Sprott Power Corp. Announces 2012 Annual and Fourth Quarter Results

  • Significant renewable energy production increases resulting in operating revenue growth of 65% for the quarter and 73% for the year
  • EBITDA increases of 172% for the quarter and 165% for the year
  • Dividend increased to $0.065 per annum, payable quarterly

TORONTO, March 28, 2013 /CNW/ - Sprott Power Corp. (TSX: SPZ) ("Sprott Power" or "the Company"),  an owner, operator and developer of renewable energy projects, today announced its results for the three months and year ended December 31, 2012.

"It has been another exciting and transformative year for Sprott Power. We completed the Shear Wind transaction which greatly increased our assets under commercial operations and added a new partnership with Inveravante of Spain," said Jeff Jenner, CEO of Sprott Power.  "In addition we successfully completed the construction of our 31.5 MW Amherst I and the 2.3 MW Glace Bay II wind farm projects.  These efforts more than tripled our managed assets and almost quadrupled our expected annual production of renewable energy.  The management team has secured additional contracted assets to double again our operating capacity in the next two years resulting in the Company seeking a strategic partner to assist in financing this growth.  We look forward to continuing to execute on our growth plans in 2013."

Operational and Growth Highlights

  • As at December 31, 2012, the Company partially or wholly owned ten operating wind power facilities with an aggregate installed capacity of 143.2 MWs.  These consist of three facilities in Ontario with an aggregate installed capacity of 21.6 MWs and seven facilities in Nova Scotia with an aggregate installed capacity of 121.6 MWs.  Each of these facilities sells its electricity under long-term power purchase agreements ("PPAs") that expire between 2020 and 2037 with a weighted average life of 17 years remaining on the contracts.
  • The Company's operating assets performed as expected during 2012, producing approximately 371.7 gigawatt hours ("GWhs") of electricity during the year ended December 31, 2012, which represents approximately 144% of the 2011 comparable period.
  12 Months Ended December 31 -
Gross GWhs produced
  2012(3)   2011(3)   2010(3)
Ontario(1) 57.9   55.6   59.1
Nova Scotia(2) 313.8   202.7   61.8
Total Generation (GWhs) 371.7   258.3   120.9

(1) Ontario projects were previously owned by Sky Generation Inc. prior to February 8, 2011.
(2) Certain Nova Scotia projects previously owned by Confederation Power Inc. prior to February 1, 2011 and by Shear Wind Inc. ("Shear Wind") prior to November 23, 2012.
(3) GWhs shown represent annual production results for acquired assets prior to the acquisition by the Company.  The 2012 results includes only 8.5 months of actual production from Amherst and two months of actual production from Glace Bay II as both these assets were constructed during the year.

  • In April 2012, the Company, with its 49% partner, announced the completion of its first internally developed and constructed project, the 31.5 MW Amherst wind power project in Cumberland County, Nova Scotia (the "Amherst I Project").   At the time the Amherst I Project was commissioned the annual gross production under management for the Company almost doubled to 215 GWh on a run rate basis.  The Amherst I Project was constructed on time and on budget.
  • In October 2012, the Company completed the expansion of its Glace Bay II operations with the construction and commissioning of a 2.3 MW turbine.  It is expected to provide an estimated 7 GWhs annually to the Company's production.

  • In November 2012, the Company completed the acquisition of Shear Wind for cash consideration of approximately $33.2 million.  As a result, the Company owns a 49% interest in the 62.1 MW Glen Dhu Wind Farm ("Glen Dhu"), the largest wind farm in Nova Scotia and a 50% interest in the 1.6 MW Fitzpatrick Mountain Wind Farm ("Fitz").  These assets generate approximately 200 GWh of renewable electricity and the acquisition increased the Company's annual gross production under management to over 400 GWh on a run-rate basis.
  • During the year, the Company entered into certain agreements and letters of intent under which it advanced funds to secure interests in various contracted wind power development projects with PPAs representing 77.5 MW of capacity.  These transactions are subject to customary terms and due diligence, including any required consent from the Ontario Power Authority and the approval of the board of directors of the Company.

