Boralex vigorously pursues its growth and diversification strategy in the second quarter

Highlights

• 89% growth in consolidated operating income and 15% growth in EBITDA(A)¹ in the second quarter of 2022
• Operating income of $45 million ($53 million)² for Q2-2022, up 89% (61%) from $24 million ($33 million) in 2021.
• EBITDA(A) of $121 million ($133 million) for Q2-2022, up 15% (14%) from $106 million ($117 million) in 2021.
• Increases mainly attributable to high electricity sales prices on certain feed-in premium contracts in France for which a legislative project to share with the French State the revenues generated beyond the contract prices is under discussion in Parliament
• 177 MW of wind and solar projects and 26 MW of storage projects added to the project portfolio
• Commissioning of 3 wind farms adding 31 MW of capacity in France.
• 22 MW of wind projects and 49 MW of solar projects added from organic growth.
• 82 MW of wind projects, 24 MW of solar projects and 26 MW of storage projects added from the Infinergy acquisition in the United Kingdom on July 4.
• 540 MW of solar projects and 77 MW of storage selected in the New York State call for tender
• Capital structure optimization and increase in sales volume at market price
• Early repayment of a $98 million project loan, of the $272 million used on the corporate credit facility, and of the $34 million US note (US$27 million). Favorable annualized effect of $19 million on discretionary cash flow.
• Boralex has more than $900 million in available cash and authorized financing⁴ to continue implementing its plan for growth.
• Early termination of 3 power purchase agreements representing a total of 58 MW at the end of July. The electricity will be sold on the market from the effective date of termination.
• Increase in cash flows
• Cash flow from operations⁴ of $86 million for Q2-2022, up $20 million from Q2-2021.
• Net cash flow related to operating activities of $97 million for Q2-2022, up $13 million from Q2-2021.
• Discretionary cash flow⁴ of $13 million, a $20 million improvement from Q2-2021.
• Production 2% (2%) lower than in Q2-2021 and 6% (6%) below anticipated production³
  • Wind: down 5% (5%) from Q2-2021 and 6% (5%) below anticipated production.
• Hydroelectric: 20% higher than in Q2-2021 and 8% below anticipated production.
• Solar: in line with Q2-2021, and 4% below anticipated production.

Montreal, Quebec, August 3, 2022 — Boralex Inc. (“Boralex” or the “Company”) (TSX: BLX) is pleased to report an increase in operating income and continued progress on certain development projects during the second quarter of 2022.

“For a second consecutive quarter, we made significant progress in our growth strategy by advancing several ongoing projects and adding new projects to our portfolio, now representing nearly 4 GW of power. New York State selected Boralex for 540 MW of solar projects and 77 MW of storage projects. In addition, we have 177 MW of wind and solar projects from the Infinergy acquisition in the United Kingdom and organic growth,” said Patrick Decostre, Boralex’s President and Chief Executive Officer.

1. EBITDA(A) is a total of sector measures. For more details, see the Non-IFRS financial measures section in this press release.
2. The figures in brackets indicated the results according to the Combined⁵, compared to those obtained according to the Consolidated.
3. Anticipated Production is an additional financial measures. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.
4. Combined, Cash Flow from operations, Discretionary Cash Flows and Available cash and authorized financing are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, these measures may not be comparable to similar measures used by other companies. For more details, see the Non-IFRS financial measures and other financial measures section of this press release

“As mentioned in the previous quarter, several European countries have been grappling with significant supply challenges and high electricity prices. France is also dealing with historically low nuclear power generation levels, which is widening the price gap with neighboring European countries. Land-based solar and wind farms can be commissioned quickly and at low cost in these markets. We are increasing our efforts and discussions with the various levels of government to accelerate our development and offer sustainable renewable energy supply solutions in the affected regions and those targeted for our growth in Europe. However, this acceleration must be done in a win-win setting for the countries and producers who invest while inflationary conditions result in a higher level of overall risk.” added Mr. Decostre.

