TORONTO, Nov. 7, 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 September 30,
2019. This earnings release should be read in conjunction
with Polaris Infrastructure's financial statements and management's
discussion and analysis, 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 133 GWh (net) (an average of 60.2 MW (net)),
resulting in revenue of $17.2 million
for the three months ended September 30,
2019, versus revenue of $18.2
million on generation of 144 GWh (net) (an average of 65.4
MW (net)) in the prior year period. For the nine months ended
September 30, 2019 the San Jacinto
project generated 401 GWh (net), resulting in revenue of
$52.3 million versus revenue of
$50.5 million on generation of 400
GWh (net) for the same period the prior year.
The 5 MW capacity Canchayllo facility contributed $0.4 million of revenue for the quarter with net
generation of 9.4 MWh and revenue of $1.1
million for the for the nine months ending September 30, 2019 on net generation of 25.4
MWh.
- Continued Cash Flow Generation: The Company generated
Adjusted EBITDA (a non-GAAP measure) of $14.3 million in the three months ended
September 30, 2019, down $1.2 million from the prior year period,
primarily as a result of lower net generation at the San Jacinto
project noted above and an increase in general and administrative
costs associated with the anticipated completion of the two hydro
projects in Peru. See Use of
Non-GAAP Measures section below for reconciliation of Adjusted
EBITDA to Total income (loss) and comprehensive income
(loss).
For the nine months ended September 30,
2019 the Adjusted EBITDA was $44.6
million versus $43.0 million
for the same period in 2018, which represents an increase of
$1.7 million or 3.9%.
For the nine months ended September 30,
2019 the Company generated operating cash flow of
$31.7 million, of which $10.8 million was used to repay debt,
$7.1 million for dividends to common
shareholders, with the remainder being invested in the construction
of the hydro projects in Peru.
- Construction Completion in Peru: The Company completed the
construction works on the El Carmen and 8 de Agosto projects in
late October 2019. El Carmen declared
Commercial Operation on November 4,
2019 and has commenced the delivery of electricity to the
grid. Certification of Commercial Operation of the El Carmen
facility will be issued by the National Interconnected System
Operations Committee ("COES") upon completion of its review of the
project's technical requirements compliance. As part of the process
of finalizing grid synchronization tests for 8 de Agosto, it was
observed that certain operational parameters of the turbines were
not within specifications required for grid connection. We are in
the process of remedying this and anticipate the commissioning
process will be finalized by December
2019.
FINANCIAL OVERVIEW
The financial results of Polaris Infrastructure for the three
and nine months ended September 30,
2019 and 2018 are summarized below:
|
|
|
|
|
Three months
ended
|
Nine months
ended
|
(all $ figures in
thousands except income (loss) per share)
|
September 30,
2019
|
September 30,
2018
|
September 30,
2019
|
September 30,
2018
|
Total
revenue
|
$
|
17,586
|
$
|
18,151
|
$
|
53,456
|
$
|
50,538
|
Adjusted EBITDA
(1)
|
14,282
|
15,538
|
44,586
|
43,023
|
Finance
costs
|
(4,812)
|
(4,108)
|
(13,494)
|
(12,197)
|
Net earnings (loss)
attributable to owners of the Company
|
2,634
|
3,980
|
(945)
|
8,402
|
|
|
|
|
|
Basic earnings per
share attributable to owners of the Company
|
$0.16
|
$0.25
|
($0.06)
|
$0.54
|
|
|
|
|
|
Diluted earnings per
share attributable to owners of the Company
|
$0.16
|
$0.25
|
($0.06)
|
$0.54
|
|
|
|
|
|
|
|
|
As at
September 30, 2019
|
As at
December 31, 2018
|
Total
assets
|
|
|
$
|
460,033
|
$
|
465,552
|
Long-term
debt
|
|
|
169,905
|
165,676
|
Total
liabilities
|
|
|
265,932
|
262,062
|
Cash
|
|
|
40,102
|
37,809
|
Working
capital
|
|
|
25,361
|
14,035
|
(1)
|
Refer to Use of
Non-GAAP Measures section for further details with respect to
calculation of Adjusted EBITDA.
