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Press release from CNW Group

Boralex: Quarterly operating results on the rise

Wednesday, November 09, 2011

Boralex: Quarterly operating results on the rise07:00 EST Wednesday, November 09, 2011MONTREAL, Nov. 9, 2011 /CNW Telbec/ - Boralex Inc. ("Boralex" or the "Corporation") reported an improvement in its operating results for the third quarter of 2011, reflecting the positive impacts of the Corporation's recent growth.(in millions of Canadian dollars, except per share amounts)  Three-month periods endedSeptember 30 Nine-month periods endedSeptember 30 2011201020112010     Revenues from energy sales50.142.1186.1129.8EBITDA16.811.076.334.2Net earnings (loss)*(7.2)34.7(5.3)32.0 per share (basic)$(0.19)$0.92$(0.14)$0.85Cash flows from operations9.72.042.721.8*attributable to shareholders of BoralexDuring the third quarter of 2011, Boralex recorded revenues from energy sales and earnings before interest, income taxes and amortization ("EBITDA") of $50.1 million and $16.8 million, respectively, up 19% and 53% from the same period of 2010. This growth was driven by the addition of the ten power stations acquired from Boralex Power Income Fund (the "Fund") and the commissioning of new wind and solar power stations, despite a decline in revenues at U.S. wood-residue power stations.The Corporation reported a net loss attributable to the shareholders of Boralex of $7.2 million, compared with net earnings of $34.7 million year over year, which included an extraordinary gain of $43.6 million related to the deemed disposal of investment in the Fund and the related income tax recovery. Excluding this gain, Boralex would have recorded a net loss of $5.4 million in the third quarter of 2010. The significant positive contribution of the new sites that were recently acquired and commissioned by Boralex was not able to offset the adverse impact, in particular, of the impairment charge against the property, plant and equipment at the Dolbeau power station."After acquiring the assets of the Fund and bringing online new wind and solar power stations totalling over 140 MW since December 2009, Boralex once again demonstrated, with the sale of its U.S. wood-residue assets, its unwavering resolve to maximize its asset portfolio with long-term contracts in the wind, hydroelectric and solar power segments, as well as to afford itself the financial leeway to continue expanding," said Boralex president and CEO Patrick Lemaire.Boralex generated significant cash inflows from its operations, a testament to the quality of its assets, in the amount of $42.7 million for the first nine months of 2011, compared with $21.8 million for the same period of 2010.Segmented financial resultsIn the wind power segment, the third quarter of 2011 saw revenues surge 44.9% to $11.3 million, and EBITDA soar 46.4% to $8.2 million. In addition, Boralex and its partner in the development of 341 MW of wind power at the Seigneurie de Beaupré wind farms announced on November 8, 2011 the completion of $725 million in financing to conduct the first 272 MW phase.The hydroelectric power segment generated $11.6 million in quarterly revenues, up fourfold year over year. EBITDA stood at $8.5 million, 5.7 times higher than for the same period of 2010. This significant growth was driven by consolidation of the results of the Fund's power stations and favourable water flows conditions.Difficult business conditions in the U.S. generated revenues of $17.0 million in the wood-residue thermal power segment, down $11.1 million from the 2010 period and a negative EBITDA of $0.6 million. The decisions by Boralex's management to close the Ashland power station, scale back electricity production at the other U.S. power stations and defer REC sales did have an adverse impact on results for the quarter. Note that Boralex announced on November 7, 2011 the disposal of its U.S. wood-residue assets which the closing is expected by the end of the year and will generate