2nd quarter highlights

Three-month periods ended June 30

			Consolidated				Combined 1
	(in millions of Canadian dollars, unless otherwise	2022	2021		Change	2022	2021		Change
	specified) (unaudited)			$	%			$	%
	Power production (GWh)2	1,298	1,323	(25)	(2)	1,452	1,485	(33)	(2)
	Revenues from energy sales and
	feed-in premium	168	147	21	14	185	164	21	12
	Operating Income	45	24	21	89	53	33	20	61
	EBITDA(A)3	121	106	15	15	133	117	16	14
	Net earnings (loss)	14	(12)	26	>100	14	(12)	26	>100
	Net earnings attributable to
	shareholders of Boralex	10	(16)	26	>100	10	(16)	26	>100
	Per share – basic and diluted	$0.10	($0.16)	$0.26	>100	$0.10	($0.16)	$0.26	>100
	Net cash flows related to operating
	activities	97	84	13	16	—	—	—	—
	Cash flows from operations1	86	66	20	32	—	—	—	—
	Discretionary cash flows1	13	(7)	20	>100	—	—	—	—

In the second quarter of 2022, Boralex produced 1,298 GWh (1,452 GWh) of power, down 2% (2%) compared to the 1,323 GWh (1,485 GWh) produced in the same quarter of 2021. For the three-month period ended June 30, 2022, revenues from energy sales and feed-in premiums were $168 million ($185 million), up 14% (12%) from Q2-2021, while EBITDA(A) reached $121 million ($133 million), up 15% (14%) from Q2-2021, and operating income was $45 million ($53 million), up 89% (61%) from the same quarter in 2021.

The decrease in production was due to unfavourable wind conditions in France. The increase in income, EBITDA(A) and operating income mainly stems from higher energy sales income for sites benefiting from the feed-in premium due to high market prices in France. The commissioning of new wind and solar farms and increased revenues from power plants selling at market prices also explain part of the increase.

Note that a legislative proposal regarding additional compensation contracts, which provides for revenue sharing between the French government and producers based on a threshold price to be determined annually by ministerial order, is currently under parliamentary review. As a result, the Company may be required to repay a portion of the amounts collected in 2022 if the legislation is passed retroactively.

For the three months ended June 30, 2022, Boralex posted net earnings of $14 million ($14 million) compared to net loss of $12 million ($12 million) for the corresponding period in 2021. The net earnings attributable to Boralex shareholders were $10 million ($10 million) or $0.10 ($0.10) per share (basic and diluted), compared to a net loss of $16 million ($16 million) or $0.16 ($0.16) per share (basic and diluted) for the corresponding period in 2021. The increase in net earnings is attributable to the increase in operating income.

1. Combined, Cash Flow from operations and Discretionary Cash Flows are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, these measures may not be comparable to similar measures used by other companies. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.
2. Power production includes the production for which Boralex received financial compensation following power generation limitations imposed by its clients since management uses this measure to evaluate the Corporation’s performance. This adjustment facilitates the correlation between power production and revenues from energy sales and feed-in premium
3. EBITDA(A) is a total of sector measures. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.

Six-month periods ended June 30

			Consolidated				Combined1
		2022	2021	Change		2022	2021	Change
	(in millions of Canadian dollars, unless otherwise specified)			$	%			$	%
	Power production (GWh)2	2,979	2,952	27	1	3,327	3,315	12	—
	Revenues from energy sales and
	feed-in premium	395	353	42	12	433	392	41	10
	Operating Income	136	102	34	35	158	124	34	28
	EBITDA(A)3	294	257	37	15	316	279	37	13
	Net earnings	71	28	43	>100	71	32	39	>100
	Net earnings attributable to
	shareholders of Boralex	60	20	40	>100	60	24	36	>100
	Per share – basic and diluted	$0.59	$0.18	$0.41	>100	$0.59	$0.23	$0.36	>100
	Net cash flows related to operating activities	234	217	17	8	—	—	—	—
	Cash flows from operations1
		222	181	41	23	—	—	—	—
		As at	As at			As at	As at
		June 30	Dec. 31	Change		June 30	Dec. 31	Change
				$	%			$	%
	Total assets	6,305	5,751	554	10	6,685	6,162	523	8
	Debt – principal balance	3,256	3,682	(426)	(12)	3,593	4,030	(437)	(11)
	Total project debt	2,956	3,141	(185)	(6)	3,293	3,489	(196)	(6)
	Total corporate debt	300	541	(241)	(45)	300	541	(241)	(45)

For the six-month period ended June 30, 2022, Boralex produced 2,979 GWh (3,327 GWh) of power, up 1% (stable) compared to the 2,952 GWh (3,315 GWh) produced in the same period in 2021. For the six-month period ended June 30, 2022, revenues from energy sales and feed-in premiums amounted to $395 million ($433 million), up $42 million ($41 million) or 12% (10%) from the same period in 2021, while EBITDA(A) was $294 million ($316 million), $37 million ($37 million) or 15% (13%) higher than the same period last year. Operating income totalled $136 million ($158 million), up $34 million ($34 million) over the same period in 2021. The increase in income, EBITDA(A) and operating income mainly stems from higher energy sales for sites benefiting from the feed-in premium due to high market prices in France. The commissioning of new wind and solar farms and increased revenues from power plants selling at market prices also explain part of the increase.

