Finavera Wind Energy: Q3 Results

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Vancouver, Canada - Finavera Wind Energy Inc.(TSX-V: FVR), a developer of renewable energy projects, has released its unaudited condensed consolidated interim financial statements and related management discussion and analysis ("MD&A") for the three and nine month periods ended September 30, 2014.


Highlights

    The Pattern Transaction:  In July 2014, the Company entered into an early settlement agreement with Pattern Renewable Holdings Canada ULC ("Pattern") where the parties settled the final payment that the Company was to receive at the financial close of the Meikle Wind Energy Project. The Company settled all of its debts with Pattern, including a development loan, working capital facility, interest, other amounts deductible under the Purchase and Sale Agreement, and legal fees.  The total consideration received from Pattern in 2014 was $24,723,881.

    The SSE Transaction:  In July 2014, the Company entered into an agreement with SSE Renewables Ltd. ("SSE") and completed the sale of its remaining 10% interest in the Cloosh Valley Wind Project in Ireland (the "Cloosh Project") for €2.1 million. Concurrent with the sale, the Company settled debt with a secured creditor for $1.5 million, plus interest and legal fees.  The Company held a 100% interest in the Cloosh Project which it began developing in 2005, and sold 90% of it to SSE in 2010 for €8.40 million. At the time, €1.26 million was received on signing and at the closing of project construction financing, currently anticipated in the first quarter of 2015, the Company is to receive the remaining €7.14 million (approximately $10.1 million).

    The Solar Alliance of America Transaction:  In August 2014, the Company signed an agreement to acquire Solar Alliance of America, Inc. ("Solar Alliance") for US $4 million cash and US $2 million in Finavera shares, valued at $0.21 per share.  This transaction represents Finavera's entry into the US residential solar market.  The Company intends to finance this transaction from the €7.14 million due from SSE or by way of a bridge financing through the issuance of debt.  The Company is currently in discussions with a number of potential debt providers.  Target for closing the transaction is Q1 2015.


Financial Highlights

    Net Income:  Generated net income of $18,416,244 (2013: Net loss of $1.4 million) and $14.3 million (2013: Net loss of $4.0 million) during the three and nine months ended September 30, 2014, respectively.

    Cash and Working Capital:  Closed third quarter of 2014 with a working capital deficit of $5.2 million (Q2 2014: $24.2 million) and cash of $802,302.  During the third quarter, the Company reduced its total liabilities by 76% as a result of the asset sales notes above.  The Company expects that it will receive €7.14 million ($10.1 million) from SSE in the first quarter of 2015.    


Management Comments

Jason Bak, the Company's Founder and CEO, commented, "The third quarter of 2014 was transformative for Finavera. The sale of our wind assets, reduction of debt and our agreement to acquire Solar Alliance of America, Inc. marked our entry in to the US residential solar market.  This market is growing at 60 - 70% annually and provides an excellent platform for the Company to expand Solar Alliance in the coming year to take advantage of the world changing opportunity presented by the unprecedented growth in residential distributed generation."


Third Quarter Results

During the three months ended September 30, 2014, Finavera recorded a net income of $18.4 million (earnings per share of $0.46) compared with a net loss of $1.4 million (loss per share of $0.03) in Q3 2013. Current period net income is mainly comprised of the gains from the sale of the Company's wind projects totaling $18.1 million, a reversal of prior project costs of $0.3 million, gains on debt settlements of 0.3 million and operating costs of $0.3 million. In Q3 2013, the loss is comprised of operating costs of $0.8 million, financing costs of $0.5 million and project costs of $0.1 million.

During the nine months ended September 30, 2014, Finavera recorded net income of $14.3 million (earnings per share of $0.36) compared to a net loss of $4.0 million for the comparable period in 2013 (loss per share of $0.10). It is comprised of gain on sale of projects of $18.1 million (2013: $nil), operating costs of $1.3 million (2013: $1.8 million), interest and financing costs of $1.0 million (2013: $1.6 million), project development costs of $1.1 million (2013: $0.2 million), and contractual payroll obligations of $0.6 million (2013: $nil). The largest difference in operating expenses between the periods was professional fees of $174k (2013 - $609k), a difference of $435k, mainly due to legal provisions of $350k booked in 2013 and which were settled in 2014.


About Finavera Wind Energy Inc. (www.finavera.com)

Finavera Wind Energy is a company focused on developing renewable energy opportunities.  Our mission is to create and operate a diversified portfolio of renewable energy projects while protecting and enhancing the physical and social environment.  Finavera has developed over 360 megawatts of wind projects and subsequently sold them to utilities or large independent power producers.  Finavera is continuing to opportunistically review prospects for growth and the enhancement of shareholder value.


Contact:
Finavera Wind Energy
Jason Bak
CEO
+1 (604) 288-9051
[email protected]
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