RCS - Polaris Renewable - Polaris Renewable Energy Announces Q3 2022 Results

Polaris Renewable EnergyAnnouncement

03/11/2022 12:45

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221103:nRSC2302Fa&default-theme=true

RNS Number : 2302F  Polaris Renewable Energy Inc  03 November 2022

Polaris Renewable Energy Announces Q3 2022 Results

TORONTO, ON / ACCESSWIRE / November 3, 2022 / Polaris Renewable Energy Inc.
(TSX:PIF) ("Polaris Renewable Energy" or the "Company"), is pleased to report
its financial and operating results for the three and nine months ended
September 30, 2022. This earnings release should be read in conjunction with
the Company's consolidated financial statements and management's discussion
and analysis, which are available on the Company's website at
www.PolarisREI.com (https://pr.report/VoQdplMZ) and have been posted on SEDAR
at www.sedar.com. The dollar figures below are denominated in US Dollars
unless noted otherwise.

HIGHLIGHTS

·      Quarterly consolidated energy production of 134,652 MWh (net) for
the period ended September 30, 2022, of which 98,949 MWh (net) was contributed
by the Company's geothermal facility in Nicaragua, an aggregate of 18,992 MWh
(net) was contributed by the Company's hydroelectric facilities in Peru,
14,262 MWh (net) was contributed by the Company's solar facility in Dominican
Republic and 2,449 MWh (net) was contributed by the Company's hydroelectric
facility in Ecuador.

·      The Company generated $14.5 million in revenue, including $14.1
million from energy sales and $0.4 million from the sale of carbon emission
reduction ("CER") credits for the three months ended September 30, 2022,
compared to $14.8 million in energy sales in the same period in 2021.

·      Net loss attributable to owners was $1.5 million or $0.07 per
share - basic for the three months ended September 30, 2022, compared to net
earnings of $2.2 million or $0.11 per share - basic for the same period in
2021.

·      Adjusted EBITDA was $10.0 million for the period ended September
30, 2022, compared to $10.9 million in the same period in 2021.

·      For the nine month period ended September 30, 2022, the Company
generated $20.7 million in net cash flow from operating activities, ending
with a strong cash position of $41.64 million ((1)) .

·      Continued progress on the construction of the Binary power plant
at San Jacinto, which is on schedule for completion in the fourth quarter of
2022. An additional $3.3 million was spent in the third quarter, bringing the
total investment to date to $22.9 million.

·      Development of the Panama Solar projects, acquired in March 2022,
continues as planned. During the third quarter of 2022 the Company spent $3.5
million in additions to construction in progress and an additional $4.2
million set aside as guarantees to ensure delivery of the solar panels to
Panama. Construction of the solar plant began in March 2022 and is expected to
be completed in December 2022.

·      On September 7, 2022, the Company closed the acquisition of
83.16% of the issued and outstanding shares of Hidroeléctrica San Jose de
Minas ("HSJM"), a run-of-the-river hydro project with approximately 6.0 MWs
capacity, in Ecuador, for $16.3 million. The Project has 7 years remaining on
a 15-year power purchase agreement ("PPA") with a wholly owned Ecuadorian
government entity, for the sale of all power production at $78.10 per MWh. The
effective date of the transaction was August 31, 2022.

·      On September 20, 2022, the Company completed the redemption of
its unsecured convertible debentures, equivalent to $15.3 million, of which
$15.0 million were converted into common shares prior to the redemption date
resulting in the issuance of an aggregate of 1,294,799 common shares, and $0.3
million were redeemed in cash.

·      The Company remains focused on maintaining a quarterly dividend.
For the three months ended September 30, 2022, the Company declared and paid
$3.1 million in dividends. The Company has declared the twenty-seventh
consecutive quarterly dividend of $0.15 per outstanding common share, which
will be paid on November 25th, 2022.

·      The Company continued to advance its environmental, social and
governance ("ESG") initiatives as part of its core strategy while continuing
to maintain an excellent health and safety record. Readers are encouraged to
refer to the Company's ESG annual report, which is available on the Company's
website for additional details.

The Company does not conduct business with or within Russia and Ukraine;
however global instability is increasing market and foreign exchange
volatility, worsening existing supply chain delays, and bringing inflationary
pressures to the economy, impacting not only the entities with interests or
exposures to both countries. Although the current exposure to these risks has
been determined as low, the Company continues evaluating them to determine if
mitigation measures in place are appropriate or need to be adjusted, as
needed.

(1) Includes current and non-current restricted cash.

