Great Lakes Hydro Income Fund Reports Strong Third Quarter Results
GATINEAU, Québec, November 3, 2008 – Great Lakes Hydro Income Fund today reported its financial and operating results for the third quarter ended September 30, 2008. The Fund provides additional information on its strategy and results in its Letter to Unitholders and Supplemental Information available at www.greatlakeshydro.com under Investor Relations/Financial Highlights.
Generation of 1,110 gigawatt hours (GWh) was the highest for any third quarter since the Fund’s inception, and compares to 749 GWh and 932 GWh for the same period in 2007 and the long-term average, respectively. These very strong results were due to continued above-average water inflows in the Québec, Ontario and New England regions, as well as favorable opening reservoir levels heading into the quarter. As a result, income before non-cash items more than doubled from the year-ago period.
The Québec region’s generation of 480 GWh was just below its quarterly record set in the prior quarter, while revenues increased almost 60% relative to the same period last year. Similarly, the Ontario region reported its strongest-ever third quarter with generation surpassing the prior year and long-term average by 93% and 12%, respectively. Generation in British Columbia exceeded long-term average while New England reported its strongest third-quarter generation since 2003. The Cedar Dam generating station in Québec was returned to service in mid-September.
Third quarter revenues of $48.0 million and income before non-cash items of $23.1 million increased by 46% and 106%, respectively, from the same period a year earlier. Third quarter distributions to unitholders totaled $15.1 million or 31.3 cents per unit.
“The third quarter brought a continuation of the very favorable conditions and strong results that we experienced in the first half of 2008,” said Richard Legault, President and Chief Executive Officer. “While hydrology conditions have largely normalized and we anticipate long-term average generation for the rest of the year, we are pleased to have exceeded our entire 2007 production in the first nine months of 2008.”
“While the capital markets are experiencing considerable volatility and uncertainty, we believe that current events will help to highlight the quality and sustainability of our assets and cash flows. Moreover, the long-life nature of our assets, their low cost structure and a contract profile with an average duration of 14 years will help to immunize the Fund against the downturn in economic conditions.”
“We remain focused on the conservative management of our operating and financial resources, and remain on the lookout for suitable opportunities going forward.”
Financial and Operating Highlights
| Unaudited | Three months ended September 30 | Nine months ended September 30 | ||||
|---|---|---|---|---|---|---|
CDN $ millions, except otherwise noted |
|
2008 |
2007 |
|
2008 |
2007 |
Revenues |
|
$ 48.0 |
$ 32.9 |
|
$ 155.8 |
$ 122.5 |
Income before non-cash items |
|
23.1 |
11.2 |
|
81.4 |
54.0 |
Distribution |
|
15.1 |
15.1 |
|
45.3 |
45.3 |
Per unit |
|
|
|
|
|
|
Income before non-cash items |
|
0.48 |
0.23 |
|
1.69 |
1.12 |
Distribution |
|
0.31 |
0.31 |
|
0.94 |
0.94 |
Power generated (GWh) |
|
1,110 |
749 |
|
3,531 |
2,745 |
Average price (¢/KWh) |
|
4.3 |
4.4 |
|
4.4 |
4.5 |
In the first nine months of 2008, the Fund has invested $8.4 million in capital expenditures and $1.9 million in major maintenance. The Fund currently expects to invest $17.4 million in capital expenditures during 2008 and $3.0 million in major maintenance for a total of $20.4 million. Work continues as planned on the High Falls project in Québec, the Wells generating station in Ontario and the Millinocket generating station in Maine.
At quarter end, the Fund had a strong liquidity position and a current cash balance of $23.3 million, an increase of $18.0 million from the balance at the end of 2007.
