Boralex releases 2013 first-quarter results

MONTREAL, May 8, 2013 /CNW Telbec/ - Boralex Inc. ("Boralex" or the "Corporation") (TSX: BLX) maintained its earnings before interest, income taxes and amortization ("EBITDA") during the first quarter of 2013, while improving its profit margin due to the higher weight of the wind power segment.

FINANCIAL HIGHLIGHTS

(In millions of dollars, except per share amounts and EBITDA margin)		Three-month periods ended March 31
		2013	2012
Revenues from energy sales		50.7	57.5
EBITDA		33.3	33.3
EBITDA margin (%)		65.7	57.9
Net earnings*		4.0	4.8
	Per share (basic) ($)	0.11	0.13
Cash flows from operations		23.0	21.8
	Per share (basic) ($)	0.61	0.58
*Attributable to shareholders of Boralex for continuing operations

The 2013 first-quarter results confirmed the dominant and strategic role of the wind and hydroelectric power segments as Boralex's main performance drivers. Wind power segment output, revenues and EBITDA grew by 10.8%, 14.3% and 17.1%, respectively, over the same quarter of 2012. With a profit margin on the order of 84%, the wind power segment had a 55% share of aggregate EBITDA before the corporate segment.

This strategy has proven beneficial, as the contribution from the St-Patrick wind farm almost completely offset the decline in production resulting primarily from the shutdown of operations at the Kingsey Falls thermal power station.

"In line with its development strategy, Boralex is building on the strengths of its wind and hydroelectric power segments to continue generating growth in Canada and France. In light of its available financial resources, including $122 million in cash, Boralex has the means to fund the equity portion of wind power projects totalling approximately 100 MW in additional capacity on top of the projects currently being developed," said President and CEO Patrick Lemaire. "Boralex's objectives are to achieve an installed capacity of approximately 1,000 MW and double its annual EBITDA to exceed $200 million by the end of 2016," added Mr. Lemaire.

Building on 286 MW of wind power assets currently in operation, Boralex will add 528 MW under long-term power sales contracts in the coming years, of which the Corporation's net interest amounts to 334 MW. In France, there are 88 MW in projects currently being developed with commissioning set between late 2013 and summer 2014. In Canada, 246 MW will be commissioned between Q4 2013 and Q4 2015, including Phase 1 of the Seigneurie de Beaupré Wind Farms, one of Canada's largest wind power sites, to be commissioned in December 2013. Incidentally, construction work at the site is on schedule and on budget.

However, in the hydroelectric power segment, despite a slight drop in production output owing in particular to less favourable water conditions in the Northeastern United States than in 2012, Boralex posts increases in revenues and EBITDA of 0.9% and 6.0%, respectively, in addition to generating a solid EBITDA margin of 80.0%. The decline in production in this segment, relative to their historical averages, was almost completely offset by a favourable price effect experienced in the NYSIO open market by the four U.S. power stations not covered by power sales contracts.

On the hydroelectric development front, construction is proceeding according to plan at the Jamie Creek power station in British Colombia, Canada, with commissioning set for 2014. The Corporation's growth outlook for this segment in Ontario and British Columbia remains good.

Excluding the Kingsey Falls power station's shutdown, the thermal power segment recorded increases in production and EBITDA of 18% and $1.2 million, respectively, fuelled by improved performance at the Senneterre power station in Canada.

About Boralex
Boralex 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 by 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 availability and price increases, currency fluctuations, volatility in the selling price of electricity, the Corporation's financing capacity, negative changes in general market conditions and regulations affecting its industry, as well as other factors listed in the Corporation'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, cash flows from operations, and adjusted net earnings 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 Statements
Consolidated Statements of Financial Position

