Boralex reports operating income of $7 million and actively pursues its development and diversification activities in the third quarter

MONTREAL, Nov. 14, 2024 (GLOBE NEWSWIRE) -- Boralex Inc. (“Boralex” or the “Company”) (TSX: BLX) is pleased to report its results for the third quarter and nine-month period ended September 30, 2024.

Highlights

Third quarter financial results

• EBITDA(A)1, operating income and net earnings under pressure in Q3-2024 owing to adverse weather conditions
  • Production down 3% (1% on a combined1 basis)2 from Q3-2023; total production 14% (11%) below anticipated production1 due primarily to adverse wind conditions in Canada and France as well as increased curtailments at certain wind farms.
  • EBITDA(A) of $87 million ($109 million on a combined basis) in Q3-2024, down $3 million ($4 million) from Q3-2023, with the decrease in production partially offset by the contribution of newly commissioned sites in France and the positive impact of the electricity selling price optimization strategy.
  • Operating income of $7 million ($22 million) in Q3-2024, down $6 million ($6 million) from Q3-2023.
  • Net earnings down $7 million from Q3-2023.
• Lower net cash flow related to operating activities for the quarter, balance sheet remains strong
  • Net cash outflows related to operating activities of $184 million in Q3-2024 compared to inflows of $1 million in Q3-2023, a decrease attributable to the change in non-cash working capital items following the payment from accounts payable of the inframarginal revenue cap tax and the feed-in premium in France.
  • Discretionary cash flows1 of $16 million in Q3-2024, down $7 million from Q3-2023.
  • $288 million of cash and cash equivalents included in the $608 million of available cash resources and authorized financing1 as at September 30, 2024.

Update on development and construction activities

• Under-construction and ready-to-build projects progressing according to plan
  • Ongoing turbine assembly at the Apuiat wind farm in Québec (total 200 MW, Boralex’s share 100 MW) and the Limekiln wind farm in Scotland (106 MW), both scheduled for commissioning later this year.
  • Start of construction at the Hagersville (300 MW) and Tilbury (80 MW) storage projects in Ontario, scheduled for commissioning in the fourth quarter of 2025.
  • Ongoing development of the Des Neiges Sud wind project in Québec (total 400 MW, Boralex’s share 133 MW) and the Oxford storage project in Ontario (125 MW), both scheduled for commissioning in 2026.
• Acquisition of Sallachy, a 50 MW advanced-stage wind project in the United Kingdom
• 391 MW added to the early-stage project pipeline
  • 510 MW in wind, solar, and storage capacity added and modified in North America and Europe.
  • 119 MW of non-strategic solar projects removed in Scotland.
• Electricity selling price optimization strategy
  • Signing of a 15-year corporate PPA with Nestlé France for a facility commissioned in 2024 and two projects included in the Corporation's project pipeline.
  • Signing of a 20-year corporate PPA with Saint-Gobain for two solar power projects and one wind power project included in the Corporation's project pipeline.

“We are pleased to report on the substantial developments within our secured project pipeline. Construction is proceeding apace at our Apuiat and Limekiln wind projects in Québec and Scotland, with commissioning of both projects planned for later this year. We have also commenced construction on our Hagersville and Tilbury storage projects in Ontario, which are scheduled for commissioning at the end of 2025. These developments confirm our teams’ ability to successfully execute projects on time in a variety of geographical settings, which bodes well for future projects. Demand in our target markets remains strong and we are well positioned to meet it. In particular, Hydro-Québec’s plan to rapidly develop 10 GW of projects, the Ontario government’s announcement of a 5 GW competitive energy procurement and the announcement of major initiatives linked to an accelerated energy transition in the United Kingdom represent strong growth potential for the Company,” said Patrick Decostre, President and Chief Executive Officer of Boralex.

“This quarter, Boralex recorded a low level of production owing to adverse weather conditions in both Canada and France. In the past few years we have seen the volatility of the resource in our segment grow from quarter to quarter, which makes it more difficult to plan and manage production without however affecting mid to long term annual production forecasts. The fluctuating weather conditions underscore the need to diversify both geographically, notably in the UK and technologically in order to strengthen the resilience of our business and ensure more stable production. We are also working to optimize our revenues by diversifying our electricity selling price optimization strategy, and on that front we are very proud to announce the signature of two corporate power purchase agreements in France with leading industrial players Nestlé and Saint-Gobain,” Mr. Decostre added.

