Alter NRG reports 2012 activities and financial results

TSX - NRG
OTCQX - ANRGF

CALGARY, March 21, 2013 /CNW/ - (TSX - NRG; OTCQX - ANRGF) - Alter NRG Corp., ("Alter NRG" or the "Corporation") is pleased to report on its corporate activities and financial results for the fiscal year ended December 31, 2012 

2012 Highlights

  • Sales of $13.7 million which is an increase over prior year of 104%. Revenue is expected to continue to increase in 2013 as the pace of fabrication increases on the facilities under construction, follow-on projects begin engineering and construction, as well as further licensing opportunities.
  • Executed on approximately 61% of the $20 million purchase order from Air Products a US based Fortune 500 Company, which has previously announced its intention to build four additional advanced gasification facilities in the United Kingdom in the coming years. On October 23, 2012 Air Products announced it is advancing a second project on adjacent lands in Tees Valley of the same size and configuration as the first project.
  • Wuhan Kaidi ("Kaidi"), which ordered engineering and torches previously, completed construction of its demonstration facility in China for which the Westinghouse Plasma Gasifier has now been commissioned. The facility is expected to take 100 tpd of biomass waste and convert it into liquid fuels. Upon successful demonstration (expected in early 2013), Kaidi has more than 100 sites identified to take biomass and convert it into power and liquid fuels.
  • Signed an agreement to provide $12 million of Westinghouse Plasma Torches to Beijing Huanyu Guanchuan Plasma Technology Ltd. ("GuanChuan"). GuanChuan has ordered the first four torches for an approximate $1 million order to be delivered in early 2013. GuanChuan is using the torches for their industrial furnace applications related to the steel and iron industry in China.
  • Advanced project development with a developer, PGP Terminal a.s. ("PGPT"), which previously purchased site licenses in the Czech Republic and Slovakia for $4.375 million, with 10% being paid up front. The developer has been working for several years on waste-to-energy projects and has a portfolio of projects that it is currently advancing in their home market. They expect to begin engineering on the first facilities in early 2013 with the intention of ordering equipment in late 2013 or early 2014.
  • Finalized scope with SMS Infrastructure ("SMS") (who has already constructed two hazardous waste facilities utilizing Westinghouse Plasma technology) on two projects which have advanced into the formal regulatory approval phase with an expected plasma gasifier order in 2013. These are the more advanced projects within a larger pipeline of projects which SMS is developing and marketing in India and the Middle East. SMS is a licensee of the Westinghouse Plasma Gasification Technology and provides turnkey hazardous waste facilities to the market and has approximately 140 people in their gasification division.
  • Supported a hazardous waste demonstration facility in Shanghai China being constructed by GTS Shanghai. We have previously delivered the detailed engineering and torches, however, during the year they ordered additional equipment for their facility which will be delivered in 2013. The facility has finalized its feedstock agreement with a large Chinese waste company and its site location and they are advancing the site plan.
  • With the introduction of Walter Howard as the newly appointed Chief Executive Officer in Q1 2012, the Corporation began creating a structure for its investment options in current projects, to provide a more formal funding structure for the following investment options. Alter NRG has options to invest with key customers, including Air Products, which allow the Corporation to elect on the option after the project receives regulatory approval but without any promoted costs. This is a favourable option for the Corporation as it does not have to deploy the risky development capital but can participate in the project level annuity cashflow after the project has been de-risked.

In addition to the highlights above, customers around the globe continue to advance their business development efforts using the Westinghouse Plasma Gasification Solution. This includes exclusive license agreements for territories that are in advanced negotiations.

Corporate

  • Closed the sale of CleanEnergy, the Corporation's geoexchange division, for $5 million of shares so that the Corporation could focus exclusively on the plasma gasification business.
  • Announced the addition of a strategic shareholder, Ervington Investments Limited ("Ervington"), which is a company that has Roman Abramovich, a wealthy Russian businessman, as its ultimate beneficial owner. Ervington has complementary investments in the waste-to-energy space and has the potential to be part of a larger group that will finance various waste-to-energy projects. The financing, led by Ervington, was for 34.2 million shares at a price of $0.325 for a total investment of $11.1 million.

For more information on the Corporation's activities please visit www.alternrg.com or www.sedar.com to view Alter NRG's 2012 Annual Report.

CEO'S MESSAGE

A year after taking the helm at Alter NRG I am very pleased with where we are today, and with the future of the Company. Currently, there are three Westinghouse Plasma Gasification facilities under construction or commissioning, we have attracted the attention of industry leading industrial and engineering companies worldwide, and we have strengthened our balance sheet with a strategic long-term investor. We exit 2012 as a strong Company which includes great people, a world-leading technology and a strong customer base - we are well positioned for continued growth and increasing profitability.

In my career, I have been involved in a handful of tipping point technologies. These are technologies that were poised to change the current paradigm - to make things better and more efficient. This was true of other energy technologies with which I have been involved in bringing to industry-wide acceptance. While recognizing that the adoption time for revolutionary approaches is not measured in weeks or months, I believe that our Westinghouse Plasma Corp. technology has passed the tipping point - it genuinely is world class and can change the face of the waste disposal industry.

Late last year we announced the sale of a full-scale gasifier to a large Fortune 500 Company that will produce 50 Megawatts of electricity; a major commercial tipping point. The Tees Valley project is providing us the opportunity to substantiate our technology and engineering in a very big way - not only to Air Products and Chemicals, but to the industry as a whole. It is a paradigm shifting project in many ways as it is more energy efficient than current waste treatment methods, has a much better environmental footprint as well as being at significantly larger scale than previous plasma gasification facilities.

