The lower volume of power generation at the hydroelectric power stations and the Dolbeau wood-residue thermal power station, combined with higher wood-residue costs and reduced steam selling price at Kingsey Falls plant, had a negative impact on earnings before interest, taxes, depreciation and amortization (EBITDA), which, in the first quarter 2009, stood at CAD18.7 million, versus CAD21.7 million for the same quarter in 2008.
More specifically, in the first quarter 2009, revenue and EBITDA in the hydroelectric segment amounted to CAD12.7 million and CAD11.0 million respectively, a decrease of CAD0.5 million and CAD0.4 million compared to the same period in 2008. This decrease stems mainly from less favourable hydrology, which resulted in a 23% drop in production volume at the U.S. power stations compared to the first quarter 2008, and a decrease of 6% compared to their historical average. Overall, the Canadian power stations were affected to a lesser degree, with a 5% drop in volume compared to the first quarter 2008 and an increase of 4% over their historical average.
The wood-residue thermal power stations recorded revenue of CAD11.1 million for the quarter ended March 31, 2009, down 4% from the first quarter 2008. At CAD5.2 million, EBITDA was down 16% from the first quarter 2008. The wood-residue supply problems had a direct impact on production volume and results for this segment. The Senneterre power station is currently operating and unless there is a significant interruption of its fuel supplies, should continue to operate in the coming months. As for Dolbeau plant, due to the problems with the wood-residue supply, the Fund was obliged to shut down power generation on April 1, 2009. This interruption is expected to continue to the end of the third quarter. Steam production will, however, continue during this period.
The Kingsey Falls natural gas cogeneration plant recorded revenue of CAD8.4 million and EBITDA of CAD4.2 million in the first quarter 2009, for respective decreases of CAD1.1 million and CAD1.4 million compared to the first quarter 2008. These results are largely due to the 33% drop in steam prices (which are indexed to the price of oil).
Furthermore, Mister Claude Boivin, chairman of the board of trustees, noted that since AbitibiBowater received court protection from its creditors, the Fund has not been able to determine the impact of this event on the operation of Dolbeau plant, nor on the dispute between the two organizations.
Boivin also noted that thanks to our careful management and the diversification of our sources of production, the Fund is capable of showing significant liquidity and a net cash balance of close to CAD20 million, in spite of a particularly difficult economic context for our wood-residue sector.
