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, Aug. 03, 2022 (GLOBE NEWSWIRE) — 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
Combined1
(in millions of Canadian dollars, unless otherwise specified) (unaudited)  2022 2021   Change
2022 2021
  Change
                   
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.

Six-month periods ended June 30

  Consolidated Combined1
(in millions of Canadian dollars, unless otherwise specified) 2022 2021 Change 2022 2021 Change
    $   %       $   %  
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
June 30
As at
Dec. 31
Change As at
June 30
As at
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 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
measure
Use Composition Most directly
comparable
IFRS measure
Financial data – Combined (all disclosed financial data) To assess the operating performance and the ability of a company to generate cash from its operations.

The Interests represent significant investments by Boralex.

Results from the combination of the financial information of Boralex Inc. under IFRS and the share of the financial information of the Interests.

Interests in the Joint Ventures and associates, Share in earnings (losses) of the Joint Ventures and associates and Distributions received from the Joint Ventures and associates are then replaced with Boralex’s respective share (ranging from 50% to 59.96%) in the financial statements of the Interests (revenues, expenses, assets, liabilities, etc.)

Respective financial data – Consolidated
Cash flows from operations To assess the cash generated by the Company’s operations and its ability to finance its expansion from these funds. Net cash flows related to operating activities before changes in non-cash items related to operating activities. Net cash flows related to operating activities
Discretionary cash flows To assess the cash generated from operations and the amount available for future development or to be paid as dividends to common shareholders while preserving the long- term value of the business.

Corporate objectives for 2025from the strategic plan.

Net cash flows related to operating activities before “change in non-cash items related to operating activities,” less (i) distributions paid to non-controlling shareholders, (ii) additions to property, plant and equipment (maintenance of operations), (iii) repayments on non-current debt (projects) and repayments to tax equity investors; (iv) principal payments related to lease liabilities; (v) adjustments for non-operational items; plus (vi) development costs (from the statement of earnings). Net cash flows related to operating activities
Non-IFRS financial measures
Specific financial
measure
Use Composition Most directly
comparable
IFRS measure
Available cash and cash equivalents To assess the cash and cash equivalents available, as at balance sheet date, to fund the Corporation’s growth. Represents cash and cash equivalents, as stated on the balance sheet, from which known short-term cash requirements are excluded. Cash and cash equivalents
Available cash resources and authorized financing facilities To assess the total cash resources available, as at balance sheet date, to fund the Corporation’s growth. Results from the combination of credit facilities available to fund growth and the available cash and cash equivalents. Cash and cash equivalents
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 395 38 433 353 39 392
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
(1) 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.
(2) 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  
(1) 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  Three-month periods ended 
(in millions of Canadian dollars) (unaudited) June 30,
2022
  June 30,
2021
  June 30,
2022
  December 31,
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  
(1) Excluding VAT bridge financing and early debt repayments.
(2) 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  

Disclaimer regarding forward-looking statements

Certain statements contained in this release, including those related to results and performance for future periods, installed capacity targets, EBITDA(A) and discretionary cash flows, the Company’s strategic plan, business model and growth strategy, organic growth and growth through mergers and acquisitions, obtaining an investment grade credit rating, payment of a quarterly dividend, the Company’s financial targets, the partnership with Énergir and Hydro-Québec for the elaboration of three 400 MW projects for which the development will depend on Hydro-Québec’s changing needs, the portfolio of renewable energy projects, the Company’s Growth Path and its Corporate Social Responsibility (CSR) objectives are forward-looking statements based on current forecasts, as defined by securities legislation. Positive or negative verbs such as “will,” “would,” “forecast,” “anticipate,” “expect,” “plan,” “project,” “continue,” “intend,” “assess,” “estimate” or “believe,” or expressions such as “toward,” “about,” “approximately,” “to be of the opinion,” “potential” or similar words or the negative thereof or other comparable terminology, are used to identify such statements.

Forward-looking statements are based on major assumptions, including those about the Company’s return on its projects, as projected by management with respect to wind and other factors, opportunities that may be available in the various sectors targeted for growth or diversification, assumptions made about EBITDA(A) margins, assumptions made about the sector realities and general economic conditions, competition, exchange rates as well as the availability of funding and partners. While the Company considers these factors and assumptions to be reasonable, based on the information currently available to the Company, they may prove to be inaccurate.

Boralex wishes to clarify that, by their very nature, forward-looking statements involve risks and uncertainties, and that its results, or the measures it adopts, could be significantly different from those indicated or underlying those statements, or could affect the degree to which a given forward-looking statement is achieved. The main factors that may result in any significant discrepancy between the Company’s actual results and the forward-looking financial information or expectations expressed in forward-looking statements include the general impact of economic conditions, fluctuations in various currencies, fluctuations in energy prices, the Company’s financing capacity, competition, changes in general market conditions, industry regulations and amendments thereto, litigation and other regulatory issues related to projects in operation or under development, as well as other factors listed in the Company’s filings with the various securities commissions.

Unless otherwise specified by the Company, forward-looking statements do not take into account the effect that transactions, non-recurring items or other exceptional items announced or occurring after such statements have been made may have on the Company’s activities. There is no guarantee that the results, performance or accomplishments, as expressed or implied in the forward-looking statements, will materialize. Readers are therefore urged not to rely unduly on these forward-looking statements.

Unless required by applicable securities legislation, Boralex’s management assumes no obligation to update or revise forward-looking statements in light of new information, future events or other changes.

Percentage figures are calculated in thousands of dollars.

For more information:
   
Media Investor Relations
Camille Laventure Stéphane Milot
Advisor, Digital Communications Senior Director, Investor Relations
Boralex Inc. Boralex Inc.
438-883-8580 514 213-1045
[email protected] [email protected]
   
Source: Boralex Inc.


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