Third Quarter Financial Results for Boralex Power Income Fund

MONTREAL, Nov. 4 /CNW Telbec/ - For its third quarter 2009, Boralex Power Income Fund (the "Fund") reported lower revenue from energy sales and earnings before interest, taxes, depreciation and amortization ("EBITDA") compared to the same quarter in 2008, primarily due to the fact that the Dolbeau power station was shut down. However, the decrease was largely offset by higher power generation by hydroelectric facilities in the United States and by the wood-residue power station in Senneterre.

The Fund reported $19.9 million in revenue from energy sales in the third quarter of 2009, compared to $23.5 million in the third quarter of 2008. EBITDA amounted to $9.7 million in the third quarter, versus $10.1 million in the corresponding period in 2008. The $3.6 million revenue shortfall stems in large part, as mentioned above, from the shutdown of electricity and steam production at Dolbeau throughout the quarter. These adverse items were partially offset by additional revenue of $1.4 million related to higher production levels at the hydroelectric power stations in the United States and at Senneterre. The Fund closed the third quarter of fiscal 2009 with a net loss of $0.7 million ($0.01 per trust unit), compared to net earnings of $2.8 million ($0.05 per trust unit) for the same period in 2008.

Revenue in the hydroelectric segment rose 9% to $10.6 million, versus $9.7 million for the same period in 2008. EBITDA grew 11% to $8.9 million in the third quarter of 2009. Revenue from this segment accounts for 53% of consolidated revenue for the quarter, whereas in the third quarter of 2008, revenue from this segment accounted for 41% of the Fund's consolidated revenue. Total production was up 24% over the historical average.

Wood residue thermal power stations reported revenue of $2.9 million in the third quarter of 2009, down $3.5 million from the same period in 2008. This segment reported a loss before interest, taxes, depreciation and amortization of $0.3 million compared to no loss or gain in the third quarter of 2008. These results stem mainly from the generally good performance as a result of increased production and selling prices at Senneterre, and the shutdown of power and steam production at Dolbeau for the entire quarter caused by wood-residue sourcing difficulties and the indefinite shutdown of the AbitibiBowater ("ABI") pulp and paper mill to which the Fund supplied steam.

The Fund has come to an agreement in principle with ABI to temporarily operate the Dolbeau power plant, from November 15, 2009 to April 15, 2010.

The Kingsey Falls natural gas cogeneration plant reported revenues of $6.3 million and EBITDA of $2.8 million, down $1.1 million and $1.0 million respectively versus the same period in 2008. These decreases are due to a 30% drop in the average price of steam, as a result of its indexation to oil prices.

Finally, taking into account the net change in non-cash working capital balances, cash flows related to operating activities amounted to $7.6 million in the third quarter of 2009, compared to $8.9 million for the same quarter in 2008. Accordingly, the Fund had a very satisfactory cash balance of $16.8 million as at September 30, 2009.

About Boralex Power Income Fund

Boralex Power Income Fund (the "Fund") is an unincorporated open-ended trust that indirectly owns ten power generating stations located in the province of Québec and in the United States producing energy from different sources including wood-residue or natural gas thermal and cogenerating facilities as well as hydroelectric power stations. In total, these power stations have an installed capacity of 190 MW. The Fund's units are listed on the Toronto Stock Exchange ("TSX") under the symbol BPT.UN.

Certain statements in this release, including statements regarding future results and performance, are forward-looking statements based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions on market and industry, increases in raw material costs, changes in the relative values of certain currencies, fluctuations in selling prices, and other factors listed in the Company's filings with different securities commissions.

The summarized financial statements included in this press release also contain certain financial measurements that are not recognized as Generally Accepted Accounting Principles of Canada (GAAP). To assess the operating performance of its assets and reporting segments, the Fund uses earnings before interest, taxes, depreciation and amortization (EBITDA) and cash flows from operations as performance measurements. These measures are not defined under GAAP and do not have a standardized definition prescribed by GAAP. Therefore, they may not be comparable to similar measures presented by other companies. EBITDA is defined in the summarized financial statements included with this press release. Cash flows from operations corresponds to cash flows from operating activities before changes in non-cash working capital items as disclosed in the consolidated statements of cash flows attached in this press release.

