Canadian Helicopters reports record sales and profitability in 2007



    
    - 2007 revenue grew 8.7% to $147.5 million
    - EBITDA margin reached 20.9% in 2007, up from 17.3% last year
    - Earnings per unit increased by 40% from $1.45 to $2.03
    - Full repayment of the revolving long-term credit facility
    - Low payout ratio of 57% compared to 73% in 2006
    

    MONTREAL, March 18 /CNW Telbec/ - Canadian Helicopters Income Fund
(TSX: CHL.UN) ("the Fund"), the largest helicopter transportation services
company operating in Canada, today announced its financial and operating
results for the fourth quarter and year ending December 31, 2007. "In its
second full year as a public fund, Canadian Helicopters posted record sales
and profitability, increased its distribution to unitholders, and fully repaid
its debt," said Mr. Jean-Pierre Blais, President.
    The Fund generated $24.7 million in distributable cash, or $1.86 per
unit, for the year ended December 31, 2007 and declared distributions of
$14.1 million, or $1.06 per unit, for the same 12-month period. The
distributable cash generated in 2007 exceeded actual distributions by
$10.6 million. As a result, the Fund's 57% payout ratio, defined as
distributions declared as a percentage of distributable cash generated,
remained conservative. This surplus cash affords the Fund room to capture
market opportunities, finance its expansion and provides flexibility for 2011
when the tax changes for trusts take effect, thus contributing to the
sustainability of its distributions.
    "This excellent performance can be attributed to our established national
franchise and trusted quality of our operations, and the management of
sustained demand in our markets," commented Mr. Blais.

    
    -------------------------------------------------------------------------
    Financial Highlights
                               Quarters ended           Twelve months ended
    (in thousands of dollars,    December 31,                December 31,
     except per unit data)    2007          2006          2007          2006
    -------------------------------------------------------------------------
    Revenue                 28,303        24,167       147,536       135,667
    EBITDA(1)                 (777)       (1,237)       30,783        23,466
    Net earnings before
     non-controlling
     interest                4,085          (729)       27,007        19,309
      Per unit - basic
       and diluted ($)        0.31         (0.06)         2.03          1.45
    Distributable cash      (3,117)       (3,554)       24,675        18,980
      Per unit - basic
       and diluted ($)       (0.23)        (0.27)         1.86          1.43
    Payout ratio               n/a           n/a            57%           73%
    Weighted-average
     units outstanding
     (basic)            13,280,000    13,280,000    13,280,000    13,280,000
    -------------------------------------------------------------------------
    (1) Earnings (loss) before interest, income taxes, depreciation and
        amortization, gain or loss on disposal of property, plant and
        equipment and non-controlling interest
    

    2007 YEAR-END RESULTS

    Canadian Helicopters' revenue for the 2007 fiscal year rose 8.7% or
$11.8 million to $147.5 million from $135.6 million in 2006. The revenue
increase stems mainly from higher volumes and rates in eastern and northern
Canada. Heightened activity in the mining sector in those areas offset a
slight decline in sales to the oil and gas industry. This variation is
primarily explained by an increase of $10.0 million in Visual Flight Rules
(VFR) revenue due to increased resource-based activity, an increase of
$0.1 million in Instrument Flight Rules (IFR) revenue in western Canada and an
increase of $1.7 million in ancillary revenue, including the Canadian Forces
Contracted Flying Training ("CFTS") contract. Revenue-earning flying hours for
the twelve months ended December 31, 2007 increased by 2,500 hours, or 3.3%,
over the previous year, to 78,970 hours.
    The Fund's EBITDA grew 31.2% to $30.8 million, up from $23.5 million in
the previous year. Expressed as a percentage of sales, the EBITDA margin
reached 20.9% in 2007, up from 17.3% a year earlier mostly related to rate and
asset utilization improvement. Net earnings before non-controlling interest
for the twelve months ended December 31, 2007 rose 39.9% to $27.0 million, or
$2.03 per unit, fully diluted, from $19.3 million in 2006, or $1.45 per unit,
fully diluted.
    Cash flows from operating activities before net changes in non-cash
working capital balances amounted to $29.3 million, an increase of 30.6% over
cash flows of $22.4 million in 2006. This strong cash flow generation enabled
the Fund to repay, in full, its revolving long-term credit facility of
$18.9 million and to conclude 2007 with cash and cash equivalents of
$6.0 million.

    FOURTH-QUARTER RESULTS

    For the three-month period ended December 31, 2007, revenue was
$28.3 million compared to $24.2 million for the same period in 2006,
representing an increase of $4.1 million, or 16.9%. This variation is
primarily explained by increases of $2.9 million in VFR revenue from resource
based activity, $0.1 million in IFR revenue and $1.1 million in ancillary
revenue including the CFTS contract. Canadian Helicopters flew 13,537 hours
over the three months ended December 31, 2007 compared to 11,902 hours in the
same period in 2006, representing an increase of 1,635 hours, or 13.7%.
    Despite seasonal weakness inherent to the fourth quarter, EBITDA improved
by $0.4 million, or 33%, to ($0.8) million, over EBITDA of ($1.2) million for
the same period in 2006. Net earnings before non-controlling interest reached
$4.1 million, or $0.31 per unit, fully diluted, compared to a net loss of
($0.7) million, or ($0.06), for the same period in 2006, representing an
improvement of $4.8 million. The Fund benefited from an income tax recovery of
$5.9 million due to changes in the Federal income tax rate which were
substantively enacted in the fourth quarter of 2007.
    Certain of the Fund's operations are subject to seasonal fluctuations due
to variations in daylight hours and changes in weather conditions, with the
highest demand generally occurring from May to October. While some operations
are dependent on flight hours and are managed to mitigate the impact of
seasonality, a significant portion of operating costs are associated with its
crew and fleet and are fixed. Canadian Helicopters takes advantage of the
off-season period to conduct repairs and maintenance on its helicopters and
provide training to its crews in order to minimize downtime during the peak
season. This strategy, necessitated by seasonality, significantly reduces
profits during the quarters ending December 31 and March 31 and has
historically resulted in losses. Therefore, results for any single quarter may
not be indicative of the results that may be expected for the full year.

