Alter NRG Reports First Quarter 2013 Activities and Financial Results

TSX - NRG                                                                                                         
OTCQX - ANRGF

CALGARY, May 2, 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 three month period ended March 31, 2013.

The Corporation's focus is the Westinghouse Plasma Gasification Technology which is the worldwide leader in creating energy from waste using plasma gasification. We market and sell the Westinghouse Plasma Technology through our wholly owned subsidiary, Westinghouse Plasma Corporation ("Westinghouse Plasma").  Westinghouse Plasma is the industry leader for the treatment of all types of waste (industrial, household, commercial, hazardous, etc.) using plasma technology and converting it into useable energy such as electricity, syngas (replacement for natural gas), heat, steam, or liquid fuels such as diesel or ethanol.

  • Our Vision - To provide the leading technology platform for converting the world's waste into clean energy for a healthier planet.

  • Our Mission - As the industry leader, we will forge and dominate an industry segment that transforms current waste management practices.  We build shareholder value by enabling customers to convert waste into clean energy by providing plasma gasification products, services and solutions that are innovative and environmentally friendly.

Westinghouse Plasma Technology is a commercially proven technology that is used in commercially operating facilities in Japan and India that have been converting waste into energy for more than ten years, and facilities are under construction in China and England.  From an environmental perspective, a plasma facility will have significantly lower emissions than other alternative energy facilities and have an overall emissions profile lower than a natural gas combined cycle power facility, which is considered the cleanest fossil fuel production.  From an economic perspective waste-to-energy projects generally have strong project returns in populous areas, as the projects receive revenues from tipping fees to take the waste and then also receive revenues from the sale of energy.

Alter NRG is pleased to be presenting highlights for its first quarter of 2013 as revenues have increased by 217% over the prior year. This is reflective of an emerging business plan with significant long-term potential.

Q1 HIGHLIGHTS

The first quarter ended March 31, 2013 had $4.4 million in revenues which is an increase of 217% over the first quarter of the prior year. This revenue reflects the progress on the fabrication of the large-scale Westinghouse Plasma gasifier for the 50 MW facility under construction by a leading Fortune 500 company. During the first quarter of 2013 there were 3 facilities under construction or commissioning which illustrates the commercial growth potential of the Westinghouse Plasma Technology.

WESTINGHOUSE PLASMA

  • Sales of $4.4 million for the first quarter which is an increase over the first quarter of the prior year of 217%.  This reflects the emerging business plan supporting the Westinghouse Plasma Technology and revenues include sales income to three facilities under construction or commissioning as well as plasma torch sales to the China market and licensing fees from developers with emerging business plans.

  • Executed on approximately 80% cumulatively to date 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 and has negotiated the power purchase agreement with the UK government.

  • Wuhan Kaidi ("Kaidi"), who previously ordered engineering and torches, completed construction of its demonstration facility in China for which the Westinghouse Plasma Gasifier was commissioned during the first quarter of 2013.    The facility is expected to take 100 tonnes per day 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"). During the first quarter of 2013, GuanChuan ordered the first four torches for an approximate $1 million order to be delivered in the second quarter of 2013.  GuanChuan is using the torches for their industrial furnace applications related to the steel and iron industry in China which is a promising growth market.

  • 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.  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 is under construction and is expected to be commissioned in mid-2013.

  • Advanced business development efforts with Waste2Tricity which announced an approximate 250 tonne per day project in England which began with the concept design study.  Business development has also advanced in the Thailand market with larger scale 1,000 tonne per day projects.  Waste2Tricity has a common shareholder with Alter NRG, Roman Abramovich, and is aggressively pursuing development opportunities including licensing for certain regions.

  • 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 2013 with the intention of ordering equipment in late 2013 or early 2014.

  • Continued due diligence and financing efforts related to the Company's investment options in current projects, to participate in the annuity cashflows of projects through a partnership structure with Alter NRG as the general partner.  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

  • Announced the closing of a financing with 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 consider participating in 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.

CEO'S MESSAGE

The first quarter of 2013 was about execution. In my previous CEO's message I talked about how we have hit the tipping point with the world's largest plasma gasification facility being constructed by Air Products. This is important and now we are 80% complete on our scope of the project. However, execution is equally as important for a Company forging forward with an innovative technology and this quarter we had some strong execution milestones, as follows:

  • Delivering the main portion of the 950 tonne per day gasifier to Air Products. This was a major milestone for the Corporation and this large scale vessel is now being shipped to the site.
  • Signing an agreement to sell $12 million of torches to China for usage in the steel industry, with the first $1 million being released in Q1. The steel industry is a significant emitter of pollution and our plasma torches provide an efficient and cleaner alternative. This market segment is attractive and has the potential for significant growth.
  • Commissioning the gasifier for Kaidi in China. This is another reference facility that takes 100 tonnes per day of biomass waste and uses our gasifier to create syngas. The plant is designed to take the clean syngas produced from the Westinghouse Gasifier and convert it into liquid fuel (diesel). This is a high value end product that can further add to our ability to disrupt the market paradigm in waste-to-energy.
  • Closing a financing with a strategic investor to bolster our balance sheet. Market penetration and infrastructure technology sales take time (often more than we would like) and a strong balance sheet shows the market we are strong, and here for the long haul.

Currently, there are three facilities under construction which shows we are penetrating the market. Each of our customers have broad business plans for multiple facilities and are deploying a lot of man hours, and resources on their first projects and the continued business development of their follow-on projects. The successful implementation of the first facilities will pave the road not only for our existing customers with facilities under construction but also for new customers that are watching. Reference facilities are key to executing our market penetration strategy and we have been actively involved in designing, training and managing these customer's projects to support their success.

Part of the excitement of our product and market penetration capability is the multiple applications for our product. One facility under construction is 950 tonnes per day and turn household waste to electricity in England; another takes 100 tonnes per day of biomass waste and is designed to convert it into liquids fuels; the third takes 50 tonnes per day of hazardous waste and will convert it into electricity. Different feedstocks, different sizes and different outputs - but the same enabling Westinghouse plasma technology. Add this to the existing reference facilities that have also taken hazardous waste (50 different kinds), auto shredder residue, and sewage sludge and have also converted our syngas into ethanol and you have a lot of potential market applications. This leads to the excitement as each new reference facility has broad market implications for a clean and efficient energy conversion in a variety of applications.

Execution also continues related to our opportunities for 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 along-side 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 first quarter of 2013 has been focused on execution and I am pleased to see results on many fronts. Each project execution opens up new markets, new applications and follow-on business opportunities. 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 and executing upon a path to success for our company, our customers and our shareholders.

       
SELECT FINANCIAL RESULTS ($)      
Balance Sheet March 31, 2013   December 31, 2012
       
Total assets $ 66,475,554    $ 57,566,565
       
Total liabilities 22,715,739   23,430,697
       
Total equity 43,759,815    34,135,868

                
         
Income Statement   Three months ended
           
      March 31,
2013
  March 31,
2012
           
Sales     $ 4,365,811   $ 1,378,457
           
Gross profit     $ 689,556   $ 271,761
           
Loss from continuing operations     (1,759,229)   (2,593,108)
           
Loss from discontinued operations     -   (350,307)
           
Basic and diluted loss per share - continuing operations     (0.02)   (0.04)
           
Basic and diluted loss per share - discontinued operations     -   (0.01)

For more information on the Corporation's financial results please visit www.alternrg.com or www.sedar.com to view Alter NRG's 2013 First Quarter 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 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 27, 2013 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:

Walt 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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