EDMONTON, Alberta - October 26, 2009 (TSX: EP.UN) - EPCOR Power Services Ltd., the general partner of EPCOR Power L.P. (the Partnership), today released the Partnership's quarterly results for the period ended September 30, 2009.
Third quarter revenue was $155.5 million, up 16.5 per cent from the year earlier level. Gross margin from the Partnership's plants, before adjustments for fair value changes, totaled $53.4 million, a 5.8 per cent reduction from the 2008 period. Cash provided by operating activities from continuing operations excluding working capital changes was $37.3 million in the quarter, consistent with expectations, compared with $41.4 million for the same period last year. This resulted in a third quarter, 2009 payout ratio of 71 per cent, which reflected maintenance capital expenditures of $3.9 million. The 71 per cent payout ratio is in-line with the Partnership's long-term payout ratio target of 75 per cent and represents a more conservative payout level when compared to the 89 per cent level in the corresponding period in 2008.
"Performance at our facilities was mixed in the third quarter of 2009," said Stuart Lee, President of the General Partner of EPCOR Power L.P. "We benefited from the additional contribution from the Morris facility acquired in October 2008 and higher contributions from our Northwest U.S. plants and the Curtis Palmer facility compared to the third quarter of 2008. However, these increases were more than offset by lower power demand in our Ontario and North Carolina regions that negatively impacted the financial performance of our plants operating in those areas."
"The Partnership remains committed to the diversification of our portfolio, both in terms of geography and fuel type, as one of the cornerstones of our strategy," added Mr. Lee. "As seen in this quarter, the diversity leads to mixed facility performance but stable consolidated results, supporting a consistent distribution policy."
On October 13, 2009, the Partnership announced the launch of a Premium DistributionTM and Distribution Reinvestment Plans and a change in the cash distribution frequency to monthly from quarterly payments, effective October 2009.
Also on October 13, 2009, the Partnership announced that a subsidiary will issue $100 million of 7.0% cumulative rate reset preferred shares. The equity raised from this offering will be used to reduce debt and provide a portion of the permanent financing of recent growth initiatives.
Highlights of EPCOR Power L.P.'s operational and financial performance included:
Operational and Financial Highlights
(unaudited) |
Three months ended
September 30 |
Nine months ended
September 30 |
| (millions of dollars except per unit and operational amounts) |
2009 |
2008 |
2009 |
2008 |
| Power generated (GWh) |
1,228 |
1,247 |
2,331 |
2,319 |
| Weighted average plant availability |
93% |
95% |
92% |
92% |
| Revenue |
155.5 |
133.5 |
292.8 |
262.0 |
| Cash provided by operating activities of continuing operations |
33.8 |
20.0 |
100.6 |
101.0 |
| Per unit (1) |
$0.63 |
$0.37 |
$1.87 |
$1.87 |
| Cash distributions |
23.7 |
34.0 |
81.4 |
101.9 |
| Per unit |
$0.44 |
$0.63 |
$1.51 |
$1.89 |
| Payout ratio (2) |
71% |
89% |
89% |
107% |
| Capital expenditures |
33.0 |
5.1 |
75.9 |
18.5 |
| Weighted average units outstanding (millions) |
53.9 |
53.9 |
53.9 |
53.9 |
(1) Cash provided by operating activities of continuing operations per unit is a non-GAAP financial measure that is defined in the interim MD&A.
(2) Payout ratio is cash distributions divided by cash provided by operating activities of continuing operations excluding working capital changes less maintenance capital expenditures.
Click here to view the management's discussion and analysis and consolidated financial statements.
The September 30, 2009 interim report is shown below. The interim management discussion and analysis and interim consolidated financial statements are available on the EPCOR Power L.P. website (http://www.epcorpowerlp.ca/) and will be available on SEDAR (http://www.sedar.com/).