Etrion Corporation today released its condensed consolidated interim financial statements and related management's discussion and analysis ("MD&A") for the three months ended March 31, 2016.
- Development: Advanced the backlog of three projects in Japan for a total capacity of 76MW. Management expects to reach financial close for these backlog projects within the second half of 2016. The Company is advancing the development of additional projects in Japan for a combined capacity of 190MW. Finally, the Company continues to maintain its shovel-ready 99MW in Chile which are targeted to be built once Power Purchase Agreements ("PPAs") are secured.
- Construction: The Company is progressing on the construction of the 25MW Shizukuishi project in northern Japan. The project is on budget and on schedule, with estimated connection to the electricity grid by September 2016.
- Production: Produced approximately 65.1 million kWh of electricity during the three months ended March 31, 2016, (2015: 64.4 million kWh), from the Company's 139MW portfolio comprising 23 solar power plants (2015: 130MW comprising 18 solar plants) in Italy, Chile and Japan. When broken down by country, the Company produced 16.4 million kWh (2015: 17.0 million kWh) in Italy, 46.0 million kWh (2015: 47.5 million kWh) in Chile and 2.8 million kWh (2015: nil) in Japan, representing an overall production increase of 1% quarter-over-quarter.
- Revenue: Generated revenues of US$9.9 million (2015: US$10.4 million) during the three months ended March 31, 2016, from the Company's 139MW portfolio comprising 23 solar power plants in Italy, Chile and Japan.
- EBITDA: Recognized earnings before interest, taxes, depreciation and amortization ("EBITDA") of US$4.4 million (2015: US$5.5 million) during the three months ended March 31, 2016.
- Cash and Working Capital: Closed the three months ended March 31, 2016 with a cash balance of US$54.5 million, of which US$14.1 million is unrestricted (December 2015: US$52.5 million and US$17.6 million, respectively) and positive working capital of US$21.7 million (December 2015: US$1.5 million).
Marco A. Northland, the Company's Chief Executive Officer, commented, "I am very excited about 2016; Japan continues to be a terrific market for Etrion. Our target is to exit 2016 with over 100MW of projects connected or under construction and a larger pipeline for realization in subsequent years. Project economics continue to be very attractive and the partnership with Hitachi High-Tech remains very strong. Italy continues to deliver strong cash flows, which were significantly improved through a series of initiatives, including a comprehensive refinancing, introduction of several cost cutting measures and successful commercial activities. Italy remains with two potential material upsides, including a potential positive outcome of the Italian Constitutional Court hearing in December 2016 to determine whether the original feed-in-tariff ("FiT") should be reinstated and the reimbursement of certain investment tax credits. We will communicate this as it is determined.
In Chile, the team has done a great job by securing a PPA for 70 gigawatt-hours for Project Salvador, starting in January 2016. The team continues to work around the clock to secure additional PPAs for the remaining capacity of Project Salvador and our pipeline as well. Spot market electricity prices for Project Salvador continued to be low during the first quarter of 2016, due to network bottlenecks and are likely to remain low for the rest of 2016 and a portion of 2017 until network expansion is completed.
On the operational side, we continue to make significant savings due to the reduction of operating and maintenance costs, headcount and other cost reduction initiatives."
During the three months ended March 31, 2016, the Company reported a gross profit of US$0.2 million (2015: US$2.4 million) and generated adjusted operating cash flow of US$4.5 million (2015: US$5.6 million). These results were primarily attributable to lower production and spot electricity prices in Chile and Italy. In addition, the substantially lower foreign exchange gain recognized during the quarter of $0.4 million (2015: $6.3 million) contributed to Etrion reporting a net loss of US$8.5 million (loss per share of US$0.02) compared to a net loss of US$2.5 million (loss per share NM) during the comparable period in 2015.