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Boralex Inc
Symbol BLX
Shares Issued 102,766,104
Close 2023-08-11 C$ 29.94
Market Cap C$ 3,076,817,154
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Boralex earns $22-million in Q2 2023

2023-08-14 09:40 ET - News Release

Mr. Patrick Decostre reports

BORALEX INCREASES ITS NET EARNINGS AND COMBINED RESULTS BY ACTIVELY PURSUING ITS GROWTH STRATEGY IN THE SECOND QUARTER OF 2023

Boralex Inc. has noted the addition of new projects to its portfolio and significant progress made on certain development projects in the second quarter of 2023.

Highlights:

  • Net earnings up from Q2 2022, operating income and EBITDA(A) (earnings before interest, taxes, depreciation and amortization (adjusted to exclude other items such as acquisition costs and other loss (gains))) down on a consolidated basis but up on a combined basis:
    • In the second quarter of 2022, financial results and cash flows included an amount of $14-million attributable to certain contracts for which Boralex had to record a provision in Q3 2022 following the publication of the 2022 Supplementary Budget Act in France. This amount should be taken into consideration when comparing with Q2 2022.
    • Net earnings of $22-million, up $8-million from Q2 2022.
    • Operating income of $38-million ($57-million) in Q2 2023, down $7-million (up $4-million) from Q2 2022.
    • EBITDA(A) of $119-million ($143-million on a combined basis) in Q2 2023, down $2-million (up $10-million) from Q2 2022.
    • Discretionary cash flows of $3-million in Q2 2023, down $10-million from Q2 2022.
    • Cash flows from operations of $76-million in Q2 2023, down $10-million from Q2 2022.
  • Sustained financial flexibility:
    • Over $300-million in available cash resources and authorized financing at June 30, 2023.
  • Total production up 4 per cent (28 per cent) compared with Q2 2022 production but 6 per cent (8 per cent) below anticipated production:
    • Production on a consolidated basis up from Q2 2022 owing to commissioning in France. Production on a combined basis also showed a positive impact of the integration of wind farms acquired in the United States in late 2022, with wind power production up 9 per cent (42 per cent), hydroelectric power production down 3 per cent and solar power production down 12 per cent, due to a curtailment request at the Five Points solar farm in California.
    • Highly unfavourable weather conditions in North America in June following good conditions in April and May led to lower-than-anticipated production: 4 per cent (6 per cent) lower for wind, 8 per cent lower for hydroelectric and 18 per cent lower for solar.
  • 420 MW (megawatts) of projects selected under requests for proposals:
    • Two storage projects totalling 380 MW in Ontario, Canada.
    • Two wind power projects totalling 40 MW in France.
  • Addition of 369 MW of projects to the early stage of the project portfolio in the second quarter of 2023:
    • Projects totalling 80 MW in wind, 149 MW in solar, and 140 MW in storage in Europe and North America.

"The increase in combined operating income and combined EBITDA(A) in the second quarter is attributable to the commissioning of assets and to high electricity prices in France, as well as to the contribution of the acquisition of wind assets in the United States. These elements more than offset the pressure on results due to unfavourable weather conditions in North America at the end of the quarter. The second quarter also saw the selection of two energy storage projects totalling 380 MW under the Ontario request for proposals," said Patrick Decostre, president and chief executive officer of Boralex. "This announcement marks a very important milestone for Boralex as we aim to expand our energy storage portfolio, and achieve the growth and diversification objectives of our 2025 strategic plan."

Note: Figures in brackets indicate results on a combined basis as opposed to those on a consolidated basis.

With respect to Boralex's prospects for the coming quarters, Mr. Decostre added: "We added 369 MW of projects to our portfolio, which now represents over 6.2 GW [gigawatts] of capacity, and continued to integrate the American wind farms, with a total capacity of 894 MW, that we acquired in late 2022. There are numerous development opportunities in the markets where we have a presence, as evidenced by the many requests for proposals planned for the next six months: Hydro-Quebec's request for proposals for 1,500 MW; Ontario's second request for proposals for energy storage; and the NYSERDA solar solicitation for North America. A 500 MW technology-neutral tender and two 925 MW onshore wind tender are also expected in France. Our teams are working very hard to prepare high-quality projects in order to provide sustainable renewable energy supply solutions in our target markets. We are continuing with these multiple development initiatives, as well as with project construction and the search for strategic acquisitions, while maintaining our financial discipline and flexibility."

