Innergex Power Income Fund: third quarter results



    LONGUEUIL, QC, Nov. 6 /CNW Telbec/ - Innergex Power Income Fund
(TSX: IEF.UN) (the "Fund") releases its financial results for the third
quarter and nine-month period ended September 30, 2007. Hydrology conditions
were more favourable during the 2007 third quarter than the corresponding
period in 2006, which explains the slight increase in the results for the
quarter.

    
    ------------------------------------------------------------------------
    For the periods        Three months                     Nine months
    ended            -------------------------------------------------------
    September 30        2007            2006            2007            2006
    ------------------------------------------------------------------------
    Production
     (MW-hr)         167,988         165,814         454,907         496,987
    Gross
     revenues  $10.4 million   $10.2 million   $29.7 million   $32.3 million
    Net income
     (loss)     $3.5 million    $2.5 million  ($37.0 million)  $10.4 million
    Net income
     (loss) per
     unit              $0.14           $0.10          ($1.50)          $0.42
    ------------------------------------------------------------------------


    Before the additional provision for future income taxes of $46.9 million
    recorded during the second quarter of 2007:

    ------------------------------------------------------------------------
    For the periods                                         Nine months
    ended                                        ---------------------------
    September 30                                        2007            2006
    ------------------------------------------------------------------------
    Net income                                  $9.9 million   $10.4 million
    Net income per unit                                $0.40           $0.42
    -------------------------------------------------------------------------


    OPERATING RESULTS

    Hydrology conditions for the quarter generated a production 1% higher as
compared to the corresponding quarter in 2006 and lower by 4% as compared to
historical average. During the 2007 third quarter, the facilities produced a
total of 167,988 MW-hr compared to 165,814 MW-hr in 2006. The level of
production of the Rutherford Creek and the Chaudière facilities mainly
explains this increase. As a consequence, the gross revenues totaled
$10.4 million, a 2% increase compared with 2006.
    For the first nine months of 2007, hydroelectric production totalled
454,907 MW-hr compared to 496,987 MW-hr for the same period in 2006. Hydrology
conditions in 2006 generated a production higher than the historical average,
compared to 2007 when production was lower by 4%. Gross revenues totalled
$29.7 million, 8% lower compared to the 2006 results that totalled
$32.3 million. This decrease can be explained by less favourable hydrology
conditions and by the shutdown at the Portneuf facilities at the beginning of
the summer allowing Hydro-Québec TransEnergie to perform maintenance work at
the Les Basques substation.

    NET INCOME

    Net income for the quarter totalled $3.5 million ($0.14 per trust unit)
compared to $2.5 million ($0.10 per trust unit) in 2006. Net income for the
nine-month period in 2007 was affected by the provision for future income
taxes of $46.9 million recorded during the second quarter following the
adoption in June 2007, of the Bill C-52 relating to income trusts taxation.
For the nine-month period, the Fund recorded a net loss of $37.0 million
compared to a net income of $10.4 million in 2006. Without taking into
consideration this provision, the net income for the first nine months would
have been $9.9 million.

    NET DISTRIBUTABLE CASH AND DISTRIBUTIONS

    For the quarter, net distributable cash totalled $6.7 million of which
$6.0 million were distributed to unitholders. Since the beginning of the year,
the net distributable cash totals $17.7 million, and the Fund distributed
$17.9 million. The distribution payout ratios for the third quarter and the
nine-month period represent 88% and 101% respectively. The Fund relied on
accumulated cash to maintain its distributions to unitholders, without using
neither its hydrology reserve nor its bank credit facilities.