As mentioned in the quarterly results section, a legislative proposal regarding additional compensation contracts, which provides for revenue sharing between the French government and producers based on a threshold price to be determined annually by ministerial order, is currently under parliamentary review. As a result, the Company may be required to repay a portion of the amounts collected in 2022 if the legislation is passed retroactively.

Overall, for the six-month period ended June 30, 2022, Boralex posted net earnings of $71 million ($71 million) compared to net earnings of $28 million ($32 million) for the corresponding period in 2021. The net earnings attributable to Boralex shareholders were $60 million ($60 million) or $0.59 (0.59 $) per share (base and diluted), compared to $20 million ($24 million) or $0.18 ($0.23) per share (base and diluted) for the same period in 2021. This increase is mainly due to an increase in operating income.

Outlook

On June 17, 2021, Boralex’s management unveiled an updated strategic plan that will guide efforts to achieve its new corporate targets for 2025. Boralex’s 2025 Strategic Plan is built around the four strategic directions of the plan launched in 2019—growth, diversification, customers and optimization—and six corporate targets. The details of this plan, which also incorporates Boralex’s CSR strategy, are included in the Corporation’s annual report.

Highlights of the main achievements of the quarter ended June 30, 2022 in relation to the 2025 Strategic Plan can be found in the 2022 Interim Report 2 available in the Investors section of Boralex’s website.

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

1. Combined, Cash Flow from operations and Discretionary Cash Flows are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, these measures may not be comparable to similar measures used by other companies. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.
2. Power production includes the production for which Boralex received financial compensation following power generation limitations imposed by its clients since management uses this measure to evaluate the Corporation’s performance. This adjustment facilitates the correlation between power production and revenues from energy sales and feed-in premium.
3. 3 EBITDA(A) is a total of sector measures. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.

To pursue its organic growth, the Corporation has a pipeline of projects at various stages of development defined on the basis of clearly identified criteria, totalling 3,889 MW in wind and solar projects and 203 MW in energy storage projects, as well as a 706 MW Growth Path in wind and solar projects and 3 MW in storage projects.

Dividend declaration

The Company’s Board of Directors has authorized and announced a quarterly dividend of $0.1650 per common share. This dividend will be paid on September 16, 2022, to shareholders of record at the close of business on August 31, 2022. 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, we have 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, we also have facilities in the United States and development projects in the United Kingdom. Over the past five years, our installed capacity has more than doubled to 2.5 GW. We are developing a portfolio of close to 4 GW in wind and solar projects and over 200 MW in storage projects, guided by our values and our corporate social responsibility (CSR) approach. Through profitable and sustainable growth, Boralex is actively participating in the fight against global warming. Thanks to our fearlessness, our discipline, our expertise and our diversity, we continue to be an industry leader. Boralex’s shares are listed on the Toronto Stock Exchange under the ticker symbol BLX.

For more information, go to www.boralex.com or www.sedar.com. Follow us on Facebook, LinkedIn and Twitter.

Non-IFRS measures

Performance measures

In order to assess the performance of its assets and reporting segments, Boralex uses performance measures. Management believes that these measures are widely accepted financial indicators used by investors to assess the operational performance of a company and its ability to generate cash through operations. The non-IFRS and other financial measures also provide investors with insight into the Corporation’s decision making as the Corporation uses these non-IFRS financial measures to make financial, strategic and operating decisions. The non-IFRS and other financial measures should not be considered as a substitute for IFRS measures.

These non-IFRS financial measures are derived primarily from the audited consolidated financial statements, but do not have a standardized meaning under IFRS; accordingly, they may not be comparable to similarly named measures used by other companies. Non-IFRS and other financial measures are not audited. They have important limitations as analytical tools and investors are cautioned not to consider them in isolation or place undue reliance on ratios or percentages calculated using these non-IFRS financial measures.

