China Wind Power Reports Record Financial Results for FY 2011

China Wind Power Reports Record Financial Results for FY 2011 – Triple digit revenue growth driven by 71% increase in production for Phase I – TORONTO, July 29, 2011 /CNW/ – China Wind Power International Corp. (TSX-V: CNW), an independent wind power producer in China, today reported its financial results for the three- and 12-month periods ended March 31, 2011. All amounts are in Canadian dollars unless otherwise indicated.

“In fiscal 2011 we recorded a 281% increase in recorded revenue, an 895% increase in adjusted EBITDA, and reduced our net loss by 50%, while increasing production by 71%,” said Mr. Jun Liu, Chief Executive Officer, China Wind Power. “Our financial results reflect our innate ability to execute on our business plan to fully develop the potential of our Du Mon County project site, in Heilongjiang Province.”

FY2011 Financial and Operational Highlights

  • Generated and sold 81.0 million KWh of electricity in FY2011 for realized revenue of $6.6 million, up 281% compared to 47.2 million KWh sold for revenue of $3.8 million in FY2010
  • Achieved first quarter of profitability in Q3
  • Increased total planned capacity from 546 MW to 800 MW for all 5 Phases
  • Secured the first two tranches of RMB 220 million (approximately CDN$32.6 million) of the previously announced RMB 330 million (approximately CDN$50 million) loan agreement with the Agricultural Development Bank of China
  • Closed a non-brokered private placement that generated gross proceeds of $4.3 million

Highlights Subsequent to Year-end

  • Production for fiscal Q1 2012 totaled 28 million KWh of electricity compared to 15 million KWh in fiscal Q1 2011
  • Received final government approval for the construction of four new wind farms totaling 198 MW which will comprise Phase III
  • Finalizing construction and supply agreements with a major international turbine manufacturer for Phase III, which is expected to begin in calendar Q3 2011
  • Moving toward completion of construction of the 49.5 MW Phase II, which is expected by the end of December 2011; currently 22 of 35 planned turbines have been installed

Financial Results for FY2011
Total electricity sales for FY2011 were $6.6 million from production of 81.0 million KWh of electricity, up 71% from $3.8 million for FY2010 from production of 47.2 million KWh of electricity.  The growth in revenue and production is due to Phase I of the Company’s energy projects approaching total expected capacity throughout the year.

The Company had recorded revenue for FY2011 of $6.6 million compared to $1.7 million for FY2010 after excluding the recovery of wind farm plant costs of $2.1 million from total electricity sales.  Sales generated during the testing, tuning and calibration of the Phase I wind project.

Adjusted EBITDA for FY2011 was $4.8 million compared to $0.5 million in FY2010, an increase of 895%.  The significant increase in adjusted EBITDA was primarily due to an increase in revenue and production as previously discussed.

Net loss for FY2011 was $2.5 million, or $0.04 per share, down from a net loss of $5.0 million, or $0.10 per share, for FY2010.   The decrease in net loss is attributable to a number of factors including the ramping up of operations in FY2011, which added $4.8 million in revenue, a $2.4 milliondecrease in stock based compensation, offset by an increase in interest expense of $1.9 million and a $2.3 million increase in amortization expense. Net loss per share was also reduced by an increase in the number of weighted average shares from 48.0 million to 61.9 million.

Financial Results for Q4 FY2011
Total electricity sales for Q4 FY2011 were $1.7 million from 21.3 million KWh, up 41% from $1.2 million from 15.2 million KWh for Q4 FY2010. The increase in revenue and production was as a result of Phase I of the Company’s wind projects operating at close to total expected capacity for the quarter compared to the same time in the previous year.

Excluding stock-based compensation, adjusted EBITDA for Q4 FY2011 was $1.0 million, up 24% from $0.8 million for Q4 FY2010.  The improvement in quarterly adjusted EBITDA is attributable to higher revenue and production as previously discussed.

Net loss for Q4 FY2011 was $0.6 million, or $0.01 per share fully diluted, down from a net loss of $1.2 million or $0.02 per share fully diluted, for Q4 FY 2010.  The year-over-year decrease in net loss was primarily due to the ramping up of operations of Phase I throughout the year.

Outlook
“We are very close to finalizing the construction and turbine supply agreements for the Phase III, which will allow us to add an additional 198 MW of capacity to our production,” also said Mr. Liu.  “With the completion of Phase II expected by the end of the calendar year and construction of Phase III expected to begin by the third quarter of the calendar year, we expect fiscal 2012 to be an even bigger year of progress for the Company.”

About China Wind Power International Corp.
China Wind Power International Corp. is an Ontario company that is uniquely positioned to capitalize on the growing demand for wind power in China.  The Company indirectly holds the exclusive rights for wind energy development in Du Mon County, Heilongjiang Province, which has a demonstrated potential installed capacity of 1,150 MW of wind energy developable over an area of 612 square km.  While 1,150 MW represents the Company’s long-term potential for wind power in the area, its current plans are for building out approximately 800 MW over five development phases.  The Company’s common shares are listed on the TSX Venture Exchange under the symbol “CNW”. The Company has approximately 63.9 million shares outstanding.

For more information and the latest updates on China Wind Power, visit our investor relations blog at http://chinawindpower.posterous.com or follow us on Twitter at http://twitter.com/ChinaWindPower

Forward-looking statements

Certain statements that are not historical facts made in this press release may be forward looking statements subject to risks and uncertainties. Statements containing words such as “will”, “could”, “expect”, “may”, “anticipate”, “believe”, “intend”, “estimate”, “plan” and other similar expressions are forward-looking statements that represent management’s beliefs at the time the statements are made and are based on certain factors and assumptions including wind farm construction and commercial production schedule, output and capacity, revenue and earnings expectations and market potential. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events to differ materially from those projected in forward-looking statements. Important factors that could cause actual results to differ materially from the Company’s expectations include uncertainties involving the availability of financing; fluctuations in currency exchange rates; uncertainties relating to economic and market conditions; uncertainty of estimates of capital and operating costs;  the need to obtain additional financing to develop the projects and uncertainty as to the availability and terms of future financing; the possibility of delay in construction projects and uncertainty of meeting anticipated program milestones; uncertainty as to timely availability of permits and other governmental approvals; and other risks and uncertainties disclosed in the information circular dated May 29, 2009 relating to the Company’s reverse take-over with Berkshire Griffin Inc., which is available at www.sedar.com under the Company’s profile. Except as required by applicable securities laws, the Company undertakes no obligation to update any forward looking statement to reflect events or circumstances after the date on which such statement is made.

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.

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