Boralex Power Income Fund: Financial Results for Second Quarter 2009



    MONTREAL, Aug. 3 /CNW Telbec/ - In the second quarter of 2009, Boralex
Power Income Fund (the "Fund") reported lower revenue from energy sales and
earnings before interest, taxes, depreciation and amortization (EBITDA), due
primarily to a decrease in power generation by its wood-residue thermal power
stations. Despite this performance, the net cash balance grew to $21.5
million.
    For the second quarter ended June 30, 2009, consolidated revenue of $25.0
million was down from $25.6 million for the same quarter a year earlier and,
year over year, EBITDA declined $2.4 million to reach $11.0 million. The
Dolbeau power station was shut down completely during the quarter and steam
production dropped significantly due to major shortages in the raw material
supplied by AbitibiBowater ("Abitibi"). These events entirely annulled the
impact of higher production by the hydroelectric power plants in the United
States. The Fund reported net earnings of $1.0 million ($0.02 per trust unit)
for the second quarter of 2009 compared to net earnings of $5.3 million ($0.09
per trust unit) for the corresponding quarter of 2008.
    More specifically, the hydroelectric segment recorded revenue of $14.9
million and EBITDA of $13.0 million for the quarter ended June 30, 2009, an
increase of $3.5 million and $3.2 million over the same quarter in 2008. Due
to favourable hydrology, the U.S. power stations reported a 34% increase in
production and exceeded their historical average by 17%.
    The wood-residue thermal power segment posted revenue of $4.5 million in
the second quarter of 2009, down $3.0 million year over year. The loss before
interest, taxes, depreciation and amortization on earnings amounted to $2.3
million compared to EBITDA of $2.2 million for the same quarter in 2008. The
decreases are related to the shut down of power generation at the Dolbeau
power station due to the lack of wood-residue supplied mainly by Abitibi, the
slowdown in this station's steam production in the second quarter and its
complete shut down since June 20, 2009 for an indefinite period.
    Representatives of the Fund and of Abitibi met during the last weeks to
relaunch the negotiations to restart the operations at the Dolbeau power
station. Although a number of scenarios have been considered, no agreement has
yet been reached. The parties will pursue the discussions in the coming weeks.
However, to date, and given Abitibi's cancellation of contracts as announced
on July 8, 2009, the Fund maintains its decision to suspend operations at its
cogeneration plant until an acceptable solution for the Fund is reached.
    The Kingsey Falls natural gas cogeneration plant recorded revenue of $5.6
million and EBITDA of $2.0 million in the second quarter of 2009, down $1.1
million and $1.2 million respectively. Power generation was constant as
compared to the second quarter 2008 and steam production was up 8% year over
year. Higher steam volume added $0.2 million to revenue and EBITDA in this
segment however, the overall decrease in revenue and EBITDA is largely due to
lower steam prices, which are partially indexed to the price of oil.
    Cash flows related to operating activities amounted to $14.2 million in
the second quarter of 2009, compared to $17.1 million for the same quarter in
2008.

    About Boralex Power Income Fund

    Boralex Power Income Fund is an unincorporated open-ended trust that
indirectly owns ten power generating stations located in the province of
Québec and in the United States producing energy from different sources
including wood-residue or natural gas thermal and cogenerating facilities as
well as hydroelectric power stations. In total, these power stations have an
installed capacity of 190 MW. The Fund's units are listed for trading on the
Toronto Stock Exchange under the symbol BPT.UN.

    Certain statements in this release, including statements regarding future
results and performance, are forward-looking statements based on current
expectations. The accuracy of such statements is subject to a number of risks,
uncertainties and assumptions that may cause actual results to differ
materially from those projected, including, but not limited to, the effect of
general economic conditions, decreased demand for the Fund's products,
availability of raw materials and increases in their cost, hydrology,
fluctuations in currency exchange rates, fluctuations in sales prices and
adverse changes in general market and industry conditions. The financial
statements included in this press release also contain certain financial
measurements that are not recognized as generally accepted accounting
principles (GAAP).

