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Sprott Power Corp. Announces 2011 Second Quarter Results

^{Published on 2011-08-11 04:10:37 - Market Wire}
 

TORONTO, Aug. 11, 2011 /CNW/ - Sprott Power Corp. ("Sprott Power" or "the Company"), (TSX: SPZ), an owner, operator and developer of renewable energy projects, today announced its financial and operational results for the three and six months ended June 30, 2011.

Operational Highlights

• On June 13, 2011, the Company announced it had entered into a limited partnership agreement for SP Amherst Wind Power LP which will own the 31.5 MW wind power project located in Amherst, Nova Scotia (the "Amherst Project").  The Amherst Project has a scheduled commercial operations date in the first quarter of 2012.  During the second quarter of 2011 significant progress was made on the project including:
  
  
• The execution of an Engineering, Procurement and Construction Agreement with Suzlon Energy Limited along with a 10 year Warranty, Maintenance and Service Agreement;
  
  
• Securing commitment letters with lenders to provide up to $45.0 million of non-recourse debt financing for the project;
  
  
• The commencement of construction.
  
  
• Acquired the rights to a 40.0 MW project near Etzikom, south of Medicine Hat, Alberta.  Etzikom is the home of the Canadian National Historic Windpower Centre.  The Company is in the process of evaluating the project for its development potential.
  
  
• Completed the integration and transition of the operational responsibilities for the acquired assets and the conversion to one common accounting and reporting system.

Financial Summary

• The operating assets performed as management had anticipated and generated positive cash flow from operations prior to changes in working capital of $0.3 and $0.4 million in the three and six months ended June 30, 2011, respectively.
  
  
• Revenue for the three and six months ended June 30, 2011 period was $2.5 million and $4.6 million respectively.  Had the Company consolidated the revenue from its acquired companies from January 1, 2011, revenue for the six months ended June 30, 2011, would have been $5.7 million (Q1 - $3.2 million; Q2 - $2.5 million).  The reduction in the run rate of normalized revenue in the second quarter was as expected due to the reduced wind resources in the summer months.
  
  
• Earnings before interest, income taxes, depreciation and amortization, acquisition gain and expenses ("EBITDA") was $1.3 million for the three months ended June 30, 2011, and $2.5 million for the six months ended June 30, 2011.
  
  
• Net loss from continuing operations for the second quarter was $0.5 million or $0.01 per share compared to net income of $0.4 million or $0.01 per share for the first quarter.  The net loss was primarily due to the expected seasonality in revenue due to reduced wind resources in the second quarter.
  
  
• The net loss with respect to assets held for sale for the second quarter was $0.5 million primarily due to a non-cash fair value adjustment.  The net loss for the second quarter of $0.1 million or $0.02 per share and year-to-date the net loss was $0.5 million or $0.02 per share.
  
  
• At June 30, 2011, the Company had working capital of $5.5 million including $7.3 million in cash.  Total assets at June 30, 2011, were $137.3 million including restricted cash of $7.3 million; long-term debt was $54.5 million; and total equity before non-controlling interest was $53.8 million ($1.12 per share on a non-diluted basis).

Recent Events

On May 11, 2011, the Company announced that it signed a non-binding letter of intent to sell one of its advanced-stage hydro projects, the 30.0 MW Anyox Creek Hydroelectric Project, and other nearby long-term hydro development assets located in north western British Columbia.  The sale was anticipated to close on or before June 30, 2011, and was subject to the successful completion of various conditions.  The transaction did not close by June 30, and subsequently the parties agreed to extend the closing to August 31, 2011.

"We were pleased that the operating results during the second quarter of 2011 were consistent with our expectations for the acquisitions completed in the first quarter.  In addition, Sprott Power has continued to execute on its plan to double our production capacity within the next twelve months," said Jeff Jenner, CEO of Sprott Power.  "The integration of the acquired assets from Q1 is now complete and we have successfully transitioned to the construction phase on the 31.5 MW development project in Amherst, Nova Scotia.  We will continue to focus on enhancing our development pipeline for the balance of this year."

The Company's full financial statements and Management's Discussion and Analysis for the quarter ended June 30, 2011, can be found at [ www.sedar.com ] or the Company's website at [ www.sprottpower.com ].

Non-IFRS Financial Measures

This press release includes financial terms (including EBITDA) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards ("IFRS"). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers.

About Sprott Power Corp.

Sprott Power is a publicly-traded (TSX: SPZ) Canadian-based company dedicated to the development, owning and operating of renewable energy projects. Through project development efforts, acquisitions, partnerships and joint ventures, Sprott Power provides its shareholders with income and growth from the renewable power generation sector of the energy industry.

Forward-Looking Statements

Certain information contained in this press release may constitute "forward-looking information" which reflects the current expectations of Sprott Power. This information reflects Sprott Power's current beliefs with respect to future events and are based on information currently available to management. Forward-looking information involves significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information including, without limitation, the risks listed under the heading "Risk and Uncertainties" in the Management Discussion and Analysis of Financial Results dated June 13, 2011.  Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information contained in this release. Although forward-looking information contained in this release is based upon what Sprott Power believes to be reasonable assumptions, management cannot assure investors that actual results, performance or achievements will be consistent with this forward-looking information. The forward-looking information is made as of the date of this release and Sprott Power does not assume any obligation to update or revise it to reflect new events or circumstances, except as required by law.