Announces plan to increase distributions
Stock Symbol: GLH.UN/TSX
GATINEAU, QC, Oct. 17 /CNW Telbec/ - Great Lakes Hydro Income Fund
(GLH.UN: TSX) today reported results for the third quarter ended September 30,
2005 and progress on a number of value enhancing initiatives, including an
increase in distributions to unitholders.
Financial results for the quarter were impacted by abnormally dry
conditions in Ontario and QuDebec.
- Revenue from operations totalled $31.6 million and $115.3 million for
the three and nine months ended September 30, 2005, respectively,
compared to $37.9 million and $136.4 million for the same periods in
2004.
- Income before non-cash and special items totalled $10.8 million and
$52.5 million for the three and nine months ended September 30, 2005,
respectively. This compares to $16.9 million and $70.5 million for the
same periods in 2004.
As we enter the fourth quarter, rainfall has returned to more normal
levels in Ontario and QuDebec and overall reservoir levels are slightly below
long-term average.
Successful Refinancing - During the third quarter, the Fund refinanced
the long-term debt related to its QuDebec facilities, through a private
placement issuance of $225 million senior secured bonds maturing in 20 years,
bearing interest at a rate of 5.6 percent per annum. This new financing
extended the average duration of the Fund's long-term debt from 10 years to
14 years and reduced annual long-term debt costs from 6.5 percent to 6
percent. The net proceeds of the offering were used to repay a $125 million
bridge loan, all outstanding amounts on the current bank facilities and the
capital expended for the construction of the 9 megawatt Cedar Dam
hydroelectric generating station.
Increase Distributions - The Board of Trustees approved an increase in
the Fund's annual distributions from $1.215 per unit to $1.24 per unit,
effective January 2006. This rise in distributions is a result of the increase
in distributable cash following the refinancing of the long-term debt that
closed on October 6, 2005, and the soon to be commissioned 9 megawatt Cedar
Dam generating station in QuDebec and the Weldon project in New England.
"We have made significant progress in enhancing the Fund's business. The
completion of the refinancing of long-term debt, the commissioning of Cedar
Dam generating station and the overhaul of the Weldon facility in New England
will provide incremental cash flow available for distribution of $2.5 million
per year. We have taken this opportunity to increase distributions by
2.5 cents per year effective January 2006," said Richard Legault, President
and Chief Executive Officer. "The increase in distributions will mark our
fifth increase to distributions in five years, reinforcing our disciplined
growth strategy and our ability to deliver stable returns to unitholders,"
added Legault.
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2005 FINANCIAL AND OPERATING HIGHLIGHTS
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Unaudited Three months Nine months
(CDN$ millions, ended September 30 ended September 30
except where noted) 2005 2004(1) 2005 2004(1)
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Revenues $ 31.6 $ 37.9 $ 115.3 $ 136.4
Income before non-cash and
special items 10.8 16.9 52.5 70.5
Income before non-cash items 10.8 16.9 42.3 70.5
Net income 3.6 9.5 19.9 46.2
Per unit
Net income 0.07 0.20 0.41 0.96
Income before non-cash and
special items 0.22 0.35 1.09 1.46
Income before non-cash items 0.22 0.35 0.88 1.46
Distribution 14.7 14.5 44.0 43.4
Power generated (GWh) 712 829 2,623 3,015
Average price-cents (cents/KWh) 4.4 4.6 4.4 4.5
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(1) As a result of the adoption of accounting guideline 15, Great Lakes
Hydro Income Fund now fully consolidates Powell River Energy. All
prior period financial comparatives have been restated.
DISTRIBUTIONS
The Fund will increase distributions to unitholders commencing in January
2006, from 10.125 cents/unit/month to 10.33 cents/unit/month. This will result
in a total annual distribution in 2006 to unitholders of $59.9 million as
compared to $58.7 million in 2005.
The schedule below sets out the Fund's cash distribution history for the
last six months:
RECORD DATE PAYMENT DATE DISTRIBUTION PER UNIT
-------------------------------------------------------------------------
August 31, 2005 September 30, 2005 10.125 cents
July 31, 2005 August 31, 2005 10.125 cents
June 30, 2005 July 31, 2005 10.125 cents
May 31, 2005 June 30, 2005 10.125 cents
April 30, 2005 May 31, 2005 10.125 cents
March 31, 2005 April 30, 2005 10.125 cents
>>
ADDITIONAL INFORMATION
The Letter to Unitholders, the supplemental information and the Fund's
unaudited quarterly financial information for the period ended September 30,
2005, contains further information on the Fund's operations and financial
results. These documents are available on the Fund's website at
www.greatlakeshydro.com . It is expected that the Fund's unaudited interim
report will be filed by early November 2005.
FORWARD-LOOKING STATEMENTS
The Fund's news release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The words
"believe," "expect," "anticipate," "intend," and other expressions which are
predictions of or indicative of future events and trends and which do not
relate to historical matters identify forward-looking statements. Reliance
should not be placed on forward-looking statements because they involve known
and unknown risks, uncertainties and other factors, which may cause the actual
results, performance or achievements of the business to differ materially from
anticipated future results, performance or achievements expressed or implied
by such forward-looking statements. Factors that could cause actual results to
differ materially from those set forth in the forward-looking statements
include general economic conditions, weather conditions, interest rates,
foreign exchange rates, availability of equity and debt financing and other
risks. The Fund undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.
Q3 CONFERENCE CALL
A conference call for investors and media to review the third quarter
results for 2005 will be held on October 18, 2005 at 10:00 a.m. (EST). To
participate in the conference call, please dial 416-640-4127 or 1-800-814-3911
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 October 20, 2005. To access this rebroadcast, please call
1-877-289-8525, toll free in North America, and enter the passcode
21152853(pound key).
ABOUT GREAT LAKES HYDRO INCOME FUND
Great Lakes Hydro Income Fund is a premier Canadian income fund and one
of the largest power income fund in North America with 986 megawatts of power
generating capacity and an average annual production of 3,711 gigawatt hours.
Great Lakes Hydro Income Fund produces electricity exclusively from
environmentally friendly hydroelectric resources. The Fund owns, operates and
manages 24 high quality hydroelectric generating stations located on seven
river systems in four distinct geographic regions across North America:
QuDebec, Ontario, British Columbia and New England.
Brascan Power, which comprises the majority of the power operations of
Brookfield Asset Management (currently Brascan Corporation), 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.
%SEDAR: 00013106EF
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