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Press release from CNW Group

Boralex Steps up Profitability in the First Quarter

Wednesday, May 09, 2012

Boralex Steps up Profitability in the First Quarter07:00 EDT Wednesday, May 09, 2012Growth strategy delivers upbeat resultsMONTREAL, May 9, 2012 /CNW Telbec/ - Boralex Inc. ("Boralex" or the "Corporation") recorded $57.5 million in revenues for the three-month period ended March 31, 2012 compared with $57.3 million in the first quarter of 2011. However, excluding the first quarter 2011 results of the Dolbeau, Québec thermal power station which ceased operations in the third quarter of 2011, revenues were up 7.7%. This improvement was driven by organic growth on the order of 13% in the output of the wind and hydroelectric power segments, higher average selling prices for Boralex and the contribution of the Corporation's first solar power station, commissioned in June 2011.The same drivers fostered the growth in earnings before interest, taxes, depreciation and amortization ("EBITDA") which came in at $33.3 million, for a margin of 57.9% of revenues, up from $31.2 million and a margin of 54.5% for the first quarter of 2011. Excluding Dolbeau, EBITDA climbed 12.5%. The wind and hydroelectric power segments posted combined EBITDA growth of $3.4 million or 14.2%, while the solar power station contributed an additional $0.5 million. In addition to the strong performance of the wind, hydroelectric and solar power segments, which generated an EBITDA margin of 79.7%, the increase in the average margin reflected the larger weight in Boralex's energy portfolio of these three segments, in which nearly all energy assets are covered by long-term power sales contracts. Accordingly, following the asset acquisitions and disposals over the past three years, 96% of Boralex's energy portfolio currently in operation is covered by indexed fixed-price long-term power sales contracts—the cornerstone of the Corporation's development strategy going forward.(in millions of Canadian dollars, except per share data and EBITDA margin) Three-month periods endedMarch 31Net earnings from continuing operations:20122011   Revenues from energy sales57.557.3EBITDA33.331.2EBITDA margin57.9%54.5%Net earnings from continuing operations*4.83.9 Per share (basic)$0.13$0.11Cash flows from operations21.817.5 Per share (basic)$0.58$0.46* Attributable to shareholders of Boralex.Boralex ended the first quarter of 2012 with $4.8 million in net earnings from continuing operations attributable to shareholders or $0.13 per share (basic), compared with $3.9 million or $0.11 per share (basic) for the same period of fiscal 2011. Net earnings for the first quarter of 2011 notably included $1.7 million in net gains on the sale of assets, while net earnings for the first quarter of 2012 included $0.5 million in net asset impairment. Excluding these items not related to operations, adjusted net earnings from continuing operations attributable to shareholders surged 141.0%. Cash flows from operations amounted to $21.8 million or $0.58 per share, up 25%. Furthermore, under the terms of the December 2011 sale of the U.S. thermal power stations, the Corporation recognized $2.3 million in after-tax proceeds on the sale of the balance of the RECs generated by these power stations in 2011."Our first-quarter results show the decisive benefits of the strategic approach we've taken over the past three years to lay the foundation for superior, balanced and sustainable growth. To date, our strategic decisions have enhanced our portfolio asset value and profit margins, generated steadier, more predictable revenue and cash flow streams and reduced our business risk exposures," indicated Patrick Lemaire, Boralex President and CEO."Lastly, due to the sale of less strategic assets and to Boralex's self-financing capacity, we have approximately $160 million in available cash resources, providing a powerful lever for expansion in our key markets, particularly in the wind power segment. With the recent acquisition of a power sales contract covering a 50 MW wind power project to be developed in the Témiscouata area, 441 MW in additional wind power capacity will be commissioned in Québec by late 2015, of which Boralex owns 246 MW. In addition, we continue to keep a watchful eye