VANCOUVER,
April 30, 2014 /CNW/ - Run of
River Power Inc. ("ROR" or the "Company")
(TSX-V:ROR) announces its financial and operating results for the
year ended December 31, 2013.
The audited consolidated annual financial statements and management
discussion and analysis for the year ended December 31, 2013 have been filed on SEDAR and
posted on ROR's website (www.runofriverpower.com). All figures
reported herein are in Canadian dollars unless otherwise
stated.
Financial Report for the Year Ended December 31, 2013
Financial Highlights
For the year ended December 31, 2013 ("fiscal 2013"), the
Company recorded a total comprehensive loss of $11,346,691 compared to a total comprehensive
loss of $2,301,191 for the year ended
December 31, 2012 ("fiscal
2012"). The significantly increased total comprehensive
losses during fiscal 2013 compared to fiscal 2012 are mainly due to
the recognition of an impairment on the Company's projects under
development in the amount of $5,006,548 (fiscal 2012: $287,836), the recognition of an adjustment to
the fair value of the convertible royalty interest in the amount of
$2,665,441 (fiscal 2012: Nil), and a
loss on project cost overrun of $1,164,499 (fiscal 2012: Nil)
Selected Financial Information
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($000's except per share and generation
amounts) |
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For the years ended December 31 |
2013 |
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2012 |
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2011 |
Electricity sales |
1,933 |
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1,936 |
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2,090 |
EBITDA(1) |
(3,997) |
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|
195 |
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(744) |
Loss |
(11,347) |
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(2,301) |
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(2,717) |
Basic and diluted loss per share |
(0.11) |
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(0.02) |
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(0.03) |
Cash flow from (used in) operations |
735 |
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(180) |
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(280) |
Total assets |
23,146 |
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27,278 |
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28,497 |
Long-term debt |
- |
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13,314 |
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13,737 |
Generation-MWh |
32,126 |
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32,314 |
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35,281 |
(1) |
EBITA is earnings before interest, taxes, depreciation and
amortization and is not a measure under International Financial
Reporting Standards ("IFRS") and may not be comparable to
similar measures presented by other companies. Refer to the
Non-GAAP Measures section of the MD&A for the year ended
December 31, 2013 for an explanation and reconciliation. |
Operating Results
During fiscal 2013, electricity sales from the
Brandywine generating facility decreased by $3,297 or 0.2% to $1,933,147 from $1,936,444 during fiscal 2012 as a direct result
of a decrease in electricity generated from 32,314 MWh to 32,126
MWh. Electricity production was down due to lower hydrology
conditions for the year despite an overall improvement in the
facility's conversion effectiveness.
Plant operating expenses decreased by
$28,419 or 2.2% from $1,286,555 during fiscal 2012 to $1,258,136 during fiscal 2013. The decrease
was due to increased reliability at the plant.
General and administrative expenses of the
Company were $1,421,398 during fiscal
2013, being $169,229, or 13.5%,
higher than the comparable expenses of $1,252,169 during fiscal 2012. Increased general
and administrative costs during fiscal 2013 were primarily
attributable to costs associated with the Skookum Creek Power
Project no longer being capitalized.
The Company incurred net finance costs of
$1,647,385 during fiscal 2013
compared to $1,537,259 during fiscal
2012. The increase of $110,126
of 7.2% was due to the secured subordinated debentures being
outstanding for an entire year.
The Company was provided $734,637 from operating activities during fiscal
2013 compared to funds of $179,921
being used in operating activities during fiscal 2012. The
improvement of $914,558 was due to
the receipt of a development fee for the Skookum Creek Power
Project.
Financial Position and Going Concern
As at December 31,
2013, the Company had $1,951,834 (December 31,
2012: $3,818,558) cash on
hand, of which $1,364,580
(December 31, 2012: $1,301,983) was restricted cash. These cash
resources will be used to fund the Company's ongoing working
capital requirements.
The success of the Company is dependent on its
ability to economically generate electrical power and its ability
to sell the electricity generated on a profitable basis to BC Hydro
and other Electricity Purchase Agreements. There is no
certainty that such events will occur and that sources of financing
will be obtained on acceptable terms. Whether and when the
Company can achieve profitability and positive cash flow is also
uncertain. These material uncertainties cast significant
doubt on the Company's ability to continue as a going concern.
The Company has entered into a Letter of Intent
with Concord Green Energy Corp., its wholly-owned subsidiary and
0999130 B.C. Ltd to sell Rockford Energy Corporation and to sell
the Company and the remaining development assets held in the
Company. If the completion of the transaction is unsuccessful and
the Company is unable to find another entity to fund operations,
the Company would be considered insolvent.
Convertible Royalty Interest
At December 31,
2013, the fair value of the convertible royalty interest is
estimated to be $1, which resulted in
a fair value loss of $2,665,441 for
the year ended December 31, 2013. The
decrease in the fair value of the convertible royalty interest is
due primarily as a result of the dilution of the Company's
financial interests in the Skookum Creek Power Partnership (the
"Partnership") as a result of a cost-over run.
Subsequent to year end, the forecasted cost over-runs reached a
point where the amount of equity in the Partnership that the
Company can acquire upon exercising its convertible royalty
interest decreased from 50% to 0%. The annual royalty amount has
been diluted from 10% to 0%.