OPERATING AND FINANCIAL OVERVIEW

                                                       Three Months Ended                                              Nine Months Ended
                                                       September 30, 2022                  September 30, 2021          September 30, 2022                      September 30, 2021
 Energy production
 Consolidated Power (MWh) net                                      134,652                             149,320                        475,536                              480,981

 Financials
 Total revenue                                         $           14,512                  $           14,806          $              45,762                   $           44,646
 Net (loss) earnings attributable to owners            $           (1,491      )           $           2,175           $              (502           )         $           1,422
 Adjusted EBITDA                                       $           10,010                  $           10,857          $              33,265                   $           32,699
 Net cash flow from operating activities                                                                               $              20,660                   $           33,903

 Per share
 Net (loss) earnings attributable to owners - basic    $           (0.07       )           $           0.11            $              (0.03          )         $           0.08
 Adjusted EBITDA - basic                               $           0.49                    $           0.56            $              1.68                     $           1.76

 Balance Sheet                                                                                                         As at September 30, 2022                As at

                                                                                                                                                               December 31, 2021
 Cash                                                                                                                  $              36,848                   $           97,930
 Restricted cash - non-current                                                                                         $              4,790                    $           3,835
 Total current assets                                                                                                  $              53,032                   $           110,143
 Total assets                                                                                                          $              536,035                  $           502,700
 Current and Long-term debt (ii)                                                                                       $              186,167                  $           169,686
 Total liabilities                                                                                                     $              266,402                  $           241,876

1.   Net of transaction costs.

During the three months ended September 30, 2022, quarterly consolidated power
production was lower than the same period in 2021, due to lower hydrology in
Peru and planned major maintenance performed in Nicaragua and Peru, partly
offset by the additional production from the solar project in Dominican
Republic acquired on June 28, 2022, and the hydroelectric project in Ecuador,
acquired on September 7, 2022.

For Nicaragua, third quarter 2022 production averaged 44.8 MWs (net), compared
to 54.7 MWs (net) in the third quarter of 2021. The decrease in average
production was due to planned major maintenance carried out in the third
quarter of 2022, which in comparison had been performed in the second quarter
of 2021. Certain high enthalpy wells, such as 9-3 and 6-2, were required to be
shut in during the major maintenance program. These wells took approximately
2-3 weeks to recover to their pre-Maintenance levels of production.
Accordingly, the net reduction in power production due to the maintenance
program in the third quarter was approximately 6 MWs (net) as opposed to 4 MWs
(net). Production to date in the fourth quarter is inline with expectations
and at similar levels to production delivered in the second quarter of this
year.

Consolidated production in Peru for the three months ended September 30, 2022,
was lower due to lower water availability at 8 de Agosto, El Carmen and
Canchayllo facilities. Water levels are usually expected to be lower in the
third quarter as this is the dry season in Peru, however this year was below
prior years and below estimated levels. In addition, we executed a planned
major maintenance program at 8 de Agosto during the quarter, which was not
performed in the same period of 2021.

For Dominican Republic, the Canoa 1 facility produced 14,262 MWh in the three
months ended September 30, 2022. This is in line with historical results and
our expectations.

For Ecuador, third quarter 2022 production of 2,449 MWh represents only one
month of production contributed by HSJM. Overall, and similar to Peru,
production in Ecuador is driven by the dry and wet season, with the dry season
generally running from June to November and wet season from December to May.

"We are pleased with the third quarter results as we generated strong free
cash flow and consolidated recent acquisitions in the numbers. In addition,
sales of carbon credits offset expected seasonal weakness in the quarter due
to maintenance in Nicaragua and the dry season in Peru. We are also very happy
with the fact that the Binary unit and the solar projects in Panama are on
schedule and close to achieving commercial operation." noted Marc Murnaghan,
Chief Executive Officer of Polaris Renewable Energy.

About Polaris Renewable Energy Inc.

Polaris Renewable Energy Inc. ( formerly, Polaris Infrastructure Inc.) is a
Canadian publicly traded company engaged in the acquisition, development, and
operation of renewable energy projects in the Americas. We are a
high-performing and financially sound contributor in the energy transition.

The Company's operations are in 5 Latin American countries and include a
geothermal plant (~72 MW), 4 run-of-river hydroelectric plants (39 MW), 1
solar (photovoltaic) project in operation (25 MWac) and 2 solar projects with
an expected total capacity of approximately 10 MWac, currently under
construction.

For more information, contact :

Investor Relations

Polaris Renewable Energy Inc.

Phone: +1 647-245-7199Email:
info@PolarisREI.com (mailto:info@PolarisREI.com)

Cautionary Statements

This news release contains "forward-looking information" within the meaning of
applicable Canadian securities laws, which may include, but is not limited to,
financial and other projections as well as statements with respect to future
events or future performance, management's expectations regarding the
Company's growth, results of operations, business prospects and opportunities,
construction plans in Panama, production in the fourth quarter in Nicaragua
and synergies of the acquisitions discussed above, and the effects of the
COVID-19 pandemic. In addition, statements relating to estimates of
recoverable energy "resources" or energy generation capacities are
forward-looking information, as they involve implied assessment, based on
certain estimates and assumptions, that electricity can be profitably
generated from the described resources in the future. Such forward-looking
information reflects management's current beliefs and is based on information
currently available to management. Often, but not always, forward-looking
statements can be identified by the use of words such as "plans", "expects",
"is expected", "budget", "estimates", "goals", "intends", "targets", "aims",
"likely", "typically", "potential", "probable", "projects", "continue",
"strategy", "proposed", or "believes" or variations (including negative
variations) of such words and phrases or may be identified by statements to
the effect that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved.

