Innergex Power: second quarter results

    LONGUEUIL, QC, Aug. 2 /CNW Telbec/ - Innergex Power Income Fund
(TSX: IEF.UN) ("Innergex Power" or the "Fund") releases its financial results
for the second quarter and six-month period ended June 30, 2007. Two main
factors explain the results: the second quarter's hydrology conditions were
inferior by 3% as compared to the historical average and a non-recurring
$46.9 million provision for future income taxes was recorded following the
adoption on June 22, 2007 of the federal government bill on trusts taxation.

    For the periods        Three months                    Six months
    ended June 30       2007            2006            2007            2006
     (MW-hr)         201,411         214,687         286,919         331,173
     revenues  $12.2 million   $12.8 million    19.4 million   $22.1 million
    Net (loss)
     income   ($41.5 million)   $5.5 million  ($40.5 million)   $7.8 million
    Net (loss)
     per unit         ($1.68)          $0.22          ($1.64)          $0.32

    Before the additional provision for future income taxes:
    Net income  $5.5 million    $5.5 million    $6.4 million    $7.8 million
    Net income
     per unit          $0.22           $0.22           $0.26           $0.32


    A late spring run-off in 2007 resulted in a lower production for the
quarter as compared to 2006 second quarter which benefited from higher than
average hydrology conditions. A shutdown at the Portneuf facilities during the
last two weeks of June so that Hydro-Québec TransEnergie could conduct
maintenance work at the Les Basques substation, also negatively affected the
Fund's results. This level of production represents a decrease of 6% as
compared to the 2006 production and inferior by 3% as compared to the
historical average. For the quarter, gross revenues totalled $12.2 million, 4%
lower than in 2006.
    For the six-month period, production showed a 13% decrease compared to
last year. Hydrology conditions resulted in a higher production in 2006 and a
production inferior by 5% in 2007 as compared to historical average. For the
first six months of the year, gross revenues total $19.4 million, 13% lower
compared to $22.1 million in 2006.


    On June 22, 2007, Bill C-52 relating to income trusts taxation was
adopted. Consequently, the Fund recorded a $46.9 million provision for future
income taxes in respect of the remaining life of the assets that spreads out
over a period ending in 2054. This taxation regime will only apply to Innergex
Power starting in 2011. This provision has no impact on distributable cash,
cash distribution to unitholders or the Fund's liquidities. However, this
provision had a material impact on the net income for the quarter and the
six-month period. Without taking into consideration this provision, the net
income would have been $5.5 million ($0.22 per unit) for the quarter and
$6.4 million ($0.26 per unit) for the six-month period.


    For the quarter, net distributable cash stood at $6.7 million and
$6.0 million were distributed to unitholders. Since the beginning of the year,
the net distributable cash totals $10.9 million, and the Fund distributed
$11.9 million. The distribution payout ratios for the second quarter and the
six-month period stand at 89% and 109% respectively. The Fund relied on
accumulated cash to maintain its distributions to unitholders, without using
neither its hydrology reserve nor its bank credit facilities.


    "The provision for future income taxes recorded by the Fund this quarter
is non-recurring and does not have an impact on distributable cash,
distributions to unitholders nor on the Fund's liquidities. The adoption of
this new bill last June has an impact for the entire income trusts market. The
Manager takes into consideration this new bill in its strategic planning and
in managing the business, in order to maximise distribution to unitholders,"
said Gilles Lefrançois, President and CEO of Innergex Management Inc., the
Manager of the Fund.
    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 and
the SEDAR Web site at


    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
Management Inc., the Manager, under long-term agreements with the Fund.


    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 Management Inc., (450) 928-2550 ext. 252; Mr.
Michel Letellier, MBA, Executive Vice-President and CFO, Innergex Management
Inc., (450) 928-2550 ext. 227;,

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