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San Jacinto geothermal plant now producing close to 77 MW nameplate capacity

In its financial results for Q2 and 1H 2018, Polaris Infrastructure reports an increase in electricity production from its San Jacinto-Tizate geothermal power plant in Nicaragua, which now operates close to its nameplate capacity of 77 MW (gross).

Polaris Infrastructure Inc. (TSX: PIF) has published its financial and operating results for the quarter ended June 30, 2018. With the financial results, the company also provides details on its operational status for its San Jacinto-Tizate geothermal plant and project in Nicaragua, Central America.

San Jacinto-Tizate Project Highlights

Comment on the political situation in Nicaragua

Along with the PENSA management team, we have been monitoring the situation in Nicaragua closely, since April 2018, and remain hopeful for a peaceful and expedient resolution.  The Company is pleased to confirm that both San Jacinto operations and our regional head office, located in central Managua, have been unaffected by the political unrest.  In fact, the San Jacinto plant achieved availability in excess of 99% in the second quarter of 2018, helping drive record level power generation.  The PENSA team has also been working to implement various optimizing activities, as we seek to maximize average generation.

Marc Murnaghan, Chief Executive Officer of Polaris Infrastructure, commented, “While mindful of the recent social and political unrest in Nicaragua, we have not experienced any impact on our operations.  We are optimistic with respect to improved stability within Nicaragua and look forward to continuing our robust social and environmental programs with local communities.”

Financial Overview

The financial results of Polaris Infrastructure for the three and six months ended June 30, 2018 and 2017 are summarized below:

For the three months ended June 30, 2018, the Company reported revenue of $17.7 million and Adjusted EBITDA of $15.1 million, compared to revenue of $15.9 million and Adjusted EBITDA of $13.6 million, for the same period in 2017. The increase in revenue resulted from an 8% increase in power generation at the San Jacinto project, combined with the 3% annual tariff increase under the power purchase agreement. The improvement in Adjusted EBITDA reflects increased contribution from the San Jacinto plant combined with ongoing control of costs. See Use of Non-GAAP Measures section below for reconciliation of Adjusted EBITDA to Total loss and comprehensive loss.

For the six months ended June 30, 2018, the Company reported revenue of $32.4 million and Adjusted EBITDA of $27.5 million, compared to revenue of $29.3 million and Adjusted EBITDA of $24.5 million, for the same period in 2017. The increase in revenue was again driven by the increase in power generation at the San Jacinto project stemming from connection of new geothermal wells, combined with the 3% annual tariff increase. The improvement in Adjusted EBITDA reflects increased contribution from the San Jacinto plant combined with ongoing control of costs. See Use of Non-GAAP Measures section below for reconciliation of Adjusted EBITDA to Total loss and comprehensive loss.

For the six months ended June 30, 2018, the Company had net operating cash inflows of $17.8 million and net financing cash outflows of $11.3 million.  Net investing cash outflows of $9.2 million included $7.2 million of capital expenditure related to the substantial conclusion of the 2017/2018 drilling and infrastructure program, as well as $0.7 million with respect to turbine maintenance activities.  At June 30, 2018, the Company had cash of $34.5 million, of which $12.4 million was held in a debt service reserve account for the San Jacinto project.

“Reflecting back to the position of the Company at the time of the 2015 recapitalization transaction, it is very satisfying to see the San Jacinto project operating so close to its nameplate capacity,” said Mr. Murnaghan. “This achievement reflects considerable time and effort on the part of the entire Polaris Energy Nicaragua team, along with the guidance and consultation of our Board.  Having largely achieved our objectives with respect to optimizing operations at San Jacinto, we are well positioned to realize upon substantial cash flow generation and seek to drive shareholder returns in other ways.”

Source: Company release

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