China Wind Power Reports Record Results for Third Quarter FY2011

- Achieves first profitable quarter in Company's history; Announces increase in capacity for planned wind farm project to 800 MW -

TORONTO, Feb. 28 /CNW/ - China Wind Power International Corp. (TSX-V: CNW) today reported its financial results for the three- and nine-month periods ended December 31, 2010.  Q3 FY2011 marks the first profitable quarter for the Company since it began operations in August 2009. The Company also reported that it plans to increase the capacity of its planned five phase wind farm development project to approximately 800 MW, up from its previously announced 546 MW. All amounts are in Canadian dollars unless otherwise indicated.

Selected Third Quarter Financial Highlights

In thousands except share or % data Dec. 31, 2010 Dec. 31,2009 Change
Total sales $2,430 $1,288 +88.6%
Recorded revenue $2,430 $512 +$1,918
Adjusted EBITDA1 $1,898 $450 +$1,448
Net earnings (loss) $92 ($626) +$719
Net earnings (loss) per share - diluted2 $0.002 ($0.01) +$0.012
  Dec. 31, 2010 March 31, 2010 Change
Cash and Cash equivalents $1,365 $373 +$992
Total assets $134,102 $114,185 +17.4%
Total liabilities $83,158 $71,075 +17.0%

"We are very pleased with our  third quarter performance, which was consistent with our expectations," said Mr. Jun Liu, Chief Executive Officer, China Wind Power International Corp. "Our third quarter was marked by record results in each of our key financial metrics, capped most notably by the first profitable quarter in our Company's history.  Given our recent progress and momentum, we believe we are well-positioned to increase the capacity of our planned wind farm project in Du Mon County."

Q3 Highlights

  • Generated more than 29 million KWh of electricity in Q3 for an aggregate production to date of 112 million KWh as of September 30, 2010.
  • Moving towards completion of Phase 2 construction, which is expected by the end of the second quarter of calendar 2011 and will generate a capacity of 49.5 MW of wind energy output.
  • Achieved first quarter of profitability
  • Secured first tranche consisting of 140,000,000 Yuan (approximately CDN$21.2 million) of a new 330,000,000 Yuan (approximately CDN$50 million) loan agreement signed with the Agricultural Development Bank of China.
  • Closed a non-brokered private placement that generated gross proceeds of $4.3 million.

Highlights subsequent to Quarter-end

  • Generated 6.1 million KWh of electricity in January, 2011, which is consistent with management's expectations given China's slower wind speeds during winter months.
  • Secured an additional tranche consisting of 120,000,000 Yuan (approximately CDN$18 million) of the previously announced 330,000,000 Yuan (approximately CDN$50 million) loan arrangement with the Agricultural Development Bank of China.
  • Increased total planned capacity from 546 MW to 800 MW for all 5 Phases.

Selected Year-to-Date 9-Month Financial Highlights

In thousands except share or % data FY2011 FY2010 Change
Total sales $4,853 $2,622 +85.1%
Recorded revenue $4,853 $512 +$4,341
Adjusted EBITDA $3,788 ($333) +$4,121
Net earnings (loss) ($1,882) ($3,755) +$1,874
Net earnings (loss) per share - diluted ($0.03) ($0.10) +$0.07

Review of Third Quarter Financial Results

Total electricity sales for the third quarter of FY2011 were $2.4 million, up 88.6% from $1.3 million for the corresponding period of FY2010. The growth is due to the completion of Phase 1 of the Company's wind energy projects and the resulting start of commercial energy production. Total sales for Q3 FY2011 were positively impacted by higher wind speed that is common in Du Mon County area, China during October and November. 

The increase in electricity product is attributable to a combination of factors, including higher wind speeds that are prevalent in China during the fall months as well as improved turbine performance resulting from the ongoing calibration and tuning of equipment. Subsequent to quarter end, the Company generated 6.1 million KWh of electricity in January.

Phase 1 is currently operating at an average of 85% capacity consistent with Management's expectation and previous guidance given ongoing calibration and tuning of turbines. It is expected that full production capacity for Phase 1 will be achieved by the end of March 2011.

Revenue for Q3 FY2011 was $2.4 million, up 374.5% from $0.5 million for the corresponding period of FY2010.  The growth is due to the completion of Phase 1 of the Company's wind energy projects and the resulting start of commercial energy production.