Conference Call
A conference call for investors and media to review the third quarter results for 2008 will be held on Monday, November 3, 2008 at 10:00 a.m. (EST). To participate in the conference call, please dial 416-644-3414 or 1-800-732-9307 toll-free in North America, at 9:50 a.m. (EST). For those unable to participate in the conference call, a taped rebroadcast will also be available until midnight on November 6, 2008. To access this rebroadcast, please call 1-877-289-8525 toll-free in North America, and enter the passcode 21284561#. The conference call will also be webcast live on the Fund’s website at www.greatlakeshydro.com, where it will be archived for three months.
Distributions
The schedule below sets out the cash distribution history for the last twelve months:
| Record Date | Payment Date | Distribution per Unit |
|---|---|---|
| September 30, 2008 | October 31, 2008 | 10.417 cents |
| August 31, 2008 | September 30, 2008 | 10.417 cents |
| July 31, 2008 | August 29, 2008 | 10.417 cents |
| June 30, 2008 | July 31, 2008 | 10.417 cents |
| May 30, 2008 | June 30, 2008 | 10.417 cents |
| April 30, 2008 | May 30, 2008 | 10.417 cents |
| March 31, 2008 | April 30, 2008 | 10.417 cents |
| February 29, 2008 | March 31, 2008 | 10.417 cents |
| January 31, 2008 | February 29, 2008 | 10.417 cents |
| December 31, 2007 | January 31, 2008 | 10.417 cents |
| November 30, 2007 | December 31, 2007 | 10.417 cents |
| October 31, 2007 | November 30, 2007 | 10.417 cents |
Forward-looking Statements
This news release may contain forward-looking statements concerning the Great Lakes Hydro Income Fund (“Fund”) business and operations. Forward looking statements can be identified by the use of words, such as “believe”, “expect”, “well positioned”, “long-term”, “grow”, “expand”, “enhance” or variations of such words and phrases or state that certain actions, events or results “will” be taken, occur or be achieved. Forward looking statements involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results or performance to be materially different from any future results or performance expressed or implied by the forward statements. More details relating to risk factors can be found in the Fund’s annual information form in the section entitled Risk Factors.
Examples of such statements include, but are not limited to factors relating to production and the business, financial position, operations and prospects for the Fund. They include (1) the Fund’s level of generation; (2) the Fund’s cost of production; (3) interest rates as they bear on the Fund’s indebtedness; (4) planned capital expenditures; (5) the impact of changes in the Canadian dollar – U.S. dollar on the Fund’s costs and results of operations; (6) the negotiation of collective agreements with its unionized employees; (7) business and economic conditions; (8) the legislation governing air emissions, discharges into water, waste, hazardous materials and workers’ health and safety as well as the impact of future legislation and regulations on expenses, capital expenditures and restrictions on operations; (9) regulatory investigations, claims, lawsuits and other proceedings; and (10) reliance on the guaranteed price for electricity by Brookfield Renewable Power Inc. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied in the forward-looking statements contained herein, and as a such, you are cautioned not to place undue reliance on these forward-looking statements.
These forward-looking statements represent our views as of the date of this news release. These forward-looking statements should not be relied upon as representing the Fund’s views as of any date subsequent to the date of this news release.
About Great Lakes Hydro Income Fund
Great Lakes Hydro (www.greatlakeshydro.com) is a premier Canadian income fund. We are the largest power income fund in North America with 1,021 megawatts of power generating capacity and average annual production of 3,912 gigawatt hours.
Great Lakes Hydro Income Fund produces electricity exclusively from environmentally friendly hydroelectric resources. The Fund owns, operates and manages 26 high quality hydroelectric generating stations located on eight river systems in four distinct geographic regions across North America: Quebec, Ontario, British Columbia and New England.
Brookfield Renewable Power Inc., which comprises all the power operations of Brookfield Asset Management Inc., owns 50.1% of the Fund’s outstanding units.
Great Lakes Hydro Income Fund units are listed for trading on the Toronto Stock Exchange under the symbol GLH.UN.
Contact Information
Zev Korman
Director, Investor Relations and Communications
Tel: (416) 359-1955
unitholderenquiries@greatlakeshydro.com