Maxim Power Corp. Reports Continued Strong Earnings with $84 million of Revenue and $25 million of Net Income in the First Six Months of 2022 - Seite 2

(1)

Select financial information was derived from the consolidated financial statements and is prepared in accordance with GAAP, except adjusted Earnings before Interest, Income Taxes, Depreciation and Amortization (“Adjusted EBITDA”). Adjusted EBITDA is provided to assist management and investors in determining the Corporation's approximate operating cash flows before interest, income taxes, and depreciation and amortization and certain other non-recurring income and expenses. Total net debt was derived from the consolidated financial statements to include: loans and borrowings (including the convertible loan facility), current liabilities, other long-term liability, less total current assets.

OPERATING RESULTS

Since commissioning Milner 2 (“M2”) in June 2020, M2 has generated 3,029,435 MWh of electricity, earned $280 million of revenue and $114 million of Adjusted EBITDA⁽¹⁾. In the first six months of 2022, M2 generated 784,404 MWh of electricity, earned $84 million of revenue and $35 million of Adjusted EBITDA⁽¹⁾.

During the second quarter of 2022, revenues increased as compared to 2021 primarily due to higher realized prices and higher generation volumes of M2. Adjusted EBITDA⁽¹⁾ decreased due to higher per unit natural gas costs in 2022, partially offset by net realized gains on power and natural gas commodity swaps and increased revenues.

Net income decreased in 2022 as compared to 2021, primarily due to the recognition of the third (final) payment from the Line loss Proceedings in 2021 and the same factors impacting Adjusted EBITDA⁽¹⁾, partially offset by unrealized gains from natural gas swaps in 2022.

M2 CCGT PROJECT UPDATE

In 2022, MAXIM continued progress on the engineering and construction of the Combined Cycle Gas Turbine (“CCGT”) expansion of M2 and is pleased to report that the project remains on schedule to commission in December 2022. Recent milestones include greater than 80% construction complete and the commencement of cold commissioning activities. The estimated project cost, excluding borrowing costs, is currently $152 million as of the date of this MD&A. Estimated costs have increased from the $142 million previously reported due to increased expenditures related to integration of the existing steam turbine, overages for mechanical work, expanded project management and construction of the associated natural gas pipeline. As of June 30, 2022, MAXIM has incurred $128 million of capital investment in relation to the CCGT expansion of M2 and has funded this spending with existing cash on hand, cash flow from operating activities and debt.