TORONTO, Aug. 8, 2019 /CNW/ - Polaris Infrastructure Inc.
(TSX: PIF) ("Polaris Infrastructure" or the "Company"), a
Toronto-based company engaged in
the operation, acquisition and development of renewable energy
projects in Latin America, is
pleased to report its financial and operating results for the
quarter ended June 30, 2019.
This earnings release should be read in conjunction with Polaris
Infrastructure's financial statements and management's discussion
and analysis ("MD&A"), which are available on the Company's
website at www.polarisinfrastructure.com and have been posted on
SEDAR at www.sedar.com. The dollar figures below are
denominated in US Dollars unless noted otherwise.
HIGHLIGHTS
- Continued Strong Power Generation: The San Jacinto
project generated 129 GWh (net) (an average of 59.0 MW (net)),
resulting in revenue of $17.3 million
for the three months ended June 30,
2019, versus revenue of $17.7
million on generation of 139 GWh (net) (an average of 63.7
MW (net)) in the prior year period. The 2% revenue decrease was
mainly due to the maintenance shutdown at San Jacinto in
April 2019. The maintenance shutdown
in 2018 was in March 2018 and
accordingly the second quarter of 2019 is not directly comparable
with the second quarter of 2018. The 5 MW capacity Canchayllo
facility contributed $0.4 million of
revenue for the quarter and produced total net 7.2 MWh for the
quarter and 17.0 MWh for the six months ending June 30, 2019.
Year over year Company revenue for six months ending June 30, 2019 was $35.8
million versus $32.4 million
in 2018, adjusting for maintenance periods in the first quarter of
2018 and the second quarter of 2019, respectively. Furthermore, on
a year over year basis for six months ending June 30, 2019 the San Jacinto project generated
268 GWh (net) (an average of 61.6 MW (net)), versus generation of
256 GWh (net) (an average of 58.6 MW (net)) in the prior year six
month period, again normalizing for maintenance periods that did
not coincide year over year.
- Continued Cash Flow Generation: The Company generated
Adjusted EBITDA (a non-GAAP measure) of $14.5 million in the three months ended
June 30, 2019, down $0.6 million from the prior year period,
primarily as a result of the maintenance shutdown. See Use of
Non-GAAP Measures section below for reconciliation of Adjusted
EBITDA to Total income (loss) and comprehensive income
(loss).
For the six months ended June 30,
2019 the Adjusted EBITDA was $30.4
million versus $27.5 million
for the same period in 2018, which represents an increase of
$2.9 million or 10.6%.
- Continued Construction Progress in Peru: The Company continues to execute on
its build-out and completion of the El Carmen and 8 de Agosto
projects acquired October 30, 2018.
Progress continues towards a commercial operations date in
October 2019. Both projects are
estimated to be at a construction progress of 84% of completion.
Excavation of new tunnels at both El Carmen and 8 de Agosto has
been completed successfully and we are now in the process of final
reinforcement. Inspections of all conduction lines have been
completed and repairs where required are being undertaken. All
rights-of-way for transmission line access have been finalized for
both rural and urban tranches. Pre-commissioning activities in the
Sub-stations commenced in early July and are proceeding per
schedule.
- Successful Close of Financing: The Company successfully
closed a private placement offering on May
28, 2019 of an aggregate principal amount of CAD
$25 million 7% senior unsecured
convertible debentures due 2024. The net proceeds from the offering
will be used for general corporate purposes and to provide the
flexibility to pursue further corporate development opportunities
in Peru and similar jurisdictions
in Latin America. The offering was
upsized from CAD $12,000,000.