Q2 highlights

In the second quarter of 2023, Boralex produced 1,353 GWh (gigawatt-hours) (1,861 GWh) of electricity, 4 per cent (28 per cent) more than the 1,298 GWh (1,452 GWh) produced in the same quarter of 2022. The increase on a consolidated basis is attributable to the commissioning of wind farms, while the increase on a combined basis is due to the integration of the wind farms acquired in the United States in late 2022.

For the three-month period ended June 30, 2023, revenues from energy sales and feed-in premiums totalled $210-million ($237-million), 25 per cent (28 per cent) more than in the second quarter of 2022. This increase is attributable the commissioning of assets, as well as high electricity prices in France on a consolidated basis and to the contribution of the acquisition in the United States on a combined basis. EBITDA(A) amounted to $119-million ($143-million), a 2-per-cent decrease (7-per-cent increase) compared with the second quarter of 2022. The slight decrease in EBITDA(A) is attributable to lower production from Canadian wind farms. It should be noted that EBITDA(A) for the second quarter of 2022 included an amount of $14-million attributable to certain contracts for which Boralex had to record a provision in the third quarter of 2022, following the publication of the 2022 Supplementary Budget Act in France. On a combined basis, the increase is attributable to the acquisition of wind farms in the United States. Operating income amounted to $38-million ($57-million), which compares with $45-million ($53-million) for the same quarter of 2022.

For the six-month period ended June 30, 2023, Boralex produced 3,050 GWh (4,147 GWh) of power, which represents an increase of 2 per cent (25 per cent) compared with the 2,979 GWh (3,327 GWh) produced in the same period in 2022. For the six-month period ended June 30, 2023, revenues from energy sales and feed-in premiums amounted to $508-million ($565-million), up $113-million ($132-million), or 29 per cent (31 per cent), from the same period in 2022.

EBITDA(A) was $290-million ($335-million), down $4-million, or 1 per cent (up $19-million, or 6 per cent), from the same period last year. Operating income totalled $115-million ($163-million), down $21-million (up $5-million) from the same period in 2022.

Over all, for the six-month period ended June 30, 2023, Boralex posted net earnings of $77-million ($77-million) compared with net earnings of $71-million ($71-million) for the same period in 2022. Net earnings attributable to Boralex shareholders amounted to $62-million ($62-million), or 60 cents (60 cents) per share (basic and diluted), compared with $60-million ($60-million), or 59 cents (59 cents) per share (basic and diluted), for the same period in 2022.

Outlook

Boralex's 2025 strategic plan is built around the same four strategic directions as the plan launched in 2019 -- growth, diversification, customers and optimization -- and six corporate targets. The details of the plan, which also sets out Boralex's corporate social responsibility strategy, are found in the corporation's annual report. Highlights of the main achievements for the quarter ended June 30, 2023, in relation to the 2025 strategic plan, can be found in the 2023 interim report 2, available in the investors section of the Boralex website.

In the coming quarters, Boralex will continue to work on its various initiatives under the strategic plan, including project development, analysis of acquisition targets, and optimization of power sales and operating costs.

Finally, to pursue its organic growth, the company has a pipeline of projects at various stages of development, defined on the basis of clearly identified criteria, totalling 5,326 MW in wind, solar and energy storage projects, as well as a growth path of 971 MW of wind, solar and energy storage projects.

Dividend declaration

The company's board of directors has authorized and announced a quarterly dividend of 16.50 cents per common share. This dividend will be paid on Sept. 18, 2023, to shareholders of record at the close of business on Aug. 31, 2023. Boralex designates this dividend as an eligible dividend pursuant to Paragraph 89(14) of the Income Tax Act (Canada) and all provincial legislation applicable to eligible dividends.

About Boralex

At Boralex, the company has been providing affordable renewable energy accessible to everyone for over 30 years. As a leader in the Canadian market and France's largest independent producer of onshore wind power, Boralex also has facilities in the United States and development projects in the United Kingdom. Over the past five years, the company's installed capacity has more than doubled to over three gigawatts. Boralex is developing a portfolio of over six gigawatts in wind, solar projects and storage projects, guided by the company's values and its corporate social responsibility (CSR) approach. Through profitable and sustainable growth, Boralex is actively participating in the fight against global warming. Thanks to its fearlessness, its discipline, its expertise and its diversity, the company continues to be an industry leader.

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