A number of known and unknown risks, uncertainties and other factors may cause
the actual results or performance to materially differ from any future results
or performance expressed or implied by the forward-looking information. Such
factors include, among others: failure to discover and establish economically
recoverable and sustainable resources through exploration and development
programs; imprecise estimation of probability simulations prepared to predict
prospective resources or energy generation capacities; inability to complete
hydro projects in the required time to meet COD; variations in project
parameters and production rates; defects and adverse claims in the title to
the Company's properties; failure to obtain or maintain necessary licenses,
permits and approvals from government authorities; the impact of changes in
foreign currency exchange and interest rates; changes in government
regulations and policies, including laws governing development, production,
taxes, labour standards and occupational health, safety, toxic substances,
resource exploitation and other matters; availability of government
initiatives to support renewable energy generation; increase in industry
competition; fluctuations in the market price of energy; impact of significant
capital cost increases; the ability to file adjustments in respect of
applicable power purchase agreements; unexpected or challenging geological
conditions; changes to regulatory requirements, both regionally and
internationally, governing development, geothermal or hydroelectric resources,
production, exports, taxes, labour standards, occupational health, waste
disposal, toxic substances, land use, environmental protection, project safety
and other matters; economic, social and political risks arising from potential
inability of end-users to support the Company's properties; insufficient
insurance coverage; inability to obtain equity or debt financing; fluctuations
in the market price of Shares; inability to retain key personnel; the risk of
volatility in global financial conditions, as well as a significant decline in
general economic conditions; uncertainty of political stability in countries
in which the Company operates; uncertainty of the ability of Nicaragua, Peru,
Panama, Ecuador and Dominican Republic to sell power to neighbouring
countries; economic insecurity in Nicaragua, Peru, Panama, Ecuador and
Dominican Republic; and other development and operating risks, as well as
those factors discussed in the section entitled "Risks and Uncertainties" in
the Company's annual and interim MD&A, copies of which are available on
SEDAR. There may be other factors that cause actions, events or results not to
be as anticipated, estimated or intended. These factors are not intended to
represent a complete list of the risk factors that could affect us. These
factors should be carefully considered, and readers of this press release
should not place undue reliance on forward-looking information.

Although the Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in forward-looking information, there may be other factors that
cause actions, events or results to differ from those anticipated, estimated
or intended. Forward-looking information contained herein is provided as at
the date hereof and the Company disclaims any obligation to update any
forward-looking information, whether as a result of new information, future
events or results or otherwise, except as required by applicable laws. There
can be no assurance that forward-looking information will prove to be
accurate, as actual results and future events could differ materially from
those anticipated in such information. Accordingly, readers should not place
undue reliance on forward-looking information due to the inherent uncertainty
therein.

Additional information about the Company, including the Company's AIF for the
year ended December 31, 2021, its annual and interim financial statements and
related MD&A is available on SEDAR at www.sedar.com and on the Company's
website at www.PolarisREI.com.

Non-GAAP Performance Measures

Certain measures in this press release do not have any standardized meaning as
prescribed by IFRS and, therefore, are not considered GAAP measures. Where
non-GAAP measures or terms are used, definitions are provided. In this
document and in the Company's consolidated financial statements, unless
otherwise noted, all financial data is prepared in accordance with IFRS.

This news release includes references to the Company's adjusted earnings
before interest, taxes, depreciation and amortization ("adjusted EBITDA") and
adjusted EBITDA per share, which are non-GAAP measures. These measures should
not be considered in isolation or as an alternative to net earnings (loss)
attributable to the owners of the Company or other measures of financial
performance calculated in accordance with IFRS. Rather, these measures are
provided to complement IFRS measures in the analysis of Polaris Renewable
Energy's results since the Company believes that the presentation of these
measures will enhance an investor's understanding of Polaris Renewable
Energy's operating performance. Management's determination of the components
of non-GAAP performance measures are evaluated on a periodic basis in
accordance with its policy and are influenced by new transactions and
circumstances, a review of stakeholder uses and new applicable regulations.
When applicable, changes to the measures are noted and retrospectively
applied.

Descriptions and reconciliations of the above noted non-GAAP performance
measures are included in Section 11: Non-GAAP Performance Measures in the
Company's MD&A for the three months ended September 30, 2022 and in the
Company's website www.polarisREI.com/Non-GAAP (https://pr.report/G8rtL3m5)
(https://pr.report/G8rtL3m5) .

SOURCE: Polaris Renewable Energy Inc.

 

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

Reach is a non-regulatory news service. By using this service an issuer is confirming that the information contained within this announcement is of a non-regulatory nature. Reach announcements are identified with an orange label and the word “Reach” in the source column of the News Explorer pages of London Stock Exchange’s website so that they are distinguished from the RNS UK regulatory service. Other vendors subscribing for Reach press releases may use a different method to distinguish Reach announcements from UK regulatory news.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NRAFZMGMGFNGZZM