FINANCIAL OVERVIEW
The financial results of Polaris Infrastructure for the three
and six months ended June 30, 2019
and 2018 are summarized below:
|
Three Months
Ended
|
Six Months
Ended
|
(all $ figures in
thousands except income (loss) per share)
|
June 30,
2019
|
June 30,
2018
|
June 30,
2019
|
June 30,
2018
|
Total
revenue
|
$
|
17,269
|
$
|
17,657
|
$
|
35,870
|
$
|
32,387
|
Adjusted EBITDA
(1)
|
14,496
|
15,128
|
30,372
|
27,458
|
Finance
costs
|
(4,111)
|
(3,850)
|
(8,683)
|
(8,089)
|
Total earnings
attributable to Owners of the Company
|
(6,731)
|
3,910
|
(3,351)
|
4,422
|
|
|
|
|
|
Basic earnings per
share attributable to owners of the Company
|
($0.41)
|
$0.25
|
($0.21)
|
$0.28
|
Diluted earnings per
share attributable to owners of the
Company
|
($0.40)
|
$0.25
|
($0.20)
|
$0.28
|
|
|
|
|
|
|
|
|
As at
June 30, 2019
|
As at
December 31,
2018
|
Total
assets
|
|
|
$
|
467,364
|
$
|
465,788
|
Long-term
debt
|
|
|
172,623
|
165,676
|
Total
liabilities
|
|
|
273,387
|
262,342
|
Cash
|
|
|
55,534
|
37,809
|
Working
capital
|
|
|
36,129
|
13,755
|
(1)
|
Refer to Use of
Non-GAAP Measures section for further details with respect to
calculation of Adjusted EBITDA.
|
For the three months ended June 30,
2019, the Company reported revenue of $17.3 million and Adjusted EBITDA of $14.5
million, compared to revenue of $17.7
million and Adjusted EBITDA of $15.1 million, for the
same period in 2018. The decrease in revenue resulted from the
down-time associated with our second quarter maintenance at San
Jacinto offset by the 3% annual tariff increase combined with
a contribution from our newest Peruvian facility
Canchayllo. The negative earnings attributable to owners of
the Company of $6.7 million is due to
a one-time, non-cash charge of $11.5
million in conjunction with the write-down of historical
costs at the development project at Casitas in Nicaragua. Earnings attributable to owners of
the Company before such write-down was $4.8
million compared to $3.9
million for the same period last year. See Use of
Non-GAAP Measures section below for reconciliation of Adjusted
EBITDA to Total loss and comprehensive loss.
For the quarter ended June 30,
2019, the Company had net operating cash inflows of
$21.4 million, net investing cash
outflows of $9.5 million and net
financing cash inflows of $5.7
million. At June 30, 2019, the
Company had cash of $55.5
million.
"The continued growth in cash flow generation at San Jacinto is
reflected in these numbers and will provide the basis to continue
to grow and diversify," noted Marc
Murnaghan, Chief Executive Officer of Polaris
Infrastructure. "The construction of the two projects in
Peru is in full mobilization now
and we expect to complete construction by the 4th
quarter of this fiscal year, which will be another significant
milestone for the Company."
Polaris
Infrastructure will hold its earnings call to discuss financial and
operating results for the quarter ended June
30, 2019 on Thursday, August 8th, 2019 at 10:00 am
EST.
To listen to the
call, please dial +1 (647) 427-7450 or +1 (888)
231-8191.
A digital
recording of the earnings call will be available for replay two
hours after the call's completion, until
May 13,
2019. Please dial +1 (416) 849-0833 or +1 (855) 829-2056;
Conference ID: 1161728.
|
About Polaris Infrastructure
Polaris Infrastructure is a Toronto-based company engaged in the
operation, acquisition and development of renewable energy projects
in Latin America. Currently, the Company operates a 72MW
geothermal project located in Nicaragua and a 5MW run-of-river project in
Peru. The Company is also completing the construction of
another 28 MW of run-of-river projects also located in Peru.
USE OF NON-GAAP MEASURES
Certain measures in this document do not have any standardized
meaning as prescribed by International Financial Reporting
Standards ("IFRS") and, therefore, are not considered generally
accepted accounting principles ("GAAP") measures. Where
non-GAAP measures or terms are used, definitions are provided. In
this document and in the Company's consolidated financial
statements, unless otherwise noted, all financial data is prepared
in accordance with IFRS.
EBITDA is a non-GAAP metric used by many investors to compare
companies on the basis of ability to generate cash from
operations. The Company uses Adjusted EBITDA to assess its
operating performance without the effects of (as applicable):
current and deferred tax expense, finance costs, interest income,
other gains and losses, impairment loss, depreciation and
amortization of plant assets, share-based compensation and other
non-recurring items. The Company adjusts for these factors as they
may be non-cash, unusual in nature and are not factors used by
management for evaluating the performance of the Company. The
Company believes the presentation of this measure will enhance an
investor's understanding of its operating performance.
