Innergex Power Income Fund: Revenues increase by 5% for the second quarter of 2009



    
    Highlights:

    - EBITDA increases by 6% compared with the same period last year
    - Diversification of facilities helps achieve stable gross operating
      revenues
    - Fund's distribution payout ratio set at 87% for second quarter of 2009
    

    LONGUEUIL, QC, Aug. 6 /CNW Telbec/ - Innergex Power Income Fund (TSX:
IEF.UN) ("the Fund") announced its financial results for the second quarter
ended on June 30, 2009. Results posted for the most recent quarter and the
six-month period ended June 30, 2009 attest to the benefits of the
geographically-diversified locations of the Fund's facilities, and the
complementarity of its hydroelectric and wind-power generation facilities.

    
    -------------------------------------------------------------------------
    For periods                    Three-month                 Six-month
    ended June 30              2009         2008           2009         2008
    -------------------------------------------------------------------------
    Production (MW-hr)      247,764      244,378        411,676      405,317
    Gross operating
     revenues              $   16.5M    $   15.8M      $   30.5M    $   29.4M
    EBITDA                 $   13.6M    $   12.8M      $   24.6M    $   23.6M
    Net adjusted earnings  $    4.7M    $    4.4M      $    7.2M    $    4.9M
    Net adjusted earnings
     per unit              $   0.16     $   0.15       $   0.24     $   0.17
    -------------------------------------------------------------------------
    

    OPERATING RESULTS

    The Fund's power generating facilities produced 247,764 MW-hr for the
second quarter of 2009 - a 1% increase over the same period in 2008. This
output translates into $16.5 million in gross operating revenues for the
second quarter of 2009, which represents a 5% ($0.7 million) increase over the
same period in 2008. This increase is attributed to an increase in energy
generation, as well as to higher sales prices resulting from increased
purchase rates as specified in long-term power purchase agreements ("PPAs").
    The increase in production during the second quarter of 2009 stems partly
from conditions more favorable to wind-power generation than were experienced
in the same quarter in 2008 at both the Baie-des-Sables (BDS) and
L'Anse-à-Valleau (AAV) wind farms. Total wind farm production was 31% higher
than last year. This increase in production is also attributable to the AAV
facility operating at its full potential, as in the second quarter of 2008,
AAV was still in its break-in period following the start-up of commercial
operations in November 2007.
    The improved performance of the wind farms was partly offset by
Hydro-Québec's work carried out on its transmission line and which required a
shutdown of the three power plants at Portneuf for 13 days in June 2009. Power
generation at the Portneuf facilities was therefore 15% lower in the second
quarter when compared to the previous year.
    For the six-month period ended June 30, 2009, the Fund's facilities
generated 411,676 MW-hr, which was up 2% over the same period in 2008. Gross
operating revenues totalled $30.5 million, a $1.1 million or 4% increase
versus the same period in 2008.
    The increase in gross operating revenues resulted primarily from higher
sales prices and a 15% improvement in wind farm performance over last year.
This increased production is partly offset by the shutdown of the three
Portneuf power plants and weaker hydrological conditions at the Rutherford
Creek power plant.
    Michel Letellier, President and Chief Executive Officer of Innergex
Renewable Energy Inc., the Fund's manager, explains: "We developed the Fund's
assets using a strategy that values revenue stability, based on the
complementarity of wind energy and hydroelectric power, as well as on
geographic diversification. It's obvious to us - now, more so than ever - that
diversifying the Fund's facilities has had a stabilizing effect on operating
results, thus enabling us to offer our investors the steadiness of
distributable cash which they like to see."

    EBITDA

    Earnings before interest, provision for income taxes, depreciation and
amortization, other revenues and expenses and minority interest ("EBITDA")
totalled $13.6 million for the three-month period ended June 30, 2009, a 6%
increase over the EBITDA of $12.8 million posted for the second quarter of
2008. This increase is attributed to higher gross operating revenues and
reduced operating expenses, particularly with respect to maintenance costs of
the Rutherford Creek facility.
    EBITDA stood at $24.6 million for the six-month period ended June 30,
2009, up 4% over the $23.6 million reported for the first six months of 2008,
also attributed to an increase in gross operating revenues and reduced
operating expenses for maintenance at the Rutherford Creek facility.

    ADJUSTED NET EARNINGS

    The Fund's manager believes that adjusted net earnings represent
additional information which is important to the reader, by providing a
measure of the Fund's profitability that excludes certain items which do not
impact cash on hand. The adjusted net earnings exclude unrealized foreign
exchange gains/losses and unrealized gain/loss on derivative financial
instruments, as well as related future income taxes. They also exclude certain
non-recurring items, such as the impact on future income taxes resulting from
amendments to tax legislation or changes in tax rates.
    The Fund posted $4.7 million ($0.16 per trust unit) in adjusted net
earnings for the second quarter of 2009, versus $4.4 million ($0.15 per trust
unit) in the same three-month period of 2008. Adjusted net earnings for the
first six months of 2009 were $7.2 million ($0.24 per trust unit), versus $4.9
million ($0.17 per trust unit) for the same period in 2008.