Non-IFRS financial measures

Specific financial			Most directly
	Use	Composition	comparable
measure
			IFRS measure
Financial data –	To assess the	Results from the combination of the financial information of	Respective
Combined (all	operating performance	Boralex Inc. under IFRS and the share of the financial	financial data –
disclosed financial	and the ability of a	information of the Interests.	Consolidated
data)	company to generate
	cash from its	Interests in the Joint Ventures and associates, Share in
	operations.
		earnings (losses) of the Joint Ventures and associates and
	The Interests represent	Distributions received from the Joint Ventures and
	significant  investments	associates are then replaced with Boralex’s respective
	by Boralex.	share (ranging from 50% to 59.96%) in the financial
		statements of the Interests (revenues, expenses, assets,
		liabilities, etc.)
Cash flows from	To assess the cash	Net cash flows related to operating activities before	Net cash flows
operations	generated by the	changes in non-cash items related to operating activities.	related to
	Company’s operations		operating
	and its ability to finance		activities
	its expansion from
	these funds.
Discretionary cash	To assess the cash	Net cash flows related to operating activities before “change	Net cash flows
flows	generated from	in non-cash items related to operating activities,” less	related to
	operations and the	(i) distributions paid to non-controlling shareholders, (ii)	operating
	amount available for	additions to property, plant and equipment (maintenance of	activities
	future development or
		operations), (iii) repayments on non-current debt (projects)
	to be paid as dividends
		and repayments to tax equity investors; (iv) principal
	to common
		payments related to lease liabilities; (v) adjustments for
	shareholders while
		non-operational items; plus (vi) development costs (from the
	preserving the long-
	term value of the	statement of earnings).
	business.
	Corporate objectives
	for 2025 from the
	strategic plan.

Non-IFRS financial measures

Specific financial			Most directly
	Use	Composition	comparable
measure
			IFRS measure
Available cash and	To assess the cash and	Represents cash and cash equivalents, as stated on the	Cash and cash
cash equivalents	cash equivalents	balance sheet, from which known short-term cash	equivalents
	available, as at balance	requirements are excluded.
	sheet date, to fund the
	Corporation’s growth.
Available cash	To assess the total	Results from the combination of credit facilities available to	Cash and cash
resources and	cash resources	fund growth and the available cash and cash equivalents.	equivalents
authorized	available, as at balance
financing facilities	sheet date, to fund the
	Corporation’s growth.

Other financial measures – Total of segments measure

Specific financial measure	Most directly comparable IFRS measure
EBITDA(A)	Operating income
Other financial measures – Supplementary Financial Measures
Specific financial measure	Composition
Anticipated production	Production that the Company anticipates for the oldest sites
	based on adjusted historical averages, commissioning and
	planned shutdowns and, for other sites, based on the
	production studies carried out.
Credit facilities available for growth	The credit facilities available for growth include the unused tranche
	of the parent company’s credit facility, apart from the accordion
	clause, as well as the unused tranche of the construction facility.

Combined

The following tables reconcile Consolidated financial data with data presented on a Combined basis:

				2022			2021
	(in millions of Canadian dollars) (unaudited)	Consolidated	Reconciliation(1)	Combined	Consolidated	Reconciliation(1)	Combined
	Three-month periods ended June 30:
	Power production (GWh)(2)	1,298	154	1,452	1,323	162	1,485
	Revenues from energy sales and feed-in
	premium	168	17	185	147	17	164
	Operating Income	45	8	53	24	9	33
	EBITDA(A)	121	12	133	106	11	117
	Net earnings	14	—	14	(12)	—	(12)
	Six-month periods ended June 30:
	Power production (GWh)(2)	2,979	348	3,327	2,952	363	3,315
	Revenues from energy sales and feed-in
	premium				353	39	392
		395	38	433
	Operating Income	136	37	158	102	22	124
	EBITDA(A)	294	22	316	257	22	279
	Net earnings	71	—	71	28	4	32
			As at June 30, 2022			As at December 31, 2021
	Total assets	6,305	380	6,685	5,751	411	6,162
	Debt – Principal balance	3,256	337	3,593	3,682	348	4,030

• Includes the respective contribution of Joint Ventures and associates as a percentage of Boralex’s interest less adjustments to reverse recognition of these interests under IFRS.
• Includes financial compensation following electricity production limitations imposed by clients.