on opportunities to acquire advanced-phase development projects in Canada and Europe," concluded Mr. Lemaire.About BoralexBoralex is a power producer whose core business dedicated to the development and the operation of renewable energy power stations. Currently, the Corporation operates an asset base with an installed capacity of nearly 500 MW in Canada, the Northeastern United States and France. Boralex is also committed under power development projects, both independently and with Canadian and European partners, to add approximately 450 MW of power. With more than 200 employees, Boralex is known for its diversified expertise and in-depth experience in four power generation types — wind, hydroelectric, thermal and 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 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.Excerpts from the unaudited interim 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, EBITDA margin, cash flows from operations, and cash flows from operations per share 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 Statements of Financial Position (in thousands of Canadian dollars) (unaudited)As atMarch 312012As atDecember 312011ASSETS  Cash and cash equivalents157,417144,703Restricted cash17,52818,288Trade and other receivables39,51550,500Inventories3,4923,573Available-for-sale financial asset2,1442,208Prepaid expenses2,5662,137CURRENT ASSETS222,662221,409   Property, plant and equipment632,676643,047Energy sales contracts96,00097,705Water rights111,103111,844Goodwill38,06338,063Other intangible assets7,1735,285Interest in the Joint Venture55,01445,266Other non-current assets13,20314,236NON-CURRENT ASSETS953,232955,446TOTAL ASSETS1,175,8941,176,855LIABILITIES  Trade and other payables37,87334,209Current portion of debt23,67626,659Current income tax liability2,21610,776Other current financial liabilities26,02529,757CURRENT LIABILITIES89,790101,401   Non-current debt470,440479,525Convertible debentures224,036223,347Deferred income tax liability29,62426,031Other non-current financial liabilities15,37314,273Other non-current liabilities3,9183,400NON-CURRENT LIABILITIES743,391746,576TOTAL LIABILITIES833,181847,977EQUITY   Equity attributable to shareholders335,419321,764Non-controlling interests7,2947,114TOTAL EQUITY342,713328,878TOTAL LIABILITIES AND EQUITY1,175,8941,176,855Consolidated Statements of Earnings  Three-month periodsended March 31(in thousands of Canadian dollars, except per share amounts) (unaudited)20122011   REVENUES  Revenues from energy sales57,45157,266Other income150152 57,60157,418   COSTS AND OTHER EXPENSES  Operating expenses19,46421,331Administrative4,1673,974Development671884Amortization13,93513,851Other gains-(2,377)Impairment of property, plant and equipment and intangible assets823- 39,06037,663   OPERATING INCOME 18,54119,755   Financing costs12,10311,975Foreign exchange loss1211,537Net loss (gain) on financial instruments(337)313   EARNINGS BEFORE THE FOLLOWING ITEMS6,6545,930   Share in earnings of the Joint Venture(43)-Income tax expense1,7591,971   NET EARNINGS FROM CONTINUING OPERATIONS 4,9383,959Net earnings from discontinued operations2,3233,108NET EARNINGS 7,2617,067   NET EARNINGS ATTRIBUTABLE TO:   Shareholders of Boralex7,1497,011 Non-controlling interests11256NET EARNINGS 7,2617,067   NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:   Continuing operations4,8263,903 Discontinued operations2,3233,108 7,1497,011   BASIC NET EARNINGS PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:   Continuing operations$0.13$0.11 Discontinued operations$0.06$0.08 $0.19$0.19DILUTED NET EARNINGS PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:   Continuing operations$0.12$0.10 Discontinued operations$0.06$0.08 $0.18$0.18Consolidated Statements of Comprehensive Income   Three-month periodsended March 31(in thousands of Canadian dollars) (unaudited)20122011NET EARNINGS7,2617,067OTHER COMPREHENSIVE INCOME (LOSS)  Translation adjustments   Unrealized foreign exchange gain (loss) on translation of financial statements ofself-sustaining foreign operations(1,385)347Cash flow hedges   Change in fair value of financial instruments(1,548)1,042 Hedging items realized and recognized in net earnings4,1391,093 Hedging items realized and recognized in statement of financial position-120 Taxes(413)(688)Cash