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Press release from CNW Group

Boralex announces its third-quarter results

Wednesday, November 07, 2012

Boralex announces its third-quarter results07:00 EST Wednesday, November 07, 2012MONTREAL, Nov. 7, 2012 /CNW Telbec/ - Boralex Inc. ("Boralex" or the "Corporation") (TSX: BLX) announces that it reported $16.2 million in EBITDA on revenues of $33.0 million for the three-month period ended September 30, 2012 compared with $16.7 million in EBITDA on revenues of $36.2 million for the same period of 2011. The third quarter is traditionally the weakest of the year due to the seasonal cycles experienced by the Corporation's two largest segments: wind and hydroelectric power production. In the coming months, Boralex will be focusing on its accelerated development plan and its growth strategy aimed in particular at expansion and geographic diversification of the wind and hydroelectric power segments, which will contribute positively to its future earnings.FINANCIAL HIGHLIGHTS(In millions of Canadian dollars, except per share amounts and EBITDA margin)    Three-month periodsended September 30,Nine-month periods ended September 30, 2012201120122011Revenues from energy sales33.036.2129.4137.5EBITDA*16.216.768.470.5EBITDA margin (%)49.146.152.951.2Net loss*(7.6)(7.2)(6.4)(5.3) Per share (basic) ($)(0.20)(0.19)(0.17)(0.14)Cash flows from operations6.59.633.736.6 Per share (basic) ($)0.170.250.890.97*  Excluding extraordinary items, adjusted EBITDA for the three-month and nine-month periods ended September 30, 2012 was $13.0 million and $66.0 million, respectively, while adjusted net loss for the same periods was $9.4 million and $9.5 million, respectively. See the reconciliation tables in the financial statements accompanying this press release. ADDITIONAL INFORMATION REGARDING THE THIRD QUARTER AND NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2012The Corporation's operating results were affected by exceptionally dry weather in Québec and the Northeastern U.S. in the summer of 2012, which led to a $4.3 million decrease in EBITDA in the hydroelectric power segment. However, the decline in the hydroelectric power segment was partially offset by an extraordinary gain of $4.0 million, regarding a retroactive adjustment on water rights of U.S. hydroelectric power stations as well as sustained performance in the wind power segment, due in particular to the contribution of the new St-Patrick site in France, acquired in June 2012. Furthermore, the change in the net loss for the third quarter and nine-month period ended September 30, 2012 compared with the same periods of 2011 resulted largely from the recognition of a $5.4 million foreign exchange gain in the third quarter of 2011.For the nine-month period ended September 30, 2012, other than the historically low water flow conditions in the hydroelectric power segment in the second and third quarters, the decrease in adjusted loss was triggered by a significant but predicable drop in thermal power segment EBITDA, owing primarily to the increase in the cost of natural gas consumed by the cogeneration power station in Kingsey Falls, Québec.Boralex President and CEO Patrick Lemaire underscored the good showing in the wind and solar power segments, whose combined EBITDA has grown over 15% to $41.6 million since the beginning of the year. "Despite the unfavourable weather conditions over the past six months, our hydroelectric power stations have excellent long-term prospects and remain major contributors to our bottom line, generating over $27.0 million in EBITDA for first nine months of 2012. Our Kingsey Falls power station will cease cogeneration operations when its sales contract with Hydro-Québec expires on November 30, 2012. The revenue shortfall arising from this shutdown will be offset in the coming quarters by the recently completed and ongoing expansion initiatives at Boralex."BORALEX AIMS TO DOUBLE EBITDA BY 2016Due to its significant capacity to generate cash from operations, Boralex is in a solid financial position, with cash on hand in excess of over $140 million as at September 30, 2012. The Corporation will use the cash to execute the full range of its development projects underway in the wind and