	As at March 31,	As at December 31,
(in thousands of Canadian dollars) (unaudited)	2013	2012
ASSETS
Cash and cash equivalents	115,737	107,138
Restricted cash	5,818	5,063
Trade and other receivables	41,085	45,589
Inventories	3,978	4,404
Available-for-sale financial asset	2,564	3,009
Prepaid expenses	3,350	2,137
CURRENT ASSETS	172,532	167,340
Property, plant and equipment	684,673	689,024
Other intangible assets	251,848	253,115
Goodwill	48,600	48,663
Interest in the Joint Venture	58,166	58,994
Other non-current assets	12,585	12,735
NON-CURRENT ASSETS	1,055,872	1,062,531
TOTAL ASSETS	1,228,404	1,229,871
LIABILITIES
Trade and other payables	41,853	46,945
Current portion of debt	99,812	98,570
Current income tax liability	1,793	1,741
Other current financial liabilities	25,058	25,508
CURRENT LIABILITIES	168,516	172,764
Non-current debt	417,457	423,616
Convertible debentures	227,059	226,299
Deferred income tax liability	31,568	29,514
Other non-current financial liabilities	23,084	24,698
Other non-current liabilities	10,612	10,611
NON-CURRENT LIABILITIES	709,780	714,738
TOTAL LIABILITIES	878,296	887,502
EQUITY
Equity attributable to shareholders	326,764	319,868
Non-controlling shareholders	23,344	22,501
TOTAL EQUITY	350,108	342,369
TOTAL LIABILITIES AND EQUITY	1,228,404	1,229,871

Consolidated Statements of Earnings

		Three-month periods ended March 31
(in thousands of Canadian dollars, except per share amounts) (unaudited)		2013	2012
REVENUES
Revenues from energy sales		50,736	57,451
Other income		315	150
		51,051	57,601
COSTS AND OTHER EXPENSES
Operating expenses		12,849	20,426
Administrative		3,654	3,205
Development		1,080	671
Amortization		13,501	13,935
Other gains		(34)	—
Impairment of property, plant and equipment and intangible assets		—	823
		31,050	39,060
OPERATING INCOME		20,001	18,541
Financing costs		12,424	12,103
Foreign exchange loss (gain)		(8)	121
Net loss (gain) on financial instruments		203	(337)
EARNINGS BEFORE THE FOLLOWING ITEMS		7,382	6,654
Share in earnings (loss) of the Joint Venture		(215)	43
Income tax expense		2,730	1,759
NET EARNINGS FROM CONTINUING OPERATIONS		4,437	4,938
Net earnings from discontinued operations		161	2,323
NET EARNINGS		4,598	7,261
NET EARNINGS ATTRIBUTABLE TO:
	Shareholders of Boralex	4,168	7,149
	Non-controlling shareholders	430	112
NET EARNINGS		4,598	7,261
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:
	Continuing operations	4,007	4,826
	Discontinued operations	161	2,323
		4,168	7,149
NET EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:
	Continuing operations	$0.11	$0.13
	Discontinued operations	—	$0.06
		$0.11	$0.19
NET EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:
	Continuing operations	$0.11	$0.12
	Discontinued operations	—	$0.06
		$0.11	$0.18

Consolidated Statements of Comprehensive Income

		Three-month periods ended March 31
(in thousands of Canadian dollars) (unaudited)		2013	2012
NET EARNINGS		4,598	7,261
Other comprehensive income to be subsequently reclassified to net earnings when certain conditions are met
Translation adjustements:
	Unrealized foreign exchange gain (loss) on translation of financial statements of self-sustaining foreign operations	981	(1,385)
Cash flow hedges:
	Change in fair value of financial instruments	257	(1,548)
	Hedging items realized and recognized in net earnings	1,851	4,139
	Taxes	(650)	(413)
Cash flow hedges - Joint Venture:
	Change in fair value of financial instruments	(613)	7,762
	Taxes	79	(2,064)
Available-for-sale financial asset:
	Change in fair value of an available-for-sale financial asset	789	(64)
	Items realized and recognized in net earnings	(37)	—
Total other comprehensive income		2,657	6,427
COMPREHENSIVE INCOME		7,255	13,688
COMPREHENSIVE INCOME ATTRIBUTABLE TO:
	Shareholders of Boralex	6,738	13,600
	Non-controlling shareholders	517	88
COMPREHENSIVE INCOME		7,255	13,688
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:
	Continuing operations	6,577	11,277
	Discontinued operations	161	2,323
		6,738	13,600

