Primary Energy Recycling Corporation announces first quarter 2007 results



    OAK BROOK, IL, April 30 /CNW/ - Primary Energy Recycling Corporation
(TSX: PRI.UN) (the "Company") today released its financial results for the
three months ended March 31, 2007. All amounts are in U.S. dollars unless
otherwise indicated.

    
    Key Points

    -   Revenue of $16.7 million and an Operating Loss of $2.7 million for
        the quarter.
    -   Reserve booked for negative inventory adjustment at Harbor Coal while
        financial performance at Harbor Coal continues to be below
        expectations, principally because of unfavorable commodity prices and
        lower production volumes compared to the first quarter of 2006.
    -   Generated Distributable Cash amounting to $4.2 million resulting in
        an effective payout ratio of 216.5% for the quarter and 108.9% since
        inception.
    

    "The first quarter's results were negatively impacted by both the reserve
taken for the inventory adjustment and otherwise poor performance compared to
the first quarter of 2006 at Harbor Coal," said John Prunkl, President of the
Company's Manager. "Beyond the inventory adjustment, revenue was below
expectations as a result of lower levels of blast furnace production and
narrow relative price spreads between the coal used and the natural gas and
coke displaced."
    For the first quarter of 2007, the Company earned revenue of
$16.7 million, down 35.0% from the first quarter of 2006. This decrease
reflects a decline in Energy Service revenue, primarily resulting from
decreased revenue at the Company's Harbor Coal facility of $8.3 million, which
is comprised predominantly of reductions based on volume of $2.2 million, on
pricing of $3.4 million (which is due to the spread between the cost of coal
supplied and the prices of the fuels that coal replaces (coke, natural gas and
fuel oil) and on a reserve against Harbor Coal revenue of $2.3 million. The
amount of this reserve has been determined based on projected consumption at
the facility using initial results of physical inventory measurements
conducted by Harbor Coal's joint venture's site host and customer.
    Total operating expenses were $19.4 million for the quarter. Operating
and maintenance expenses were $6.4 million, down 27.0% from the first quarter
of 2006 due to reduced expenditures at Harbor Coal.
    First quarter earnings before interest, taxes, depreciation and
amortization ("EBITDA" --see non-GAAP Measures below) was $7.5 million
compared to $13.3 million in the first quarter of 2006. Distributable Cash was
$4.2 million or $0.11 (Cdn$ 0.13) per Common and Equivalent Common Share in
the first quarter of 2007. The Company declared total distributions in the
first quarter of 2007 of $9.2 million or $0.25 (Cdn$ 0.29) per EIS.

    
    Summary of Distributable Cash
    -------------------------------------------------------------------------
                                             Three Months       Three Months
                                                Ended              Ended
                                              March 31,           March 31,
    (US$ thousands except per share data)        2007               2006
    -------------------------------------------------------------------------
    Cash Provided by Operating Activities           5,203             10,469
    -------------------------------------------------------------------------
    Cash Interest Expense                           4,872              4,746
    -------------------------------------------------------------------------
    Changes in Operating Assets
     and Liabilities                               (2,557)            (1,884)
    -------------------------------------------------------------------------
    Accretion of Asset Retirement
     Obligations                                      (54)               (51)
    -------------------------------------------------------------------------
    EBITDA                                          7,464             13,280
    -------------------------------------------------------------------------
    Interest on New Credit Facility                (2,759)            (2,481)
    -------------------------------------------------------------------------
    Interest on separate subordinated notes          (464)              (464)
    -------------------------------------------------------------------------
    Distributable Cash                              4,241             10,335
    -------------------------------------------------------------------------
    Hedge Rate (Cdn$/US$)                          1.1671             1.1712
    -------------------------------------------------------------------------
    Distributable Cash (Cdn$)                       4,950             12,104
    -------------------------------------------------------------------------
    Distributable Cash (Cdn$) per Common
     and Equivalent Common Share                     0.13               0.33
    -------------------------------------------------------------------------
    Distributable Cash Declared (Cdn$) per
     Common and Equivalent Common Share              0.29               0.28
    -------------------------------------------------------------------------
    Excess Distributable Cash Earned (Cdn$)
     per Common and Equivalent Common Share         (0.15)              0.05
    -------------------------------------------------------------------------
    Payout Ratio                                    216.5%              84.7%
    -------------------------------------------------------------------------
    

    At March 31, 2007, the Company had total liquidity of $28.6 million of
which $13.6 million was cash and cash equivalents and $15.0 million was an
unused credit facility.
    In a press release dated April 25, 2007 the Company announced that an
unplanned turbine outage at the North Lake facility could negatively affect
second quarter 2007 revenue and expenses by between $1 million to $2 million.
In addition, a planned turbine outage at the Company's Portside facility is
also scheduled for the second quarter of 2007 and is expected to cost
approximately $0.9 million.
    The Company's interim financial statements for the three months ended
March 31, 2007 and Management's Discussion and Analysis, are available at
www.sedar.com or the Company's website www.primaryenergyrecycling.com.

    Conference Call and Webcast
    -----------------------------
    Management will also host a conference call to further discuss the first
quarter results on Monday, April 30, 2007 at 11 a.m. (ET). Following
management's presentation, there will be a question and answer session. To
participate in the conference call, please dial (416) 644-3417 or           
1-800-732-6179. A conference call replay will be available until 12 a.m. on
May 8, 2007. The replay can be accessed by dialing (416) 640-1917 or        
1-877-289-8525 and entering passcode 21227217 followed by the number sign. A
webcast replay will also be available for 90 days by accessing a link through
the Investor Information section at www.primaryenergyrecycling.com.

    Non-GAAP Measures

    Distributable Cash and EBITDA are not recognized measures under U.S. GAAP
or Canadian GAAP and do not have standardized meanings prescribed by U.S. GAAP
or Canadian GAAP. Therefore, Distributable Cash and EBITDA may not be
comparable to similar measures presented by other companies. See the
definitions of Distributable Cash and EBITDA in the Company's MD&A.

    Forward-Looking Statements

    When used in this news release, the words "anticipate", "expect",
"project", "believe", "estimate", "forecast" and similar expressions are
intended to identify forward-looking statements. Such statements are subject
to certain risks, uncertainties and assumptions pertaining, but not limited,
to operating performance, regulatory parameters, weather and economic
conditions and the factors discussed in the Company's public filings available
on SEDAR at www.sedar.com. These forward-looking statements are made as of the
date of this press release and the Company assumes no obligation to update or
revise them to reflect new events or circumstances.

    About Primary Energy Recycling Corporation

    Primary Energy Recycling Corporation owns a majority interest in Primary
Energy Recycling Holdings LLC ("PERH"). PERH, headquartered in Oak Brook,
Illinois, indirectly owns and operates four recycled energy projects and a  
50 per cent interest in a pulverized coal facility (collectively, the
"Projects"). The Projects have a combined electrical generating capacity of
283 megawatts (MW) and a combined steam generating capacity of 1,851Mlbs/hour.
PERH creates value for its customers by capturing and recycling waste energy
from industrial and electric generation processes and converting it into
reliable and economical electricity and thermal energy for its customers' use.
For more information, please see www.primaryenergyrecycling.com.





For further information:

For further information: V. Michael Alverson, Chief Financial Officer,
Primary Energy Ventures, (630) 371-0505, investorinfo@primaryenergy.com

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