    SUBSEQUENT EVENTS

    On October 26, 2007, the Fund announced the acquisition of a 38% interest
owned by Innergex II Income Fund ("Innergex II") in two wind farms (the
"Transaction"). The Baie-des-Sables wind farm has an installed capacity of
109.5 MW and the Anse-à-Valleau wind farm totals 100.5 MW. This Transaction,
the most important one the Fund has realized to date, should allow an increase
in the distributions to unitholders of 3.5 cents to $1.00 on an annualized
basis, starting on January 1st, 2008. This Transaction will also:

    - Increase the Fund's total installed capacity by 61% to 210 MW;
    - Increase the anticipated net annual production by 37%, or by
      226.6 GW-hr, to 835 GW-hr;
    - Increase the 2008 anticipated revenues by 44%, from $41 million to
      approximately $59 million, and 2008 anticipated EBITDA by 49%, from
      $31.5 million to approximately $47 million;
    - Increased diversification in terms of energy sources; and
    - Mitigate the effect of seasonality on the Fund's cash flows.

    The Fund intends to finance the acquisition price of $172.9 million,
subject to a working capital adjustment, by issuing 4,724,409 units to
Innergex II, representing an amount of $61.7 million, by assuming
$107.6 million in non-recourse debts which are expected to be outstanding as
at December 31, 2007 and by increasing the Fund's indebtedness by
$3.6 million. The interest rate risk of such debts is mitigated by way of
derivative instruments.
    On October 26, 2007, the Manager of the Fund, Innergex Renewable Energy
Inc., formerly known as Innergex Management Inc., has announced its intention
to conclude an initial public offering, and released a preliminary prospectus.
Upon closing of its initial public offering, which is expected before the end
of 2007, Innergex Renewable Energy Inc. will acquire the 4,724,409 units of
the Fund from Innergex II, which will give it a 16.1% interest in the Fund,
and will remain its manager.
    In connection with the proposed Transaction, the Fund has agreed to
certain amendments, which will take effect at closing of the Transaction, to
its management agreements with the Manager, including: i) the extension of
their initial terms from 2023 to 2030; and ii) mutual rights to terminate the
agreements upon certain events provided that a cash compensation is paid to
the Manager.
    The closing of Innergex Renewable Energy Inc.'s initial public offering
is, among others, one of the conditions precedent to the closing of the
acquisition of the two wind farms by the Fund and to the amendments of the
Management, Administration and Services agreements.

    OUTLOOK

    "The results of the quarter continue to show the Funds great stability. In
order to diversify the Fund's energy sources of production and to increase
distributions to unitholders, the Fund has announced the acquisition of a 38%
interest in two wind farms located in the province of Québec: the
Baie-des-Sables wind farm of a total installed capacity of 109.5 MW, and the
Anse-à-Valleau wind farm of a total installed capacity of 100.5 MW. These
acquisitions of great quality are perfectly in line with the Fund's growth
strategy. The Fund intends to complete the transaction upon closing of
Innergex Renewable Energy Inc.'s initial public offering, expected by the end
of year 2007," said Mr. Jean La Couture, Chairman of the Board of Trustees of
Innergex Power Trust.
    The quarterly report to unitholders, which includes the unaudited
consolidated financial statements and the management's discussion and
analysis, can be downloaded from the Innergex Web site at www.innergex.com and
the SEDAR Web site at www.sedar.com.

    PROFILE

    Innergex Power Income Fund is an open-ended income trust that indirectly
owns ten hydroelectric power generating facilities with a total installed
capacity of 129.9 MW. These facilities are operated and managed by Innergex
Renewable Energy Inc. (formerly known as Innergex Management Inc.), the
Manager, under long-term agreements with the Fund.

    FORWARD-LOOKING STATEMENTS

    Investors should note that some statements in this press release are
forward-looking and may not give full weight to all potential risks and
uncertainties. Forward-looking statements are, by their nature, subject to
risks and uncertainties, and actual results, actions or events could
materially differ from those set forth in the forward-looking statements. All
forward-looking statements are only valid as of the date they were made. The
Fund does not undertake to update forward-looking statements.
    
    %SEDAR: 00018706EF




For further information:

For further information: Mr. Jean Trudel, MBA, Vice-President - Finance
and Investor Relations, Innergex Renewable Energy Inc., (450) 928-2550, ext.
252; Mr. Michel Letellier, MBA, President and Chief Executive Officer,
Innergex Renewable Energy Inc., (450) 928-2550, ext. 227; info@innergex.com;
www.innergex.com

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INNERGEX POWER INCOME FUND

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