|
For the three months ended September 30,
2019, the Company reported revenue of $17.6 million and Adjusted EBITDA of $14.3
million, compared to revenue of $18.2
million and Adjusted EBITDA of $15.5 million, for the
same period in 2018. The revenue decrease is mainly due to
anticipated natural declines, an increase in cycling of well SJ 9-3
as well as the stabilization of the field after sufficient time for
well SJ 12-5 having been online. Earnings attributable to
owners of the Company was $2.6
million, compared to $4.0
million in the same period of 2018. The decrease was
driven by lower revenue reported by San Jacinto, coupled with an
increase in general and administrative expenses, arising from the
increase in insurance costs and other administrative expenses
associated with the increase in activities in Peru after the acquisition of UEG in late
October 2018. See Use of Non-GAAP Measures section below
for reconciliation of Adjusted EBITDA to Total earnings (loss) and
comprehensive earnings (loss).
For the nine months ended September 30,
2019, the Company had net operating cash inflows of
$31.7 million, net investing cash
outflows of $29.2 million and net
financing cash outflows of $0.3
million. At September 30,
2019, the Company had cash of $40.1
million.
"The completion of the construction of the hydro projects in
Peru is another important
milestone for the Company. The combination of strong cash
flow generation at San Jacinto with additional revenue and cash
flow from our hydro projects in Peru sets the Company up very well for 2020.
The additional diversification of revenue and cash flow will enable
the Company to continue to grow and diversify as well as return
capital to shareholders," noted Marc
Murnaghan, Chief Executive Officer of Polaris
Infrastructure.
Polaris
Infrastructure will hold its earnings call to discuss financial and
operating results for the quarter ended
September 30, 2019 on Thursday, November 7th, 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 November 21, 2019. Please dial +1 (416)
849-0833 or +1 (855) 829-2056; Conference ID:
9064148.
|
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 completed 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 Total earnings (loss) and
comprehensive earnings (loss), calculated in accordance with
IFRS.
Reconciliation of
Adjusted EBITDA to Total earnings and comprehensive earnings
attributable to Owners of the Company
|
|
Three months
ended
|
Nine months
ended
|
(in
thousands)
|
September 30,
2019
|
September 30,
2018
|
September 30,
2019
|
September 30,
2018
|
Total earnings (loss)
attributable to Owners of the Company
|
$
|
2,634
|
$
|
3,980
|
$
|
(945)
|
$
|
8,402
|
Add
(deduct):
|
|
|
|
|
Net earnings (loss)
attributable to non-controlling interest
|
|
-
|
30
|
(1,653)
|
62
|
Income tax (expense)
recovery
|
1,885
|
1,938
|
5,030
|
6,000
|
Finance
costs
|
4,812
|
4,108
|
13,494
|
12,197
|
Interest
income
|
(351)
|
(247)
|
(867)
|
(539)
|
Other
losses
|
(281)
|
254
|
(205)
|
439
|
Acquisition
costs
|
|
-
|
|
-
|
199
|
|
-
|
Impairment
loss
|
|
-
|
|
-
|
11,564
|
|
-
|
Depreciation and
amortization of plant assets
|
5,748
|
5,721
|
17,535
|
17,056
|
Share-based
compensation
|
(165)
|
(246)
|
435
|
(594)
|
Adjusted
EBITDA
|
$
|
14,282
|
$
|
15,538
|
$
|
44,586
|
$
|
43,023
|
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, future demand for and prices of electricity,
business prospects and opportunities. In addition, statements
relating to estimates of recoverable geothermal or hydroelectric
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 or
hydroelectric 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 or hydroelectric energy production, development and/or
exploration activities and the accuracy of probability simulations
prepared to predict prospective geothermal and hydroelectric
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 and hydroelectric
industries; 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.