a net proceeds of about US$81 million.Lastly, the natural gas cogeneration thermal power segment reported revenues and EBITDA of $9.3 million and $3.7 million, respectively, while recently commissioned solar power station contributed $0.9 million and $0.8 million to the Corporation's revenues and EBITDA, respectively.About BoralexBoralex is a power producer whose core business is dedicated to the development and the operation of renewable energy power stations. The Corporation currently operates an asset base with an installed capacity of more than 700 MW in Canada, the Northeastern United States and France. Boralex is also committed under power development projects, both independently and with European and Canadian partners, to add approximately 400 MW of power. With nearly 350 employees, Boralex is known for its diversified expertise and in-depth experience in four power generation types — wind, hydroelectric, thermal and more recently, solar.Boralex's shares and convertible debentures are listed on the Toronto Stock Exchange under the ticker symbols BLX and BLX.DB, respectively. More information is available at www.boralex.com or www.sedar.com.Certain statements contained in this press release, including those regarding future results and performance, are forward-looking statements based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the general impact of economic conditions, raw material price increases and availability, currency fluctuations, volatility in electricity selling prices, the company's financing capacity, negative changes in general market conditions and regulations affecting the industry, as well as other factors listed in the Company's filings with different securities commissions.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.The summarized financial statements included in this press release also contain certain non-GAAP financial measures. To assess the performance of its assets and reporting segments, the Corporation uses EBITDA and cash flows from operations as performance measures, as defined in the accompanying financial statements. These non-GAAP measures have no standardized meaning under IFRS. As a result, these measures may not be comparable to similarly named measures used by other companies. Consolidated Balance Sheets (in thousands of Canadian dollars) (unaudited) AS ATSEPTEMBER 30,2011AS ATDECEMBER 31,2010    ASSETS   CURRENT ASSETS   Cash and cash equivalents 133,06892,650Restricted cash 1,27715,924Accounts receivable 33,84560,420Available-for-sale financial asset 2,33923,251Future income taxes -512Inventories 8,4229,179Prepaid expenses 4,2052,516Fair value of derivative financial instruments 47769  183,203205,221Interest in a joint venture 16,039_Property, plant and equipment 734,479738,884Energy sales contracts 101,914103,994Water rights 110,792113,015Other long-term assets 39,58546,842Goodwill 38,06338,063  1,224,0751,246,019LIABILITIES   CURRENT LIABILITIES   Bank loans and advances -195Accounts payable and accrued liabilities 39,63459,558Income taxes payable 4493,209Fair value of derivative financial instruments 29,740183Current portion of long-term debt 24,02334,033  93,84697,178Long-term debt 492,367479,546Convertible debentures 222,579220,824Long-term lease accruals 3,3852,981Future income taxes 49,28066,967Fair value of derivative financial instruments 18,61410,834  880,071878,330EQUITY   Capital stock 222,751222,853Equity component of convertible debentures 14,37914,488Contributed surplus 5,8785,028Retained earnings 136,921142,300Accumulated other comprehensive loss (44,064)(25,874)Equity attributable to shareholders 335,865358,795Non-controlling interests 8,1398,894Total equity 344,004367,689  1,224,0751,246,019Consolidated Statements of Earnings (Loss)  THREE-MONTH PERIODSENDED SEPTEMBER 30NINE-MONTH PERIODS  ENDED SEPTEMBER 30(in thousands of Canadian dollars, except per share amounts and numberof shares) (unaudited)  2011201020112010 REVENUESRevenues from energy sales50,12042,096186,112129,828Management