2019 HIGHLIGHTS
Operational
Etrion produced 63.6 Gigawatt-hours (“GWh”) of electricity from the Company’s 57 MW portfolio comprising 11 solar power plant sites inJapan , a 12% increase in production compared with 2018.- Construction of the 45 MW Niigata solar project in central
Japan is approximately 36% complete with estimated connection to the electricity grid in the fourth quarter of 2021. Once completed, this project will generate an estimated 45 GWh per year and approximatelyUS$3.6 million of free cash flow per year while nearly doubling our net installed capacity to 102 MW. Etrion continues to advance the litigation over a backlog solar power project under development inJapan with estimated gross capacity of 60 MW.
Financial
- Consolidated revenues of
US$21.9 million were 12% higher relative to 2018. - Solar segment EBITDA of
US$16.5 million was 13% higher relative to 2018. Etrion closed 2019 with a cash balance ofUS$123.4 million ,US$10.6 million of which was unrestricted and held at the corporate level, and working capital ofUS$109.7 million .- On
December 25, 2019 ,Etrion closed a multi-step transaction resulting in significant value creation across its Japanese solar portfolio.Etrion acquired forUS$4.3 million the minority equity interests of Hitachi High Technologies (“Hitachi High-Tech” or “HHT”) andTamagawa Holdings (“Tamagawa”), optimized the related Japanese corporate structure and renegotiated the operations and maintenance (“O&M”) contracts for Etrion’s 57 MW solar portfolio inJapan . - In
June 2019 , the Group issued a project bond of approximately ¥16.0 billion (US$147.0 million ) at an all-in fixed rate of 1.2% for the construction of the 45 MW Niigata solar power project. - On
July 1, 2019 ,Etrion charged the Niigata project with a net development fee of approximately ¥600 million (US$5.6 million ) and anticipated land lease for ¥459 million (US$4.2 million ). - The Group collected ¥300 million (
US$2.7 million ) associated with the sale of rights of the 45 MW Kumamoto solar power project. - The Company received a VAT reimbursement of ¥300 million (
US$2.8 million ) associated with the Komatsu project and repaid the outstanding amount of the VAT credit facility for the same amount.
Management Comments
FINANCIAL SUMMARY
Three months ended | Twelve months ended | |||||||
US$ thousand (unless otherwise stated) | Q4-19 | Q4-18 | 2019 | 2018 | ||||
Electricity production (MWh)1 | 10,396 | 12,190 | 63,631 | 56,786 | ||||
Financial performance | ||||||||
Revenues | 3,599 | 4,048 | 21,876 | 19,500 | ||||
Consolidated EBITDA | 99 | 510 | 14,196 | 7,553 | ||||
Net loss | (6,249 | ) | (2,566 | ) | (4,688 | ) | (8,618 | ) |
Project cash distributions | - | - | 2,030 | 2,135 | ||||
Cash flow from operations | 2,955 | 2,171 | 15,920 | 8,795 | ||||
Adjusted operating cash flow | 168 | 1,360 | 14,421 | 7,958 | ||||
Financial position | ||||||||
Unrestricted cash at parent level | 10,596 | 9,328 | ||||||
Restricted cash at project level | 112,786 | 15,399 | ||||||
Working capital | 109,655 | 22,835 | ||||||
Consolidated net debt on a cash basis | 193,143 | 151,918 | ||||||
Corporate net debt | 27,201 | 29,476 | ||||||
2020 Guidance
US$ million otherwise stated | Low end | High end |
Energy generation (GWh) | 59.9 | 66.2 |
Revenue | 20.6 | 22.8 |
Project-level EBITDA | 15.0 | 16.5 |
Revenue, project-level EBITDA and production forecast for our Japanese business, incorporated in the above consolidated guidance, are based on Etrion’s 100% ownership over the approximately 57 MW operational Japanese portfolio comprising the Mito, Shizukuishi, Misawa and Komatsu solar parks. These projects benefit from 20-year Power Purchase Agreements with Japanese public utilities under which they will receive between ¥32 and ¥40 per kWh produced (approximately between
Operations and Finance Update call
A conference call webcast to present the Company’s 2019 Operations and Finance update will be held on
Dial-in details:
Conference ID: 3854058
Webcast:
A webcast will be available at https://www.webcaster4.com/Webcast/Page/1297/33370
The Operations and Finance update call presentation and the Company’s consolidated financial statements for the year ended
A replay of the telephone conference will be available until
Replay dial-in details:
Pass code for replay: 3854058
About Etrion
For additional information, please visit the Company’s website at www.etrion.com or contact:
Telephone: +41 (22) 715 20 90
Note: The capacity of power plants in this release is described in approximate megawatts on a direct current (“DC”) basis, also referred to as megawatt-peak (“MWp”).
Project Economics Forecasts
Basis of preparation of the forecasts:
The revenue forecasts have been prepared on a basis consistent with the accounting policies that are expected to be used in the Group’s consolidated financial statements for the year to be then ended. These policies are consistent with those set out in the accounting policies in the Group’s consolidated financial statements for the years ended
Assumptions for the forecasts:
The forecasts included herein also reflect assumptions with respect to certain factors outside the influence or control of management:
- There will be no major event or other circumstances which would cause a significant delay in the construction, completion and connection to the grid of new solar power plants.
- There will be no material change in the current management team, ownership of and control over the project level companies.
- There will be no material change in legislation or regulatory requirements impacting the Group’s operations or its accounting policies.
- There will be no material differences between the actual or past recent weather and irradiation conditions and those anticipated or projected by management.
- There will be no material changes to general trading and economic conditions and no downturn in economic activity in
Japan , from that which is currently prevailing and/or anticipated by management which would cause a material change in levels of energy production and demand. - There will be no major or international natural disasters, outbreaks of hostilities, terrorist attacks or other circumstances which would cause a material change in levels of energy production and demand.
- There will be no business interruptions that materially affect the Group, its major suppliers or its major customers.
- There will be no material change in interest rates from those currently prevailing, hedged and/or anticipated by management.
- There will be no material changes to the prices of energy electricity forecasted by the Group’s projects.
Factors within the influence or control of management:
- There will be no loss of revenue due to underperformance of the solar projects which will have a material impact on the forecast.
- There will be no acquisitions and disposals by the Group which will have a material impact on the forecast.
Non-IFRS Measures:
This press release includes non-IFRS measures not defined under IFRS, specifically EBITDA and Adjusted operating cash flow. Non-IFRS measures have no standardized meaning prescribed under IFRS and therefore such measures may not be comparable with those used by other companies. EBITDA is a useful metric to quantify the Company’s ability to generate cash before extraordinary and non-cash accounting transactions recognized in the financial statements. In addition, EBITDA is useful to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting policy decisions. The most comparable IFRS measure to EBITDA is net income (loss). In addition, adjusted operating cash flow is used by investors to compare cash flows from operating activities without the effects of certain volatile items that can positively or negatively affect changes in working capital and are viewed as not directly related to a company’s operating performance. The most comparable IFRS measure to adjusted operating cash flow is cash flow used in operations. Refer to Etrion’s MD&A for the year ended
Forward-Looking Information:
This press release contains certain “forward-looking information”. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements relating to the Company’s 2020 guidance and development projects in
Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
1 MWh-Megawatt-hour
Source:
2020 GlobeNewswire, Inc., source