Management’s Analysis of Operating Results
and Financial
Position
For the
quarter ended June 30, 2002, its first full quarter of operations, Boralex Power
Income Fund (the ”Fund”) generated revenue of $15.0 million and net
income of $4.3 million or $0.106 per unit. The results for the quarter include
a contribution of $0.5 million from Boralex Inc., a 34% unitholder and its manager,
to cover lost revenue and additional operating costs during the start up period
at the Senneterre power station in April and May. From the beginning of June,
this power station was operating at its design capacity. All of the other power
stations operated according to expectations and their financial results are in
line with the forecast provided in the Fund’s prospectus of February 20,
2002. During the quarter, the Fund used $3.4 million of its reserve to cover distributions
to its unitholders and major capital maintenance expenditures at its Kingsey Falls
cogeneration plant which underwent a major overhaul of its turbine generator in
June.
For the period from February 20, 2002, to June 30, 2002, total revenue
of the Fund was $24.5 million and its net income totaled $8.8 million or $0.218
per unit.
Operating Results
| Revenue for the quarter and the year to date period ended
June 30, 2002, totalled $3.7 million and $5.2 million respectively and were essentially
in line with expectations for this sector of operations.
| The revenue for this sector during the quarter and
the year to date period ended June 30, 2002, include a contribution of $0.5 million
and $1.6 million respectively from Boralex, its 34% unitholder and manager to
cover the cost of operating inefficiencies during these periods at the Senneterre
power station. As at June, 2002, this power station was operating at its design
capacity. The Dolbeau facility operated normally during the quarter.
| The revenue from the gas cogeneration power station
at Kingsey Falls for the quarter and the year to date period ended June 30, 2002,
was $4.1 million and $7.1 million respectively, which in both cases is slightly
in excess of expectations due to a higher selling price for the steam which is
related to the market price for crude oil.
Earnings
Before Interests, Taxes, Depreciation and Amortization (EBITDA)
| EBITDA for the quarter and the year to date period ended June
30, 2002, totalled $3.2 million and $4.4 million respectively, which was somewhat
higher than expectations due to improved hydrology.
| EBITDA for the quarter and the year to date period
ended June 30, 2002, of $3.8 million and $7.4 million include a contribution from
Boralex Inc. of $0.5 million for the quarter and $1.6 million for the year to
date to cover the cost of operating inefficiencies at the Senneterre power station
during these periods.
| EBITDA for this facility for the quarter and the year to date period ended June
30, 2002, totalled $1.5 million and $3.1 million respectively, which was higher
than expectations due to the higher selling price for steam.
The financial expenses for the quarter and the
year to date period ended June 30, 2002, were $0.3 million and $0.4 million respectively,
include interest income from the investment of the reserve. This expense is lower
than expectations because of lower interest rates. The amortization of assets
totalled $2.7 million for the quarter and $3.8 million for the year to date period
ended June 30, 2002, and is in line with expectations.
Cash
Flow
For the quarter ended Juyne 30, 2002, the Fund generated cash from
operations of $6.0 million, incurred $1.6 million of capital maintenance expenditures
and made $8.9 million in distributions to its unitholders. It used $3.4 million
of its reserve and $0.2 million of its bank line of credit to finance these operations.
Financial
Position
Other than the use of its reserve to fund partially its distributions
to its unitholders, there have been no other major changes in the Fund’s
financial position since March 31, 2002.
Outlook
The
Fund remains confident that it will continue to generate stable earnings and cash
flows. All of the power stations’ revenues are covered by long term contracts
and their fuel requirements are also contracted for on a long term basis. This
should generate stable distributions to unitholders for the rest of the year.
Boralex
Power Income Fund is an unincorporated open-ended trust that indirectly owns and
operates eight power generating stations located in the province of QuÈbec
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 131 MW. The Fundís
units are listed for trading on The Toronto Stock Exchange under the symbol BPT.UN.
Shareholders
and Media Services
Principal Place of Business
770 Sherbrooke Street West,
Montreal
(Quebec) H3A 1G1
Telephone : 514-284-9890
Fax : 514-284-9895
E-mail
: cvilleneuve@cascades.com
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