In the third quarter of 2008, Boralex Power Income Fund recorded a significant rise in revenue from energy sales and earnings before interest, taxes, depreciation and amortization (EBITDA), largely due to favourable hydrology for its hydroelectric power stations.
For the third quarter ended September 30, 2008, consolidated revenue grew to $23.5 million, up 18.7% over the same quarter a year earlier. EBITDA increased to $10.1 million in the third quarter of 2008, compared to $9.8 million for the same period in 2007. These increases are due to higher steam prices, since steam is partially indexed to the price of oil, and a positive volume effect resulting from higher levels of power generation by the Fund's hydroelectric power stations in the United States and Canada. The Fund recorded net earnings of $2.8 million ($0.05 per trust unit) for the quarter ended September 30, 2008, compared to $1.5 million ($0.03 per trust unit) for the third quarter of 2007.
The hydroelectric segment's good performance is due to favourable hydrology in the third quarter of 2008. Production volume in the United States was up 65.2% and in Canada 42.8% during the third quarter compared to the same period in 2007. Revenue for this segment amounted to $9.7 million for the three months ended September 30, 2008, versus $6.0 million for the same period a year earlier, a jump of 61.7%. Revenue in the hydroelectric segment accounted for 41.3% of consolidated revenue for the third quarter of 2008.
Revenue from the wood residue segment stood at $6.4 million for the third quarter of 2008, down $1.7 million compared to the third quarter of 2007. EBITDA for the three months ended September 30, 2008 was zero, down $4.0 million compared to the same quarter in 2007. The decrease stems mainly from the downtime at Senneterre since September 21 and the cease of electricity generation at Dolbeau since July 4. Those cease are currently due to the closure of several sawmills and the resulting difficulty in obtaining sufficient wood-residue supplies. Both are expected to be producing again by the end of November and the Fund expects they will operate continuously during the capacity premium period, which runs from December to March, to optimize the Fund's cash flow during that period. The Fund is keeping a close eye on the activities of certain sawmills.
The natural gas cogeneration power station recorded revenue of $7.4 million and EBITDA of $3.8 million in the third quarter of 2008, for increases of 29.8% and 26.7% respectively compared to the third quarter of 2007. The increases stem from the indexing of electricity selling prices and higher steam prices.
Lastly, cash flows related to operating activities were up $1.3 million or 17% to $8.9 million versus the same quarter in 2007. This increase is due mainly to third quarter 2008 operating results. As at September 30, 2008, the Fund had a balance in cash and cash equivalents of $20.3 million, double that at December 31, 2007. The Fund therefore considers its current financial position favourable for maintaining stable distributions within a reasonable horizon. Furthermore, the Fund took advantage of the recent weakness in the value of the Canadian dollar to cover close to 65% of the cash assets generated by its U.S. operations to the end of the third quarter of 2010. -- www.cnxmarketlink.com
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