    The Fund uses EBITDA, among other measures, as a performance measure with
respect to its operations. This term is not a defined financial measure
according to GAAP of Canada and it does not have a standardized meaning
prescribed by GAAP. Therefore, this measure may not be comparable to similar
measures presented by other enterprises. EBITDA is defined in the excerpts
from the financial statements appended to this press release.

    Notice to Unitholders

    These interim consolidated financial statements as at June 30, 2009 and
2008 have not been reviewed by our auditors Ernst & Young LLP. The financial
statements are the responsibility of the Manager of Boralex Power Income Fund,
and have been reviewed and approved by Boralex Power Trust's trustees and the
members of its Audit Committee.

    The following financial informations were extracted from the interim
consolidated financial statements of Boralex Power Income Fund (the "Fund").
The complete interim financial statements were prepared conformingly with the
Canadian generally accepted accounting principles ("GAAP"). They are available
on the Fund's website (www.boralex.com/trust) and filed with SEDAR.

    
    Consolidated Balance Sheets

                                                         As at         As at
                                                       June 30,  December 31,
    (in thousands of dollars) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    Assets
    Current assets
    Cash and cash equivalents                           23,916        18,846
    Accounts receivable                                 19,222        17,610
    Inventories                                          2,587         2,953
    Prepaid expenses                                       824           945
                                                  ---------------------------
                                                        46,549        40,354
                                                  ---------------------------
    Property, plant and equipment                      361,070       376,316
    Intangible assets                                   61,130        66,990
    Other long-term assets                               5,699         5,552
                                                  ---------------------------
                                                       474,448       489,212
                                                  ---------------------------
    Liabilities and unitholders' equity
    Current liabilities
    Short-term revolving credit facility                 2,400             -
    Accounts payable and accrued liabilities            15,736        13,985
    Income taxes payable                                 1,364           400
    Distributions payable to unitholders                 3,446         3,446
    Current portion of obligation under capital
     lease                                                   -            20
                                                  ---------------------------
                                                        22,946        17,851
                                                  ---------------------------
    Future income tax liabilities                       41,887        43,280
    Fair value of derivative financial
     instruments                                             -           233
    Long-term debt                                     115,097       119,191
    Long-term lease accruals                             2,851         2,773
                                                  ---------------------------
                                                       182,781       183,328
                                                  ---------------------------
    Unitholders' equity
    Capital contribution                               422,174       422,174
    Capital contribution - exchangeable
     Class B units                                     112,867       112,867
    Deficit                                           (229,905)     (220,137)
    Accumulated other comprehensive loss               (13,469)       (9,020)
                                                  ---------------------------
                                                       291,667       305,884
                                                  ---------------------------
                                                       474,448       489,212
    -------------------------------------------------------------------------


    Consolidated Statements of Earnings

                                                                For the
    (in thousands of dollars,       For the quarters       six-month periods
     except per unit amounts)        ended June 30,          ended June 30,
     (unaudited)                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    Revenues                      25,003      25,554      57,253      59,827
                             ------------------------------------------------
    Expenses
    Operating                     13,125      11,080      26,020      22,552
    Administrative                   839       1,037       1,463       2,160
                             ------------------------------------------------
                                  13,964      12,117      27,483      24,712
                             ------------------------------------------------
    Operating income before
     amortization                 11,039      13,437      29,770      35,115
    Amortization of
     property, plant and
     equipment                     5,004       4,669      10,087       9,256
    Amortization of
     intangible assets             1,909       1,902       3,767       3,971
                             ------------------------------------------------
    Operating income               4,126       6,866      15,916      21,888
    Financing costs, net           1,986       1,742       3,876       3,576
    Foreign exchange gain           (103)     (1,059)       (136)     (1,615)
                             ------------------------------------------------
    Earnings before income
     taxes                         2,243       6,183      12,176      19,927
    Income taxes (recovery)        1,223         927       1,270        (560)
                             ------------------------------------------------
    Net earnings for the
     period                        1,020       5,256      10,906      20,487
                             ------------------------------------------------
    Basic and diluted net
     earnings per trust unit
     (in dollars)                   0.02        0.09        0.18        0.35
                             ------------------------------------------------
    Weighted average number
     of trust units
     outstanding              59,067,992  59,067,992  59,067,992  59,067,992
    -------------------------------------------------------------------------


