Jade Power Reports Second Quarter 2021 Results and Announces Board Approval of Consolidation and Normal Course Issuer Bid
TORONTO, ONTARIO – August 30, 2021 – Jade Power Trust ("Jade Power" or the "Trust") (TSXV: JPWR.UN) is pleased to report its second-quarter 2021 financial results and announce board approval of a unit consolidation and normal course issuer bid. All amounts are expressed in Canadian Dollars unless otherwise noted.
Energy generation of 35,561 MWh for the second quarter of 2021 compared to 38,247 MWh for the second quarter of 2020. Energy generation of 79,382 MWh for the six months ended June 30, 2021, compared to 88,456 MWh with the comparable period in 2020. Energy generation for the second quarter and for the six months ended June 30, 2021, was lower than the prior year's comparable period due to less favorable wind levels.
Revenue of $4.6 million for the second quarter of 2021, compared to $4.9 million for the second quarter of 2020. Revenue of $9.6 million for the six months ended June 30, 2021, compared to $10.3 million for the same period in 2020. The decrease in revenue was primarily a result of less energy generation net of higher net balancing costs.
Net income of $1.1 million, or $0.00 per trust unit (each, a “Unit”) of the Trust, for the second quarter of 2021 compared to a net income of $0.5 million or $0.00 per unit for the second quarter of 2020. Net income of $2.9 million or $0.01 for the six months ended June 30, 2021, compared to $1.9 million, or $0.01 per Unit, for the same period in 2020.
Adjusted EBITDA of $2.4 million,1 or $0.01 per Unit, for the second quarter compared to $2.9 million, or $0.01 per Unit, for the comparable quarter in 2020. Adjusted EBITDA of $5.4 million, or $0.02 per Unit, for the six months ended June 30, 2021, compared to $6.1 million, or $0.03 per Unit, for the six months ended June 30, 2020 (See reconciliation of adjusted EBITDA under "Non-IFRS Measures").
Operating cash flows of $0.8 million, or $0.00 per Unit, after net changes in working capital for the second quarter of 2021 compared to $2.2 million, or $0.01 per Unit, for the second quarter of 2020. Operating cash flows of $4.5 million, or $0.02 per Unit, after changes in working capital for the six months ended June 30, 2021, compared to $3.7 million, or $0.02 per Unit, for the six months ended June 30, 2020 (See reconciliation of adjusted EBITDA under "Non-IFRS Measures").
Subsequent to the six months ended June 30, 2021, the Board of Directors (the “Board”) of Jade Power Administrator, as administrator of the Trust, approved a consolidation of the outstanding Units at a ratio of 10:1 (the “Consolidation”) and a normal course issuer bid (the “NCIB”) for up to 5% of the outstanding Units over a 12-month period. The NCIB is expected to be commenced following the effective date of the Consolidation. All purchases made under the NCIB will be completed through the facilities of the TSXV in open market transactions or by such other means as may be permitted under applicable laws and the policies of the TSXV. The Consolidation and NCIB are both subject to the approval of the TSXV.
The Board believes that it is in the best interests of the Trust to implement the Consolidation for the following reasons:
Increased investor interest. A higher post-Consolidation Unit price could help generate interest in the Trust among new and existing investors. While decreasing the number of outstanding Units may not, by itself, affect the marketability of the Units, in practice many investors, including institutional investors and investment funds, consider low-priced securities as unduly speculative in nature and, as a matter of policy, avoid investments in such Units. As a result, a higher anticipated Unit price may meet investing guidelines for certain investors that are currently prevented under their investing guidelines from investing in the Units at current price levels, and may allow such investors to leverage their investment by meeting margin eligibility requirements.
Reduction of Unitholder transaction costs. Unitholders may benefit from relatively lower trading costs associated with a higher Unit price. In circumstances where commissions are based on the number of Units traded, investors pay lower commissions to trade a fixed value of Units where the per Unit price is higher.
Improved liquidity. The aggregate potential effect of increased interest from investors and potentially lower transaction costs could ultimately improve the trading liquidity of the Units.