Loss on Project Cost Over-Run and Project Development
Revenue
As a result of project cost-over runs on the
Skookum Power Project the Company is obligated to repay
$2.7 million of the cost-over runs to
the Partnership which has been recognized in its statement of
financial position at December 31,
2013. The $2.7 million has
been offset with $336,609 owing to
the Company from the Partnership for project development
services.
During the year ended December 31, 2013, final financing arrangements
were agreed upon for the Skookum Project and the Company was
entitled to receive $1,697,977 for
project development. During fiscal 2013, the Company received
another advance of $921,267. At
December 31, 2013 a total of 88.3% of
the Skookum Power Project was complete; however, as a result of the
forecasted cost over-runs the Company has reduced the project
development fee earned to $nil and offset the remaining amount
receivable of $336,609, with the cost
over-run provision. A loss of $1,164,499 was recognized in fiscal 2013.
Projects Under Development
Due to the economic outlook in British Columbia, the Company has impaired its
projects under development to reflect the increased risk of
obtaining an economic benefit from the successful development of
its assets. The Company recognized an impairment on its projects
under development in the amount of $5,006,548.
In November 2013,
the government of British Columbia
confirmed its approval of BC Hydro's Integrated Resource Plan
("IRP"). The IRP provides a 20-year outlook of how BC
Hydro expects to reliably and cost-effectively meet the anticipated
future electricity needs of the Province through conservation, the
acquisition of sufficient generation capacity, transmission
resource upgrades and the advancement of the Site C hydroelectric
project on the Peace River. A summary of BC Hydro's views as set
out in the IRP is included in the Company's MD&A for the year
ended December 31, 2013, a copy of
which has been filed on SEDAR. As a result of BC Hydro's
current views respecting future power shortfalls in the 2013 IRP,
it is not expected that there will be any formal calls for clean
energy for at least the next ten years. This outlook provides for
limited renewable energy development opportunities in British Columbia unless the supply demand
picture changes dramatically from what is outlined in the IRP.
Non-GAAP Measures
The Company reports its financial position, results of
operations and cash flows in accordance with IFRS.
About Run of River Power Inc.
ROR develops renewable, sustainable energy
through its portfolio of clean energy projects. The Company helps
diversify BC's energy mix by providing a cleaner way to generate
power and increasing the security of BC's energy supply. ROR
operates an Eco Logo© certified hydroelectric power generation
station at Brandywine Creek, near Whistler, BC that provides green power for
about 4,000 homes.
Disclaimer Regarding Forward Looking
Information
Certain information included in this press
release constitutes forward-looking information under applicable
securities legislation. Forward-looking information typically
contains statements with words such as "anticipate", "believe",
"expect", "plan", "intend", "estimate", "propose", "project" or
similar words suggesting future outcomes or statements regarding an
outlook, or statements that certain events or conditions "may"
occur. Forward-looking information in this press release
includes, but is not limited to, statements regarding the
expectations of management of ROR regarding: (i) the Transaction;
(ii) completion of the Transaction; (iii) entry into the Payment
Indenture; (iv) the intended results of the Transaction; (v) the
conditions to completion of the Transaction; (vi) the calculation
of and timing for payment of the ROR Consideration to the
Shareholders; (vii) the Shareholders' meeting in connection with
the Transaction; (viii) receipt of a fairness opinion and valuation
in connection with the Transaction; (ix) the preparation and
delivery of an information circular in connection with a
Shareholders meeting to consider the Transaction; and * the
proposed de-listing of the ROR Shares and the proposed ceasing to
be a reporting issuer of ROR.
Although ROR believes that the expectations
reflected in the forward-looking information are reasonable, undue
reliance should not be placed on forward-looking information
because ROR can give no assurance that such expectations will prove
to be correct. Such forward-looking statements are subject to
risks and uncertainties that may cause actual results, performance
or developments to differ materially from those contained in the
statements including, without limitation, the risks that: (1) the
Transaction may not be completed for any reason whatsoever,
including that the requisite Shareholder, court and/or regulatory
approval of the Transaction may not be obtained or that AcquireCo
and/or the REC Acquirer may not have the necessary funds to make
the Advance and the REC Purchase Price available to ROR; (2) an
Payment Indenture may never be entered into for any reason
whatsoever; (3) the Transaction, if completed, may not have the
intended effect as set out in this news release; (4) the aggregate
amount of the ROR liabilities to be deducted from the Available
Funds may be significant, and the resulting ROR Consideration, if
any, may be nominal; (5) the meeting of Shareholders to consider
the Transaction may not occur; (6) a fairness opinion and/or
valuation may not be obtained, or if obtained, may not provide a
favourable opinion as to the fairness or value of the Transaction;
(7) the information circular and other materials for the meeting of
Shareholders may not be prepared or delivered to Shareholders as
expected; (8) the ROR Shares may not be de-listed and ROR may not
cease to be a reporting issuer following closing for any reason
whatsoever, and (9) such other risks and uncertainties beyond the
control of ROR.
Readers are cautioned that the foregoing list is
not exhaustive of all factors and assumptions which have been used.
The forward-looking information contained in this press release is
made as of the date hereof and ROR undertakes no obligation to
update publicly or revise any forward-looking information, whether
as a result of new information, future events or otherwise, unless
required by applicable securities laws. The forward looking
information contained in this press release is expressly qualified
by this cautionary statement.
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.
powering a cleaner tomorrow®
SOURCE Run of River Power Inc.