Boralex Power Income Fund: Fiscal 2009 Results
MONTREAL, Feb. 22 /PRNewswire-FirstCall/ - Boralex Power Income Fund (the "Fund") ended its fiscal year as at December 31, 2009 with consolidated revenue from energy sales of $102.2 million and earnings before interest, taxes, depreciation and amortization ("EBITDA") of $51.7 million, down $7.1 million and $6.0 million respectively compared to fiscal 2008. This decrease stems mainly from the shortfall caused by the shutdown of power and steam production at the Dolbeau power station.
Revenue in the hydroelectric segment amounted to $51.4 million at December 31, 2009, a gain of 9% over revenue of $47.2 million in fiscal 2008. EBITDA grew 10% to $44.2 million compared to $40.1 million during 2008. This performance is mainly due to superior hydrology resulting in higher power generation.
In 2009, the wood-residue segment reported revenue of $22.8 million, down $9.0 million from $31.8 million in 2008. EBITDA fell to $1.8 million from $9.3 million in 2008. This decrease is the result of wood-residue supply difficulties at the Dolbeau power station during the first quarter and the fact that the plant generated no electricity for seven months. Power generation at the Senneterre power station rose 8.6% and the plant operated at full capacity for the entire year, thanks to the strategy of using wood-residue from older piles, given the difficulties in obtaining fresh bark.
The Kingsey Falls natural gas cogeneration plant reported revenue of $28.0 million and EBITDA of $12.2 million, down $2.3 million and $2.6 million respectively versus fiscal 2008. The main factor that influenced these results was the drop in the price of steam.
In the fourth quarter of 2009, the Fund recorded an impairment on its property, plant and equipment of $29.6 million. The impairment applied solely to the Dolbeau property, plant and equipment and stemmed from a number of situational factors, namely the reduction in available fuel supplies, the insolvency of AbitibiBowater ("ABI"), ABI's unilateral termination of service agreements as well as steam sales and biomass supply contracts, and its indefinite shutdown of the Dolbeau pulp and paper plant. As a result, the Fund registered a net loss of $10.9 million ($0.18 per trust unit) for fiscal 2009 compared to a net loss of $5.8 million ($0.10 per trust unit) for fiscal 2008.
Lastly, in the fourth quarter of 2009, the Fund recorded EBITDA of $12.2 million, down $0.3 million over the corresponding period in 2008. Increased power generation at the hydroelectric power plants, exceeding the historical average by 20%, and higher steam prices at Kingsey Falls largely offset the negative effects of the strong Canadian dollar and reduced generation at the Dolbeau plant. During the quarter, the Fund reached an agreement in principle with ABI to temporarily restart the Dolbeau power plant, which came back on-line on November 26, 2009 and will operate until April 2010.
In 2009, despite the ongoing difficulties in the economy, the Fund continued to demonstrate its ability to generate significant cash flows, given the nature of its long-term contracts and high-quality assets, which are supported by efficient management of operations and a rigorous facility maintenance program.
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 megawatts ("MW"). The Fund's units are listed on the Toronto Stock Exchange ("TSX") under the symbol BPT.UN.
Certain statements contained in this press release, including those 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 general impact of economic conditions, raw material price increases and availability, currency fluctuations, prevailing electricity selling prices on long-term power sales contract renewal dates, the Fund's financing capacity, changes to laws and regulations affecting the Fund's operations particularly with respect to taxation and the environment, adverse changes in general market and industry conditions, as well as other factors listed in the Fund'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
The interim consolidated financial statements as at December 31, 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 annual consolidated financial statements of Boralex Power Income Fund (the "Fund"). The complete annual consolidated 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
December 31, December 31,
-------------
(in thousands of dollars) (unaudited) 2009 2008
-------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents 15,867 18,846
Accounts receivable 14,498 15,259
Inventories 2,837 2,953
Prepaid expenses 350 945
---------------------------
33,552 38,003
---------------------------
Property, plant and equipment 311,735 376,316
Intangible assets 54,142 66,990
Other long-term assets 6,354 5,552
---------------------------
405,783 486,861
---------------------------
Liabilities and unitholders' equity
Current liabilities
Short-term revolving credit facility 3,100 -
Accounts payable and accrued liabilities 10,125 11,634
Income taxes payable 800 400
Distributions payable to unitholders 3,446 3,446