Finally, Boralex continues to excel on the corporate social responsibility front. In the third quarter, the Company announced that it was one of the few companies in the industry to have had its greenhouse gas emission reduction targets validated by the Science Based Targets initiative (SBTi). This recognition shows Boralex’s commitment to achieve carbon neutrality by 2050.

3rd quarter highlights

Three-month periods ended September 30

In the third quarter of 2024, Boralex produced 1,081 GWh (1,508 GWh) of electricity, 3% (1%) less than the 1,110 GWh (1,522 GWh) produced in the third quarter of 2023. The decrease was mainly attributable to the weather conditions and power curtailments. As a result, Boralex ended the quarter with total production that was 14% (11%) below anticipated production.

Revenues from energy sales and feed-in premiums for the three-month period ended September 30, 2024, amounted to $150 million ($175 million), 12% (10% on a combined basis) lower than in the third quarter of 2023. The decrease was mainly attributable to the lower production. EBITDA(A)1 amounted to $87 million ($109 million), down 4% (4%) from the third quarter of 2023. The decline in production was partially offset by the contribution of new assets commissioned in France and to a lesser degree by the positive impact of the electricity selling price optimization strategy. Operating income totalled $7 million ($22 million), compared to $13 million ($28 million) for the same quarter of 2023. The Company posted a net loss of $14 million, a decrease of $7 million compared to the $7 million loss recorded for the same quarter of 2023.

Nine-month periods ended September 30

In the nine-month period ended September 30, 2024, Boralex produced 4,171 GWh (5,745 GWh) of power, slightly more than the 4,159 GWh (5,670 GWh) produced in the same period in 2023. Revenues from energy sales and feed-in premiums for the nine-month period ended September 30, 2024, amounted to $589 million ($675 million), down $90 million ($84 million) or 13% (11%) from the same period in 2023.

EBITDA(A) amounted to $412 million ($479 million), up $36 million ($33 million) or 10% (7%) from the same period last year. Operating income totalled $148 million ($214 million), up $20 million ($27 million) from the same period in 2023. Overall, for the nine-month period ended September 30, 2024, Boralex posted net earnings of $76 million ($76 million) compared to net earnings of $57 million ($57 million) for the same period in 2023.

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 September 30, 2024, in relation to the 2025 Strategic Plan can be found in the 2024 Interim Report 3, 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 fuel its organic growth, the Company has a pipeline of projects at various stages of development and construction defined on the basis of clearly identified criteria, totaling 7.2 GW of wind, solar and energy 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 December 16, 2024, to shareholders of record at the close of business on November 29, 2024. 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 over 3.1 GW. We are developing a portfolio of projects in development and construction of more than 7.2 GW in wind, solar and 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, visit www.boralex.com or www.sedarplus.ca. Follow us on Facebook, LinkedIn and X.

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 substitutes for IFRS measures.

These non-IFRS and other 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.

Combined

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

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 and integration costs, other losses (gains), net loss (gain) on financial instruments and foreign exchange loss (gain), with the last two items included under Other.

EBITDA(A) is used 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:

Cash flow from operations and discretionary cash flows

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

Available cash and cash equivalents and available cash resources and authorized financing

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

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 Corporation'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 Corporation’s financial targets, the projects commissioning dates, the portfolio of renewable energy projects, the Corporation’s Growth Path, the bids for new storage and solar projects 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 Corporation’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 Corporation considers these factors and assumptions to be reasonable, based on the information currently available to the Corporation, 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 Corporation’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 risk of not renewing PPAs or being unable to sign new corporate PPA, the risk of not being able to capture the US or Canadian investment tax credit, counterparty risk, the Corporation’s financing capacity, cybersecurity risks, competition, changes in general market conditions, industry regulations and amendments thereto, particularly the legislation, regulations and emergency measures that could be implemented for time to time to address high energy prices in Europe, litigation and other regulatory issues related to projects in operation or under development, as well as certain other factors considered in the sections dealing with risk factors and uncertainties appearing in Boralex's MD&A for the fiscal year ended December 31, 2023.

Unless otherwise specified by the Corporation, 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 Corporation’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.