    Consolidated Statements of Deficit
                                                                For the
                                                           six-month periods
                                                             ended June 30,
    (in thousands of dollars) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    Deficit - beginning of period                     (220,137)     (170,982)
    Net earnings for the period                         10,906        20,487
    Distributions to unitholders                       (20,674)      (22,642)
                                                  ---------------------------
    Deficit - end of period                           (229,905)     (173,137)
    -------------------------------------------------------------------------


    Consolidated Statements of Comprehensive
     Income (Loss)
                                                                For the
                                    For the quarters       six-month periods
    (in thousands of dollars)        ended June 30,          ended June 30,
     (unaudited)                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    Net earnings for the period    1,020       5,256      10,906      20,487
    Other comprehensive income
     (loss):
    Translation adjustments
    Unrealized foreign exchange
     gains (losses) on
     translation of financial
     statements of self-
     sustaining foreign
     operations                   (7,369)       (802)     (4,675)      2,525
    Reclassification of
     accumulated foreign
     exchange losses on
     translation of financial
     statements of self-
     sustaining foreign
     operations following a
     reduction in net
     investment                        5          (1)         98          14
    Future income taxes             (515)        (54)       (324)        175
    Hedging of net investment
     in self-sustaining
     foreign operations
    Change in fair value of
     derivatives designated as
     hedges of net investment
     in self-sustaining
     foreign operations            1,261          96         658         (83)
    Hedging instruments
     realized and recognized
     in net earnings                (147)     (1,052)       (211)     (1,906)
                             ------------------------------------------------
                                  (6,765)     (1,813)     (4,454)        725
                             ------------------------------------------------
    Comprehensive income
     (loss) for the period        (5,745)      3,443       6,452      21,212
    -------------------------------------------------------------------------


    Consolidated Statements of Cash Flows

                                                                For the
                                    For the quarters       six-month periods
    (in thousands of dollars)        ended June 30,          ended June 30,
     (unaudited)                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    Operating activities
    Net earnings for the
     period                        1,020       5,256      10,906      20,487
    Items not affecting cash:
      Amortization of property,
       plant and equipment         5,004       4,669      10,087       9,256
      Amortization of
       intangible assets           1,909       1,902       3,767       3,971
      Amortization of deferred
       financing costs                99          82         208         169
      Long-term lease accruals       109          99         226         196
      Future income taxes           (366)        327      (1,270)     (2,811)
      Realized currency
       translation adjustments         4          (1)         97          14
      Other                            -         115           -         115
                             ------------------------------------------------
                                   7,779      12,449      24,021      31,397
    Net change in non-cash
     working capital balances      6,384       4,609       1,537       3,674
                             ------------------------------------------------
    Cash flows related to
     operating activities         14,163      17,058      25,558      35,071
                             ------------------------------------------------

    Investing activities
    Additions to property,
     plant and equipment            (185)     (1,054)     (1,052)     (1,222)
    Acquisition of other
     assets                          (19)         (9)        (26)        (71)
    Other                              -         (25)          -         (25)
                             ------------------------------------------------
    Cash flows related to
     investing activities           (204)     (1,088)     (1,078)     (1,318)
                             ------------------------------------------------

    Financing activities
    Net change in short-term
     revolving credit facility    (1,300)       (600)      2,400        (700)
    Repayment of capital lease
     obligation                        -         (58)        (20)       (116)
    Distributions paid to
     unitholders                 (10,337)    (10,337)    (20,674)    (23,627)
    Proceeds from sale of
     options on foreign
     exchange forward
     contracts                         -         191           -         337
                             ------------------------------------------------
    Cash flows related to
     financing activities        (11,637)    (10,804)    (18,294)    (24,106)
                             ------------------------------------------------
    Translation adjustments
     on cash and cash
     equivalents                  (1,649)        (62)     (1,116)        400
                             ------------------------------------------------
    Net change in cash and
     cash equivalents during
     the period                      673       5,104       5,070      10,047
    Cash and cash
     equivalents - beginning
     of period                    23,243      15,683      18,846      10,740
                             ------------------------------------------------
    Cash and cash
     equivalents - end of
     period                       23,916      20,787      23,916      20,787
                             ------------------------------------------------

