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Maxim Power Corp. reports continued strong earnings with

CALGARY, Alta., Aug. 11, 2022 (GLOBE NEWSWIRE) — Maxim Power Corp. (“MAXIM” or the “Company”) (TSX: MXG) today announced the release of its financial and operating results for the second quarter ended June 30, 2022. The unaudited condensed consolidated interim financial statements, the accompanying notes and MD&A will be available on SEDAR and on MAXIM’s website on August 11, 2022. All figures herein are in Canadian dollars unless otherwise indicated.

FINANCIAL HIGHLIGHTS

Three months completed
June 30th,
Semester completed
June 30th,
(in thousands of dollars, except per share amounts) 2022 2021 2022 2021
Revenue 48,380 44,342 84 172 74,372
Net revenue 8,565 29,589 25,463 56,015
Earnings per share – basic 0.17 0.59 0.51 1.12
Earnings per share – diluted 0.15 0.48 0.42 0.91
Adjusted EBITDA (1) 18,781 21,441 34,674 30,864
Total production – (MWh) 390,813 389 101 784 404 713 591
Total fuel consumption – (GJ) 4,119,567 4,137,093 8,303,475 7,734,434
Average price of electricity in the Alberta market ($ per MWh) 122.47 104.51 106.32 100.01
Average realized price of electricity ($ per MWh) 123.79 113.96 107.31 104.22
Total net debt (1) 55,639 14,997 55,639 14,997
Total assets 365 459 295,366 365 459 295,366
(1) Certain financial information is derived from the consolidated financial statements and is prepared in accordance with GAAP, except for adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted EBITDA is provided to assist management and investors in determining the Company’s approximate operating cash flow before interest, income taxes, depreciation and amortization and certain other non-recurring income and expenses. Total net debt has been derived from the consolidated financial statements to include: loans and borrowings (including the convertible loan facility), current liabilities, other long-term liabilities, less total current assets.

OPERATIONAL RESULTS

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

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

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

UPDATE ON THE M2 CCGT PROJECT

In 2022, MAXIM continued engineering and construction progress on the M2 Combined Cycle Gas Turbine (“CCGT”) Expansion and is pleased to report that the project remains on schedule. for commissioning in December 2022. Recent milestones include over 80% of construction complete and the start of cold commissioning activities. The estimated cost of the project, excluding borrowing costs, is currently $152 million as of the date of this MD&A. Estimated costs have increased from the previously reported $142 million due to increased expenses related to the integration of the existing steam turbine, overruns for mechanical work, expanded project management and construction of the related pipeline. As of June 30, 2022, MAXIM has committed $128 million in capital investments for M2’s CCGT expansion and has funded these expenditures with existing liquidity, cash flow from operating activities and the debt.

MAXIM began the commissioning process in the third quarter of 2022 and expects the plant to begin commercial operations in December 2022. MAXIM firmly believes that this asset will be one of the best performing facilities in the power market in Alberta.

Currently, MAXIM expects to have sufficient cash on hand to complete the CCGT expansion of M2 and will finance the project using cash on hand, cash flow from operating revenues, grants and funds available through existing senior and subordinated credit facilities, as required.

$20 MILLION GRANT

On July 14, 2022, the Company, through a wholly owned subsidiary, entered into an agreement to receive a grant in the amount of $20 million. The Company’s M2 CCGT expansion captures waste heat that would otherwise be vented to the atmosphere and converts it into useful low-carbon electricity for Alberta’s power grid. To date, all grant proceeds have been received and will be used to fund the CCGT extension of M2, which is expected to be operational by December 2022.

AMENDMENT TO THE SENIOR CREDIT FACILITY

In June 2022, MAXIM amended the terms of its senior credit facility to allow an increase in its normal course issuer bid (“OPRNA”) limits from $1.0 million to $2.0 million. .5 million for calendar year 2022. In addition, MAXIM has resumed repayments of its $28.5 million Bank Term Facility No. 1, under the Senior Credit Facility, for an amount of $0.7 million per quarter. The first quarterly payment took place on August 2, 2022, followed by regular quarterly payments beginning at the end of the third quarter of 2022.

NORMAL CURRENT ISSUER OFFER

MAXIM is continuing its NCIB program for the period from August 25, 2021 to August 24, 2022. Under this issuer bid, MAXIM may purchase for cancellation up to 2,400,000 common shares of the Company. Collectively under this program and as of June 30, 2022, the Company has repurchased and canceled 277,285 common shares for $1.1 million, of which 266,370 common shares were repurchased and canceled in 2022 for $1.0 million. MAXIM’s NCIB program is limited to $2.5 million for calendar year 2022 under the senior credit facility. Any excess is subject to the approval of the lenders under the Senior Credit Facility.

About MAXIME

Based in Calgary, Alberta, MAXIM is one of Canada’s largest truly independent power producers. MAXIM is now fully focused on energy projects in Alberta. Its main asset – the 204 MW, M2, HR Milner Generating Station in Grande Cache, AB – is a state-of-the-art natural gas-fired power plant that was commissioned in the second quarter of 2020. MAXIM is currently increasing capacity to M2 for approximately 300 MW and will simultaneously achieve plant efficiency improvement by investing in heat recovery combined cycle technology. Additionally, MAXIM continues to explore other development options in Alberta, including its currently licensed gas-fired generation projects and the licensing of its wind power generation project. MAXIM trades on the TSX under the symbol “MXG”. For more information about MAXIM, visit our website at www.maximpowercorp.com. For more information, please contact:

Bob Emmott, President and Chief Operating Officer, (403) 263-3021

Kyle Mitton, CFO and Vice President, Corporate Development, (403) 263-3021

This press release contains forward-looking statements and forward-looking information (collectively “forward-looking information”) within the meaning of applicable securities laws relating to MAXIM’s plans and other aspects of MAXIM’s planned future operations, direction management, objectives, strategies, financial condition, results of operations and production. Forward-looking information generally uses words such as “anticipate”, “believe”, “project”, “expect”, “goal”, “plan”, “intend”, “may”, “would “, “could” or “will” or similar words suggesting future results, events or performance. The forward-looking statements contained in this press release speak only as of the date hereof and are expressly qualified by Specifically, this press release contains forward-looking information regarding, among other things, the expected completion date of the M2 CCGT Extension, emissions intensity, current estimates of the costs of the M2’s CCGT and MAXIM’s financing plans for the CCGT extension.

Management has included the above forward-looking statements and a summary of the assumptions and risks associated with the forward-looking statements provided in this press release in order to provide readers with a more complete perspective on MAXIM’s future plans and operations and such information may not not be appropriate. for other purposes.

MAXIM’s actual results, performance or achievements could differ materially from those expressed or implied by such forward-looking statements and, therefore, no assurance can be given that any of the events anticipated by the forward-looking statements will or will occur. , or if any of them do, what benefits will MAXIM derive from it. Readers are cautioned that the above lists of factors are not exhaustive. These forward-looking statements are made as of the date of this press release, and MAXIM disclaims any intention or obligation to publicly update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except if necessary. by applicable securities laws.