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Press release from CNW Group

2012 - Boralex poised for strong growth

Wednesday, February 20, 2013

2012 - Boralex poised for strong growth07:00 EST Wednesday, February 20, 2013MONTREAL, Feb. 20, 2013 /CNW Telbec/ - Boralex Inc. ("Boralex" or the "Corporation") (TSX: BLX) maintains its EBITDA and improves its EBITDA margin at the close of fiscal 2012 despite a 6.5% decrease in revenues from energy sales.FINANCIAL HIGHLIGHTS(In millions of Canadian dollars, except per share amounts and EBITDA margin)      Three-month periodsended December 31, Years endedDecember 31, 20122011 20122011Revenues from energy sales52.156.5 181.4194.0EBITDA29.930.3 98.4100.8EBITDA margin (%)57.453.6 54.252.0Net earnings (loss)1.28.2 (5.1)2.9 Per share (basic) ($)0.030.22 (0.14)0.08Cash flows from operations14.117.6 48.654.2 Per share (basic) ($)0.370.47 1.291.44COMPANY'S EXPANSIONFiscal 2012 gave the Corporation the opportunity to transform its asset profile by significantly reducing the weight of its thermal power segment in favour of the wind power segment. With the proceeds from the December 2011 sale of the U.S. thermal power stations, coupled with its capacity to generate cash flows from operations, Boralex carried out a series of strategic acquisitions in fiscal 2012:A power supply contract for a 50 MW wind power project to be commissioned in late 2015 in the Témiscouata RCM in Québec, Canada;The 32 MW La Vallée wind power project in France to be commissioned in late 2013;The St-Patrick wind farm, also in France and already in operation, with 34.5 MW of installed capacity;Three wind power projects: Vron, Fortel-Bonnières and St-François, with a total installed capacity of 56 MW, to be commissioned in France in 2013 and 2014; andA 22 MW hydroelectric project in British Columbia, Canada to be commissioned in 2014."For Boralex, 2012 was a transition year that saw the weight of our thermal power stations reduced in favour of assets covered by long-term contracts in the wind and hydroelectric power segments," said President and CEO Patrick Lemaire.In 2013, the transformation will be solidified by the commissioning, in particular, of  phase 1 of the Seigneurie de Beaupré wind farms, the largest wind power project ever undertaken by Boralex. This project, whose construction is, to date, within budget and on schedule, will significantly impact the Corporation's results upon its commissioning in late 2013.Boralex remains focused on its strategic growth plan, building on quality assets covered by long-term contracts in the wind and hydroelectric power segments. With projects under development, in which the Corporation owns a net share of 356 MW scheduled for commissioning from 2013 to 2015, plus available cash resources which will be used to develop around 100 MW in additional wind power, Boralex aims to double its annual EBITDA by the end of 2016.ADDITIONAL INFORMATION REGARDING THE YEAR ENDED DECEMBER 31, 2012EBITDA for the year ended December 31, 2012 amounted to $98.4 million compared with $100.8 million for the year ended December 31, 2011. The Corporation enjoyed higher contributions from the wind and solar power segments, which however did not fully offset lesser performances in the hydroelectric and thermal power segments.The wind power segment's contribution to EBITDA (before corporate and eliminations) for the past fiscal year, grew significantly to 53% in 2012 from 46% in 2011. The segment thus confirmed its importance to the Corporation's EBITDA margin and helped temper the adverse effects of certain extraordinary factors in the thermal power segment. The wind segment's increased contribution in 2012 was driven by the roll-out of the Corporation's strategy, under which Boralex aims to increase the percentage of its assets covered by long-term contractual agreements. This growth also reflects Boralex's ongoing commitment to optimize current operations.In 2012, Boralex continued transforming its thermal power segment:the Dolbeau power station was sold;the agreement with Hydro-Québec, under which the Senneterre power station operated only six months in 2012, remained in place; andin the fourth quarter, operations at the Kingsey Falls cogeneration power station came to an end due to the