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Press release from CNW Group

Boralex announces its second-quarter results

Wednesday, August 08, 2012

Boralex announces its second-quarter results07:00 EDT Wednesday, August 08, 2012MONTREAL, Aug. 8, 2012 /CNW Telbec/ - Boralex Inc. ("Boralex" or the "Corporation") (TSX: BLX) announces its results for the second quarter of 2012, historically amongst its weakest due to seasonal factors. The results for the three-month period ended June 30, 2012 point to a quarter mainly affected by sluggish water flow conditions in the United States. The second quarter also saw a series of transactions in the wind and hydroelectric power segments, prompted by the Corporation's strategic choices, set to sustain its growth over the next few years. Together, the projects announced during the first half of fiscal 2012 will increase Boralex's capacity by 195 MW. Fully covered by long-term fixed-price contracts, these acquisitions will significantly boost production at Boralex, with an initial contribution in fiscal 2013.GROWTH STRATEGY Since the beginning of fiscal 2012, the cash position of Boralex enables the Corporation to invest massively in the wind power and hydroelectric segments in Canada and France. A series of transactions began in March 2012 with the wind power supply contract secured for 50 MW of capacity under a project to be built in the Témiscouata area of Québec. More recently, the acquisition in June of a 34.5 MW wind farm in operation in France - the St-Patrick wind farm - started contributing to the Corporation's results as of July 2012. Boralex also acquired four wind power development projects in France, totalling 88 MW. These four projects are slated for commercial commissioning in the second half of fiscal 2013. All of the assets acquired in France are covered by long-term sales contracts with Électricité de France. In addition, the Corporation entered into a five-year agreement with an independent French corporation to secure options to purchase 130 MW in additional wind power projects currently under development. Lastly, Boralex announced late in July 2012 the signing of a letter of agreement to purchase a 22 MW hydroelectric project in British Columbia, for which construction work is set to begin shortly.Work on the first phase of the Seigneurie de Beaupré Wind Farms (272 MW - net amount of 136 MW for Boralex) resumed in summer and is progressing on budget and on time. The facilities are still slated for commissioning in late 2013. For the second phase, the Corporation also expects to commission approximately 50 MW of additional net wind power for Boralex by the end of 2015. In light of the foregoing, the Corporation enthusiastically welcomes the Québec government's July 20, 2012 announcement of a new request for proposals for 700 MW in wind power and firmly intends to continue developing the enormous potential of the Seigneurie de Beaupré site.According to Boralex President and CEO Patrick Lemaire, this new injection of capital into wind power and hydroelectric segments expansion, the cornerstone of Boralex's growth strategy, demonstrates the Corporation's ability to identify and execute projects to meet its financial performance targets. "We continue to actively explore further opportunities in both France and Canada. Given the announcement of the new request for proposals in Québec for 700 MW in additional wind power, the financing terms for quality projects remain very attractive, as do other factors, such as the price and quality of the turbines available. With these favourable conditions, plus our enviable cash position of $160 million, we are really confident we will be able to announce other initiatives to drive long-term value creation for our shareholders," added Patrick Lemaire.FINANCIAL HIGHLIGHTS for the second quarter (In millions of Canadian dollars, except per share data and EBITDA margins   Three-month periodsended June 30Six-month periodsended June 30  2012201120122011Revenues from energy sales38.944.196.4101.3AdjustedEBITDA*19.722.553.053.8Adjusted