2017 second quarter: Boralex announces growth in operating results
Boralex Inc. (“Boralex” or the “Corporation”) (TSX: BLX) recorded increases in production, revenues from energy sales and EBITDA(A) for the three-month period ended June 30, 2017, compared with the second quarter of 2016. “We’re extremely proud of these results which underscore the merits of our expansion strategy,” pointed out Patrick Lemaire, Boralex’s President and Chief Executive Officer. “What’s more, thanks to our approach focused on segment and geographic diversification of our sites, the good performance of wind farms in Canada and hydroelectric power stations in the United States more than compensated the less favourable conditions for French wind farms and Canadian hydroelectric power stations.”
Operational highlights
Note: The figures in brackets below show results under proportionate consolidation compared with the results under IFRS. Boralex generated 744 GWh (863 GWh) of electricity in the second quarter of 2017, up 31% (27%) from the same period of 2016. This increase stemmed largely from the contribution of sites acquired and commissioned after June 30, 2016, representing an installed capacity of 274 MW. Excluding the contribution of these sites, the production at existing facilities rose 7% (7%), driven primarily by the improved performance at U.S. hydroelectric power stations which benefited from better water flow conditions during the last quarter, offsetting the lower production of French wind farms and Canadian hydroelectric power stations. Note that weather conditions are generally less favourable for the wind power segment in the second quarter.
Financial highlights
Boralex recorded $92 million ($105 million) in revenues from energy sales for the second quarter of 2017, up 41% (36%) from the same period of 2016. With these revenues, Boralex increased its EBITDA(A) by 52% (39%) to $57 million ($67 million). As a result, the Corporation’s EBITDA(A) margin was up four percentage points to 62% from 58% for the same period of 2016 (64% from 63%). Also, cash flows from operations reached $44 million ($46 million) in the second quarter of 2017 compared with $27 million ($28 million) for the same period of 2016. This increase was largely attributable to the $19 million ($19 million) increase in EBITDA(A).
The Corporation reported a net loss attributable to shareholders of $2 million or $0.02 per share (basic and diluted) for the second quarter of 2017 compared with a loss of $7 million or $0.11 per share (basic and diluted) for the same quarter of 2016. Note that the proportionate consolidation of results had no effect on the net loss.
Outlook
Boralex continues its expansion strategy. By the end of fiscal 2017, four new wind farms will be commissioned in France for an additional installed capacity of 87 MW. Accordingly, at the end of fiscal 2017, Boralex’s installed capacity under its control would amount to 1,456 MW, up 321 MW or 28% compared with the December 31, 2016 level. Note that the Corporation completed its largest ever transaction with the acquisition of the 230 MW Niagara Region Wind Farm in January 2017. Within its portfolio of projects, the Corporation expects to commission during fiscal 2018 four wind farms in France, one wind farm in Canada and its first hydroelectric power station in Ontario, namely Yellow Falls with an installed capacity of 16 MW, for a total of 120 MW. In 2019, the 50 MW Otter Creek wind power project will be launched in Canada. Boralex acquired a majority interest in this project during the first quarter of 2017. Once completed, these sites which are currently under development will increase Boralex’s installed capacity to 1,626 MW, which is less than 375 MW below the target of 2,000 MW by the end of 2020. Given the projects that are at an advanced stage of development in France and the initiatives taken elsewhere in Europe and North America, Boralex’s management is confident of achieving this target which represents a compound annual growth rate of about 10%.
At the same time, Boralex continues its expansion strategy in the markets of Alberta and Northeastern United States. In this respect, it announced on July 27, 2017 that it had submitted three different bids with the same wind project for the request for proposals launched on March 31, 2017 by the State of Massachusetts for the supply of renewable energy. The proposed SBx project is a 300 MW power project located on the private land of the Seigneurie de Beaupré, in the Greater Québec City Area. If selected, SBx would represent the fourth phase of the Seigneurie de Beaupré Wind Farms, the largest group of wind farms in Canada which already has an installed capacity of 364 MW. SBx is expected to be entirely developed, financed, built and operated by Boralex and Gaz Métro. Last, very recently, the Caisse de dépôt et placement du Québec (the “Caisse”) became Boralex’s main shareholder with the acquisition of all the Class A common shares of Boralex held by Cascades Inc., representing 17.3% of the outstanding shares. In connection with this transaction, Boralex and the Caisse in particular agreed to explore partnership opportunities relating to investments in projects to be developed by Boralex, in line with its growth strategy.
Dividend declaration
The Corporation’s Board of Directors has authorized and declared a quarterly dividend of $0.15 per common share to be paid on September 18, 2017 to shareholders of record at the close of business on August 31, 2017. 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.
About Boralex
Boralex develops, builds and operates renewable energy power facilities in Canada, France 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 segments — wind, hydroelectric, thermal and solar. Boralex ensures sustained growth with its approach focused on segment and geographic diversification, and over 25 years of expertise. 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.
Caution regarding forward-looking statements
Some of the statements contained in this press release, including those regarding future results and performance, are forward-looking statements based on current expectations, within the meaning of securities legislation. Boralex would like to point out that, by their very nature, forward-looking statements involve risks and uncertainties such that its results or the measures it adopts could differ materially from those indicated by or underlying these statements, or could have an impact on the degree of realization of a particular projection. The main factors that could lead to a material difference between the Corporation’s actual results and the projections or expectations set forth in the forward- looking statements include, but are not limited to, the general impact of economic conditions, currency fluctuations, volatility in the selling price of energy, the Corporation’s financing capacity, negative changes in general market conditions and regulations affecting the industry, raw material price increases and availability, as well as other factors discussed in the Corporation’s filings with the various securities commissions.
Unless otherwise specified by the Corporation, the forward-looking statements do not take into account the possible impact on its activities, transactions, non-recurring items or other exceptional items announced or occurring after the statements are made. There can be no assurance as to the materialization of the results, performance or achievements as expressed or implied by forward-looking statements. The reader is cautioned not to place undue reliance on such forward-looking statements. Unless required to do so under applicable securities legislation, Boralex management does not assume any obligation to update or revise forward-looking statements to reflect new information, future events or other changes.
Non-IFRS measures
The interim report contains a “Non-IFRS Measures” section. In order to assess the performance of its assets and reporting segments, Boralex uses EBITDA(A) and cash flows from operations as performance measures under IFRS and proportionate consolidation. EBITDA(A) represents earnings before interest, taxes, depreciation and amortization, adjusted to include other items. Cash flows from operations are equal to net cash flows related to operating activities before change in non-cash items related to operating activities.
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. These non-IFRS measures are derived primarily from the unaudited interim 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.
Proportionate consolidation
The interim report also contains a section entitled, “Reconciliations between IFRS and Proportionate Consolidation,” in which the results of Joint Ventures 50% owned by Boralex are treated as if they were proportionately consolidated instead of being accounted for using the equity method as required by IFRS. Under proportionate consolidation, which is no longer permitted in accordance with IFRS, the items Interests in the Joint Ventures and Share in earnings (loss) of the Joint Ventures are eliminated and replaced by Boralex’s share (50%) in all items in the financial statements (revenues, expenses, assets and liabilities). Since the information that Boralex uses to perform internal analyses and make strategic and operating decisions is compiled on a proportionate consolidation basis, management has considered it relevant to include the “Proportionate Consolidation” section to make it easier for investors to understand the concrete impacts of decisions made by the Corporation. Accordingly, tables included in this section reconcile IFRS data with data presented on a proportionate consolidation basis.