Adjusted EBITDA for Q3 FY2011 was $1.9 million, up from EBITDA of $0.5 million for the corresponding of FY2010, representing an increase of $1.7 million.  The year-over-year improvement in adjusted EBITDA was due primarily to higher revenue as the Company continues its roll-out of its five-phased development plan.  

Net income for Q3 FY2011 was $0.09 million, or $0.002 per share fully diluted.  This compares to a net loss of $0.6 million, or $0.01 per share fully diluted, for Q3 FY2010.  The net gain versus the net loss was primarily attributable to the increase of revenue associated with the completion of Phase I of the Company's wind energy projects and the resulting start of commercial operations. 

At December 31, 2010, China Wind had cash totaling $1.4 million, total assets of $134.1 million and total liabilities of $83.2 million. These compare to $0.4 million, $114.2 million and $71.1 million, respectively at March 31, 2010. 

Outlook

"We are very encouraged by our recent financial and operational performance and the progress we have made towards the build out approximately 800 MW of our 5 Phases," added Mr. Liu.  "We are currently working towards completing construction and supply agreements with a major wind turbine manufacturer for Phase 3. Not only will it give us access to leading wind turbine technology with no upfront capital requirements, we also expect that it will provide us a clear path for the construction and commercialization of Phase 3 and its 198 MW of capacity by the end of calendar 2012."

About China Wind Power International Corp.

China Wind Power International Corp. is an Ontario company that is uniquely positioned to capitalize on the growing demand for wind power in China.  The Company indirectly holds the exclusive rights for wind energy development in Du Mon County, Heilongjiang Province, which has a demonstrated potential installed capacity of 1,150 MW of wind energy developable over an area of 612 square km.  While 1,150 MW represents the Company's long-term potential for wind power in the area, its current plans are for building out approximately 800 MW over five development phases.  The Company's common shares are listed on the TSX Venture Exchange under the symbol CNW. The Company has approximately 63.9 million shares outstanding.

For more information and the latest updates on China Wind Power, visit our investor relations blog at http://chinawindpower.posterous.com or follow us on Twitter at http://twitter.com/ChinaWindPower

Forward-looking statements

Certain statements that are not historical facts made in this press release may be forward looking statements subject to risks and uncertainties. Statements containing words such as "will", "could", "expect", "may", "anticipate", "believe", "intend", "estimate", "plan" and other similar expressions are forward-looking statements that represent management's beliefs at the time the statements are made and are based on certain factors and assumptions including wind farm construction and commercial production schedule, output and capacity, revenue and earnings expectations and market potential. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events to differ materially from those projected in forward-looking statements. Important factors that could cause actual results to differ materially from the Company's expectations include uncertainties involving the availability of financing; fluctuations in currency exchange rates; uncertainties relating to economic and market conditions; uncertainty of estimates of capital and operating costs;  the need to obtain additional financing to develop the projects and uncertainty as to the availability and terms of future financing; the possibility of delay in construction projects and uncertainty of meeting anticipated program milestones; uncertainty as to timely availability of permits and other governmental approvals; and other risks and uncertainties disclosed in the information circular dated November 5, 2010, which is available at www.sedar.com under the Company's profile. Except as required by applicable securities laws, the Company undertakes no obligation to update any forward looking statement to reflect events or circumstances after the date on which such statement is made.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

1   Earnings before interest, taxes, depreciation and amortization (EBITDA) is often used as a measure of financial performance. However, EBITDA is not a term that has specific meaning in accordance with generally accepted accounting principles and may be calculated differently by other companies.   China Wind reconciles EBITDA to its net earnings (loss).  Adjusted EBITDA also excludes stock-based compensation.

2  China Wind Power's weighted average number of shares at December 31, 2010 was 62,529,711 compared to 57,323,412 at December 31, 2009.


SOURCE China Wind Power International Corp.

For further information:

Wendell Zhang
Chief Financial Officer
China Wind Power International Corp.
Tel: 416-916-4205
Email: wzhang@chinawindpowerinternational.com
      Joe Racanelli
Investor Relations
TMX Equicom  
Tel: 416-815-0700 ext 243
Email: jracanelli@equicomgroup.com 

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China Wind Power International Corp.

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