EBITDA margin (%)50.651.055.053.1Adjusted net loss*(5.5)(3.7)(0.2)(1.5)Per share (basic) ($)(0.15)(0.10)-(0.04)Cash flows from operations5.39.627.227.1Per share (basic) ($)0.140.250.720.72*  See the reconciliation tables in the accompanying financial statements.During the three-month period ended June 30, 2012, Boralex got a boost from the solid performance of its wind power segment, particularly in France where for a third straight quarter, wind conditions were significantly more favourable than a year ago. The wind power segment reported 9% growth in earnings before interest, income taxes, depreciation and amortization (EBITDA), which partially offset lower profitability in Boralex's other segments. In particular, the hydroelectric segment was hit by abnormally poor water flow conditions in the Northeastern U.S. for the second quarter of the year, trimming $3.6 million from segment EBIDTA. These atypical weather conditions are largely the cause of the reduced profitability on a consolidated basis, with an adjusted EBITDA (see the table in the summary financial statements) of $19.7 million on revenues of $38.9 million for the second quarter of 2012, compared with an adjusted EBITDA of $22.5 million out of $44.1 million for the same period in 2011. Consolidated adjusted EBITDA margin was relatively flat at 50.6% for the second quarter of 2012 compared with 51.0% for the same period of 2011. Boralex ended the second quarter with an adjusted net loss attributable to shareholders of $5.5 million or $0.15 per share (basic and diluted) compared with $3.7 million or $0.10 per share (basic and diluted) for the corresponding period a year earlier.As at June 30, 2012, Boralex reported cash and cash equivalents and restricted cash totalling $159.8 million or $4.24 per common share (basic).About BoralexBoralex is a power producer whose core business is dedicated to the development and the operation of renewable energy power stations. Currently, the Corporation operates an asset base with an installed capacity of more than 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 over 550 MW of power that will be put in service between the middle of 2013 and the end of 2015. 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 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, EBITDA margin, cash flows from operations, adjusted EBITDA, adjusted net loss, 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 Financial StatementsConsolidated Statements of Financial Position(in thousands of Canadian dollars) (unaudited)As atJune 30,2012As atDecember 31,2011ASSETS  Cash and cash equivalents153,114144,703Restricted cash6,66018,288Trade and other receivables27,41450,500Inventories4,5553,573Available-for-sale financial asset1,7572,208Prepaid expenses2,9312,137CURRENT ASSETS196,431221,409   Property, plant and equipment673,748643,047Energy sales contracts138,89597,705Water rights110,383111,844Goodwill38,06338,063Other intangible assets9,2015,285Interest in the Joint Venture53,28845,266Other non-current assets13,24414,236NON-CURRENT ASSETS1,036,822955,446TOTAL ASSETS1,233,2531,176,855LIABILITIES  Trade and other payables39,72934,209Current portion of debt26,10026,659Current income tax liability91910,776Other current financial liabilities28,16829,757CURRENT LIABILITIES94,916101,401   Non-current debt508,053479,525Convertible debentures224,787223,347Deferred income tax liability35,99726,031Other non-current financial liabilities20,69114,273Other non-current liabilities4,7643,400NON-CURRENT LIABILITIES794,292746,576TOTAL LIABILITIES889,208847,977EQUITY   Equity attributable to shareholders324,468321,764Non-controlling interests19,5777,114TOTAL EQUITY344,045328,878TOTAL LIABILITIES AND EQUITY1,233,2531,176,855Consolidated Statements of Earnings (Loss) Three-month periodsended June 30Six-month periodsended June 30(in thousands of Canadian dollars, except per share amounts) (unaudited)2012201120122011   REVENUES    Revenues from energy sales38,90544,06996,356101,335Other income171172322324 39,07644,24196,678101,659   