hydroelectric power segments totalling over 550 MW under long-term power sales contracts held independently or with partners. By completing these various projects in the coming years, plus approximately 100 MW in anticipated additional capacity in its project pipeline, Boralex aims to double the EBITDA reported in the past twelve months with no dilution to existing shareholdings.Boralex continues seeking acquisition opportunities mainly in Canada and France, targeting renewable energy assets covered by long-term power sales contracts that offer growing and predictable cash flows along with attractive leveraged financing options. "Boralex commands a strong competitive edge to continue seizing the best market opportunities, consisting of robust finances, its targeted approach, an excellent multidisciplinary team and its entrepreneurial culture," added Mr. Lemaire.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 2013 and 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-IFRS financial measures. To assess the performance of its assets and reporting segments, the Corporation uses EBITDA, adjusted EBITDA, cash flows from operations, and adjusted net loss as performance measures, as defined in the accompanying unaudited interim condensed consolidated financial statements. These non-IFRS 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 atSeptember 30,2012 As atDecember 31,2011ASSETS    Cash and cash equivalents 140,495 144,703Restricted cash 207 18,288Trade and other receivables 27,807 50,500Inventories 4,109 3,573Available-for-sale financial asset 972 2,208Prepaid expenses 3,316 2,137CURRENT ASSETS 176,906 221,409     Property, plant and equipment 655,856 643,047Energy sales contracts 98,975 97,705Water rights 109,685 111,844Goodwill 46,504 38,063Other intangible assets 33,957 5,285Interest in the Joint Venture 57,200 45,266Other non-current assets 12,864 14,236NON-CURRENT ASSETS 1,015,041 955,446TOTAL ASSETS 1,191,947 1,176,855LIABILITIES    Trade and other payables 37,440 34,209Current portion of debt 98,570 26,659Current income tax liability 813 10,776Other current financial liabilities 26,997 29,757CURRENT LIABILITIES 163,820 101,401     Non-current debt 418,823 479,525Convertible debentures 225,491 223,347Deferred income tax liability 27,210 26,031Other non-current financial liabilities 21,847 14,273Other non-current liabilities 4,723 3,400NON-CURRENT LIABILITIES 698,094 746,576TOTAL LIABILITIES 861,914 847,977EQUITY     Capital stock 222,827 222,758Equity component of convertible debentures 14,379 14,379Contributed surplus 6,682 6,106Retained earnings 143,245 144,501Accumulated other comprehensive loss (74,082) (65,980)Equity attributable to shareholders 313,051 321,764Non-controlling interests 16,982 7,114TOTAL EQUITY 330,033 328,878TOTAL LIABILITIES AND EQUITY 1,191,947 1,176,855Consolidated Statements of Loss   Three-month periodsended September 30 Nine-month periodsended September 30(in thousands of Canadian dollars, except per share amounts) (unaudited) 20122011 20122011       REVENUES      Revenues from energy sales 33,02136,198 129,377137,533Other income 130189 452513  33,15136,387 129,829138,046       COSTS AND OTHER EXPENSES      Operating expenses 12,59515,115 47,66753,172Administrative 3,7393,529 11,52211,695Development 5941,055 2,2302,724Amortization 15,11914,214 43,00943,250Other losses (gains) 971(582) 971(2,959)Impairment of property, plant and equipment and intangible assets -6,503 8236,503  33,01839,834 106,222114,385       OPERATING INCOME (LOSS)  133(3,447) 23,60723,661       Financing costs 12,44012,537 36,63937,024Foreign exchange loss (gain) (25)(5,393) 106(3,346)Net loss on financial instruments 1468 499474       LOSS BEFORE THE FOLLOWING ITEMS (12,296)(10,659) (13,637)(10,491)       Share in earnings of the Joint Venture (3)- (20)-Income tax recovery (3,494)(4,011) (3,456)(3,588)       NET LOSS FROM CONTINUING OPERATIONS  (8,799)(6,648) (10,161)(6,903)Net earnings (loss) from discontinued operations 566(893) 3,025838NET LOSS (8,233)(7,541) (7,136)(6,065)       NET LOSS ATTRIBUTABLE TO:       Shareholders of Boralex (7,601)(7,208) (6,353)(5,304) Non-controlling shareholders (632)(333) (783)(761)NET LOSS  (8,233)(7,541) (7,136)(6,065)       NET EARNINGS (LOSS) ATTRIBUTABLE