Boralex discloses its results for the third quarter of 2018

by ahnationtalk on November 10, 201811 Views

Montréal, November 9, 2018 – For the first nine months of 2018, Boralex Inc. (”Boralex” or the “Corporation”) (TSX: BLX) reported EBITDA(A) of $200 million ($233 million)1, up 9% (8%) from $183 million ($215 million) for the comparative period of 2017. EBITDA(A) for the three-month period ended September 30, 2018 was comparable to that of the corresponding quarter of 2017, that is, $39 million ($51 million in 2018 and $50 million in 2017). The contribution of facilities acquired and commissioned over the past twelve months as well as the sound performance of Canadian wind farms offset the impact of less favourable wind conditions for French wind farms and Canadian and U.S. hydroelectric power stations and a rise in development costs.

“The entire Boralex team is hard at work to ensure continuity on the path to growth while integrating the most recent acquisitions and maximizing synergies in the day-to-day management of operations,” stated Patrick Lemaire, President and Chief Executive Officer of Boralex.

“We remain focused on our strategy, which will allow us to generate substantial economies of scale in the future. Recently, we successfully completed the acquisition of Invenergy’s2 interests in five wind farms in Canada as well as the Kallista3 sites in France. In addition to these acquisitions, which added nearly 25% to our installed capacity since the beginning of the year, we recently commissioned, on schedule, the 33 MW Inter Deux Bos wind farm in France. We also intend to commission six new facilities in Canada and France for a total of 97 WM by the end of the year. We’re very proud of these achievements which will undoubtedly improve our positioning as a leading operator in both Canada and France.”

Mr. Lemaire pointed out that Boralex has an excellent positioning in the wind power segment, citing the example of the most recent round of RFPs in France where the Corporation was awarded the largest portion of capacity for onshore wind power production. “We have what it takes to seize the growth opportunities currently available to us in the context of a market that is expected to be increasingly competitive,” he added.

  • The figures in brackets show the results on a Combined basis in comparison to those disclosed in accordance with IFRS. For the Combined information, see the Non-IFRS measures section below.
  • Invenergy Renewables LLC.
  • Acquisition of Kallista Energy Investment SAS and KE Production SAS.
FINANCIAL HIGHLIGHTS Three-month periods ended September 30
(in millions of dollars, unless otherwise specified) 2018 2017 2018 2017
IFRS Combined(1)
Production (GWh)(2) 548 605 679 706
Revenues from energy sales 79 74 93 85
EBITDA(A)(3) 39 39 51 50
EBITDA(A) margin (%) 49 53 55 59
Net loss (40) (26) (40) (26)
Net loss attributable to shareholders (34) (17) (34) (17)
Per share – basic and diluted ($0.43) ($0.23) ($0.43) ($0.23)
Net cash flows related to operating
activities 17 36 10 32
Cash flows from operations(4) 23 24 15 17
  • These amounts are adjusted on a Combined basis and are non-IFRS measures. See the Non-IFRS measures section in Interim Report 3 available on the websites of Boralex (boralex.com) and SEDAR (sedar.com).
  • Had the 42 GWh power limitation at the Niagara Region Wind Farm for which Boralex was compensated been included, production would have totalled 590 GWh for the three-month period ended September 30, 2018 (721 GWh on a Combined basis).
  • EBITDA(A) consists of earnings before interest, taxes, depreciation and amortization, adjusted to include other items. For more details, see the Non-IFRS measures section in Interim Report 3 available on the websites of Boralex (boralex.com) and SEDAR (sedar.com).
  • This is a non-IFRS measure. For more details, see the Non-IFRS measures section in Interim Report 3 available on the websites of Boralex (boralex.com) and SEDAR (sedar.com).
FINANCIAL HIGHLIGHTS Nine-month period ended September 30
(in millions of dollars, unless otherwise specified) 2018 2017 2018 2017
IFRS Combined(1)
Production (GWh)(2) 2,350 2,258 2,763 2,632
Revenues from energy sales 326 285 371 325
EBITDA(A)(3) 200 183 233 215
EBITDA(A) margin (%) 61 64 63 66
Net loss (50) (18) (50) (18)
Net loss attributable to shareholders (42) (4) (42) (4)
Per share – basic and diluted ($0.53) ($0.05) ($0.53) ($0.05)
Net cash flows related to operating 179 130 182 137
activities
Cash flows from operations(4) 121 127 125 131

Notes (1), (3) and (4) are identical to those in the table above.

  • Had the 126 GWh power limitation at the Niagara Region Wind Farm for which Boralex was compensated been included, production would have totalled 2,441 GWh for the nine-month period ended September 30, 2018 (2,854 GWh on a Combined basis).

Financial highlights

Three-month period ended September 30, 2018

Boralex generated revenues from energy sales of $79 million ($93 million) in the third quarter of 2018, up 6% (9%) compared with the same period in 2017. EBITDA(A) for the quarter totalled $39 million ($51 million), which is identical to the result of $39 million ($50 million) for the same quarter of 2017.

Cash flows from operations totalled $23 million ($15 million) for the third quarter of 2018 compared with $24 million ($17 million) for the same period a year earlier.

As a result, the Corporation reported a net loss attributable to shareholders amounting to $34 million ($34 million) or $0.43 ($0.43) per share (basic and diluted) for the third quarter of 2018, compared with a net loss attributable to shareholders of $17 million ($17 million) or $0.23 ($0.23) per share (basic and diluted) for the same period a year earlier.