revenues from the Fund-1,158-4,437Other income189144513598 50,30943,398186,625134,863     COSTS AND OTHER EXPENSES    Operating costs    28,13926,62993,39777,562Administrative    4,3381,84214,20612,373Development    1,0557852,7243,587Management and operation of the Fund    -1,176-3,995Amortization    15,9578,37448,79024,314Impairment of property, plant and equipment    6,503-6,503-Net gain on deemed disposal of investment in the Fund    -(25,692)-(25,692)Other gains    (582)-(2,959)(774) 55,41013,114162,66195,365 OPERATING INCOME (LOSS)  (5,101)30,28423,96439,498 Financing costs12,5534,19537,04913,078Foreign exchange loss (gain)(5,377)361(3,340)(69)Net loss (gain) on financial instruments68214477(125) EARNINGS (LOSS) BEFORE INCOME TAXES AND SHARE IN LOSS OF THE FUND(12,345)25,514(10,222)26,614 Income tax recovery(4,804)(10,801)(4,157)(8,249) NET EARNINGS (LOSS) BEFORE SHARE IN LOSS OF THE FUND(7,541)36,315(6,065)34,863 Share in loss of the Fund-(1,955)-(3,148)NET EARNINGS (LOSS)(7,541)34,360(6,065)31,715 NET EARNINGS (LOSS) ATTRIBUTABLE TO: Shareholders of Boralex(7,208)34,730(5,304)31,992 Non-controlling shareholders(333)(370)(761)(277)NET EARNINGS (LOSS)(7,541)34,360(6,065)31,715 Net earnings (loss) per share (basic)$(0.19)$0.92$(0.14)$0.85Net earnings (loss) per share (diluted)$(0.19)$0.87$(0.14)$0.84Weighted average number of shares outstanding (basic)37,745,59837,740,92137,761,69237,740,921Weighted average number of shares outstanding (diluted)37,792,34940,186,96937,856,77638,658,117Consolidated Statements of Comprehensive Income (Loss)  THREE-MONTH PERIODSENDED SEPTEMBER 30NINE-MONTH PERIODSENDED SEPTEMBER 30(in thousands of Canadian dollars) (unaudited)  2011201020112010       NET EARNINGS (LOSS)  (7,541)34,360(6,065)31,715Other comprehensive income (loss)       Translation adjustments        Unrealized foreign exchange gain (loss) on translation of financial statements of self-sustaining foreign operations  9,562(179)9,845(6,553)  Share of cumulative translation adjustments of the Fund  -(216)--  Taxes  -(123)(259)37 Cash flow hedges        Change in fair value of financial instruments  (30,949)228(41,672)(13,849)  Hedging items realized and recognized in net earnings (loss)  990(1,076)3,140(4,454)  Hedging items realized and recognized in balance sheet  -2,7111984,848  Taxes  9,14954511,3354,458 Available-for-sale financial asset        Unrealized loss on available-for-sale financial asset  (571)-(771)-   (11,819)1,890(18,184)(15,513)COMPREHENSIVE INCOME (LOSS)  (19,360)36,250(24,249)16,202       COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:  Shareholders of Boralex  (19,027)36,573(23,494)16,454  Non-controlling shareholders  (333)(323)(755)(252)COMPREHENSIVE INCOME (LOSS)  (19,360)36,250(24,249)16,202Consolidated Statements of Changes in Equity  NINE-MONTH PERIODENDED SEPTEMBER 30, 2011 Attributable to shareholders  (in thousands of Canadian dollars) (unaudited)CapitalstockEquitycomponent ofconvertibledebentures Contributedsurplus  Retainedearnings ComprehensivelossTotalNon-controllinginterestsTotalequity Balance - beginning of period222,85314,4885,028142,300(25,874) 358,7958,894367,689         Net loss for the period---(5,304)-(5,304)(761)(6,065)Other comprehensive loss----(18,190)(18,190)6(18,184)Comprehensive loss---(5,304)(18,190)(23,494)(755)(24,249)         Conversion of convertible debentures250----250-250Share repurchase(352)--(75)-(427)-(427)Stock option expense--850--850-850Other-(109)---(109)-(109)Balance - end of period222,75114,3795,878136,921(44,064)335,8658,139344,004    NINE-MONTH PERIODENDED SEPTEMBER 30, 2010 Attributable to shareholders (in thousands of Canadian dollars) (unaudited)CapitalstockEquity  component of convertibledebenturesContributedsurplusRetainedearningsComprehensivelossTotalNon-controllinginterestsTotalequity         Balance - beginning of period222,694-4,290105,538(2,344)330,1787,031337,209         Net earnings for the period---31,992-31,992(277)31,715Other comprehensive