Maxim Power Corp.

Maxim Power Corp.

August 12, 2005 09:15 ET

MAXIM Power Corp. Reports Results for the Second Quarter of 2005

CALGARY, ALBERTA--(CCNMatthews - Aug. 12, 2005) - Maxim Power Corp. (TSX:MXG) ("MAXIM") today announced results for the second quarter of 2005.

Financial Highlights

For accounting purposes, the Milner Power Limited Partnership ("Milner") is considered to have acquired MAXIM under a reverse takeover ("RTO") at March 31, 2005. As a result, the 2005 operating results and funds from operations reflect those of Milner for the six months ended June 30, 2005 plus the other operations of MAXIM for the three months ended June 30, 2005. Comparative amounts for 2004 represent only Milner's operations from January 29, 2004, the date of acquisition of Milner, to June 30, 2004.

Six Five
Months Months
Three Months Ended Ended
Ended June 30 June 30 June 30
2005 2004 2005 2004
($ in thousands except
per share amounts)
Revenue $17,810 $16,032 $29,290 $22,891
EBITDA (i) 3,511 6,498 6,652 7,933
Operating Income 2,123 6,150 4,814 7,202
Net Income 1,523 6,153 4,254 7,221
Per share-basic and
diluted $ 0.00 $ 0.03 $ 0.01 $ 0.04
Funds from
Operations 3,146 6,501 6,327 7,952
Per share-basic and
diluted (i) $ 0.01 $ 0.03 $ 0.02 $ 0.04

Deliveries (MWh) 263,042 260,393 499,008 410,793
Net Generation
Capacity (MW) 262.4 144 262.4 144
Average Milner
Prices ($ per MWh) $ 54.00 $ 62.00 $ 51.00 $ 56.00

(i) Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") and Funds from Operations per share are not measures
under Canadian Generally Accepted Accounting Principles ("GAAP")
and may not be comparable to similar measures presented by other

Operating Results

MAXIM continued its strong performance in the second quarter of 2005 achieving record levels of electricity deliveries and revenues, and a sixth straight quarter of profitability was recorded. Net income for the second quarter was $1,523,000 compared to $6,153,000 in 2004. The primary reasons for this decrease were lower pool prices in Alberta, reduced production at Milner due to unplanned outages, and the adoption of a more conservative approach for accruing turnaround costs at Milner. In addition, Milner's coal costs were significantly lower in 2004 as the plant was able to blend larger amounts of low cost coal tailings to fuel the plant. As the supply of tailings diminishes, coal costs will stabilize as Milner's requirements are met under a fixed price contract with Luscar.

Maxim is pleased to report that Milner continues to be very cost competitive relative to the entire generation portfolio in the Province of Alberta. Milner operated at an 86% availability factor, per unit operating costs have decreased since the acquisition of the plant and further opportunities for optimization continue to be identified.

Despite Milner's lower production in the second quarter, overall production increased reflecting the inclusion of the operating results from MAXIM's other projects as follows:

Three Months Ended June 30
2005 2004
MWh Revenue MWh Revenue
($ in thousands)
Milner 219,173 $11,714 260,393 $16,032
MAXIM's other
projects (i)
Alberta 7,974 1,026 - -
British Columbia 14,062 747 - -
Europe 6,180 677 - -
Cambodia 15,653 3,646 - -
Sub-total 43,869 6,096 - -

Total 263,042 17,810 260,393 16,032

(i) No comparatives for 2004 under RTO accounting principles

MAXIM's other projects are not reflected in the first quarter 2005 or in 2004 due to RTO accounting. However, those projects generated electricity deliveries of 59,249 MWh and revenue of $5,096,000 in the second quarter 2004.

Milner also provides a significant benefit through ownership of mineable coal leases in close proximity to the power station. A review of the leases has provided an estimate of 13.3 million tonnes of recoverable coal which could be developed to fuel the power plant or sold in the international marketplace. MAXIM intends to advance permitting and has begun a review of the development of this resource.

Growth Initiatives

The Basin Creek Project in Montana is under construction with over $25 million spent to June 30. This project, which will represent net 50.2 Megawatts ("MW") of natural gas fired generating capacity to MAXIM, is forecast to be in commercial operations by January, 2006, at which time, it will sell power under a fixed price contract.

MAXIM's acquisition of 7 projects in France on June 22, 2005 represents the addition of 54 MW of electric and 18 MW of thermal generating capacity. These projects are available for the start of the French cogeneration season on November 1, 2005.

Also in France, MAXIM's 5.6 MW Bataneres cogeneration project is under construction and fully financed. It will be completed for the start of the cogeneration season on November 1, 2005.

MAXIM has initiated the expansion of the Vancouver Landfill Project from its current 5.6 MW (electric) and 6.7 MW (thermal) capacity to a plant capacity of 7.4 MW (electric) and 8.9 MW (thermal). The existing powerhouse was designed to accept the fourth cogeneration unit, and MAXIM expects to complete the expansion by May 2006.


On a consolidated basis, MAXIM is forecasting electricity deliveries of 576,000 to 651,000 MWh in the second half of 2005, for a total for the year of 1,075,000 to 1,150,000 MWh. This compares with 808,855 MWh in 2004.

Maxim Power Corp.
- all projects 2005 2005 2005
6 Months 6 Months 12 Months
Ended Ended Ended
June 30 December 31 December 31
($ in thousands)
Electricity Deliveries
(MWh) 499,008 576,000 - 651,000 1,075,000 -
Revenue $29,290 $ 46,500 - 51,000 $ 75,500 -
EBITDA $ 6,652 $ 9,900 - 11,900 $ 16,500 -

MAXIM expects to have a total of 318 MW electric and 44 MW of thermal net installed generating capacity by the end of 2005. This represents a 121% increase in installed electric capacity from year end 2004. MAXIM will continue to execute on its strategy as an Independent Power Producer and is targeting significant growth through acquisitions and development of power projects which utilize hydrocarbon based fuels and renewables in the markets of North America and Europe.


Based in Calgary, Alberta, MAXIM is an Independent Power Producer, which acquires or develops, owns and operates innovative and environmentally responsible power projects. MAXIM currently owns and operates 24 power plants in Western Canada, Continental Europe and Cambodia, having 262 MW of electric and 39 MW of thermal net generating capacity with another 58 MW under construction. MAXIM trades on the TSX under the symbol "MXG". For more information about MAXIM, visit our website at

Statements in this release which describe Maxim's intentions, expectations or predictions, or which relate to matters that are not historical facts are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of MAXIM to be materially different from any future results, performances or achievements expressed in or implied by such forward-looking statements. MAXIM may update or revise any forward-looking statements, whether as a result of new information, future events or changing market and business conditions.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the press release.

Contact Information

  • Maxim Power Corp.
    John R. Bobenic
    President and CEO
    (403) 750-9300
    Maxim Power Corp.
    Victor S. Dusik
    Vice President Finance and CFO
    (403) 750-9319