flow hedges - Joint Venture   Change in fair value of financial instruments7,762- Taxes(2,064)-Available-for-sale financial asset   Change in fair value of an available-for-sale financial asset(64)1,378 Items realized and recognized in net earnings-(624)Discontinued operations-(2,021)Total other comprehensive income6,427647COMPREHENSIVE INCOME13,6887,714COMPREHENSIVE INCOME ATTRIBUTABLE TO:   Shareholders of Boralex13,6006,752 Non-controlling shareholders88962COMPREHENSIVE INCOME13,6887,714COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX   Continuing operations11,2775,665 Discontinued operations2,3231,087 13,6006,752Consolidated Statements of Changes in Equity          Three-month periodended March 31   2012 Equity attributable to shareholders  (in thousands of Canadian dollars) (unaudited)CapitalstockEquitycomponent ofconvertibledebenturesContributedsurplusRetainedearningsOthercomprehensivelossTotalNon-controllinginterestsTotalequityBalance as at January 1, 2012222,75814,3796,106144,501(65,980)321,7647,114328,878         Net earnings---7,149-7,1491127,261Other comprehensive income (loss)----6,4516,451(24)6,427Comprehensive income---7,1496,45113,6008813,688         Conversion of convertible debentures5----5-5Stock option expense--50--50-50Contribution of non-controlling interest------9292Balance as at March 31, 2012222,76314,3796,156151,650(59,529)335,4197,294342,713                  Three-month periodended March 31   2011 Equity attributable to shareholders  (in thousands of Canadian dollars) (unaudited)CapitalstockEquitycomponent ofconvertibledebenturesContributedsurplusRetainedearningsOthercomprehensivelossTotalNon-controllinginterestsTotalequityBalance as at January 1, 2011222,85314,4885,028141,693(24,705)359,3578,332367,689         Net earnings---7,011-7,011567,067Other comprehensive income (loss)----(259)(259)906647Comprehensive income (loss)---7,011(259)6,7529627,714         Conversion of convertible debentures17----17-17Stock option expense--161--161-161Balance as at March 31, 2011222,87014,4885,189148,704(24,964)366,2879,294375,581Consolidated Statements of Cash Flows Three-month periodsended March 31(in thousands of Canadian dollars) (unaudited)20122011Net earnings attributable to shareholders of Boralex7,1497,011Less: Net earnings from discontinued operations2,3233,108Net earnings from continuing operations attributable to shareholders of Boralex4,8263,903Financing costs12,10311,975Interest paid(10,354)(12,402)Income tax expense1,7591,971Income taxes paid(1,696)(1,441)Non-cash items in earnings:   Amortization13,93513,851 Other gains-(2,377) Impairment of property, plant and equipment and intangible assets823- Net loss (gain) on financial instruments(337)313 Share in earnings of the Joint Venture(43)- Other8331,660 21,84917,453Change in non-cash items related to operating activities12,69115,170NET CASH FLOWS RELATED TO OPERATING ACTIVITIES34,54032,623   Additions to property, plant and equipment(1,495)(10,498)Change in restricted cash7609,412Increase in interest in the Joint Venture(1,858)-Development projects(1,010)(593)Other6847NET CASH FLOWS RELATED TO INVESTING ACTIVITIES(3,535)(1,632)   Decrease in bank loans and overdraft-(201)Net increase in non-current debt-11,737Repayments on non-current debt(12,076)(12,061)Other12-NET CASH FLOWS RELATED TO FINANCING ACTIVITIES(12,064)(525)Cash from discontinued operations(5,713)7,486TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS(514)666NET INCREASE IN CASH AND CASH EQUIVALENTS12,71438,618CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD144,70392,650CASH AND CASH EQUIVALENTS - END OF PERIOD157,417131,268Segmented InformationThe Corporation's power stations are grouped into four distinct operating segments—wind, hydroelectric, thermal and solar power. The Corporation operates under one reportable segment: power generation. The classification of these operating segments is based on the different cost structures relating to each of the four types of power stations. The same accounting rules are used for segmented information as apply to the consolidated accounts.Following the sale of its five U.S. wood-residue thermal power stations, the Corporation redefined its operating segments. Previously, operations were grouped into five distinct segments. Wood-residue thermal power stations