    OUTLOOK

    The majority of Canadian Helicopters' business will continue to be
derived from essential service providers. "The Fund's contracts in emergency
medical services, infrastructure maintenance, support for utilities, and
missions for government-related defense, survey and sovereignty work will
largely shield Canadian Helicopters from potential downturn as the global
economy slows," stated Mr. Blais.
    A strong source of business and growth for Canadian Helicopters is
Canada's natural resources sector. Base metals are in high demand globally,
and in uncertain times, exploration for precious metals accelerates. Such
activity, usually occurring in remote areas where no practical alternative
form of transportation exists, generates a steady call for the services of
Canadian Helicopters. Third party maintenance, including the CFTS contract and
the operation of the company's flight schools, also provide steady revenue.
    "With a strong, debt-free balance sheet and a low payout ratio, Canadian
Helicopters has the flexibility to grow through acquisition or fleet
purchases. We are at present studying a number of opportunities and will
aggressively pursue expansion on behalf of our unitholders," concluded
Mr. Blais.

    CONFERENCE CALL

    Canadian Helicopters will hold a conference call to discuss these results
March 19, 2008, at 10:00 AM (ET). Interested parties can join the call by
dialing 514-807-8791 (local) or 800-732-6179 (toll free). If you are unable to
call in at this time, you may access a tape recording of the meeting by
calling 416-640-1917 (local) or 877-289-8525 (toll free) followed by access
code #21265780. This tape recording will be available on March 19, 2008 until
March 26, 2008.

    ABOUT CANADIAN HELICOPTERS INCOME FUND

    Through Canadian Helicopters Limited, Canadian Helicopters Income Fund is
the largest helicopter transportation services company operating in Canada and
one of the largest in the world based on the size of its fleet. From over
40 base locations across Canada, Canadian Helicopters provides helicopter
services to a broad range of sectors, including emergency medical services,
infrastructure maintenance, utilities, oil and gas, forestry, mining and
construction. In addition to helicopter transportation services, Canadian
Helicopters operates three flight schools and provides third party repair and
maintenance services. With over 60 years of experience, Canadian Helicopters
is an industry leader in establishing safety standards and operating
procedures.

    FORWARD-LOOKING STATEMENTS

    This press release contains forward-looking statements relating to the
future performance of the Fund. Forward-looking statements, specifically those
concerning future performance, are subject to certain risks and uncertainties,
and actual results may differ materially. Consequently, readers should not
place any undue reliance on such forward-looking statements. In addition,
these forward-looking statements relate to the date on which they were made.
The Fund disclaims any intention or obligation to update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise unless being required by applicable laws.

    DEFINITION OF NON-GAAP MEASURES: EBITDA, STANDARDIZED DISTRIBUTABLE CASH
    AND DISTRIBUTABLE CASH

    References to "EBITDA" are to earnings (loss) before interest, income
taxes, depreciation and amortization, gain or loss on disposal of property,
plant and equipment and non-controlling interest, as disclosed in the Summary
of Selected Consolidated Financial Information.
    Standardized Distributable Cash is a non-GAAP measure recommended by the
Canadian Institute of Chartered Accountants ("CICA") in order to provide a
consistent and comparable measurement of distributable cash across entities.
Standardized Distributable Cash represents cash flows from operating
activities, less adjustments for net maintenance capital expenditures as
reported in accordance with GAAP.
    Management views Distributable Cash as an operating performance measure,
as it is a measure generally used by Canadian income funds as an indicator of
financial performance. Distributable Cash is defined as cash flows related to
operating activities plus the net change in non-cash working capital balances
less the net maintenance capital expenditures. The long term incentive plan
("LTIP") funding requirement for a year in connection with the Fund exceeding
its annual distributable cash target is deducted in determining the annual
distributable cash of that year while the LTIP compensation expense will be
added back. Distributable Cash is important as it summarizes the funds
available for distribution to Unitholders. As the Fund will distribute a
significant portion of its cash on an on-going basis and since EBITDA is a
metric used by many investors to compare issuers on the basis of the ability
to generate cash from operations, management believes that, in addition to net
earnings or loss, EBITDA is a useful supplementary measure from which to make
adjustments to determine Distributable Cash.
    EBITDA, Standardized Distributable Cash and Distributable Cash are not
earnings measures recognized under GAAP and do not have standardized meanings
prescribed by GAAP. Therefore, EBITDA, Standardized Distributable Cash and
Distributable Cash may not be comparable with similar measures presented by
other entities. Investors are cautioned that EBITDA, Standardized
Distributable Cash and Distributable Cash should not be construed as an
alternative to net earnings (loss) determined in accordance with GAAP as
indicators of the Fund's performance, or to cash flows from operating,
investing and financing activities as measures of liquidity and cash flows.

    Note to readers: Complete consolidated financial statements and
Management's Discussion & Analysis of Operating Results and Financial Position
are available on Canadian Helicopters' website at www.canadianhelicopters.com
and on SEDAR at www.sedar.com .
    %SEDAR: 00022513EF




For further information:

For further information: Canadian Helicopters Income Fund: Jean-Pierre
Blais, President, (450) 452-3007; Don Wall, Senior Executive Vice President,
(780) 429-6919


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