Boralex Power Income Fund: Financial Results for the First Quarter 2009



    MONTREAL, May 4 /CNW Telbec/ - In the first quarter of 2009, Boralex
Power Income Fund (the "Fund") recorded operating income of $32.3 million,
down 6% from the same period in 2008, stemming from less favourable hydrology
and difficulties with the wood-residue supply.
    The lower volume of power generation at the hydroelectric power stations
and the Dolbeau wood-residue thermal power station, combined with higher
wood-residue costs and reduced steam selling price at Kingsey Falls plant, had
a negative impact on earnings before interest, taxes, depreciation and
amortization (EBITDA), which, in the first quarter 2009, stood at $18.7
million, versus $21.7 million for the same quarter in 2008. The Fund's net
earnings amounted to $9.9 million ($0.17 per trust unit) for the three-month
period ended March 31, 2009, compared to net earnings of $15.2 million ($0.26
per trust unit) for the same period in 2008.
    More specifically, in the first quarter 2009, revenue and EBITDA in the
hydroelectric segment amounted to $12.7 million and $11.0 million
respectively, a decrease of $0.5 million and $0.4 million compared to the same
period in 2008. This decrease stems mainly from less favourable hydrology,
which resulted in a 23% drop in production volume at the U.S. power stations
compared to the first quarter 2008, and a decrease of 6% compared to their
historical average. Overall, the Canadian power stations were affected to a
lesser degree, with a 5% drop in volume compared to the first quarter 2008 and
an increase of 4% over their historical average.
    The wood-residue thermal power stations recorded revenue of $11.1 million
for the quarter ended March 31, 2009, down 4% from the first quarter 2008. At
$5.2 million, EBITDA was down 16% from the first quarter 2008. The
wood-residue supply problems had a direct impact on production volume and
results for this segment. The Senneterre power station is currently operating
and unless there is a significant interruption in its fuel supplies, should
continue to operate in the coming months. As for Dolbeau plant, due to the
problems with the wood-residue supply, the Fund was obliged to shut down power
generation on April 1, 2009. This interruption is expected to continue to the
end of the third quarter. Steam production will, however, continue during this
period.
    Furthermore, Mister Claude Boivin, chairman of the Board of Trustees,
noted that "since AbitibiBowater received court protection from its creditors,
the Fund has not been able to determine the impact of this event on the
operation of Dolbeau plant, nor on the dispute between the two organizations."
    The Kingsey Falls natural gas cogeneration plant recorded revenue of $8.4
million and EBITDA of $4.2 million in the first quarter 2009, for respective
decreases of $1.1 million and $1.4 million compared to the first quarter 2008.
These results are largely due to the 33% drop in steam prices (which are
indexed to the price of oil).
    Mr. Boivin also noted that "thanks to our careful management and the
diversification of our sources of production, the Fund is capable of showing
significant liquidity and net cash balance of close to $20 million, in spite
of a particularly difficult economic context for our wood-residue sector."

    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 the United States producing energy from different sources including
wood-residue or natural gas-fired 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 financial statements as at March 31, 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
                                                      March 31,  December 31,
    (in thousands of dollars) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    Assets
    Current assets
    Cash and cash equivalents                           23,243        18,846
    Accounts receivable                                 19,206        17,610
    Inventories                                          2,770         2,953
    Prepaid expenses                                     1,590           945
                                                  ---------------------------
                                                        46,809        40,354
                                                  ---------------------------
    Property, plant and equipment                      375,694       376,316
    Intangible assets                                   66,367        66,990
    Other long-term assets                               5,424         5,552
                                                  ---------------------------
                                                       494,294       489,212
                                                  ---------------------------