and natural gas thermal power stations have been combined in a single segment called Thermal Power Stations. The comparative data have been adjusted to reflect this change. In addition, the data related to discontinued operations have been excluded as they are reported on a separate line in the Consolidated Statement of Earnings.The operating segments are presented according to the same criteria used to prepare the internal report submitted to the chief operating decision-maker, who allocates resources and assesses operating segment performance. The chief operating decision-maker is considered to be the President and Chief Executive Officer, who assesses segment performance based on production of electricity, revenues from energy sales, EBITDA and cash flows from operations.EBITDA does not have a standardized meaning under IFRS; accordingly, it 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, which are IFRS measures.EBITDA is reconciled to the most comparable IFRS measure, namely, net earnings attributable to shareholders of Boralex, in the following table: Three-month periodsended March 31(in thousands of Canadian dollars) (unaudited)20122011Net earnings attributable to shareholders of Boralex7,1497,011Net earnings from discontinued operations(2,323)(3,108)Non-controlling interests11256Income tax expense1,7591,971Net loss (gain) on financial instruments(337)313Foreign exchange loss1211,537Financing costs12,10311,975Impairment of property, plant and equipment and intangible assets823-Other gains-(2,377)Amortization13,93513,851EBITDA33,34231,229Investors 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-month periodsended March 31(in thousands of Canadian dollars) (unaudited)20122011Net cash flows related to operating activities34,54032,623Less:  Change in non cash items related to operating activities12,69115,170CASH FLOWS FROM OPERATIONS21,84917,453Information by Operating Segment Three-month periodsended March 31(in thousands of Canadian dollars, unless otherwise specified) (unaudited)20122011Power production (MWh)  Wind power stations172,405152,570Hydroelectric power stations163,095145,004Thermal power stations118,323175,046Solar power station1,329- 455,152472,620Revenues from energy sales  Wind power stations20,64718,273Hydroelectric power stations13,98612,732Thermal power stations22,24226,261Solar power station576- 57,45157,266EBITDA  Wind power stations16,93415,066Hydroelectric power stations10,6449,076Thermal power stations8,39511,532Solar power station495-Corporate and eliminations(3,126)(4,445) 33,34231,229Additions to property, plant and equipment  Wind power stations3478,119Hydroelectric power stations189174Thermal power stations661,159Solar power station692951Corporate and eliminations20195 1,49510,498   As atMarch 31As atDecember 31(in thousands of Canadian dollars) (unaudited)20122011Total assets  Wind power stations535,120528,521Hydroelectric power stations366,784366,099Thermal power stations101,758101,683Solar power station19,59323,586Corporate152,639156,966 1,175,8941,176,855Total liabilities  Wind power stations386,466392,611Hydroelectric power stations142,438143,439Thermal power stations32,95129,581Solar power station17,08321,043Corporate254,243261,303 833,181847,977Information by Geographic Segment Three-month periodsended March 31(in thousands of Canadian dollars, unless otherwise specified) (unaudited)20122011Power production (MWh)  Canada226,953266,747United States113,472100,035France114,727105,838 455,152472,620Revenues from energy sales  Canada31,17033,594United States8,4037,786France17,87815,886 57,45157,266EBITDA  Canada17,32717,091United States6,6465,698France9,3698,440 33,34231,229Additions to property, plant and equipment  Canada3656,962United States85170France1,0453,366 1,49510,498   As atMarch 31As atDecember 31(in thousands of Canadian dollars) (unaudited)20122011Total assets  Canada694,011679,354United States200,573209,003France281,310288,498 1,175,8941,176,855Non-current assets  Canada548,433543,319United States151,782156,631France253,017255,496 953,232955,446Total liabilities  Canada487,353483,731United States111,980122,827France233,848241,419 833,181847,977 For further information: Media Ms. Andréan Gagné Advisor, Communications Boralex Inc. 514-985-1353  Investors Mr. Marc Jasmin Boralex Inc. 514-284-9868