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Boralex Inc
Symbol BLX
Shares Issued 102,766,104
Close 2023-11-08 C$ 27.73
Market Cap C$ 2,849,704,064
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Boralex loses $2-million in Q3 2023

2023-11-09 09:28 ET - News Release

Mr. Patrick Decostre reports

BORALEX SIGNIFICANTLY INCREASES ITS FINANCIAL RESULTS AND FLEXIBILITY IN THE THIRD QUARTER OF 2023

Boralex Inc. has noted increased earnings, significant progress on certain projects under construction or at the ready-to-build stage, and the addition of new projects to its pipeline in the third quarter of 2023.

Highlights

Financial results:

  • EBITDA(A) (earnings before interest, taxes, depreciation and amortization (adjusted to exclude other items such as acquisition costs and other loss (gains))), operating income and net earnings higher than in Q3 2022:
    • The increase is mainly attributable to the commissioning of assets and the good performance of comparable wind farms in France, as well as to the integration of the wind farms acquired in the United States in late 2022.
    • EBITDA(A) of $91-million ($113-million on a combined basis) for Q3 2023, up $41-million ($50-million) compared with Q3 2022, or up $13-million ($22-million), or 17 per cent (24 per cent), after adjusting for a $28-million revenue reversal for certain feed-in premium contracts in France accounted for in Q3 2022.
    • Operating income of $13-million ($29-million) in Q3 2023, up $44-million ($54-million) from Q3 2022.
    • Net earnings (loss) improved by $54-million compared with Q3 2022.
  • Higher cash flows and sustained financial flexibility:
    • Discretionary cash flows of $21-million in Q3 2023, up $20-million from Q3 2022.
    • Net cash flow related to operating activities of $1-million at Q3 2023 ($96-million before payment of the inframarginal rent representing the contribution paid to the French government related to the price cap).
    • Close to $400-million in available cash resources and authorized financing at Sept. 30, 2023, $100-million more than in the previous quarter.

Development:

  • Projects under construction or at the ready-to-build stage progressing according to plan, budgets and expected returns:
    • A $608-million financing has been completed for the 200 MW (megawatt) Apuiat wind farm in Quebec, 50 per cent owned by Boralex -- work is currently under way and commissioning is planned for the end of 2024.
    • A contract for difference has been obtained at the August, 2023, request for proposals for the Limekiln 106 MW wind farm project in Scotland -- work started in late October and commissioning is planned for the end of 2024.
  • 509 MW added to the early- and mid-stages of the project pipeline:
    • 244 MW in early-stage projects, comprising six new solar projects and one storage project in North America, and two solar projects in Europe.
    • One new mid-stage wind project in North America, for 265 MW.
  • 200 MW of solar projects in the State of New York moved from secured phase to advanced phase. The company is evaluating the possibility to rebid these projects in upcoming requests for proposals.

"The increase in earnings for the quarter is mainly attributable to the contribution of the wind assets acquired in the United States for the North American sector, and the wind and solar farms commissioned in France for the European sector. The European sector also benefited from favourable production for comparable wind assets. These elements more than offset the pressure on earnings from particularly unfavourable wind conditions in Canada," said Patrick Decostre, president and chief executive officer of Boralex. "The third quarter was also marked by the progress made on three major projects under construction or at the ready-to-build stage: the Apuiat wind farm in Quebec; the two storage projects in Ontario; and the Limekiln wind farm in Scotland. Those projects have high expected returns, surpassing our threshold, and are progressing on schedule."

Commenting on what lies ahead for Boralex in the coming quarters, Mr. Decostre added: "We remain very confident in the future of our industry and our ability to grow our business in our target markets, where demand is stronger than ever, thanks in particular to governments' commitment to reducing their carbon footprint and the competitiveness of renewable energies over other forms of energy production. Our discipline and agility have enabled us to adapt quickly to the challenges faced by the industry as a whole in recent months. We are still adding many projects to our pipeline and they are maintaining high returns, with the prices of the most recent power purchase agreements significantly up, and reflecting the current supply situation and financing costs."

Q3 highlights

In the third quarter of 2023, Boralex produced 1,110 GWh (gigawatt-hours) (1,522 GWh) of electricity, 9 per cent (31 per cent) more than the 1,019 GWh (1,159 GWh) produced in the same quarter of 2022. The increase on a consolidated basis is attributable to the commissioning of wind and solar farms, and the good performance of comparable wind sites in France. The increase on a combined basis is primarily due to the integration of the wind farms acquired in the United States in late 2022, as well as from elements contributing to the increase on a consolidated basis. The diversification of the corporation's activities both by region and by technology enabled Boralex to partly compensate for the highly unfavourable wind conditions in Canada during the quarter. Boralex thus ended the quarter with total production 9 per cent (7 per cent) below anticipated production.

For the three-month period ended Sept. 30, 2023, revenues from energy sales and feed-in premiums totalled $171-million ($194-million), 70 per cent (67 per cent) more than in the third quarter of 2022. EBITDA(A) amounted to $91-million ($113-million), up 82 per cent (82 per cent) compared with the third quarter of 2022. It should be noted that EBITDA(A) for the third quarter of 2022 included an amount of $28-million attributable to certain contracts for which Boralex had to record a provision following the enactment of the 2022 Supplementary Budget Act in France. Operating income amounted to $13-million ($29-million), which compares with an operating loss of $31-million ($25-million) for the same quarter of 2022. The net loss for the quarter was $2-million, a $54-million improvement compared with the net loss of $56-million for the same quarter of 2022.

For the nine-month period ended Sept. 30, 2023, Boralex produced 4,159 GWh (5,670 GWh) of power, which represents an increase of 4 per cent (26 per cent) compared with the 3,998 GWh (4,486 GWh) produced in the same period in 2022. Revenues from energy sales and feed-in premiums for the nine-month period ended Sept. 30, 2023, amounted to $679-million ($759-million), up $183-million ($210-million), or 37 per cent (38 per cent), from the same period in 2022.

EBITDA(A) was $381-million ($448-million), up $37-million ($69-million), or 11 per cent (18 per cent), from the same period last year. Operating income totalled $128-million ($192-million), up $23-million ($59-million) from the same period in 2022. Over all, for the nine-month period ended Sept. 30, 2023, Boralex posted net earnings of $75-million ($75-million) compared with net earnings of $15-million ($15-million) 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 company's annual report. Highlights of the main achievements for the quarter ended Sept. 30, 2023, in relation to the 2025 strategic plan can be found in the 2023 interim report, 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 6.4 GW (gigwatts) 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 Dec. 15, 2023, to shareholders of record at the close of business on Nov. 30, 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 Inc.

Boralex 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, the company also has facilities in the United States and development projects in the United Kingdom. Over the past five years, Boralex's installed capacity has more than doubled to over three GW. The company is developing a portfolio of projects in development and construction of close to 6.4 GW in wind, solar 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, discipline, expertise and diversity, Boralex continues to be an industry leader.

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