Adjusted EBITDA is not intended to be representative of cash
provided by operating activities or results of operations
determined in accordance with GAAP. The table below
reconciles between Adjusted EBITDA and Net income (loss) and
comprehensive Income (loss), calculated in accordance with
IFRS.
|
|
Three months
ended
|
Six months
ended
|
(in
thousands)
|
|
June 30,
2019
|
June 30,
2018
|
June 30,
2019
|
June 30,
2018
|
Total earnings (loss)
attributable to Owners of the
Company
|
|
$
|
(7,723)
|
$
|
3,910
|
$
|
(4,343)
|
$
|
4,422
|
Add
(deduct):
|
|
|
|
|
|
Net loss attributable
to non-controlling interest
|
|
(1,653)
|
26
|
(1,653)
|
32
|
Income tax (expense)
recovery
|
|
1,715
|
2,017
|
3,138
|
4,063
|
Finance
costs
|
|
4,883
|
3,850
|
9,454
|
8,089
|
Interest
income
|
|
(290)
|
(161)
|
(516)
|
(292)
|
Other
losses
|
|
(513)
|
149
|
75
|
185
|
Acquisition
costs
|
|
199
|
|
-
|
199
|
|
-
|
Decommissioning
liabilities adjustments
|
|
35
|
(10)
|
69
|
(29)
|
Impairment
loss
|
|
11,564
|
|
-
|
11,564
|
|
-
|
Depreciation and
amortization of plant assets
|
|
5,952
|
5,788
|
11,786
|
11,335
|
Share-based
compensation
|
|
464
|
(441)
|
600
|
(347)
|
Adjusted
EBITDA
|
|
$
|
14,632
|
$
|
15,128
|
$
|
30,372
|
$
|
27,458
|
Cautionary Statements
This news release contains certain "forward-looking information"
which may include, but is not limited to, statements with respect
to future events or future performance, management's expectations
regarding the Company's growth, results of operations, estimated
future revenue, requirements for additional capital, timelines for
construction, revenue and production costs, future demand for and
prices of electricity, business prospects and opportunities. In
addition, statements relating to estimates of recoverable
geothermal energy "reserves" or "resources" or energy generation
are forward-looking information, as they involve implied
assessment, based on certain estimates and assumptions, that the
geothermal resources and reserves described can be profitably
produced in the future. Such forward-looking information reflects
management's current beliefs and is based on information currently
available to management. Often, but not always, forward-looking
statements can be identified by the use of words such as "plans",
"expects", "is expected", "budget", "scheduled", "estimates",
"forecasts", "predicts", "intends", "targets", "aims",
"anticipates" or "believes" or variations (including negative
variations) of such words and phrases or may be identified by
statements to the effect that certain actions "may", "could",
"should", "would", "might" or "will" be taken, occur or be
achieved. A number of known and unknown risks, uncertainties
and other factors may cause the actual results or performance to
materially differ from any future results or performance expressed
or implied by the forward-looking information. Such factors
include, among others, general business, economic, competitive,
political and social uncertainties; the actual results of current
geothermal energy production, development and/or exploration
activities and the accuracy of probability simulations prepared to
predict prospective geothermal resources; changes in project
parameters as plans continue to be refined; possible variations of
production rates; failure of plant, equipment or processes to
operate as anticipated; accidents, labor disputes and other risks
of the geothermal industry; political instability or insurrection
or war; labor force availability and turnover; delays in obtaining
governmental approvals or in the completion of development or
construction activities, or in the commencement of operations; the
ability of the Company to continue as a going concern and general
economic conditions, as well as those factors discussed in the
section entitled "Risk Factors" in the Company's Annual Information
Form. These factors should be considered carefully, and
readers of this news release should not place undue reliance on
forward-looking information.
Although the forward-looking information contained in this news
release is based upon what management believes to be reasonable
assumptions, there can be no assurance that such forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance
on forward-looking information. The information in this news
release, including such forward-looking information, is made as of
the date of this news release and, other than as required by
applicable securities laws, Polaris Infrastructure assumes no
obligation to update or revise such information to reflect new
events or circumstances.
SOURCE Polaris Infrastructure Inc.