TOSHAREHOLDERS OF BORALEX:       Continuing operations (8,167)(6,315) (9,378)(6,142) Discontinued operations 566(893) 3,025838  (7,601)(7,208) (6,353)(5,304)       BASIC NET EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:       Continuing operations $(0.22)$(0.17) $(0.25)$(0.16) Discontinued operations $0.02$(0.02) $0.08$0.02  $(0.20)$(0.19) $(0.17)$(0.14)       DILUTED NET EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:       Continuing operations $(0.22)$(0.17) $(0.25)$(0.16) Discontinued operations $0.02$(0.02) $0.08$0.02  $(0.20)$(0.19) $(0.17)$(0.14)Statements of Comprehensive Loss    Three-month periodsended September 30 Nine-month periodsended September 30(in thousands of Canadian dollars) (unaudited) 20122011 20122011NET LOSS (8,233)(7,541) (7,136)(6,065)        OTHER COMPREHENSIVE INCOME (LOSS)      Translation differences       Unrealized foreign exchange gain (loss) on translation offinancial statements of self-sustaining foreign operations (4,878)9,562 (5,929)9,586Cash flow hedges       Change in fair value of financial instruments (4,618)(30,998) (13,460)(39,903) Hedging items realized and recognized in net loss 3,7941,204 11,6203,818 Hedging items realized and recognized in statement of financialposition -- -198 Taxes 2689,083 84011,008Cash flow hedges - Joint Venture       Change in fair value of financial instruments (2,545)- (5,895)- Taxes 677- 1,568-Available-for-sale financial asset       Change in fair value of an available-for-sale financial asset 182(571) (269)(147) Items realized and recognized in net loss 968- 968(624)Discontinued operations -(99) -(2,120)Total other comprehensive loss (6,152)(11,819) (10,557)(18,184)COMPREHENSIVE LOSS (14,385)(19,360) (17,693)(24,249)        COMPREHENSIVE LOSS ATTRIBUTABLE TO:       Shareholders of Boralex (13,040)(18,101) (15,633)(23,413) Non-controlling shareholders (1,345)(1,259) (2,060)(836)COMPREHENSIVE LOSS (14,385)(19,360) (17,693)(24,249)        COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:       Continuing operations (13,606)(17,109) (18,658)(22,131) Discontinued operations 566(992) 3,025(1,282)  (13,040)(18,101) (15,633)(23,413)Consolidated Statements of Changes in Equity               Nine-month periodended September 30                2012  Equity attributable to shareholders    (in thousands of Canadian dollars) (unaudited) Capitalstock Equitycomponent ofconvertibledebentures Contributedsurplus Retainedearnings Othercomprehensiveloss Total Non-controllinginterests TotalequityBalance as at January 1, 2012 222,758 14,379 6,106 144,501 (65,980) 321,764 7,114 328,878                 Net loss - - - (6,353) - (6,353) (783) (7,136)Other comprehensive loss - - - - (9,280) (9,280) (1,277) (10,557)Comprehensive loss - - - (6,353) (9,280) (15,633) (2,060) (17,693)                 Conversion of convertible debentures 74 - - - - 74 - 74Stock option expense - - 576 - - 576 - 576Share repurchases (5) - - (2) - (7) - (7)Excess of proceeds from partial saleof a subsidiary - - - 5,099 1,178 6,277 (6,277) -Contribution of non-controllingshareholders - - - - - - 18,205 18,205Balance as at September 30, 2012 222,827 14,379 6,682 143,245 (74,082) 313,051 16,982 330,033                               Nine-month periodended September 30                2011  Equity attributable to shareholders    (in thousands of Canadian dollars) (unaudited) Capitalstock Equitycomponent ofconvertibledebentures Contributedsurplus Retainedearnings Othercomprehensiveloss Total Non-controllinginterests TotalequityBalance as at January 1, 2011 222,853 14,488 5,028 141,693 (24,705) 359,357 8,332 367,689                 Net loss - - - (5,304) - (5,304) (761) (6,065)Other comprehensive loss - - - - (18,109) (18,109) (75) (18,184)Comprehensive loss - - - (5,304) (18,109) (23,413) (836) (24,249)                 Conversion of convertible debentures 250 - - - - 250 - 250Share repurchases (352) - - (75) - (427) - (427)Stock option expense - - 850 - - 850 - 850Other - (109) - - - (109) - (109)Balance as at September 30, 2011 222,751 14,379 5,878 136,314 (42,814) 336,508 7,496 344,004Consolidated Statements of Cash Flows  Three-month periodsended September 30 Nine-month periodsended September 30(in thousands of Canadian dollars) (unaudited) 20122011 20122011Net loss