expiration of its power sales contract with Hydro-Québec.These elements contributed to a 34% decrease in segment production which also was confronted with the higher cost of natural gas at the Kingsey Falls power station.Power output of hydroelectric power stations was down 19% from fiscal 2011, and 9% from historical averages. Overall, these results were partially offset by the  performance of the St-Patrick wind power station in France, acquired late in the second quarter of 2012, as well as by annual indexation under long-term power sales contracts.From a strategic standpoint, due to the sale of thermal segment assets late in 2011 and strong cash flows related to operating activities for the past year, Boralex ended fiscal 2012 with an excellent cash position of $112 million and an asset base nearly entirely covered by long-term contracts. With this solid financial profile, Boralex is in excellent position to pursue solid growth in the coming years.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 almost 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 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 earnings (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  As atDecember 31, As atDecember 31,(in thousands of Canadian dollars) (unaudited)2012 2011ASSETS   Cash and cash equivalents107,138 144,703Restricted cash5,063 18,288Trade and other receivables45,589 50,500Inventories4,404 3,573Available-for-sale financial asset3,009 2,208Prepaid expenses2,137 2,137CURRENT ASSETS167,340 221,409    Property, plant and equipment689,024 643,047Other intangible assets253,115 214,834Goodwill48,663 38,063Interest in the Joint Venture58,994 45,266Other non-current assets12,735 14,236NON-CURRENT ASSETS1,062,531 955,446TOTAL ASSETS1,229,871 1,176,855LIABILITIES   Trade and other payables46,945 34,209Current portion of debt98,570 26,659Current income tax liability1,741 10,776Other current financial liabilities25,508 29,757CURRENT LIABILITIES172,764 101,401    Non-current debt423,616 479,525Convertible debentures226,299 223,347Deferred income tax liability29,514 26,031Other non-current financial liabilities24,698 14,273Other non-current liabilities10,611 3,400NON-CURRENT LIABILITIES714,738 746,576TOTAL LIABILITIES887,502 847,977EQUITY   Equity attributable to shareholders319,868 321,764Non-controlling shareholders22,501 7,114TOTAL EQUITY342,369 328,878TOTAL LIABILITIES AND EQUITY1,229,871 1,176,855Consolidated Statements of Earnings (Loss) Three-month periodsended December 31Twelve-month periodsended December 31(in thousands of Canadian dollars, except per share amounts) (unaudited)2012201120122011     REVENUES    Revenues from energy sales52,06356,492181,440194,025Other income2,4011672,853680 54,46456,659184,293194,705     COSTS AND OTHER EXPENSES    Operating expenses18,61422,25166,28175,423Administrative4,6643,15816,18614,853Development1,2907993,5203,523Amortization15,02114,58358,03057,833Other losses (gains)——971(2,959)Impairment (reversal) of property, plant and equipment and intangible assets—(5,000)8231,503 39,58935,791145,811150,176     OPERATING INCOME14,87520,86838,48244,529     Financing costs12,64012,63949,27949,664Foreign exchange loss (gain)(80)2,38626(961)Net loss (gain) on financial instruments(103)498396972          EARNINGS (LOSS) BEFORE THE FOLLOWING ITEMS2,4185,345(11,219)(5,146)     Share in earnings (loss) of the Joint Venture(31)150(51)150Income tax expense (recovery)1,2731,277(2,183)(2,311)          NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS1,1763,918(8,985)(2,985)Net earnings from discontinued operations6964,6513,7215,489NET EARNINGS (LOSS)1,8728,569(5,264)2,504     NET EARNINGS (LOSS) ATTRIBUTABLE TO:     Shareholders of Boralex1,2388,187(5,115)2,883 Non-controlling shareholders634382(149)(379)NET EARNINGS (LOSS)1,8728,569(5,264)2,504     NET EARNINGS (LOSS) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:     Continuing operations5423,536(8,836)(2,606) Discontinued operations6964,6513,7215,489 1,2388,187(5,115)2,883     NET EARNINGS (LOSS) PER SHARE (BASIC AND DILUTED) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:     Continuing operations$0.01$0.10$(0.24)$(0.07) Discontinued operations$0.02$0.12$0.10$0.15 $0.03$0.22$(0.14)$0.08Consolidated Statements of Comprehensive