Notice to Unitholders

These interim consolidated financial statements as at September 30, 2009 and 2008 have not been reviewed by our auditors Ernst & Young LLP. The financial statements are the responsibility of the Manager of Boralex Power Income Fund, and have been reviewed and approved by Boralex Power Trust's trustees and the members of its Audit Committee.

The following financial information was extracted from the interim consolidated financial statements of Boralex Power Income Fund (the "Fund"). The complete interim financial statements were prepared in accordance with Canadian generally accepted accounting principles. They are available on the Fund's website (www.boralex.com/trust) and filed with SEDAR.

    
    Consolidated Balance Sheets

                                                         As at         As at
                                                  September 30,  December 31,
    (in thousands of dollars) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    Assets
    Current assets
    Cash and cash equivalents                           16,773        18,846
    Accounts receivable                                 18,150        17,610
    Income taxes receivable                                356             -
    Inventories                                          2,720         2,953
    Prepaid expenses                                       628           945
                                                  ---------------------------
                                                        38,627        40,354
                                                  ---------------------------
    Property, plant and equipment                      347,567       376,316
    Intangible assets                                   56,715        66,990
    Other long-term assets                               6,534         5,552
                                                  ---------------------------
                                                       449,443       489,212
                                                  ---------------------------
    Liabilities and unitholders' equity
    Current liabilities
    Short-term revolving credit facility                   500             -
    Accounts payable and accrued liabilities            16,142        13,985
    Income taxes payable                                     -           400
    Distributions payable to unitholders                 3,446         3,446
    Current portion of obligation under
     capital lease                                          -            20
                                                  ---------------------------
                                                        20,088        17,851
                                                  ---------------------------
    Future income tax liabilities                       41,529        43,280
    Fair value of derivative financial instruments           -           233
    Long-term debt                                     108,924       119,191
    Long-term lease accruals                             2,730         2,773
                                                  ---------------------------
                                                       173,271       183,328
                                                  ---------------------------
    Unitholders' equity
    Capital contribution                               422,174       422,174
    Capital contribution - exchangeable
     Class B units                                     112,867       112,867
    Deficit                                           (240,951)     (220,137)
    Accumulated other comprehensive loss               (17,918)       (9,020)
                                                  ---------------------------
                                                       276,172       305,884
                                                  ---------------------------
                                                       449,443       489,212
    -------------------------------------------------------------------------



    Consolidated Statements of Earnings

    (in thousands of                                           For the
     dollars, except           For the quarters           nine-month periods
     per unit amounts)        ended September 30,         ended September 30,
     (unaudited)              2009          2008          2009          2008
    -------------------------------------------------------------------------
    Revenues                19,879        23,541        77,132        83,368
                        -----------------------------------------------------
    Expenses
    Operating                9,339        12,666        35,359        35,218
    Administrative             830           733         2,293         2,893
                        -----------------------------------------------------
                            10,169        13,399        37,652        38,111
                        -----------------------------------------------------
    Operating income
     before amortization     9,710        10,142        39,480        45,257
    Amortization of
     property, plant
     and equipment           4,926         4,705        15,013        13,961
    Amortization of
     intangible assets       1,443         1,579         5,210         5,550
                        -----------------------------------------------------
    Operating income         3,341         3,858        19,257        25,746
    Financing costs, net     1,907         1,840         5,783         5,416
    Foreign exchange
     loss (gain)             1,945          (512)        1,809        (2,127)
                        -----------------------------------------------------
    Earnings (loss)
     before income taxes      (511)        2,530        11,665        22,457
    Income taxes
     (recovery)                198          (278)        1,468          (838)
                        -----------------------------------------------------
    Net earnings (loss)
     for the period           (709)        2,808        10,197        23,295
                        -----------------------------------------------------
    Basic and diluted
     net earnings
     (loss) per trust
     unit (in dollars)       (0.01)         0.05          0.17          0.39
                        -----------------------------------------------------
    Weighted average
     number of trust
     units outstanding  59,067,992    59,067,992    59,067,992    59,067,992
    -------------------------------------------------------------------------