attributable to shareholders of Boralex (7,601)(7,208) (6,353)(5,304)Less: Net earnings (loss) from discontinued operations 566(893) 3,025838Net loss from continuing operations attributable to shareholders of Boralex (8,167)(6,315) (9,378)(6,142)Financing costs 12,44012,537 36,63937,024Interest paid (9,764)(9,060) (33,091)(33,776)Income tax recovery (3,494)(4,011) (3,456)(3,588)Income taxes paid (176)(1,469) (2,369)(4,298)Non-cash items in loss:       Unrealized foreign exchange loss on intercompany advances -(2,899) -(1,324) Amortization 15,11914,214 43,00943,250 Loss (gain) on sale of assets 971- 971(2,377) Gain on sale of assets to the Joint Venture -(582) -(582) Impairment of property, plant and equipment and intangible assets -6,503 8236,503 Net loss on financial instruments 1468 499474 Share in earnings of the Joint Venture (3)- (20)- Other (442)586 631,462  6,4989,572 33,69036,626Change in non-cash items related to operating activities (3,474)4,561 17,13924,973NET CASH FLOWS RELATED TO OPERATING ACTIVITIES 3,02414,133 50,82961,599       Business acquisitions -(700) (39,080)(700)Additions to property, plant and equipment (2,990)(6,159) (5,533)(28,902)Additions to other intangible assets (588)- (2,148)-Change in restricted cash 6,453- 18,08114,647Increase in interest in the Joint Venture (6,452)(8,164) (17,735)(10,376)Development projects (1,588)(532) (3,244)(1,181)Proceeds from sale of assets -- 8,7632,050Other 14234 110500NET CASH FLOWS RELATED TO INVESTING ACTIVITIES (5,151)(15,321) (40,786)(23,962)       Decrease in bank loans and overdraft -- -(201)Net increase in non-current debt -(67) -33,186Repayments on non-current debt (9,299)(9,311) (23,966)(42,427)Contribution of non-controlling interests 82- 18,206-Other 46(427) (2)(427)NET CASH FLOWS RELATED TO FINANCING ACTIVITIES (9,171)(9,805) (5,762)(9,869)Cash related to discontinued operations 5683,457 (6,404)11,061TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS (1,889)1,867 (2,085)1,589NET CHANGE IN CASH AND CASH EQUIVALENTS (12,619)(5,669) (4,208)40,418CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 153,114138,737 144,70392,650CASH AND CASH EQUIVALENTS - END OF PERIOD 140,495133,068 140,495133,068Segmented 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 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 for the consolidated accounts.The operating segments are presented according to the same criteria used to prepare the internal report submitted to the segment leader who allocates resources and assesses operating segment performance. The President and Chief Executive Officer is considered the segment leader, 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 (loss), or as a measure of operating results, which are IFRS measures.EBITDA is reconciled to the most comparable IFRS measure, namely, net loss attributable to shareholders of Boralex, in the following table:  Three-month periodsended September 30 Nine-month periodsended September 30(in thousands of Canadian dollars) (unaudited) 20122011 20122011Net loss attributable to shareholders of Boralex (7,601)(7,208) (6,353)(5,304)Net loss (earnings) from discontinued operations (566)893 (3,025)(838)Non-controlling shareholders (632)(333) (783)(761)Income tax recovery (3,494)(4,011) (3,456)(3,588)Net loss on financial instruments 1468 499474Foreign exchange loss (gain) (25)(5,393) 106(3,346)Financing costs 12,44012,537 36,63937,024Impairment of property, plant and equipment and intangible assets -6,503 8236,503Other losses (gains) 971(582) 971(2,959)Amortization 15,11914,214 43,00943,250EBITDA 16,22616,688 68,43070,455Cash 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 September 30 Nine-month periodsended September 30(in thousands of Canadian dollars) (unaudited) 20122011 20122011Net cash flows related to operating activities 3,02414,133 50,82961,599Less :Change in non-cash items related to operating activities (3,474)4,561 17,13924,973       CASH FLOWS FROM OPERATIONS 6,4989,572 33,69036,626The two following tables reconcile EBITDA and the net loss attributable to shareholders of Boralex as reported in the financial statements with adjusted EBITDA and adjusted net loss:  Three-month periodsended September 30 Nine-month periodsended September 30(in thousands of Canadian