COSTS AND OTHER EXPENSES      Operating expenses14,01215,70533,47637,036Administrative5,2125,2139,3799,187Development9657851,6361,669Amortization13,95415,18627,89029,036Other gains---(2,377)Impairment of property, plant and equipment and intangible assets--823- 34,14336,88973,20474,551     OPERATING INCOME 4,9337,35223,47427,108     Financing costs12,09612,51124,19924,487Foreign exchange loss105111312,047Net loss on financial instruments82293485406     EARNINGS (LOSS) BEFORE THE FOLLOWING ITEMS(7,995)(5,763)(1,341)168     Share in loss (earnings) of the Joint Venture27-(17)-Income tax expense (recovery)(1,723)(1,549)38423     NET LOSS FROM CONTINUING OPERATIONS (6,299)(4,214)(1,362)(255)     Net earnings (loss) from discontinued operations134(1,377)2,4591,731 NET EARNINGS (LOSS) (6,165)(5,591)1,0971,476 NET EARNINGS (LOSS) ATTRIBUTABLE TO:       Shareholders of Boralex(5,901)(5,107)1,2481,904 Non-controlling shareholders(264)(484)(151)(428)NET EARNINGS (LOSS) (6,165)(5,591)1,0971,476     NET EARNINGS (LOSS) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:       Continuing operations(6,035)(3,730)(1,211)173 Discontinued operations134(1,377)2,4591,731 (5,901)(5,107)1,2481,904     BASIC NET EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:      Continuing operations      $(0.16)      $(0.10)      $(0.03)      $0.01 Discontinued operations      $0.00      $(0.04)      $0.06      $0.04       $(0.16)      $(0.14)      $0.03      $0.05     DILUTED NET EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:       Continuing operations      $(0.16)      $(0.10)      $(0.03)$0.00 Discontinued operations      $0.00      $(0.04)      $0.06      $0.04       $(0.16)      $(0.14)      $0.03      $0.04 Consolidated Statements of Comprehensive Loss Three-month periodsended June 30Six-month periodsended June 30(in thousands of Canadian dollars) (unaudited)2012201120122011 NET EARNINGS (LOSS) (6,165)(5,591)1,0971,476 OTHER COMPREHENSIVE INCOME (LOSS)    Translation differences     Unrealized foreign exchange gain (loss) on translation of financial statements of self-sustaining foreign operations334(323)(1,051)24Cash flow hedges     Change in fair value of financial instruments(7,294)(9,947)(8,842)(8,905) Hedging items realized and recognized in net earnings (loss)3,6871,5217,8262,614 Hedging items realized and recognized in statement of financial position-78-198 Taxes9852,6135721,925Cash flow hedges - Joint Venture     Change in fair value of financial instruments(11,112)-(3,350)- Taxes2,955-891-Available-for-sale financial asset     Change in fair value of an available-for-sale financial asset(387)(954)(451)424 Items realized and recognized in net earnings (loss)---(624)Discontinued operations---(2,021)Total other comprehensive loss(10,832)(7,012)(4,405)(6,365)COMPREHENSIVE LOSS(16,997)(12,603)(3,308)(4,889) COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:     Shareholders of Boralex(16,194)(12,064)(2,593)(5,312) Non-controlling shareholders(803)(539)(715)423COMPREHENSIVE LOSS(16,997)(12,603)(3,308)(4,889) COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:     Continuing operations(16,329)(10,687)(5,052)(5,022) Discontinued operations135(1,377)2,459(290)  (16,194)(12,064)(2,593)(5,312)Consolidated Statements of Changes in Equity        Six-month periodended June 30   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 (loss)---1,248-1,248(151)1,097Other comprehensive loss----(3,841)(3,841)(564)(4,405)Comprehensive income (loss)---1,248(3,841)(2,593)(715)(3,308)         Conversion of convertible debentures45----45-45Stock option expense--313--313-313Share repurchases(5)--(2)-(7)-(7)Excess of proceeds from partial sale of a subsidiary---4,946-4,946(4,946)-Contribution of non-controlling shareholders------18,12418,124Balance as at June 30, 2012 222,79814,3796,419150,693(69,821)324,46819,577344,045        Six-month periodended June 30   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 (loss)---1,904-1,904(428)1,476Other comprehensive income (loss)----(7,216)(7,216)851(6,365)Comprehensive