loss----(15,538)(15,538)25(15,513)Comprehensive income (loss)---31,992(15,538)16,454(252)16,202         Excess of purchase price paid for acquisition of non-controlling interests---(1,725)-(1,725)(26)(1,751)Excess of proceeds from partial sale of a subsidiary---3,415-3,415-3,415Stock option expense--594--594-594Issuance of convertible debentures and imputed interest-13,185---13,185-13,185Contribution of non-controlling interest------2,2472,247Acquisition of the Fund------81,00281,002Balance - end of period222,69413,1854,884139,220(17,882)362,10190,002452,103Consolidated Statements of Cash Flows THREE-MONTH PERIODSENDED SEPTEMBER 30NINE-MONTH PERIODS ENDED SEPTEMBER 30(in thousands of Canadian dollars) (unaudited) 2011201020112010OPERATING ACTIVITIES    Net earnings (loss) attributable to shareholders of Boralex(7,208)34,730(5,304)31,992Distributions received from the Fund-1,377-4,475Financing costs12,5534,19537,04913,078Interest paid(9,073)(6,231)(33,796)(13,682)Income tax recovery(4,804)(10,801)(4,157)(8,249)Income taxes paid(1,469)(961)(4,298)(2,535)Adjustments for non-cash items:     Unrealized foreign exchange gain on intercompany advances(2,899)-(1,324)- Net loss (gain) on financial instruments68214477(125) Share in earnings of the Fund-1,955-3,148 Amortization15,9578,37448,79024,314 Impairment of property, plant and equipment6,503-6,503- Gain on sale of assets--(2,377)(774) Gain on sale of assets to a joint venture(582)-(582)- Gain on deemed disposal of investment in the Fund-(30,874)-(30,874) Other68061,7321,066 9,7261,98442,71321,834Change in non-cash working capital items7,49288730,4712,988 17,2182,87173,18424,822INVESTING ACTIVITIES    Additions to property, plant and equipment(6,598)(73,541)(30,039)(137,822)Change in restricted cash-38,66314,647(35,022)Business acquisitions(700)(40,953)(700)(40,953)Increase in interest in a joint venture(8,164)-(10,376)-Proceeds from sale of a subsidiary---878Change in reserve funds(10)-(254)882Development projects(532)(335)(1,181)(730)Proceeds from sale of asset--2,050-Other1,0557031,3672,207 (14,949)(75,463)(24,486)(210,560)FINANCING ACTIVITIES    Decrease in bank loans and advances--(201)(12,291)Net increase in long-term debt(67)54,40533,186263,271Payments on long-term debt(9,311)(6,983)(42,427)(67,757)Net issuance of convertible debentures-103,945-103,945Share repurchase(427)-(427)-Purchase of non-controlling interests---(1,751)Increase in non-controlling interests-5,662-5,662 (9,805)157,029(9,869)291,079TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS1,8676,5401,589(2,430)NET CHANGE IN CASH AND CASH EQUIVALENTS(5,669)90,97740,418102,911CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD138,73749,75592,65037,821CASH AND CASH EQUIVALENTS - END OF PERIOD133,068140,732133,068140,732SEGMENTED INFORMATIONIn order to assess the performance of its assets and reporting segments, Boralex uses EBITDA and cash flows from operations as performance measures. Management believes that these measures are financial indicators widely used by investors to assess operating performance and its ability to generate cash through operations.These non-GAAP measures are drawn primarily from the unaudited interim condensed 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.Investors should not view EBITDA as an alternative measure to, for example, net earnings, or as a measure of operating results or cash flows, or as a parameter for measuring liquidity, which are IFRS measures.EBITDA is reconciled to the most comparable IFRS measure, namely, net earnings (loss) attributable to shareholders of Boralex, in the following table: THREE-MONTH PERIODSENDED SEPTEMBER 30NINE-MONTH PERIODS ENDED SEPTEMBER 30 2011201020112010Net earnings (loss) attributable to shareholders of Boralex(7,208)34,730(5,304)31,992Non-controlling interests(333)(370)(761)(277)Income tax recovery(4,804)(10,801)(4,157)(8,249)Net loss (gain) on financial instruments68214477(125)Foreign exchange loss (gain)(5,377)361(3,340)(69)Financing