dollars) (unaudited) 20122011 20122011EBITDA 16,22616,688 68,43070,455Specific items :       Professional fees incurred in connection with acquisitions in France 711-  1,543- Retroactive adjustment to taxed on water rights of U.S. hydroelectric powerstations (3,957)- (3,957)-ADJUSTED EBITDA 12,98016,688 66,01670,455                   Three-month periodsended September 30 Nine-month periodsended September 30(in thousands of Canadian dollars) (unaudited) 20122011 20122011Net loss attributable to shareholders of Boralex (7,601)(7,208) (6,353)(5,304)Net loss (earnings) from discontinued operations (566)893 (3,025)(838)Specific items* :       Other losses (gains) 680(407) 680(2,071) Impairment of property, plant and equipment and intangible assets -4,552 492           4,552 Professional fees incurred in connection with acquisitions in France 477- 1,034- Retroactive adjustment to taxed on water rights of U.S. hydroelectric powerstations (2,374)- (2,374)-        ADJUSTED NET LOSS (9,384)(2,170) (9,546)(3,661)* Net of income taxesInformation by Operating Segment   Three-month periodsended September 30 Nine-month periodsended September 30(in thousands of Canadian dollars) (unaudited) 20122011 20122011Power production (MWh)      Wind power stations 110,34394,840 421,584371,771Hydroelectric power stations 86,472148,596 408,441507,091Thermal power stations 83,81592,423 244,119355,608Solar power station 2,0561,942 5,3252,210  282,686337,801 1,079,4691,236,680Revenues from energy sales      Wind power stations 12,54011,328 49,53144,794Hydroelectric power stations 7,45611,615 33,88740,337Thermal power stations 12,17312,368 43,70151,391Solar power station 852887 2,2581,011  33,02136,198 129,377137,533EBITDA      Wind power stations 9,5638,160 39,62235,217Hydroelectric power stations 7,5108,513 27,21130,237Thermal power stations 2,4082,928 11,95716,538Solar power station 770810 1,988931Corporate and eliminations (4,025)(3,723) (12,348)(12,468)  16,22616,688 68,43070,455Additions to property, plant and equipment      Wind power stations 1,4173,362 2,03712,094Hydroelectric power stations 830908 1,3671,239Thermal power stations 2411,534 3073,481Solar power station 24112 72011,545Corporate and eliminations 478243 1,102543  2,9906,159 5,53328,902       (in thousands of Canadian dollars) (unaudited)    As atSeptember 30,2012As atDecember 31,2011Total assets      Wind power stations    557,936528,521Hydroelectric power stations    360,420366,099Thermal power stations    87,943101,683Solar power station    20,30523,586Corporate    165,343156,966     1,191,9471,176,855Total liabilities      Wind power stations    420,032392,611Hydroelectric power stations    137,378143,439Thermal power stations    27,11329,581Solar power station    16,11221,043Corporate    261,279261,303     861,914847,977Information by Geographic Segment  Three-month periodsended September 30 Nine-month periodsended September 30(in thousands of Canadian dollars) (unaudited) 20122011 20122011Power production (MWh)      Canada 155,518186,271 547,573670,834United States 43,38486,194 242,853328,673France 83,78465,336 289,043237,173  282,686337,801 1,079,4691,236,680Revenues from energy sales      Canada 17,26718,746 67,73575,560United States 3,5156,427 18,41524,620France 12,23911,025 43,22737,353  33,02136,198 129,377137,533EBITDA      Canada 5,0145,643 30,46432,111United States 5,0715,201 16,32319,194France 6,1415,844 21,64319,150  16,22616,688 68,43070,455Additions to property, plant and equipment      Canada 1,6954,955 2,82113,378United States 77207 162502France 1,218997 2,55015,022  2,9906,159 5,53328,902       (in thousands of Canadian dollars) (unaudited)    As atSeptember 30,2012As atDecember 31,2011Total assets      Canada    642,751679,354United States    192,866209,003France    356,330288,498     1,191,9471,176,855Non-current assets      Canada    537,276543,319United States    145,596156,631France    332,169255,496     1,015,041955,446Total liabilities      Canada    480,013483,731United States    107,742122,827France    274,159241,419     861,914847,977 SOURCE: BORALEX INC.For further information: Media Andréan Gagné Advisor, Communications Boralex514-985-1353 andrean.gagne@boralex.com Investors Marc Jasmin Boralex 514-284-9868 marc.jasmin@boralex.com