Consolidated Statements of Changes in Equity

													Three-month period ended March 31
														2013
	Equity attributable to shareholders
(in thousands of Canadian dollars) (unaudited)	Capital stock		Equity component of convertible debentures		Contributed surplus		Retained earnings		Other comprehensive income (loss)		Total		Non-controlling shareholders	Total equity
BALANCE AS AT JANUARY 1, 2013	222,870		14,379		6,945		144,492		(68,818)		319,868		22,501	342,369
Net earnings	—		—		—		4,168		—		4,168		430	4,598
Other comprehensive income	—		—		—		—		2,570		2,570		87	2,657
COMPREHENSIVE INCOME	—		—		—		4,168		2,570		6,738		517	7,255
Conversion of convertible debentures	2		—		—		—		—		2		—	2
Stock option expense	—		—		156		—		—		156		—	156
Contribution of non-controlling shareholders	—		—		—		—		—		—		326	326
BALANCE AS AT MARCH 31, 2013	222,872		14,379		7,101		148,660		(66,248	)	326,764		23,344	350,108
													Three-month period ended March 31
														2012
	Equity attributable to shareholders
(in thousands of Canadian dollars) (unaudited)	Capital stock		Equity component of convertible debentures		Contributed surplus		Retained earnings		Other comprehensive income (loss)		Total		Non-controlling shareholders	Total equity
BALANCE AS AT JANUARY 1, 2012	222,758		14,379		6,106		144,501		(65,980)		321,764		7,114	328,878
Net earnings	—		—		—		7,149		—		7,149		112	7,261
Other comprehensive income (loss)	—		—		—		—		6,451		6,451		(24)	6,427
COMPREHENSIVE INCOME	—		—		—		7,149		6,451		13,600		88	13,688
Conversion of convertible debentures	5		—		—		—		—		5		—	5
Stock option expense	—		—		50		—		—		50		—	50
Contribution of non-controlling shareholders	—		—		—		—		—		—		92	92
BALANCE AS AT MARCH 31, 2012	222,763		14,379		6,156		151,650		(59,529)		335,419		7,294	342,713

Consolidated Statements of Cash Flows

		Three-month periods ended March 31
(in thousands of Canadian dollars) (unaudited)		2013	2012
Net earnings attributable to shareholders of Boralex		4,168	7,149
Less: Net earnings from discontinued operations		161	2,323
Net earnings from continuing operations attributable to shareholders of Boralex		4,007	4,826
Financing costs		12,424	12,103
Interest paid		(10,013)	(10,354)
Income tax expense		2,730	1,759
Income taxes paid		(757)	(1,696)
Non-cash items in earnings:
	Net loss (gain) on financial instruments	203	(337)
	Share in loss (earnings) of the Joint Venture	215	(43)
	Amortization	13,501	13,935
	Impairment of property, plant and equipment and intangible assets	—	823
	Other gains	(34)	—
	Other	678	833
		22,954	21,849
Change in non-cash items related to operating activities		(504)	11,225
NET CASH FLOWS RELATED TO OPERATING ACTIVITIES		22,450	33,074
Additions to property, plant and equipment		(8,381)	(1,495)
Change in restricted cash		(755)	760
Increase in interest in the Joint Venture		—	(1,858)
Development projects		(977)	(1,010)
Other		(19)	68
NET CASH FLOWS RELATED TO INVESTING ACTIVITIES		(10,132)	(3,535)
Increase in non-current debt		5,050	—
Repayments on non-current debt		(9,553)	(12,076)
Contribution of non-controlling shareholders		323	—
Other		—	12
NET CASH FLOWS RELATED TO FINANCING ACTIVITIES		(4,180)	(12,064)
Cash from discontinued operations		98	(4,247)
TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS		363	(514)
NET CHANGE IN CASH AND CASH EQUIVALENTS		8,599	12,714
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		107,138	144,703
CASH AND CASH EQUIVALENTS - END OF PERIOD		115,737	157,417