This project has provided the breakthrough which has brought us many opportunities that we intend to translate into shareholder value in the coming years. We are the clear industry leader providing a solution to both large-scale waste management challenges, and also our increasing need for energy. The good news is that large, capable companies are actively seeking out our technology. That is tempered by the reality that these are long lead time projects and will take time to develop. Therefore, the fact that we are past a tipping point will be most clear in hindsight in coming months.

This point was not just reached by a single project. The success story is supported by 20 years of innovative thinking, R&D and hard work by many people inside of Westinghouse, and also Alter NRG. Our commercial facilities in Japan and India are a crucial part of that history and continue to play a vital role in our advancement. We continue to take potential customers to these facilities so they can witness firsthand the technology in action, however, the customers today are much more sophisticated and well-funded than before. Our strategy is to continue to partner with companies that have the proven capability and the capital available to execute. We are pleased that many of them have invited us to co-invest in the projects. It is outstanding progress to have three facilities under construction simultaneously and speaks volumes as to how this technology is penetrating the waste to energy market. Two new facilities are currently under construction in China (both with numerous follow-on opportunities), two additional facilities are now in regulatory approvals in India by our strategic customer in that jurisdiction, and our Fortune 500 partner in England has announced its second project going into its regulatory process. We are past the point of widespread acceptance, and are now adding to our list of capable strategic customers.

Part of our growth will be co-investment into projects that are being developed by capable partners and have strong financial returns. As an innovative and paradigm changing technology, most developers welcome the core technology provider as a project owner. However, we are not the developer - that is a time-consuming and often expensive process best left to larger institutions and specialized local teams. We have options to invest alongside the developer once the projects have achieved their major commercial milestones including regulatory approvals. My history of financing energy projects tells me this is an area where we can add significant shareholder value.

The Westinghouse Plasma Technology has passed the commercial tipping point making me confident that we will execute on significant commercial contracts in 2013. Worldwide, energy and waste management solutions are in demand; critical demand in some cases and with a disciplined approach Alter NRG is uniquely positioned to grow and be successful, and to build value for our shareholders. We are charting a path to success for our company, our customers and our shareholders.

SELECT FINANCIAL RESULTS ($)

  December 31, 2012 December 31, 2011
     
Total assets $57,566,565  $63,173,939 
Total liabilities 23,430,697 20,050,857
Total equity 34,135,868  43,123,082 
     
  For the Year Ended For the Year Ended
  December 31, 2012 December 31, 2011
     
Sales $13,699,743 6,711,189
Gross profit 1,666,547 4,037,844
Loss from continuing operations (10,711,029) (4,123,382)
Net loss from discontinued operations (395,997) (17,023,037)
Basic and diluted loss per share - continuing
operations
(0.16) (0.07)
Basic and diluted loss per share - discontinued
operations
(0.01) (0.28)

As at and for the years ended December 31, 2012, the Corporation had losses of $11,107,026 positive cash flows from operations of $400,463 and had an accumulated a deficit of $103,045,714 (year ended December 31, 2011 - $20,748,825, $(8,507,926) and $91,938,688 respectively).  Management is developing new sustainable energy solutions which is a long-term process and recognizes that the Corporation must generate positive cash flows or secure additional financial resources in order to meet its liabilities as they come due and to enable the Corporation to continue operations.

For more information on the Corporation's financial results please visit www.alternrg.com or www.sedar.com to view Alter NRG's 2012 Annual Report.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

Advisory Respecting Forward-Looking Statements

This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "confident", "might" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains forward-looking information and statements pertaining to the following: availability and cost of key materials and labour and availability of funds with respect to the amount of capital expenditures and scheduled commencement of operations; timing of regulatory approval including various permits from the applicable government authorities; the assessment of capital markets including the availability of debt and equity in current market conditions; commodity prices for electricity, natural gas, coal and other resources that impact the Corporation's operations directly and indirectly; extent of investment by government authorities in infrastructure projects; the financial and operational health of key partners in various projects; the continued development of the Corporation's technology and its use in various applications and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements reflect management's current beliefs and assumptions, based on information currently available to management. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, many of which are beyond the control of the Corporation. Among the material factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: that the information is of a preliminary nature and may be subject to further adjustment; unforeseen environmental effects; the completion of strategic partner's projects; arrangements with key suppliers; potential product liability and other claims; other business risks outlined in this news release, including risks associated with the proprietary technology; the possible unavailability of financing at competitive rates and the related effect on development activities; the effect of energy price fluctuations; changes in government regulation, including changes to environmental regulations; the effects of competition; the dependence on senior management and key personnel, and fluctuations in currency exchange rates and interest rates, as well as those factors discussed in or referred to under the heading "Risk Factors" in the Corporation's Annual Information Form dated March 28, 2012 available at www.sedar.com. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements.

The Corporation cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information and statements contained in this news release speak only as of the date of this news release, and the Corporation assumes no obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws.

 

SOURCE: Alter NRG Corp.

For further information:

Walter Howard, Chief Executive Officer
(403) 806-3877 whoward@alternrg.ca

Daniel Hay, Chief Financial Officer
(403) 214-4235  dhay@alternrg.ca

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Alter NRG Corp.

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