    
    The Fund's adjusted net earnings are calculated as follows:

    -------------------------------------------------------------------------
    Net adjusted        Three-month  Three-month      Six-month    Six-month
      earnings               period       period         period       period
                         ended June   ended June     ended June   ended June
                           30, 2009     30, 2008       30, 2009     30, 2008
    -------------------------------------------------------------------------
    Net earnings       $ 13,353,012  $ 7,507,371   $ 16,372,466  $ 6,746,378

    Add / (deduct):

    Unrealized gain
     (loss) on
     derivative
     financial
     instruments
                        (11,197,317)    (541,178)   (11,771,096)   1,088,101
    Unrealized
     foreign
     exchange gain
     (loss)                (232,442)     (24,107)      (135,982)      70,736
    Future income taxes
     relating to
     unrealized gains/
     losses on
     foreign exchange
     and on unrealized
     derivative
     financial
     instruments          2,798,537      146,118      2,712,219     (293,787)
    Increase
     (decrease) in
     future income tax
     rates                        -   (2,680,653)             -   (2,680,653)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Adjusted net
     earnings          $  4,721,790  $ 4,407,551   $  7,177,607  $ 4,930,775
    Adjusted net
     earnings per
     trust unit        $      0.16   $      0.15   $       0.24  $      0.17
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Results per trust unit for the three-month and six-month periods ended
    June 30, 2009 and 2008 are based on a weighted average of 29,404,276
    outstanding trust units.
    

    NET DISTRIBUTABLE CASH AND CASH DISTRIBUTIONS

    For the three-month period ended June 30, 2009, the Fund generated $8.5
million in net distributable cash compared to $8.3 million for the same
quarter in 2008. Declared cash distributions totalled $7.4 million, or $0.25
per trust unit, an amount similar to the three-month period ended June 30,
2008. The Fund's second-quarter distribution payout ratio in 2009 and 2008
worked out to 87% and 89% respectively. The improvement in this ratio is due
to higher EBITDA and decreased long-term debt repayments, both of which offset
the impact of a $0.8 million realized gain on derivative financial instruments
recorded in 2008 (nil in 2009). The Fund therefore deposited its net
distributable cash excess over distribution to unitholders, into its cash
accounts during these two quarters.
    Since the beginning of 2009, the Fund has generated net distributable
cash in the amount of $15.9 million and declared cash distributions totalizing
$14.7 million, or $0.50 per unit. For the first half of 2008, the Fund had
generated $13.7 million in net distributable cash and declared cash
distributions totalizing $14.7 million, or $0.50 per unit. The Fund's
distribution payout ratio worked out to 93% and 107%, respectively, for the
six-month periods ended June 30, 2009 and 2008. The improvement in this ratio
is due to increased EBITDA, reduced long-term debt repayments and a $1.0
million loss on derivative financial instruments in 2008 (nil in 2009). In the
most recent six-month period, the Fund therefore deposited its net
distributable cash excess over distribution to unitholders, into its cash
accounts.

    Innergex Power Income Fund is an open-ended income trust that indirectly
owns interests in 10 hydroelectric power-generating facilities and two wind
farms. The Fund's installed capacity is 340 MW (net interest of 210 MW).
Approximately 27% of total annual production comes from wind energy. The
Fund's units are traded on the Toronto Stock Exchange under the symbol IEF.UN.
The hydroelectric facilities and wind farms are managed by Innergex Renewable
Energy Inc., the manager, under long-term agreements with the Fund.
    The unaudited consolidated financial statement and the management's
discussion and analysis can be downloaded from Innergex' website at:
www.innergex.com, as well as of the website of Sedar, at www.sedar.com.

    NON-GAAP MEASURES

    Some indicators referred to in this press release are not recognized
measures under Canadian Generally Accepted Accounting Principles ("GAAP").
Consequently, they may not be comparable to measures presented by other
issuers. The Fund believes that these indicators are important since they
provide the reader with additional information about production, available
cash and the Fund's ability to meet its cash distribution objectives to
unitholders. The Fund also believes that they facilitate the comparison of
results over different periods.

    FORWARD- LOOKING STATEMENTS

    In order to inform the Fund's unitholders as well as potential investors
on future prospects of the Fund, this press release may contain
forward-looking statements within the meaning of securities legislation.
Forward-looking Statements can generally be identified by the use of words and
phrases, such as "may", "will", "estimate", "anticipate", "plans", "expects"
or "does not expect", "is expected", "budget", "scheduled", "forecasts",
"intends" or "believes", or variations of such words and phrases that state
that certain events will occur. Forward-looking Statements represent, as of
the date hereof, the estimates, forecasts, projections, expectations or
opinions of the Manager relating to future events or results. Forward-looking
Statements involve known and unknown risks, uncertainties and other important
factors which may cause the actual results or performance to be materially
different from those expressed, or implied, including: (i) operations-related
risk, (ii) hydrology and wind regime risk, (iii) reliance on major customers,
(iv) tax treatment of distributions, (v) level of production from Fund's
facilities, (vi) the cost of production of the Fund's facilities, (vii)
interest rates as they bear on the Fund's indebtedness. Although the Fund
believes that the expectations instigated by the Forward-looking Statements
are based on reasonable and valid hypotheses, there is a risk that the
Forward-looking Statements may be incorrect. The readers are cautioned not to
rely unduly on these Forward-looking Statements. The Forward-looking
Statements are expressly qualified by this cautionary statement. The Fund does
not undertake any obligation to update or revise any Forward-looking
Statements, whether as a result of events or circumstances occurring after the
date hereof, unless required by legislation.
    %SEDAR: 00018706EF




For further information:

For further information: Ms. Edith Ducharme, LL.L., Director - Financial
Communications and Investor Relations, Innergex Renewable Energy Inc., Manager
of the Fund, (450) 928-2550, ext. 222, educharme@innergex.com; Mr. Jean
Trudel, MBA, Vice President - Finance and Investor Relations, Innergex
Renewable Energy Inc., Manager of the Fund, (450) 928-2550, ext. 252,
jtrudel@innergex.com; www.innergex.com

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INNERGEX POWER INCOME FUND

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