EPCOR Power Services Ltd. (EPCOR Power), the general partner of EPCOR Power L.P., has declared revenue of CAD499.3 million for the year-end 2008, compared with the revenue of CAD549.8 million in the previous year-end. It has also reported a net loss of CAD67.1 million, or CAD1.24 loss per unit, for the year-end 2008, compared with the net income of CAD31 million, or CAD0.59 per unit, in the previous year-end.
The Partnership’s 2008 operating cash flows were in line with our expectations, said Brian Vaasjo, president of the general partner of EPCOR Power L.P. Cash provided by operating activities from continuing operations was $157 million and excluding working capital changes was $144 million in 2008, representing an 11 per cent increase from the prior year. The Partnership reported a net loss of $67.8 million in 2008, which was driven by the accounting recognition of $98.5 million in unrealized losses on the change in fair value of natural gas supply and foreign exchange contracts. Due to various non-cash items that are reported on the income statement which have no current economic impact, the net loss is not a meaningful measure of the Partnership’s operating performance.
During the past year, we have made solid progress on a number of internal enhancement projects at our two North Carolina facilities and at the North Island facility, which are scheduled for completion in 2009. We also announced the agreement to sell the Castleton facility and completed the acquisition of the Morris Cogeneration LLC facility. All of these initiatives will help stabilize and sustain future cash flows.
With the economic downturn, 2008 was a challenging year for the Partnership, our peers and markets in general. This year will continue to present challenges; however, the Partnership’s strong diversification in its broad fleet of assets, counterparties and geography will help mitigate risk from one specific facility or industry. We believe the underlying fundamentals of the business remain strong and as a power generator with stable cash flow, the Partnership is well positioned to be competitive in the market over the long-term.