income (loss)---1,904(7,216)(5,312)423(4,889)         Conversion of convertible debentures196----196-196Stock option expense--584--584-584Other-(109)---(109)-(109)Balance as at June 30, 2011223,04914,3795,612143,597(31,921)354,7168,755363,471Consolidated Statements of Cash Flows Three-month periodsended June 30Six-month periodsended June 30(in thousands of Canadian dollars) (unaudited)2012201120122011Net earnings (loss) attributable to shareholders of Boralex(5,901)(5,107)1,2481,904Less: Net earnings (loss) from discontinued operations134(1,377)2,4591,731Net earnings (loss) from continuing operations attributable to shareholders of Boralex(6,035)(3,730)(1,211)173Financing costs12,09612,51124,19924,487Interest paid(12,973)(12,314)(23,327)(24,716)Income tax expense (recovery)(1,723)(1,549)38423Income taxes paid(497)(1,388)(2,193)(2,829)Non-cash items in earnings (loss):     Unrealized foreign exchange loss on intercompany advances-1,575-1,575 Amortization13,95415,18627,89029,036 Other gains---(2,377) Impairment of property, plant and equipment and intangible assets--823- Net loss on financial instruments82293485406 Share in loss (earnings) of the Joint Venture27-(17)- Other(328)(784)505876 5,3439,60027,19227,054Change in non-cash items related to operating activities7,9225,24320,61320,412NET CASH FLOWS RELATED TO OPERATING ACTIVITIES13,26514,84347,80547,466     Business acquisitions(39,080)-(39,080)-Additions to property, plant and equipment(1,048)(12,245)(2,543)(22,743)Additions to other intangible assets(1,560)-(1,560)-Change in restricted cash10,8685,23511,62814,647Increase in interest in the Joint Venture(9,425)(2,212)(11,283)(2,212)Development projects(910)(56)(1,656)(649)Proceeds from sale of assets8,7632,0508,7632,050Other29221996266NET CASH FLOWS RELATED TO INVESTING ACTIVITIES(32,100)(7,009)(35,635)(8,641)     Decrease in bank loans and overdraft---(201)Net increase in non-current debt-21 516-33,253Repayments on non-current debt(2,591)(21,055)(14,667)(33,116)Contribution of non-controlling interests18,124-18,124-Other(60)-(48)-NET CASH FLOWS RELATED TO FINANCING ACTIVITIES15,4734613,409(64)Cash from discontinued operations(1,259)118(6,972)7,604TRANSLATION DIFFERENCE ON CASH AND CASH EQUIVALENTS318(944)(196)(278)NET INCREASE IN CASH AND CASH EQUIVALENTS(4,303)7,4698,41146,087CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD157,417131,268144,70392,650CASH AND CASH EQUIVALENTS - END OF PERIOD153,114138,737153,114138,737Segmented 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.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 (loss) attributable to shareholders of Boralex, in the following table: Three-month periodsended June 30Six-month periodsended June 30(in thousands of Canadian dollars) (unaudited)2012201120122011Net earnings (loss) attributable to shareholders of Boralex(5,901)(5,107)1,2481,904Net earnings (loss) from discontinued operations(134)1,377(2,459)(1,731)Non-controlling shareholders(264)(484)(151)(428)Income tax expense (recovery)(1,723)(1,549)38423Net loss on financial instruments82293485406Foreign exchange loss105111312,047Financing costs12,09612,51124,19924,487Impairment of property, plant and equipment and intangible assets--823-Other gains---(2,377)Amortization13,95415,18627,89029,036EBITDA18,86022,53852,20453,767Cash flows from operations are equal to net cash flows related to operating activities before change in non-cash items related to operating activities. Management uses this measure to assess cash flows generated by the Corporation's operations and its capacity to finance its expansion through those funds. Investors 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, net cash flows related to operating activities, in the following table: Three-month periodsended June 30Six-month periodsended June 30(in thousands of Canadian dollars) (unaudited)2012201120122011Net cash flows related to operating activities13,26514,84347,80547,466Less :    Change in non-cash items related to operating activities7,9225,24320,61320,412 CASH FLOWS FROM