Current portion of obligation under capital
lease - 20
---------------------------
17,471 15,500
---------------------------
Future income tax liabilities 33,966 43,280
Fair value of derivative financial instruments - 233
Long-term debt 107,234 119,191
Long-term lease accruals 2,760 2,773
---------------------------
161,431 180,977
---------------------------
Unitholders' equity
Capital contribution 422,174 422,174
Capital contribution - exchangeable Class B
units 112,867 112,867
Deficit (272,349) (220,137)
Accumulated other comprehensive loss (18,340) (9,020)
---------------------------
244,352 305,884
---------------------------
405,783 486,861
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Consolidated Statements of Earnings
(in thousands of
dollars, except
per unit amounts For the quarters ended For the twelve-month
and number of December 31, periods ended December 31,
trust units) ------------- -------------
(unaudited) 2009 2008 2009 2008
-------------------------------------------------------------------------
Revenues 25,064 25,975 102,196 109,343
-------------------------------------------------------
Expenses
Operating 12,170 12,234 47,529 47,452
Administrative 719 1,274 3,012 4,167
-------------------------------------------------------
12,889 13,508 50,541 51,619
-------------------------------------------------------
Operating income
before
amortization 12,175 12,467 51,655 57,724
Amortization of
property, plant
and equipment 4,840 4,934 19,853 18,895
Amortization of
intangible
assets 1,753 1,993 6,963 7,543
-------------------------------------------------------
Operating income 5,582 5,540 24,839 31,286
Financing costs,
net 1,966 2,324 7,749 7,740
Foreign exchange
loss (gain) 1,375 587 3,184 (1,540)
Change in fair
value of
derivative
financial
instruments - (5) - (5)
Impairment of
goodwill - 16,243 - 16,243
Impairment of
property, plant
and equipment
and intangible
assets 29,591 17,724 29,591 17,724
-------------------------------------------------------
Loss before
income taxes (27,350) (31,333) (15,685) (8,876)
Income taxes
recovery (6,289) (2,199) (4,821) (3,037)
-------------------------------------------------------
Net loss for the
period (21,061) (29,134) (10,864) (5,839)
-------------------------------------------------------
Basic and diluted
net loss per trust
unit (in dollars) (0.36) (0.49) (0.18) (0.10)
-------------------------------------------------------
Weighted average
number of trust
units outstanding 59,067,992 59,067,992 59,067,992 59,067,992
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-------------------------------------------------------------------------
Consolidated Statements of Deficit For the twelve-month periods
ended December 31,
-------------
(in thousands of dollars) (unaudited) 2009 2008
-------------------------------------------------------------------------
Deficit - beginning of period (220,137) (170,982)
Net loss for the period (10,864) (5,839)
Distributions to unitholders (41,348) (43,316)
---------------------------
Deficit - end of period (272,349) (220,137)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Consolidated Statements of Comprehensive Income (Loss)
For the quarters ended For the twelve-month
(in thousands of December 31, periods ended December 31,
dollars) ------------- -------------
(unaudited) 2009 2008 2009 2008
-------------------------------------------------------------------------
Net loss for
the period (21,061) (29,134) (10,864) (5,839)
Other comprehensive
income (loss):
Translation
adjustments
Unrealized foreign
exchange gains
(losses) on trans-
lation of financial
statements of self-
sustaining foreign
operations (1,780) 13,714 (13,208) 19,658
Reclassification
of accumulated
foreign exchange
losses on trans-
lation of financial
statements of self-
sustaining foreign
operations following
a reduction in net
investment 1,656 994 3,850 1,075
Future income taxes (153) 947 (998) 1,356
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 135 (670) 1,699 (904)
Hedging instruments
realized and
recognized in net
loss (280) (267) (668) (2,741)
-------------------------------------------------------
(422) 14,718 (9,325) 18,444
-------------------------------------------------------
Comprehensive
income (loss) for
the period (21,483) (14,416) (20,189) 12,605
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Consolidated Statements of Cash Flows
For the quarters For the twelve-month
(in thousands of ended December 31, periods ended December 31,
dollars) ------------ -------------
(unaudited) 2009 2008 2009 2008
-------------------------------------------------------------------------
Operating activities
Net loss for the
period (21,061) (29,134) (10,864) (5,839)
Items not affecting
cash:
Amortization of
property, plant
and equipment 4,840 4,934 19,853 18,895
Amortization of
intangible assets 1,753 1,993 6,963 7,543
Amortization of
deferred financing
costs 87 93 384 341
Long-term lease
accruals 96 115 425 411
Future income
taxes (7,527) (2,864) (9,008) (5,373)
Realized currency
translation
adjustments 1,656 1,002 3,850 1,083
Impairment of