    Liabilities and unitholders' equity
    Current liabilities
    Short-term revolving credit facility                 3,700             -
    Accounts payable and accrued liabilities            10,809        13,985
    Income taxes payable                                   768           400
    Distributions payable to unitholders                 3,446         3,446
    Current portion of obligation under capital
     lease                                                   -            20
                                                  ---------------------------
                                                        18,723        17,851
                                                  ---------------------------
    Future income tax liabilities                       42,382        43,280
    Fair value of derivative financial
     instruments                                           703           233
    Long-term debt                                     121,765       119,191
    Long-term lease accruals                             2,972         2,773
                                                  ---------------------------
                                                       186,545       183,328
    Unitholders' equity
    Capital contribution                               422,174       422,174
    Capital contribution - exchangeable
     Class B units                                     112,867       112,867
    Deficit                                           (220,588)     (220,137)
    Accumulated other comprehensive loss                (6,704)       (9,020)
                                                  ---------------------------
                                                       307,749       305,884
                                                  ---------------------------
                                                       494,294       489,212
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Earnings          For the three-month periods
    (in thousands of dollars,                             ended March 31,
     except per unit amounts) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    Revenues                                            32,250        34,272
                                                  ---------------------------
    Expenses
    Operating                                           12,895        11,471
    Administrative                                         624         1,122
                                                  ---------------------------
                                                        13,519        12,593
                                                  ---------------------------
    Operating income before amortization                18,731        21,679
    Amortization of property, plant and equipment        5,083         4,587
    Amortization of intangible assets                    1,858         2,069
                                                  ---------------------------
    Operating income                                    11,790        15,023
    Financing costs, net                                 1,890         1,835
    Foreign exchange gain                                  (33)         (556)
                                                  ---------------------------
    Earnings before income taxes                         9,933        13,744
    Income taxes (recovery)                                 47        (1,487)
                                                  ---------------------------
    Net earnings for the period                          9,886        15,231
                                                  ---------------------------
    Basic and diluted net earnings per trust
     unit (in dollars)                                    0.17          0.26
    Weighted average number of trust units
     outstanding                                    59,067,992    59,067,992
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Deficit           For the three-month periods
                                                          ended March 31,
    (in thousands of dollars) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    Deficit - beginning of period                     (220,137)     (170,982)
    Net earnings for the period                          9,886        15,231
    Distributions to unitholders                       (10,337)      (12,306)
                                                  ---------------------------
    Deficit - end of period                           (220,588)     (168,057)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Comprehensive
     Income                                      For the three-month periods
                                                          ended March 31,
    (in thousands of dollars) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    Net earnings for the period                          9,886        15,231
    Other comprehensive income:
    Translation adjustments
    Unrealized foreign exchange gains on
     translation of financial statements of
     self-sustaining foreign operations                  2,694         3,327
    Reclassification of accumulated foreign
     exchange losses on translation of financial
     statements of self-sustaining foreign
     operations following a reduction in net
     investment                                             93            15
    Future income taxes                                    191           229
    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                (603)         (179)
    Hedging instruments realized and recognized
     in net earnings                                       (64)         (854)
                                                  ---------------------------
                                                         2,311         2,538
                                                  ---------------------------
    Comprehensive income for the period                 12,197        17,769
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Cash Flows        For the three-month periods
                                                          ended March 31,
    (in thousands of dollars) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    Operating activities
    Net earnings for the period                          9,886        15,231
    Items not affecting cash:
      Amortization of property, plant and
       equipment                                         5,083         4,587
      Amortization of intangible assets                  1,858         2,069
      Amortization of deferred financing costs             109            87
      Long-term lease accruals                             117            97
      Future income taxes                                 (904)       (3,138)
      Realized currency translation adjustments             93            15
                                                  ---------------------------
                                                        16,242        18,948
    Net change in non-cash working capital
     balances                                           (4,847)         (935)
                                                  ---------------------------
    Cash flows related to operating activities          11,395        18,013
                                                  ---------------------------

    Investing activities
    Additions to property, plant and equipment            (867)         (168)
    Acquisition of other assets                             (7)          (62)
                                                  ---------------------------
    Cash flows related to investing activities            (874)         (230)
                                                  ---------------------------

    Financing activities
    Net change in short-term revolving credit
     facility                                            3,700          (100)
    Repayment of capital lease obligation                  (20)          (58)
    Distributions paid to unitholders                  (10,337)      (13,290)
    Proceeds from sale of options on foreign
     exchange forward contracts                              -           146
                                                  ---------------------------
    Cash flows related to financing activities          (6,657)      (13,302)
                                                  ---------------------------
    Translation adjustments on cash and cash
     equivalents                                           533           462
                                                  ---------------------------
    Net change in cash and cash equivalents
     during the period                                   4,397         4,943
    Cash and cash equivalents - beginning of
     period                                             18,846        10,740
                                                  ---------------------------
    Cash and cash equivalents - end of period           23,243        15,683
                                                  ---------------------------

    Supplemental information
    Interest paid                                        2,548         2,365
    Income taxes paid                                      795           119
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    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 three-month periods
                                                          ended March 31,
                                                          2009          2008
    -------------------------------------------------------------------------
    Net earnings                                         9,886        15,231
    Income taxes (recovery)                                 47        (1,487)
    Foreign exchange gain                                  (33)         (556)
    Financing costs, net                                 1,890         1,835
    Amortization of intangible assets                    1,858         2,069
    Amortization of property, plant and equipment        5,083         4,587
                                                  ---------------------------
    EBITDA                                              18,731        21,679
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Information by operating segment

                                                 For the three-month periods
                                                              ended March 31,
                                                          2009          2008
    -------------------------------------------------------------------------
    PRODUCTION (in MWh)
    Hydroelectric power stations                       117,132       143,045
    Wood-residue thermal power stations                 75,746        81,764
    Natural gas thermal power station                   61,190        60,373
                                                  ---------------------------
                                                       254,068       285,182
    -------------------------------------------------------------------------
    REVENUES
    Hydroelectric power stations                        12,712        13,237
    Wood-residue thermal power stations                 11,144        11,560
    Natural gas thermal power station                    8,394         9,475
                                                  ---------------------------
                                                        32,250        34,272
    -------------------------------------------------------------------------
    EBITDA
    Hydroelectric power stations                        10,966        11,435
    Wood-residue thermal power stations                  5,154         6,247
    Natural gas thermal power station                    4,201         5,604
    Corporate and eliminations                          (1,590)       (1,607)
                                                  ---------------------------
                                                        18,731        21,679
    -------------------------------------------------------------------------
    ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT
    Hydroelectric power stations                           752            13
    Wood-residue thermal power stations                     95            55
    Natural gas thermal power station                       20           100
                                                  ---------------------------
                                                           867           168
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                         As at         As at
                                                      March 31,  December 31,
                                                          2009          2008
    -------------------------------------------------------------------------
    ASSETS
    Hydroelectric power stations                       288,514       295,182
    Wood-residue thermal power stations                151,231       149,868
    Natural gas thermal power station                   40,571        42,043
    Corporate and eliminations                          13,978         2,119
                                                  ---------------------------
                                                       494,294       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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