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Higher New World losses
1 August 1996
New World Power Corp has reported slightly higher losses for 1995 than predicted a month ago. Its net loss last year was $41.3 million compared with loss of $7.5 million a year ago and compared with its predicted 1995 loss of $35-40 million. Per share, the loss increased from $.90 in 1994 to $3.97. A large portion of the loss was because of a $24.4 million "impairment charge" -- the estimated difference between the carrying value of assets and of investments held for sale and the estimated net realised value. Also included is an equity loss on non-consolidated affiliates of $4.4 million and a $1.5 million write off in discontinued operations. The wind company also announced that its auditor, Price Waterhouse LLP, warns that New World's recurring losses and limited capital "raise substantial doubt about the company's ability to continue as a going concern." New World's financial troubles were exacerbated, it says, by delays in major projects in China and Texas in late 1995. Under a new business plan, the company expects to put off all new business ventures until its finances improve. It expects too to reduce, where possible, ownership in operating wind farms and in those under development in non-strategic areas. New World will however continue to pursue development of large scale wind farm projects in countries such as Mexico, Ireland and China. Meanwhile, Nevada Energy Co of Reno has agreed to buy New World's 49.99% stake in San Jacinto Power Co. Nevada Energy will take on certain debt obligations and pay New World cash. San Jacinto's 62 wind turbines near Palm Springs are operated under a 18.9 MW contract with Southern California Edison.
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