Synex International Inc. – Second quarter of fiscal 2008
TSE : SXI
VANCOUVER, Feb. 12 – For the six months ended December 31, 2007, revenue increased to $1,233,627 from $859,046 in the corresponding period in fiscal 2007. The increase was a result of increased revenue from the Engineering Division and increased electricity sales from the Mears Plant and the Kyuquot Utility. Electricity generation from the Mears Plant for the six months ended December 31, 2007 was 6,326 MWh as compared to 5,414 MWh in the corresponding period in fiscal 2007. The increase in revenue of the Kyuquot Utility is a result of increased electricity sales. For the six months ended December 31, 2007, net income was $319,768 as compared to $568,635 in the corresponding period in the previous year. Earnings per share for the six months ended December 31, 2007 was $0.01 as compared to $0.02 in the corresponding period in the previous year. The Power Division had a gain on sale of shares of NovaGold Resources Inc. (“NovaGold”) of $332,421 during the first six months of fiscal 2008 as compared to a gain of $818,099 in the corresponding period in fiscal 2007. As at December 31, 2007, the Power Division held 34,063 shares of NovaGold with a value of approximately $276,000 based on the price of CDN$8.10 per NovaGold share.
Construction of the 2.8MW Cypress Creek Hydroelectric Project (“Cypress Plant”) was advanced during the second quarter with capital expenditures of about $1.2 million and a total investment at December 31, 2007 exceeding $5.6 million. As at the end of December 2007, the project was about 70% complete with completion anticipated in late fiscal 2008. The Company is expecting to secure an electricity purchase agreement (“EPA”) with BC Hydro under the Standing Offer Call. The Standing Offer Call is scheduled for initial availability in late spring 2008. On October 22, 2007, the Company announced that the Power Division had entered into a loan agreement with the Canadian Western Bank. The amount advanced under the loan at December 31, 2007 was $600,000 with a maximum lending of $5,529,945 available.
On July 26, 2007, the Power Division terminated the electricity purchase agreement with BC Hydro for the McKelvie Project due primarily to unforeseen delays in acquiring the necessary land and cost impacts regarding the design of the intake. The power division is continuing to advance the McKelvie Project while it works towards securing an alternative EPA including a potential increase in installed capacity of up to 5MW. The Power Division is continuing to advance the 4MW Barr Creek Hydroelectric Project and the 10MW Victoria Lake Hydroelectric Project, which both have executed electricity purchase agreements with BC Hydro.
The Power Division owns and operates an electrical distribution utility serving the Kyuquout area on the west coast of Vancouver Island (“Kyuquot Power Ltd.”), which distributes and sells electricity using its $3.8 million powerline connected to the BC Hydro integrated grid. The Ka:’yu:’k’t’h’/Che:k:tles7et’h’ First Nation (the “KCFN”) has committed to advancing a maximum of $3 million over the next three years towards the capital cost of the Kyuquot powerline. The KCFN will receive a reduction in electricity rates for the capital contributions. The Company is expecting to use the funds for capital expenditures for the Cypress Plant and the several other projects under development.
Synex International Inc. is a public company trading on the Toronto Stock Exchange (TSX) with businesses involved with the development, ownership and operation of electrical generation facilities, as well as the provision of consulting engineering services in water resources, particularly for hydroelectric and other power facilities.
Greg Sunell, President
This press release contains forward-looking statements that involve risks and uncertainties. These statements reflect our current expectations and are subject to change. They are subject to a number of risks and uncertainties including, but not limited to, changes in economic conditions, risks associated with the construction and operation of hydroelectric facilities and changes in government policies.
For further information: Greg Sunell, President, 400 – 1444 Alberni Street, Vancouver BC, V6G 2Z4, Phone (604) 688-8271 Ext. 372, Fax (604) 688-1286, E-mail: email@example.com, Web Site: www.synex.com