Innergex Power Income Fund (Innergex) has reported gross operating revenues of CAD13.9 million for the first quarter of 2009, up 3%, compared with the gross operating revenues of CAD13.6 million in the year-ago quarter. It has also reported net earnings of CAD3.02 million for the first quarter of 2009, compared with the net loss of CAD0.76 million in the year-ago quarter.

Operating results:

The Fund’s power generating facilities produced 163,912 MW-hr during the first quarter of 2009, an increase of 2% compared to the corresponding period in 2008. The most significant factor in this increase is the performance of the LAnse-a-Valleau wind farm, which produced 11% more power than during the first quarter of 2008. This increased production is due in part to conditions more favorable to wind-power generation during the first quarter of 2009. Hydroelectric facilities in Quebec also enjoyed favorable hydrological conditions, counterbalancing less favorable conditions at the Rutherford Creek and Horseshoe Bend (Idaho) facilities.

Increased revenues were the result of higher production levels and rates the latter resulting from increased power rates linked to inflation as specified in long-term power purchase agreements with Hydro-Quebec and with British Columbia Hydro and Power Authority.

Earnings before interest, provision for income taxes, depreciation and amortization (EBITDA):

EBITDA, other revenues and expenses and minority interest (EBITDA) totaled CAD11.1 million during the first quarter of 2009, a 2% increase as compared to EBITDA of CAD10.9 million for the corresponding quarter in 2008. These results reflect greater power generation at the Fund’s facilities, as well as power purchase rates set at a higher level for the first quarter of 2009 compared to the first quarter of the previous year.

Adjusted Net Earnings:

The Fund manager believes that net adjusted earnings represent additional information that is important to the reader, as it provides a measure of profitability that excludes certain items that do not immediately impact cash on hand. The net adjusted earnings exclude unrealized losses / gains on exchange rates and derivative financial instruments and related future income taxes. They also exclude major non-recurring items, such as the impact on future income taxes resulting from modifications to tax legislation or changes in tax rates.

The Fund posted net adjusted earnings of CAD2.5 million (CAD0.08 per trust unit) for the first quarter of 2009, compared to CAD0.5 million (CAD0.02 per trust unit) for the first quarter of 2008. The difference is primarily the result of a loss of CAD1.8 million realized on a derivative instrument during the first quarter of 2008.

Net Distributable Cash And Cash Distributions:

Net distributable cash for the first quarter of 2009 was CAD7.4 million, as compared to CAD5.4 million for the corresponding period in 2008.

Distribution for the first quarter of 2009 and of 2008 was set at CAD7.3 million, or CAD0.25 per unit. For the first quarter of 2009, the distribution payout ratio is 99%, compared to 135% for the first quarter of 2008. The improvement in this ratio results from a decrease in repayments of long-term debt and the realized loss of CAD1.8 million on a derivative financial instrument reported in 2008 (nil in 2009). Consequently, during the most recent quarter, following distribution to unitholders, the Fund deposited its net distributable cash surplus into current cash accounts. During the corresponding quarter in 2008, the Fund used CAD1.9 million in cash on hand to enhance the net distributable cash in order to maintain distributions to unitholders.

Outlook:

Michel Letellier, president and chief executive officer of Innergex Renewable Energy Inc., the Fund’s Manager, notes, “The Fund has posted improved financial results for the first quarter, thereby demonstrating its ability to produce stable returns for unitholders. The Fund has reserves at its disposal, along with access to credit facilities and loans required for our operations to run smoothly. As a result, we believe that the Fund is in a position to continue to offer stability to unitholders in the coming months, despite the recession.”