Boralex Power Income Fund: Results for First Quarter 2008
MONTREAL, May 5 /PRNewswire-FirstCall/ — Boralex Power Income Fund (the “Fund”) recorded net earnings of $15.2 million ($0.26 per trust unit) in the first quarter of 2008, or $2.5 million more than the $12.7 million ($0.21 per trust unit) recorded for the same period a year earlier.
The Fund closed the first quarter of 2008 with an increase of $0.4 million in revenue from energy sales compared to the first quarter of 2007; consolidated revenue amounted to $34.3 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at $21.7 million, similar to EBITDA of $21.8 million for the first quarter last year. The Fund’s net earnings also benefited from a positive adjustment of $3.5 million related to the reversal of future income taxes.
The first quarter good performance stems in large part from higher electricity and steam prices, which offset the decrease in total electricity generation. Production in the wood residue segment declined 17%; in the hydroelectric segment it rose 6% compared to the first quarter of 2007. The improved hydroelectric generation was due to better hydrology, resulting in a 19% increase over the power stations’ historical average. In the wood-residue thermal power segment, the drop in production was caused by about 10 days of forced downtime at the Senneterre power station due to emergency repairs to a Hydro-Quebec high voltage line, and by disruptions in Dolbeau’s fuel supply.
Mr. Claude Boivin, chairman of the Board of Trustees, said “we are satisfied with the overall results for the first quarter, which is traditionally the Fund’s best quarter. The wood-residue supply is an ongoing concern given the current sawmill closures. However, the Fund maintained a satisfactory rate of generation in the first quarter. Also, the Fund continues to benefit from high oil prices, which are translating into sharply rising steam prices. Lastly, the Fund and its manager, Boralex, are making serious efforts to arrive at a negotiated solution to the dispute with Abitibi Bowater related to the Dolbeau cogeneration plant.”
About Boralex Power Income Fund
Boralex Power Income Fund is an unincorporated open-ended trust that indirectly owns ten power generating stations located in the province of Quebec and the United States producing energy from different sources including wood-residue or natural gas-fired 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 for trading on The Toronto Stock Exchange 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, decreased demand for the Fund’s products, increases in raw material costs, hydrology, fluctuations in currency exchange rates, fluctuations in sales prices and adverse changes in general market and industry conditions. The summarized financial statements included in this press release also contain certain financial measurements that are not recognized as generally accepted accounting principles (GAAP).
The Fund uses EBITDA, among other measures, as a performance measure with respect to its operations. This term is not a defined financial measure according to GAAP and it does not have a standardized meaning prescribed by GAAP. Therefore, this measure may not be comparable to similar measures presented by other enterprises. EBITDA is defined in the summarized financial statements accompanying this press release.
Notice to unitholders
These quarterly financial statements for the periods ended March 31, 2008 and 2007 were not reviewed by our auditors Ernst & Young LLP. The financial statements are the responsibility of the Manager of Boralex Power Income Fund, and were reviewed and approved by Boralex Power Trust’s trustees and the members of their audit committee.
The following financial informations were extracted from the interim consolidated financial statements of Boralex Power Income Fund (the “Fund”). The complete interim financial statements were prepared conformingly with the Canadian generally accepted accounting principles (“GAAP”). They are available on the Fund’s website (http://www.boralex.com/trust) and filed with SEDAR.
Boralex Power Income Fund Consolidated Balance Sheets (in thousands of dollars) (unaudited) As at As at March December 31, 31, 2008 2007 ————————————————————————- (audited) Assets Current assets Cash and cash equivalents 15,683 10,740 Accounts receivable 13,577 13,333 Income taxes receivable 203 1,949 Inventories 2,378 2,405 Prepaid expenses 1,565 1,248 ————————————————————————- 33,406 29,675 Property, plant and equipment 367,217 367,474 Intangible assets 83,132 83,690 Goodwill 16,243 16,243 Other long-term assets 7,589 8,594 ————————————————————————- 507,587 505,676 ————————————————————————- ————————————————————————- Liabilities and unitholders’ equity Current liabilities Short-term revolving credit facility 2,200 2,300 Accounts payable and accrued liabilities 6,673 8,909 Distributions payable to unitholders 3,446 4,430 Current portion of obligation under capital lease 195 233 ————————————————————————- 12,514 15,872 Future income tax liabilities 45,637 48,817 Fair value of derivative financial instruments 5 5 Long-term debt 105,341 102,529 Long-term lease accruals 2,032 1,858 ————————————————————————- 165,529 169,081 ————————————————————————- Unitholders’ equity Capital contribution 422,174 422,174 Capital contribution – exchangeable Class B units 112,867 112,867 Deficit (168,057) (170,982) Accumulated other comprehensive income (24,926) (27,464) ————————————————————————- 342,058 336,595 ————————————————————————- 507,587 505,676 ————————————————————————- ————————————————————————- Boralex Power Income Fund Consolidated Statements of Earnings (in thousands of dollars, except amounts per unit) (unaudited) For the Three-month periods ended March 31, 2008 2007 ————————————————————————- Revenues 34,272 33,920 ————————————————————————- Expenses Operating 11,465 11,300 Administrative 1,128 789 ————————————————————————- 12,593 12,089 ————————————————————————- Operating income before amortization 21,679 21,831 Amortization of property, plant and equipment 4,587 3,955 Amortization of intangible assets 2,069 2,157 ————————————————————————- Operating income 15,023 15,719 Financial expenses, net 1,835 1,746 Foreign exchange gain (556) (457) Change in fair value of derivative financial instruments – (31) ————————————————————————- Earnings before income taxes 13,744 14,461 Income taxes (recovery) (1,487) 1,796 ————————————————————————- Net earnings for the period 15,231 12,665 ————————————————————————- ————————————————————————- Basic and diluted net earnings per trust unit (in dollars) 0.26 0.21 ————————————————————————- ————————————————————————- Weighted average number of trust units outstanding 59,067,992 59,067,992 ————————————————————————- ————————————————————————- Consolidated Statements of Deficit (in thousands of dollars) (unaudited) For the Three-month periods ended March 31, 2008 2007 ————————————————————————- Deficit – beginning of period (170,982) (82,128) Net earnings for the period 15,231 12,665 Distributions to unitholders (12,306) (13,290) ————————————————————————- Deficit – end of period (168,057) (82,753) ————————————————————————- ————————————————————————- Boralex Power Income Fund Consolidated Statements of Comprehensive Income (in thousands of dollars) (unaudited) For the Three-month periods ended March 31, 2008 2007 ————————————————————————- Net earnings for the period 15,231 12,665 Other comprehensive income : Translation adjustments Unrealized foreign exchange gains (losses) on translation of the financial statements of self-sustaining foreign operations 3,327 (1,327) Reclassification of accumulated foreign exchange losses on translation of financial statements of self-sustaining foreign operations following a reduction in net investment 15 51 Future income taxes 229 (71) 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 (201) (431) Hedging items realized and recognized in net earnings (832) 151 ————————————————————————- 2,538 (1,627) ————————————————————————- Comprehensive income for the period 17,769 11,038 ————————————————————————- ————————————————————————- Boralex Power Income Fund Consolidated Statements of Cash Flows (in thousands of dollars) (unaudited) For the Three-month periods ended March 31, 2008 2007 ————————————————————————- Operating activities Net earnings for the period 15,231 12,665 Items not affecting cash: Amortization of property, plant and equipment 4,587 3,955 Amortization of intangible assets 2,069 2,157 Amortization of deferred financing costs 87 110 Long-term lease accruals 97 117 Future income taxes (3,138) 153 Realized currency translation adjustments 15 51 Other – 174 ————————————————————————- 18,948 19,382 Net change in non-cash working capital balances (935) (3,205) ————————————————————————- Cash flows related to operating activities 18,013 16,177 ————————————————————————- Investing activities Additions to property, plant and equipment (168) (260) Acquisition of other assets (62) (150) Other – (6) ————————————————————————- Cash flows related to investing activities (230) (416) ————————————————————————- Financing activities Distributions paid to unitholders (13,290) (13,290) Net change in short-term revolving credit facility (100) 2,500 Repayment of capital lease obligation (58) (64) Proceeds from sale of options on foreign exchange forward contracts 146 148 ————————————————————————- Cash flows related to financing activities (13,302) (10,706) ————————————————————————- Translation adjustments on cash and cash equivalents 462 (381) ————————————————————————- Net change in cash and cash equivalents during the period 4,943 4,674 Cash and cash equivalents – beginning of period 10,740 25,877 ————————————————————————- Cash and cash equivalents – end of the period 15,683 30,551 ————————————————————————- ————————————————————————- Supplemental information Interest paid 2,365 2,448 Income taxes paid 119 1,583 ————————————————————————- ————————————————————————- Boralex Power Income Fund Segmented Information (tabular amounts are in thousands of dollars, unless otherwise specified) (unaudited, unless otherwise specified) 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 their EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is not a measure of performance defined under Canadian generally accepted accounting principles; however, management uses this performance 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: For the Three-month periods ended March 31, 2008 2007 ————————————————————————- Net earnings 15,231 12,665 Income taxes (recovery) (1,487) 1,796 Change in fair value of derivative financial instruments – (31) Foreign exchange gain (556) (457) Financial expenses, net 1,835 1,746 Amortization of intangible assets 2,069 2,157 Amortization of property, plant and equipment 4,587 3,955 ————————————————————————- EBITDA 21,679 21,831 ————————————————————————- ————————————————————————- Information by operating segment For the Three-month periods ended March 31, 2008 2007 ————————————————————————- PRODUCTION (in MWh) Hydroelectric power stations 143,045 135,031 Wood-residue thermal power stations 81,764 98,176 Natural gas power station 60,373 59,281 ————————————————————————- 285,182 292,488 ————————————————————————- ————————————————————————- REVENUES Hydroelectric power stations 13,237 13,927 Wood-residue thermal power stations 11,560 11,881 Natural gas power station 9,475 8,112 ————————————————————————- 34,272 33,920 ————————————————————————- ————————————————————————- EBITDA Hydroelectric power stations 11,435 11,771 Wood-residue thermal power stations 6,247 7,848 Natural gas power station 5,604 4,233 Corporate and eliminations (1,607) (2,021) ————————————————————————- 21,679 21,831 ————————————————————————- ————————————————————————- For the Three-month periods ended March 31, 2008 2007 ————————————————————————- ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT Hydroelectric power stations 13 50 Wood-residue thermal power stations 55 12 Natural gas power station 100 198 ————————————————————————- 168 260 ————————————————————————- ————————————————————————- As at As at March December 31, 31, 2008 2007 ————————————————————————- (audited) ASSETS Hydroelectric power stations 270,629 262,881 Wood-residue thermal power stations 187,712 190,541 Natural gas power station 45,061 47,003 Corporate and eliminations 4,185 5,251 ————————————————————————- 507,587 505,676 ————————————————————————- ————————————————————————-
BORALEX POWER INCOME FUND
CONTACT: Ms. Patricia Lemaire, Director, Public Affairs andCommunications, Boralex Power Inc., (514) 985-1353,patricia.lemaire@boralex.com