Corporate Highlights

  • The Company increased its dividends per share 62.5% during the year to an annual $0.065 cash dividend, payable quarterly.
  • In March 2012, the Company completed its first offering as a public company through the issuance of 10.1 million units at a price of $1.05 for each unit, 10.1 million flow through shares at a price of $1.20 for each flow through share and 0.15 million warrants at a price of $0.07 for each warrant.  The offering generated gross proceeds of approximately $22.8 million.
  • In August 2012, the Company completed a public offering of 34,500 extendible convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debenture for an aggregate principal amount of $34.5 million.  The Debentures yield 6.75% and mature on December 31, 2017.  The Debentures are convertible at the option of the holder into common shares ("Shares") of the Company at a conversion price of $1.30 per Share (the "Conversion Price") and contain a change of control feature that, if applicable, reduces the Conversion Price.  The net proceeds from the sale of the Debentures were used to partially finance the acquisition of all of Shear Wind's issued and outstanding shares.
  • Subsequent to December 31, 2012, the Company announced that its Board had initiated a process to identify, examine and consider a range of strategic options available to the Company with a view to finding additional capital to fund its growth and enhancing shareholder value, including a possible sale of the Company (the "Strategic Review").  As part of the Strategic Review, the Company announced that it has decided to transition to internal management by way of a notice of termination, effective July 31, 2013, of its Management Services Agreement ("MSA") with Sprott Power Consulting LP.   The Company is to pay $8.5 million (the "Termination Fee") in full satisfaction of all amounts owing by the Company under the MSA.  The Termination Fee may be paid by cash or the issuance of Shares.

Financial Summary

  • Revenue from energy sales for the three months ended December 31, 2012 was $5.7 million, as compared to $3.5 million in the same period of 2011, an increase of $2.2 million or 65%.  Revenue for the year ended December 31, 2012 was $16.7 million, as compared to $9.6 million in the same period of 2011, an increase of $7.1 million or 73%.
  • Earnings before interest, income taxes, depreciation and amortization, impairment loss and the inclusion of Glen Dhu and Fitz ("EBITDA"1) for the three months ended December 31, 2012 was $4.9 million as compared to $1.8 million, a net increase of $3.1 million or 172% as compared to in the same period of 2011.  EBITDA for the year ended December 31, 2012 was $10.6 million as compared to $4.0 million, a net increase of $6.6 million or 165% as compared to the same period of 2011.
  • The net loss attributable to the shareholders for the three months ended December 31, 2012 was $6.5 million, as compared to an income of $0.4 million in the same period of 2011.  The net loss attributable to the shareholders for the year ended December 31, 2012 was $8.1 million or $0.125 per share, as compared to a net loss of $1.9 million or $0.042 per share in the same period of 2011.  Included in annual loss per share calculations for the twelve months ended December 31, 2012 is an impairment loss of approximately $5.0 million related to projects under development.
  • The net source of cash from operations prior to changes in working capital for the year ended December 31, 2012 was $2.3 million as compared to $0.8 million in the same period of 2011.
  • At December 31, 2012 the Company had working capital of $17.7 million, including $17.5 million in unrestricted cash as compared to working capital of $10.2 million, including $8.5 million in unrestricted cash as at December 31, 2011.  The Company's assets included short and long-term restricted cash of an additional $12.8 million at December 31, 2012, as compared to $18.4 million as at December 31, 2011.
  • At December 31, 2012 the Company had total assets of $236.8 million as compared to $177.9 million as at December 31, 2011.  At December 31, 2012 the Company had long-term debt of $129.9 million as compared to $87.9 million (including construction loan) as at December 31, 2011.

The Company's full audited consolidated financial statements and Management's Discussion and Analysis for the quarter and year ended December 31, 2012, can be found at www.sedar.com or the Company's website at www.sprottpower.com.

__________________________________
1 A financial term (EBITDA) that the Company utilizes to assess the financial performance of its business that is not a measure recognized under International Financial Reporting Standards ("IFRS"). This non-IFRS measure should not be considered an alternative to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers.  See the calculations included in the December 31, 2012 Management's Discussion and Analysis of Financial Results for a discussion of this calculation.

About Sprott Power Corp.

Sprott Power is a publicly-traded (TSX: SPZ) Canadian-based company dedicated to the development, ownership and operation of renewable energy projects. Through project development efforts, acquisitions, partnerships and joint ventures, Sprott Power provides its shareholders with income and growth from the renewable power generation sector of the energy industry.

Forward-Looking Statements

Certain information contained in this press release may constitute "forward-looking information" which reflects the current expectations of Sprott Power. This information reflects Sprott Power's current beliefs with respect to future events and is based on information currently available to management.  Forward-looking information involves significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information including, without limitation, the risks listed under the heading "Risk Factors" in the Company's Annual Information Form dated March 28, 2013. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information contained in this release. Although forward-looking information contained in this release is based upon what Sprott Power believes to be reasonable assumptions, management cannot assure investors that actual results, performance or achievements will be consistent with this forward-looking information. The forward-looking information is made as of the date of this release and Sprott Power does not assume any obligation to update or revise it to reflect new events or circumstances, except as required by law.

SOURCE: Sprott Power Corp.

For further information:

Jeff Jenner, CA, CBV
President and Chief Executive Officer
Sprott Power Corp.
416-943-6387
jjenner@sprottpower.com 

Ross Marshall
Investor Relations
(416) 815 0700 ext. 238
rmarshall@tmxequicom.com

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