There can be no assurance that any increase in the market price per Unit or improved liquidity would result from the Consolidation. The Trust will disseminate an additional news release upon receipt of TSXV approval for the Consolidation, which will include the date on which the Consolidation will be effected.
Normal Course Issuer Bid
The actual number of Units that will be purchased under the NCIB, if any, and the timing of such purchases will be determined by the Trust from time to time and all Units purchased under the NCIB will be cancelled. The Board believe that the current market price of the Units does not adequately reflect their value of the Units and that the purchase of Units under the NCIB is in the best interests of the Trust, a desirable use of its available cash, and will enhance Unitholder value, general. To the knowledge of the Trust, no director, senior officer or other insider of the Trust currently intends to sell any Units under the NCIB.
The Trust has engaged Canaccord Genuity Corp. as the broker through which the Trust will conduct purchases under the NCIB, which purchases will be completed pursuant to the policies of the TSXV. The price that the Trust will pay for the Units purchased under the NCIB, if any, will be the market price of such Units at the time of the applicable purchases. The Trust will disseminate an additional news release upon receipt of TSXV approval for the NCIB, which will include the date on which the NCIB will commence.
J. Colter Eadie, Chief Executive Officer of Jade Power, commented,
"We had a positive first half of 2021. On the operational spectrum, we continue to generate free cash flow from our assets and our performance was in line with management’s goals. From a macro perspective, we believe Romania will continue to emerge as an undervalued part of the Unified EU Energy Market. The increased interconnection will drive normalization of valuations across EU markets.
We continue to focus on ways to improve value to our Unitholders and are seeking accretive ways to leverage our proven ability to execute in markets, both in our existing and target markets. We have now positioned ourselves to complete a consolidation of our Units.
With respect to the proposed NCIB, management and the Board have concluded that an accretive use of the surplus cash currently being generated by the operations of the Trust is to repurchase Units through the NCIB. We believe that the NCIB will improve liquidity in the Units which could benefit Unitholders in the long term.”
For further information, please contact:
|J. Colter Eadie
Chief Executive Officer
Chief Financial Officer
About Jade Power
The Trust, through its direct and indirect subsidiaries in Canada, the Netherlands and Romania, has been formed to acquire interests in renewable energy assets in Romania, other countries in Europe and abroad that can provide stable cash flow to the Trust and a suitable risk-adjusted return on investment. The Trust intends to qualify as a "mutual fund trust" under the Income Tax Act (Canada) (the "Tax Act"). The Trust will not be a "SIFT trust" (as defined in the Tax Act), provided that the Trust complies at all times with its investment restriction which precludes the Trust from holding any "non-portfolio property" (as defined in the Tax Act). All material information about the Trust may be found under Jade Power's issuer profile at www.sedar.com.
Statements in this press release contain forward-looking information. Such forward-looking information may be identified by words such as "anticipates", "plans", "proposes", "estimates", "intends", "expects", "believes", "may" and "will". The forward-looking statements are founded on the basis of expectations and assumptions made by the Trust. Details of the risk factors relating to Jade Power and its business are discussed under the heading "Business Risks and Uncertainties" in the Trust's annual Management's Discussion & Analysis for the year ended December 31, 2020, a copy of which is available on Jade Power's SEDAR profile at www.sedar.com. Most of these factors are outside the control of the Trust. Investors are cautioned not to put undue reliance on forward-looking information. These statements speak only as of the date of this press release. Except as otherwise required by applicable securities statutes or regulation, Jade Power expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
Neither the TSXV nor its regulation services provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
The Trust has included certain non-IFRS measures to supplement its consolidated financial statements, which are presented in accordance with IFRS:
The following is a reconciliation of adjusted EBITDA and adjusted EBITDA per Unit:
The following is a reconciliation of operating cash flow after changes in net working capital per unit:
The Trust believes that these non-IFRS measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Trust. Non-IFRS financial measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other entities. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Management's determination of the components of non-IFRS and additional measures are evaluated on a periodic basis influenced by new items and transactions, a review of investor uses and new regulations as applicable. Any changes to the measures are duly noted and retrospectively applied as applicable.
1 Includes foreign exchange gains (losses).