Income (Loss) Three-month periodsended December 31Twelve-month periodsended December 31(in thousands of Canadian dollars) (unaudited)2012201120122011     NET EARNINGS (LOSS)1,8728,569(5,264)2,504     Other comprehensive income (loss) to be subsequently reclassified to net earnings (loss) when certain conditions are met    Translation differences:     Unrealized foreign exchange gain (loss) on translation of financial statements ofself-sustaining foreign operations4,577(5,528)(1,352)4,058Cash flow hedges:     Change in fair value of financial instruments(3,471)(13,107)(16,931)(53,010) Hedging items realized and recognized in net earnings (loss)2,9062,22214,5266,040 Hedging items realized and recognized in statement of financial position———198 Taxes2692,3971,10913,405Cash flow hedges - Joint Venture:     Change in fair value of financial instruments1,807(13,461)(4,088)(13,461) Taxes(481)3,5791,0873,579Available-for-sale financial asset:     Change in fair value of an available-for-sale financial asset221(131)(48)(278) Items realized and recognized in net earnings (loss)——968(624)Discontinued operations:—99—(2,021)Total other comprehensive income (loss)5,828(23,930)(4,729)(42,114)COMPREHENSIVE INCOME (LOSS)7,700(15,361)(9,993)(39,610)     COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:     Shareholders of Boralex6,502(14,979)(9,131)(38,392) Non-controlling shareholders1,198(382)(862)(1,218)COMPREHENSIVE INCOME (LOSS)7,700(15,361)(9,993)(39,610)     COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:     Continuing operations5,806(19,729)(12,852)(41,860) Discontinued operations6964,7503,7213,468 6,502(14,979)(9,131)(38,392)Consolidated Statements of Changes in Equity      2012 Equity attributable to shareholders (in thousands of Canadian dollars) (unaudited)Capitalstock Equitycomponent ofconvertibledebentures Contributedsurplus Retainedearnings Othercomprehensiveincome (loss) Total Non-controllinginterests TotalequityBalance as at January 1, 2012222,758 14,379 6,106 144,501 (65,980) 321,764 7,114 328,878                  Net loss— — — (5,115) — (5,115) (149) (5,264)Other comprehensive loss— — — — (4,016) (4,016) (713) (4,729)Comprehensive loss— — — (5,115) (4,016) (9,131) (862) (9,993)                Conversion of convertible debentures117 — — — — 117 — 117Share repurchases(5) — — (2) — (7) — (7)Stock option expense— — 839 — — 839 — 839Excess of proceeds from partial sale of a subsidiary— — — 5,108 1,178 6,286 (6,286) —Contribution of non-controlling shareholders— — — — — — 22,535 22,535Balance as at December 31, 2012222,870 14,379 6,945 144,492 (68,818) 319,868 22,501 342,369                  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, 2011222,853 14,488 5,028 141,693 (24,705) 359,357 8,332 367,689                Net earnings (loss)— — — 2,883 — 2,883 (379) 2,504Other comprehensive loss— — — — (41,275) (41,275) (839) (42,114)Comprehensive income (loss)— — — 2,883 (41,275) (38,392) (1,218) (39,610)                Conversion of convertible debentures258 — — — — 258 — 258Share repurchases(353) — — (75) — (428) — (428)Stock option expense— — 1,078 — — 1,078 — 1,078Other— (109) — — — (109) — (109)Balance as at December 31, 2011222,758 14,379 6,106 144,501 (65,980) 321,764 7,114 328,878Consolidated Statements of Cash Flows Three-month periodsended December 31Twelve-month periodsended December 31(in thousands of Canadian dollars) (unaudited)2012201120122011Net earnings (loss) attributable to shareholders of Boralex1,2388,187(5,115)2,883Less: Net earnings from discontinued operations6964,6513,7215,489Net earnings (loss) from continuing operations attributable to shareholders of Boralex5423,536(8,836)(2,606)Financing costs12,64012,63949,27949,664Interest paid(14,180)(13,358)(47,271)(47,134)Income tax expense (recovery)1,2731,277(2,183)(2,311)Income taxes paid(2,071)(39)(4,440)(4,337)Non-cash items in earnings (loss):     Net loss (gain) on financial instruments(103)498396972 Share in earnings (loss) of the Joint Venture(31)150(51)150 Amortization15,02114,58358,03057,833 Impairment (reversal) of property, plant and equipment and intangible assets—(5,000)8231,503 Loss (gain) on sale of assets——971(2,377) Gain on sale of assets to the Joint Venture———(582) Other1,0273,3271,8973,465 14,11817,61348,61554,240Change