine 16S ("M16S"). This initiative is construction
ready and is the most advanced metallurgical coal mine development
project in North America.
Current estimates for M14 are 18.9 million tonnes of low-mid
volatile metallurgical coal reserves with a mine life of 17 years
based on the NI 43-101 Technical Report filed on SEDAR on March 21,
2013. M16S is located 30 kilometers northwest of M14 and represents
1,792 hectares or 29% of SUMMIT's total area of coal leases. A NI
43-101 Technical Report has not been prepared for the Mine 16S
property. The coal quality of M14 has been tested by numerous
potential buyers and independent labs and is a very coveted mid to
low volume coking coal with other attributes which are best in
class.
The Corporation considers the advancement of the M14 and M16S
development projects strategic for MAXIM primarily because of the
value of metallurgical coal and partially due to Milner's ability
to utilize tailings and lower quality fuels, which are by-products
of the beneficiation of coal, to produce electricity. All
monetization options including: i) construction, own and operate,
ii) joint venture or iii) outright sale, have been preserved for
SUMMIT and the evaluation of these options is ongoing.
Deerland Peaking Station ("D1")
MAXIM is actively pursuing commercial arrangements that will
allow for the full-scale construction of the 190 MW D1 Station to
commence during 2014. In 2012, MAXIM entered into an agreement to
secure firm natural gas transportation services for D1. MAXIM had
previously received regulatory approvals 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. The Corporation incurred costs in 2013 related to
AESO studies, engineering and legal work. Additional costs will be
incurred in 2014 for engineering and construction work in order to
further develop the project. All monetization options including: i)
construction, own and operate, ii) joint venture or iii) outright
sale, have been preserved for D1 and the evaluation of these
options is ongoing.
Milner Expansion ("M2")
The Alberta Utilities Commission ("AUC") has granted MAXIM
approval to develop a 500 MW generating facility adjacent to the
existing 150 MW generating facility ("M1"). A lengthy public
consultation and regulatory process culminated in the project's
final approval by the AUC on August 10, 2011. On September 12, 2012
the Government of Canada enacted new greenhouse gas legislation
that limits the amount of carbon dioxide emitted by coal-fired
generation facilities. As a result of the new greenhouse gas
legislation, on November 15, 2013, MAXIM submitted amendments for
the existing M2 permit that would convert the M2 fuel source from
coal to natural gas. MAXIM expects approval of these submissions by
the second quarter of 2014. The Corporation incurred costs in 2013
related to AESO studies and legal and consulting work associated
with permit amendments. In 2014, MAXIM will incur further costs on
the aforementioned permit amendments and engineering
consultation.
Buffalo Atlee ("B1")
MAXIM acquired the B1 Power Project, 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 six years and supports project development based on
expected new provincial greenhouse gas legislation and/or higher
power prices than currently forecasted. 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 expected new provincial
greenhouse gas legislation.
CONFERENCE CALL FOR 2013 FOURTH QUARTER AND YEAR END RESULTS
MAXIM will host a conference call for analysts and investors on
Thursday, March 20, 2014 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 (877)
223-4471 or (647) 788-4922 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 March
20, 2014 to March 27, 2014. To access the replay, dial (800)
585-8367 or (416) 621-4642. In addition, the recording will be
available commencing March 20, 2014 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 785 MW of electric
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.
Maxim Power Corp.John R. BobenicPresident and CEO(403)
750-9300Maxim Power Corp.Michael R. MayderVice President, Finance
and CFO(403) 750-9311Maxim Power Corp.Press Line: (403)
750-9305www.maximpowercorp.com
Maxim Power (TSX:MXG)
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