    Consolidated Statements of Deficit
                                                               For the
                                                          nine-month periods
                                                          ended September 30,
    (in thousands of dollars) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    Deficit - beginning of period                     (220,137)     (170,982)
    Net earnings for the period                         10,197        23,295
    Distributions to unitholders                       (31,011)      (32,979)
                                                  ---------------------------
    Deficit - end of period                           (240,951)     (180,666)
    -------------------------------------------------------------------------



    Consolidated Statements of Comprehensive Income (Loss)

                                                               For the
    (in thousands              For the quarters           nine-month periods
     of dollars)              ended September 30,         ended September 30,
     (unaudited)              2009          2008          2009          2008
    -------------------------------------------------------------------------
    Net earnings (loss)
     for the period           (709)        2,808        10,197        23,295
    Other comprehensive
     income (loss):
    Translation
     adjustments
    Unrealized foreign
     exchange gains
     (losses) on
     translation of
     financial
     statements of
     self-sustaining
     foreign operations     (6,753)        3,419       (11,428)        5,944
    Reclassification of
     accumulated
     foreign exchange
     losses on
     translation of
     financial
     statements of
     self-sustaining
     foreign operations
     following a
     reduction in net
     investment              2,096            67         2,194            81
    Future income taxes       (521)          234          (845)          409
    Hedging of net
     investment in
     self-sustaining
     foreign operations
    Change in fair
     value of
     derivatives
     designated as
     hedges of net
     investment in
     self-sustaining
     foreign operations        906          (151)        1,564          (234)
    Hedging instruments
     realized and
     recognized in net
     earnings                 (177)         (568)         (388)       (2,474)
                        -----------------------------------------------------
                            (4,449)        3,001        (8,903)        3,726
                        -----------------------------------------------------
    Comprehensive
     income (loss) for
     the period             (5,158)        5,809         1,294        27,021
    -------------------------------------------------------------------------



    Consolidated Statements of Cash Flows

                                                               For the
    (in thousands of           For the quarters           nine-month periods
     dollars)                 ended September 30,         ended September 30,
     (unaudited)              2009          2008          2009          2008
    -------------------------------------------------------------------------
    Operating activities
    Net earnings (loss)
     for the period           (709)        2,808        10,197        23,295
    Items not affecting
     cash:
      Amortization of
       property, plant
       and equipment         4,926         4,705        15,013        13,961
      Amortization of
       intangible assets     1,443         1,579         5,210         5,550
      Amortization of
       deferred
       financing costs          89            79           297           248
      Long-term lease
       accruals                103           100           329           296
      Future income
       taxes                  (211)          302        (1,481)       (2,509)
      Realized currency
       translation
       adjustments           2,096            67         2,194            81
      Other                     49            (1)           48           114
                        -----------------------------------------------------
                             7,786         9,639        31,807        41,036
    Net change in
     non-cash working
     capital balances         (233)         (738)        1,304         2,936
                        -----------------------------------------------------
    Cash flows related
     to operating
     activities              7,553         8,901        33,111        43,972
                        -----------------------------------------------------

    Investing activities
    Additions to
     property, plant
     and equipment            (427)         (983)       (1,479)       (2,205)
    Acquisition of
     other assets             (248)          (15)         (274)          (86)
    Other                        -            23             -            (2)
                        -----------------------------------------------------
    Cash flows related
     to investing
     activities               (675)         (975)       (1,753)       (2,293)
                        -----------------------------------------------------

    Financing activities
    Net change in
     short-term
     revolving credit
     facility               (1,900)        1,200           500           500
    Repayment of capital
     lease obligation            -           (58)          (20)         (174)
    Distributions paid
     to unitholders        (10,337)      (10,337)      (31,011)      (33,964)
    Proceeds from sale
     of options on
     foreign exchange
     forward contracts           -           112             -           449
                        -----------------------------------------------------
    Cash flows related
     to financing
     activities            (12,237)       (9,083)      (30,531)      (33,189)
                        -----------------------------------------------------
    Translation
     adjustments on cash
     and cash
     equivalents            (1,784)          708        (2,900)        1,108
                        -----------------------------------------------------
    Net change in cash
     and cash
     equivalents during
     the period             (7,143)         (449)       (2,073)        9,598
    Cash and cash
     equivalents -
     beginning of period    23,916        20,787        18,846        10,740
                        -----------------------------------------------------
    Cash and cash
     equivalents - end
     of period              16,773        20,338        16,773        20,338
                        -----------------------------------------------------

    Supplemental
     information
    Interest paid            2,432         2,347         6,324         5,863
    Income taxes paid        2,139           144         3,791         1,216
    -------------------------------------------------------------------------
    

Segmented information

The Fund's power stations are grouped into three distinct segments-hydroelectric power, wood-residue thermal power and natural gas thermal power-and are engaged mainly in power generation. The classification of these segments is based on the different cost structures relating to each type of power station. The Fund allocates its revenues by geographical region based on the point of delivery of the power.