costs12,5534,19537,04913,078Other gains(582)-(2,959)(774)Net gain on deemed disposal of investment in the Fund-(25,692)-(25,692)Impairment of property, plant and equipment6,503-6,503-Amortization15,9578,37448,79024,314EBITDA16,77711,01176,29834,198Investors should not consider cash flows from operations as an alternative measure to cash flows related to operating activities, which is an IFRS measure.Cash flows from operations are reconciled to the most comparable IFRS measure, namely, cash flows related to operating activities, in the following table: THREE-MONTHS PERIODSENDED SEPTEMBER 30 NINE-MONTHS PERIODSENDED SEPTEMBER 30 20112010 20112010Cash flows related to operating activities17,2182,871 73,18424,822Cash flows provided by change in non-cash working capital items(7,492)(887) (30,471)(2,988)CASH FLOWS FROM OPERATIONS9,7261,984 42,71321,834INFORMATION BY OPERATING SEGMENT THREE-MONTH PERIODSENDED SEPTEMBER 30NINE-MONTH PERIODSENDED SEPTEMBER 30 2011201020112010Power generation (MWh)    Wind power stations94,84066,722371,771234,013Hydroelectric power stations148,59633,300507,091107,910Wood-residue thermal power stations287,369339,903837,822925,429Natural gas thermal power stations39,3977,953167,02430,460Solar power station1,942-2,210- 572,144447,8781,885,9181,297,812Revenues from energy sales    Wind power stations11,3287,80244,79428,446Hydroelectric power stations11,6152,78440,3378,161Wood-residue thermal power stations16,99028,07263,84381,184Natural gas thermal power stations9,3003,43836,12712,037Solar power station887-1,011- 50,12042,096186,112129,828EBITDA    Wind power stations8,1605,62835,21722,159Hydroelectric power stations8,5131,47330,2374,528Wood-residue thermal power stations(585)7,1357,52521,587Natural gas thermal power stations3,69425414,8922,186Solar power station810-931-Corporate and eliminations(3,815)(3,479)(12,504)(16,262) 16,77711,01176,29834,198Additions to property, plant and equipment    Wind power stations3,36272,25012,094133,592Hydroelectric power stations9081,8351,2392,250Wood-residue thermal power stations7253343,3682,392Natural gas thermal power stations1,24611,25010Solar power station11225111,545505Corporate and eliminations245(1,130)543(927) 6,59873,54130,039137,822 AS ATSEPTEMBER 30,2011AS ATDECEMBER 31,2010Total assets  Wind power stations491,938536,135Hydroelectric power stations386,016364,548Wood-residue thermal power stations146,952162,070Natural gas thermal power stations35,54637,974Solar power station21,7077,607Corporate and eliminations141,916137,685 1,224,0751,246,019Long-term assets  Wind power stations462,048469,707Hydroelectric power stations348,489350,773Wood-residue thermal power stations126,621137,376Natural gas thermal power stations17,63522,619Solar power station20,1696,723Corporate and eliminations65,91053,600 1,040,8721,040,798INFORMATION BY GEOGRAPHIC SEGMENT THREE-MONTH PERIODSENDED SEPTEMBER 30NINE-MONTH PERIODSENDED SEPTEMBER 30 2011201020112010Power generation (MWh)    Canada186,27144,116670,834114,172United States320,537353,021977,911996,127Europe65,33650,741237,173187,513 572,144447,8781,885,9181,297,812Revenues from energy sales    Canada18,7464,82875,56013,405United States20,34929,18773,19985,757Europe11,0258,08137,35330,666 50,12042,096186,112129,828EBITDA    Canada5,810(430)32,701(3,596)United States5,1227,68924,44623,642Europe5,8453,75219,15114,152 16,77711,01176,29834,198Additions to property, plant and equipment    Canada4,93230,49213,37872,246United States6466831,6393,120Europe1,02042,36615,02262,456 6,59873,54130,039137,822 AS ATSEPTEMBER 30,2011AS ATDECEMBER 31,2010Total assets  Canada621,618634,043United States306,743301,921Europe295,714310,055 1,224,0751,246,019Long-term assets  Canada517,346529,787United States247,251263,094Europe276,275247,917 1,040,8721,040,798For further information: Media   Investors Patricia Lemaire Director, Publics Affairs and Communications Boralex Inc. 514-985-1353 patricia.lemaire@boralex.com   Marc Jasmin Boralex Inc. 514-284-9868 marc.jasmin@boralex.com