Junex inc.

Junex inc.

May 30, 2006 08:00 ET

Junex reaches net income for a third consecutive quarter

MONTREAL, May 30 - Junex filed today its financial results
for the first quarter ended March 31, 2006. During this quarter, the company
recorded net income of $32,290, a significant improvement compared to the net
loss of $377,437 for the same period of 2005.

"We have had our best financial year in 2005 and we are pleased to see
that we have continued in 2006 the trend started in the third quarter of 2005.
Our goal for the entire year of 2006 still to reach positive cash flows from
our exploitation activities while pursuing the exploration effort through
partnerships. First quarter sales are higher then expected but we are still
working with a conservative budget forecasting sales of $3M for the full year"
stated Mr. Jean-Yves Lavoie, P. Eng., President of Junex.

Financial Highlights

In thousands $ excepted for per share results 2006 2005

Sales 1,180 111
Gross profit 376 (22)
Administrative expenses 329 364
Net income 32 (377)
EBIDTA 143 (314)
Cash flows from exploitation activities 165 (354)
Deferred exploration cost (268) (259)


Junex's sales for the three-month period ended March 31, 2006 totalled
$1,180,230 up 966% from $110,715 for the same quarter in the previous year.
The consolidated sales are essentially coming from our subsidiary Foragaz
which had not registered any sales in 2005 and has generated sales of
$1,168,580 in 2006.

We expect that the sales of our subsidiary Foragaz to be lower during the
next quarter but we hope that drilling contracts will be signed and carried
out during the and fourth quarter of the current year. The sales of natural
brine and oil have been almost non-existent during the first quarter.
Historically, the majority of the natural brine sales is noted during the
second quarter of the year, which should be the case for 2006. As for the
sales of natural gas, the Marinard Plant, which was our only customer for the
gas produced at the Galt No.1 and Galt No.3 wells, has reduced its consumption
due to financial difficulties. We are currently seeking a new customer for
this gas in order to re-start theses operations for the third quarter of 2006.
At last, the tests at the Galt No.3 and Haldimand No.1 wells will probably
allow us to register sales for oil during the last two quarters of 2006.

Net income and EBITDA

The net income for the first quarter of 2006 amounted to $32,290 compared
to net loss $377,437 in the prior year's first quarter. The increase in the
net income is primarily attributable to an important increase in sales and
operational gross profit. Earnings before interests tax and amortization
(EBITDA) was of $135,429 during the first quarter, an important improvement
compared to a negative EBITDA of $387,055 in 2006. This result reflects
essentially on the growth of the gross profit. Junex's goal remains to be able
to show a positive EBITDA for the entire 2006 exercise.

Financial position

As at March 31, 2006, Junex's working capital amounted to $3,115,286, a
small reduction compared to the working capital of $3,330,123 at the end of
the 2005 exercise.

Cash flows from exploitation and Deferred exploration cost

During the first three quarters of the year, the company's exploitation
activities have generated cash flows of $165,240 in comparison with a negative
cash flow of $353,613 in 2005. The increase in sales and profits before income
taxes are mainly responsible of this situation.

During the first three quarters of the year 2006, Junex has spent
$267,525 as deferred exploration expenses compared to $258,569 in 2005. These
exploration expenses, less deduction from income taxes credit and partnerships
contribution, are capitalised as investments which will be amortised or
written off depending on the developments which will occur on the different
properties during the coming years. In 2005, Junex has written off an amount
of $113,840 which was directly applied and shown as expenses on the Earnings.
No radiation or write off was applied during the first quarter.

Complete financial results are available on www.sedar.com

Contact Information

  • Junex:
    Jean-Yves Lavoie,
    P. Eng.,
    (418) 654-9661;

    Dave Pépin,
    (418) 654-9661