Q2 Operational Highlights
* Generated more than 15.2 million KWh of electricity in Q2 for an aggregate production to date of 83 million KWh as of September 30, 2010.
* Continued construction of Phase 2, which is expected to be completed in the second quarter of calendar 2011 and generate a capacity of 49.5 MW of wind energy output.
Highlights subsequent to Quarter-end
* Closed a non-brokered private placement that generated gross proceeds of $4.3 million.
* In final process with the Agricultural Development Bank of China for additional debt financing that will support the completion of Phase 2 and future wind power projects.
* Generated 10.7 million KHh of electricity in October, 2010.
Total electricity sales for the second quarter of FY2011 were $1.2 million, up 72.7% from $0.7 million for the corresponding period of FY2010. The growth is due to the completion of Phase 1 of the Company’s wind energy projects and the resulting start of commercial energy production. Total sales for Q2 FY2011 were impacted by slower wind speed, which is common in China during the summer months. Subsequent to quarter end, the Company generated 10.7 million KWh of electricity in October. The increase in electricity product is attributable to a combination of factors, including higher wind speeds that are prevalent in China during the fall months as well as improved turbine performance resulting from the ongoing calibration and tuning of equipment.
Phase 1 is currently operating at an average of 60% capacity consistent with Management’s expectation and previous guidance given ongoing calibration and tuning of turbines. It is expected that full production capacity for Phase 1 will be achieved in the first quarter of calendar 2011.
Revenue for Q2 FY2011 was $1.2 million. The Company had no recorded revenue for the corresponding period of FY2010 after excluding the recovery of wind farm plant costs of $705,162. The recovery costs were recorded during the testing, tuning and calibration of the Phase 1 wind project.
Adjusted EBITDA for Q2 FY2011 was $1.3 million, up from adjusted negative EBITDA of $0.4 million for the corresponding of FY2010, representing a positive turnaround of $1.7 million. The year-over-year improvement in adjusted EBITDA was due to a number of factors, including higher revenue and higher amortization and interest expenses as the Company continues its roll-out of its five-phased development plan. Adjusted EBITDA for Q2 FY2011 excluded a stock-based compensation charge of $0.2 million as well as amortization expenses of $0.9 million and interest expenses of $0.8 million.
Net loss for Q2 FY2010 was $0.6 million, or $0.01 per share. This compares to a net loss of $2.7 million, or $0.06 per share, for Q1 FY2010. The decline in net loss was primarily attributable to the recording of revenue sales of $1.2 million and a decline in stock-based compensation charges of more than $2.1 million on a year over year basis.
At September 30, 2010, China Wind had cash totaling $1.8 million, total assets of $133.6 million and total liabilities of $86.4 million. These compare to $0.4 million, $114.2 million and $71.1 million, respectively at March 31, 2010. Subsequent to quarter end, the Company closed a private placement that generated gross proceeds of $4.3 million.
Outlook
"Our recent financing will help us to accelerate completion of Phase 2 of our wind farm project, which we now expect to be completed by the end of the second quarter of calendar 2011," added Mr. Liu. "Adding another 49.5 MW of wind turbines capacity will be a key milestone on our path towards completing our five-phased development plan, which will generate 547 MW of wind energy, by the end of 2014."
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 546 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 61.5 million shares outstanding.
http://chinawindpower.posterous.com