The increase in net loss between the two periods resulted primarily from a lower production volume at existing facilities plus the increases of $16 million in amortization expense, $1 million in acquisition costs and $3 million in financing costs.

Nine-month period ended September 30, 2018

Boralex generated revenues from energy sales of $326 million ($371 million) for the first nine months of 2018, up 14% (14%) compared with the same period in 2017. EBITDA(A) for the period totalled $200 million ($233 million), up 9% (8%) from $183 million ($215 million) for the first nine months of 2017.

Cash flows from operations totalled $121 million ($125 million) for the first nine months of 2018 compared with $127 million ($131 million) for the same period a year earlier. This decline stemmed primarily from the $12 million increase in interest paid as well as acquisition costs of $8 million. These changes were partially offset by the $17 million increase in EBITDA(A).

Outlook

Following the recent acquisitions and the commissioning of Inter Deux Bos wind farm, the Corporation has substantially expanded its operating base. The installed capacity under Boralex’s control has now reached 1,853 MW, up 397 MW or 27% since the beginning of the year. Taking into account the facilities to be commissioned by 2020 as set out in the Growth Path for a total of 214 MW, Boralex should achieve an installed capacity of nearly 2,065 MW at the end of 2020, excluding any other opportunities that could arise.

To continue on the growth path, Boralex has in particular a portfolio of potential projects representing over 1,000 MW in Europe alone. In light of its long-term presence and deep knowledge of the French market, the Corporation has numerous strengths to capitalize on this favourable environment for developing renewable energy, particularly wind power. The Corporation will actively participate in the tendering system, which anticipates the awarding of contracts of a cumulative installed capacity of onshore wind power totalling 3,000 MW by June 2020, of which 2,400 MW is yet to be awarded, and which will benefit from 20-year contracts. Boralex is also seeking development opportunities elsewhere in Europe, particularly in the United Kingdom. Boralex also remains active in North America, particularly in Alberta where it has submitted bids under requests for proposals in partnership with developer AWEC.

In light of all the above, management maintains its annualized EBITDA(A) target of $390 million to $410 million under IFRS ($480 million to $500 million on a Combined basis) at the end of 2020.

Dividend declaration

The Corporation’s Board of Directors has authorized and declared a quarterly dividend of $0.1650 per common share to be paid on December 17, 2018 to shareholders of record at the close of business on November 30, 2018. Boralex has designated this dividend as an eligible dividend within the meaning of section 89.14 of the Income Tax Act (Canada) and all provisions of provincial laws applicable to eligible dividends.

Note that following the signing of the agreement to acquire Invenergy’s interests in five wind farms in Québec and given the confidence inspired by the outlook for the Corporation, Boralex’s Board of Directors had conditionally authorized, upon closing of the transaction, a further increase in the annual dividend of 4.8%, increasing it to $0.66 per share from $0.63 per share (to $0.1650 per share from $0.1575 per share on a quarterly basis). This second increase since the beginning of fiscal 2018, which became effective on September 14, 2018, brings the total dividend increase to 10% in 2018. Boralex is also maintaining its dividend policy which aims to distribute between 40% and 60% of its discretionary cash flows.

About Boralex

Boralex develops, builds and operates renewable energy power facilities in Canada, France, the United Kingdom and the United States. A leader in the Canadian market and France’s largest independent producer of onshore wind power, the Corporation is recognized for its solid experience in optimizing its asset base in four power generation types – wind, hydroelectric, thermal and solar. Boralex ensures sustainable growth by leveraging the expertise and diversification developed over the past 25 years. Boralex’s shares and convertible debentures are listed on the Toronto Stock Exchange under the ticker symbols BLX and BLX.DB.A, respectively. More information is available at www.boralex.com or www.sedar.com. Follow us on Facebook, LinkedIn and Twitter.

Combined – Non-IFRS measure

The combined information (“Combined”) presented above and elsewhere in the MD&A results from the combination of the financial information of Boralex Inc. (“Boralex” or the “Corporation”) under IFRS and its share of the financial information of the Interests (as defined in note 5 to Boralex’s interim financial statements). The Interests represent significant investments by Boralex and although IFRS does not permit the consolidation of their financial information within that of Boralex, management considers that information on a Combined basis is useful data for investors. In order to prepare the Combined information, Boralex first prepares its financial statements and those of the Interests in accordance with IFRS. Then, the Interests in Joint Ventures and associates, Share in earnings (losses) of the Joint Ventures and associates and Distributions received from the Joint Ventures and associates line items are replaced by Boralex’s respective share (ranging from 50% to 59.96%) in the financial statement items of the Interests (revenues, expenses, assets, liabilities, etc.). All the information required to make this calculation can be found in Boralex’s financial statements, more specifically in Note 5, Interests in the Joint Ventures and associates, with respect to the financial information of the Interests under IFRS. We also refer you to the Non-IFRS measures section for more information. It is important to note that the calculation method described here is identical to the method previously used to establish the data identified as Proportionate Consolidation in previous MD&As.

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For more information:

Julie Lajoye

Principal Advisor,

Public Affairs and Communications

Boralex Inc.

514-985-1327

julie.lajoye@boralex.com

Investor Relations

Marc Jasmin

Director,

Investor Relations

Boralex Inc.

514-284-9868

marc.jasmin@boralex.com

NT4

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