Ram Power, Corp. (TSX: RPG) (“Ram Power” or the “Company”), a renewable energy company focused on the development, production and sale of electricity from geothermal energy, is pleased to announce its operating results for the fiscal year ended December 31, 2013. This earnings release should be read in conjunction with Ram Power’s financial statements, and management’s discussion and analysis (“MD&A”), which are available on the Company’s website at www.ram-power.comand have been posted on SEDAR at www.sedar.com.
San Jacinto-Tizate Project
The San Jacinto-Tizate Power Plant generated 423,998 (net) MWh resulting in revenue of $46.2 million for the year ended December 31, 2012 (an increase of 65% over 2012) and EBITDA (as defined below) of $30.5 million in 2013 compared to revenue of $28.1 million and EBITDA of $9.7 million in 2012;
Well SJ 12-3 was placed in commercial operation following an extensive thermal recovery period in late February, 2014. Well head temperature and pressures continue to oscillate since being placed into production, but will stabilize over time and the well is currently producing between 7-10 MW.
Well SJ 9-3 continues to be in thermal recovery. The Company has made four attempts to tie in the well into the plant after nine weeks of thermal recovery. SJ 9-3, when achieving well head pressure necessary for the operating pressure of the plant, has demonstrated a production output between 7-10 MW. The well continues to show improved thermal recovery of temperature and pressure, but will continue to be shut in for periods of time over coming weeks to allow for complete stabilization.
The Company entered into a letter of intent on January 14, 2014 with an interested party for the purchase and sale of the Geysers Project. The Company is in the final stages of negotiating a purchase and sale agreement, and intends to execute an agreement in the immediate future. The Company anticipates an expected close and funding of the sale by April 30, 2014.
The Company continues to work with Dundee Securities on the strategic process, and expects letters of intent from interested parties by mid-April 2014.
The Company continues the process of selling and / or disposing of all non-core assets to focus its efforts on maximizing the cash flow and profitability of the Company’s producing assets in Nicaragua. Accordingly, the Company has made the strategic decision to close the Reno, Nevada office effective May 31, 2014.
For the year ended December 31, 2013, the Company reported revenue of $46.2 million and a total loss and comprehensive loss of $50.9 million, or $(0.17) per share, compared to revenue of $28.1 million and a total loss and comprehensive loss of $60.2 million, or $(0.21) per share, for 2012. The 65% increase in revenue resulted from commencing operations of the San Jacinto Phase II expansion in January 2013. Total loss and comprehensive loss for year ended December 31, 2013 was the result of non-cash depreciation and amortization expense of $24.5 million, a one-time loss on impairment of the Geysers and other North America projects of $20.3 million, deferred tax expense of $8.2 million and nonrecurring corporate restructuring costs of $1.3 million.
EBITDA increased to $30.5 million for the year ended December 31, 2013 compared to $9.7 million for the prior year. The $20.8 million increase in EBITDA for the year ended December 31, 2013 principally resulted from an $18.1 million increase in revenue and a $4.5 million decrease in general and administrative expenses and other operating costs, offset by increases in direct costs of plant operations of $1.8 million.
For the year ended December 31, 2013, the Company had net operating cash inflows of $8.4 million, net investing cash outflows of $20.4 million and net financing cash outflows of $16.8 million, which combined for a net decrease in cash of $28.8 million. The Company expended $24.8 million for additions to geothermal properties, including $8 million related to completion of Phase II of the San Jacinto expansion and $19.2 million related to San Jacinto drilling costs. At December 31, 2013, the Company had cash of $22.5 million, of which $19.9 million was held for current use in the San Jacinto project.
Antony Mitchell, Executive Chairman of Ram Power, said, “I am proud of what we have accomplished in 2013. Through a hard look at our overhead costs, we have emerged a leaner Company, with a sharp focus on the execution of our immediate goal of returning San Jacinto closer to its design capacity. And though the process of thermal recovery from our remediation program has taken longer than expected, I would like to thank our shareholders who continue to support the Company as we continue to work to maximize value for shareholders.”
CORRECTION OF ERROR
In its financial statements for the year ended December 31, 2013, the Company determined the calculation of deferred income tax expense was in error for previously issued financial statements for the year ended December 31, 2012. The Company incorrectly recognized deferred tax assets related to net operating losses in PENSA. Nicaraguan law changed at the end of 2012, resulting in restrictions on the recognition of NOLs after a tax holiday. The law was substantially enacted by December 31, 2012. This change resulted in a $6.4 million understatement of 2012 deferred tax expense. As a result of this error, the previously reported balances of deferred tax liability and accumulated deficit as at December 31, 2012, were misstated and certain previously reported amounts in the consolidated statements of operations and comprehensive loss, consolidated statements of changes in shareholders’ equity and consolidated statements of cash flows for the year ended December 31, 2012 were misstated. The amount of the error was significant, and the Company has restated the financial statements for the year ended December 31, 2012 to correct the error. Accordingly, the Company has restated its financial statements for the year ended December 31, 2012 to correct the error. The error and its correction had no effect on the Company’s cash flows or cash balances. The restated financial statements and MD&A are available on the Company’s website at www.ram-power.com and have been posted on SEDAR under the Company’s profile at www.sedar.com.
Ram Power will hold its earnings call to discuss the year ending December 31, 2013 financial and operating results on Monday, April 7, 2014 at 10:00 am EST (7:00 am PST). To listen to the call, please dial 1-866-696-5910 by entering the participant pass code 1658549, or on the web at http://bell.media-server.com/m/p/xvc6oofu.
Source: Ram Power
For more information on: Ram Power