TSX : AXY

VANCOUVER, Feb. 25, 2014 /PRNewswire/ - Alterra Power Corp. (TSX: AXY) ("Alterra") announces that its 66.6% owned Icelandic subsidiary, HS Orka hf, today released audited financial and operating results for the twelve month period ended December 31, 2013. HS Orka's financial statements are prepared in accordance with International Financial Reporting Standards (as adopted by the European Union), are reported in Icelandic Krona (ISK), and can be found at http://www.hsorka.is.

Highlights for the year ended December 31, 2013 include (all amounts in US$):





        --  Electricity production from the Reykjanes and Svartsengi
            geothermal power plants increased by 7% to 1,280,394 MWh (2012:
            1,193,584 MWh); the additional generation was used to meet new
            sales contracts entered into in late 2012 and early 2013.

        --  Revenue increased 5% to $57.7 million (2012: $55.0 million) due
            to the increase in generation coupled with the strengthening
            ISK during the year. These increases were partially offset by a
            reduction in revenue from sales contracts linked to the price
            of aluminum resulting from an 8% decline in aluminum prices in
            the current year against 2012.

        --  HS Orka generated $21.3 million of EBITDA and $14.1 million of
            gross profit in 2013 (down 11% and 27% respectively from 2012),
            reflecting increased maintenance at the power plants in the
            year as a result of planned cleaning and repair of two
            boreholes in the period, in addition to increased transmission
            expenses resulting from an increase in transmission rates of
            20% during the period. This transmission rate increase has
            since been rolled back, which will be reflected in future
            periods.

        --  A net loss of $2.9 million was recorded in 2013 as compared to
            net income of $5.2 million in 2012. In addition to the
            operating results described above, this decrease was primarily
            due to a $32.3 million non-cash negative change in the fair
            value of embedded derivatives in power sales contracts, offset
            in part by a positive movement in net finance income of $20.8
            million related to foreign exchange gains, reduced interest and
            indexation expense.

        --  HS Orka's share of income from associates increased 129% to
            $3.2 million (2012: $1.4 million) primarily due to results from
            the Blue Lagoon, which continues to outperform expectations due
            to increased visitor attendance.

        --  HS Orka received a dividend of $1.8 million in the year from
            the Blue Lagoon (2012: $1.3 million). During 2013, HS Orka
            passed through the majority of the prior year dividend from the
            Blue Lagoon to its existing shareholders and issued a cash
            dividend of $1.2 million, with Alterra's share being 66.6%
            ($0.8 million).

        --  HS Orka commenced a fluid reinjection program at the Reykjanes
            field by drilling a new large diameter well to enhance future
            field stability, whereby a portion of geothermal fluids
            extracted from current operations will be reinjected into the
            field to maintain or increase subsurface pressure and optimize
            the resulting electrical output.

        --  HS Orka continues to use cash from operating activities to pay
            down loans and borrowings, with repayments of $18.6 million in
            2013 (2012: $17.2 million) and a balance outstanding at
            year-end of $126.3 million. Total debt repayments in the last
            three years have been $53.6 million, with scheduled loan
            repayments set to decline substantially from 2017 onwards.

Summary financial information with respect to the operations of HS Orka is as follows:

HS Orka Financial Results Summary
(expressed in millions of US dollars)


                           For the twelve months      For the twelve months
                                           ended                      ended

                               December 31, 2013          December 31, 2012

                           at an average rate of      at an average rate of
                                 122 ISK per USD            125 ISK per USD

    Total revenue         $                 57.7    $                  55.0

    Cost of energy                                  
    production                            (43.6)                     (36.2)

    Gross profit                            14.1                       18.8

    Other operating                                 
    expenses                               (3.6)                      (3.5)

    Operating income                        10.5                       15.3

    Other income                                    
    (expenses)                            (18.2)                     (10.5)

    Equity income                            3.2                        1.4

    Income tax recovery                             
    (expense)                                1.6                      (1.0)

    Income (loss) for                               
    the year                               (2.9)                        5.2

    EBITDA (1)                              21.3                       23.4

                                  ISK (millions)             ISK (millions)
                                       2,603.05                   2,923.25 

                                                  

                         As at December 31, 2013    As at December 31, 2012

                            at a rate of 115 ISK   at a rate of 128 ISK per
                                         per USD                        USD

    Total assets          $                390.2   $                  389.2

    Total liabilities                      163.9                      181.4

    Cash and cash                                   
    equivalents(2)                          38.4                       40.8

    Working capital                         20.9                       29.1








    1 EBITDA is defined by HS Orka and Alterra as earnings before interest,
      taxes, foreign exchange, depreciation and amortization, as well as
      before deductions for other gains and losses, amortization of below
      market contracts, and value assigned to options granted. HS Orka and
      Alterra disclose EBITDA as it is a measure used by analysts and by
      management to evaluate company performance. As EBITDA is a non-GAAP
      measure, it may not be comparable to EBITDA calculated by others. In
      addition, as EBITDA is not a substitute for net earnings, readers
      should consider net earnings in evaluating HS Orka's performance.

       

    2  Includes $4.5 million of restricted cash



Alterra will include the results of HS Orka together with all applicable fair value adjustments applied as a result of its acquisition of control of HS Orka in August 2010, in its consolidated results to be released on March 27, 2014.

About HS Orka

HS Orka is the largest privately owned energy company in Iceland, producing 9% of the country's power needs and 10% of the country's heating needs. Installed geothermal power capacity is 172 MW from the Svartsengi and Reykjanes power plants. In addition, HS Orka generates 150 MW of thermal energy for district heating.

About Alterra Power Corp.

Alterra Power Corp. is a leading global renewable energy company, operating six power plants totaling 566 MW of generation capacity, including British Columbia's largest run-of-river hydro facility and largest wind farm, two geothermal facilities in Iceland, and a geothermal plant in Nevada. Alterra owns a 260 MW share of this capacity, generating approximately 1,300 GWh of clean power annually.

Alterra has an extensive portfolio of exploration and development projects and a skilled international team of developers, explorers, builders and operators to support its growth plans.

The Alterra trades on the Toronto Stock Exchange under the symbol AXY and OTC in the United States as MGMXF.

Cautionary Note regarding Forward-Looking Statements and Information

This news release contains certain "forward-looking information" within the meaning of Canadian securities laws, which may include, but is not limited to, statements with respect to future events or future performance, the fulfillment of all conditions precedent to the obligation of the parties under the agreements, required consents and third party approvals. This news release also contains statements with respect to our plans to expand our operations, management's expectations regarding our growth, business prospects and opportunities and energy generation capacities. Such forward-looking information reflects management's current beliefs and is based on information currently available to management.

SOURCE Alterra Power Corp.