goodwill - 16,243 - 16,243
Impairment of
property, plant
and equipment and
intangible assets 29,591 17,724 29,591 17,724
Other - 55 48 169
-------------------------------------------------------
9,435 10,161 41,242 51,197
Net change in
non-cash working
capital balances (1,068) (233) 236 2,703
-------------------------------------------------------
Cash flows related
to operating
activities 8,367 9,928 41,478 53,900
-------------------------------------------------------
Investing
activities
Additions to
property, plant
and equipment (1,112) (1,510) (2,591) (3,715)
Acquisition of
other assets (4) (8) (278) (96)
-------------------------------------------------------
Cash flows related
to investing
activities (1,116) (1,518) (2,869) (3,811)
-------------------------------------------------------
Financing
activities
Net change in
short-term
revolving
credit facility 2,600 (2,800) 3,100 (2,300)
Repayment of
capital lease
obligation - (59) (20) (233)
Distributions
paid to
unitholders (10,337) (10,337) (41,348) (44,301)
Proceeds from
sale of options
on foreign
exchange forward
contracts - 59 - 508
-------------------------------------------------------
Cash flows
related to
financing
activities (7,737) (13,137) (38,268) (46,326)
-------------------------------------------------------
Translation
adjustments on
cash and cash
equivalents (420) 3,235 (3,320) 4,343
-------------------------------------------------------
Net change in
cash and cash
equivalents during
the period (906) (1,492) (2,979) 8,106
Cash and cash
equivalents -
beginning of
period 16,773 20,338 18,846 10,740
-------------------------------------------------------
Cash and cash
equivalents - end
of period 15,867 18,846 15,867 18,846
-------------------------------------------------------
Supplemental
information:
Interest paid 1,211 1,348 7,535 7,211
Income taxes paid 82 216 3,873 1,432
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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 loss:
For the quarters For the twelve-month
ended December 31, periods ended December 31,
------------ ------------
2009 2008 2009 2008
-------------------------------------------------------------------------
Net loss for the
period (21,061) (29,134) (10,864) (5,839)
Income taxes
recovery (6,289) (2,199) (4,821) (3,037)
Impairment of
property, plant
and equipment and
intangible assets 29,591 17,724 29,591 17,724
Impairment of
goodwill - 16,243 - 16,243
Change in fair value
of derivative finan-
cial instruments - (5) - (5)
Foreign exchange
loss (gain) 1,375 587 3,184 (1,540)
Financing costs, net 1,966 2,324 7,749 7,740
Amortization of
intangible assets 1,753 1,993 6,963 7,543
Amortization of
property, plant
and equipment 4,840 4,934 19,853 18,895
-------------------------------------------------------
EBITDA 12,175 12,467 51,655 57,724
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Information by operating segment
For the quarters For the twelve-month
ended December 31, periods ended December 31,
------------- -------------
2009 2008 2009 2008
-------------------------------------------------------------------------
PRODUCTION (in MWh)
Hydroelectric power
stations 147,230 134,753 553,627 536,407
Wood-residue thermal
power stations 50,281 47,145 226,209 256,979
Natural gas thermal
power station 56,571 54,819 211,132 206,152
-------------------------------------------------------
254,082 236,717 990,968 999,538
-------------------------------------------------------------------------
-------------------------------------------------------------------------
REVENUES
Hydroelectric
power stations 13,198 12,929 51,431 47,243
Wood-residue thermal
power stations 4,217 6,325 22,762 31,779
Natural gas thermal
power station 7,649 6,721 28,003 30,321
-------------------------------------------------------
25,064 25,975 102,196 109,343
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EBITDA
Hydroelectric
power stations 11,304 10,890 44,219 40,060
Wood-residue thermal
power stations (712) 871 1,828 9,296
Natural gas thermal
power station 3,261 2,268 12,194 14,800
Corporate and
eliminations (1,678) (1,562) (6,586) (6,432)
-------------------------------------------------------
12,175 12,467 51,655 57,724
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ADDITIONS TO
PROPERTY, PLANT
AND EQUIPMENT
Hydroelectric
power stations 251 371 1,559 692
Wood-residue thermal
power stations 830 443 936 1,287
Natural gas thermal
power station 31 696 96 1,736
-------------------------------------------------------
1,112 1,510 2,591 3,715
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As at As at
December 31, December 31,
-------------
2009 2008
-------------------------------------------------------------------------
ASSETS
Hydroelectric power stations 246,387 295,182
Wood-residue thermal power stations 106,845 147,517
Natural gas thermal power station 37,308 42,043
Corporate and eliminations 15,243 2,119
---------------------------
405,783 486,861
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SOURCE BORALEX POWER INCOME FUND
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