in non-cash items related to operating activities(17,551)(13,082)(1,219)11,891NET CASH FLOWS RELATED TO OPERATING ACTIVITIES(3,433)4,53147,39666,131     Business acquisitions(24,801)—(63,881)(700)Additions to property, plant and equipment(4,787)(5,517)(10,320)(34,419)Additions to other intangible assets(402)—(2,550)—Change in restricted cash(4,856)(17,011)13,225(2,364)Increase in interest in the Joint Venture—(42,573)(17,735)(52,949)Development projects(178)(439)(3,422)(1,620)Proceeds from sale of asset—2,1508,7634,200Insurance proceeds723—723—Other—(66)110434NET CASH FLOWS RELATED TO INVESTING ACTIVITIES(34,301)(63,456)(75,087)(87,418)     Decrease in bank loans and overdraft—6—(195)Net increase in non-current debt—6,488—39,674Repayments on non-current debt(3,747)(2,608)(27,713)(45,035)Redemption of financial instruments prior to maturity—(15,670)—(15,670)Contribution of non-controlling shareholders4,307—22,513—Other—(5)(2)(433)NET CASH FLOWS RELATED TO FINANCING ACTIVITIES560(11,789)(5,202)(21,659)Cash related to discontinued operations, includingproceeds on disposal2,76283,709(3,642)94,770TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS1,055(1,360)(1,030)229NET CHANGE IN CASH AND CASH EQUIVALENTS(33,357)11,635(37,565)52,053CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD140,495133,068144,70392,650CASH AND CASH EQUIVALENTS - END OF PERIOD107,138144,703107,138144,703Segmented 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 and EBITDA.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 earnings (loss) attributable to shareholders of Boralex, in the following table: Three-month periodsended December 31Twelve-month periodsended December 31(in thousands of Canadian dollars) (unaudited)2012201120122011Net earnings (loss) attributable to shareholders of Boralex1,2388,187(5,115)2,883Net earnings from discontinued operations(696)(4,651)(3,721)(5,489)Non-controlling shareholders634382(149)(379)Income tax expense (recovery)1,2731,277(2,183)(2,311)Net loss (gain) on financial instruments(103)498396972Foreign exchange loss (gain)(80)2,38626(961)Financing costs12,64012,63949,27949,664Impairment (reversal) of property, plant and intangible assets—(5,000)8231,503Other losses (gains)——971(2,959)Amortization15,02114,58358,03057,833     EBITDA29,92730,30198,357100,756Cash 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. In light of the seasonal nature of the Corporation's operations and development activities, changes in non-cash items can vary considerably. In addition, development activities result in significant changes in Trade and other payables during the construction period, as well as an initial injection of working capital at project start-up. Accordingly, the Corporation considers it more representative not to integrate changes in non-cash items in this performance measure.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 December 31Twelve-month periodsended December 31(in thousands of Canadian dollars) (unaudited)2012201120122011Net cash flows related to operating activities(3,433)4,53147,39666,131Less:Change in non-cash items related to operating activities(17,551)(13,082)(1,219)11,891     CASH FLOWS FROM OPERATIONS14,11817,61348,61554,240The following four tables reconcile hydroelectric and corporate segment EBITDA, consolidated EBITDA and net earnings (loss) attributable to shareholders of Boralex as reported in the financial statements with adjusted EBITDA and adjusted net earnings (loss): Three-month periodended December 31Twelve-month periodsended December 31(in thousands of Canadian dollars) (unaudited)2012201120122011EBITDA - Hydroelectric segment9,54111,38636,75241,623Specific items:     Retroactive adjustment to taxes on water rights of hydroelectric power stations in the U.S. and Canada717—(3,240)—     ADJUSTED EBITDA - HYDROELECTRIC SEGMENT10,25811,38633,51241,623      Three-month periodsended December 31Twelve-month periodsended December 31(in thousands of Canadian dollars) (unaudited)2012201120122011EBITDA - Corporate segment(3,902)(4,024)(16,250)(16,492)Specific items:     Professional fees incurred in connection with acquisitions in France and Canada305—1,848— Other income(1,815)—(1,815)—     ADJUSTED EBITDA - CORPORATE SEGMENT(5,412)(4,024)(16,217)(16,492)      Three-month