China Wind Power Reports First Quarter FY2011 Financial Results

TORONTO, Aug. 27 /CNW/ - China Wind Power International Corp. (TSX-V: CNW) today reported its financial results for the three-month period ended June 30, 2010. All amounts are in Canadian dollars unless otherwise indicated.

    
    Selected First Quarter Financial Highlights
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    In thousands except share                June 30,    June 30,    Change
     or % data                                  2010        2009
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    Total sales                               $1,206        $629      +91.7%
    -------------------------------------------------------------------------
    Recorded revenue                          $1,206           -    +$1,206
    -------------------------------------------------------------------------
    Adjusted EBITDA(1)                          $598       ($383)     +$981
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    Net loss                                  $1,405        $403    +$1,002
    -------------------------------------------------------------------------
    Net loss per share - diluted(2)            $0.02       $0.01     +$0.01
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                                             June 30,   March 31,    Change
                                                2010        2010
    -------------------------------------------------------------------------
    Cash and Cash equivalents                 $3,369        $373    +$2,995
    -------------------------------------------------------------------------
    Total assets                            $135,195     114,185      +18.4%
    -------------------------------------------------------------------------
    Total liabilities                        $87,618     $71,075      +23.3%
    -------------------------------------------------------------------------
    

"We are very pleased with our first quarter results," said Mr. Jun Liu, Chief Executive Officer, China Wind Power International Corp. "Our revenue growth, increased electricity production and ongoing build-out of our operations are clear signs of the progress that we have made over the past 12 months, and underscore our commitment to completing of our five-phased development plan with a total capacity of 547 MW of wind power by the end of 2014."

    
    Q1 Operational Highlights

    -  Generated more than 67 million KWh of electricity to the end of June,
       2010.
    -  Completed a non-brokered private placement that generated gross
       proceeds of $4.4 million.
    -  Continued construction of Phase 2, which is expected to be completed
       in the fourth quarter of calendar 2010 and generate a capacity of 49.5
       MW of wind energy output.

    Highlights subsequent to Quarter-end

    -  In final negotiation with the Agricultural Development Bank of China
       for additional debt financing that will support the completion of
       Phase 2 and future wind power projects.
    

Review of Financial Results

Total electricity sales for the first quarter of FY2011 were $1.2 million, up 92% from $0.6 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 Q1 FY2011 were impacted, however, by the re-calibration and fine tuning of turbine equipment in April, 2010.

Phase 1 is currently operating at an average of 60% capacity consistent with Management's expectation and previous guidance. It is expected that full production capacity for Phase 1 will be achieved in calendar 2011.

Recorded revenue for Q1 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 $629,063. The recovery costs were recorded during the testing, tuning and calibration of the Phase 1 wind project.

Excluding a stock-based compensation charge of $0.4 million, adjusted EBITDA for Q1 FY2011 was $0.6 million. The Company had adjusted negative EBITDA of $0.4 million for the corresponding period of FY2010.

Net loss for Q1 FY2010 was $1.4 million, or $0.02 per share fully diluted, up from a net loss of $0.4 million or $0.01 per share fully diluted, for Q1 FY2010. The increase in net loss is attributable to ramping up of operations, higher stock-based compensation expenses of $0.4 million and higher interest expenses of $0.7 million.

At June 30, 2010, China Wind had cash totaling $3.4 million, total assets of $135.2 million and total liabilities of $87.6 million. These compare to $0.4 million, $114.2 million and $71.1 million, respectively at March 31, 2010.

Outlook

"We are very encouraged by our recent momentum, particularly as we enter the period of the year when wind capacity as its highest," added Mr. Liu. "Over the coming months, our focus will be to complete the construction of Phase 2, which when finalized by Q4 will add another 49.5 MW of capacity. Over the longer term, we remain very committed to completing all phases, which will generate 547 MW of wind energy, by the end of 2014."

About China Wind Power International Corp.

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.

For more information and the latest updates on China Wind Power, visit our investor relations blog at http://chinawindpower.posterous.com or follow us on Twitter at http://twitter.com/ChinaWindPower

Forward-looking statements

Certain statements that are not historical facts made in this press release may be forward looking statements subject to risks and uncertainties. Statements containing words such as "will", "could", "expect", "may", "anticipate", "believe", "intend", "estimate", "plan" and other similar expressions are forward-looking statements that represent management's beliefs at the time the statements are made and are based on certain factors and assumptions including wind farm construction and commercial production schedule, output and capacity, revenue and earnings expectations and market potential. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events to differ materially from those projected in forward-looking statements. Important factors that could cause actual results to differ materially from the Company's expectations include uncertainties involving the availability of financing; fluctuations in currency exchange rates; uncertainties relating to economic and market conditions; uncertainty of estimates of capital and operating costs; the need to obtain additional financing to develop the projects and uncertainty as to the availability and terms of future financing; the possibility of delay in construction projects and uncertainty of meeting anticipated program milestones; uncertainty as to timely availability of permits and other governmental approvals; and other risks and uncertainties disclosed in the information circular dated May 29, 2009 relating to the Company's reverse take-over with Berkshire Griffin Inc., which is available at www.sedar.com under the Company's profile. Except as required by applicable securities laws, the Company undertakes no obligation to update any forward looking statement to reflect events or circumstances after the date on which such statement is made.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

    
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    (1) Earnings before interest, taxes, depreciation and amortization
        (EBITDA) is often used as a measure of financial performance.
        However, EBITDA is not a term that has specific meaning in accordance
        with generally accepted accounting principles and may be calculated
        differently by other companies. China Wind reconciles EBITDA to its
        net earnings (loss). Adjusted EBITDA excludes stock-based
        compensation.
    (2) China Wind Power's weighted average number of shares at June 30 2010
        was 59,612,488 compared to 29,300,000 at June 20 2009.
    

For further information: Wendell Zhang, Chief Financial Officer, China Wind Power International Corp., Tel: [phone], Email: [email protected]; Joe Racanelli, Investor Relations, The Equicom Group Inc., Tel: [phone] ext 243, Email: [email protected]