The Mackenzie power plant. @Conifex.com
MACKENZIE – Conifex Timber Inc recently release their fourth quarter results. Conifex and its subsidiaries’ primary business currently includes forestry products, harvesting and reforestation as well as producing bioenergy at a power generation facility in Mackenzie.
EBITDA* from continuing operations was $1.0 million for the quarter and $51.8 million for the year, compared to EBITDA of $6.8 million in the fourth quarter of 2020 and $9.7 million for the 2020 year. Net income was $27.2 million or $0.60 per share for the year versus net loss in the preceding year of $0.14 per share.
The Mackenzie power plant sold 184.6 gigawatt hours of electricity under their Electricity Purchase Agreement (“EPA”) with BC Hydro and Power Authority (“BC Hydro”) in 2021, representing approximately 83 per cent of targeted operating rates.
In 2020, the Mackenzie power plant sold 202.5 gigawatt hours of electricity, representing 92 per cent of targeted operating rates. The decrease in 2021 production was driven by a disruption in December 2020 caused by damage to the plant’s generator. A replacement for the failed component of the power plant was procured from the original equipment manufacturer and installed in February 2021. The power plant was successfully recommissioned and began producing electricity at normalized rates on February 21, 2021.
During the fourth quarter of 2021, the plant incurred a net loss from continuing operations of $2.5 million or $0.06 per share compared to $0.9 million or $0.02 per share in the previous quarter and net income of $2.2 million or $0.05 per share in the fourth quarter of 2020. The net loss in the fourth quarter was primarily as a result of lower production and shipment volumes due to COVID-19 related shift reductions and weather-related transportation and logistics challenges.
The Mackenzie power plant sold 54.9 gigawatt hours of electricity under the EPA with BC Hydro in the fourth quarter of 2021, representing approximately 101 per cent of targeted operating rates. It sold 53.7 and 41.7 gigawatt hours of electricity in the previous quarter and fourth quarter of 2020, respectively. Electricity production contributed revenues of $8.0 million in the fourth quarter of 2021, an increase of 14 per cent from the previous quarter and an increase of 32 per cent from the fourth quarter of 2020. In comparison to the previous quarter, revenues were higher due to an increased number of billable gigawatt hours at seasonally higher rates under the EPA.
Improvement in operating costs in 2022 is anticipated as a result of decreased unit fixed costs on higher lumber production volumes and availability of sufficient logs. The Mackenzie power plant is forecasted to continue to generate a steady and diversified source of cash flow throughout 2022.