OPERATIONS5,3439,60027,19227,054The two following tables reconcile EBITDA and the net earnings (loss) attributable to shareholders of Boralex as reported in the financial statements with adjusted EBITDA and adjusted net loss: Three-month periodsended June 30Six-month periodsended June 30(in thousands of Canadian dollars) (unaudited)2012201120122011EBITDA18,86022,53852,20453,767Specific items :     Professional fees incurred in connection with acquisitions in France832- 832- ADJUSTED EBITDA19,69222,53853,03653,767  Three-month periodsended June 30Six-month periodsended June 30(in thousands of Canadian dollars) (unaudited)2012201120122011Net earnings (loss) attributable to shareholders of Boralex(5,901)(5,107)1,2481,904Net earnings (loss) from discontinued operations(134)1,377(2,459)(1,731)Specific items* :     Gain on sale of assets---(1,664) Impairment of property, plant and equipment and intangible assets--492- Professional fees incurred in connection with acquisitions in France557-557-   ADJUSTED NET LOSS(5,478)(3,730)(162)(1,491)* Net of income taxesInformation by Operating Segment  Three-month periodsended June 30Six-month periodsended June 30(in thousands of Canadian dollars) (unaudited)2012201120122011Power production (MWh)*    Wind power stations138,836124,362311,241276,931Hydroelectric power stations158,874213,490321,969358,495Thermal power stations41,98188,138160,304263,185Solar power station1,9402683,269268 341,631426,258796,783898,879Revenues from energy sales    Wind power stations16,34515,19336,99133,466Hydroelectric power stations12,44515,99026,43128,722Thermal power stations9,28512,76231,52839,023Solar power station8301241,406124 38,90544,06996,356101,335EBITDA    Wind power stations13,08211,99130,05927,057Hydroelectric power stations9,05612,64819,70121,724Thermal power stations1,1542,0789,54913,610Solar power station7231211,218121Corporate and eliminations(5,155)(4,300)(8,323)(8,745) 18,86022,53852,20453,767Additions to property, plant and equipment    Wind power stations2736136208,732Hydroelectric power stations348157537331Thermal power stations-788661,947Solar power station310,48269611,433Corporate and eliminations424205624300 1,04812,2452,54322,743 (in thousands of Canadian dollars) (unaudited)  As atJune 30,2012As atDecember 31,2011Total assets    Wind power stations  582,345528,521Hydroelectric power stations  368,068366,099Thermal power stations  96,962101,683Solar power station  20,57523,586Corporate  165,303156,966   1,233,2531,176,855Total liabilities    Wind power stations  433,632392,611Hydroelectric power stations  139,333143,439Thermal power stations  29,77829,581Solar power station  16,51021,043Corporate  269,955261,303   889,208847,977 Information by Geographic Segment Three-month periodsended June 30Six-month periodsended June 30(in thousands of Canadian dollars) (unaudited)2012201120122011Power production (MWh)*    Canada165,103217,816392,055484,563United States85,996142,444199,469242,479France90,53265,998205,259171,837 341,631426,258796,783898,879Revenues from energy sales    Canada19,29723,22050,46856,814United States6,49710,40714,90018,193France13,11110,44230,98826,328 38,90544,06996,356101,335EBITDA    Canada8,1239,37725,45026,468United States4,6058,29511,25213,993France6,1324,86615,50213,306 18,86022,53852,20453,767Additions to property, plant and equipment    Canada7611,4611,1268,423United States-12585295France28710,6591,33214,025 1,04812,2452,54322,743 (in thousands of Canadian dollars) (unaudited)  As atJune 30,2012As atDecember 31,2011Total assets    Canada  653,487679,354United States  197,104209,003France  382,662288,498   1,233,2531,176,855Non-current assets    Canada  537,049543,319United States  151,253156,631France  348,520255,496   1,036,822955,446Total liabilities    Canada  482,226483,731United States  111,811122,827France  295,171241,419   889,208847,977   SOURCE: BORALEX INC.For further information: Media Andréan Gagné Advisor, Communications Boralex Inc. 514-985-1353 andrean.gagne@boralex.comInvestors Marc Jasmin Boralex Inc. 514-284-9868 marc.jasmin@boralex.com