VANCOUVER, March 19 /CNW/ - Westshore Terminals Income Fund (TSX: WTE.UN) (the "Fund") announced today that a quarterly cash distribution of $16,706,254 (representing $0.225 per trust unit) will be paid on or before April 15, 2007 to unitholders of record on March 31, 2007 as compared to $20,410,522 (representing $0.29 per trust unit) for the same period in 2006. The Q1 2007 distribution is solely derived from the operations of Westshore Terminals Limited Partnership. Performance in subsequent quarters will determine the sustainability of the level of quarterly distribution.
In addition, the Fund announced a special distribution of $0.035 per trust unit payable on or before April 15, 2007 to unitholders of record on March 31, 2007. This represents a portion of the discrepancy between taxable income allocated to unitholders for 2006 and cash distributions in that year, which resulted principally from a combination of better than expected performance and a number of year end adjustments. Because the Fund's investments now consist of substantially all the limited partnership units of Westshore Terminals Limited Partnership, virtually all of the taxable income of the Partnership for any year is automatically allocated to the Fund. While the Fund attempts both to estimate its taxable income for the year and to make distributions for the year as close as possible to that taxable income, there will always be some discrepancy between the taxable income of the Fund and cash distributions by the Fund.
For the first quarter of 2007, Westshore anticipates that its tonnage throughput will be approximately 4.5 million tonnes as compared to 4.4 million tonnes for the same period in 2006. As announced by Fording Canadian Coal Trust ("Fording") on March 1, 2007 adverse weather conditions from November through January reduced inventories at Westshore and restricted the ability to load vessels which affected volumes in the first quarter.
Based on the information currently available, Westshore is budgeting for approximately similar volumes in 2007 compared to 2006 and a lower average loading rate. However, Fording has not yet announced its average coal sales price.
For 2007, tonnages shipped at fixed rates are expected to account for approximately 22% of the Terminal's throughput; tonnages shipped at variable rates but subject to a cap, in effect for this year, are expected to account for 32% of throughput; and finally, tonnages shipped at full variable rates are expected to account for approximately 46% of throughput at the Terminal.
Because of a combination of possible variations in tonnage, the US dollar denominated coal price and exchange rates, it is not possible for the Fund to predict accurately the level of its distributions for 2007. However, based on the most current information available to it, the Fund is budgeting for lower distributions for the 2007 calendar year than the 2006 calendar year. The variance year over year will be ultimately impacted by the average coal price settled by Fording and total volumes shipped through the terminal.
The foregoing statements concerning tonnages, coal prices, loading rates, taxation and variability of distributions are forward-looking statements but reflect the current expectations of the Fund and Westshore with respect to future events and performance. Wherever used, the words "may," "will," "anticipate," "intend," "expect," "plan," "believe," and similar expressions identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at which, such performance or results will be achieved.
Forward-looking statements are based on information available at the time they are made, assumptions made by management, and management's good faith belief with respect to future events, and are subject to the risks and uncertainties outlined in the Fund's annual information form that could cause actual performance or results to differ materially from those reflected in the forward-looking statements, historical results or current expectations. All forward-looking statements will be impacted by and are subject to the risks set out under Risk Factors in the Fund's annual information form.
Dividend Reinvestment Plan
The Fund also announced today the approval in principle of a distribution reinvestment plan whereby unitholders may direct that distributions otherwise payable to them would be applied to purchase existing units through The Toronto Stock Exchange at prevailing market prices. Under the proposed plan, no additional units will be issued from treasury. Details of the plan will be announced in a news release when the required documentation has been finalized. This is anticipated to occur within the next (30) days.