periodsended December 31Twelve-month periodsended December 31(in thousands of Canadian dollars) (unaudited)2012201120122011EBITDA - Consolidated29,92730,30198,357100,756Specific items:     Retroactive adjustment to taxes on water rights of hydroelectric power stations in the U.S. and Canada717—(3,240)— Professional fees incurred in connection with acquisitions in France and Canada305—1,848— Other income(1,815)—(1,815)—     ADJUSTED EBITDA - CONSOLIDATED29,13430,30195,150100,756      Three-month periodsended December 31Twelve-month periodsended December 31(in thousands of Canadian dollars) (unaudited)2012201120122011Net earnings (loss) attributable to shareholders of Boralex1,2388,187(5,115)2,883Net earnings from discontinued operations(696)(4,651)(3,721)(5,489)Specific items*:     Retroactive adjustment to taxes on water rights of hydroelectric power stations in the U.S. and Canada977—(1,397)— Professional fees incurred in connection with acquisitions in France and Canada212—1,246— Other income(1,271)—(1,271)— Impairment (reversal) of property, plant and equipment and intangible assets—(3,500)4921,052 Other losses (gains)——680(2,071)     ADJUSTED NET EARNINGS (LOSS) - CONSOLIDATED46036(9,086)(3,625)* Net of income taxesInformation by Operating Segment  Three-month periodsended December 31Twelve-month periodsended December 31(in thousands of Canadian dollars) (unaudited)2012201120122011Power production (MWh)    Wind power stations210,838182,810632,422554,581Hydroelectric power stations164,072196,522572,513703,612Thermal power stations66,051114,225310,170469,835Solar power station9911,0176,3163,227 441,952494,5741,521,4211,731,255Revenues from energy sales    Wind power stations25,12422,46174,65467,255Hydroelectric power stations13,86015,98247,74856,319Thermal power stations12,65417,58456,35568,975Solar power station4254652,6831,476 52,06356,492181,440194,025EBITDA    Wind power stations21,36318,44060,98553,657Hydroelectric power stations9,54111,38636,75241,623Thermal power stations2,6014,10014,55820,638Solar power station3243992,3121,330Corporate and eliminations(3,902)(4,024)(16,250)(16,492) 29,92730,30198,357100,756Additions to property, plant and equipment    Wind power stations1,1201973,15712,291Hydroelectric power stations2,5722,4793,9393,718Thermal power stations1162844233,765Solar power station—1,86472013,409Corporate and eliminations9796932,0811,236 4,7875,51710,32034,419   As atDecember 31,As atDecember 31,   20122011Total assets    Wind power stations  597,237528,521Hydroelectric power stations  382,515366,099Thermal power stations  84,480101,683Solar power station  20,77923,586Corporate  144,860156,966   1,229,8711,176,855     Total liabilities    Wind power stations  505,713392,611Hydroelectric power stations  148,477143,439Thermal power stations  26,91429,581Solar power station  20,93121,043Corporate  185,467261,303   887,502847,977Information by Geographic Segment  Three-month periodsended December 31Twelve-month periodsended December 31(in thousands of Canadian dollars) (unaudited)2012201120122011Power production (MWh)    Canada181,870231,018729,443901,853United States100,441137,709343,294466,381France159,641125,847448,684363,021 441,952494,5741,521,4211,731,255Revenues from energy sales    Canada21,88826,84489,623102,404United States7,96010,52626,37535,145France22,21519,12265,44256,476 52,06356,492181,440194,025EBITDA    Canada10,31911,38340,78343,494United States5,5467,83521,86927,029France14,06211,08335,70530,233 29,92730,30198,357100,756Additions to property, plant and equipment    Canada3,9283,0916,75016,469United States2167164669France8572,2593,40617,281 4,7875,51710,32034,419   As atDecember 31,As atDecember 31,   20122011Total assets    Canada  642,985679,354United States  186,491209,003France  400,395288,498   1,229,8711,176,855     Non-current assets    Canada  557,013543,319United States  145,604156,631France  359,914255,496   1,062,531955,446     Total liabilities    Canada  481,774483,731United States  109,541122,827France  296,187241,419   887,502847,977  SOURCE: BORALEX INC.For further information: Media Patricia Lemaire Director, Public Affairs and Communications Boralex Inc. 514-985-1353 patricia.lemaire@boralex.com  Investors Marc Jasmin Boralex Inc. 514-284-9868 marc.jasmin@boralex.com