Segmented Information

The 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, 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 periods ended March 31
(in thousands of Canadian dollars) (unaudited)	2013	2012
Net earnings attributable to shareholders of Boralex	4,168	7,149
Net earnings from discontinued operations	(161)	(2,323)
Non-controlling shareholders	430	112
Income tax expense	2,730	1,759
Net loss (gain) on financial instruments	203	(337)
Foreign exchange loss (gain)	(8)	121
Financing costs	12,424	12,103
Impairment of property, plant and intangible assets	—	823
Other gains	(34)	—
Amortization	13,501	13,935
EBITDA	33,253	33,342

Cash 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 periods ended March 31
(in thousands of Canadian dollars) (unaudited)	2013	2012
Net cash flows related to operating activities	22,450	33,074
Change in non-cash items related to operating activities	(504)	11,225
CASH FLOWS FROM OPERATIONS	22,954	21,849

The following table reconciles net earnings attributable to shareholders of Boralex as reported in the financial statements with adjusted net earnings:

		Three-month periods ended March 31
(in thousands of Canadian dollars) (unaudited)		2013	2012
Net earnings attributable to shareholders of Boralex		4,168	7,149
Net earnings from discontinued operations		(161)	(2,323)
Specific items*:
	Impairment (reversal) of property, plant and equipment and intangible assets	—	492
ADJUSTED NET EARNINGS - CONSOLIDATED		4,007	5,318

* Net of income taxes

Information by Operating Segment

	Three-month periods ended March 31		Three-month periods ended March 31
(in thousands of Canadian dollars) (unaudited)	2013	2012	2013	2012
	Power production (MWh)		Revenues from energy sales
Wind power stations	191,028	172,405	23,598	20,647
Hydroelectric power stations	148,473	163,095	14,113	13,986
Thermal power stations	70,879	118,323	12,546	22,242
Solar power station	1,079	1,329	479	576
	411,459	455,152	50,736	57,451
	EBITDA		Additions to property, plant and equipment
Wind power stations	19,875	16,977	4,459	347
Hydroelectric power stations	11,284	10,644	2,205	189
Thermal power stations	4,668	8,395	18	66
Solar power station	382	495	527	692
Corporate and eliminations	(2,956)	(3,169)	1,172	201
	33,253	33,342	8,381	1,495
			As at March 31,	As at December 31,
			2013	2012
Total assets
Wind power stations			591,545	597,237
Hydroelectric power stations			389,757	382,515
Thermal power stations			71,813	84,480
Solar power station			20,252	20,779
Corporate			155,037	144,860
			1,228,404	1,229,871
Total liabilities
Wind power stations			495,321	505,713
Hydroelectric power stations			149,781	148,477
Thermal power stations			26,561	26,914
Solar power station			20,479	20,931
Corporate			186,154	185,467
			878,296	887,502

Information by Geographic Segment

	Three-month periods ended March 31		Three-month periods ended March 31
(in thousands of Canadian dollars) (unaudited)	2013	2012	2013	2012
	Power production (MWh)		Revenues from energy sales
Canada	177,204	226,953	21,841	31,170
United States	98,568	113,472	8,340	8,403
France	135,687	114,727	20,555	17,878
	411,459	455,152	50,736	57,451
	EBITDA		Additions to property, plant and equipment
Canada	14,629	17,327	3,328	365
United States	6,732	6,646	43	85
France	11,892	9,369	5,010	1,045
	33,253	33,342	8,381	1,495
			As at March 31,	As at December 31,
			2013	2012
Total assets
Canada			642,324	642,985
United States			193,321	186,491
France			392,759	400,395
			1,228,404	1,229,871
Non-current assets, excluding interest in the Joint Venture
Canada			497,066	498,019
United States			146,760	145,604
France			353,880	359,914
			997,706	1,003,537
Total liabilities
Canada			479,793	481,774
United States			111,567	109,541
France			286,936	296,187
			878,296	887,502

 

 

SOURCE: BORALEX INC.

Media 
Patricia Lemaire
Director, Public Affairs and Communications
Boralex Inc.
514-985-1353
[email protected]

Investors
Marc Jasmin
Director, Investor Relations
Boralex Inc.
514-284-9868
[email protected]