The Fund analyzes the performance of its operating segments based on earnings before interest, taxes, depreciation and amortization ("EBITDA"). EBITDA is not a measure of performance defined under Canadian GAAP; however, management uses this measure to assess the operating performance of its reportable segments. Results for each segment are presented on the same basis as those of the Fund. In the consolidated statement of earnings, EBITDA is represented by operating income before amortization.

The following table reconciles EBITDA with net earnings or net loss:

    
                                                               For the
                               For the quarters           nine-month periods
                              ended September 30,         ended September 30,
                              2009          2008          2009          2008
    -------------------------------------------------------------------------
    Net earnings (loss)       (709)        2,808        10,197        23,295
    Income taxes (recovery)    198          (278)        1,468          (838)
    Foreign exchange
     loss (gain)             1,945          (512)        1,809        (2,127)
    Financing costs, net     1,907         1,840         5,783         5,416
    Amortization of
     intangible assets       1,443         1,579         5,210         5,550
    Amortization of
     property, plant and
     equipment               4,926         4,705        15,013        13,961
                        -----------------------------------------------------
    EBITDA                   9,710        10,142        39,480        45,257
    -------------------------------------------------------------------------



    Information by operating segment

                                                               For the
                               For the quarters           nine-month periods
                              ended September 30,         ended September 30,
                              2009          2008          2009          2008
    -------------------------------------------------------------------------
    PRODUCTION (in MWh)
    Hydroelectric power
     stations              122,079       118,071       406,397       401,654
    Wood-residue thermal
     power stations         53,700        46,636       175,928       209,834
    Natural gas thermal
     power station          47,570        45,489       154,561       151,333
                        -----------------------------------------------------
                           223,349       210,196       736,886       762,821
    -------------------------------------------------------------------------
    REVENUES
    Hydroelectric power
     stations               10,619         9,698        38,233        34,314
    Wood-residue thermal
     power stations          2,928         6,402        18,545        25,454
    Natural gas thermal
     power station           6,332         7,441        20,354        23,600
                        -----------------------------------------------------
                            19,879        23,541        77,132        83,368
    -------------------------------------------------------------------------
    EBITDA
    Hydroelectric power
     stations                8,942         7,962        32,915        29,170
    Wood-residue thermal
     power stations           (319)           (8)        2,540         8,425
    Natural gas thermal
     power station           2,777         3,750         8,933        12,532
    Corporate and
     eliminations           (1,690)       (1,562)       (4,908)       (4,870)
                        -----------------------------------------------------
                             9,710        10,142        39,480        45,257
    -------------------------------------------------------------------------
    ADDITIONS TO
     PROPERTY, PLANT
     AND EQUIPMENT
    Hydroelectric power
     stations                  400            52         1,308           321
    Wood-residue thermal
     power stations              -            13           106           844
    Natural gas thermal
     power station              27           918            65         1,040
                        -----------------------------------------------------
                               427           983         1,479         2,205
    -------------------------------------------------------------------------



                                                         As at         As at
                                                  September 30,  December 31,
                                                          2009          2008
    -------------------------------------------------------------------------
    ASSETS
    Hydroelectric power stations                       271,532       295,182
    Wood-residue thermal power stations                144,853       149,868
    Natural gas thermal power station                   36,518        42,043
    Corporate and eliminations                          (3,460)        2,119
                                                  ---------------------------
                                                       449,443       489,212
    -------------------------------------------------------------------------
    

SOURCE BORALEX POWER INCOME FUND

For further information: For further information: Ms. Sophie Paquet, Communications Advisor, Boralex Inc., (514) 985-1353, sophie.paquet@boralex.com

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BORALEX POWER INCOME FUND

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