    Supplemental information

    Interest paid                  1,344       1,151       3,892       3,516
    Income taxes paid                857         953       1,652       1,072
    -------------------------------------------------------------------------
    

    Segmented information

    The Fund's power stations are grouped into three distinct
segments-hydroelectric power, wood-residue thermal power and natural gas
thermal power-and are engaged mainly in power generation. The classification
of these segments is based on the different cost structures relating to each
type of power station. The Fund allocates its revenues by geographical region
based on the point of delivery of the power.
    The Fund analyzes the performance of its operating segments based on
earnings before interest, taxes, depreciation and amortization ("EBITDA").
EBITDA is not a measure of performance defined under Canadian GAAP; however,
management uses this measure to assess the operating performance of its
reportable segments. Results for each segment are presented on the same basis
as those of the Fund. In the consolidated statement of earnings, EBITDA is
represented by operating income before amortization.

    The following table reconciles EBITDA with net earnings:

    
                                                                 For the
                                    For the quarters       six-month periods
                                     ended June 30,          ended June 30,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    Net earnings                   1,020       5,256      10,906      20,487
    Income taxes (recovery)        1,223         927       1,270        (560)
    Foreign exchange gain           (103)     (1,059)       (136)     (1,615)
    Financing costs, net           1,986       1,742       3,876       3,576
    Amortization of intangible
     assets                        1,909       1,902       3,767       3,971
    Amortization of property,
     plant and equipment           5,004       4,669      10,087       9,256
                             ------------------------------------------------
    EBITDA                        11,039      13,437      29,770      35,115
    -------------------------------------------------------------------------


    Information by operating segment

                                                                For the
                                    For the quarters       six-month periods
                                     ended June 30,          ended June 30,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    PRODUCTION (in MWh)
    Hydroelectric power
     stations                    167,186     140,538     284,318     283,583
    Wood-residue thermal
     power stations               46,482      81,434     122,228     163,198
    Natural gas thermal
     power station                45,801      45,471     106,991     105,844
                             ------------------------------------------------
                                 259,469     267,443     513,537     552,625
    -------------------------------------------------------------------------
    REVENUES
    Hydroelectric power
     stations                     14,902      11,378      27,614      24,616
    Wood-residue thermal
     power stations                4,473       7,492      15,617      19,052
    Natural gas thermal
     power station                 5,628       6,684      14,022      16,159
                             ------------------------------------------------
                                  25,003      25,554      57,253      59,827
    -------------------------------------------------------------------------
    EBITDA
    Hydroelectric power
     stations                     13,007       9,773      23,973      21,208
    Wood-residue thermal
     power stations               (2,295)      2,186       2,859       8,433
    Natural gas thermal
     power station                 1,955       3,179       6,156       8,782
    Corporate and eliminations    (1,628)     (1,701)     (3,218)     (3,308)
                             ------------------------------------------------
                                  11,039      13,437      29,770      35,115
    -------------------------------------------------------------------------
    ADDITIONS TO PROPERTY,
     PLANT AND EQUIPMENT
    Hydroelectric power
     stations                        156         256         908         269
    Wood-residue thermal power
     stations                         11         776         106         831
    Natural gas thermal power
     station                          18          22          38         122
                             ------------------------------------------------
                                     185       1,054       1,052       1,222
    -------------------------------------------------------------------------


                                                         As at         As at
                                                       June 30,  December 31,
                                                          2009          2008
    -------------------------------------------------------------------------
    ASSETS
    Hydroelectric power stations                       281,084       295,182
    Wood-residue thermal power stations                147,568       149,868
    Natural gas thermal power station                   38,169        42,043
    Corporate and eliminations                           7,627         2,119
                                                  ---------------------------
                                                       474,448       489,212
    -------------------------------------------------------------------------
    




For further information:

For further information: Ms. Sophie Paquet, Communications Advisor,
Boralex Power Inc., (514) 985-1353, sophie.paquet@boralex.com

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BORALEX POWER INCOME FUND

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