EBITDA(A)

EBITDA(A) is a total of segment financial measures and represents earnings before interest, taxes, depreciation and amortization, adjusted to exclude other items such as acquisition costs, other loss (gains), net loss (gain) on financial instruments and foreign exchange loss (gain), the last two items being included under Other.

Management uses EBITDA(A) to assess the performance of the Corporation’s reporting segments.

EBITDA(A) is reconciled to the most comparable IFRS measure, namely, operating income, in the following table:

				2022			2021	Variation
								2022 vs 2021
	(in millions of Canadian dollars)
	(unaudited)	Consolidated	Reconciliation(1)	Combined	Consolidated	Reconciliation(1)	Combined	Consolidated	Combined
	Three-month periods ended June 30:
	Operating income	45	8	53	24	9	33	21	20
	Amortization	72	6	78	73	5	78	(1)	—
	Impairment	2	1	3	1	—	1	1	2
	Share in earnings of Joint Ventures and
	Associates	10	(10)	—	(1)	1	—	11	—
	Change in fair value of a derivative
	included in the share of the Joint
	Ventures	(8)	8	—	4	(4)	—	(12)	—
	Other gains	—	(1)	(1)	5	—	5	(5)	(6)
	EBITDA(A)	121	12	133	106	11	117	15	16
	Six-month periods ended June 30:
	Operating income	136	22	158	102	22	124	34	34
	Amortization	144	12	156	148	10	158	(4)	(2)
	Impairment	3	1	4	2	—	2	1	2
	Share in earnings of Joint Ventures and
	Associates	34	(34)	—	9	(9)	—	25	—
	Excess of the interest over the net
	assets of Joint Venture SDB I	—	—	—	6	(6)	—	(6)	—
	Change in fair value of a derivative
	included in the share of the Joint
	Ventures	(23)	23	—	(5)	5	—	(18)	—
	Other gains	—	(2)	(2)	(5)	—	(5)	5	3
	EBITDA(A)	294	22	316	257	22	279	37	37

• Includes the respective contribution of Joint Ventures and associates as a percentage of Boralex’s interest less adjustments to reverse recognition of these interests under IFRS.

Cash flow from operations and discretionary cash flows

The Corporation computes the cash flow from operations and discretionary cash flows as follows:

Consolidated

Three-month periods ended		Twelve-month periods ended
June 30,	June 30,	June 30,	December 31,

(in millions of Canadian dollars) (unaudited)

2022	2021	2022	2021

 

	Net cash flows related to operating activities	97	84	362	345
	Changes in non-cash operating items	(11)	(18)	42	18
	Cash flows from operations	86	66	404	363
	Repayments on non-current debt (projects)(1)	(69)	(72)	(218)	(222)
	Adjustment for non-operating items(2)	4	2	6	8
		21	(4)	192	149
	Principal payments related to lease liabilities	(3)	(2)	(16)	(13)
	Distributions paid to non-controlling shareholders	(10)	(6)	(23)	(20)
	Additions to property, plant and equipment
	(maintenance of operations)	(3)	(1)	(12)	(8)
	Development costs (from statement of earnings)	8	6	28	24
	Discretionary cash flows	13	(7)	169	132

• Excluding VAT bridge financing and early debt repayments.
• For the three-month period ended June 30, 2022, favourable adjustment of $4 million consisting mainly of transactions and acquisition costs. For the twelve-month period ended June 30, 2022, favourable adjustment of $6 million consisting mainly of transactions and acquisition costs. For the twelve-month period ended December 31, 2021, favourable adjustment of $8 million consisting of $5 million of expense payments and assumed liabilities related to acquisitions as well as $3 million for previous financing arrangements or amount not related to operating sites.

Available cash and cash equivalents and available cash resources and authorized credit facilities

The Corporation defines available cash and cash equivalents as well as available cash and authorized financing facilities as follows:

		Consolidated
		As at June 30	As at December 31
	(in millions of Canadian dollars) (unaudited)	2022	2021
	Cash and cash equivalents	701	256
	Cash and cash equivalents earmarked for known short-term requirements	(280)	(220)
	Available cash and cash equivalents	421	61
	Credit facilities available to fund growth	500	339
	Available cash resources and authorized financing facilities	921	400

For more information:

Media
Camille Laventure
Advisor, Digital Communications
Boralex Inc.
438-883-8580
camille.laventure@boralex.com

Investor Relations
Stéphane Milot
Senior Director, Investor Relations
Boralex Inc.
514 213-1045
stephane.milot@boralex.com

NT4